Imagine this: A group of Wall Street’s sharpest minds, managing billions, get called into a meeting. They’re about to meet the mystery investor who’s been crushing their returns. They expect a slick, fast-talking genius with a complex algorithm.
Instead, in walks Allan Mecham, a quiet, soft-spoken college dropout from Utah. He had no MBA, no secret software. When they asked about his investment models, he replied, “I don’t use spreadsheets… It’s all in my head.”
They were baffled. But Mecham’s results were undeniable. He became a legend for posting a positive return in 2008, a year when the S&P 500 cratered by nearly 37%.
His long-term record was even more staggering. Over his first 12 years (from 1999 to 2011), his fund generated massive annualized returns, with some reports citing rates as high as 40%. At that pace, he didn’t just turn a $100,000 stake into $500,000; he would have turned it into well over $5 million.
So, how did this underdog do it? His strategy is so simple, it’s radical.
His ‘Boring’ Billion-Dollar Blueprint 🤫
Mecham’s approach is a masterclass in patient, common-sense investing that anyone can learn from. He follows three powerful rules.
-
1. Buy Amazing, Obvious Businesses. Mecham doesn’t chase flashy trends. He buys companies you already know and understand. Think PepsiCo (people will always drink soda and eat snacks) or AutoZone. He famously bought AutoZone because he realized that when the economy is bad, people fix their old cars instead of buying new ones. These aren’t exciting stocks, but they are predictable, cash-generating machines.
-
2. Bet Big on Your Best Ideas. Most funds own hundreds of stocks, hoping a few will be winners. Mecham does the opposite. He typically owns only 6 to 12 stocks. Why? He believes truly brilliant ideas are rare. When he finds one, he invests with conviction. It’s about quality over quantity.
-
3. Master the Art of Doing Nothing. 🧘♂️ This is his ultimate secret weapon. Mecham spends most of his time reading and thinking, waiting for the perfect opportunity, what baseball legend Ted Williams called the “fat pitch.” While Wall Street traders are frantically buying and selling every day, Mecham sometimes goes a whole year without making a single new investment.
When Everyone Panicked, He Went Shopping 💰
Mecham’s genius was on full display during the 2008 financial crisis. As markets around the world collapsed and investors sold everything in a panic, Mecham did the opposite.
He had been patiently sitting on a huge pile of cash, waiting for a moment just like this. When the crash came, he saw it not as a crisis, but as the sale of a lifetime. He went on a buying spree, loading up on incredible companies at bargain-basement prices.
The result? While the S&P 500 was down nearly 40% in 2008, Mecham protected his investors’ capital. The next year, his fund soared an astonishing 59%.
Your Biggest Advantage Over the Pros
The story of Allan Mecham proves you don’t need a fancy degree or complex tools to succeed in investing. In fact, as a retail investor, you have a huge advantage over the professionals.
Wall Street managers are pressured to show results every three months. They can get fired for one bad quarter, which forces them to follow the herd. You don’t have a boss. You can ignore the daily noise and focus on what truly matters: finding great businesses and holding them for the long term.
You can be patient. You can be brave when others are fearful. You can invest like Allan Mecham.
What do you think is the hardest part about being a patient investor? Share your thoughts in the comments!
Follow me for more simple, smart investing strategy. Join the Relax to Rich Club, where we grow wealth the calm, thoughtful way. ✨