We are delighted to share with you our audio program on Arnold Van Den Berg, founder and chief executive officer of Century Management, part of the Great Investors podcast by Latticework. Each program in the series is an hour-long narrated profile of one investor, drawn from MOI Global’s archive of interviews and conference sessions and from the investor’s published work. We make these programs so that members can learn how a great investor thinks and works, through the decisions he made and what he said about them at the time. Your feedback on what was useful, and on which investors to cover next, shapes what we produce. We start with who he is:
Arnold Van Den Berg was born in Amsterdam, to parents who had fled the Nazis to Holland. His parents went into hiding, and a young woman from the Dutch underground carried him through the German lines to an orphanage. They were caught, taken to Westerbork and then to Auschwitz, and both survived. The family came to the United States in 1949. He sold insurance, then got his mutual fund license six months before the market peaked. In 1974, about three months before the market reached its bottom, he opened his firm in Century City, which gave it its name. He is the founder and chief executive officer of Century Management, in Austin, Texas.
He built his method out of a shoebox. Whenever he read about an acquisition, he cut out the article, and on the weekend he ran every ratio. The file showed him what a sophisticated buyer would pay, and about 80 percent of that became his sell point. He gave MOI Global the rule in Omaha in May 2014. “I had the private market value, I have my worst case, and then I buy it no more than 20% above the worst case, and that gives me my five to one.” He says none of it needs more than fourth grade math.
He learned visualization on a rope, by accident. He watched the city champion from Venice High School shoot up the rope, replayed it in his mind, and practiced the move in front of the mirror every night. He once wrote his wife, Eileen, a check for $250,000, when he was $20,000 in debt and grossing $8,000 a year. He says he has a hundred rules of thumb, and that his favorite milestone is an industry eight years into a bear market. The patience is in oil: in June 2021 he said the firm had bought early, been wrong for two or three years, and lost clients before the price went from $15 to $60.
The program opens in 1987, with 50 percent of the portfolio in cash, clients leaving, and, by his account, the crash two weeks later. It follows his mother’s two kinds of people, and the market she made in garlic in Auschwitz. It covers the slide from 1969 to 1974 and the funds that did well, all run by people who believed in Benjamin Graham. It has his father’s death march and the one thought he kept on it, to move that leg. It has the prospect who counted four stocks where he had claimed three, and closed the account on the third call. It ends with the seismologist’s map, the move to Austin, and the wall of photographs.
Arnold spoke at MOI Global’s Latticework summit in New York in 2019. He said that investment counselors are wrong a lot of the time. MOI Global, the community behind the Best Ideas conference and the Latticework summit, sat down with him in Omaha in May 2014. On November 18, 2014, at the offices of Century Management in Austin, the whole conversation went to using the subconscious mind in business. For more, see Arnold Van Den Berg: Five Decades of Investing and Life Lessons, which replays a segment of the 2019 Latticework session.
The complete program runs fifty-three minutes.
Get the next program the day it comes out. Great Investors is on Apple, Spotify, and YouTube (or add the podcast feed to any app).
Transcript
The transcript is available for download to members only.
