Ray Kroc and the Ford Edsel

On November 19, 1956, Ford Motor Company announces to the Detroit automotive press that it was launching a new car brand, the Ford Edsel, that would be available for the 1958 model year. The company spent $250 million on marketing the car, which had cutting edge features like seat belts, children’s locks, a rolling-dome speedometer, and warning lights for low oil and engine overheating. It had a funky design that looked like the GM Lasalle and was billed as the “car of the future.”

The product was so overhyped that it led to inevitable disappointment upon its market launch. It was discontinued within three years, and only 2,846 Ford Edsels were manufactured in … Read the rest of this article!

The Saga Of Destruction For Small Investors

There are generally two ingredients to the formula that cause someone to walk around saying something like, “The stock market is rigged.” First, they generally buy stocks at prices that could be considered a bit higher than average. And secondly, they tend to sell during times when stock prices have become low, because they are focusing on the fact that $10,000 of hard work can only be redeemed for $7,000 (or whatever the low turns out to be) at a particular moment in time.

It seems that the first condition is now being met. The Wall Street Journal reports that small investors are becoming increasingly comfortable with investing in the stock market again … Read the rest of this article!

Rich People Habits: Almost No Television Time

I find it wise to pay attention to the cultural habits that distinguish the difference between the most and least successful households in the United States. Obviously, the most interesting data points are those where the behaviors of the rich and poor are the polar opposite.

In particular, there is an ever-widening gulf between the amount of time that America’s rich and America’s poor spend watching television.

A few TV-related data points:

  1. 6% of households with income above $150,000 watch over an hour of television per today, compared to 78% of households that earn under $50,000 per year;
  2. 89% of households that earn under $50,000 watch at least
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Experiencing Stock Price Loss Is Almost Necessary For Long-Term Success

On certain college campuses in the United States, particularly places like Oberlin and UC Santa Barbara, there is a new trend afoot to preface potential intellectual discomfort with a “trigger warning.” For example, at Oberlin, if an English 101 professor desires to have his class read “The Great Gatsby”, a drafted proposal to the faculty encourages the professor to “be aware of racism, classism, sexism, heterosexism, cissexism, ableism, and other issues of privilege and oppression” in devising their syllabi. In other words, just like the surgeon general places warnings on packages of Marlboro reds, an English professor would have a duty to warn the student body of the sexism to come in Francis … Read the rest of this article!

Higher Interest Rates Would Change Everything

Among my investment notes, I keep a copy of a printout from the 1990 edition of the Moody’s Investment Manual that described the prevailing interest rates at the time. In March 19990, the Treasury bond rate was 9%.

The interest rate on debt was further broken down based on the following rates: AAA bonds paid 9.30% interest on its debt, AA 9.7%, A+ 10%, A 10.25%, A- 10.5%, BBB 11%, BB 11.5%, B+ 12%, B 13%, B- 14%, CCC 15%, CC 16.50%, C 18%, D 21%. We have all gotten so used to low borrowing costs that it requires historical reminders of what the world can look like in the event that credit … Read the rest of this article!