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| | |-+  Earnest Work? Sustainable Growth? Whiskey and Wine Barrels.
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Author Topic: Earnest Work? Sustainable Growth? Whiskey and Wine Barrels.  (Read 1054 times)
nissan03
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« on: December 30, 2010, 05:12:38 PM »

As heard on Marketplace 12-29-2010.
Cuba, Missouri.  Great town.  Not distant from National Forests, spring feed rivers.
http://marketplace.publicradio.org/display/web/2010/12/29/pm-building-success-the-oldfashioned-way/
   or listen:    http://marketplace.publicradio.org/www_publicradio/tools/media_player/popup.php?name=marketplace/pm/2010/12/29/marketplace_cast3_20101229_64&starttime=00:22:05.0&endtime=00:26:55.0
http://mcginnisbourbonbarrels.com/index.html

You can't build long-term growth on financial wizardry with gains on paper and not in the real world. That's the view of Bill Gross, the respected chief of the investment firm PIMCO, in his letter to clients this month. America, Gross writes, "needs to make things, not paper." Things maybe like barrels made of American white oak manufactured without much in the way of financial engineering.

McGinnis may not believe in leverage, but he does believe in growth, slow steady growth over time. He had $18 million in sales this year and is shooting for $20 million next. I had visited this factory exactly 10 years ago, and since then, McGinnis bought some expensive new kilns for drying the oak and there's a new building so whiskey and wine barrels can be made separately. Over the decade, he's doubled his employees to 135 people.

This conservative approach is not crazy or sentimental.

Dan Gross: That's actually pretty smart.

Dan Gross, economics editor at Yahoo! Finance, says other, bigger American firms have only recently figured out what guys in the heartland like McGinnis have known all along.

Gross: Large corporations today are hoarding cash, right? They are paying down their debt if they're smart. They're keeping a huge amount of cash on hand to ward off any liquidity problems in the future, so this is what big businesses are doing too.
« Last Edit: December 31, 2010, 02:25:41 PM by nissan03 » Logged

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kwellada
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« Reply #1 on: December 30, 2010, 06:22:11 PM »

I am for any industry that leads to the production of good whiskey.
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Cedar
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« Reply #2 on: December 31, 2010, 01:39:13 PM »

NPR getting financial advice from the NASCAR crowd? OMG.

With all the gains and losses I’d say stocks earned me ZERO. I thought I had a good broker but everything he bought failed. He churned and burned me. Until recently, even money markets was paying good returns… for the last decade I watched my portfolio stay basically flat while my MM was earning 2-4-even 6%. I bought a $50k CD from the local bank in 2003… it’s now worth $64k.
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On the other hand... we could take the remaining resources and try to create a comfortable, enjoyable, naturally sustainable low energy consuming world unaffected by shortages or economic swings.
billonions
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« Reply #3 on: December 31, 2010, 06:51:01 PM »

My Uncle has a business in Buffalo New York.... last winter I asked him how it was going.  Slow, but he had no debt.  "All need to stay in business is a chair and a phone."  He employs people, he can keep them on, he can pay his taxes and adjust his spending according to earnings.  Smart guy my uncle.
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jbushkey
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« Reply #4 on: January 08, 2011, 11:09:46 PM »

I bought a $50k CD from the local bank in 2003… it’s now worth $64k.

I am curious what $50k was worth in 2003 vs what $64k is worth in 2010.  Somehow I suspect your better off with $50k in 2003.  Not to say Cedar made a bad decision or did not invest wisely.  Just a question that came to mind upon reading that reply.
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billonions
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« Reply #5 on: January 08, 2011, 11:40:34 PM »

That's just under 4% annually.  Pretty good.

Ummm...... the inflation rate for the last 7 years probably averages out to 2.5% annually.  So a net gain of 1.5 %.  This guessing on my part, not so much exact science.  Official inflation rates are skewed, they are general, and not specific.

  The other point is that, Ceder has the money still, and it has grown.
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Cedar
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« Reply #6 on: January 09, 2011, 01:46:58 PM »

Maybe I was a little obtuse, Nissans original thought was on growth, but I heard that episode on NPR and what I got out of it was that the man invested in the local bank. Another form of localism.

Quote
Somehow I suspect your better off with $50k in 2003.
Agreed. But as Bill pointed out, I didn’t LOOSE it. When the market crashed and pooled mortgage retirement funds went to zero and everyone feared money markets “breaking the buck”… I was thinking… how can I start over with the $50k sitting in the local bank.

Quote
That's just under 4% annually.  Pretty good.
It’s a tad over 3%. Started in early 03, probably January, it’s had about 8 full years. Compounded 4 times annually. It helps my local bank sits in the middle of corn country. Corn is real money. Not many defaults around here.

If I remember right, from investment advice I got BEFORE 1994 when markets and investors went wacko… rational, average gains from long term savings accounts returned 4% while the stock market long term average returns 7%.
« Last Edit: January 09, 2011, 01:57:21 PM by Cedar » Logged

On the other hand... we could take the remaining resources and try to create a comfortable, enjoyable, naturally sustainable low energy consuming world unaffected by shortages or economic swings.
billonions
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« Reply #7 on: January 09, 2011, 08:07:14 PM »

"Long term returns on the stock market" is one of the statistics used as in "Lies, damn Lies and Statistics".   Depends on the 'term'.  Even a recent downturn can be muted if you include enough periods of growth from the past or start on the low side of things.

 Nor do 'trends' reflect the majority of investment behavior, which is buy on the rise and sell on the drop.  When I first got interested in investing, the stock-market had been flat or returns had been less than inflation for more than a decade.  Several years later it was hot (remember the 80's).  I invested in Mutual funds, as did a lot of other folks and had returns in the double digits!  Small potato stuff, but it was my savings plan and it was amazing how fast, over about ten years my little portfolio grew.  7%, was the benchmark minimum, 10% was the goal as an average long term return.  I had some investments return as high as 17%! over the year!  Cleverness had nothing to do with it, it was just being lucky enough to start investing when the rest of the baby boomers decided to do so as well.  The outfits I was investing in did not necessarily grow relative to their share price, it was a case of a lot of dollars searching for value.  All this is long gone by the way.

  I remember trying to figure out what companies actually were in my funds.  For instance, my 'Green fund" which averaged 14% year to year by the way, was composed mainly of big pharma and retail stocks.  This is pre-internet times so to find out anything more than the bare minimum of what these outfits did was pretty hard.  Again it wasn't the companies in the fund doing so well, but the fact that most boomers liked the idea of plunking some coin into a 'green fund' regardless of the content.  I didn't see it as cynical on my part because I too wanted to be responsible, and gosh it returned nicely.

  I don't have any of this anymore....long gone.

  Around the time of the dot.com boom, I used to get involved in debates as to stock investing.  I would be gobsmacked to find folks investing bucks into enterprises that they had no idea what they did other than the 'stats' from the last few years as to ROI and such.  "But what do they make?" I would ask....
  At the time our mill manager berated us as to our historically poor return.  Up until that point in time, the late nineties, we, our mill, had 'only' averaged a return on investment of 6% per year.  80 some years at 6%....hmmmm a fortune really.

  I would imagine wood barrel making does have long term potential. 
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whipstock
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« Reply #8 on: January 09, 2011, 08:33:35 PM »

That's just under 4% annually.  Pretty good.

Ummm...... the inflation rate for the last 7 years probably averages out to 2.5% annually.  So a net gain of 1.5 %.  This guessing on my part, not so much exact science.  Official inflation rates are skewed, they are general, and not specific.

  The other point is that, Ceder has the money still, and it has grown.

I think that is the key Bill; the Governments numbers are skewed. The Shadowstats site calculates inflation and unemployment with the same formula's used in the 70's.  People see a larger numeric value in their bank account and assume they are richer, but in reality they are poorer.   http://www.shadowstats.com/

What was gold at in 2003? Around $350 I think. What about any other commodity that can not be made out of thin air.
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jbushkey
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« Reply #9 on: January 10, 2011, 01:31:24 AM »

Good points about not losing the money in the stock market and patronizing the local bank.
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fugeguy
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« Reply #10 on: January 10, 2011, 04:50:44 PM »

Good points about not losing the money in the stock market and patronizing the local bank.

Those are all good things.

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alanbruce
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« Reply #11 on: May 19, 2017, 01:00:51 PM »

Yes true information about sustainable growth in any business. If you are a true wine lover, you can also try old wine and feel a different taste.
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