Mary Chris Gay (née Adamec) is visible in the far upper left corner of the photo, behind the flash, as she catches me napping. When I started a pint-sized partnership in 1992, it seemed a good idea to have an office instead of just an address in a briefcase, so I sublet space in what was then the Legg Mason building.  Mary Chris worked with Bill Miller at the Legg funds, handling sums that would have given me apoplexy. I ran Remnant Partners L.P. until the end of 2006, working out of several offices after the Legg lease ran out. In the 1990s, there were decent opportunities in post-bankruptcy securities, as companies emerging from reorganization traded at as little as three times cash flow: a good time for a totally unqualified person to set himself up in business. 

The partners were great and mostly tolerant of a deep-value investor who trailed the S&P by something like 50 percentage points in 1999. Fortunately  the next years reversed that. Over the life of the partnership the limiteds made a hair under 12% annually compounded, after expenses and fees. Not spectacular, but nobody sued me.

The cheap-money regimen that began in 1998 has changed the business. Not only are there billions around to chase bad ideas, there are billions to chase no ideas at all, via ETFs. Bill Miller’s main fund, the Value Trust, made him famous as the only money manager to beat the S&P 500 fifteen years straight. That run ended with the millennial bear market. Bill left Legg Mason last year. Mary Chris, who departed in 2013, serves on the board of MGM Resorts International. It’s hard for me to believe that twenty-five years have passed since that flash went off—or that, unless actuarial tables mean nothing at all, I have much less than another twenty-five to try to get it right.

September 28 2017