Teledyne Concepts

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

by William Thorndike · 14 Sep 2012 · 330pp · 59,335 words

: Singletonville Introduction An Intelligent Iconoclasm 1. A Perpetual Motion Machine for Returns Tom Murphy and Capital Cities Broadcasting 2. An Unconventional Conglomerateur Henry Singleton and Teledyne 3. The Turnaround Bill Anders and General Dynamics 4. Value Creation in a Fast-Moving Stream John Malone and TCI 5. The Widow Takes the

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1950s, he created an inertial guidance system that is still in use in most military and commercial aircraft. All that before he founded a conglomerate, Teledyne, in the early 1960s and became one of history’s great CEOs. Conglomerates were the Internet stocks of the 1960s, when large numbers of them

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public. Singleton, however, ran a very unusual conglomerate. Long before it became popular, he aggressively repurchased his stock, eventually buying in over 90 percent of Teledyne’s shares; he avoided dividends, emphasized cash flow over reported earnings, ran a famously decentralized organization, and never split the company’s stock, which for

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his better-known peers were generally mediocre—averaging only 11 percent per annum, a small improvement over the S&P 500. Singleton, in contrast, ran Teledyne for almost thirty years, and the annual compound return to his investors was an extraordinary 20.4 percent. If you had invested a dollar with

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time (twenty-eight years versus Welch’s twenty) and in a market environment that featured several protracted bear markets. His success did not stem from Teledyne’s owning any unique, rapidly growing businesses. Rather, much of what distinguished Singleton from his peers lay in his mastery of the critical but somewhat

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differed significantly from the decisions his peers were making and had an enormous positive impact on long-term returns for his shareholders. Specifically, Singleton focused Teledyne’s capital on selective acquisitions and a series of large share repurchases. He was restrained in issuing shares, made frequent use of debt, and did

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extensive searching in databases at Harvard Business School’s Baker Library, we came across only seven other examples that passed these two tests. Interestingly, like Teledyne, these companies were not generally well known. Nor were their CEOs despite the enormous gap between their performance and that of many of today’s

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also been excellent—the stock has appreciated over fourfold since the company’s 2006 initial public offering. CHAPTER 2 An Unconventional Conglomerateur Henry Singleton and Teledyne Henry Singleton has the best operating and capital deployment record in American business . . . if one took the 100 top business school graduates and made a

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good as Singleton’s. —Warren Buffett, 1980 I change my mind when the facts change. What do you do? —John Maynard Keynes In early 1987, Teledyne, a midsize conglomerate with a reputation for unconventional behavior, declared a dividend. This seemingly innocuous event attracted inordinate attention in the business press, including a

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as dividends. Many investors, particularly senior citizens, relied on these dividends for income and looked closely at dividend levels and policies in making investment decisions. Teledyne, however, alone among 1960s-era conglomerates, steadfastly refused to pay dividends, believing them to be tax inefficient (dividends are taxed twice—once at the corporate

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founder and CEO, Henry Singleton, this dividend policy was, as we’ve seen, just one in a series of highly unusual and contrarian practices at Teledyne. In addition to eschewing dividends, Singleton ran a notoriously decentralized operation; avoided interacting with Wall Street analysts; didn’t split his stock; and repurchased his

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1969, he purchased 130 companies in industries ranging from aviation electronics to specialty metals and insurance. All but two of these companies were acquired using Teledyne’s pricey stock. Singleton’s approach to acquisitions, however, differed from that of other conglomerateurs. He did not buy indiscriminately, avoiding turnaround situations, and focusing

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instead on profitable, growing companies with leading market positions, often in niche markets. As Jack Hamilton, who ran Teledyne’s specialty metals division, summarized his business to me, “We specialized in high-margin products that were sold by the ounce, not the ton.”1

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in his largest acquisition to date, Singleton acquired Vasco Metals for $43 million and elevated its president, George Roberts, to the role of president of Teledyne, taking the titles of CEO and chairman for himself. Roberts had been Singleton’s roommate at the Naval Academy, where he had been admitted at

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share of stock. The effectiveness of this acquisition strategy can be seen in table 2-1. Over its first ten years as a public company, Teledyne’s earnings per share (EPS) grew an astonishing sixty-four-fold, while shares outstanding grew less than fourteen times, resulting in significant value creation for

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. Ironically, the most successful conglomerate of the era was actually the least conglomerate-like in its operations. This decentralization fostered an objective, apolitical culture at Teledyne. Several former company presidents mentioned this refreshing lack of politics—managers who made their numbers did well; those who did not, moved on. As one

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the time, running his company instead to optimize free cash flow. He and his CFO, Jerry Jerome, devised a unique metric that they termed the Teledyne return, which by averaging cash flow and net income for each business unit, emphasized cash generation and became the basis for bonus compensation for all

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business unit general managers. As he once told Financial World magazine, “If anyone wants to follow Teledyne, they should get used to the fact that our quarterly earnings will jiggle. Our accounting is set to maximize cash flow, not reported earnings.”2

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with that 1972 tender and continuing for the next twelve years, Singleton went on an unprecedented share repurchasing spree that had a galvanic effect on Teledyne’s stock price while also almost single-handedly overturning long-held Wall Street beliefs. To say Singleton was a pioneer in the field of share

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sign of weakness. Singleton ignored this orthodoxy, and between 1972 and 1984, in eight separate tender offers, he bought back an astonishing 90 percent of Teledyne’s outstanding shares. As Munger says, “No one has ever bought in shares as aggressively.”5 Singleton believed repurchases were a far more tax-efficient

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for shareholders only if they are made at attractive prices. Not surprisingly, Singleton bought extremely well, generating an incredible 42 percent compound annual return for Teledyne’s shareholders across the tenders. These tender offers were in almost every case oversubscribed. Singleton had done the analysis and knew these buybacks were compelling

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, and with the strength of his conviction always bought all shares offered. These repurchases were very large bets for Teledyne, ranging in size from 4 percent to an unbelievable 66 percent of the company’s book value at the time they were announced. In all

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incredible $2.5 billion on the buybacks. Table 2-2 puts this achievement in perspective. From 1971 to 1984, Singleton bought back huge chunks of Teledyne’s stock at low P/Es while revenues and net income continued to grow, resulting in an astonishing fortyfold increase in earnings per share. It

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important, however, to recognize that this obsession with repurchases represented an evolution in thinking for Singleton, who, earlier in his career when he was building Teledyne, had been an active and highly effective issuer of stock. Great investors (and capital allocators) must be able to both sell high and buy low

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the mid-1970s, Singleton finally had an opportunity to act on this lifelong fascination when he assumed direct responsibility for investing the stock portfolios at Teledyne’s insurance subsidiaries during a severe bear market with P/E ratios at their lowest levels since the Depression. In the area of portfolio management

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“Like Warren and me, he was comfortable with concentration and bought only a few things that he understood well.”6 As with his repurchases of Teledyne stock, Singleton’s returns in these insurance portfolios were excellent. A proxy for these returns can be seen in figure 2-1, which shows the

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approximately eightfold growth in book value at Teledyne’s insurance subsidiaries from 1975 through 1985, when Singleton began the process of dismantling his company. During the period from 1984 to 1996, Singleton shifted

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values for Unitrin and Argonaut subsidiaries. Singleton was a pioneer in the use of spin-offs, which he believed would both simplify succession issues at Teledyne (by reducing the company’s complexity) and unlock the full value of the company’s large insurance operations for shareholders. In the words of longtime

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off Unitrin, the company’s largest insurance operation, with Jerry Jerome as CEO. This was a significant move as Unitrin accounted for the majority of Teledyne’s enterprise value at that time. It has had excellent returns since going public under the leadership of Jerome and his successor, Dick Vie. Starting

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in the mid- to late 1980s, Teledyne’s noninsurance operations slowed in the face of a cyclical downturn in the energy and specialty metals markets and fraud charges at its defense business

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eventually acquire over 1 million acres of ranchland across New Mexico, Arizona, and California.) He returned, however, in 1996 to personally negotiate the merger of Teledyne’s remaining manufacturing operations with Allegheny Industries and fend off a hostile takeover bid by raider Bennett LeBow. In these negotiations, according to Bill Rutledge

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getting the best possible price, ignoring other peripheral issues such as management titles and board composition.8 Again, the outcome was a favorable one for Teledyne share holders: a 30 percent premium to the company’s prior trading price. Singleton left behind an extraordinary record, dwarfing both his peers and the

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. This was highly unconventional behavior at a time when his more accommodating peers were often on the cover of the top business magazines. Teledyne Versus Sarbanes-Oxley Teledyne’s iconoclasm extended to today’s hot-button topic of corporate governance. The company’s board would fail miserably by the current standards of

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Sarbanes-Oxley legislation. Singleton (like many of the CEOs in this book) was a proponent of small boards. Teledyne’s board consisted of only six directors, including Singleton, half of them insiders. It was an exceptionally talented group, however, and each member had a

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significant economic interest in the company. In addition to Singleton, Roberts, and Kozmetzky (who retired from Teledyne in 1966 to run the business school at the University of Texas), board members included Claude Shannon, Singleton’s MIT classmate and the father of

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,” preferring instead a “suction hose.” Singleton’s 1980 share buyback provides an excellent example of his capital allocation acumen. In May of that year, with Teledyne’s P/E multiple near an all-time low, Singleton initiated the company’s largest tender yet, which was oversubscribed by threefold. Singleton decided to

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, however, with cash from the company’s pension fund, which was not taxed on investment gains. As a result of this complex series of transactions, Teledyne successfully financed a large stock repurchase with inexpensive debt, the pension fund realized sizable tax-free gains on its bond purchase when interest rates subsequently

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of his life. In 1997, two years before his death from brain cancer at age eighty-two, he sat down with Leon Cooperman, a longtime Teledyne investor. At the time, a number of Fortune 500 companies had recently announced large share repurchases. When Cooperman asked him about them, Singleton responded presciently

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Singleton: Separated at Birth? Many of the distinctive tenets of Warren Buffett’s unique approach to managing Berkshire Hathaway were first employed by Singleton at Teledyne. In fact, Singleton can be seen as a sort of proto-Buffett, and there are uncanny similarities between these two virtuoso CEOs, as the

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. This accordion-like pattern of expansion and contraction, of diversification and divestiture, was highly unusual (although similar in some ways to Henry Singleton’s at Teledyne) and paid enormous benefits for General Cinema’s shareholders. . . . Dick Smith was born in Newton, Massachusetts, in 1924. He was the eldest son in a

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the partnership for four more years with continuing excellent results, and then in 1969 (not coincidentally, the same year Henry Singleton stopped making acquisitions at Teledyne), abruptly dissolved it in the face of the high prices of the late 1960s’ bull market. He did, however, retain his ownership interest in Berkshire

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as possible managing operations, where he felt he could add little value. As a result, the touchstone of the Berkshire system is extreme decentralization. If Teledyne, Capital Cities, and the other companies in this book had decentralized management styles and philosophies, Berkshire’s is positively anarchic by comparison. TABLE 8-3

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following. As such, they were inoculations against conventional wisdom, and they spread widely throughout the outsider companies. As George Roberts, Henry Singleton’s COO at Teledyne, told Forbes magazine, “Capital discipline is so ingrained in our managers that very few low-returning proposals are ever presented to us.”2 Under the

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had the great fortune to collaborate with on this project over the last eight years. This gifted group included Paul Buser (Ralston Purina), Aleem Choudhry (Teledyne), Erin Eisenberg (Berkshire Hathaway), Matt Estep (General Dynamics), John Gilligan (Capital Cities Broadcasting), Brian Hersman, Moritz Jobke (Tele-Communications Inc.), Christina Miller (The Washington Post

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to especially thank Charlie Munger, Warren Buffett’s inimitable partner, for his early encouragement of this project and for his insightful comments, particularly on the Teledyne, Capital Cities, Washington Post, and General Dynamics chapters. I’d also like to offer special thanks to Denise Ahern, my unflappable, omni-competent assistant, for

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. Author interview with Fayez Sarofim, March 2, 2004. 8. Author interview with William Rutledge, February 23, 2004. 9. James P. Roscow, “The Many Lives of Teledyne,” Financial World, November 1, 1978. 10. Robert J. Flaherty, “The Singular Henry Singleton,” Forbes, July 9, 1979. 11. Flaherty, “The Sphinx Speaks.” 12. Author interview

Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

by William Poundstone · 18 Sep 2006 · 389pp · 109,207 words

lived in Greenwich Village near Bell Labs. Then he moved west to work in the booming defense industry. In 1960 Singleton and George Kozmetsky founded Teledyne, a defense contractor selling digital navigation systems to a still-analog Pentagon. Shannon bought a couple thousand shares at the initial price of $1 a

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. By 1967 it hit $24. As the company’s shares skyrocketed, Singleton used the inflated market value to buy other companies. He bought about 130. Teledyne came to own insurance companies, offshore oil wells, and the manufacturer of Water Pik teeth cleaners. In 1962 an MIT group founded Codex Corporation to

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try it and don’t like it,” Shannon said, “we simply won’t consider an investment in the firm.” Shannon became a board member of Teledyne. He was not just a distinguished name in the annual report but was actively scouting potential acquisitions for CEO Henry Singleton. For instance, in 1978

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Shannon investigated Perception Technology Corporation on behalf of Teledyne. Perception Technology was founded by an MIT physicist, Huseyin Yilmaz, whose training was largely in general relativity. During the visit with Shannon, Yilmaz spoke enthusiastically

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very sharp and highly motivated, but much less interested in product development, sales and earnings.” Shannon concluded: “I think that an acquisition of PTC by Teledyne would be meaningful only as a long-term gamble on scientific research. I would not recommend such an acquisition.” Warren Buffett himself said that Singleton

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’s portfolio would have appalled Harry Markowitz (or any financial adviser). By this point, nearly 81 percent of the portfolio was in a single stock, Teledyne. The three largest holdings constituted 98 percent of the portfolio. “We have not, at any time in the past 30 years, attempted to balance our

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much money into a new stock, and they sold rarely after the mid-1960s. Practically all of the profit came from the Teledyne/Motorola/Hewlett-Packard triumvirate. Shannon had bought Teledyne for 88 cents a share, adjusted for stock splits. Twenty-five years later, each share was worth about $300, a 25

Market Wizards: Interviews With Top Traders

by Jack D. Schwager · 7 Feb 2012 · 499pp · 148,160 words

. I told him about my experiences and he suggested that I join him. In my first week at his office he told me to buy Teledyne calls right before expiration because he was sure they were going up. I followed his advice, and the calls completely collapsed. How much did you

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of the rare spectacular trading opportunity. His fortune has been built largely by exploiting only a handful of such events. Two of these situations—the Teledyne price explosion and the October 1987 stock market collapse—are discussed in the interview. The impressive aspect of Saliba’s trading achievements is not the

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what I should be doing, not putting myself at a big risk, trying to collect a ton of dough. At the time I was in Teledyne options, which was a very volatile market. So, I switched to Boeing, which was a very tight, narrow range type of market. I became a

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work, homework, and discipline. I teach my guys that. Anyway, at this same time, I still had the remnants of a big spread position in Teledyne that I was in the process of liquidating. It was a position that would lose in a rising market. One day after I had been

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trading Boeing for about five weeks, Teledyne started moving up sharply. I was not going to let it get me again. I rushed into the Teledyne pit to take my position off. I was hearing floor brokers come in with orders, and

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all of a sudden I found myself responding to them. I was adapting the same technique I had learned in Boeing to Teledyne, except instead of scalping for an eighth or a quarter, I was scalping for halves and dollars. What size were you trading at the time

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market makers are the locals who trade for themselves. On the options exchange, the two are separate. Were you the only one-lot trader in Teledyne? For the most part, yes. Did you take a lot of ribbing? Oh, did I! They called me “one-lot” for the longest time. The

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price changes in either direction.] Usually, but once in a while I would take a significant net position. What was your first really big trade? Teledyne in 1984. The stock had dropped sharply and I was building up a position in the out-of-the-money October calls. Well, the stock

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started inching back up, but these guys from the Pacific Coast Exchange, where they also list Teledyne, were leaning on my longs. They just kept battering them on the close every night. Instead of shying away, I stepped up and would buy

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didn’t think it was going to go up anymore. On May 9 at 9:20 they stopped trading in Teledyne because of news pending. The news comes across the tape: “Teledyne Announces a Stock Repurchase Program at $200 per Share.” Buying back their own stock? Yes. The stock was at $155

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move, but I didn’t know if it would be up or down. So, I started building the same type position that I had in Teledyne. The butterfly spread combined with the explosion position. Yes. What was the explosion position in this case? In this case, it was formed by buying

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his trading career. For example, many others faced with the type of constant ridicule that Saliba was subjected to in the Teledyne pit might have abandoned their strategy. This same Teledyne example also illustrates another important characteristic of the superior trader: the maintenance of rigid risk control, even in difficult circumstances. It

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must have been very tempting for Saliba to trade a larger position size in the Teledyne pit when he was being derided as “one-lot.” Instead, he maintained his discipline and continued to trade small until his capital had grown sufficiently

The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley

by Leslie Berlin · 9 Jun 2005

PhD engineer who had left his research job at Litton Industries two years before to start a high-tech conglomerate he called Teledyne. Singleton wanted to start a division of Teledyne to develop advanced semiconductor devices for military applications. In other words, he wanted to start an integrated circuits company. Rock, who

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day of 1960, they donned their best suits (“negotiating suits,” they called them) and met with Singleton and his co-founder George Kozmetsky at the Teledyne office in West Los Angeles. The meeting lasted several hours and ended well enough that Last and Hoerni left feeling fairly certain they would go

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ago had told Last and Hoerni that he would leave Fairchild if the right opportunity arose) resigned from Fairchild to start the Amelco division of Teledyne. The departure of three founders opened the floodgates at Fairchild. In the next few months, a key researcher left to join Amelco. The integrated circuits

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Semiconductor as its own company separate from Camera and Instrument. No, Semiconductor would merge with Hughes Aircraft—no, with Jay Last’s semiconductor group at Teledyne; no, with Signetics. Charlie Sporck would return to run Fairchild; no, Noyce planned to join Sporck at National to build a new semiconductor powerhouse; no

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company for which Beadling now worked, the semiconductor division of Union Carbide, had been started by Jean Hoerni after he left Jay Last and Amelco-Teledyne. In July and August alone, Noyce noted meetings with a dozen current or former Fairchild employees, most of them looking for jobs. Chances are high

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that it seemed as if nearly everyone in a professional position knew everyone else—often from having worked together at Fairchild. Jay Last’s Amelco-Teledyne rented space from Ed Baldwin’s Rheem, a company later bought by Raytheon, yet another Fairchild spin-off, which years later would hook up with

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the fund (the other $2 million were never invested) were now, seven years later, worth nearly $100 million, thanks in large measure to stakes in Teledyne and Scientific Data Systems, an early scientific computer company. Over the years, Rock had focused on investments in technology, but he considered his real expertise

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people crowded around the Apple booth than any other, Rock decided to invest $60,000 in the company. He also brought in Henry Singleton of Teledyne, who invested $108,000. In 1977, Regis McKenna, who handled Intel’s public relations, began working with Apple. He hosted a party, one of whose

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. 80. 81. 82. 83. 84. 85. 86. 331 edge (newsletter), 4 Dec. 2000. http://hbswk.hbs.edu/pubitem.jhtml? id=1821&t=special_reports_donedeals Teledyne deal: Jay Last, interview by author. Signetics funding information: Jack Yelverton, interview by author. If personnel expansion rate: Moore and Grinich to Noyce, 8 Feb

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’s reactions to departures: Jack Yelverton to author, 18 Dec. 2003; Jerry Levine, interview by author; “Drs. Hoerni, Last Resign Posts at Fairchild to Join Teledyne,” Electronic News, 13 Feb. 1961. Semiconductor doubled its share: “Strong Position of Firm Cited by Fairchild Semiconductor VP,” Electronic News, 20 March 1961, 16. Record

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. On Noyce’s activities at the start of Intel: Noyce 1968 datebook, ASB; Noyce to Frank Roberts [attorney], 20 July 1968. 21. Jay Last’s Teledyne rented: “Antenna—Can’t Keep a Good Man Down,” Electronic News, 17 Nov. 1969. Carter’s firm was called “Carter Semiconductor of Hong Kong.” It

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also Defense Department, U.S. Allison, Dave, 95. See also Signetics Altair computer kit, 226 aluminum contacts, 98–99 AMD. See Advanced Micro Devices Amelco-Teledyne, 124, 161 American Electronics Association (AEA), 209, 224, 236, 262. See also Western Electronics Manufacturers Association American Stock Exchange, 250 Angell, Jim, 162, 385 Apple

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Tandem Computer, 253 taxes: capital gains, 168, 262; group of eight, 124 Tech Museum of Innovation, 307 technology: cost of, 137–39; need for, 182 Teledyne, 123 Telettra, 121 Teresi, Bob, ix, 275–76, 388 Teresi, Donna, ix Terman, Frederick, 31, 57–58, 286 Texas Instruments (TI), 93, 183, 199, 283

Quantitative Value: A Practitioner's Guide to Automating Intelligent Investment and Eliminating Behavioral Errors

by Wesley R. Gray and Tobias E. Carlisle · 29 Nov 2012 · 263pp · 75,455 words

's domain but that do nothing for (or even harm) shareholders.” —Warren Buffett, Shareholder Letter, 19841 Henry Singleton is most notable for two achievements: building Teledyne from scratch into one of the most profitable and successful stocks in the United States at the time he stepped down 29 years later, and

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and capital deployment record in American business.”4 That is high praise indeed, coming from one of the world's greatest capital allocators. Singleton founded Teledyne in 1960 with just $225,000. He continually adapted his capital management strategy to the prevailing climate on Wall Street. In the conglomerate era, he

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soaring stock to make cheap acquisitions and raise earnings per share. In the 1970s, when the stock slumped, Singleton bought back Teledyne's undervalued stock hand over fist. Said Singleton in a 1979 Forbes article5: In October 1972 we tendered for 1 million shares and 8.9

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and when the market is ready that value will be recognized. Investors, heeding Singleton's signal that the stock was cheap, made out like bandits. Teledyne stock, which had sold for less than $14 in 1972, the year of Singleton's first buyback, was by 1987, when adjusted for splits and

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distributions, worth well over $930 a share (see Figure 9.1).6 The gain in Teledyne stock following the buyback represents a total return of more than 6,500 percent, or a compound yearly return of more than 32 percent. This

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signal to the market, perhaps about how insiders view the health of the stock, or its price relative to its underlying value. FIGURE 9.1 Teledyne Performance Chart (1972 to 1987) If we think more broadly, buybacks are not the only signals sent by insiders. Insider purchases also send a signal

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, Inc. Annual Report, 1982. 4. John Train, The Money Masters (New York: HarperBusiness, 1994). 5. Flaherty. 6. Alison Leigh Cowan, “Wall St. Eyes Are on Teledyne.” New York Times, July 9, 1987. 7. David L. Ikenberry, Josef Lakonishok, and Theo Vermaelen, “Market Underreaction to Open Market Share Repurchases.” NBER Working Paper

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year, starting in 1974. TABLE 12.6 Selected Quantitative Value Portfolio Holdings There are some storied names in this list. For example, the strategy bought Teledyne, Inc. in 1977 just as it was about to embark on the stellar run under Henry Singleton that we described in Chapter 9. It bought

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: Why Thinking-by-Numbers Is the New Way to Be Smart (Ayres) “The Superinvestors of Graham-and-Doddsville” (Buffett) Survivorship bias Sustainable alpha Taleb, Nassim Teledyne Tetlock, Philip Theory of Investment Value (Williams) Third Avenue Value Fund Thorp, Ed Total enterprise value (TEV) Transaction costs Tsai, Claire Tversky, Amos Value investors

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated

by Gautam Baid · 1 Jun 2020 · 1,239pp · 163,625 words

cash flow cannot be reinvested, then look for sound capital allocation that might result in dividends or value-accretive buybacks and acquisitions. Henry Singleton of Teledyne Technologies was an exemplary capital allocator. He would issue shares to acquire cheaper companies when his company’s stock was trading at expensive P/E

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1. Michael Rothschild, Bionomics: Economy as Business Ecosystem (Beard Books, 1990). 2. Carter Johnson, “Dr. Henry Singleton and Teledyne,” ValueWalk, April 27, 2018, https://www.valuewalk.com/2018/04/dr-henry-singleton-and-teledyne. 3. Whitney Tilson, “Notes from the 2004 Wesco Annual Meeting,” Whitney Tilson’s Value Investing Website, May 5

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, June 14, 2005. https://news.stanford.edu/2005/06/14/jobs-061505. Johnson, Carter. “Dr. Henry Singleton and Teledyne.” ValueWalk, April 27, 2018. https://www.valuewalk.com/2018/04/dr-henry-singleton-and-teledyne. Jordon, Steve. “Investors Earn Handsome Paychecks by Handling Buffett’s Business.” Omaha World-Herald, April 28, 2013. https

The Investment Checklist: The Art of In-Depth Research

by Michael Shearn · 8 Nov 2011 · 400pp · 124,678 words

Berkshire Hathaway; Bruce Flatt, CEO of Brookfield Asset Management; Dave and Sherry Gold, founders of 99 Cent Only Stores; and Henry Singleton, former CEO of Teledyne. Singleton, for example, did not receive any option awards and only sold stock in 1987 and 1988 after continuing to buy it for more than

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Business Review, September 2009. 26. Ibid. 27. Schwartz, Nelson D., Doris Burke, and Matthew Schuerman. “Greed-mart.” Fortune, October 14, 2002. 28. “The Brain Behind Teledyne: A Great American Capitalist.” New York Observer, April 7, 2003. 29. Byrne, Harlan S. “Dimon in the Rough: A Turnaround at Bank One Won’t

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well-formulated strategic plans but instead improve the business day by day. Henry Singleton, CEO of Teledyne Inc. from the 1960s through the 1980s, believed the best plan was no plan. Under his tenure, Teledyne’s stock compounded at more than 20 percent for more than 20 years. He believed it was

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better to approach an uncertain world with an open mind. Singleton once remarked at a Teledyne annual meeting, “. . . we’re subject to a tremendous number of outside influences, and the vast majority of them cannot be predicted. So my idea is

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stocks in history—that is, those that have compounded at rates greater than 20 percent over 15 years—have used decentralized operating structures; for example, Teledyne, Berkshire Hathaway, Penn National Gaming, Expeditors International, Fastenal, Capital Cities ABC, and Bed Bath & Beyond. One reason for their success is that this type of

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big picture and not get bogged down in the details. One of the best capital allocators in corporate history was Henry Singleton, longtime CEO of Teledyne, who cofounded the business in 1960 and served as CEO until 1986. In John Train’s book The Money Masters, Warren Buffett reported that he

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believes “Henry Singleton has the best operating and capital-deployment record in American business.” When Teledyne’s stock was trading at extremely high prices in the 1960s, Singleton used the high-priced stock as currency to make acquisitions. Singleton made more

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acquisitions of small, high-margin manufacturing and technology businesses that operated in defensible niches managed by strong management. When the price-to-earnings ratio of Teledyne fell sharply starting in the 1970s, he repurchased stock. Between 1972 and 1984, he reduced the share count by more than 90 percent. He repurchased

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. “The Sky Really Is Falling.” U.S. News and World Report, November 8, 2004. 12. “The Brain Behind Teledyne: A Great American Capitalist.” New York Observer, April 7 2003; Henry Singleton at a Teledyne annual meeting. 13. Author’s interview with Dave and Sherry Gold in May 2010. 14. Stemberg, Thomas. “Treat

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, Steven D. “In the Money: Hurd’s H-P Grew, But Charges Pruned Earnings.” Dow Jones News Service, August 10, 2010. 58. “The Brain Behind Teledyne: A Great American Capitalist.” New York Observer, April 7, 2003. 59. Time Value of Money, LP free cash flow estimate. 60. Standard & Poor’s Capital

The Power Law: Venture Capital and the Making of the New Future

by Sebastian Mallaby · 1 Feb 2022 · 935pp · 197,338 words

$1 billion.[46] On June 30, 1968, Davis and Rock wound up their partnership. Thanks overwhelmingly to SDS, but also to a defense contractor called Teledyne, their initial fund of $3.4 million was now worth almost $77 million, an extraordinary return of 22.6x; it was a performance that easily

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of their research. If Rock had liberated them once, he could easily do so a second time. He advised Last and Hoerni to talk to Teledyne, the firm that would become the second most successful investment in the Davis & Rock portfolio. Time passed and nothing happened. Last and Hoerni seemed too

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timid to act. So Rock spoke with Teledyne’s boss, Henry Singleton, explaining why his hiking friends would be assets to his enterprise. Then he placed a call to Fairchild midway through the

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his phone, Rock urged him. He was sitting there, waiting, expecting Last’s call.[53] Last duly dialed Singleton and agreed to meet him at Teledyne’s headquarters in West Los Angeles.[54] He promised to bring Hoerni along. Hoerni hated flying, so the two researchers donned what they called their

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corporate venture bet was sealed. Last and Hoerni soon persuaded two more of the Traitorous Eight, Sheldon Roberts and Eugene Kleiner, to follow them to Teledyne, where they too were rewarded with suitable grants of stock.[57] More defections followed, and at the end of 1965 a particularly spirited engineer filled

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to Arthur Rock. There were plenty of venture investors to pick from, but Rock had financed Fairchild. His reputation had blossomed thanks to SDS and Teledyne. Noyce explained that he was quitting Fairchild and was plotting a new firm. “What took you so long?” was all that Rock said.[62] Noyce

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take a new kind of venture capitalist, because Atari was a new kind of tech firm. When Arthur Rock had backed Fairchild—or SDS or Teledyne or Intel—the gamble lay in the technology: Would the research and development yield products that worked? With Atari, in contrast, the technology was relatively

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, interview by the author, Nov. 8, 2017. BACK TO NOTE REFERENCE 55 George A Roberts, Distant Force: A Memoir of the Teledyne Corporation and the Man Who Created It (Teledyne Corporation, 2007), 14. A slight variant on this account is given by Berlin, Man Behind the Microchip, 123. BACK TO NOTE REFERENCE

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, 347 King, Martin Luther, Jr., 3 Kirby, Bob, 61 Kleiner, Eugene, 98 Apple investment, 82, 83 founding of Kleiner Perkins, 67–69 retirement of, 122 Teledyne and, 54 Traitorous Eight and, 24, 31–32, 34–36, 54 Kleiner, Rose, 31 Kleiner Perkins (KP), 60, 67–80, 92, 377–78 activist investing

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, 152–53, 171, 176–78, 184–85, 190–91 Tech Model Railroad Club, 19 technology fairs, 29 Techstars, 220–21 telecoms, 9–10, 129–31 Teledyne Corporation, 50, 53–54, 55, 58 Tenable, 451n Tencent, 224, 233, 245–46, 288, 394, 402, 447n Terman, Fred, 17 “term sheets,” 104 Tesla, 12

The Idea Factory: Bell Labs and the Great Age of American Innovation

by Jon Gertner · 15 Mar 2012 · 550pp · 154,725 words

owned significant shares in Hewlett-Packard, where his friend Barney Oliver ran the research labs, and was deeply invested in Teledyne, a conglomerate started by another friend, Henry Singleton. Shannon sat on Teledyne’s board of directors. The stock market was therefore just another puzzle, albeit one with a pleasant proof of

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, 302, 351–52 TASI (Time Assignment Speech Interpolation), 183–84 TAT-1, 175–80 Teal, Gordon, 86–87, 109–10, 168 Telecommunications Act, 328–29 Teledyne, 319 telegraph, 126, 224, 260 telephones, 17–19, 126, 134, 155, 260, 263 carbon granules in, 12, 20 diaphragms in, 82 long-distance calling, 20

Concentrated Investing

by Allen C. Benello · 7 Dec 2016

it in 1962, Shannon received stock as part of the merger, and was struck by the size of the gain.13 He also invested in Teledyne, Inc., a new venture started by Henry Singleton, a close friend and alumnus from MIT’s graduate school. Shannon bought in 1960 at the $1

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“managerial superstar,”15 with “the best operating and capital deployment record in American business.”16 Shannon would go on to sit on the board of Teledyne, and would conduct technical and business diligence on potential acquisitions at Singleton’s behest. In 1963, Shannon backed another technology group from MIT, Codex Corporation

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’s portfolio observable in the 1981 snapshot. The first is the extreme concentration. Fully 81 percent of the portfolio was dedicated to his biggest position, Teledyne. His secondlargest holding, Motorola, made up another 12 percent of the portfolio, and Hewlett‐Packard, the third-largest holding, accounted for a further 5 percent

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$1.63 $28.88 $3,465.00 1,672% Hewlett‐Packard International Flavors and Fragrances John H. Harland Masco M.I.L.I Motorola Schlumberger Teledyne Total 40 $32.00 $28.13 $1,125.00 –12% 1,086 $1.13 $65.00 $70,590.00 5,652% 22 $44.00 $108

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.38 $471,942.50 19,338% $582,717.50 invested in each as they grew. This allowed Motorola to compound his initial investment 57 times. Teledyne, his largest investment, grew an incredible 194 times. Hewlett‐Packard, his second-largest holding, multiplied his capital an astonishing 630 times from his average purchase

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.30 Shannon’s three biggest gainers, which accounted for 98 percent of his portfolio, were all investments sourced through his MIT and Bell Labs connections. Teledyne was from MIT classmate Singleton, Motorola was the new name for MIT start‐up Codex Corporation, and Hewlett‐Packard had taken over his Bell Labs

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Rose & Farnham, 9–10 Stern, Thomas, 177–178 Stewart, Samuel, 181–182 Strachey, Lytton, 39 Swensen, David, 38, 185–186 T TCA Cable, 194–196 Teledyne, Inc., 78, 81–82, 82 temperament of investors, 203–220 Buffett on, 3–4, 203–204 finding targets and, 204–211, 214–218 Munger on