Is This The Next Warren Buffett?
A short while ago I was at a wedding in San Francisco when someone came up to me, clasped my hand in both of his, and began thanking me effusively....MORE
He then introduced me to his wife, who also began thanking me.
The reason? Just over two years ago this couple had read an article I had written for Smart Money magazine about a young, unknown college dropout in Salt Lake City called Allan Mecham (The text of that article can be read here). Mecham ran a tiny investment fund, I reported – and was shooting the lights out. After reading the article, the couple had investigated Mecham further, and had then invested a good chunk of their savings with him.
The result? They’ve doubled their money, or better. In two years. Last year alone Mecham was up 52%. After fees.
No wonder they were so happy.
(These numbers are all pretax, of course).
For the past thirty years everyone on Wall Street has been looking for the Holy Grail of money managers, the “next Warren Buffett.” It’s always dangerous to make these kinds of predictions, but if Allan Mecham – currently just in his mid-30s - isn’t the genuine article, he’s doing a remarkably good impression of it.
He’s been crushing his competitors, and the indexes, since launching his investment firm, Arlington Value Management, in the final days of 1999.
The attached chart shows how you would have fared if you had invested a notional $100 in his initial fund at the start of 2000, and then rolled that money over to his new flagship fund, AVM Ranger, when it launched in 2008. The chart also shows how you’d have fared over the same time if you’d invested in Vanguard’s Total Stock Market index fund, which tracks the total U.S. stock market, or Warren Buffett’s investment vehicle, Berkshire Hathaway, over the same time.
Yikes....
