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Route to an $8 Million Portfolio Started With Frugal Living

An old postcard shows the gas station in Brattleboro, Vt., where Ronald Read worked for many years.
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An old postcard shows the gas station in Brattleboro, Vt., where Ronald Read worked for many years.


Photo:

Estate of Ronald Read

By

Anna Prior

March 19, 2015 11:52 a.m. ET

Ronald Read may have spent years pumping gas, but he was even more adept at pumping up his portfolio.

Mr. Read, a longtime resident of Brattleboro, Vt., died in June at the age of 92. His friends were shocked when they learned his estate was valued at almost $8 million. Long widowed and with two stepchildren, he left most of his money to a local hospital and library.

So how did he manage to pull it off? Besides being a good stock picker, he displayed remarkable frugality and patience—which gave him many years of compounded growth.

Ronald Read
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Ronald Read


Photo:

Estate of Ronald Read

He lived modestly, working as a maintenance worker and janitor at a J.C. Penney store after a long stint at a service station that was owned in part by his brother. Those who knew him talk of how he at times used safety pins to hold his coat together and sometimes parked his 2007 Toyota Yaris far from where he was going to avoid having to feed the parking meter.

“If he could save a penny, he would,” says Bridget Bokum, a senior client associate at the Wells Fargo Advisors office in Brattleboro, and who is assisting with his estate.

When he died, Mr. Read left behind a five-inch-thick stack of stock certificates in a safe-deposit box. The shares represented the bulk of his estate, and his executor and Wells Fargo still are working to determine their exact worth.

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“We all knew he was into the stock market, but not to this extent,” says Claire Johns, who worked with Mr. Read at J.C. Penney and is executor of his estate.

Mr. Read owned at least 95 stocks at the time of his death, many of which he had held for years, if not decades. They were spread across a variety of sectors, including railroads, utility companies, banks, health care, telecom and consumer products. He avoided technology stocks.

Friends say Mr. Read typically bought shares of companies he was familiar with and those that paid out hefty dividends. When dividend checks came in the mail, he plowed the money back into more shares, Ms. Bokum says.

Among his longtime holdings were blue-chip stalwarts such as Procter & Gamble,J.P. Morgan Chase,General Electric and Dow Chemical. When he died, he also had large stakes in J.M. Smucker,CVS Health and Johnson & Johnson.

Physically holding stock certificates became passé for investors more than a decade ago, but Mr. Read held onto his.

In recent years, as investing shifted to electronic platforms, firms began imposing fees for ordering the actual certificates. So Mr. Read turned to a more thrifty option, agreeing to have his purchases held by the official record-keeper for share ownership—known as a transfer agent—that each public company employs. That likely saved him from $25 to several hundred dollars per transaction, says Peter Duggan, a senior vice president at transfer agent Computershare.

By buying shares this way, he likely also paid low fees, even compared with those charged now by many online brokerages for do-it-yourself investors. The average fee for buying shares in a so-called direct-stock purchase program is about $3 at Computershare, Mr. Duggan says.

Ronald Read’s longtime home in Brattleboro, Vt., as seen in a 1960s family photo.
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Ronald Read’s longtime home in Brattleboro, Vt., as seen in a 1960s family photo.


Photo:

Estate of Ronald Read


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Mr. Read didn’t always hit home runs. His portfolio included shares of Lehman Brothers Holdings, the financial firm that collapsed in 2008, for example. But he was willing to stick with his picks for many, many years.

He bought 39 shares of Pacific Gas & Electric on Jan. 13, 1959, for example, Ms. Bokum says. The shares were worth about $2,380 then, according to a PG&E spokesman. They were worth about $10,735 at his death, taking into account subsequent stock splits of 2-for-1 and 3-for-1 that increased the share total to 234.

When he died, he owned 578 shares in all of PG&E, worth just over $26,500, some of which he may have purchased with the dividend payments the West Coast utility made to shareholders.

In unwinding Mr. Read’s holdings, Ms. Bokum has processed 328 stock-ownership certificates from 87 different companies—now 76 companies after recapitalizations and mergers—and has so far tracked down investments in 19 other companies held directly at transfer agents.

While there were a few “bad” certificates—shares that were, for example, no longer valid because they had later been deposited electronically—most were in fine order, she says. Mr. Read “was impeccable about what he did. He was organized and he took care of them,” she says.

Mr. Read relied in part on print publications for his investment research and, while he subscribed to The Wall Street Journal and Barron’s, he also made use of the local library. He also chatted about investing with those he knew, including a neighbor who also was his Wells Fargo adviser in Brattleboro. He regularly sought advice from this adviser and kept a brokerage account at the firm, but it held only a small portion of his investments, according to Mr. Read’s attorney, Laurie Rowell.

For today’s investor, using Mr. Read’s exact approach could be somewhat cumbersome. The fees now charged for paper certificates make that kind of trading expensive, and having purchases held by a transfer agent puts an added burden of research and record-keeping on the investor. Most low-cost investors these days favor the ease of online trading platforms and the ready accessibility of research on the Internet.

Of course today’s investor likely has a computer. To Mr. Read’s way of thinking, “a computer would have been wasteful,” Ms. Bokum says.

Write to Anna Prior at [email protected]

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Route to an $8 Million Portfolio Started With Frugal Living Reviewed by on . ENLARGE An old postcard shows the gas station in Brattleboro, Vt., where Ronald Read worked for many years. Photo: Estate of Ronald Read By Anna Prior Anna Prio ENLARGE An old postcard shows the gas station in Brattleboro, Vt., where Ronald Read worked for many years. Photo: Estate of Ronald Read By Anna Prior Anna Prio Rating:
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