50-Year Maturity Sovereign Bonds in Euros

The Folly of Investing in 50-and-100-Year Bonds

Benjamin Graham once wisely observed that more money has been lost by investors “reaching for yield” than stolen at the barrel-end of a gun.  During periods of anemic interest rates on fixed-income securities, bank deposits, and cash equivalents, a combination of impatience, action bias, and desperation causes savers to do what they would otherwise consider extraordinarily foolish.  

Joshua and Aaron Colgate-Palmolive Toothpaste

Colgate-Palmolive: A Real World Examination of the Limitations of the P/E Ratio

Back in 2011, I did a 20-year case study of Colgate-Palmolive. Global events have conspired in such a way that it can now serve as a perfect illustration of a valuation conundrum: While not cheap, Colgate-Palmolive is significantly cheaper for a long-term owner than the price-to-earnings ratio alone would have you believe. In fact, despite having what appears to be a 26.54 p/e ratio, it’s slightly undervalued to its private market value could you get your hands on the entire empire. It’s a rare thing to be able to talk about a gem like this under conditions such as these so I’m not going to let the opportunity pass. Dust off your powdered wigs, take out your walking cane, and travel back with me to post-Revolutionary America.