MUST READ
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
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Monday, March 24, 2008
Saturday, March 22, 2008
God's sugar daddy
LEAH McLAREN
"His earliest virtues," Lauren Templeton explains, "were thrift, an industrious nature, wild curiosity and a quiet self-assuredness."
The law office overlooked Winchester's main square, so Harvey could see the courthouse where auctions were held when the bank foreclosed on farms. "When the auctions failed to produce a highest bidder," writes Lauren Templeton in Investing the Templeton Way, the book she and her husband, Scott Phillips have just published, "Harvey Sr. would leave his office and bid … usually able to buy farms for a few cents on the dollar.
"Uncle John's observation of this practice as a young boy is likely the very first seed of this most famous investing approach, which he coined, buying at the point of 'maximum pessimism.' "
Of course, "buy low, sell high" is an old stock-market maxim, but it takes courage to follow through. And as Mr. Templeton has wryly put it, "usually God favours the people who try to do good. So, when you find the crowd is desperately trying to sell, help them and buy. When you find that the crowd is desperately trying to buy, help them and sell. It usually works out."
This kind of gutsiness got him his start as an investor. In 1939, he was young and living in a seedy Manhattan walk-up when he took an almost unthinkable risk. He borrowed $10,000 and bought $100 worth of every stock then valued at less than $1 a share on the New York Stock Exchange. It looked like madness, but Germany had just invaded Poland and he felt the looming war would drive up the market. All but four of 104 stocks he bought turned a profit.
His ability to calculate risk and sense a payoff proved uncanny and consistent. Sixty years later, the same man who bought low as conflict loomed sold high just as the tech bubble was about to burst.
It also may have been the seed of his mythic frugality. Despite his vast wealth, he flies economy class and long ago renounced his citizenship and took up residence in the Bahamas, a tax haven with a wonderful climate.
Lauren Templeton says "the accumulation of money was merely a way for him to measure his progress. He wasn't out buying Rolexes, that's for sure. This is a man who made $200-million off Kia automobile stocks, but for many years thought a Kia was too expensive to buy. Bargain-hunting affected every part of his life."
"He's like John D. Rockefeller, who said, 'God gave me my money.' "
Canadian researcher Elizabeth Dunn reported this week that people who spend their money on others feel happier than those who spend it on themselves. According to old friend and finance colleague Foster Friess, this applies to Sir John. "I don't think he went out of his way to accumulate. It's just something that happens to people who are committed to serving others. It's not something he sought, but something that came to him because of his serving attitude.
"His faith dictated that the money wasn't really his anyway but that he was merely a steward of it. So that is probably why he was motivated to spend it in a way he thought would be pleasing to God."
"In general, the problem with our culture is narcissism, solipsism and selfishness," says Steven Post. "Sir John has always said to me, 'Just love and let everything else take care of itself.' He agrees with Abe Lincoln, who said we have to focus not on what we know, but on what we don't know.
"So, what I'm financing is humility. I want people to realize that you shouldn't think you know it all."
LEAH McLAREN
"His earliest virtues," Lauren Templeton explains, "were thrift, an industrious nature, wild curiosity and a quiet self-assuredness."
The law office overlooked Winchester's main square, so Harvey could see the courthouse where auctions were held when the bank foreclosed on farms. "When the auctions failed to produce a highest bidder," writes Lauren Templeton in Investing the Templeton Way, the book she and her husband, Scott Phillips have just published, "Harvey Sr. would leave his office and bid … usually able to buy farms for a few cents on the dollar.
"Uncle John's observation of this practice as a young boy is likely the very first seed of this most famous investing approach, which he coined, buying at the point of 'maximum pessimism.' "
Of course, "buy low, sell high" is an old stock-market maxim, but it takes courage to follow through. And as Mr. Templeton has wryly put it, "usually God favours the people who try to do good. So, when you find the crowd is desperately trying to sell, help them and buy. When you find that the crowd is desperately trying to buy, help them and sell. It usually works out."
This kind of gutsiness got him his start as an investor. In 1939, he was young and living in a seedy Manhattan walk-up when he took an almost unthinkable risk. He borrowed $10,000 and bought $100 worth of every stock then valued at less than $1 a share on the New York Stock Exchange. It looked like madness, but Germany had just invaded Poland and he felt the looming war would drive up the market. All but four of 104 stocks he bought turned a profit.
His ability to calculate risk and sense a payoff proved uncanny and consistent. Sixty years later, the same man who bought low as conflict loomed sold high just as the tech bubble was about to burst.
It also may have been the seed of his mythic frugality. Despite his vast wealth, he flies economy class and long ago renounced his citizenship and took up residence in the Bahamas, a tax haven with a wonderful climate.
Lauren Templeton says "the accumulation of money was merely a way for him to measure his progress. He wasn't out buying Rolexes, that's for sure. This is a man who made $200-million off Kia automobile stocks, but for many years thought a Kia was too expensive to buy. Bargain-hunting affected every part of his life."
"He's like John D. Rockefeller, who said, 'God gave me my money.' "
Canadian researcher Elizabeth Dunn reported this week that people who spend their money on others feel happier than those who spend it on themselves. According to old friend and finance colleague Foster Friess, this applies to Sir John. "I don't think he went out of his way to accumulate. It's just something that happens to people who are committed to serving others. It's not something he sought, but something that came to him because of his serving attitude.
"His faith dictated that the money wasn't really his anyway but that he was merely a steward of it. So that is probably why he was motivated to spend it in a way he thought would be pleasing to God."
"In general, the problem with our culture is narcissism, solipsism and selfishness," says Steven Post. "Sir John has always said to me, 'Just love and let everything else take care of itself.' He agrees with Abe Lincoln, who said we have to focus not on what we know, but on what we don't know.
"So, what I'm financing is humility. I want people to realize that you shouldn't think you know it all."
Sunday, March 16, 2008
Wow, Bear Stearns being bought out for $2 a share. Fucking scary. You never know.. Stay away from what one doesn't understand. Thankfully did not venture into financial shares because of lack of understanding. One exception is CNA, hope they will be ok.
What happens tomorrow, where does AMR go? Did I make a huge mistake with AMR too?
Scared but holding on, think it should still be ok.
What happens tomorrow, where does AMR go? Did I make a huge mistake with AMR too?
Scared but holding on, think it should still be ok.
Thursday, March 06, 2008
I think I may have made a mistake with AMR. Either they go into bankruptcy or should go back to 16-17 if oil falls a bit. Spinoff may yield some positive too. But debt load should have warned me. Bought CNA for retirement acct.
Not looking at account anymore due to AMR, did buy more but am on a lot of margin now. :(
Oh well, back to the poorhouse..
Not looking at account anymore due to AMR, did buy more but am on a lot of margin now. :(
Oh well, back to the poorhouse..