Department stores are now offering ties for less than $20. That's amazing!
Although I’m normally a Nordstrom’s guy myself, I have to say that after reading an article a few years ago (The Wall Street Journal or The Financial Times maybe?) about the vastly improved quality of department stores suits such as the J.C. Penny brand thanks to the use of expert tailors in Hong Kong for a fraction of the price and trying out the difference for myself, I have been genuinely shocked at how good the improvement is. I waited until a 50% off sale and bought a couple of suits for $179 each instead of the usual $360 and they were great. They now hang in my closet next to far more expensive Brooks Brothers and Burberry brands and, to be perfectly honest, I’m just as comfortable and content wearing either.
To be fair, since I’ve been back in the Midwest, I find myself wearing blue jeans, a cashmere sweater, and tennis shoes about 90% of the time. The suits have sort of languished in my closet because my primary job is now capital allocation, we’re entirely internally funded so I don’t have to meet with investors, and there’s no point in wearing anything except for the sake of comfort. (Today was actually the first day I had been dressed normally for a long time – a Brooks Brothers dress shirt with a blue Burberry, Ralph Lauren jacket, Johnston & Murphey shoes, Montblanc watch.)
Focus on quality and substance, not brands. Most people don't buy products for their utility, they buy them as "status symbols" that are meant to signal to other people, "I fall (insert class here) on the class system, I have (insert degree) educational credentials, and I am doing better than you. It is the same belief that causes some to think they can never be successful from a community college compared to a private school. That's ignorant and pathetic.
Anyway, J.C. Penny is having another suit sale and I am seriously considering buying several more. I’m sure the people at Halls Department Store and Barney’s would be aghast at the notion of private label store brands lining the shelves along with Ermenegildo Zegna and Hickey Freeman but, frankly, that’s just too damn bad. Charlie Munger taught me to focus on quality and substance, not marketing and illusion. The same part of me that gets excited about stocks trading at a 5x p/e ratio or selling a product for a 500% markup gets downright ecstatic about the idea of saving that kind of money.
It’s just how I’m built. I hardly ever pay full retail price for anything. I just can’t help myself. For example, at Nordstrom’s, if you wait until the Christmas sales when prices are nearly 50% off and use a Charles Schwab 2% cash back Platinum Visa (which you pay off in full, of course) so that part of your purchase gets credit back to your brokerage account as a dividend, you can usually get a fantastic suit from Burberry, Hickey Freeman, or Canali for only $300 to $700 (compared to the usual $600 to $1,500 per suit), plus find more money in your investment account with which you can buy stock!
Better yet, use American Express reward points gift certificates and your cost is zero. Someone who owned a small business that generated $500,000 in sales and put $250,000 of his cost of goods on an American Express Platinum Card would get the equivalent of $2,500 in gift certificates to the vendor of his choice by cashing in points. By waiting until the sale, you could get at least five really good suits that normally would cost $5,000 absolutely free. Seriously, even if you weren’t making any more profit than the guy down the street, you would be living much better because of how you bought. Hence, the old retail saying, “Well bought is well sold.” Buying correctly is more than half of the battle to building a successful business and your net worth.
So, if you happen to be in the sales department of the local department stores, there’s a good chance you’ll see me over the next few days.
Side Story: The Competition
To this day, Brooke Edwards remains the only person I know who can seriously challenge me when it comes to getting the most bang for the buck. She somehow has the ability to get free sofas and insanely nice merchandise for like, $3 or $7. I don't know how she does it. If there were a money saving Olympics, I would be nervous before she and I competed.
The only person who has ever matched my skills in the money saving department is a woman named Brooke Edwards. She has the ability, somehow, to get $300 worth of merchandise for like $7. (I’m not kidding – seriously.) She would just show up at college and have free sofas or furniture.
If you ever need anything purchased or procured, Brooke Edwards is the woman to see. Her skills are magical.
Amherst professor Richard Wolff, is arguing that capitalism is a failure because events like the housing crisis keep occurring with some regularity. Evil banks are “forcing debt” on more Americans who are downing under their bills. He proposes that we should create low cost “community owned” housing for everyone.
