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.
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A short documentary has been released called Bankrupt by Beanie Babies that details the loss of $100,000 by one family during the 1990s craze. Aaron just sent me the story, with a short note that read something like, “It’s sad because they should have applied to become a wholesale dealer and owned a shop.”
I spent the past few days updating some of my own internal case studies, spreadsheets, and other documents, as well as wrapping up a few things that needed to be crossed off the agenda for the private businesses. I ended up putting together a collection of visual references covering some of the long-term holdings I keep for my household, among them Nestlé SA following my post on Monday.
One of the biggest dangers an investor faces when he or she decides to buy individual stocks for a portfolio is the temptation to chase something “exciting”, regardless of valuation. That’s a foolish undertaking. Valuation matters a great deal. The exact same business might be a wonderful investment at 10 times earnings but a horrible investment at 50 times earnings. It’s not enough for profits to rise, or dividends to expand; they have to offer a good return, based on what you paid, relative to a reasonable opportunity cost hurdle such as the long-term 30-year Treasury bond yield.
After I explained the BHP vs BBL shares for BHP Billiton, I realized I may as well dive into the complexity of the Royal Dutch Shell Class A vs Class B shares. I had originally avoided it when writing about the shares I picked up for the KRIP the other day, but there seems to…
With the discussion of me buying some shares of mining giant BHP Billiton the other day for the KRIP portfolio, there seems to be some confusion about the difference between BHP vs BBL, and how those are related to the BHP and BBL ADR listings on the New York Stock Exchange. This is one of…
Here is a great question about first home buying and what to expect … Dear Joshua, I’ve learned a lot over the years reading your content, and I value your in-depth research and nuts-and-bolts discussions on a lot of the subjects you talk about. With that, I have some questions about home ownership. My wife…
My morning was spent reading the New Hampshire Bar Journal, Winter 2010 edition because I was interested in a piece by Joseph F. McDonald, III called Migrating Trusts to New Hampshire: The “Why” and the “How”. New Hampshire, along with a very few other states, allows the existence of something known as a “silent trust” or “quiet trust”. It made me realize: I think a person could use these to drive a truck through the college financial aid process.
One of the tricks I use to think of the stocks I hold as real businesses, just like the operating companies we own, is to get a physical representation of the firm, putting it in an investment cabinet. Now that I am building a 25-year energy portfolio as a personal side project for my household, I already have replica die cast oil tankers on their way from retailers and eBay. I’m having a hard time finding a comparable quality Total SA tanker, if they are even manufactured.
One of the ways I manage my life is to sit in a room several times a year, staring off into the distance, and trying to imagine 5, 10, 15, 20, 30+ years in the future. I ask myself what things I wish I had done when I was younger, what things I would have wanted to avoid, what risks I would have wanted to take, and what experiences I would have wanted to have. A topic that has come up several times during these exercises is the concept of energy assets. A portfolio of energy assets is fundamentally different in nature than almost any other security, business, or holding.
For the past day, I’ve been thinking about a 65 year old man named John Demetriou. He was from Cyprus, but moved to Australia, where he spent 35 years working “days, nights and weekends in Sydney markets selling jewellery and imitation jewellery” according to The Sydney Morning Herald. Wanting to be in his home country, and…
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