Between 1978 and 2012, IBM stock delivered returns of at least 12% during every ten-year or greater time frame except for the 1998-2008 and 1999-2009 measuring periods. Up until the past decade or so, it was “the” tech stock. It was the company in the tech industry that survived every change and found itself in the taxable accounts, retirement accounts, trust funds, and charitable accounts of even the most conservative of equity investors. “Big Blue” had survived a century, putting a together a track record of 14.5% annual returns from 1945 until 2012. We are talking about real multi-generational wealth here.

As those same investors know, IBM has been struggling competitively since 2012, as net profits have declined from $16 billion to $12 billion. The blow has been softened somewhat due to IBM repurchasing almost 300 million of its then-existing 1.1 billion shares outstanding in 2012 to bring the total … Read the rest of this article!

An interesting approach to individual stock selection involves looking at businesses that are indispensable to your career’s successful functioning.

If you work in HR, you have probably relied upon the services of Automatic Data Processing to assist with payroll and other employment-documentation needs. Lo and behold, ADP has a historical track record of 14% annual returns going back decades. It was one of the few companies to maintain a bond rating of AAA, only losing it a few years ago when it embarked on a stock repurchase binge.

If you manage an ice cream shop, you might have noticed how ubiquitous Mars Candy and Hershey toppings are for nearly every product, and have been so for decades. Unfortunately for investors, Mars Candy is a privately held company, but as for Hershey, it has been compounding at 11-13% rates for decades.

For the American farmer, the need to buy tractors, front … Read the rest of this article!

My dear,

In the midst of hate, I found there was, within me, an invincible love.

In the midst of tears, I found there was, within me, an invincible smile.

In the midst of chaos, I found there was, within me, an invincible calm.

I realized, through it all, that…

In the midst of winter, I found there was, within me, an invincible summer.

And that makes me happy. For it says that no matter how hard the world pushes against me, within me, there’s something stronger – something better, pushing right back.

Truly yours,

Albert Camus

Originally posted 2014-03-08 20:48:30.

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Benjamin Graham argued that a long-term investor will almost never participate in an initial public offering (IPO) because the animal spirits that are triggered by the IPO will almost never coincide with sensible pricing. Warren Buffett elaborated on this concept by saying that, if there are over ten thousand publicly traded companies in the world, the odds that the best deal out of any of them is the company going public is extremely slim. I think he went even further and said that he has never before invested in an initial public offering on behalf of Berkshire Hathaway.

I have been close attention to Luckin Coffee, the Chinese-based coffee startup that is opening up about 100 new stores across China per month. It is anticipated that it could become the most significant rival to Starbucks because it is rapidly expanding in a country with 1.3 billion people it is currently … Read the rest of this article!

Walter Schloss is on the short list of the most interesting investors I’ve ever studied on Wall Street. He worked under Ben Graham himself, and struck out on his own once he saw the outsized attention that Warren Buffett was receiving under Graham’s tutelage and realized that his best life outcome would result from striking out on his own rather than living under the shadow of what would become the most high-profile investor that the world had ever seen.

Schloss developed an offbeat investment strategy that consisted of buying gobs of cheap stocks (at one point, he owned several hundred stocks in his partnership, causing Warren Buffett to joke that his favorite story from biblical times must have been Noah’s Ark because Walter liked to buy two of everything). He also had rock bottom expense rates for administering his investment strategy. At one point, it was reported that he was … Read the rest of this article!