Thoughts on Business, Politics, and Life from a Private Investor
Today's question comes from someone named Aran. (Is that pronounced like Erin or Aaron?) Anyway, it involves launching a mutual fund. Hi - Why did you decide against launching a mutual fund? Were there any specific operational barriers that you didn't realize existed? What did you estimate the cost of establishing the SEC-registered vehicle would be? Thanks,Aran I didn't (decide against it, that is). The start-up costs were relatively low, the operational barriers were all … [Read more...]
Between work, my writing commitments, personal Christmas events, parties, get togethers, the upgrades at the house, and my home life, I haven't been paying much attention to the stock market lately. This weekend, my father mentioned that General Electric had raised its dividend, again, to 17¢ per share, per quarter (indicating 68¢ per share, per year, for a dividend yield of 4.00% on current market cost). That was a pleasant surprise since I hadn't yet gotten around to listening to the … [Read more...]
When looking at home purchases, it is best to compare median household income to median home price for a local economy, then factor in a few other projections. Though not perfect, it improves your odds of avoiding serious trouble. There are also a few other things that are worthy of consideration, including future interest rates, local employment projections, your own personal opportunity cost, and expectations for the supply and demand of housing units to households. Joshua, Hi again. … [Read more...]
From time to time, to gauge opportunities for the workforce in the marketplace, I look at retirement investing benefits and other benefits. This evening, I was thinking about Wal-Mart Stores, Inc. Here is how I approach these things at my desk. Wal-Mart matches employee stock purchases by 15% on the first $1,800 worth of shares bought each year. If you work at the company and write a check to buy $1,800 worth of the stock, the company is going to give you another $270 to buy … [Read more...]
Here are some words of wisdom I came across about portfolio management and building wealth from billionaire Charlie Munger. We've really made the money out of high-quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money's been made in the high quality businesses. And most of the other people who've made a lot of money have done so in high-quality businesses. Over the … [Read more...]
I do not believe your investments should be protean. If you have chosen an asset well, meaning the asset continues to churn out constant or ever-increasing sums of surplus cash net of taxes and inflation, and you paid a reasonable price for ownership, the best thing you can possibly do for the long-run is sit on your metaphorical hands, grow richer with each passing year, and figure out intelligent things to do with the dividends, interest income, and rents you accumulate. This is the … [Read more...]
In 1936, Parker Brothers released an add-on to the popular Monopoly board game called the Stock Exchange. Although the core Monopoly game had two asset classes - real estate and a few common stocks in the form of the four railroads and two utility companies - the Stock Exchange add-on brought the experience to a new level, introducing different dynamics to game play. Personally, I much prefer the Stock Exchange inclusive version of Monopoly to the regular game itself. Collecting … [Read more...]
Think of Long-Term Stock Holdings Like You Would a Family Business Sidney Weinberg, the legendary leader of Goldman Sachs a couple of generations ago, makes perfect sense to me. According to Charles D. Ellis, "Loyalty was a central value to Weinberg. He ate, drove, wore, and used the products produced by 'his' companies - cheese had to be Kraft, coffee had to be Maxwell House, cars were Fords, etc." I don't see how there is any other way to behave. If you are long-term owner … [Read more...]
What follows is an example of how we think about investing. It is not a stock recommendation, and the only reason I'm using this as an example is because the firm in question, Wells Fargo & Company, is one of the biggest enterprises in the world with more than $1.2 trillion in assets. Virtually everyone reading this who owns any low-cost index fund or a comparable equity fund through a 401(k) or brokerage account already owns shares of Wells Fargo. There is no guarantee that the entire … [Read more...]
A nearby sandwich shop got a Coca-Cola Freestyle fountain machine, the revolutionary new design that allows you to create more than 100 flavors of soda from a single spout as a result of microburst flavor technology controlled through a touch-face screen. Aaron and I went and had lunch, trying it out for ourselves. For me, it was Cherry Vanilla Coca-Cola all the way. He tried both the Raspberry Coca-Cola and the Lime Coca-Cola. A few hours later, we returned and I tried the Orange … [Read more...]
There is a painting from 1750 by artist Thomas Gainsborough called Mr. and Mrs. Andrews. The original hangs in the National Gallery in London, England, where it has been held in collection for more than 50 years. I have a reproduction hanging in my own home because I love the story behind it. The painting [...]
Last night, I was working late and watching the most recent episode of House, M.D. on Hulu Plus. There is a scene where an Amy Grant song plays and one of the doctors goes, “Amy Grant? Really?”. That response mirrored the response of some music critics when she burst onto the music scene decades ago, [...]
There is an old latin phrase, panem et circenses, made famous by Juvenal of Ancient Rome. “Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and [...]
This mail bag question has to do with marriage and figuring out the answer to the oft-posed question, “When is the best age to get married?” … Dear Mr. Kennon, Your writing has helped me so much since I first found it. My question isn’t exactly related to money or investing but I want to [...]
Today’s question comes from someone named Aran. (Is that pronounced like Erin or Aaron?) Anyway, it involves launching a mutual fund. Hi - Why did you decide against launching a mutual fund? Were there any specific operational barriers that you didn’t realize existed? What did you estimate the cost of establishing the SEC-registered vehicle would [...]
I'm a private investor who loves architecture, furniture, clothes, history, philosophy, books, cooking, and music as much as I do finance. Continue reading ...
Connect with Joshua Kennon
You can send mail bag questions, subscribe to updates on Facebook and follow me on Pinterest, where I track stuff I like, collect, study, and find amusing.
Investing for Beginners
To read my content for new investors on a wide range of topics including investing in stocks, investing in bonds, investing in real estate, and investing in mutual funds, head over to Investing for Beginners at About.com, a division of The New York Times, where I have thousands of articles and lessons.
Membership has its benefits. When you are logged in, you see the most recent version of the site (not an archived cache), you can post comments and join in the discussion, and more! It takes less than 10 seconds to join and basic membership is free.