Visa: Probably The Best Investment You Can Make Today

When someone says that the stock market looks expensive, often what he is saying is this: the current earnings yield that you are receiving is quite low. Of course, the total returns that you receive from an investment consist of two dominating variables: the earnings yield that you receive today, and the future growth rate that the company offers you thereafter.

The general concern right now is that companies that typically give you an initial earnings yield of 5-7% are currently giving you an earnings yield of 3-4% instead. Take something like Hershey chocolate. An absolutely excellent company, the kind of stock that once you buy, you never sell—letting the growing dividends that you receive every three months do the talking. Since becoming a large-cap chocolate manufacturer, Hershey’s fair stock valuation is usually when its stock trades at $20 for every dollar in profit that it makes, for a P/E ratio of 20 or an earnings yield of 5% depending on how you look at it.

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McCormick And Sysco: Two Companies Quietly Making You Rich

Most of the time, my writings on this site focus on companies with excellent brand names that have a history of creating great wealth for their owners. There’s a reason for that: people will always be willing to pay more money for Colgate toothpaste than a generic store version (and that price differential is what creates shareholder wealth), and companies with brand-name protection generally don’t get crushed by inept management because the brands generally sell themselves (thus making companies with strong brands a strong ideal for those interested in intergenerational wealth transfers).

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Remedial Life Lessons Need To Be Taught In Schools

Yesterday, Michael Bloomberg published an op-ed on the website which he owns that reached some conclusions different than what I was expecting to see—I wasn’t expecting the guy that wants to legally restrict the size of our soda containers to write a piece glorifying the need for freedom, but then I came across this passage of his:

There is an idea floating around college campuses — including here at Harvard — that scholars should be funded only if their work conforms to a particular view of justice. There’s a word for that idea: censorship. And it is just a modern-day form of McCarthyism.

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Why Are American Schools Failing?

Lately, I have been reading the works of Charles Murray, an author of social commentaries who is not at all popular with those on the left side of the political spectrum. Mostly, I’ve wanted to determine whether his unpopularity is due to the fact that he is right, or whether the criticism that he uses data to fit into his preconceived conclusions is a fair criticism of his work.

One area where I do think his work is right on the money is when he talks about why American public schools have declined. If I had to paraphrase his work into a sentence, it would be this: American public schools are generally on the decline because individual communities no longer consist of a wide range of students from significantly varying economic backgrounds, and to the extent that you still do have areas where kids of the affluent and relatively poor intermingle, the affluent often choose to send their kids off to private schools. I call it the loss of the “invisible father.”

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Tony La Russa’s Commencement Address Applied To Investing

Tony La Russa, the current director of baseball operations for the Arizona Diamondbacks who coached the St. Louis Cardinals to World Series victories in 2006 and 2011, gave the commencement address last week to graduates of Washington University in St. Louis.

In his speech, La Russa mentioned the value of self-reliance and resisting the temptation to outsource your thinking to machines:

I think the essence of personalization is to start with, you personalize your feelings about yourself. The thing I said about having an ego. Personalizing is about respect, trust, and caring. You act in a way that you earn your own respect. Don’t ever fool yourself. You want to trust that you’re doing your best, you’re not going to fool yourself. You’re going to care about what you represent and what people think of you. And then you translate that into the people that you work with, respect, trust, and care.

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