Best investment adviser Richard Losch's blog

Carnival Cruise Lines

Because the cruise companies are foreign corporations, and because most of the business of cruising is done offshore, substantially all of Carnivals income is exempt from US corporate Tax. Most of the Companies shipboard employees are foreign nationals and are not US residents so they are not subject to US Income tax on wages and the company is not required to contribute Social Security and Medicare taxes on their behalf. While most of the recreation industries are intensely seasonal (Las Vegas is hot in the summer and cold in the winter, Orlando has very hot, very long summers). The cruise business can mitigate this seasonality to some extent by moving its best ships to take advantage of seasonal rate premiums. Their ships can sail Alaska in the summer and the Bahia or Caribbean in the winter. They can sail Scandinavia in the summer and the Mediterranean in the spring and fall.

450000 Square Ft Furniture Store

The 450,000 Square Feet Furniture Store - this is No ordinary store. If you have never been inside the Nebraska Furniture Market it is easy to underestimate its significance. It is not that one furniture store will have much impact on a company the size of Berkshire Hathaway, but a visit to the Omaha store speaks volumes about Warren Buffett's business philosophy, and particularly it helps the visitor understand how he has built a huge moat around this furniture business. If I were teaching a class in a business school about moat construction for a retail business I would start the class out with a trip to Omaha or about the Nebraska Furniture Market and what it tells about the management philosophy at Berkshire Hathaway. What does the "Principle of Intermediate Fragmentation" have to do with selling home furnishings?

Lunch Money Indicators - Annual report

Actions speak loader than words (or sometimes numbers). What are the deeds that speak about the integrity of a company's management?

Other People's Money

More about the evils of cheap capital and why tight money is good for investors. "There is no better way to make managers understand how valuable capital is, than to charge them for it," ... Warren Buffett.

Bear Tracks

The bear may be loose but the fun has only begun. "The good news is that there are many old economy stocks that are attractively priced. When you look at your December statements you will begin to see some new names there. This does not necessarily mean that I, as investment manager, think the market as a whole has bottomed. It means that I, as investment manager, am finding good companies at attractive prices, and that I am afraid that they may not get much cheaper even if the rest of the market turns back down."

Build It and Money Will Come

Why cheap money is bad for the stock market, and why corporate CEO's think that if they are smart enough to get their hands on large piles of cash they must be smart enough to spend it.

Efficient Stock Market

How rational are stock market values: tech stocks in the stratosphere in March, but 80% less in October.

Style Drift

What happens when mutual fund managers chase Performance at the expense of investor suitability rules.

Lunch Money Indicators - Options

Discusses the effect of stock options on the behavior of corporate managers, and how this behavior may differ from managers who actually own a substantial position in the stock of the company. This can be hazardous to the financial health of shareholders.

Identifying Problems

How Higher interest rates and a slowing economy effect tech stocks. And why a little pain is good for the economy.


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