Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory

Apr262013
1 ounce American gold eagle bullion coins on wooden background

This Is the Kind of Business Behavior That Disgusts Me

Case Studies & Profiles9 Comments

How can people do this and live with themselves?  This is the sort of thing that if I were running a company, I don’t care if we made millions of dollars a year in profit doing it, I’d shut it down.  I believe it is immoral.  Sure, it breaks no laws that I know of but it strikes me as ethically wrong.  It is the reason we need stronger consumer protection laws in the United States.  I believe it preys on the ignorant; the people who don’t know any better and who are trying to secure their future.

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Apr42013
McDonalds Brothers

The Economic Tragedy of Ed Toman and the McDonald’s Fortune That Could Have Been

Case Studies & Profiles9 Comments

The biggest mistakes are often not seizing the huge opportunities that are right in front of you.  One of my least favorite stories of this economic tragedy involve a man named Ed Toman, who lived in Southern California back in the 1940s and 1950s and played an important role in the early days of the McDonald’s restaurant empire.

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Mar292013
An Academic Example of Cash Flow Differing from Reported Earnings - McDonald's Corporation

A Quick Cash Flow Statement Lesson – A Look at How McDonald’s Real Payout Ratio Is 110%, Not 54% As First Appears

Accounting & Finance, Stocks2 Comments

McDonald’s is one of those businesses that I love.  The last time we talked about it was when I wrote the 25 Year Investment Case Study of McDonald’s, and showed how you could have turned $100,000 into anywhere between $1,839,033 and $5,547,089 depending on how you handled dividend reinvestment and the Chipotle split-off back in 2006, and the sorely lacking media coverage of McDonald’s results in February.  No matter which way you look at it, despite periods of overvaluation and undervaluation, alternating with the underlying performance and the emotional moods of shareholders, McDonald’s has been a fantastic company.  It makes its employees and shareholders a lot of money.  It gives society something it wants, whether that be a plain salad with side of fresh fruit and a non-sweetened iced tea or a double cheeseburger with french fries and a Coca-Cola.

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Feb182013
Railroad Stocks - Historical Analysis

Union Pacific: A Company That Looked Expensive But Was Undervalued

Case Studies & Profiles, Value Investing3 Comments

The developments on the income statement and balance sheet of Union Pacific between 2005 and 2013 are an excellent example of why it is important for you to analyze data yourself, and come to conclusions based on reasonable, rational, intelligently organized facts.  The willingness to take action when others do not agree with you, and to have your action backed up by solid evidence, can make the difference between being comfortable and ending up rich.  Two of the world’s wealthiest titans demonstrated this truth, not only when buying shares of Union Pacific, but other railroads, as well.

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Feb62013
Running an Investment Case Study on Eastman Kodak Including the Bankruptcy

An Investment Case Study of Eastman Kodak: How the Bankruptcy of One of America’s Oldest Blue Chip Stocks Would Have Turned Out for Long-Term Investors

Case Studies & Profiles11 Comments

A Case Study of Eastman Kodak How the Bankruptcy of One of America’s Oldest Blue Chip Stocks Would Have Turned Out for Long-Term Investors One year ago, Kodak declared bankruptcy after more than 130 years in business as a leading blue chip firm that gushed profits for its owners.  I wrote Kodak’s demise at the…

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Feb42013
Quincy Florida - The Town of Secret Coca-Cola Millionaires

How Quincy, Florida Became a Town of Secret Coca-Cola Millionaires

Case Studies & Profiles25 Comments

In the 1920s and 1930s, a banker named Pat Munroe in the small town of Quincy, Florida noticed that even during the depths of the Great Depression, otherwise impoverished people would spend their last nickel to buy a glass of Coca-Cola.  With good returns on capital, and a once-in-a-century valuation so low that the business was trading for less than the cash in the bank, “Mr. Pat”, as he was called, encouraged everyone he knew to buy an ownership stake in the firm.  He would even underwrite bank loans, backed by Coca-Cola stock, for his responsible depositors to encourage people to acquire equity.

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Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory