1/12 As the financial crisis was coming to an end in 2011, I visited a small boutique investment firm outside of Atlanta, GA that had generational clients. The families that had been wealthy for decades almost all had a huge block of Coca-Cola $KO stock in their accounts. 2/12 They mostly wanted the dividends to live off with the remainder invested as the professional saw fit. Many of the firm's Mississippi and Florida clients had the same disposition. The attitude was something like, "The coastal elites have their lofty real estate and economies

1/ One of the major questions that you will have when you begin investing is this: What does it take to generate substantial money passively over a somewhat reasonable amount of time? The answer: $650 per month for twenty years. 2/ If someone in 1990 was earning the average income and wanted to generate $67k passively in 2021 (the US median household income), it would require setting aside a bit over $200 per month into Johnson & Johnson, Coca-Cola, and McDonalds stock.

1/ When it comes to successful investing, there is a substantial persuasion gap between what you hear from the value investors and those who invest in the newest thing that's supposed to take over the world. This has enormous consequences for the net worth of every American. 2/ Whenever there is talk of a new industry, the hypemeisters come out and tell you about the 1,000,000% returns that await the space. It takes the frontier spirit you have and tries to map on a form of Manifest Destiny to crypto, electric cars, and sustainable whatever.

1/ In a world where everyone seems to want to invest nearly all of their funds into tech, I thought it would be worthwhile to take a moment to reflect on the role of non-tech stocks in an investment portfolio and the advantage they bring to long-term wealth creation. 2/ The advantage of tech stocks is well known. Scalability with intangible goods can take you from 0 to 1,000,000 (or higher) in a matter of time. Successful full video games are one of the best examples of this - a couple of guys create code, pick a platform, and

1/ I want to reflect on several topics: Apple stock (which many own either outright or through many workplace 401k funds), stock market valuations and the future of returns, and Charlie Munger's comments this past week at the Sohn Conference. 2/ Charlie Munger offered a very profound observation when he said that the current market mania is crazier than the 1990s and "everyone who bought a stock at a P/E ratio 10 and now finds it at 35 thinks himself a genius" when criticizing the nature of current investment gains.

1/ We need to talk about the difference between "gambling" and "investing". Every market cycle has its risks. When times are tough, I remind investors that they own assets and have a perpetual claim on the *forever* future of the business absent insolvency. But.... 2/ In bull markets, a different risk shows up. And that is the seduction of gambling. Right now, our culture makes it easier than ever to gamble. There are TV commercials, websites, and right now as I watch the Giants-Dodgers baseball game, gambling imprints placed on the mound.

1/ One of my favorite investing questions: How on earth did Monster Energy $MNST compound a total of 70,515% since 1985, turning a $10,000 investment into $7 million over that same time frame while the average American household generated total income of $1.8 million? 2/ As is always the case when it comes to the "supercompounders" of the investment world, Monster Beverage's long-term success is a combination of: good product, good structure, and good management.

Financial media is always interested in content, fresh ideas, and the latest cutting edge. There is a lot of value here, but there is also a lot of trouble because it can lead susceptible investors to play "gin rummy" with their portfolio by constantly buying/selling stocks. To use an example, Apple is the most widely held stock on Robinhood over the past five years. It has returned 418% over that time frame, 462% with dividends reinvested. An extraordinary return!

When you look at Procter & Gamble's stock return history, it is clear that it has entered the "resilient slow-grower" stage where valuation is particularly important for total returns. If you buy the stock for 16x earnings or less, you get total returns of 12%. But if you pay 25x earnings, as is the valuation right now, you get..7.5% annual returns. Over time, that is a very big difference. People who bought in the late 1990s have only tripled their money through today, and that benefits from the high valuation level of today.