General American Investors Company, Inc., is a closed end fund traded on the New York Stock Exchange under the symbol GAM. It was established in 1927 and invests in large cap growth company. GAM uses a rifle rather than a shotgun and so has a smaller number of securities in its portfolio than most other investment management companies that are its size.
As of December 31, 2011, GAM had net assets of $886,537,370 and has leveraged its portfolio with an additional $190,117,175. The gross assets are $1,084,081,988 with a cost basis of $777,928,855. There is substantial unrealized appreciation in the portfolio. GAM does have a small option writing program.
GAM has been selling at a discount from net asset value. On December 31, 2011 the discount was 16.4% and on December 31, 2010 it was 14.2%. The discount continues to hover in that area.
Performance over the past fifty (50) years has been as follows:
|Years||Percent Market Value Return||Percent Net Asset Value Return||Percent S & P 500 Return|
GAM's ten (10) largest holdings constituted 42.7% of its entire gross portfolio and are as follows:
|Percent of Assets|
GAM's portfolio targets those sectors which offer promise. It is not intended to be a fully balanced and broad portfolios. The following four (4) sectors constitute the bulk of its holdings:
|Sector||Percent of Gross Assets|
|Finance and Insurance||26.4|
|Oil and Natural Gas||11.5|
|Percent Expenses to Net Assets||Percent Income to Assets||Percent Portfolio Turnover|
I also believe in GAM and think they are doing a fine job. They buy quality large cap growth companies which they follow and hold. They do not scatter their bets but focus on what they believe in. I have been watching them a long time and fully accept their philosophy and approach. It does not hurt that they also trade at a substantial discount from net asset value.
I fully believe that most investors should have GAM in their portfolio.
Disclosure: I am long GAM.