How Fast Did Henry Singleton Compound Teledyne?

David Senra, reading the book's account, says Henry Singleton compounded Teledyne at an extraordinary 20.4% a year for almost 30 years. A dollar invested with Singleton in 1963 was worth 180 by 1990, when he stepped down. Charlie Munger called Singleton's financial returns a mile higher than anyone else's and utterly ridiculous.

He founded the conglomerate Teledyne in the early 1960s. Conglomerates were the internet stocks of the 1960s, and a large number of them went public, but Singleton ran a very unusual conglomerate. Long before he became popular, he bought over 90% 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. Known as the Sphinx for his reluctance to speak with analysts or journalists, he ignored the skeptics. The long-term returns of his better-known peers were generally mediocre.

CEOs need to run operations efficiently and deploy the cash generated by operations. Most CEOs focus on managing operations. Singleton gave most of his attention to capital allocation. Warren Buffett observed that very few CEOs come prepared for capital allocation, since most bosses rise through marketing, production, engineering, administration, or institutional politics and then face a critical job they may never have tackled. Singleton's allocation decisions differed from his peers and had an enormous positive impact on the long-term return for his shareholders.