California is dreaming. Where else in the world do regular homes go for well over $2 million bucks? There are cracks in that foundation. As an aside, take a look at the chart. The top three holdings in the MSCI USA Growth Index are: Apple, Amazon.com, and Facebook. Look familiar? Now forget about this chart. It’s scary. I don’t want to scare you. I want to point you to one of my favorite annual reports. Every year around this time, like Christmas in May, demographer Joel Kotkin and Pepperdine University public policy professor Michael Shires publish The Best Small and Medim-Size … [Read more...]
How to be a Billionaire: Proven Strategies from the Titans of Wealth
Martin Fridson is one of the best high-yield bond analysts, period. I had a chance to meet Mr. Fridson when I started a small stock club at Babson College in Wellesey, Massachusetts in the early 90s. Two of my favorite professors at Babson are involved in this story. The first is Joel Shulman, who introduced me to Fridson. He suggested my stock group co-sponsor a talk by Fridson. Thanks to Professor Shulman, to this day, I have a signed copy of Fridson’s book Investment Illusions in my office. In looking up that book for this post, I found Financial Statement Analysis, now in it's fourth … [Read more...]
Believe in My Bezos Law; Invest with Mr. Dividend
Make no mistake. I am a believer in Jeff Bezos. I even coined a term in his name: The Bezos Law: If Jeff Bezos enters an industry, prices will be lower. But that doesn’t mean I’m a buyer of the stock. Remember the dot-com boom and bust? I do. I had a front row seat as a college intern with the founding team of a grocery home delivery start-up. It was the Webvan of the east coast, with the same unfortunate result; Bankruptcy. What went wrong? Turns out, among other things, shoppers like to pick their own produce. What’s changed? Not much, as far as I can tell. Will FreshDirect be … [Read more...]
Bezos’ Law: Prices will be Lower, But what about for Income Investors?
Great ideas don’t always translate into great investments. Remember Amazon almost going out of business in the dot com bust? When I think of Jeff Bezos I think of Steve Jobs. Both are, and were one of a kind. That doesn’t mean I’d buy their stocks. There’s plenty of ways to benefit from Bezos’ Law, which I define as whatever business Bezos decides to get into, “prices will be lower.” But, and here’s the catch, to make Bezos’ Law into the law of the land, Mr. Bezos needs LOTS of capital and GREAT people working for him. The ONLY way to make that work is with a high stock price to reward both … [Read more...]
Why Apple is like a Picasso
Is it better to be creative or to steal? It’s a good question. Which leads me to Apple and Microsoft founders Steve Jobs and Bill Gates. They both founded ultra-successful companies using Xerox’s ideas. “Later, when he was challenged about pilfering Xerox’s ideas, Jobs quoted Picasso: ‘Good artists copy, great artists steal.’ He added, ‘And we have always been shameless about stealing great ideas.” That’s from The Innovators, by Walter Isaacson, author of Steve Jobs. Hence the Macintosh personal computer with its Windows-like interface. At the same time, Bill Gates was helping Jobs … [Read more...]
When Will this Bull Market End? Because it Will End
Here, "stocks are advanced on hopes and expectations” - Robert Rhea When will this bull market end? Because it will end. The market is simply a collection of people’s emotions. How stable can that be? Over the weekend I re-read The Dow Theory Today by the late Richard Russell. It’s a collection of twelve articles which were written and published in Barron’s during the period of December, 1958, through December, 1960. This is not a history lesson because the articles were written, much like writing about today’s markets, while taking on live fire. The future was not known. That’s the life … [Read more...]
Massachusetts MBTA Pension Problems
The $1.5 billion pension fund has 5,786 bus and train divers, track workers, and other employee members, reports the Boston Globe. And there are 6,685 retirees participating in the fund. Those numbers aren’t sustainable. Apart from numbers that look hard to reconcile, the fund is now embroiled in a bit of a scandal. Beth Healy reports at the Globe: Michael Mulhern took home $2.2 million in compensation as chief of the MBTA Retirement Fund in the eight years after the financial crisis, including $216,329 in 2016, when he worked just seven months. The compensation, released in response to a … [Read more...]
Apple Loses its Edge?
Is $5 billion spent on a company’s headquarters really money well spent? In the following article about the construction of the Apple’s new Mothership it seems as if those who remain are still worried about not disappointing Steve Jobs. Has Apple lost its edge? Amid all the fanboy anticipation, though, Apple has also taken some knocks for the scale and scope of the thing. Investors urging Apple to kick back more of its bounty to shareholders have questioned whether the reported $5 billion in construction costs should have gone into their own pockets instead of a workplace striving for … [Read more...]
Make Your Bed: Advice for SEALs and Investors
Make Your Bed by Admiral William H. McRaven (U.S. Navy Retired) is a little blue-book about little things that can change your life…and maybe the world. It was inspired by the commencement speech McRaven gave on May 21, 2014. Start your day with a task completed. Make your bed. And, as he explains in Chapter Ten: Never Quit. McRaven told Business Insider in an interview: Admiral McRaven: We used to have a saying in SEAL training, "Take it one evolution at a time." Meaning don't look six months down the road. Don't ask yourself or don't look and say, "My gosh, I've got more swims and more … [Read more...]
Get More Retirement Income and Be Your Own Boss
Who would have thought you could make money fishing in retirement? I’ll explain. “Hey, E.J., quick question. I’ve got a minute before my next pick-up.” That’s when it hit me. He wasn’t joking about working for Uber. Nice! What a great way to pick-up some extra cash. Why wouldn’t you work for Uber? The money is good. Much better than I had expected. And, he told me, “I’m meeting some incredible people.” He is learning a ton. How many retirees can say they’re meeting new people at a part-time job, having fun, while being the boss? It’s meeting people and getting some fresh ideas that … [Read more...]
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