Mundy's Moment: Margins of safety

Coping with changing investment attitudes

In the late 1950s, Sandborn Maps was struggling. Operating profits fell by more than 80% over the previous 20 years and the share price followed, falling from $110 to $45.

A market cap of $4.7m for its $100,000 of operating profits might have looked generous, had it not been for the $7m of marketable securities the company also held.  Investec's Mundy: I would say we are only half way through the global financial crisis Young Warren Buffett began to buy Sanborn shares in 1958 and encouraged his friends and family to do the same. With a sufficiently large holding he won a seat on the board and agitated for change. Not all the other directors shared Buffett's enthusiasm for a new direction, so he and his pals continued to buy. This left him with eno...