Vulcan sold Apple at a split-adjusted $33, missing a massive run
Jim Falbe · Jim Falbe – Modern Value Investing at Saguaro (Capital Allocators, EP.320) · Jun 8, 2023 · at 37:40
Jim Falbe, former partner at Vulcan Value Partners and founder of Saguaro Capital, explains the danger of selling great compounders early based on static fair value estimates.
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“When I first started at Vulcan, we owned Apple, and at the time, I mean, it was just unbelievably cheap. It was like, and the iPhone that they'd released that year was not as popular as the Samsung Galaxy, which is hard to believe today, but everybody was kind of poo-pooing it, and we had a multiple on that thing of like, 10 times, and it was incredibly discounted, even at a 10 times multiple. We owned it, and we'd go to meeting after meeting where people say, what's wrong with you guys? How can you be so dumb that you own Apple? And lo and behold, over the next 18 months, the stock actually doubled. And we were so excited, patted ourselves on the back and hit the fair value estimate, and we exited the position. Well, you know, on a split adjusted basis, the stock was 33 dollars at that point in time. Today, it's almost 180.”
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