I presume that, when Warren Buffett discusses the rationale for a particular investment, he holds back a little bit of the rationale for making the investment so that his theses aren’t immediately adopted by others and thus driving the price of the stock up. I say this without negative judgment, as competitive insights are hard-won and Buffett owes no duty to third parties to diminish the effectiveness of his own insights.
Specifically, I was thinking about Warren Buffett’s investment in American Express, an important part of his lifetime accumulation of wealth. As you may know, he made a lot of money in 1963-1964 by purchasing American Express stock through his seven Buffett Limited Partnership, and the quick tripling of the stock price gave Buffett an Omaha fortune and regional credibility as an investor.
Disney just announced, in what has become an annual tradition, that it is raising prices for Disneyland tickets 10.4%, such that the a single day Disneyland ticket will now cost $149, and annual passes will now cost a low of $399 to a high of $1,949. This is roughly in line with the typical Disney experience over the past generation or so, as Disneyland has raised its priced by 9.8% annually since 1993.
I was recently talking with a waitress at a bar I frequent often enough for the waitress to know me by name, and I remarked to her that she must have been working a lot lately because she has been there just about every time I have ever been there. She replied that she works every chance she gets, saying, “If you don’t work on Saturday, You Don’t Eat on Saturday.”
Applying that line to personal finance, I once again received a real-life look at what delayed gratification is all about, and why I try to use my disposable income to buy cash-generating assets.
When you own no cash-producing assets—no stocks, no bonds, no real estate—you must work to make money. If you work 10 hours per day at $10 per hour, you’re getting a little bit less than $100 that day, depending on your personal … Read the rest of this article!
One of the great things about going old school and reading Charles Dickens novels is that Dickens is one of Western Civilization’s all-time greats when it comes to articulating the intersection of morality and economics. In fact, I read most of his work with this point of view in mind: How do I maximize my personal economic success while having a net positive effect on the other members of the civilization that I encounter?
Dickens is relentless when it comes to constructing various scenarios that can help us determine when we should prioritize economic success over the other areas of our life.
For instance, many of you have probably encountered this quote from Wilkins Micawber in David Copperfield: “Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” That is one of the most succinct insights into … Read the rest of this article!
With the very big exception of oil stocks, the healthcare industry comprises the largest share of my personal investments. In particular, Johnson & Johnson is my far and away my largest personal investment (I honestly believe the company has such an enduring built-in moat that, absent gross product liability negligence on the order of tens and tens of billions of dollars, it will still be a profitable enterprise when it’s time for me to rock on towards the next world, which will, God willing, be many decades from now).
Because I’m naturally curious about the topic, and because Johnson & Johnson, Becton Dickinson, and GlaxoSmithKline have been/are three of my largest personal investments, I’ve been following with great interest the pending changes to our healthcare system as the Affordable Care Act is on its way to becoming the prevailing law of the land.