Danny DeVito Explains Value Investing in 3 Minutes
A classic scene from Other People’s Money
In the 1991 film Other People’s Money, Wall Street financier Larry “The Liquidator” Garfield (played by Danny DeVito) attempts to gain control of the fictional New England Wire and Cable, a small Rhode Island-based company led by the benevolent CEO Andrew Jorgenson (Gregory Peck).
A brief but memorable scene captures why Garfield saw New England Wire and Cable as a cheap stock.
To sum up Garfield’s analysis, the debt-free company owned property and equipment worth $40 million, along with several other businesses valued at $60 million and $25 million of working capital.
That added up to $125 million for the entire company, although just to be on the safe side, Garfield rounds down to $100 million (the equivalent of $25 a share).
Meanwhile, the stock was selling for only $10 a share.
In 1949 finance professor Benjamin Graham published The Intelligent Investor, the book that his most famous pupil, Warren…
