Nevstar Links 15 November 2024
Welcome back to the Nevstar Links, your guide to some of the best articles on markets and investing available on the internet.
Today is Friday the 15th of November and it was on this day in 1904 that US patent #775134 was granted to a certain Mr King Camp Gillette. As might be obvious from the name, the patent granted was for a thin, sharp disposable blade to be used for shaving - the razor blade. To this day, Gillette holds around a 70% market share in the razor blade market and has annual revenues of over US$80 billion. Its pioneering tactic of selling a durable product (the razor handle) for a loss while generating profits from sale of consumables (the razors) is still taught in business schools today.
Onto the links for this week including articles on fashion, failures and finance.
Some Things I Don't Believe
Great blogpost from Ben Carlson who is consistently one of the best personal finance writers in the blogosphere. In this post, he elaborates on a number of things that he does not believe. This helpfully reveals several strategies that can safely be avoided when seeking investment success.
"I don't believe politics should ever play a role in your investment decisions. Partisan politics feels like they are infused in everything these days. It's impossible to avoid.
Presidents get too much credit when the economy is strong and too much blame when the economy stumbles. Politicians don't control the economy, stock market, gas prices or grocery prices."
The Failure That Started The Internet
The very first message sent over the internet occurred 55 years ago in October 1969. Two scientists from UCLA and Stanford built a system establishing a connection between their computers. It crashed the first time but from this inauspicious start, the internet was born. Fascinating interview with the two professors courtesy of the BBC detailing their ground-breaking efforts.
"Half a century later, the internet has shrunk the whole world down to a small black box that fits in your pocket, one that dominates our attention and touches the furthest reaches of lived experience. But it all started with two men, experiencing just how frustrating it is when you can't get online for the very first time."
Buffett is Raising Cash Holdings: Should You?
Compendium of random thoughts from The Brooklyn Investor but the one that I was interested in (about halfway down the post) is the section on Warren Buffett's cash balance. The Berkshire Hathaway balance sheet now has over US$300 billion in cash holdings. So why is Buffett raising cash and does that mean you should too? Probably not.
"Without Apple, he would have had to sell his entire equity portfolio to raise cash so high. Instead of seeing this as a way to get more defensive by raising cash, it feels more like going back to normal after Apple boosted the equity portfolio so much."
See also: Warren Buffett Is Preparing For A Bear Market
Implications For Investors
Interesting market perspective piece from Franklin Templeton looking at the potential implications for investors resulting from the decisive victory by Republicans in the United States election last week. Good summary of the various asset classes and what impacts are likely from such a significant change in leadership.
"No president since Lyndon Johnson, not even Ronald Reagan, has had the opportunity to enact his agenda now available to incoming President Trump. Investors should take note. This was no ordinary election, and the ramifications for financial markets and investment portfolios are likely to be extraordinary as well."
See also: President Trump and The Future of Stock Returns
Rent To Wear: Business or Investment
Interesting piece discussing the latest trend in clothing - 'rent to wear' which has seen a number of fledging wardrobe rental businesses popping up online. But if you buy a new dress with the intention of renting it out, is that an 'investment' or a 'business'?
"Last week, one of the UK fashion pages profiled some ladies who have found great success renting their wardrobes. After getting plenty of hits on the pieces they already owned, they bought new dresses to rent out and now have thriving operations that keep the cash rolling in."
Quote of the Week
"I like my money right where I can see it...hanging in my closet."
Carrie Bradshaw
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Have a great weekend.
The Nevstar
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