If you had invested 1 $ with Tom Murphy as he became CEO of Capital Cities in 1966, that 1 $ would have been worth $204 by 1995, a remarkable 20% compounded return.
A bartender at one of the management retreats made a handsome return by buying Capital Cities stock in the 1970s.
When an executive later asked why he had made the investment, the bartender replied, “I’ve worked at a lot of corporate events over the years, but Capital Cities was the only company where you couldn’t tell who the bosses were.”
One reply on “The Bartender Test for Stock Selection”
The Outsiders is a fantastic book on understanding management and how capital allocation skills separates the best managers from the average.