Kinder Morgan has been one of the best income investments in the world for people that discovered the company and acted upon it. The original Kinder Morgan—the one with the KMP ticker symbol—benefitted from a great confluence of factors that led to 20% annual returns between its 1997 founding and the November 2014 merger.
The story began with Richard Kinder getting passed up for CEO of Enron. He responded by offering $25 million for Enron Liquid Pipelines L.P. Without a doubt, it is one of the great ironies of American corporate history that the eventually bankrupt Enron sold off the most lucrative, cash-generative assets in its portfolio to avoid executive rivalry and focus on derivative trading in the energy sector instead. Illusory trading was favored over pipeline infrastructure that could build a great company. While Enron was becoming asset light and lying about it, Kinder took the pipes and ran … Read the rest of this article!
The general theme of my investing articles has been this: Buy healthcare. Buy energy. Buy consumer staples. There may also be a place for tobacco, telecommunications, and utilities depending on your moral sensibilities, desire to receive dividend income while giving up long-term growth, and willingness to deal with the lid on growth that results when you have to rely upon regulators to achieve rate increases.
Some things, like long-term retail investing, are debatable. Equally credible arguments can be made in favor of long-term investing in companies like Walgreen, Wal-Mart, and Target. Others can point to Woolworth, A&P, and Sears to make the opposite case. And then the buy-and-holders can point out that the Sears spinoffs of All-State, Discover Card, Morgan Stanley, and Lands’ End made it a superior investment (stock calculators no longer accurately report this information because they treat spinoffs as one-time special dividends and then reinvest it into … Read the rest of this article!
Visa and Mastercard are distinctly different from other credit card companies like American Express and Discover Card. When you swipe something on your Visa or Mastercard, you are not actually using cards issued by Visa or Mastercard. The card itself is issued by a bank or financial institution somewhere, and the Visa and Mastercard brands represent networks that the issuing card joins. Anytime you make a purchase, the merchant has to pay a fee to the issuing bank by the end of the day, and the financial institutions have to share this fee with Visa and Mastercard.
Visa was created by Bank of America back in the 1966 to act as a way for banks to collect more from non-check purchases than the rising Mastercard which was an open-loop system created to electronically transfer funds. The important takeaway is that the Visa and Mastercard networks were created to make transactions … Read the rest of this article!
Somehow, this site developed a strong Canadian audience. There are as many Canadian readers here as readers from the state of Georgia, which is a little perplexing to me because I can at least understand why people from Atlanta end up here—practically every investor there owns some Coca-Cola, and I have enough posts on that to bring ‘em in through the search engines. But I don’t know that much about Canadian stocks and the international rules regarding taxation, although I appreciate the country’s underappreciated banking history that does not get nearly the amount of global acclaim that it deserves.
I once attended an investment conference hosted by the great great grandnephew of an early 20th century American president, and all he did was rave about his investments in Canadian bank stocks. He said that they had a superior culture to American banks because there is less pressure to act … Read the rest of this article!