What Warren Buffett saw in Tom Murphy of Capital Cities/ABC
One of my favorite books is The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success. The Warren Buffett Way is another great book to read if you want to learn more about Tom Murphy and Capital Cities/ABC.
For those who aren’t familiar with Capital Cities, it started as a radio station in 1946 and later added TV broadcasting in 1953. Tom Murphy became the CEO of Capital Cities in 1966, at a time when the station only had five TV stations and four radio stations in small markets. CBS was the dominant media business at the time with more stations in much larger markets. Yet when Tom sold Capital Cities/ABC to Disney 30 years later, it was three times as valuable as CBS. How was this possible?
Warren Buffett's 1958 Letter: A Masterclass in Value Investing
Warren Buffett, one of the most successful investors of all time, has consistently emphasized the importance of identifying undervalued securities rather than attempting to forecast the general market. As he aptly stated:
"I make no attempt to forecast the general market - my efforts are devoted to finding undervalued securities. However, I do believe that widespread public belief in the inevitability of profits from investment in stocks will lead to eventual trouble. Should this occur, prices, but not intrinsic values in my opinion, of even undervalued securities can be expected to be substantially affected."