When I was a child, I grew up in a small farm town and used to walk to the local public library just off the town square during the weekends to pour through the Value Line Investment Survey. When I found a stock that interested me, I’d pay to have copied on a black and white machine for $0.01 to $0.03 per sheet, take it home, study it, and then open a small safe that I had purchased from an acquaintance of the family. Inside, there were dollar bills (that I had ironed), coins from around the world, and stock tables.

Today, my life is remarkably the same. The difference is, the copy of Value Line is my own, sitting on a mahogany desk, the walls are covered in framed stock certificates and fine art, I’m writing with a fine fountain pen, and the coffee is served to me in a gold-rimmed cup. Yet, the nature of what I do is identical – in fact, I have such a passion for studying companies, that it brings me the same joy now as it did back when I had no net worth of which to speak and was trying to figure out how to make my way in the world. That is the very essence of what is great about the American dream. My family wasn’t wealthy or powerful, and yet because the knowledge was available, upward mobility existed and allowed me to pour my time, efforts, and talents into something that brought me joy (and profits). This was underscored earlier in the week when I was reviewing the Fortune 500 rankings. Charlie Munger has pointed out in the past that it only takes two or three great investments in a lifetime to get very rich (and you only have to get rich once). That means thinking through the problem of what could go wrong and working to make as certain as possible that you are getting full value for your money.

Let me illustrate the point by taking you through some of the stats. My hope is that seeing real-world examples can help you in constructing your own portfolio ... Continue Reading ...