A Smart Investor 1-2

1.While Anne scheiber was alive, no one

paid much attention to her. She had no
husband, no friends, and hardly any contact
with her four sisters. She rarely left her
small apartment, and when she did go out,
she was almost invisible-a short, thin
woman dressed entirely in black. But when
she died at age 101, Anne scheiber
suddenly became famous. It turned out that
Miss scheiber was rich, and she left her
fortune-$22 million to yeshiva university in
new attended and never even visited.
2.The story of how Anne scheiber made her
fortune is as fascinating as why she gave it
all away. Annes father died when she was
a child, leaving her mother with nine
children to support. Annes mother
managed to feed and clothe her family, but
money was tight. Whenever the family had
any extra money, it went to educate the four
sons; the five daughters were on their own.
3.Anne started working as a bookkeeper
when she was 15 and went to school at
night, eventually graduating from college
with a law degree. She decided not to
practice law, however. Instead, she went to
work for the internal revenue service (the
I.R.S.) in Washington, D.C., as a tax
auditor. Her job was to examine income tax
returns and look for errors. Anne was a
diligent employee who excelled at her work.
Although she was only five feet tall and
weighed 100 pounds, her favorite technique
was to scare people when she thought they
were cheating on their taxes. These are
not the correct figures, she would tell them.
Come back tomorrow with the real figures.
She was described as a terror, yet, in the
23 years that Anne worked for the I.R.S.
she was never promoted, and she got only
small pay raises.

4. Anne learned two lessons in her years of

working at the I.R.S. first; she concluded
that women had little chance of succeeding,
no matter how hard they worked. Second,
from examining thousands of income tax
records she learned that the surest way to
get rich in the United States was to invest in
stocks. Anne scheiber felt that the I.R.S.
had treated her unfairly, and she wanted
revenge. She decided to get even by
getting rich. Even though she was earning
very little money, she saved as much as
she could; some years, she used her
savings to invest in the stock market. By
1936, she had $21.000 invested in stocks.
But it wasnt until 1944, when Anne retired
at age 50, that she became a full-time
investor.
5.Anne retired from the I.R.S. with a small
pension and a savings account of $5.000 in
cash. She moved to New York City, the
financial center of the United States, and
rented a small apartment. The she began to
study the stock market in the same diligent
way she had studied income tax returns.
She decided to invest first in industries she
knew something about. She loved
Hollywood movies, so she investigated the
studios. Which studios were the most
successful? Using information she got from
newspapers at the public library, she kept
track of attendance records for recent
movies. Two studios-paramount and
universal-seemed to produce the most
popular movies. She bought stock in both
studios. She bought stock in a broadcasting
company called capital cities, which later
became Disney Corporation. She bought
stock in Coca-Cola and later in pepsi-cola.
She bought stock in drug companies like
Bristol-Myers Squibb and Schering-Plough
and Schering-Plough.

6. Annes investment strategy was simple.

First, she didnt put all her eggs in one
basket-she ultimately invested in 100
companies, not just in one or two. Second,
she invested only in leading companies
whose products she understood. Third, she
almost never sold stocks. When the value
of her stocks fell, she hung on to them,
convinced they would be worth something
in the long run.
7.By 1970, Anne scheiber had turned her
small savings into a stock portfolio worth
millions, but she certainly didnt live like a
millionaire. Her home was she same tiny
apartment she rented when she moved to
New York, furnished with the same tables,
chairs, and lamps she had bought in 1944.
Paint was peeling off the walls, and dust
covered the bookcases. She often skipped
meals to save money on bus fare, even
when it rained. She never bought a
newspaper-instead, she walked to the
library and read the wall street journal
there-and she rarely bought new clothes.
Everywhere she went, she wore the same
cheap black coat-fall winter, and spring.
(Once, a niece bought her a new black coat
and investing money was her obsession.
Every penny Anne had, she used to buy
stocks.
8.The sacrifices Anne made to invest in the
stock market were not only material; there
were social sacrifices, too. Her entire world
was her investments. She shut out her
family and friends, and she never had a
sweetheart. The only social events Anne
attended were stockholders meetings if the
companies whose stock she owned.
Whenever a stockholders meeting was in
New York City, Anne scheiber was there.
She would go directly to the CEO of the

company and demand answers to her

questions, just as she had when she was
an auditor at the I.R.S. in the last years of
her life, Anne left her apartment only to visit
her lawyer, her stockbroker, or to see her
stock certificates, which were kept in a vault
in her stockbrokers offices near wall street.
She would walk to the offices, look over her
stock certificates, and then walk back to her
apartment. She did a lot, her stockbroker
says.
9.When Anne scheiber died in 1995 at the
age of 101, she had $22 million in stocks. In
her will, she left $50,000 to the niece who
had bought her the black coat, and she
gave the rest of the money to Yeshiva
University. She specified that the money
was to be used for scholarships and loans
for women only. In the end, Anne scheiber
did indeed get even: there is no tax on
money given to schools, so not one penny
of Annes fortune went to her former
employer, the I.R.S.
10.When news of Anne scheibers $22
million gift spread, she suddenly got the
attention she had never had while she was
alive. People poured over her stock
portfolio, curious to see which stock had
made her a multimillionaire. Newspapers
called her amazing, wise, and brilliant.
But money managers pointed out that one
didnt have to be a genius to accomplish
what Anne scheiber did. Anne scheiber
began buying stocks as early as 1936 and
died in 1995. So, she owned some stocks
for over 50 years. According to money
managers, that investment strategy-buying
stock and holding onto it for a long time-has
always been successful. Yes, they said,
Anne scheiber was smart. But perhaps the
smartest thing she did was live to be 101.

A smart investor test

1. Anne scheriber saw her family only once or twice a year. She had hardly any contact with them.
a. almost no
b. regular
2. After she died, Anne scheiber got the attention she never had while she was alive. People found her
story fascinating.
a. Very interesting
b. Difficult to believe
3. The scheiber family never went on vacations, never ate al restaurants, and never owned a new car:
money was always tight.
a. There was not enough money
b. All their money was in the bank
4. Anne worked during the day and went to classes only at night, so it took her years to finish school.
Eventually, she graduated from college with a degree in law.
a. After a lot of hard work
b. After a long time
5. If Anne thought people were not being honest, she would say, These are not the correct figures. Come
back tomorrow with the real figures! her technique usually worked.
a. Way of doing something
b. Angry words
6. In the 23 years that Anne worked at the I.R.S., she always had the same job. She was never promoted.
a. Told she was doing a good job
b. Given a more important, higher-paying job
7. Anne believed that the I.R.S. had been unfair to her. She wanted to get even.
a. Hurt the I.R.S. as much as the I.R.S had hurt her
b. Ask the I.R.S. for a big pay raise and a promotion
8. Anne didnt worry when the price of her stocks fell because she believed that they would make money
in the future. She was sure they would be worth something in the long run.
a. If she sold them
b. At a later time
9. Anne never bought new clothes, new furniture, or even a newspaper. She made a lot of sacrifices to
save money.
a. Things of poor quality that you get free or very cheaply
b. The decision not to have valuable things in order to get something that is more important to you.
10. Anne could think of nothing else but saving and investing money. It was her obsession.
a. An extreme, unhealthy interest in something
b. Something you do in your free time because you find it enjoyable
11. At stockholders meetings, Anne would ask the CEO questions about the company.
The chief executive officer, the person with the most authority in a company
The company export official, the person in charge of sales to foreign countries
12. When anne wrote her will, she knew exactly who she wanted to get her money. She specified that
money was for female students only.
Hoped it would be possible
Stated in an exact and detailed way