Value in markets by identifying money trees like redwoods.

3 February 2018

Dear Fellow Investors,

The Redwood trees in Northern California are the tallest trees on Earth. They can live for over 3000 years.

Notice the size of the man standing next to the giant Redwood

Imagine all the storms, droughts, and forest fires these trees have experienced and yet they are still standing strong.

We find value in markets by identifying money trees like redwoods. These are shares that grow over time, survive adversity and continue to grow stronger.

We may be entering into a period of adversity. US Interest rates are rising, bond prices are falling and stocks are correcting. The water is heating slowly but not yet boiling.  World wide, investors are demanding higher rates to compensate them for a falling US dollar and rising budget deficits. Some investors are asking why should I hold shares and get a dividend payment less than a risk free US
Treasury bond ?

We need to be mindful of managing our risks should the water start to boil.

The shares in our portfolios are solid companies with low or no debt  which mitigates interest rate risk. They are like money trees compared to killer trees.

Debt is the killer of capitalism. Debt adds uncertainty and risk. Good businesses don’t need much debt to operate. Debt also reduces operational margin of safety and manoeuvrability.  

As long as our companies continue to grow earnings and have solid balance sheets we will survive and prosper over time.

I have moved to a defensive position. keeping cash reserves to take advantage of lower prices should they come.

Should major supports in shares we hold break down, we will lock in our profits and live to fight another day.

Invest well and grow your wealth
Bill

This dog is a survivor !  Saved by the technology of a microchip.

APOLLO, Pa. — A family has been reunited with its dog 10 years after the dog went missing.

Debra Suierveld and her family assumed their dog Abby had died after she ran away in 2008 from their home in Apollo, but decade-old sadness turned to joy on Saturday when Suierveld received word someone had found the dog.

The black Labrador mix showed up on George Speiring’s front porch in Lower Burrell, 10 miles west of Apollo. 

Speiring contacted Animal Protectors of Allegheny Valley, which discovered the dog’s microchip and was able to contact Suierveld.