“It’s our job, though, to over time deliver significant growth, bumpy or not. After all, as stewards of your capital, Berkshire directors have opted to retain all earnings,” writes Warren Buffett in his 2016 Annual Report Chairman’s letter. In other words, Berkshire doesn’t pay a dividend. It retains all earnings to invest in its companies or to acquire new ones. If you’re a Berkshire shareholder and need retirement income you need to rely on Berkshire’s capital gains to sell shares. I don’t like that and it's not how Mr. Buffett operates. He loves cash and invests it wisely (most of the … [Read more...]
Apple’s Headquarters Reminds Me of this Stock
Do you remember Polaroid? It was a "Nifty-Fifty" stock back in the 70s. It constructed a huge headquarters building to signify its greatness. Below are some pictures of just how run down Polaroid's Waltham, MA location was before demolition in 2008. Apple, Facebook, Amazon, and Google are also putting up structures of their own. How will this movie end? I’ll point out that these four companies, plus Microsoft, are responsible for a huge chunk of this year’s advance in the markets, especially NASDAQ. … [Read more...]
The Best Investment You Can Make Ever
The best investment you can ever make is your work. Steve Jobs said “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it.” I like that quote. But come on Steve, work can be a pain. No one loves getting up at 4:30am. But after years and years of doing your work you wake up one day and realize, “hey, I might not have to work.” And … [Read more...]
How Can I Be a Great Investor Like Richard C. Young?
How can you be a great investor like Richard C. Young? Study. Keep it simple. Tell it the way it is. All of that comes to mind. But here’s what I want to share with you that I think you’ll find helpful. It’s a constant battle. It’s a ton of work. It’s a daily grind. It’s not easy. This week I’ve been studying some old Richard Russell reports from the late 70s. I feel like I’m actually living through the day to day markets with out of control government spending, fear about interest rates rising, inflation, and a lame economy. Sound familiar? What I’ve enjoyed most is reading … [Read more...]
If You Had to Own Just One Mutual Fund Should it be this One?
If you had to own just one mutual fund, which one should it be? My answer is Vanguard Wellesley. In 2011, I coined the phrase “Sleep Well-esley at Night” to capture the safety first, survivalist manner of this balanced fund. A must have for you and your family. Since then we've made a lot of money together with the fund. It’s not an exciting fund. After all, close to two-thirds of the Vanguard Wellesley fund is in bonds. The rest is in stocks. But Vanguard Wellesley pays you a decent wage while you work through this market. It yields 2.74%. Sure there’s stocks or mutual funds that … [Read more...]
This is the Future of Elon Musk
I know and speak with a handful of Tesla car owners. They love them. Their enthusiasm is more powerful than an army of car salesmen. That’s not easy to do. It’s a good idea to listen to what Elon Musk is thinking. … [Read more...]
RAGE Gauge: Investors are Becoming Complacent
Complacent. That’s the word that sticks out in my mind in studying May’s RAGE Gauge. Investors have become complacent. As the indexing craze continues mad money props up the same stocks. Is that a good idea? There’s a false sense of confidence in believing one is diversified from buying an index when only a handful of companies move it. May’s reading is another warning of how complacent investors have become. It doesn’t mean the party is over. But it does mean more money riding on a few names. Don’t let the complacency bring you down. … [Read more...]
Can You Live Anywhere You Want in the World?
Have you heard of Sprout? It’s not a food. It’s a company that’s involved with building the future. Literally. Sprout is part of the tiny house movement where the dream of living in 300 to 600 sq. feet becomes a reality. Sound like fun? Maybe not. For you at least. But hear me out. As real estate prices become more and more expensive in places we want to be—who services them? Think Baby Boomers and think Millennials. How do they co-exist successfully? It’s becoming more difficult in desirable places. Desirable being the driving force. Off the top of my head, and from … [Read more...]
This is What Happens When the Market Crashes and You Need to Innovate
A market crash has a way of focusing the mind. The 2014-2015 crash in oil prices, for example, forced unconventional oil and gas producers (Frackers) to improve their water management programs. “The predominant overarching trend in the industry is still dominated by ways to reduce the total spend on water—whether through recycling or sourcing water for lower cost,” said Devesh Mittal, vice president and general manager of Aquatech’s Shale Gas Division. Jeff Gunderson writes at Industrial WaterWorld: According to Wastewater Treatment Technologies in Natural Gas Hydraulic Fracturing, a report … [Read more...]
NASDAQ Has a Diversity Problem
Did you know there are over 3,000 companies in the Nasdaq Composite, and that the index is market weighted—i.e. the biggest companies have the most impact? Apple, Facebook, Amazon.com, Microsoft, and Google comprise 40% of the index’s gains this year according to Birinyi Associates. And they combine to represent 29% of the index's market capitalization. That’s a lot of money in a handful of stocks. Owning an index of 3,000 stocks doesn’t always mean diversification. … [Read more...]
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