I was reviewing some of Benjamin Graham’s old lecture notes at Columbia University in which he warned his students that “it is the good ideas that do you in.” If something is a bad idea on its face, everyone knows it’s a bad idea and there is no risk to you because you wouldn’t dedicate money towards it in the first place. After all, no one is reading blogs about how to invest in pay phone companies.
But failing in the specifics of the pursuit of a generally good idea is where many of us can make our mistakes. For instance, over the past few years, many of us have come to realize … Read the rest of this article!
Some perspective on IBM: For the June 30th through September 30th 2013 period, IBM reported a profit of $3.68 per share. For the June 30th through September 30th 2014 period, IBM reported a profit of $3.68 per share. Each share of third-quarter profit is the same year-over-year. And, though, nobody is talking about it now, IBM is still expected to earn $16.04 in annual profit for 2014, compared to $14.94 last year. Though it has gone completely undiscussed in the past several days, IBM is still on target to post profit per share growth of 7% when you compare 2014 against 2013.
Why, then, is everyone speaking so negatively … Read the rest of this article!
I was reading an investor forum recently where a commenter said that he was contemplating a purchase of shares in Vanguard’s legendary Wellington Fund that has a track record of delivering 8.5% annual returns to investors dating back to 1929, making it one of, if not the, oldest balanced fund in the nation.
He said that he wasn’t going to buy shares because it had trailed the S&P 500 over the past three and five years. For reference, the Vanguard Wellington Fund has returned 12.32% over the past three years and 13.95% annually over the past five, while the S&P 500 has returned 16.58% and 18.83% over those same time periods, respectively.
… Read the rest of this article!
Whenever these founding families of publicly traded businesses decide to sell stock, they often encounter the possibility that they could someday be ousted from their control of the company because of the waning voting influence they may have over the company as they sell their shares (and in many ways, this is perfectly fair. Someone who owns 1,000 shares of a company should have 10x the input of someone who owns 100 shares).
But often times, these founders want to liquidate their shares and diversify while also maintaining their grip over the company. The most common way to effectuate the sale of stock while maintaining control occurs through the issuance of multiple classes … Read the rest of this article!
While I am flattered—and I mean this sincerely but I’m not a good enough internet writer to make the depth of my appreciation jump off the screen—that some of you have written to me asking that I manage some of your money, sadly, that is not something I can nor want to do.
First of all, I mean that literally: I don’t have the proper licensing to start taking on investors.
And secondly, even though I understand that the management of other’s assets “is where the money is” when it comes to the financial services industry, it’s not something I’ve had much of an inclination to do because most people are interested in … Read the rest of this article!