MIAMI BEACH, FLA. -- Victor Posner spends a lot of time around the swimming pool of one of his Florida properties. An aide is always near the poolside phone to summon him from the water if business calls.
Since he believes he is one of the leading individual American investors in the stock market, with hundreds of millions of dollars at stake, the phone rings often.
There is also on his staff a young man who has been up all night examining companies in which Posner is interested. The reports are ready in the morning and with them begins another day in the remarkable career of a man who was a child prodigy of sorts in business, held on to the flair to become rich by the time he was 18 and at 62 must have bigger interests in more corporations than almost any single investor outside Arabia.
Posner agreed to a rare interview. He wore a tie and jacket for the occasion, a fact worth recording since his usual office gear is a sportshirt. There was no explanation for the sartorial change. It probably does not signal a new attitude towards the media. He stopped talking to reporters because of persistent misunderstanding of what he is about -- as he sees it -- on the part of some writers.
They used a word that infuriates him -- 'raider.' He says he is not a raider. He does not buy into companies to take them over. He regards himself as a financier with a clear philosophy of investment. He buys into companies in growth or basic industries whose assets are undervalued and whose stock is selling at or near book value. He uses the cash flow and borrowing capability of some of these companies for further investment on the same line.
'In all instances we have a tremendous stock position,' he said. 'I think I'm doing what's best and I'm the biggest loser if I'm wrong. It's ridiculous to call me a raider. Most people now understand that we are taking a position of investment.'
Posner's resources are obviously vast but he did not put a total value on them.
'We have hundreds of millions of surplus cash at all times,' he said.
Two years ago The Racz International newsletter estimated he controlled $500 million in cash, $1 billion in cash and bank credit, probably as much as $1.5 billion through the issuance of debentures. These amounts are probably higher now.
When he has researched a stock that fits his guidelines -- and he says that almost all of his information comes from close study of the Standard and Poor service plus 'a couple of minutes' on the balance sheet -- he arrives at two conclusions. One is the price at which he will buy. The other is a price at which he will sell. He has no permanent positions in the market.
Since the first of the year he has sold $200 million in stock for a profit of $75 million. Out of his shifting portfolio went Foremost-McKesson -- which fought off what it saw as his takeover threat in 1976 -- Coachman Industries, Simplicity Pattern, Interlake Inc., Orange-Co. Inc., National Gypsum.
His 11 percent interest in Simplicity brought him a profit of $8 million. Simplicity was just the kind of company he looks for. It was cash rich -- $78 million in cash and short term notes. The price was right. He was talking about doubling his 1,395,500 shares in the sewing pattern company when he sold. Why?
'Everything I have has a price,' he said. 'I buy to sell and make a profit on it. When we feel the price is more than we would like to buy more stock at, we sell. We only move into undervalued situations and there are plenty of them in the market today.'
'We' includes his son, Steven, who was trained as a lawyer and manages the New York end of the operation. Posner, who is divorced, has two daughters, one married, the other in college.
He buys and sells in the stock market daily. The phones in his office atop his Victorian Plaza apartment house (which he named with his initials) ring constantly with offers of blocks of stock.
But there is no dipping in and out with real estate, the original source of his wealth, to which he clings with the tenacity of the British landed gentry. A few days before the interview, a choice plot of oceanfront land he bought in nearby Hallandale in 1952 was granted the licenses for which he had pressed for nearly 30 years. He plans several large apartment buildings.
'It might now be worth as much as $150 million,' he said. 'One of the major reasons for success in real estate is staying power. How many people could have paid the taxes for Hallandale? Land itself is an eating turkey.'
Posner was born in Baltimore in 1919 to a family which operated small general stores. He says they were not poor, as gathering legends have it. He became interested in the family business when he was 7 or 8. At 13, he quit Forest Park High School though he would have been the youngest ever to graduate had he stayed. When the principal asked his father to urge his son to remain, he says Posner pere replied: 'He's the boss.'
'I ran everything,' Posner says.
After 18 months of shopkeeping he saw bigger opportunities in real estate. 'At 15 or 16,' he joined in a deal to renovate and sell low-cost housing while he retained ownership of the land itself.
'I retired the first time when I was 18.'
He visited Florida in 1938. He liked the climate. He was struck by the opportunities. Back north he became one of the biggest builders in the country -- he still owns thousands of apartments -- and in 1952 decided to retire again, in a manner of speaking, to Florida.
'Luck is part of the equation,' he said, 'being at the right place at the right time.' His Hallandale land proves it.
He claims his massive entry into the stock market is in the nature of a hobby in that he thinks he would stop if it began to feel like work. He is on deck and available for action from 6 or 7 a.m. to 10 or 11 p.m. The hours seem to agree with him. His hair is white but his manner and movements are those of a younger man.
In the office he works at four flat-topped desks piled with what appeared to be prospectus and reports. 'I come back to them from time to time,' he said. A staff of three file them in due course.
He has four homes, all with tennis courts though he does not play tennis. His newest home at exclusive Golden Beach cost him several million dollars. He has a yacht and, what is getting to be routine for the rich or famous in South Florida, an armed guard at the door.
His philanthropies are private. A friend said he mentioned one day that the Greater Miami Philharmonic needed $100,000. 'You've got it,' said Posner.
He is still surprised that '9 out of 10 financial experts do not believe in undervalued assets. I differ.'
He first came to notice in 1966 when, as the owner of 57 percent of DWG Corp., the third largest cigar manufacturer in the country, he was asked to intervene in an attempt to unseat the management. He sided with the management. When the dispute was settled he fired it.
But he does not interfere with good executives. He insists that no employee with five or more years of service in any of his companies can be dismissed without his approval.
His personal holding company is Security Management Corp. His major investments are in NVF -- ranked high in Fortune's 500 on return to investors -- Sharon Steel, Pennsylvania Engineering, Southeastern Public Service, Birdsboro Corp., Universal Housing and Development Co., and Wilson Brothers (clothing).
'We are the largest stockholders in 15 companies,' he said, but there are also positions in more than 20 others including the $7 billion City Investing where he has agreed to limit his holding to 25 percent and give the company first refusal on the stock.
In May, he bought 416,300 shares $(TEXT OMITTED FROM SOURCE$) of Royal Crown Co., an Atlanta-based soft drink producer and fast food franchiser, through the Chesapeake Insurance Company of which he is chairman, president and chief executive. Posner said 'it's just a good investment.' He thinks it is symptomatic of what he perceives as a more realistic attitude to his dealings that a spokesman for Royal Crown commented: 'We are always pleased about interest in our stock.
If Posner has any regrets it is that he did not fight an SEC claim in 1979 that corporate funds were used for family and personal purposes. On the advice of attorneys, he and his family repaid $1.4 million. 'That was my biggest mistake,' he said. 'It was all untrue.'
