07/21/2010
December 3, 2017
07/06/2010
December 3, 2017

07/14/2010

Greetings from Vancouver!!


I loved that post, I bookmarked it and plan on returning to it frequently. Regarding your investment philosophy I am curious if you are getting tempted by blue chips at these levels. Jeremy Grantham, Jim Grant etc. I’d imagine you have a bigger edge with small caps but the likes of JNJ, MSFT and Kimberly Clark are getting pretty tempting and pay good dividends while one waits. Thanks for the insightful blog,

Glad you liked the post.

I am going to stick to smaller companies for now. I’m focused on companies that can go up 5-fold in 5 years. I agree that many large cap companies are ‘cheap’ but define cheap. What if the market multiple drops to 5? There’s minimal growth in these companies, so you are really just counting on dividends and them being cheap. I don’t think you can lose much money long term, but what will you make? Are you compensated for the risks of a crazy macro environment? I’d rather invest in companies overseas that have good growth prospects. Besides, while a lot of large cap US companies have low double digit PE multiples, you can find a lot of rapidly growing smaller companies with SINGLE DIGIT multiples. You take on a bit more risk–but everything these days is risk. Not sure if i fully answered your question, but I’d rather own a basket of smaller growing companies than old and static large cap. But they do look cheaper than they’ve been in quite a long time and dividends sure are nice.


Your assertion that macro forces are arrayed against business, is one sided. Wouldn’t you agree that government policy is also highly influenced by equally insane corporate lobbying? The average citizen is powerless against business and the forces of globalization and destruction of the planet. I also question the viability our current system to provide a sustainable world, but the current unregulated business world is clearly not up to the task. If you haven’t read Hot, Flat and Crowded, by Thomas Friedman, you are missing the crux of the problem. George Soros also has a great series of lectures on the internet about the future of capitalism as we know it. What to do? What to do?

You bring up an interesting point that I hadn’t considered which is that some of the craziness in the world currently is the result of corporations trying to legislate their own rules into the free market.This creates its own level of problems that are then compounded by governments trying to also create rules counter to the free market. I believe in the free market. I think there would be fewer problems out there if the market were made freer. I don’t want to see the government meddling–nor do i want to see companies asking governments to meddle on their behalf. I don’t know how to stop it–I’m just trying to navigate it.


Re: Just A Little Patience….

With the patience you needs balls.

Said like a true poet–thanks dad.