Buying Hershey Stock: The Wealth Clusters

There was a moment in 2016 when Hershey stock was trading at $82 per share while earning $4.41 per share in profits for a valuation of 18.5x earnings. It was something that struck me as an example of “buying a wonderful company at a fair price”, and I purchased shares. The stock briefly rose to $113 per share for a rapid 37.8% increase. By June 2018, Hershey was down to $92, for a 12.2% gain.

Did that bother me in the slightest? No, because Hershey was growing its profits along the way. Profits per share in $4.41 (2016) had climbed to $4.76 (2017) then to $5.36 in 2018. The company was growing profits … Read the rest of this article!

Whataburger Sold to BDT Capital: Upcoming Changes

The best hamburger I’ve ever eaten in my life was at a Whataburger in Dallas, Texas within driving distance of the DFW Airport. For like three bucks and tax, you would get this huge piece of meat that was larger than anything that you could find at another restaurant. And for a few more pucks, you get a huge dollop of fries and a gigantic soda. I loved it. The guy who founded the place, Harmon Dobson, famously stated that his goal was to make a burger so big that you’d have to hold it with both hands to eat.

These burgers and fries have created a billion-dollar fortune for the Dobson family.
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Guilford Babcock’s Letter to Charlie Munger


Two decades ago, Charlie Munger visited The University of Southern California’s Graduate School of Business Administration. There, he gave his speech “Wordly Wisdom as It Relates to Investment Management and Business.” This talk proved fruitful when, on Professor Babcock’s final examination for USC business students, he asked members of the class to discuss the most important thing they learned about investments that had not been mentioned on the test.

A student in Professor Babcock’s class replied:

“I thought that the interview with Munger was brilliant! It really grabbed my attention when he challenged the reader to make only 20 investments over a lifetime. It changes your perception of an

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Chipotle Vote Proves Say-On-Pay Executive Compensation Votes Must Become Binding


As far as management teams go, the gang at Chipotle gets a lot of things right. Since the spinoff from McDonalds in 2006, Chipotle has managed to grow profits from $1.28 per share to an estimated $12.60 by the end of this year. When you increase profits almost ten-fold in under ten years, it’s probably a pretty darn good automatic indicator that you’re doing something right.

And for those of you that appreciate the process of how things get done, you can’t help but tip your cap towards how Chipotle management has generally treated shareholder capital. Chipotle has no debt, no preferred stock, no pension obligation, and hardly any encumbrances on the balance … Read the rest of this article!

Bear Stearns, Ross Perot, Underground Minerals, And That Honus Wagner Baseball Card


My weekend reading, for those of you interested:

#1. The Fall of Bear Stearns— It already seems like a lifetime ago, but for those of you who want to turn back the clock and read about the collapse of Bear Stearns in real-time, check out this August 2008 piece from vanity fair. Here’s the kind of satire you can expect from the piece:

“At Phi Kappa Wall Street, most of the frat boys are instantly recognizable. There’s the big, backslapping Irishman, Merrill Lynch, the humorless grind, Goldman Sachs, and the straitlaced rich kid, Morgan Stanley. And then, off in the corner, wearing its beat-up leather jacket and nursing a cigarette, was the

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