Why Investing is Great, Election Thoughts, and Other News from the Business World-

The summer has been very interesting, and in many ways very rewarding for me personally. The rewards I mention are not financial, though I am sure you would agree there is nothing wrong with a few extra bucks in your pocket. No, what I am talking about is the gratification that comes from being associated with people who in some way you may have helped. Specifically, there are people who are clients of mine who in some minor way I have helped through investing. For example, I recently recieved notice that a client who opened a new business had the enterprise go live with a very interesting business. We talked about the idea and he has refined it into a product which has a great deal of potential. One never knows how these things play out as the business world is tough in almost every area, certainly in markets which offer large rewards. Still, helping people start and reach for their dreams is wonderful and very gratifying.



Another example is a client who is very diligent recently sent me an email notifying me of an upcoming appearance on television for her small business. She is a super lady who tries very hard with her candy business, and I was overjoyed to see the television spot and I hope it really helped with her orders.



A few other anecdotal stories deserve mention as well. A young man recently came to me with some money he wants to invest. He is only 13 years old but he has already saved some capital and wants to see it grow. He is also interested in learning about investing so I gave him some informtion about books to read and how to pursue his objectives. As I get older, and I think most people who have had success financially might agree with this, more focus and satisfaction comes with helping others attain their dreams. You realize people are not that concerned with rates of return, but having enough money so they have the freedom to do what they want to do. It may be retiring early, buying a new house, renovating a new house, starting a new business, expanding an existing enterprise, sending a child to college, whatever. Investing money successfully can help people do those things, but it certainly is not easy.



Investing is spending money today so you will have more money in the future. Just as important, is how any individual is forced to grow intellectually by investing. You can spend money without knowing anything about what you are investing in, which in my mind is not intelligent. When you invest and work at it, you learn about the entire world, about what companies are doing all over the globe, and almost every sphere in the world affects your companies. Weather, sports, politics, culture, music, fashion, nothing should be ruled out. As a result, an investor is constantly forced to learn, which means you are growing. You grow or you die. While you are at it, there is plenty of struggle and adversity, but the rewards are well worth the effort.

We are now, as Lincoln said, "Getting to the stub of it.", regarding the upcoming presidential election. The conventions are in the next two weeks and the debates will follow. I recently read where only 5%, or 15 millon people out of 300 million in the country, will decide the outcome. I am sure you might agree neither side will probably call you after they win to see what your thoughts are on how to proceed forward. What will be very interesting is to see how both parties approach the election. The important issue is which leader is better able to lead the country in the future. Politics is a subject which you cannot avoid and there is much to hate about it. However, the next few months will be interesting for any observer, whether you vote or not.

Apple defeated Samsung in a trial regarding patents for phones. The result is the smart phone business will get more competitive. The companies most affected by the decision are Apple, Google, and Microsoft, all financial and cultural heavyweights. Personally, I think the first two are in the strongest positions and I think they have all been great businesses. However, in the future I would not go against Apple or Google.

http://www.bloomberg.com/news/2012-08-25/apple-patent-victory-seen-spurring-wider-range-of-smartphones.html

Mario Batali is a legend in the culinary world and has some great advice for any enterpreneur in this interview-

http://www.nytimes.com/2012/08/26/business/in-mario-batalis-kitchen-please-refrain-from-shouting.html?ref=business

Apple is introducing a new mini-Ipad and a new I-phone in the fall.

https://allthingsd.com/20120825/confirmed-new-ipad-mini-will-debut-in-october-after-latest-iphones-september-bow/

John Bogle is a giant in investing world and has some great advice for any investor. I personally disagree with his ideas about index investing versus active management, but I do think index investing is a great way to invest for a lot of people. http://seattletimes.nwsource.com/html/businesstechnology/2018994009_bogleworry26xml.html

The online poker controversy just gets worse. http://www.lvrj.com/business/online-poker-s-window-of-opportunity-may-be-closing-167464895.html

Finally, I hope all readers have a great week, if you have any comments, thoughts, questions, or ideas about the blog post, please share them! Thank you for reading.

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital
. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles Yale Bock has written about specific companies.

Romney/ Ryan vs Obama/Biden, California, and the State of the Market-

The dog days of August are on us and the never ending summer heat is at its zenith. Hopefully in a few weeks, temperatures will moderate some and the environment will turn pleasant. The mood in the country is as difficult as the weather. In the forefront of anyone with a pulse is the upcoming presidential election. Voters will face a clear choice between the Romney-Ryan ticket and the incumbant Obama-Biden pair.

I would imagine both sides would agree the country will deserve the winner. A legitimate question which faces the victor is can they work with the defeated side? The advertising campaigns on both sides are doing everything and saying anything possible to discredit the opponent. Staring those same people in the face after you win presents a major problem. One might say it does not matter, but it does and one only needs to look at the lack of accomplishment of our current government to prove the point.


Governor Romney brought up the case of what is happening in California as potentially what could happen to the United States if our government does not start to address the financial issues it has. Naturally, Jerry Brown, the governor of California, says Romney is misguided. California is running a deficit of 10 billion dollars, up 50% from what it thought it might run. The state is losing citizens and businesses because of the financial problems, delusional legislature, and a myriad of regulatory red tape which would frustrate any reasonable business owner. The New York Times recently had a piece in it about how France is going to raise tax rates to 75% for millionaires, and many business owners in France have already left, or are considering leaving. California is facing the same issue and it will continue until people with common sense figure out how to come to an agreement on practical rules for spending and taxing.


Stock market psychology is a reflection of what is happening in all over the world, and I recently read where sentiment about the market is at a 27 year low. Very few people have any interest in the equity market. For experienced investors, this is music to their ears as they want to invest when everyone hates stocks because you get better prices. Time will tell as to how things play out, but I know which camp I am in.


The Olympics ended yesterday and there were no tragic incidents. I am happy the games went so well for the British as they had a smashingly successful two week run. Apparently, the shopping really picked up and certainly the US performance helped on that end.


Facebook's lockup period ends pretty soon and if you thought the selling was bad before this-http://www.nytimes.com/2012/08/13/technology/facebooks-stock-has-suffered-but-some-investors-see-value-now.html?_r=1&ref=business



If you wonder why Mitt Romney does not want to release his tax returns, look no further than this story-http://www.nytimes.com/2012/08/14/us/politics/sheldon-adelsons-dealings-in-china-are-under-investigation.html?ref=business

Thank you for reading the blog, and if you have any comments or thoughts about the blog, or thoughts, please post them!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles Yale Bock has written about specific companies.

Summer Fun, Mr. Market is Blue, and Romney's Strategy-

The summer is continuing to wind down, and oh, what a few months it has been, in all kinds of ways. My focus is the markets, and specifically the stock market. One of the things I always notice is when things get difficult in the stock market, all of the same detractors and naysayers love to pile on and emphasize the world is going to end. I write from the perspective of someone who is long the market, meaning over the long term it will go up. What is really tough for stock market investors is there have been so many events which lead people to say 'Why bother with this nonsense?'



Over the last few months, investors have gone through the continuing problems in Europe, the Facebook IPO debacle, and this week's Knight trading malfunctions. On a daily basis, you see companies which miss earnings estimates by a few cents, and the market value of the stock will get hammered by 20-30% or more. I have seen stocks go down by 50% or more with downward guidance. Are these punishments really fitting of the crime of reduced guidance? I think not.



You have a situation where Mr. Market, as Ben Graham calls it, is in a mood which looks at the extreme negative all the time. No company gets the benefit of the doubt, regardless of the circumstance. As an investor, the valuations are compelling because of what is seen as uncertainty. However, much of the uncertainty will eventually end. The United States will eventually have our presidential election, and one candidate will win. Europe's debt crisis will result in a restructuring of the Euro currency, or the countries will find a way to work through the issues. China will eventually show improved economic growth, or will go through a lull. All of these problems will eventually reach a conclusion. What will also remain constant is companies which are making hundreds of millions or billions of dollars will continue to try to sell more products and services. You invest in these strong companies because they can endure the problems and work through them.



A nice article in the NY Times on the Long Term Value of Internet Businesses-http://dealbook.nytimes.com/2012/08/03/the-long-term-value-of-internet-companies/?ref=business



Business Insider tells us the favorite U.S. stocks- http://www.businessinsider.com/morgan-stanley-9-stocks-america-2012-7

Defending Mitt Romney's election strategy-http://www.businessweek.com/articles/2012-07-20/a-qualified-defense-of-the-romney-campaign#r=related-rail



Thank you for reading the blog and I hope you have a great rest of the summer. Please be healthy and and best wishes to you and your family members. If you have any comments, thoughts, or questions regarding the blog, please post them!!!!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles Yale Bock has written about specific companies.

Thoughts on Colorado, Questioning Facebook, and How to Market Your Business-

I hope all readers will join me in sending their thoughts and prayers for the victims of the senseless tragedy in Aurora, CO this past Friday morning. I have been doing quite a bit of reading and thinking about this and thought I would offer my perspective.



First, something like this certainly makes one think about your own situation and how fortunate you are to have a family and life which are healthy. One never knows what will happen in the world, and nothing is guaranteed. The events in Colorado vividly illustrate the unpredictability of the world we live in. As a father of a 4 year old daughter, my heart breaks for the parents of the 6 year old girl who lost her life. I think leaders should really think about ways events like this can be eliminated, or at the very least, minimize the damage from. Society is never going to be able to prevent things like this from happening. However, an analysis can be done on what factors contributed to this event and how someone who came from a very good family and had a promising future turns into a mass murderer.



Personally, I believe society should look very closely at automatic machine guns and think long and hard at who should have access to these weapons. Does a citizen working in a potentially dangerous industry have to have an automatic machine gun? Maybe. Does a citizen not working in these situations need an automatic machine gun? Probably not.



My own thinking on the role of content producers certainly has been changed as I think if content has no social redeeming quality, there should be restrictions on who can see it. Moreover, people ages 5-18 who have impressionable minds are the most at risk to being affected by violence, sex, vulgarity, or anything which might alter how they see the world. Currently, movie studios have their way as anything can be shown to anyone. I saw a film the other night which had nothing in it which had social value. Does that mean every piece of content must have social value? No, but it means if you want to show it to everyone, it has to at least have some merit. If all you are going to show is violence, vulgarity, sex, blood, gore, and special effects, uh no, not everyone can see it.



In the investment world, the environment remains the same as we are in the midst of the summer, and the focus continues to be on the problems in Europe. This week brings an avalanche of earnings reports from some of the biggest companies in the world- Apple, Starbucks, McDonalds, etc. I would suspect the reports will be pretty strong with weakness in Europe, and a cautious outlook about the next 6 months.



The Olympics are almost here and I cannot wait to see them. The opening ceremony is always great as the pageantry and pomp never fail to disappoint, and I am sure our British friends will do a great job. I only hope the security is great and nothing violent happens to mar the games. I hope you enjoy them as well.

At least one observer is not sold on Facebook-http://www.technologyreview.com/news/427972/the-facebook-fallacy/



Marketing is the most crucial issue for all businesses and here is a great story about how one group achieved great success on a limited budget-http://techcrunch.com/2012/07/22/reaching-10m-downloads-and-the-guerrilla-marketing-tactics-we-used-to-get-there/



Many shareholders are voting no on executive compensation- as they should be-http://www.bloomberg.com/news/2012-07-19/more-shareholders-are-just-saying-no-on-executive-pay.html




Thank you for reading the blog and I hope you have a happy and healthy week.  If you have any comments, thoughts, or questions about the blog, please post them!!!!

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles Yale Bock has written about specific companies.

Recession is Built In, the T-Hause, and Facebook gets the London Olympics-

July 4 has come and gone, and the summer Olympics in London are rapidly approaching. Summer is usually a more relaxed time, and the record hot temperatures across the United States have literally put a little fire under most people. In stock markets across the world, trading volumes are usually light and this year is no exception. In looking at the volumes over the last few weeks, the average volume is half of what it might be during the fall or winter. As a result, the volatility is more pronounced. With the profit warnings from Cummings, Nike, AMD, and the bankruptcy of Patriot Coal, investors are very nervous over the possibility of a global recession.

From my perspective, in many ways, the world economy is already in a recession. Unofficial unemployment in the U.S. is already 15%, and that does not include the underemployed. In many mature European countries, you have official unemployment rates hovering well above 10% and youth unemployment above 20% and in some cases closer to 50%. Stock markets have done very little for 15 years, and bond yields are incredibly low. Many believe the continued low interest rate policies of the Federal Reserve are the proper medicine to fight deflation. Many disagree as well, sighting a persistently sluggish economy and lack of jobs and hiring in the private sector. I think most people are sick of the finger pointing and want results, not excuses or blaming the opposing political sides. If people want bickering, they can look at their young children and teenagers and get enough disagreement to last a lifetime.

Let me include a shameless plug for a new business I am a part of, the T-Haus:(www.californiathaus.com).



I have been drinking loose leaf tea since my sister in law Jacci Aronson introduced it to me last December. Drinking tea has become a wonderful daily habit for me and I thoroughly enjoy preparing a different tea each morning and evening. If you have any gift needs or would like to try drinking loose leaf tea, you might go to the site and call Jacci for more information. She will certainly provide you plenty of information to make the experience enjoyable. (If you have any interest at all, just enter your email address and you will be added to our mailing list).


Social Media is just so powerful and it is helping change the business landscape very quickly. Those who embrace it will prosper, those who don't will fall by the wayside. Here is a nice piece about a fashion related startup- http://techcrunch.com/2012/07/11/social-media-for-the-fashion-conscious-chicisimo-chalks-up-800k-in-angel-funding/

The Olympics are going to be integrated with Facebook. Lots of people doubt the company, but I am not one of them-http://www.nytimes.com/2012/07/11/business/media/nbc-and-facebook-announce-facebook-partnership.html?ref=business

Nice article about how to help achieve your goals-http://www.businessinsider.com/five-steps-for-achieving-your-goals-2012-7

Finally, I know it is hot, hot, hot, so make sure you drink plenty of water, or tea- hint, hint, to make sure you stay hydrated. Have a great rest of the week and weekend.

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.
Here are some Seeking Alpha articles Yale Bock has written about specific companies.

Summer Slowdown, A New Tea Store, Who Need's PC's, and the London Olympics-

Over the weekend, Greece citizens decided to elect a government that is more responsible than a completely idiotic party. Well at least they did not decide to do the stupid thing, however slim the margin was. In fact, many argue the best thing for Greece and Europe would be to have them leave the European Union. I know this, I am pretty confident Germany is fed up with all things related to Greece, and at this point so am I. I find it amazing there are those who believe the fault lies with Germany because they enabled poor fiscal habits by the countries in Southern Europe. Still, Germany finds itself in a tough position as 42% of its exports are to the rest of Europe. If you think Germany wants to see the Euro fall apart, you are badly mistaken.



In the United States, again we see the same old calls for more monetary stimulus to counteract a possible slowdown in the economy. Hello, do these people ever operate in the world? Do they not know the summer is always slower? People do take vacations, slow down, take it easy, you know, that kind of thing. Today, Federal Reserve Chairman Ben Bernanke decided to extend 'Operation Twist' until the end of the year. Great, continued record low interest rates at the long end of the bond curve. It has really worked so far, hasn't it Uncle Ben? He would argue it has, as the economy is not in recession, or even depression. I suspect until the election in November, we are at a stand still, in the economy, in the stock market, and politically, whether we like it or not.



The NBA Finals continues this week as the Miami Heat have jumped out to a 3-1 game advantage over the Oklahoma City Thunder. As always, playing smart and not making mistakes are usually the path to success, and this series has been no exception. Turning the ball over and not making open shots are not winning recipes.
The Olympics is less than a month away, and I am very excited to see them. I think England will do a great job as a host and the world will be captivated, as always, by the pageantry and great competition. Apparently, tickets are very hard to get-http://www.bloomberg.com/news/2012-06-20/olympic-tickets-sell-for-20-times-face-value-on-secondary-market.html



I recently started drinking loose leaf tea and really enjoy the experience. There are many different kinds of flavors, with a great majority of them potentially very good for you. Many kinds are high in anti-oxidants, which have a number of positive health attributes. Apparently, Starbucks agrees with me as they are opening a store in Seattle which just sells tea-http://seattletimes.nwsource.com/html/businesstechnology/2018473295_tazo20.html



Finally, it is interesting to see more and more of the world move away from personal computers. I love the Ipad, and if Intuit ever makes a Quickbooks version for it I am in like flynn. The PC is probably not going away any time soon, but it will be nice to have more options than to be stuck with Microsoft products, which I think are awful. Here is an article about a move to virtual pc's-http://www.businessinsider.com/this-company-just-yanked-out-500-pcs-to-get-windows-7-from-the-cloud-2012-6

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles about specific companies.

How to Identify Winners, Beating the London Whale, and an Interview with Mitt Romney-

Success is not easy, and it is not supposed to be easy.  The whole world admires and embraces winning, and people are rewarded for it, in many instances, far more than they should be.  Failure is not tolerated, and in society today, ridiculed.  However, what most people don't quite get, is that success is born from failure, if a person can learn from their experiences.  So how does one identify people or businesses, or entities which are going to be successful?  What qualities should you look for?
1)  Leaders who are bold and not afraid to lose.  It is easy to find people at the top who are always hedging their bets.  Hedging is a good strategy, especially if you have large gains.  However, to be a big winner, you need people at the top who have a bold plan about what they are going to do, and how they are going to do it.  One such leader is Howard Schultz, the CEO of Starbucks.  I can remember listening to a presentation by him when their stock prices was way down in the dump.  Their strategy was impeccable, and they knew exactly what they had to do.  Not once did their strategy change.  Over time, the company executed and the performance spoke for itself.  Shareholders get rewarded, and the success is played up in the press.  Schultz and his team learn from their mistakes, and are applying those lessons to all areas of the business, in countries across the globe.  If the stock gets pounded again, believe me, I buy a lot more.



2)  Leaders who embrace the challenge, and stick with the task all the way from start to finish.  Many people hope they get an opportunity with a successful business or organization.  However, most often, the real big chances one has are in situations which look very bleak.
I am very familiar with the head coach of the Oklahoma City Thunder, Scott Brooks.  Mr. Brooks has a background which anybody can and should admire. He was not drafted out of college, played a year in the CBA, and made the Philadelphia 76rs when they had Charles Barkley and Maurice Cheeks.  After playing 10 years or so in the NBA, he wanted to coach and had to start by being an unpaid assistant in something called the American Basketball Association.  He landed a job with the Denver Nuggets as an assistant, and then moved to Seattle to work for PJ Carlesimo.  The team then moved to Oklahoma City, and Carlesimo was fired twenty or thirty games in after losing every game by nearly 20 points.

Brooks is given a chance to coach the team as an interim coach, which he embraced.  The team wins 20 or 25 games that year, and the franchise rewards him with a 3 year deal to coach the team permanently.  OKC wins 50 games in his first year, and has now made the Western Conference Finals two years in a row.  Mr. Brooks takes advantage of his opportunities, and they have a heck of a chance to win the NBA championship.  He played young players like Russell Westbrook, Kevin Durant, Serge Ibaka, and James Harden and has stuck with them, sometimes suffering losses which were difficult.  Now the team is poised to reap the rewards of those lessons, possibly for a very long time.  A big thing Brooks has done is to emphasize the essential habit of trying to improve each day.  If you get better every day, over the long term, it adds up to tremendous improvement.
 

3)  Leaders who are building for the future, as well as executing today.  You should look for organizations who are strong today, but have large ambitions for how to go about growing in the future.  I look for companies who are investing in the largest countries in the globe- China, India, Brazil, Russia, Indonesia, etc, as a way to grow for the future.  You want companies or leaders who place a large emphasis on positioning for the path going forward.  You want to see what plans are in place, and how the group is executing versus those plans.  Many talk about their plans, but you don't want talk.  I want to see action- partnerships, agreements, new stores, new products, goals for next year, three years, five years, etc.  A great example of a company which invests in the future is IAC Interactive- led by Barry Diller (yes, full disclosure, my clients and I own shares in IAC).  Diller is investing in the future, and has his hands in a lot of pots, across the globe.  Will they all work out?  No, but he does not need them to.





Nice story in the NY Times about how JP Morgan got unseated by a smart trader-
http://www.nytimes.com/2012/05/27/business/how-boaz-weinstein-and-hedge-funds-outsmarted-jpmorgan.html?pagewanted=1&_r=1&ref=business

Great Interview by Peggy Noonan with Mitt Romney-​http://online.wsj.com/article/SB10001424052702304707604577424642695167400.html

Mobile Shopping is a huge opportunity-​Mobile Online Shopping Holds The Real Opportunity In Mobile Payments

A massive difference in global gas prices-​http://www.bloomberg.com/video/93419911-where-in-the-world-is-the-cheapest-gas.html

Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital.
As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Here are some Seeking Alpha articles about specific stocks written by Yale Bock.