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.
There is a traditional Chinese proverb that goes something along the lines of, “Do not take the seeds and throw away the melon”. Though there are many ways you can approach this, and multiple lessons that can be extracted from reflecting on it, it can be particularly sage when it comes to running a business and allocating the cash flow from that business. One of my favorite examples comes from The Coca-Cola Company.
The sugar industry is fascinating. For a variety of reasons, including protectionist policies put in place by Congress, prices recently hit a thirty-year high, threatening chaos for sugar refiners.
During college, one of Aaron and my closest friends made a comment that still haunts me to this day. I was explaining that if you own a share of The Coca-Cola Company, you actually receive a proportionate cut of the company’s profits on every single can of Coke sold. This makes sense, after all … if a business is divided into 100 shares outstanding, and you own 1 share, you own 1% of the company. If you own all 100 shares, you would own the entire business and get all of the profit, right? For me, this falls into the, “We hold these truths to be self-evident” category.
How My Grandpa Dennis Could Have Turned His Pepsi Habit Into a 7-Figure Estate I’ve written in the past about how nearly every American alive today has been confronted with perhaps a dozen different companies that they knew first hand because they enjoyed using the firm’s products for years (in some cases, their whole life)…
I love Apple’s products and what Apple has accomplished over the past few years. However, it is amazing to see how little even journalists understand the way companies or valued or how to properly compare the total return generated by one business over a given period of time to another business.
We added Breakfast of Tycoons to the official Carl Barks collection. We’ve been selectively acquiring more and more of his stuff when the price is attractive and it just fits with all of the framed stock certificates and financial artwork.
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.
From the time I was a kid and had only a few thousand dollars in the bank, I have wanted a Bosendorfer Strauss model grand piano, probably in a 7 foot size (which is comparable to a Steinway & Sons Model B semi-concert grand). Yet, the list price is $111,080 plus you’d be looking at sales tax of roughly $8,331 for a grand total of $119,411. The time value of money opportunity cost of buying a Bosendorfer Strauss grand piano, then is enormous.
A week or two ago, I wrote an article called Understanding Stock Repurchase Plans for About.com, a division of The New York Times, which discussed Sonic Restaurant and the massive stock buy back program that had taken place over the past few years. In it, I walked the readers through a lot of the math and explained that I had purchased a couple hundred shares to watch and monitor the stock through one of my companies, Mount Olympus Awards, LLC. (I’ve since increased it to about 500 shares to continue watching and waiting to see how events unfold).
John Templeton was a billionaire mutual fund pioneer that specialized in using a value investing strategy to buy stocks around the world. By practicing a disciplined version of Benjamin Graham’s teaching on a global scale, Templeton amassed an astounding record that made shareholders of his fund wealthy and earned him hundreds of millions of dollars in well-deserved fees. Toward the end of his life, John Templeton ran his international investments from his mansion on Lyford Clay in the Bahamas.
