http://www.raymondjames.com/inv_strat.htm"For the record, Henry Singleton was the Warren Buffet of that era. Singleton was the co-founder of Teledyne in 1960 and built it into one of the most profitable companies ever. He was the pioneer of company share repurchases, as well as the instigator of the purchase of deeply undervalued companies. He had an uncanny ability to resist fads, as well as criticism. His focus was on 1) defining his investment framework by following a strict discipline; and, 2) always doing his own work. Those focuses generated extraordinary results from ordinary businesses whereby Teledyne enjoyed 30%+ returns on equity, and EPS growth of greater than 1200% in a 10-year period. Teledyne’s businesses were diverse, but with exceptional returns on capital that included companies like offshore drilling units, auto parts, machine tools, electronic components, engines, Water Pik, etc. Singleton often stated, “After we acquire a business, we reflect on all aspects of that business. Our conclusion was that the key was cash flow.” He went on to note that investors should NOT focus on accounting profits, but free cash flow that can be redeployed in the business at a high rate of return to shareholders.Moreover, like Buffett, Singleton concentrated his investments with Litton, at one point making up 25% of his investment portfolio. He also tried to stay within his “circle of competence” by buying companies that paralleled Teledyne’s strengths. Further, Singleton liked to buy companies at 6x earnings (price/earnings), with an earnings yield of 17% (earnings/price), because such metrics provide a large margin of safety on the downside. After spending decades creating one of the world’s largest conglomerates, Singleton stepped down as CEO in 1986, but remained as Chairman, and decided to break the company into three pieces, believing it had become too big for a single manager to oversee.I've often thought that post-Buffett Berkshire might follow the Teledyne model and become a massive repurchaser of its own stock.There is a great story in Market Wizards about some guy who had been short a ton of calls on Teledyne the day the stock gapped up a massive amount.
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