Donald Yacktman, one of my favorite investors once you get past the list of usual suspects that everyone knows, conducted an interview with Consuelo Mack a month or two ago that explained the rationale for his old-fashioned investing style (his portfolio typically owns large chunks of Procter & Gamble, Coca-Cola, and PepsiCo). My favorite quote from the episode is when he recalls a dinner conversation with his son in which his son explained the Yacktman investing style: “Basically, what you are saying is, if you buy above average businesses at below average prices, then on average, it is going to work” (That quote starts a little after the 14:30 mark).
The largest holdings … Read the rest of this article!
Estee Lauder sells $15 billion worth of beauty products per year, with approximately half of the revenues coming from makeup and half coming from skin care. It has increased in value from $1,000 in 1946 to $58 billion today, for an annual compounding rate of 24.7%. You would have been better off finding Estee and Joseph Lauder a year after WWII ended and demanding that you could join them as an investor in their company than you’d have been finding Warren Buffett at any point in his life and demanding the same.
The reason why great fortunes can be made in the beauty sector is because the profit margins are extreme once a … Read the rest of this article!
Although I strongly encourage any of you to read Benjamin Graham’s classic “The Intelligent Investor” if you have not done so already, I do know that “life happens” and it’s a lot easier to find fifteen minutes to read an article than it is to hunker down and read a dry, detailed text for 4-5 hours straight. So for those of you don’t have the time to read The Intelligent Investor or simply want to get a summary to help you determine whether the book is worth reading, I’ll try and share with you the four general principles that I took away from reading the book.
(1) Price Matters. A lot.
(2) Stock … Read the rest of this article!
I’m currently in the process of decluttering everything (as you can see from this screenshot, I currently have 12,446 unread e-mail messages). A lot of it is spam, and some of it is reader questions that got lost in the shuffle through the holidays that I did not manage to catch.
Anyway, I’ve been trying to opt out of everything and clean up the amount of physical mail and e-mail that I receive, and I thought it would be worth pointing out the two most mainstream ways to get off lists.
If you are interested in getting on the “National Do Not Call Registry”, then you should visit this link and have your … Read the rest of this article!
Back when I was soliciting questions from you before Thanksgiving, one of the questions I received from a reader concerned the wisdom of taking out student loans to invest. That’s a question that I have gotten two or three times before and never had the time to answer, so I’ll tackle it now.
The short answer is no. The longer answer is: I don’t know who you are borrowing the money from, but most likely, you are signing a contract that has restricted potential uses for the money that you borrow. Most likely, “investing the money” violates the contract. Look, nowadays, everything you do leaves behind a digital trail. If you take out … Read the rest of this article!