Time Magazine reported, in 1953, that among U.S. mutual funds for the past decade one stood far above the rest.
Was it Philip Carret’s Pioneer Funds? No.
It was Investment Trust of Boston led by Ernest Henderson and Bob Moore.
The previous 10 year track record?
1,220% cumulative or ~30% compounded annually.
Compare that with the 262% return of the Dow Jones.
Who were these investors you’ve never heard of?
Ernest Henderson and Bob Moore started their open end mutual fund, originally called World Investment Trust, in 1931. Henderson and Moore had zero investment background. They were entrepreneurs.
From rebuilding Fords in their Harvard dormitory yard, to foreign exchange, to importing German binoculars and dogs, to manufacturing and selling radios. These guys spotted and seized opportunity after opportunity. They turned a $1,000 investment into a small fortune by 1929.
When the Great Depression hit, Henderson and Moore found an even better opportunity. Through their mutual fund they picked up real estate and publicly traded investment trusts at dirt cheap prices. Then as the market started to turn positive, they sold a portion of their securities and focused their capital and effort on one hotel they acquired - the Continental Hotel in Cambridge, MA. They would turn the Continental into the most profitable hotel in the U.S. during the depression. The Continental soon became the seed of the Sheraton Hotel chain.
Henderson and Moore continued to invest their fund’s capital in publicly traded securities, but they focused a greater deal of attention on their core holding Sheraton Corporation. Henderson and Moore had a vision. They properly spotted and rode the hotel chain wave. By the early 1950s, Henderson and Moore would grow Sheraton to more than 30 hotels. Sheraton Corp. was one of the largest winners for their fund; Its shares went from $0.60 to $11 by the time Investment Trust of Boston started to spin off a portion of Sheraton shares to their fund’s investors.
Ernest Henderson and Bob Moore would go on to turn their initial $1,000 investment in 1918 into ~$300 million in 1967.