Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory

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I Can’t Seem to Stop Myself from Buying Nestlé

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.

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Dr Pepper Snapple Investment

An Example of Real World Value Investing Through the Lens of Dr. Pepper Snapple Group

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.

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Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory