Philip Carret, Legendary Investor, Dies at 101.
May 30, 1998
By EDWARD WYATT
NEW YORK -- Philip L. Carret, a founder of one of
the country's first mutual funds and a legendary
investor
who swapped investment ideas with Warren E. Buffett's
father half a century ago, died on Thursday at Mount
Vernon Hospital in Mount Vernon, N.Y., where he was
recovering from hip surgery. He was 101.
In an investment career that spanned eight decades and
encompassed dozens of cycles of bull and bear markets,
Carret (pronounced cuh-RAY) was known as a longtime
proponent of the "value" style of investing: buying
shares of companies with steadily growing earnings,
strong balance sheets and committed managers who
themselves owned a hefty stake in the company, and then
holding onto those investments for many years.
It was a style he employed successfully for 55 years as
manager of the Pioneer Fund, a mutual fund he founded
in 1928. Carret came upon the idea for an investment
pool four years earlier while working as a financial
reporter at the Boston News Bureau, whose publisher,
Clarence Barron, later lent his name to the financial
weekly Barron's, where Carret also worked.
Carret gathered $25,000 contributed by friends and
family to start the investment pool, which evolved into
its current incarnation as a mutual fund. The fund lost
money in the stock market crash of 1929 and the Great
Depression that followed, but from the mid-1930s
through his retirement as its manager in 1983, Carret
led the Pioneer Fund to some of the best long-term
returns in the fund industry.
Carret also displayed an equal passion for pursuits
that offered fewer financial rewards. After seeing his
first total solar eclipse in 1925 in Westerly, R.I., he
traveled fanatically around the globe to view 19 more,
the last in February in Barbados.
Viewing a solar eclipse was "a deeply religious
experience," Carret said in 1981, but he also
recognized that its attraction was somewhat mysterious
even to him. "I don't think I can explain it to any
rational person," he said.
Befitting a legacy of longevity, Philip Lord Carret was
born on Nov. 29, 1896, in Lynn, Mass., the only child
of a 51-year-old lawyer and a 39-year-old social
worker. After graduating from Harvard College in 1917
with a degree in chemistry, he enlisted in the Army
Signal Corps, a predecessor to the Air Force, where he
was trained to fly the Sopwith Camel airplane. He was
sent to France, but the war ended before he saw combat.
In 1922, he married Florence Elisabeth Osgood, who died
in 1986. He is survived by a son, Donald, of New York;
a daughter, Diane, of Pawling, N.Y.; 12 grandchildren
and 15 great-grandchildren. Another son, Gerard, died
of cancer in 1991 at age 70.
In 1963, after selling control of the company that
managed the Pioneer Fund, he founded Carret & Co.,
which oversaw investment portfolios for wealthy
individuals and institutions. He sold his stake in the
firm in 1988, but he continued to work there without
salary. Until this month, he commuted three days a week
from his home in Scarsdale, N.Y., to the Carret offices
in midtown Manhattan. Carret also remained a trustee of
the Pioneer mutual funds until his 100th birthday in
1996.
A trademark of his investing style was to buy a stock
only if he thought he could double his money, but to
wait patiently for that to happen. He scoffed at the
tendency of many younger mutual fund managers to hold a
stock for weeks, if not days, which he called "the
pinnacle of stupidity."
In the mid-1940s, Carret traveled to Omaha, where a
young stock broker named Howard Buffett recommended an
investment in Greif Brothers Corp., a barrel maker.
Carret bought the stock, which then traded for 68
cents, adjusted for subsequent stock splits. He held on
through the company's sometimes difficult transitions
to new packaging materials, like fiber and steel drums
and containers. At the end of last year, Carret & Co.
still owned 4 percent of Greif Brothers' class A
shares, which now trade at about $36.50.
Carret also has been a longstanding shareholder of
Berkshire Hathaway, the holding company now managed by
Warren E. Buffett, the son of Carret's stockbroker
friend. Carret usually traveled to Omaha for the
company's annual meeting, where the younger Buffett,
Berkshire's chairman, once introduced him as "one of my
heros."
Carret was the author of several investment books,
including "Buying a Bond," and "The Art of
Speculation," both originally written as a series of
articles for Barron's magazine and published as books
in 1924 and 1930, respectively. Both books have been
reissued recently as commemorative editions, and in
1991, Fraser Publishing Co. of Burlington, Vt.,
released "A Money Mind at Ninety," an anecdotal
autobiography.
Its title notwithstanding, "The Art of Speculation" is
considered a classic of the value style of investing.
But Carret was not above investing for shorter-term
gains. In 1939, drawing on his grandfather's experience
as owner of a sugar plantation in Trinidad, Carret
bought shares of a Cuban sugar company, expecting that
the price of sugar would soar during wartime. He sold
the shares, purchased for $1.75 each, for $65 to $200
apiece in the 1940s.
Last year, Carret, as one of Harvard's oldest living
graduates, led the annual alumni procession at
commencement exercises, and he had planned to attend
this year's event on June 4 even after his recent
accident. In a May 11 letter to John F. Cogan Jr., a
longtime friend and chairman of the Pioneer Group,
Carret wrote, "I am confined to quarters and feasting
on antibiotics, but this phase will soon be over and I
shall lunge vigorously into the alien world of
exercise, for I am determined to be in Cambridge for
commencement day."
Copyright 1998 The New York Times Company |
