This issue I pass Heinz H. Biel to become the longest continuously running columnist in Forbes’ history–a personal, sacred goal. (David Dreman and Gary Shilling, both of whom I respect greatly, wrote here before me and do now, but Gary had many years where he didn’t at all and David writes only occasionally.) I write now in Heinz’s honor and of his sagacity.
History is a font of wisdom. So was Heinz. He wrote from Nov. 1, 1950, days before my birth, until Dec. 20, 1982, 18 months before my first blather on these pages. The Information Content of Financial Columns, a 1982 Wharton School study, centered on Heinz. It showed he added value in his picks (a little) and his analysis (more so). His results were inconsistent over time, as are everyone’s. But he beat the market–surely supporting his longevity.
Born in Germany in 1908, he got an economics Ph.D. and moved to America and Wall Street in 1933 as an analyst for a string of brokerage firms–first at Ladenburg Thalmann & Co. and ending with Janney Montgomery Scott. He came to Forbes via Joseph Goodman, our fifth-longest-running columnist. (I paid tribute to Goodman in the Aug. 13, 2007 issue.)
While less popular than Lucien Hooper, our third-longest-running regular (see my Dec. 16, 2013 column), Heinz was arguably our most savvy seer. More than not he stayed on the market’s right side, calling peaks like 1961’s and 1966’s biggie, simply by noting the “blind fervor with which the public has been jumping from one ‘hot stock’ to another”–as excess exuberance.
Cutely, he wouldn’t pick stocks “with fewer shares than Forbes had subscribers”–too small. He was early in global awareness and foresaw 1974’s global debacle as heavily derived from European problems. From the first he described markets as irrationally extreme. More than what he said to do, he detailed why–so you could weigh his logic. “Why” is always the toughest to get right! Luck sometimes gives “what.” He gave both well. As a Ph.D. economist, his last column ironically said that while the market isn’t always right, “the record of the economists … is worse.” Amen, brother!
Among his first three picks was Western Union (WU, 21), the telegram monarch–returning 15.2% annually for the next decade. Completely different now, it’s a global money-transfer firm–including for the vast underclass who must move money where today’s banks won’t. That will grow. Technology replaced telegrams but can’t replace this need–a wide, valuable protective moat. Yet it’s cheap at 11 times my 2017 earnings estimate, with a 2.9% dividend yield.
As Heinz liked WU then, he would love United Parcel Service (UPS, 109) now. Heavy infrastructure investment, pricing gains and a growing overseas franchise–all helping UPS exceed expectations. Its 2017 P/E is 17 on consensus estimates but just 15 times my guestimate–and 1.7 times sales, with a 2.85% dividend yield.
As Tesla’s halo now tarnishes, that should help brighten the status of Daimler (DAI, 69). DAI deserves fatter valuations anyway. Why? Executing well! New models well received! Unit volume rising! Its only real risks are in truck sales. It’s worth more than eight times my 2017 earnings estimate, 40% of sales and 5.2% dividend yield.
Money manager Ken Fisher’s latest book is Beat the Crowd: How You Can Out-Invest the Herd by Thinking Differently (John Wiley, 2015). Visit his home page at www.forbes.com/fisher.
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