The Black and White Burgers of McDonald’s Taipei
Long story short, I’ve been looking into Taipei for various reasons and, in the process, discovered that McDonald’s serves limited edition White and Black burgers there. Besides the fact it warms this American’s heart to know that I’m collecting New Taipei dollars (McDonald’s dividend day was last week and, with the exception of my two sisters, I have practically every member of my family holding shares somewhere, so the deposit is fresh on my mind as I saw it come in across the accounts), I would very much like to try these out of sheer curiosity.
McDonald’s regional offerings are nothing new – in Japan, they serve a Teritama burger with egg, pork, ginger teriyaki, lettuce, and sweet lemon sauce, while in India, there is a Maharaja Mac with chicken rather than beef due to the sacred nature of cows – but other than wraps, it’s been awhile since the company released anything unique in North America.
Wall Street is not pleased with management at the moment due to slow growth but, personally, and given present known factors, I think a 25-year owner is going to be happy with a purchase at today’s price, especially if the dividends are reinvested. That may not turn out to be the case and my opinion may change in the future – crazy things happen and even the strongest businesses can fall into decline – but, for now, I’m willing to back that hypothesis with my own capital. By the end of the year, you’d be looking at an expected 6.1%+ earnings yield with a 3.2% cash dividend yield. But it’s boring and slow, which causes folks to ignore it despite pouring cash into its coffers year after year. The stock isn’t expected to go anywhere over the next 2-3 years (who can predict these things, anyway?); I think it’s stupid to be concerned about that. If the price is right, I like boring and slow. It keeps me in cashmere. And there’s a lottery ticket effect if management can get its act together. Though, I say that because I have faster growing assets that I own entirely so maybe if it’s the only thing in your portfolio you wouldn’t be happy.
I will turn 32 years old later this autumn and I still never get tired of the investing game despite being obsessed with it for the past 22 years. It almost feels too good to be true – money just floods in from smart past decisions as you give individual men and women what they want. Need an ice cream bar on a hot day? That will be $2. Want a hotel room for the night? That will be $325. I love economics. I love it more than Korean dramas, video games, and cooking. I love that right now, it is 3:09 p.m. in Taipei and people are lining up to buy products and services from companies in which I have an ownership stake. How can people not love finance? How can investing not make your heart soar? Even if you want to donate all the money to charity, it’s like a real life game of monopoly where you get rewarded by improving life for your fellow citizens (assuming you choose your firms well – there are some companies that are so evil I couldn’t bring myself to own them, with two off the top of my head that I find particularly disgusting).
I need to get an essay published elsewhere but I’m in my office listening to a song by 炎亞綸 and reading about Taiwanese capital markets and taxation reform to curb speculation.
One of these days, I need to make it over to China. Taiwan just made my list of places to visit, particularly Taipei. My youngest sister is thinking about moving to Japan for a year following college graduation, so it’d give me an excuse to spend half a year visiting various countries over there. A cousin of mine taught English there (China) before he came back to the United States to clerk for a Federal judge in Washington, D.C. if I remember correctly. I should give him a call and ask about how he liked the country.
Update: I restored this post on 05/17/2019 as part of a project in which I am making selected posts from the private archives available, again. This post was particularly sweet for two reasons. Today, Taiwan became the first nation in Asia to legalize civil marriage equality for same-sex couples, including certain adoption rights for family formation. Secondly, adjusting for dividends (but assuming no dividend reinvestment), McDonald’s has produced a total return of more than 127% in the few short years since this post was originally published. Aaron and I still hold shares in our personal household portfolio and it’s been a wonderful component in our overall, diversified asset allocation mix. The lesson: you cannot predict the stock market in the short-term. Equities can increase or decrease in value, often by 50% or more, at any time. Some can even go to zero, experiencing total and complete permanent capital impairment. Rather, the key is to go through life accumulating ownership of productive assets that generate a lot of surplus cash, acquire those assets at valuations that make sense to a rational, non-leveraged business owner, and avoid putting too many proverbial eggs in a single basket, as the saying goes. While it cannot guarantee results, and an investor is almost assuredly going to experience losses, sometimes painful and permanent, from time to time, history has shown that good things tend to happen over multi-decade periods to disciplined savers who follow that model. As always, none of this is investment advice. Instead, I want to focus on the underlying philosophy of wealth accumulation and preservation, especially as measured on inflation-adjusted purchasing power terms.
Reader Comments (14)
Comments are presented chronologically, with replies indented beneath the comments to which they respond.
Lou
June 24, 2014
Joshua,
I typically don't post on blogs - but here it goes.
I appreciate your work even when I disagree with some of it. I appreciate one whom puts in the work in and reduces to a conclusion from facts and instinctive discernment.
"How can people not love finance? How can investing not make your heart soar?" - Best part of this narrative. At a very young age I discovered my love for business (I view investing as a business, from the school of value investing) and the freedom it provides to those who participate in its thrill.
Now at 24, I have not invested in the markets like you have but rather have invested in myself (education, not just paper degrees - although I have a MBA, thanks to a football scholarship). But reading some of your posts put in perspective what I think the millennial generation should be focused on, that is - building wealth through investing, days of our mother's defined benefits are gone.
Anyway, I read a post where you said you wanted to manage a fund by 30, and you state in this post that you're now 32. What happened to managing a fund? I only ask because I have the same aspirations. We share a lot in common (at least what I've garnered from your posts).
I must say, I LOVE YOUR PASSION for this stuff!
TEA - 12
Joshua Kennon
June 24, 2014
Replying to Lou
Nice to meet you! I'm still technically 31 for at least another quarter, haha =) Almost every day, the conversation is coming up at home about what, specifically, the spouse and I want to do with the rest of our careers, where we want to live, and what we want our day-to-day experience to look like. In a sense, not having the same constraints as most families in terms of geography or income has created a situation where anything is possible.
Whether I take on outside capital is one of those discussion. I've met with both attorneys and underwriters and priced a public mutual fund as well as a private hedge fund. Both paths would result in vastly different life experiences. Another option is to refuse altogether, put the money into more passive sources, and spend my days traveling or writing (a few days ago, Aaron and I seriously discussed spending 2-3 years traveling the world living in different countries.) We're also in the early stages of planning to have kids so there are personal considerations. There is literally a file sitting in my house that, if I wanted to pull the proverbial trigger on a fund of some sort, I could do it (one of them needs to be updated - I'm sure the costs have risen a bit).
Though my head rules most decisions, the big ones are made by my heart. Always have been, always will be. My heart will tell me what I want to do one of these days (or years). I figure that as long as the family net worth is climbing higher, I'm having fun, and I'm learning more, the rest is of secondary importance. It makes the journey interesting. Ten years from now, I might be running a public company, building a hedge fund, or running a sea side coffee shop where I spend my mornings reading philosophy. The answer hasn't yet presented itself because I'm not sure which path through the forest of life I want to walk. It will work out when I'm ready. That's how it's been in my experience. I'll wake up one morning, open my eyes, and just know. Then I'll move heaven and earth to make it happen. I've learned not to fight it and let it come on its own.
Kevin
June 24, 2014
I can't recommend Taipei highly enough (and Taiwan in general - other cities are well worth visiting, and some of the national parks are breathtakingly beautiful). I absolutely love it. I'm not even going to get started on the food, I'd be here all day... When you do get around to making this trip, I have a head full of suggestions for you, mostly in Korea and Taiwan, but a few cities here and there in the region too!
innerscorecard
June 24, 2014
They had those here in mainland China too. They were discontinued.
I tried them and they were pretty bad, to be honest.
I do like McDonald's here, though. The menu is becoming more and more local, with some strange and interesting results. If you come here e-mail me and I can buy you and Aaron coffee at a McCafe (I have discount coupons through a family member who works there).
Lou
June 24, 2014
Nice!
Certainly it seems like you have figured out life for yourself.
Wish you continued success, I hope we can connect - I'd like to get your opinion on what the process (starting a fund) has been like for you. I spoke with a few attorneys too, trying to figure out the best way has been fun because I end up learning so much about different structures, cultures and results from existing companies.
We are currently creating a movement for millennials to push - less about degrees and more about education (Don't hate school by any means). Hope to stay in touch so maybe one day you could be a keynote speaker - talk about building worth organically and about your journey.
TEA
Joshua
June 24, 2014
"I figure that as long as the family net worth is climbing higher, I'm having fun, and I'm learning more, the rest is of secondary importance."
I love this quote. It seems like a very good way to ensure a positive life experience. I'm a relative newcomer to the get richer, get smarter, and really enjoy life party, but I figure if I keep something like this as my personal creed life should continue to get better and better.
Engineer7006
June 24, 2014
I prefer the Teriyaki burger over normal McDonalds hamburgers (onions mixed in the patty and teriyaki sauce), and if you talk to Japanese, they generally miss the fish burger from the japanese menu. I can't quite remember what was different about it compared to the normal fillet of fish.
Chinese McDonalds has the Taro pie which looks pretty much like the apple pie, but is way too sweet for my taste.
In both places, you get to see the old school sizes from the 80's. The small is the old small not the 16oz version for soda, and you get fries in the old small bags.
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In china you can get hot pot flavored Dorritos and those are amazing. In both Japan and China you can get white chocolate flavored Kit Kats that are pretty tasty too.
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Japan is a fun place to visit, less so to live unless you are fine with living on the japanese standard and not the american one. I can write up some of my favorite stuff for you if you like based off my experiences living there.
Engineer7006
June 24, 2014
Replying to Engineer7006
Pizza Hut in China is somewhat upscale compared to the American one. YUM! brands has a pretty decent hold in China as their food meets chinese tastes.
You can see what I mean in the below photo:
http://www.intelliot.com/blog/wp-content/uploads/2012/06/pizza-hut.jpg
You can order steaks there!
Scott McCarthy
June 24, 2014
Replying to Engineer7006
...oh my God, Demolition Man was right! Please don't murder death kill me...
DP
June 25, 2014
Replying to Scott McCarthy
Maybe they know what the three shells are for!
Niket Dhruv
June 25, 2014
Dear Joshua,
You are spot on. In India cows are considered to be very sacred ( They are given the status of a Mother ) and even a good number of Indian population is Vegetarian ( no meat ) so they have introduced quite a few local products such as Veggie Delight,Spicy Paneer, Maharaja etc, also they have experimented quite a bit with spices as India is a land of spices !
Thanks !
Brendan K
June 25, 2014
Hi Joshua,
I enjoyed this article, especially your statement: "I love that right now, it is 3:09 p.m. in Taipei and people are lining up to buy products and services from companies in which I have an ownership stake." My thoughts exactly. My wife and I recently made the drive from Washington DC to Las Vegas so she can attend medical school (after 3 years of applying!) and while she has very little interest in investing outside of being thrifty and letting me invest her money in index funds, we both couldn't help but notice 2 things: 1) the vast size of this country, and 2) while cultures, climate and geography very greatly, people in Kentucky still by Coca Cola, in Missouri they still buy Tide to do their laundry, in Colorado they still by Hershey's chocolate (maybe a little more now with certain plants being legal) and in Nevada people still eat at Mcdonalds. Expand that to a global scale and it's pretty darn exciting to be able to join in the investment arena, globally, and be able to see our investment seeds grow into mighty oaks over time.
DVY
June 25, 2014
Taipei is like NY city of China/Taiwan. Absolutely mindblowing in a lot of ways.
Wonderful underground railway(MRT) and amazing high-speed bullet train ( 186 mph). Its truly a modern marvel.
If you visit Taiwan, you should go see the south and island-hop as well. Lots of very beautiful scenery and diverse standards of living.
innerscorecard
June 25, 2014
By the way what are the two companies you would never own at any price due to how disgusting they are? Not just "sin" companies like tobacco, nor big oil, I know.
Private prisons, perhaps?