Roger Lowenstein, in his preface commentary found prior to Chapter 1 of Security Analysis, wrote:
“In the 1930s, there was a common notion that bonds were safe— suitable for ‘investment’—while stocks were unsafe. Graham and Dodd rejected this mechanical rule, as they did, more generally, the notion of relying on the form of any security. They recognized that the various issues in the corporate food chain (senior bonds, junior debt, preferred stock, and common) were not so much dissimilar but rather part of a continuum. And though a bondholder, it is true, has an economic, and also a legal, priority over a stockholder, it is not the contractual obligation that provides safety to the bondholder, the authors pointed out, but ‘the ability of the debtor corporation to meet its obligations.’ And it follows that (leaving aside the tax shield provided from interest expense) the bondholder’s claim cannot be worth more
… Read the rest of this article!
“Think how association, pure association, works. Take the Coca-Cola Company (we’re the biggest shareholder). They want to be associated with every wonderful image: heroics in the Olympics, wonderful music, you name it. They don’t want to be associated with the funerals of presidents and so forth.” –Charlie Munger
If I were running advertising campaigns for Google, I wouldn’t want my brand name associated with the image of dying dogs, even within the context of admirably visiting an ailing pet. The point of the commercial is to showcase the new features and functionalities of the Nexus 7—when the guy in the commercial learns that the flights to his home are full, he is able to verbally ask for directions home and learn of an Express Train route he can take.
This advertising campaign could have easily accomplished the same net effect (making us, the TV viewers, aware of the Nexus … Read the rest of this article!