Letter from the Publisher
Do Your Homework
June 2008
Letter from the Publisher archive |
William F. Buckley said a magazine "is to be a trusted friend who arrives in the mail." The journalist, author and television personality who died in February worked over 50 years in the media business. As a teenager first discovering the power of words, I remember watching Mr. Buckley moderate his TV show Firing Line, where he would do battle against the forces of bureaucracy. Sometimes he would come away scarred. Other times absolutely victorious, and every time he told the truth. Mr. Buckley possessed the good judgment and responsibility the media should have for its audience. As the creator of the National Review magazine, he was a custodian of objectivity and truth. To be your “trusted friend”. This is our mission at Investor Concepts.
This month I am trying to find time to read two astounding books --- A Bull In China: Investing Profitably In The World’s Greatest Market by billionaire and commodities guru Jim Rogers, and Crash Proof: To Profit From The Coming Economic Collapse by Peter D. Schiff, two books I highly recommend. Jim Rogers knows a thing or two about investing in China. During his two decades of China investing he has made three trips across the country, two of which were enjoyed atop a Harley-Davidson motorcycle. And after reading Crash Proof you may want to run out to your bank and cash out your savings accounts held in US dollars and exchange them for euros or Chinese renminbi currency (whose principal unit is the yuan) to protect against a US dollar value which is undeniably suspect and sure to evaporate even more in the coming years. Crash Proof is so important to your investment portfolio that we hope to have Peter Schiff as a guest writer in an upcoming issue.
Most investors are aware of the audacious TV luminary Jim Cramer and his cable television show Mad Money. In our office it seems that Mad Money is always playing on the TV nearby. CNN is getting its money’s worth with the perpetual reruns. On a recent show Mr. Cramer professed the importance of homework when it comes to investing, an idea he promotes in his book, Real Money: Sane Investing In An Insane World.
As Jim Cramer would advise, “Before you buy any stock…please, please, do your homework. Listen to the conference calls. Go to the company's Web site. Read the research. Read the news stories. Everything's available on the Web. Everything.”
This week, Warren Buffett held court at this year’s Berkshire Hathaway annual general meeting in Omaha, Nebraska. When asked by a shareholder whether Mr. Buffett expected to earn returns of 7% to 10% on publicly traded stocks Berkshire had purchased recently, Mr. Buffet quickly responded no.
“We would be very happy if we earned 10%, pre-tax," he said. "Anyone that expects us to come close to replicating the past should sell their stock; it isn't going to happen. We'll get decent results over time, but not indecent results." And then Charlie Munger, Berkshire’s vice chairman, weighed in: "You can take what Warren said to the bank. We are very happy at making money at a rate in the future that's much less than the past... and I suggest that you adopt the same attitude."
Another astounding comment was made by Mr. Buffett during the meeting where he said, "We are happy to invest in businesses that earn their money in euros in France or Italy or sterling in the UK, because I don't have a feeling that those currencies are likely to depreciate against the dollar."
The point is we are fortunate to live among some very smart people who have studied hard to understand how to succeed financially in our free market economy. It’s a tough market and it’s only going to get even tougher, but the tools, the ideas and the mentors to help you navigate the market are out there. Their insights are no more than a click away. If you’re not listening, learning, re-learning and un-learning, you are not progressing, and life is about progress, and progress is about homework.
Our niche in the financial media is to present to you alternative investments that may become the next Microsoft, Dover or Google. One quality that thrives among the companies in this issue of Investor Concepts is innovation. You should find some interesting companies doing some very interesting things, from Zuma Beach Entertainment and their World Arena Rugby league, to Taurean Global Properties, Fusion Oil and Europa Capital Advisors. Don’t be afraid to talk to these groundbreaking entrepreneurs. Ask them questions about their companies. And, always do your homework.
John Tidwell
Publisher & Editorial Director
jt@investorconcepts.com