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- Wilmot Kidd’s Central Securities has returned an annualized 14.5% over 47 years.
- Like Warren Buffett, Kidd buys for the long term, concentrates his portfolio, and keeps costs low.
- Kidd’s winners include a $700,000 bet on Plymouth Rock in 1982, now worth an estimated $293 million.
A little-known investor has rivaled Warren Buffett’s track record by pulling from the Berkshire Hathaway CEO’s playbook: holding stocks for the long term, concentrating his portfolio, keeping costs low, and striking private deals.
Wilmot Kidd took over Central Securities in 1974, when the closed-end fund had $34 million in assets under management, Forbes reported. Kidd, now 80 years old and set to retire later this month, has grown that figure to $1.3 billion as of September 30 this year — a 38-fold increase in under 48 years.
Central has outperformed Buffett’s Berkshire over the past two decades, and the S&P 500 index over the past 25, 30, and 40 years, The Wall Street Journal reported. The fund has returned an annualized 14.5% with dividends reinvested since Kidd took over, trumping an 11.7% return for the S&P 500 over the same period, the Journal said.
Kidd’s success largely reflects his willingness to hold stocks for decades. For example, Central spent about $6 million in 1987 for a stake in Analog Devices worth $75 million as of September 30 this year, Securities and Exchange Commission filings show.
Moreover, Central owned a chunk of Murphy Oil for nearly 45 years — between 1974 and 2018 — and continues to hold Intel stock that it first bought in 1986.
Kidd has also emulated Buffett’s strategy of investing in private companies. Central’s most-valuable holding is an estimated $293 million stake in Plymouth Rock, an unlisted auto and property insurer. The fund spent only $700,000 to establish that position in 1982, SEC filings show.
Like Buffett, Kidd has bet big on his favorite stocks. Central only had 33 holdings at the end of September, and its 10 biggest positions were worth a combined $755 million — 61% of its portfolio’s total value. Plymouth Rock alone made up 24%.
Kidd has also joined Buffett in minimizing costs to maximize gains for his backers. Central’s expenses are running at 0.54% this year, well below the average percentage for closed-end or mutual funds, the WSJ said.
“We’re in business to make money for the stockholders, not off the stockholders,” Kidd told the newspaper.
Kidd hasn’t just embraced Buffett’s investing strategy; he’s also echoed the Berkshire chief’s humility about the amount of luck required for investing success.
“Skill is just recognizing when you’ve gotten lucky,” Kidd told the Journal. The best investors also double down when they strike gold, and excel at “holding on to what you have and not chickening out,” he added.