Over 99% of the content that I produce on The Conservative Income Investor is accessible through “The Income Archives” on the right-hand side of the website and available to all readers free of charge.
Every year or so, I come up with an insight that requires in-depth research and has a unique insight with great potential that is worthy of putting into eBook format as a fair compensation for the time that went into the research and development which stands a fair chance of having the greatest usefulness to the readership.
I came across a business recently that has quietly amassed an eighty percent market share in its niche industry. It is so lucrative that the United States government literally considers the business a quasi-monopoly and places a cap on the amount of price increases that are permitted every year so the company doesn’t jack up the price of its … Read the rest of this article!
Lending Club and other peer-to-peer lending platforms have gotten a lot of attention in recent years because of the promise of double-digit income returns that can obtained by lending money to borrowers at a generally high rate of return.
My review of the Lending Club platform is that investors are once again somewhat intoxicated by the idea of high returns and are ignoring the fact that: (1) Lending Club relies upon Kroll to supply half of its ratings of borrowers, and Kroll predicts the lowest rate of default in the entire industry; (2) the debt is unsecured—that is, fully dischargeable in bankruptcy and likely not worth the hassle of collection in the event of default; (3) some investors are grumbling about high default rates now, which makes me really worried about what will happen during the next recession; and (4) the interest paid out through Lending Club is taxed at … Read the rest of this article!
Marty Whitman, the successful investor and author of “The Aggressive Conservative Investor”, recommended investing in companies that were profitably growing in their own right but also had the high probability of being acquired by a larger firm in the industry.
The attractiveness of this philosophy is that you can have a few holdings in your portfolio that stand to gain from a one-time bump of 37% in addition to receiving returns fueled by the earnings growth in the interim.
The awareness of this type of flavor to one’s investing strategy is generally most actionable when you are considering businesses that you would independently own in their own right even if not accompanied by the promise of an eventual buyout.
I imagine some form of this strategy animates at least a portion of the shareholder base for Monster Beverages stock, most famous for selling drinks under the … Read the rest of this article!