The Valuation on Tiffany & Company Common Stock Continues to Perplex Me
The current valuation of Tiffany & Co. seems absurd to me. I do not understand why people are paying it. Let me walk you through the numbers.
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Investing is the process of putting aside money today in exchange for more money in the future. This process involves risk but, when well managed, can help grow your wealth over time due to the power of compounding. This is the investing archive that includes articles published on JoshuaKennon.com. If you are looking for more great content, visit Joshua’s Investing for Beginners site at About.com, a division of The New York Times.
Independent Thinking Is a Key to Success In Investing and Business
You have to think independently and make up your own mind. That is the responsibility each of us has. That doesn’t mean you can’t look for input from others but you cannot outsource the obligation to rationally think, decide upon a course of action, and live with the results of your decision. Apparently, Munger hasn’t…
A Perfect Example of Acquiring Cash Generating Assets from Charlie Munger
I’m re-reading “Damn Right! Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger” by Janet Lowe and came across a passage that illustrates exactly the sort of thing I’m talking about when I harp on acquiring assets that constantly churn out piles of cash for you spend, redeploy into new investments, give to charity, or…
If Charlie Munger Didn’t Quit When He Was Divorced, Broke, and Burying His 9 Year Old Son, You Have No Excuse
At 31 years old, Charlie Munger was divorced, broke, and burying his 9 year old son, who had died from cancer. By the time he was 69 years old, he had become one of the richest 400 people in the world, been married to his second wife for 35+ years, had eight wonderful children, countless…
Reading the Johnson & Johnson Annual Report to Stockholders
The experience of Johnson & Johnson owners over the past decade is informative in understanding the role valuation and growth plays in determining total return outcome. Let’s take a closer look.
A Technique for Comparing the Intrinsic Valuation of Two Stocks
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.
The Basics of How to Analyze an Investment Portfolio of Individual Stocks or Other Securities
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.
How to Measure Your Wealth
Years ago, I vaguely remember hearing someone comment that it was interesting how differently we measure wealth today compared to British society at the end of the 19th century. This made me realize that most people don’t even know there is a difference; that there are primarily two ways you can think about measuring your wealth and which you choose for your own household will influence how you behave, the capital structure you employ, and even how you think about risk.
Finding a List of Stocks for Your Portfolio
One of the most common questions I receive is, “how do you come up with a list of stocks for your portfolio that you then research further?”. Here is a brief overview.
The Money Illusion – Why Thinking About Things In Nominal Currency Can Destroy Your Net Worth
In 1928, Irving Fisher published The Money Illusion (seriously, buy it – it’s only $7.95), which discussed the human fallacy of thinking about things in the nominal currency of your home country instead of in terms of purchasing power. The concept phrase “money illusion” was coined by legendary investor and economist John Maynard Keynes. The…