A good lesson in investment.

[Sunfish]

Or possibly a lesson in good investing.

An elderly Aunt died last week and we have been clearing out her desk. While not well off, she was doing better than she would on a pension only.

In '62 she bought 500 shares in the float of the new TV station in town. I'm not sure if she paid half a dollar or half a pound each but today those shares are worth $170k and she has been getting div cheques twice a year all along.

Warren Buffet would have approved, others may not. She did not diversify, just bought and held a good share and watched it closely.

Thommo

 

[always_learning]

Or possibly a lesson in good investing.

An elderly Aunt died last week and we have been clearing out her desk. While not well off, she was doing better than she would on a pension only.

In '62 she bought 500 shares in the float of the new TV station in town. I'm not sure if she paid half a dollar or half a pound each but today those shares are worth $170k and she has been getting div cheques twice a year all along.

Warren Buffet would have approved, others may not. She did not diversify, just bought and held a good share and watched it closely.

Thommo

BTW How much did those 500Shares cost? I am just thinking what would would have happend if she had used the same money to purchased a house in an "established" area at the time?

 

[geoffw]

BTW How much did those 500Shares cost?

I'm not sure if she paid half a dollar or half a pound each

It would be interesting to compare those shares against a property in the area. I'd be suspecting that shares would have outperformed- not allowing for leveraging. I'd also be intersted to know whether the amount invested in the shares would have been sufficient for a deposit on a property at the time.

 

[Sim]

Don't forget that property has intrinsic holding costs, whereas shares usually don't (ignoring leverage costs if used).

Shares are much cheaper to hold - even if real estate would have performed better in capital growth, you might not be able to hold onto the real estate if you didn't have the income to service it.

 

[Sunfish]

I'd rather not enter the shares V property debate and this post was not meant as an opening salvo in such.

They cost half a dollar or half a pound each which would be 250 or 500$.

I also have no intention of discussing my Aunt's personal affairs other than to say she was single. Do your own research on availability of loans to single women pre equal pay legislation. What you have now is not as it always has been.

Thommo

 

[geoffw]

Keeping it away from property vs shares, how did they perform against other shares over the same period?

If the sum invested originally was $1000, I make that out to be about 12.7% growth, compounded- an excellent performance, especially as dividentds were also paid. If the sum was $500, that would be about 14.5%. I'd guess that either way, it was rather much better than the average share.

 

[Sunfish]

Keeping it away from property vs shares, how did they perform against other shares over the same period?

If the sum invested originally was $1000, I make that out to be about 12.7% growth, compounded- an excellent performance, especially as dividentds were also paid. If the sum was $500, that would be about 14.5%. I'd guess that either way, it was rather much better than the average share.

You don't have enough data to come to such conclusions. eg Those 500 shares are now 51632 TEN shares and 2961 SBC shares. I have no accurate idea on how much she paid, if anything, for options or whether there was ever a share purchase plan instead of dividends.

I just posted what I thought was an up-lifting story.

Thommo

 

[geoffw]

Thommo

It was an excellent story. It's good to know that people can, and do, invest their money well.

I was just drawing conclusions based on data you gave on the price range you stated they were worth, and what you stated they were worth today. I was genuinely interested to know just HOW well they performed, hence my attempt to get a very rough figure.

My apologies if that was not a good thing to do.

 

[Andrew_A]

Watching carefully is the key

Interesting.

My Dad bought me 500 sarich shares for $5+ when they were "Long overdue for a take off" as he called it.

They remained in the bottom of the draw for some 10 years until I sold them off for around $0.50 a share I recall. And no dividends!