Tales of the Greatest Investors: Alfred Lee Loomis

Tales of the Greatest Investors: Alfred Lee Loomis

by ValueWalk StaffNovember 19, 2013

Alfred Lee Loomis was accomplished in many areas, including science, philanthropy, law and investment banking. His laboratory in Tuxedo Park, New York was responsible for the development of enormously prolific scientific contributions, especially to the U.S. defense in World War II. He is not to be understated as a scientist; however, this discussion is not focused on Loomis the scientist, but on Loomis the investor. Originally, he was an attorney. Later he became an investment banker who made a lot of money in the 1920s in utilities. He and his partner, Landon K. Thorne, took over a nearly bankrupt investment bank known as Bonbright. Between 1924 and 1929 Bonbright underwrote 15% of not merely utility securities, a field in which Loomis specialized, but of all the securities issued in the U.S.An interesting point about Alfred Lee Loomis is that he, more than anyone else, is probably responsible for the evolution of the American utility industry as it existed in 1929. Books written about the industry at that time give credit to a gentleman known as Samuel Insull, a utility entrepreneur. Insull is said to be the pioneer of the holding company structure, also known as the pyramid structure. An example of how that structure works is when Company A buys shares with leverage of utility B, which in turn buys shares with leverage of utility C, which then buys shares with leverage of utility D and so on in a vast chain.

That structure proved to be very dangerous. Since that time, Insull has been recognized as the person responsible for creating the holding company structure for utilities. I went to the library and found that Insull made the cover of Time Magazine three times during that era of leveraged utilities—remember this is the cover of Time Magazine. That was before the evolution of the Public Utility Holding Company Act of 1935, which made the holding company structure illegal for utilities. The first time that Insull made the cover of Time Magazine was on November 29, 1926.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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