Phase I of our secret project and my third quarter goals are both going really well, even though I’m spending an inordinate amount of time on the manuscript for my next book, which is a guide to calculating intrinsic value of stocks, bonds, real estate, and other assets.

Everything Merging Under the Kennon & Company Brand

Remember the $31,000 we spent on the paid search advertising pilot program last September?  Yeah, part of that involved testing various keywords to determine if we were better off running our retail companies as separate domains or under one, parent brand.  I didn’t tell you that at the time because there was no reason to do so.

Baby Gifts from Kennon & Company

Following the successful divestment of JustBabyGifts.com and WonderfulWeddingFavors.com, we are bringing in luxury niche-market baby gifts and such to the Kennon & Company store and online boutique.

The results of that test helped us confirm our belief that we can grow even faster by consolidating everything under a single brand name and online store and unleashing all of our advertising dollars, search optimization efforts, and time on that one luxury “superstore”.  The search engines and shopping engines, which serve as a major source of new customers, are now sophisticated enough they don’t require individual domains for various product lines.

Thus, as part of the launch of Cherrywood Capital Group, we successfully divested JustBabyGifts.com and the WonderfulWeddingFavors.com, leaving us with a pile of cash to focus our attention on building a retail holding structure that mirrors our sporting goods businesses all under the Kennon & Company brand.  (My guess is, those two sites will be shut down later this week and absorbed into the new business that owns them.)

Don’t misunderstand me … we will still be in the baby and wedding gift businesses, but they will be departments within the larger Kennon & Company family, giving us access to far more prestigious product lines that require physical retail locations and economies of scale when it comes to purchasing and banking relationships. (more…)

Grafton Cologne from Truefitt and Hill

The Grafton cologne for men from Truefitt and Hill retails for $75.00 per bottle.

We are expanding our shaving section at Kennon Home Accessories and one of the things I’ve been testing is the Truefitt & Hill line of shaving creams, shaving lotions, aftershave, colognes, and other products. It is toward the higher end of the price point when it comes to luxury shaving sets for men (a bottle of aftershave, shaving cream, cologne, and shaving oil would retail for $202.00) but after using it, I don’t think I could ever go back to the products I used for most of my life.

Grafton Aftershave from Truefitt and Hill

The Grafton aftershave from Truefitt and Hill retails for $42.00 per bottle.

Truefitt and Hill is the company that has been making shaving creams and personal fragrance products for the British royal family and aristocracy for centuries. In fact, they crafted a $2,000+ sterling silver shaving set that is available via special order and is purportedly used by the House of Windsor. The company history is magnificent and it is clear to see why when you experience the products themselves.

The fragrances of the Trueffitt and Hill shaving set family are unique – you aren’t likely to find anything comparable among the other shaving set companies. You are also going to find that they become personal. Once you find the one that pleases you most (or your spouse, depending upon who has the stronger opinion), you aren’t likely to deviate. We have customers that specifically stop by to refill on their fragrance of shaving cream when they are in need of a new box. (more…)

Joshua Kennon reading the Cinnabon franchise disclosure document

I worked my way through the Cinnabon franchise disclosure document that the Focus brands company sent and the problem I'm having is two-fold: 1. It seems like the investment itself is a craps-shoot in the sense that there appear to be a few highly successful Cinnabon franchise locations but the others may not be (I can't tell, obviously, without speaking to individual Cinnabon franchise owners), and 2. It probably isn't worth the time investment relative to the potential profit payoff.

I mentioned yesterday in the article on Dairy Queen franchise owners that after graduating from college, Aaron and I had looked into putting capital to work by opening several franchises in the town where we grew up.  We thought it would be a good place to invest the money we were earning from our other businesses without having to be involved on a day-to-day basis.  In other cases, we thought it might be a good way to structure companies so that our immediate family members could make an investment alongside us and, in some cases, run the companies as managers / minority-owners.

One of the companies we researched was Cinnabon, the maker of (what I consider) to be the world’s best cinnamon rolls.  The company’s owner, Focus Brands, sent us a franchise disclosure document and I began working my way through it.  I love the Cinnabon brand and the idea of owning a local Cinnabon franchise is appealing because it would mean I could grab a cup of coffee each morning from my own business.  It obviously wouldn’t be a large part of our holdings, but it would have a certain emotional appeal and bring jobs to the local community.

Here are our thoughts … (more…)

Kennon Green and Company

For the first, I understand what Buffett and Munger mean when they say there is "no master plan". If you follow attractive values, and focus on opportunity cost, you end up in places you never expected. I have no idea what the firm will look like 10 years from now, only that we will focus on generating the highest risk-adjusted real return on capital.

I’ve been thinking a lot about the ultimate form the partnership or the holding company is going to take when I consolidate everything I own – all of my private businesses, stocks, bonds, real estate, and other assets, along with my parents, family, and friends, under a single investment vehicle (I explained this in We’ve Finally Settled on a Course of Action).  This has been occupying and increasingly large percentage of my time, mostly because I think the best thing to do is to simply raise capital, take a percentage of the profits, and then invest the money in the best risk-adjusted opportunities.  Which opportunities present themselves and which time is beyond our control, so there’s really no way to predict, ahead of time, what our holdings will be.

I do know, however, that there are a few areas that interest me.  I’ve been breaking them up in an organizational matrix so I can think about how to put together the various “pieces” when the time comes.  This is probably 5+ years in the future.

Here’s the plan …

(more…)

David Oscarson Releases New Pen Series

David Oscarson Consider the Liles Black Pen

David Oscarson Consider the Liles Black Pen

Sweet!  David Oscarson released the next installment of his pen series called Consider the Lilies.  They were inspired by Luke 12:27 when Christ said, “Consider the lilies, how they grow. They toil not, neither do they spin; yet I say unto you, Even Solomon in all his glory was not arrayed like one of these.”

Here’s the company’s official statement on the pens:

Marking our Tenth Anniversary, the Lily Collection speaks of our gratitude for all that is virtuous, beautiful and pure. In a world full of clouds and error, the Lily Collection reminds us of all that we hold precious, all that we hope for and all that we aspire to be.

The Lily Collection incorporates three levels of Guilloché engraving and six colors of translucent and opaque Hard Enamel on each Collection piece. The entire body of each pen is first cut down to the level of the background, leaving the outer and inner lines of the lilies, pads and leaves in high relief. The backgrounds are then kiln-fired with opaque Hard Enamel in either Black or White. The Lilies are the first Collection pieces to incorporate three colors of Hard Enamel onto one surface without separating each of them with dividing lines in high relief and the three colors of the daylilies graduate and gradate inconsistently, emulating nature’s unique ability to distinguish one lily from another.

I have got to get my hands on both of these.  The rollerball version lists for $4,700 with the fountain pens coming in at $4,900 each before sales tax.

Consider the Lilies White Version David Oscarson Pen

Consider the Lilies White Version David Oscarson Pen

The great, eternal question is, of course, whether or not to ink a collector’s edition fountain pen.  Personally, I buy them to write.  I say ink away, absolutely, positively.  These are not just financial investments for me.  They are tangible and in that regard, they are different from stocks or bonds.  You can see them.  At some point, they become emotional attachments, as well.  I can still pick up the two Montblanc pens I bought as my first writing instruments when my mom took me to Omaha to visit Warren Buffett’s jewelry store, Borsheim’s.

At the time, I was in college and I spent $500 or $600 on the two pens, which consisted of a black and platinum rollerball Montblanc LeGrand and a black and gold fountain pen Montblanc LeGrand.  They still sit in my office at headquarters today.  In fact, I used them to sign the papers when I bought my first house, to sign my book contract, and a lot of other important documents.  I’ve used them to sign the incorporation papers for some of the businesses we launched this year.

These are not mere excesses or trivialities.  They are probably one of the best emotional and financial investments a man (or woman) can make if he knows what he’s doing.

Triple Burl Wood 9 Pillow Watch Case

Triple Burl Wood 9 Pillow Watch Case

When you own businesses, certain orders just make you happy. Of course, you appreciate every one, no matter how small. From time to time, however, there is something about a particular piece of business that just makes you smile.

We actually do respectable global business through many of our online businesses. Surprisingly, quite a bit comes from The United Arab Emirates, specifically areas such as Abu Dhabi. Apparently, we just sold a $700 watch to a professional soccer star and are shipping the merchandise to his home there.

It’s crazy to think that as I sit here, working on a MacBook Pro, drinking coffee, and reading stock reports, there are people all of the world browsing the pages of companies that I own, buying products that generate cash for me to redeploy into other investments. It was always the goal, but the fact that it’s happening halfway around the globe is just amazing to me, even now.

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