Jim Koch, the co-founder and chairman of Boston Beer Company (SAM), the maker of Samuel Adams beer, has a unique way of investing in stocks. He does not rely on his own judgment or a professional broker, but on his wife’s assistant, who used to be their babysitter 20 years ago. He also does not follow any strategy or analysis, but randomly picks a stock to buy every two weeks.
A Zero-Engagement Approach: A Random Stock Selection
Koch revealed his unconventional investment method in an interview with Forbes, where he said that he does not believe that he can outsmart the professional investors. He said that his main goal is not to accumulate wealth, but to protect it and diversify it. He said that he finds personal portfolio management boring and annoying, and that he prefers to focus on his beer business.
That is why he delegates the task of managing his stock portfolio to his wife’s assistant, who was originally hired as their babysitter when she was in college. Every two weeks, she sells any stocks that have declined in value and randomly chooses a new one from a preset list of indexes that includes the S&P 500 and Russell 2000. She then executes the trades on Koch’s behalf, without consulting him or informing him.
Koch calls this approach “zero-engagement”, as he does not have any involvement or interest in his stock investments. He said that this approach has worked well for him, as it has outperformed many active portfolios over the years.
A Long-Term Investor: A Procter & Gamble Story
Koch started his investment journey at the age of 12, when he bought two shares of Procter & Gamble (PG) for about $140. Today, after multiple stock splits, those two shares are worth $20,000. Koch said that this experience taught him the value of long-term investing and compound interest.
Koch said that he still owns those two shares of Procter & Gamble, as well as some other stocks that he bought decades ago. He said that he does not sell any stocks that have appreciated in value, as he does not want to pay taxes or fees on them. He said that he only sells stocks that have declined in value, as part of his biweekly random stock selection process.
Koch said that he does not know how much his stock portfolio is worth, as he does not check it regularly. He said that he only knows that it is enough to support his lifestyle and philanthropic activities. He said that he does not have any plans to change his investment method, as he is happy with it.
