April 28, 2015

Joshua A. Kennon

I’m a private investor, financial author, and business owner who was the first in his family to graduate from college.  I grew up in a small farm town in the midwest and decided I wanted to be rich at a very early age.  My youth was spent obsessively studying accounting, finance, economics, business, and the biographies of what amounted to probably every notably successful person in the past two hundred years.  As a teenager, I decided to take the advice of older, wiser men who encouraged a liberal arts education and moved across the country to study classical music in university, both Aaron and I working our way through our undergraduate years and earning six-figures from side projects while enrolled as full-time students, living far below our means.  We shoved all of that money into brokerage accounts to buy shares of whatever undervalued stocks, bonds, or other assets we could find.

Our senior year, in between 18 credit hours each, three internships between us, Aaron’s part-time job at Macy’s, me writing about investing online, and a book contract I signed that resulted in the publication of The Complete Idiot’s Guide to Investing, 3rd Edition, we decided to start our first Internet company.  We taught ourselves how to code, launched it, and within a very short amount of time, it made us a lot of money.  That money was another source of cash that was redeployed to the investment operations I managed, building our capital levels, position by position, using a deep value, discounted cash flow approach with an almost religious-like obsession to minimizing the downside of risk.  (Both of us having to pay our own way through school, and support ourselves from the time we were 18, our motto was taken from Charlie Munger: “You only have to get rich once”.  We were not going back to “Go” and were willing to take a bit longer to get there for the sake of safety.)

Today, Aaron and I own a collection of operating companies and investments that generate ever-growing streams of cash.  We have no regular office hours, still live in the same house we bought at 25 or 26 years old, and wake up every day to try and find intelligent things to do with the new money that has come into the accounts.  Sometimes, we work for weeks straight, other times, we don’t do anything but watch movies, play games of Civilization, and bake pies.  There’s not really a model for how we structured our lives except we know that it fits us.  Our goal was to do an entire lifetime worth of work during those early years so we could live off the dividends, interest, and rents in later years – in the old days, there were times we’d sleep at the office and put in 100+ hour weeks, only going home to brush our teeth and shower.  Thankfully, we achieved that so those days are behind us.

This blog began as a way to keep in touch with my retired Aunt Donna.  It attracted a small community, some finding me from my book, some finding me from my finance articles at About.com, some discovering me after reading an excerpt of my work in a textbook they had to have for a college course.  Some found their way here after stumbling on a post about trying a new recipe or one of my favorite Korean dramas.  Over time, the user base grew into a group of amazing people who came together over time and have a passion for talking about corporate finance, politics, ethics, science, gardening, and a host of other seemingly non-connected topics.  (Seriously, the demographics of this place are incredible and I feel privileged just to have so many interesting conversations with so many interesting people.)

This site is mostly about ideas; things that are on my mind, companies I happen to find interesting, events that catch my eye.  My favorite thing in the world is a passionate, well-reasoned argument against a position I believe so if you see something you think is in error, convince me.  Use facts and figures.  Explain why I should change my mind, base it on evidence, and I will.

Finally, there is something else unusual about the blog that seems to be hard for a tiny minority of people to accept: I have nothing to sell you and don’t manage outside money.  Despite attracting tens of millions of unique readers per year between the two sites on which I write, I have zero interest in any sort of fame or notoriety.  This is an intellectual outlet for me, and I’m just as likely to post about testing white chicken chili or cinnamon roll recipes as I am about the pension disclosures of a Fortune 500 company.  Whether you buy individual stocks or real estate, whether you invest through index funds or certificates of deposit, whether you believe in widespread diversification or focus investing, I just like having conversations with highly intelligent people about really interesting things.  While I’ll tell you the reasons I behave in certain ways when it comes to managing my family’s money, I have no interest in attempting to convince you that you should behave in a similar way, only having a discussion so we all improve our thought process.  You’ll probably find that I am far too conservative for many of you as I believe in taking calculated risks with low downsides and high payouts, letting compounding, tax efficiency, and synthetic equity do most of the work.