Walter Bagehot: Company was ServiceMaster. I followed Mr. Buffett into it late '70's, early '80's (if memory serves). Added more periodically as performance (company and stock) improved. Company earned great returns with little capital expenditures. The company dominated a fragmented market.
Eventually combo of the business not having a sustainable competitive advantage and poor management decisions (acquisitions, hubris, etc.) led to earnings losses. Not sure how I ended up by the time I sold: I'll say not so great-- giving up gains as stock fell; and as stock faltered my holding it tied up capital that could've been employed elsewhere.
Buffett exited too, possibly cutting his position way before me. If Buffett originally bought partly because he had faith in the key guy who built the company, well that guy retired and the new ceo and his new team essentially failed the stockholders. Perhaps Buffett, with his access to management, saw this quicker than small, outside investors.
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I don't follow Imperial Oil anymore. At one time, I believed XOM, the majority shareholder, might acquire the remaining outstanding shares. That doesn't seem likely to me now, esp. with Exxon recently having made a big gas acquisition. I hold a few shares of XOM (a trade gone wrong). My interest now is on small e&p companies which a) can more easily or likely replace their reserves than big integrated oilers, and/or b) which trade below nav. |
