Michael Price in 2010.
Ramin Talaie/Bloomberg
Famed value investor Michael F. Price died this past week at 70. Meryl Witmer, a general partner at Eagle Capital Partners, Barron’s Roundtable member, and Price protégé, penned this remembrance.
On my first day at Mutual Shares [part of Price’s former investment company] in 1985, Michael Price handed me a company’s annual report and a 10Q regulatory filing and asked me to look into the company and report back. I was 23, and had landed my dream job with him, so I dug right in. The next day I said I was ready to talk about it. He looked at me and said, deadpan, “I just want a number! What is it worth?”
I went back to my windowless office/prior storage room, just off the trading desk, and came up with a number after a few hours. Since Michael sat on the trading desk, I only had to peek out to opine, “It is worth $23 a share.” He stood up, came into my cubicle, and asked, still deadpan, but with a hint of amusement in his eyes, “How did you get $23?”
That was the beginning of my education from one of the all-time great investors. Always asking, “Where is it trading and what is it worth?” was the first of many lessons. A few that followed are:
• Evaluate businesses on merits and facts, not emotion. Fear and pessimism bring opportunities.
• Just quantify bad news and subtract it from the company’s value (example: Union Carbide’s Bhopal disaster).
• Rely on primary sources, dig deep, and don’t use sell-side reports. We even had rolls of nickels to copy documents at the bankruptcy court!
• Understand and assert your shareholder rights.
• Recognize the magic of a good management team to transform a company.
• His ahead-of-his-time “always follow a process. Not everything will work, but you will be way ahead.”
Beyond his impressive investing and mentorship talent, Michael was a bigger-than-life, extraordinary person. His generosity, intelligence, and fairness are legendary. I count working with Michael Price as one of the luckiest and most transformational periods of my life and remain grateful to him. My sincerest condolences to his family.
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