This is the Value Investor podcast with Tracy Rinek, All Things Value All the Time. Welcome back, Value Investors. So I am having a little trouble with my throat this week. It is January, 2026 and things are going around, so bear with me.
But this is a very important podcast this week, so I want to make sure I did it because I am updating a story that I covered on the podcast. I think it was about four years ago during the pandemic. My family friend, Ed, who is a successful stock investor. You may remember him if you've listened to the podcast for a number of years.
So back then, I believe he was 92. 92 years old, had been investing for a long time. And we basically kind of covered what worked for him, what didn't, and how he was able to accumulate a vast amount of fortune after his retirement, age 60 in 1990. Now I'm sure some of you tuned to this podcast because of the title, Lessons from a Rich 95-Year-Old Stock Investor.
And it's the Value Investor podcast. I'm sure you're thinking, is she talking about Warren Buffett in this podcast? That has to be who it is. And I am going to talk about Warren Buffett because as I was preparing for this podcast, I realized that Ed's investing journey basically mapped what Warren Buffett did in different capacities, but there is lessons from both of their lives of investing that we can take as value investors from both of them.
And they are both 95-years-old here in 2026. Ed unfortunately has just passed away, but I promised his family that I would do an update on this podcast about what his portfolio was like a couple of years after we last talked about him. So if you recall, or if you're new here, the family-friend, Ed, retired at age 60 in 1990, it seems like a long time ago, right? 36 years ago.
And he had $50,000, including some of it in Sherwin-Williams stock. So he had worked at Sherwin-Williams. He got the stock when he retired. And he always enjoyed investing and read the Wall Street Journal.
We worked together briefly when I was in my early 20s, and we would both sit there during our lunch hour. We had the same office. And this was after he retired from Sherwin-Williams. This was like a side gig for him so that he didn't drive his wife crazy, but we both worked for my father.
And we would both sit there and read the Wall Street Journal and talk about what was going on in the business world. And so he got a lot of his ideas from the Wall Street Journal. And then later, he did start following Warren Buffett's stock moves. And that's what I talked about on the last podcast with him, that he enjoyed what Buffett bought because that's what a lot of value investors do, or even non-value investors, that they were zeroing in on Buffett's investing genius in the equity portfolio and buying what he bought and selling when he sold.
And it worked out well for Ed. So I want to go through some top lessons, and I'll get more into his story, and as well as Buffett's as I go along. But these lessons are good for all of us. And it's a good reminder here as we celebrate these longtime investors who had been in stocks not just 36 years for Ed, but 60, 70, even 80 plus years for Warren Buffett.
He bought us for stock when he was like 11 or 12 years old. So we can learn a lot from both of these gentlemen. So the first lesson is it's never too late. I get this question a lot from investors.
Oh, I'm 50. I've never been in stocks. Is it too late for me to put some money in? Either your IRA, the Roth, your 401k, just the Robinhood account, a regular brokerage account, is it too late?
And both of their stories, I would argue, no, it's not too late. So again, Ed didn't invest this $50,000 till he retired at age 60. And Buffett, he was going from age 12, but he didn't buy some of his biggest investments, like Apple. He bought Apple shares when he was 85.
And look what it still did for the Berkshire Hathaway portfolio. So the first lesson is it's not too late. And all you have to really do is just start. Everybody starts somewhere.
You don't need a lot of money anymore to do so like Ed and Buffett needed more money to open up a brokerage account. You can open with very little money and you can put in very little money in almost all these accounts now. So there's really nothing stopping you from just starting out and making a go of it. And one of the things you do have to do is stay in it.
Both of these investors did stay in stocks for many years. So then we're going to get to the second lesson that does feed on the first one. And that is both of these investors benefited from the miracles of compounding. And there's some people call it like, I've heard it, the eighth wonder of the world is compounding.
And I recently watched the CNBC interview that Becky Quick did, the documentary on Warren Buffett's career in his life, the two-hour show that they just showed. I recommend watching it. It's very well done. She also interviews his three children.
And in it, Buffett talks again about the miracles of compounding. And he talks about how if he had died in his 60s around the same age as his father had, that he wouldn't be worth $150 billion because he had all those extra years to compound. Now what does it mean to compound? This is going to go very basic.
And I know some of you are going to be like, Tracy, we know this, we know how it works, but a lot of people really don't know how it works. So let's just say you have a million dollars and you're able to get a 7% return. You should be able to double that million dollars in 10 years at 7%. Let's just say you can do that.
So suddenly 10 more years from now, your million dollars is now $2 million. That sounds good. But if you're still getting the 7% again for the next 10 years, so this is over a 20 years span that now $2 million will double again. And you're going to get $4 million sitting there.
That sounds pretty good. So you went from $1 million to $4 million in 20 years. But this is where after the 20 year mark, it starts to really work its magic. And the longer you're into the compounding, even more magic ensues.
So after the 20 years, you get another 7% a year for 10 more years. You were at $4 million and now you're at $8. So after 30 years, you've grown that $1 million to $8 million without putting another dime in. And this is why time is your friend.
And that showed up with both Ed and Buffett. So Buffett first became a billionaire at, I believe it was age 63. It was in his early 60s. So that's just $1 billion.
And now here in 2026 at age 95, his shares in Berkshire are worth about $150 billion. Now it might be a little more now. I haven't looked recently. Let's just call it 150.
So he has grown his wealth. Almost all of it, really, since age 63. And that is from the power of compounding. It's just picking up steam once he gets to those levels and he's adding on a decade after decade after decade.
It did help that he's not getting 7%. He was getting like 20, which is incredible. But even if he was getting 7, he would still be getting many billions of dollars sitting there from the power of compounding those extra couple decades. And the same with Ed.
He was able to add on 35 more years of investing onto that initial $50,000. And while the stock market had some ups in those, the 1990s were fantastic. And then not so good for the next 13 years. But in recent years, it's returned to a more secular bull market with very nice returns in the S&P 500 over 10%.
And so that compounding just is picking up steam again. And remember, you can get this with just small amounts. But this is the power of compounding. If you were to put $500 a month into stocks or whatever it is, but you're getting 7% a year, you would have a million dollars in 27 years.
But that doesn't seem like that much money to put in per month to get that outcome. Yes, it's taking you 27 years because you're only putting in the 500. But that compounding is really picking up steam in the scenario the longer you're getting towards that 30 year mark. So this is the miracle of compounding.
And again, Buffett talked about this in his interview with Becky Quik and about how he had all these plans for what his kids could do with the money that he was leaving them, the Berkshire shares, and they were to distribute it through their foundations to charities and all of that. But he did not anticipate $150 billion would have to be distributed because he always assumed he may pass on in his 60s, maybe his 70s. And even though he is a believer in the power of compounding and he talks about it all the time, he's seeing it in real time now in his own business at Berkshire itself sitting on $350 billion in cash now and also in his own personal net worth. So miracle of compounding for any long term investor, don't underestimate it.
It starts to take over to do the business of growing your wealth when you're not even putting any more money in. It's not like Warren Buffett is buying more Berkshire Hathaway shares all these years. It's the power of compounding. Okay, the third lesson we can learn from both of them is sometimes you get lucky in stack investing.
It is can be lucky. With Buffett, he managed to go to Geico Insurance early in his career, knock on the door, go in and poke around, like what he saw ends up buying one of the top insurance companies of the last 60 years, right? But what if he didn't go into Geico and knock on that door? That was his own research and skills, but it's also kind of lucky he ended up in one that was so tremendous.
Ed went to work in the 1970s at a paint company called Sherwin Williams. Who knew that it would still be operating in 2026? He didn't when he went there. It was a good company, painting coatings in the 1970s, but it went on to buy out many competitors and become one of the last men standing in the paint industry.
And that is lucky. He didn't go to work for Bethlehem Steel or Zenith or Sears or Kmart or later on, Blackbuster Video. He didn't work for an industry that got innovated out of business by something else. He didn't work for one that had management problems and ended up going under.
So that is the luck. And sometimes we just need that and you can't plan for it. They both did get lucky. Most companies, by the way, that go IPO, that go public, they fail to make it even 50 years, let alone Sherwin Williams founded in 1866, 160 years.
So I looked at the chart for Sherwin Williams going back. I did an alt chart on Stacks.com. So it went back to like November 2nd, 1970. We have the data going back F.R.
and I couldn't compare it to the S&P 500 necessarily. I didn't want to, but I did want to compare it to a pure, not in paints, but a pure company that has managed to survive for like a hundred years as well. That's been around a long time too. So I chose Exxon because that's a winner in its industry as well.
And Sherwin Williams in that time going back to 1970 through January 14th, 2026. The shares are up 88,723%. That is lucky. That is extraordinary.
It's a lottery stock. But if you managed to be in it as Ed was, you reaped a lot of rewards. Exxon, by the way, was a good performer, but it was only up 5,677% in that same time period. So you're not as much in a lottery stock, even though Exxon, just this week, it knew all time high.
And so both good performers, but one is going to be much more extraordinary. And that's just kind of luck. So the third lesson is, yeah, you're going to need some luck along the way. Number four, lesson, patience, and discipline.
Neither one ever panicked in market sell-offs. I asked Ed this specifically about the Great Recession. He had been retired for almost 20 years at that point. So he was nearing 80.
That could be a little scary to see a huge decline in your stock portfolio, even though he wasn't living in a mansion or anything of that sort. And he had all of his costs covered. For most of us investors, it's still pretty difficult to stay in the stock market when you're getting a 40% or 50% pullback in the major indexes. But Ed never panicked.
He was following Buffett at that time. We know Buffett didn't panic. Then he looked for opportunities and found them. And that turned out well going forward once we had come out of that.
So both of these men were long-term investors and Ed 35 years here into the end of his life. Both also on the patience and discipline side had no trouble getting rid of their losers. They both did recognize there would be losers. You're not going to get all the lottery stocks.
You're just not. So good investors know if something isn't working like IBM with Warren Buffett. He even said when he sold it, it's not doing what I thought it was going to do. So even taking a loss and it was what?
A couple billion dollars. Nothing to shrug at. He felt like he needed to get out of it and redeploy the money and he redeployed it into Apple and the rest is history. Now Ed bought a general electric back during the, I think during the financial crisis or maybe even just before it was well regarded company for decades of very good performer.
But GE ran into all those troubles during the recession. And so he had loser in the stock. But his investments were not in a retirement account. They were just a regular brokerage account.
And he offset winners with the loser in GE and would sell off losing shares to counter it over the years. So this is just the patience and the discipline and realizing what's working and what's not. So that's a good lesson for all investors. Lesson number five, it doesn't take a lottery stock like a Sherwin Williams or an Nvidia in today's world would be an Nvidia.
What if you just got 10% a year? What if you just got the S&P 500 over 30 or 40 years? You'd be pretty rich. And I took a look at Sherwin Williams over the last five years because it's fun to go back to 1970 and be like, it's up 88,000%.
But let's be realistic. Most of us have not been invested for decades and decades in most stocks. The average length of time people own a stock now is less than three months. And I think many people would be challenged to own a stock even for three years, let alone five or 10 or 20 or 40.
So I wanted to look at the five year chart for Sherwin Williams. It got pretty expensive there during the pandemic on a PE basis. And so as much as I actually do like the company and I've talked about it on various podcasts over the years, including these ones I've done on Ed's investments, it was just a little too pricey. Even today, it's still trading at 28 times forward with a peg of 4.4.
So that's still pretty pricey. 2025, the paints and coatings because the autos aren't good. They're seeing only earnings growth of 0.2%, revenue growth of just 2%. They've had layoffs, then we have tariffs on a lot of things.
And so there's a lot of challenges facing peak and coatings. 2026, it looks a little bit better. Revenue up 4.9, earnings up 10.9. So we'll see if we get that.
But the shares are still just a little too pricey for me. They come off of their all-time highs in 2024, but not enough for me as a value investor. But over the last five years, they're up 47.2%. That is annualized 9.4.
I know it's common to think, oh, we have to get 20 or 50% a year, and that's good. And we have stocks like Google doing 200% in five years. But this is 9.4 over five years, and they do pay a dividend yielding 0.9%. So when you add on almost another whole percent, you're at 10.4 on your return.
That's pretty solid. And if you have your portfolio on autopilot and you're getting 10.4, you can get very rich over the years compounding that 10.4. So still very good returns on Sherwin Williams. So you don't have to have an NVIDIA.
If you get an NVIDIA, fantastic. You all seek it out, but you don't have to have it to have a very successful stock portfolio and to build your wealth. So that's number five. You don't have to have the NVIDIA.
Another stock that Ed has bought over the years because Warren Buffett bought it was Bank of America. So he dove in. That was a little bit after the financial crisis. I want to say 2010 or 2011 is when Buffett bought Bank of America at one point.
It was the second or third largest holding in the equity portfolio. He has sold off a lot of his bank stocks over the last couple of years. Bank of America, he still is in, but he has sold some shares, but still pretty prominent. It's stopped paying a dividend after the financial crisis, but it has resumed it again.
The dividend right now is about 2%. That's not too shabby. And just looking up over the last five years, if you'd own Bank of America, it's up 57.7%. That's without the dividend included.
That dividend is 2%. So that's 11.5% annualized and then adding on the two and you're getting 13.5 over the last five years. So that's pretty impressive above the average of the S&P 500 historically, but we know the S&P 500 hasn't done even better than that over the last five years. But again, this just goes to show you to be successful.
You don't have to get a thousand percent over the last five years. Slow and steady can in the race and you don't have to have the mega lottery stocks to have a great portfolio. And then number six lesson, but this is really just a tip from Ed from the prior podcast. I asked him what advice he would have for younger investors, given everything he's seen over all those years.
And one of his big things was his money was in a regular brokerage account because it went back to 1990. There weren't as many options of like there was no Roth IRA yet and there was no Robin Hood. There wasn't even E trade or anything yet. And it was just a lot harder to invest.
He did have a regular brokerage account, obviously, but he would advise people to use like Roth IRA accounts or Roth 401k accounts where you can grow the money tax free and you pay no taxes on withdrawing it. That's the best of both worlds. So he encouraged young people to do that. So let's finish up with some numbers.
So we now know Buffett is at about $150 billion. After hitting that billion dollar mark about what was it 32 years ago, 32 years ago? Well, Ed started 35 years ago with $50,000. And when I last spoke to him in about three or four years ago, he was at $5 million in that account.
He did go more conservative in the years after I chatted with him because we did have a chat a couple of months ago. And so he was in not like an all equity portfolio anymore. He was in some cash and some bonds and very conservative investments, which is good, given his age and what his goals for the money were. But even still over that time period because stocks have done well, he was then at $7 million on this portfolio.
So Ed I want to describe was in the military, he served in the Korean War, he didn't go to college, he did have some training. However, he became a real estate agent on the side, but he would have considered himself mostly middle class. But because he took a chance in the stock market, he had 35 years to compound it in some very good bull markets. He got lucky in one of his holdings that he happened to work for Sherwin Williams and get some stock and keep it in Sherwin Williams a lot of years.
And it did well. He ended up with $7 million at the end. And Ed's story kind of reminds me of some of those stories we see when like the one in, I think it was Vermont where they're like this local school janitor died and left $8 million to the city to build a library. And he never made more than XYZ amount of money, but he bought some stocks and held them for 40 or 50 years.
And then he made the gift at the end. So there's a lot of lessons to be learned from long living investors and really power of compounding does a lot of the work for you. So the biggest lesson of all from all of Buffett's experience and Ed's experience is start as early as you can. Be diverse in your portfolio, have patience and it's a long game and stay invested.
That's really the keys to growing this big portfolio. But I want to add one other thing that I noticed when I was watching the Buffett documentary. And when he was talking about his kids giving away all that money and that he never really expected it to be that much. Because that's a lot of responsibility on his three kids who are in their 60s and 70s now themselves and to be in charge of that amount of wealth is a lot as well.
But is that no one can take it with you. So use your money, half a goal, live it up, is what I would say. For some people the goal is to get to those levels. I think with Buffett it definitely was.
Ed enjoyed growing his portfolio so that was part of his goal and it was to be financially secure for him and his wife who's still with us at age 93. And so they could live a solid years in their golden years and then to leave it to their children or charities or whatever goals you have for the money. But enjoy the money, have the goals because again you can't take it with you. So let me recap some of the tickers we talked about.
This wasn't really a podcast where we're getting stock picks. But I did talk about Sherwin Williams, ticker SHW, Bank of America is another one that both Ed and Buffett both own. Bank of America is trading with a Ford P of 12.5. It has had a big run and the ticker is BAC on Bank of America.
Price of book is at 1.4. So you can't really look at P so much with the banks as I've mentioned before. So the Bank of America let's say buy at one on the price to book and sell it to. So 1.4, it's closer to the one, it's fairly cheap.
And a little nervous when it goes over to, which is like JP Morgan right now. So I consider JP Morgan Chase to be expensive. So I'm not super thrilled with the more expensive banks right now. But Bank of America is still fairly attractive.
Berkshire Hathaway, we talked about them. I would include them here, ticker BRK.B from the B shares.A for the A shares. The B shares are trading at $494. They've been just sideways for the last year, basically ever since Buffett announced that he was stepping down as CEO.
So he has stepped down. Well, it's now running things at Berkshire Hathaway. Nothing has been done with the money as far as we know, at least not yet. And we'll see where things develop at Berkshire Hathaway, but they are sitting on that huge $350 billion and growing cash for there.
Ford P is at $24.8. And so it hasn't been cheap for a while. And even Berkshire under Buffett was not buying back its own shares because it was too expensive. So it's also in industries that are struggling at the moment, a lot in manufacturing.
Energy is not real good on the earnings side. And those will turn around eventually, but it is impacting earnings right now. So keep all that in mind with Berkshire Hathaway, ticker BRK.B. And we'll be watching to see what happens over the next decade past Buffett on that one.
We also mentioned Apple, AAPL, I mentioned IBM. IBM is the ticker, I as an I B as an boy, Amazon Mary. Exxon is X, O, Amazon Mary if you're interested in big oil. And it is breaking out to new highs.
But the earnings look terrible on the oils right now, but those will turn around at some point, as I mentioned earlier. So we'll see. But that's it on the stock tickers for this episode. I hope you enjoyed getting a little lessons on what happens when you own stocks for all those years.
I think it's good to check in with our experienced investors. And I encourage people to watch the CNBC documentary with Buffett because that could be our last real interviews with him about investing, although we'll see as we go on. So thanks for joining me as well and getting through this with my voice this week. Be sure to subscribe so you're getting all of the value-investing podcasts.
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