- 30 -
Market Total Return
Company Discount 3-month 1-year 3-year 5-year
Morgan Grenfell 19.2% 39.3% 45.5% 18.4% 22.1%
Central Securities 17.3 17.0 23.9 13.9 21.7
Tri-Continental 17.3 4.9 11.2 21.4 22.7
Adams Express 17.2 17.5 27.6 26.4 24.9
Royce Micro Cap 17.0 8.7 4.1 8.4 11.7
General American Inv. 8.5 24.2 38.7 37.1 30.0
Salomon Bros. 7.3 23.6 34.7 28.8 33.8
Average 14.8 19.3 26.5 22.1 23.8
75th percentile 17.3 23.9 36.7 27.6 27.5
Median 17.2 17.5 27.6 21.4 22.7
CCC 25.0 6.0 17.8 25.1 22.9
Next, Mr. Frazier eliminated lower discounted funds (General
American and Salomon Brothers) because he concluded the low
discounts were due to the consistently high returns of those
companies. Mr. Frazier believed that CCC’s performance was most
similar to those of the funds in the upper end of the discount
spectrum (Morgan Grenfell, Central Securities, and Tri-
Continental), because of CCC’s inconsistent returns and small
size. Finally, he concluded that CCC was comparable to Morgan
Grenfell, because its assets were slightly less than CCC’s and
Central Securities’ and Tri-Continental’s assets were much
larger.
Ultimately, Mr. Frazier concluded that an investor would
demand a higher rate of return or a larger discount than for the
comparable companies, because: (1) CCC had fewer assets than
almost all comparables; (2) CCC paid fewer dividends than the
average of all comparable companies (excluding Morgan Grenfell,
which did not pay dividends) but paid dividends in amounts
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011