Monthly Archives: March 2013

Small Businesses Support Sun Life Stadium

Small businesses are supporting the modernization of South Florida’s Sun Life Stadium. The Miami Dolphins are hoping to gain public funding as well. According to the team, small businesses are hoping to benefit benefit from a sale tax rebate and a Miami-Dade County hotel tax are approved to fund the stadium improvements.

“It just helps the community to be alive. People spend more money on food. They can go to the supermarket and it helps everyone in the community,” said Fernando Martinez of Roma Foods.

7 News covers the story:
WSVN-TV –
 

 

Stephen Leeb: Investing in Railroad Companies

In the past, railroad company shares were considered cyclical, almost boring stocks when compared with growth stocks. About 8 years ago, oil prices climbed significantly, pushing transportation costs to an all-time high. As a result, the price of transporting goods and people also peaked.

“In a world of high oil prices and potentially scarce energy resources, betting on railroads and on the infrastructure to improve them makes a lot of sense,” said Stephen Leeb, Leeb Asset Management president and editor of the Complete Investor. He argues that this is because industries involved in conserving energy-and thus, money- will undoubtedly thrive.

Leeb believes all investors should have a stake in railroads today, because rail transportation posts dramatically higher energy efficiency rates. According to the Rocky Road Mountain Institute, the average train has an efficiency of 400 ton-miles per gallon of fuel. Trucks, on the other hand, have an efficiency of 200-300 tons.

Leeb says: “The increased use of rails and the building of rail infrastructure is arguably the closest you can come to a win-win situation in the debate over energy policy.”

He also points out three stocks that he thinks will come out on top in the railroad industry: Berkshire Hathaway, Union Pacific and Wabtech.

Celebrities Take Interest in the Wine Business

A new trend is becoming increasingly popular amongst celebrities: wine.

Fergie recently launched her Ferguson Crest brew from a Santa Barbara winery, while Drew Barrymore released her Barrymore Pinot Grigio from Italy. However, the most popular (and already successful) fresh sommeliers are the famous couple Brad Pitt and Angelina Jolie.

Brangelina has unveiled a rose called Miraval, originating in their French chateau. Within six hours of its launch, the wine sold more than 6,000 bottles online. According to a statement from Pitt, the two celebrities are “intimately involved” in their new project, which will feature a number of white libations as well.

When asked about Ferguson Crest, Fergie explained:

“My wines are about having a dream and making it come true. It’s something for a father and daughter to share together. It’s coming from the inside out. It’s not about having a huge business.” She added that her father “wanted to retire and move north and grow grapes. It was really special. And we thought, ‘Let’s not only bottle this for ourselves, let’s share it.’ I was always a big wine person. I learned that wines are about the smells and the experience as opposed to just chugging something to get drunk. It’s a social thing and a way for families to get together. It’s something I learned about and was excited about. Being a musician, wine and a good concert go hand-in-hand. Who doesn’t put on a nice record and have a nice bottle of wine?”

Drew Barrymore agrees, stating:

“I love wine, especially Pinot Girgio. It’s what I drink with my girlfriends. It feels so right when you’re sitting around a table having food and wine. I really wanted to start with a wine I was familiar with myself. I wanted it to be something that’s really from my family. That’s my grandfather’s crest on the label. I wanted to honor the tradition of family.”

Warren Buffet on Value and Quality Stocks

Warren Buffett, arguably the most famous “value investor”, recently discussed high quality stocks.

In a letter to shareholders, he explained how Charlie Munger taught him the true meaning of value:

“More than 50 years ago, Charlie told me that it was far better to buy a wonderful business at a fair price than to buy a fair business at a wonderful price. Despite the compelling logic of his position, I have sometimes reverted to my old habit of bargain-hunting, with results ranging from tolerable to terrible. Fortunately, my mistakes have usually occurred when I made smaller purchases. Our large acquisitions have generally worked out well and, in a few cases, more than well.”

This lesson is confirmed by Jason Zweig, who recently wrote a good column in the Wall Street Journal:

“Research can be published soon in the prestigious Journal of Financial Economics by Robert Novy-Marx, a finance professor at the University of Rochester, shows that bargain priced “quality” stocks outperformed the overall market by more than four percentage points annually between 1963 and 2011. This stunning margin is even higher than that earned over the same period traditionally measured cheap “value” stocks, but usually with less severe losses in market downturns. Quality also tends to do well when value does poorly, and vice versa.”