The Intelligent Investor: The Definitive Book On Value part 45. The purpose of this book is to supply, in a form suitable for laymen, guidance in the adoption and execution of an investment policy. Comparatively little will be said here about the technique of analyzing securities; attention will be paid chiefly to investment principles and investors’ attitudes. We shall, however, provide a number of condensed comparisons of specific securities - chiefly in pairs appearing side by side in the New York Stock Exchange list in order to bring home in concrete fashion the important elements involved in specific choices of common stocks | 426 The Intelligent Investor The rise and fall of Ling-Temco-Vought can be summarized by setting forth condensed income accounts and balance-sheet items for five years between 1958 and 1970. This is done in Table 17-1. The first column shows the company s modest beginnings in 1958 when its sales were only 7 million. The next gives figures for 1960 the enterprise had grown twentyfold in only two years but it was still comparatively small. Then came the heyday years to 1967 and 1968 in which sales again grew twentyfold to billion with the debt figure expanding from 44 million to an awesome 1 653 million. In 1969 came new acquisitions a further huge increase in debt to a total of 1 865 million and the beginning of serious trouble. A large loss after extraordinary items was reported for the year the stock price declined from its 1967 high of 169 2 to a low of 24 the young genius was superseded as the head of the company. The 1970 results were even more dreadful. The enterprise reported a final net loss of close to 70 million the stock fell away to a low price of 7 and its largest bond issue was quoted at one time at a pitiable 15 cents on the dollar. The company s expansion policy was sharply reversed various of its important interests were placed on the market and some headway was made in reducing its mountainous obligations. The figures in our table speak so eloquently that few comments are called for. But here are some lic by becoming his own investment banker hawking prospectuses from a booth set up at the Texas State Fair. His success at that led him to acquire dozens of different companies almost always using LTV s stock to pay for them. The more companies LTV acquired the higher its stock went the higher its stock went the more companies it could afford to acquire. By 1969 LTV was the 14th biggest firm on the Fortune 500 list of major . corporations. And then as Graham shows the whole house of cards came crashing down. LTV Corp. now exclusively a .
