Imagine if you could have bought a loaf of bread in 1932 for 7 cents. That 7 cents would be $3.09 today would be a gain of 4,414%. Of course, you could not even freeze it that long. That is also the problem with many who sell investments. Gold was $20.67 in 1932 so that has been a gain of 8990%. On the other hand, the Dow Jones Industrials bottomed in 1932 at 40.56. That has been a gain of 83,992%.
In 1955, the Dreyfus Fund was established by a New York stockbroker named Jack J. Dreyfus, Jr. (1913–2009) It was Dreyfus who acquired the open-end Nesbett Fund, which had $2.3 million in assets. This ambitious stockbroker renamed the fund bestowing his own family name upon it which would become a household word in the decades ahead. By year end, the assets grew to $5.6 million as 1955 drew to a close. The best decision Dreyfus made was to buy 400 shares of an unlisted stock. That “sleeper” stock was Polaroid which he bought for $31 7/8. Dreyfus would watch this single purchase rise to $6,372 per share – not counting splits – in the years ahead. This outstanding performance almost single-handedly led to the mutual fund boom in the 1960s.
Sometimes a new technology paves the way for something that changes the game.
