Among the articles in the current Barron's catching my eye is from 2004. That's right, twenty-oh-four. It's linked from Barron's piece on J&W Seligman, a money management firm dating back to the Civil War, selling out to Ameriprize Financial.
Seligman's most famous fund is Tri-Continental, the closed-end fund launched in August 1929 -- just three months before the crash. That's where Barron's links back to their October 2004 article on the closed-ends surviving the 1929 crash, including Tri-Continental:
According to the Securities and Exchange Commission, some 770 investment trusts, as they were then known, were spawned in the years leading up to the crash, including 265 in 1929 alone. That autumn, 75 years ago, Herbert Hoover sat in the White House, the Philadelphia Athletics captured the World Series and the Dow Jones Industrial Average began its relentless slide, culminating in the bloodbath of Black Tuesday, Oct. 29, 1929. By the time the Dow finally touched bottom in July 1932, it had plunged 89% from its September 1929 high.
Only 46 of the 770 investment trusts survived to 1932.
Among those around today (according to the article) are Central Securities, Adams Express and General American Investors, as well as Tri-Continental.
Starting in 1974 (another rough time), these and other closed-end fund managers formed what they've dubbed the Survivor's Club -- meeting for lunch every three months to discuss the common challenges and experiences of running these investment vehicles.
I've never owned any of the funds mentioned in this article. But I do think closed-ends can play a role in my portfolio. In the past, I've bought single country closed-ends with success (though my Korean one dived big time during the Asian crisis but eventually came back strong). My last experience was with Central Fund of Canada, which holds gold and silver bullion. I bought it earlier this decade when gold was going for about $270 an ounce. I sold it -- and too soon, as happens with us value players.
But back to the linked article. Reading about those surviving Depressions (and as they were known before that, Panics) can be instructive for us in the market today. With fortitude and maybe some luck, we can survive whatever Mr. Market has in store for this year. And the one after that. And the one after that.
Comments