Did you all see BP has lost 20% of its value since I first start buying it? Oh, please, please please hit $31.94 per share. Please. That would result in 5x operating profit on a regularized basis. Even if it took five or ten years to get back to normal, that's a hell of a discount. I told you these things were risky. That's why our derivatives don't expire until 2012. I'm not going to get my hopes up ... but, still ... just imagine that kind of valuation. … [Read more...]
Building a Flour Empire on Super Tycoons
May 19, 2010 By Leave a Comment
I have been playing Super Tycoons so much on Facebook and my iPad that I upped my donation to the developers from $150 to $250. I decided that my next focus is on launching a series of grain mills to build a fortune in the flour industry. Once I've paid for the upgrades, which will cost at least several hundred million dollars in the game, I will have a total of 15 operational mills producing 151,200 pounds of flour per day. At $115 per pound, this would add $17.39 million to my in-game … [Read more...]
The Nature of True Friendship
May 15, 2010 By Leave a Comment
I have a theory that true intimacy, whether in friendship, business, or romantic entanglements, is based upon the degree to which one must censor himself or herself. People are happiest when they do not have to censor or edit what comes out of their mouth and they don't have to concern themselves with the possibility of being judged. On the flip side of the Janus coin, relationships suffer when one party feels they must start watching their words or actions. Personally, I think the best … [Read more...]
Not Every Value Investing Position Is “Buy and Hold”
May 14, 2010 By Leave a Comment
I'm a value investor. My favorite type of holding is a company that generates high returns on non-leveraged equity, has a strong competitive position that is virtually unassailable, and is trading at a stupidly low price-to-earnings ratio. These are rare and when they come along, you have to be willing to make a substantial commitment (as Buffett said, when it is raining gold, reach for a bucket not a thimble). Since I don't like selling stuff, I love the fact they can sit in my accounts, … [Read more...]
Sugar Prices Hit 30 Year Highs
May 14, 2010 By Leave a Comment
I spent the evening reading through the annual report and SEC filings of Imperial Sugar on the iPad listening to the river outside with the windows open. (That would be an article in and of itself - the company had a huge explosion in 2008 at one of its sugar refineries, killing several employees and injuring dozens more. The insurance proceeds have been paid and they rebuilt a state-of-the-art facility that is just now gearing up for full production. Yet, they are off hedge accounting, … [Read more...]
The Problem with Tootsie Roll Industries for the Value Investing Crowd
May 12, 2010 By Leave a Comment
For more than 15 years, I have watched the Tootsie Roll company and waited for it to be "fairly" valued or undervalued relative to the stable profits that churn out year after year like the chewy candies for which the business is known. It's the type of company that I would love to have a long-term investment in that sits on the balance sheet of my operating businesses and compounds over the decades. In fact, I love the idea of being able to pass on to my grandchildren shares of the company … [Read more...]
Why Don’t People Realize You Can Do This In Real Life?
May 10, 2010 By Leave a Comment
During college, one of Aaron and my closest friends made a comment that still haunts me to this day. I was explaining that if you own a share of The Coca-Cola Company, you actually receive a proportionate cut of the company's profits on every single can of Coke sold. This makes sense, after all ... if a business is divided into 100 shares outstanding, and you own 1 share, you own 1% of the company. If you own all 100 shares, you would own the entire business and get all of the profit, … [Read more...]
Foreign Stocks or ADRs …
May 9, 2010 By 2 Comments
I have been thinking about our BP position over the past few days. In fact, once I have gone through a few more years of back reports, I would even consider adding it to the blue chip reserve portfolio as an outright stock holding purely for the dividend income. But that got me thinking ... BP is a foreign stock that is traded on the London Stock exchange and is denominated in pound sterling currency. Would we buy the American Depository Shares that are traded in the United States and … [Read more...]
Tycoons Game on Facebook
May 9, 2010 By Leave a Comment
There is a free game on Facebook called Tycoons that I began playing a few days ago. The premise is that you acquire businesses and sell the commodities or products generated by these companies in a real market-based system. Over time, those who grow the richest are put on a leader board. I'm coming quite late to the game, but I think it will be fun to participate. I am so impressed with the system that I donated $150.00 to the developers. I believe that it should be modified (it is a … [Read more...]
An Interesting Observation from Aaron
May 7, 2010 By 1 Comment
A few nights ago, Aaron and I were discussing the businesses. I asked him what would happen if we ever had a huge, catastrophic falling out (would never happen) to the point we didn't see each other. I inquired as to whether or not he would open an office across the hall from mine in some skyscraper and compete head to head with whatever we had been doing. He'd certainly be rich enough to start buying assets and get into any industry he wanted. His answer surprised me and caught me … [Read more...]
I'm a private investor who loves architecture, furniture, clothes, history, philosophy, books, cooking, and music as much as I do finance. 
