Joshua Kennon is a Managing Director of
Kennon-Green & Co., a private asset management firm specializing in global value investing for affluent and high net worth individuals, families, and institutions. Nothing in this article or on this site, which is Mr. Kennon's personal blog, is intended to be, nor should it be construed as, investment advice, a recommendation, or an offer to buy or sell a security or securities. Investing can result in losses, sometimes significant losses. Prior to taking any action involving your finances or portfolio, you should consult with your own qualified professional advisor(s), such as an investment advisor, tax specialist, and/or attorney, who can help you consider your unique needs, circumstances, risk tolerance, and other relevant factors.
One technique I find helps a lot of investors act more rationally is one I developed during my late teenage years. I would convert all companies I was analyzing to $100 per share to make comparison of the figures and yields easier. In essence, this allowed me to ask the question, “How much profit am I buying for every $100 I put into this company?” If I paid a high multiple for a particular business, it forced me to justify the higher valuation by writing down my reasons for my belief.
I thought it might be useful to show you how I’d analyze an investment portfolio and calculate a reasonable estimate of not only expected growth in capital but the overall economic characteristics of the holdings.
I often hear people throw around words like “moral” and “immoral”. What does this mean? Does morality change or is morality something that is always true and unshifting through the sands of time? Words mean something so I have to identify what it is to be “moral”. That means we need to frame the parameters.…
There is an apocryphal story about Warren Buffett that I always found useful. [mainbodyad]Years ago, when he was supposedly touring Heart Castle, the gargantuan San Simeon, California estate of American newspaper tycoon William Randolph Hearst, the tour guide spent hours highlighting the enormous scale and no-expense-spared luxuries. He talked about how much money was spent…
Continuing on their quest for the perfect cupcake, my mom and Aaron were cooking up a storm in the kitchen tonight making what turned out to be an amazingly fantastic chocolate and peanut butter cupcake filled with cream peanut butter and layered with melted liquid milk chocolate. Here are some pictures of the work in…
Have you ever wondered how the average American household spends its money? How much goes into food versus shelter or how much money is spent on transportation versus clothing? This great chart helps illustrate the most recent government data on household expenditures by category.
There was a firestorm of controversy this morning following remarks by New York Federal Reserve Chairman William Dudley. In an attempt to explain how the Federal Reserve calculates inflation, the Fed President commented to a group of working class people that you can’t just look at the price of food – the price of everything has to be factored in to understand what is happening to the purchasing power of the dollar.
We had hoped to have time to swing by Washington, D.C. on our upcoming business trip to New York but it looks like that won’t happen because we need to spend more time in New York and New Jersey. My mom wanted to try this place called Georgetown Cupcake in Washington and now that we…
Today’s mail bag letter comes from Sjberkely who writes: I was reading one of your blog entries and found it to be misleading. I hope you are able to correct the problem. Below are some facts that should help explain the system a bit more clearly. You should know that people are in a state…
How big is Earth compared to the Universe? Think about Earth. The oceans. The mountains. The forests. The millions of forms of life. Thunderstorms. Volcanoes. Snow. Our history, including past civilizations and enormous monstrous dinosaurs. Now consider that there are at least 10 trillion planetary systems in the known universe.
