Earlier this year, I didn’t pay Facebook much mind. With only one unique exception, I have never had much of an interest in staking real money on business models that rely upon digital advertisements because I know darn well how quickly the rate that companies pay to advertise declines during a recession.
The last real recession was almost a decade ago, from 2008 through 2010 or so. Facebook did not have its IPO until 2012. The investor community has not yet witnessed how quickly Facebook’s profits could fall during a recession. We are talking 50-70% declines in overall profitability in as quick as a months-long timespan.
I even anticipatorily felt bad for money managers across the country who have received client praise for investing in Facebook over the past few years because I know quickly that praise could turn into a scolding under any ordinary adverse turn in the business … Read the rest of this article!
The business of Royal Dutch Shell is one of the most impressive in the entire world. If I had to make a list of thirty buy-and-hold forever stocks, Shell would get a spot. It owns such a staggering amount of assets that I once tried to specifically tally and itemize everything it owns, it took a few days to just put the basics together. That is what happens when a single corporate umbrella controls sixteen billion barrels of oil and 40 trillion cubic feet of natural gas to account for.
When these oil majors fluctuate, as it as inherent for them to do, I caution against worry and advocate focusing on how low stock prices are often the basis for very lucrative returns down the road.
Think oil is low now?
Well, look at what happened during the last fluctuation when the price of Royal Dutch Shell fell to $36. … Read the rest of this article!
Check out this great quote from Charles Swindoll:
“The longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, than education, than money, than circumstances, than failures, than successes, than what other people think or say or do. It is more important than appearance, giftedness or skill. It will make or break a company…a church….a home. The remarkable thing is we have a choice every day regarding the attitude we will embrace for that day. We cannot change our past…we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude…I am convinced that life is 10% what happens to me and 90% how I react to
… Read the rest of this article!
I pay close attention to consumer brands for the following reason:
“The best stocks to buy create a product that nobody else can legally produce then delivers that product using super-efficient distribution channels. This results in hard-to-replicate economies of scale. The product is protected by trademarks, patents, and copyrights, allowing the company to price higher than it otherwise could, accelerating the virtuous cycle as it generates higher free cash flow that can then be used for advertising, marketing, rebates, and promotions. Most people don’t reach for the knockoff Hershey bar or Coca-Cola bottle. They want the real thing, with the price differential being small enough there is no utility trade-off on a per-transaction basis.”
Source: The Best Stocks Are Historically Found In A Handful of Industries
The disproportionate amount of wealth that got created for American investors over the past hundred years have come from the pharmaceutical, tobacco, oil, beverage, … Read the rest of this article!