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Outstanding
Investor Digest

January 1986

PERSPECTIVES OF 1llE NATION'S MOST SUCCESSFUL MONEY MANAGERS.

This Issue:

Most Purchased Securities

issue of Outstandin& Investor

This months featured money manager is Ernie
Kiehne, lead portfolio manager of Legg Mason
Value Trust, the nation's best performing mutual fund
since its formation in 1982. Our interview with Mr
Kiehne begins on page 5. Mr. Kiehne and Legg Mason
have also published a list of recommendations every
Thanksgiving since 1975. Their list is up over 800%
since 1978 (better than 37% per year). For annual
performance figures, see page 5. This year's list of Legg
Mason recommendations begins below
We have also prepared a list of the stocks most purchased by a select group of money managers whose investment judgment has been excellent to date-our "Most
Purchased Securities"- the first in a series of "Outstanding Investor Portfolio Reports" (see opposite).
In our regular feature, "Outstandin~ Investor
Perspectives," ~pull together the opinions and outlooks of outstanding money managers from the nation's
leading business publications, newsletters, company
communications, SEC filings and of course, directly
from the investors themselves (begins on page 2).
In our first "Outstanding Investor Digest Awards",
(page 11 ), we take a look at the most noteworthy comments to date. Finally, r,our editor closes out this first
issue with "Observations' of a common lament being
sounded by an increasing chorus of highly respected
observers (page 12).

Outstanding Investor Portfolio Report

Welc~e to the 1first

We welcome your comments, suggestions, and criticisms. Our format will likely undergo significant changes
as as we strive to make Outstanding Investor Digest more
interesting and valuable for you. What will not change,
however, is our subject-the nation's most successful
money managers-their outlooks, opinions, activities, and
achievements. We hope you find it as fascinating and
insightful as we do.

This Month's Portfolio;

Legg Mason's Thanksgiving
Most Purchased Securities:
Outstanding Investor Portfolio Report 1
Perspectives .............. 2
Interview:
Legg Mason's Ernie Kiehne S
Outstanding Investor Digest Awards 11
Observations-Patience.12

. ~tanding Inyestor Digest has reviewed the portfolio holdings of 30 selected money managers and investors who have achieved excellent investment perfomance
in prior periods (from as little as 3 1/2 years to more than
50 years). Among the more than 1,600 common stocks
3;l1d the more ~ 5,000 equity positions in their portfo~os, the ~ollowmg were _those 111!>5t often showing an
mcrease m shares held by these mvestors in the quarter
ended 9/30/85:
Securi
Purchasing
IBM* ty
11
Schlumberger*
7
ABC Cos.
6
CBS, Inc.*
6
Eastman Kodak
6
Helmerich & Payne* 6
Montana Power Co.
6
6
RCA Corp.*

Sellin& HoldinJ

3
1

6
3

3
0

*Referenced elsewhere in this issue.

Individual portfolio holdings, based on filings with the
Securities and Exchange Commission and shareholder
~rts, provided by CPA Investment Technologies,
with offices in Manhattan and Silver Spring, Maryland.

Legg Mason's Thanksgiving List

Santa Claus Arrives Early
With Stocking Full of Bargains
Legg Mason's annual Thanksgiving List has perform
ed remarkably (up more than 37% per year since 1978).
Annual performance figures are shown on page 7.
Here's this year's Thanksgiving Do:zen with Legg
Mason's accompanying commentary:
Affiliated Bankshares of Colorado @ $15 112
is the third largest banking system in the state with $3.5
billion in assets. AFBK is a quality regional bank which
has earned high returns on equity and assets.
Amdahl @ $11 7/8 is a leading manufacturer of
large scale IBM-compatible computers which offer price
performance characteristics believed to be superior to
competitors. Selling near historic lows relative to book
yalue and revenues, AMH is attractive for aggressive
mvestors
Converse @ $14 produces a complete line of
athletic footwear. During the past five years, annual
sales growth has averaged 17%. (contmu
. ed on page lO)