Archives for posts with tag: Apple

Whenever a blogger references really important people or companies, the number of hits on their website goes up. I have found this occurs when I mention my wife’s favorite company, Apple, or the infamous, to me, Tesla. But I actually have had two connections to the famous and well-regarded, Warren Buffett. Let’s start with a story I will call:

Leaving Donn Corporation for Warren Buffet!

I believe that everything in life and business is a cycle. There is a beginning, middle and an end that occur over some variable but predictable timeframe. Daniel Levinson’s book, Seasons of a Man’s Life, talks about this in detail and gives creditability to the notion of a seven-to-ten-year cycle or itch both in one’s personal and professional life.

For me, it was about twelve years after I started with the private Donn Corporation that I almost left. At the time, my old boss had retired and I was the Chief Financial Officer.

The Donn companies had grown ten times in that time period. We had gone through several financial and organization crises. I had finally been able to build a small but great corporate headquarters staff that was working well with both the owner’s family and Donn’s unique business people. The large Donn domestic business had an excellent Controller who was gladly taking on some my work.

I was bored to death! I had never experienced that feeling in public accounting or at Donn. And, I was about 38 years old, prime for what Daniel Levinson would call the Age 40 Transition. He wrote that, at all of these critical times in our life, we all consciously or subconsciously reflect and re-evaluate both our personal and work lives. Sometimes we make big changes and sometimes we don’t.

At exactly that moment I received a call from an executive search firm. As CFO of a very private mid-sized firm I did not get a lot of these calls, but when I had in the past, I would say thanks but no thanks. This time I actually listened. This time I even agreed to meet the headhunter for lunch. And what I heard was fascinating:

-a much larger, well known public firm was the client

-they wanted someone with my diverse background

-they were growing worldwide through acquisitions

-the CFO role involved a large pay package with stock options (not available at private Donn)

And here was the strangest thing. They were located literally down the street from Donn! It seemed too good to be true. But it also seemed like the perfect next step for me. The bigger size and the public company status were both appealing.  I love doing deals and the stock was a way to build-up my own net worth. I even really liked the search person. So, I agreed to interview. We were closing in on an offer when the headhunter called to say the search has been put on hold. Hmm. Okay.

A few months later he called and told me that his client has just been acquired by Warren Buffett’s Berkshire Hathaway, and it will become one of their portfolio companies. But they still want a CFO.

I said no thanks. The CFO role in a subsidiary of a private company is not the same as a public firm. This is true even if the owner of the private firm is Warren Buffett.  By then, Donn seemed more fun. And, unbeknownst to me, within a short time I would be involved in the sale of the company to USG Corporation. I never regretted my decision to stay with Donn even though I missed the opportunity to work with a legend.

There is a valuable lesson here that I often explain to people I advise. Sometimes, in your personal and business life, you need to take a long, hard look at where you are and explore your alternatives.  You may decide to make a move or you may decide you are better off staying where you are. But the internal review process is critical whether you are in your Age 40 Transition or not!

Next time, I will tell you about my second connection to Mr. Buffett.

 

The famous stock investor, Peter Lynch, said to “buy what you know”. The Wall Street Journal ran an interesting article about that with some of the pros and cons. The article was aimed more at consumer companies and their stock but it can relate to a broader range than that.

One fund manager in the article realized that his teenage daughter loved a retail jewelry company. Before he could invest, the company filed for bankruptcy and closed all their stores due to on-line competitors. Moral: be very cautious when investing in any teenagers’ fascination of the moment.

Another investor found a number of West Elm and Williams Sonoma catalogs and boxes that his wife had ordered being delivered to his new house. He bought the stock which proved to be a timely investment over the last couple of years. Moral: wives know things their husbands do not!

This brings me to my wife, Tricia. She has her own investment account. When we meet with our financial advisor all of her stocks are up from when she bought them. My stocks are, well, varied might be a good word.

But it may be useful to look into this in a little more detail and see what and why Tricia invests in various companies.

Tricia bought the stock where her brother works, Honeywell, a few years ago and it has more than doubled! But J.C. Penny, where her sister worked, went south when the guy from Apple joined and tried to change the place. (To be fair, her sister retired about then and Tricia told me to sell but I was slow!)

Her stocks also include retailers that she buys from like Under Armour, Urban Outfitters and William Sonoma, mentioned above. All have made money. She also owns two restaurant groups that we and our friends frequent, Panera Bread and Blooming Brands which owns Outback, Bonefish and Flemings . These have also at least doubled in value.

But her investment grand slam was buying Apple stock. She insisted on this after first buying an early G4 laptop for herself on Valentine’s Day in 2002. At the time, everyone, from our financial advisor, to our Banker,  to me strongly suggested she Not buy this small, second level company. Well, you know the rest. Moral: for business and life stories listen to me, for stocks ask my wife.

The overall message here is that I have learned that buying what you know or what you like can be a great strategy or, better yet, a great part of your overall investment strategy. I have also been around long enough to add that Buying things is often the easy and fun part. Selling things and knowing when to sell is a lot harder to do. This is true of stocks, companies or even collectibles. So, like with most things in life or business, think about it before you do it!