How to Invest?

In Good Times and Bad

When I was about 15 in the 1940s and away at school, I had a friend whose grandfather and father had a nice broom business in Brooklyn. In the late 1930s they had been sold an accounting machine by a little-known company called IBM. The machine was PERFECT and helped them improve their already solid broom business.

My friend’s father was so impressed by the machine that he took ALL his savings and bought shares in IBM and continued to do so every year thereafter. By the time I knew this fellow, the broom business was doing fine, netting about $100,000 a year or so. Their IBM shares were already worth about $10 million.

God knows what they are worth today!

Modern finance is far different today than it was in my school days. There are now so many ways to invest that the processes crash into one another. But the broom story highlights some key lessons that apply even now.

First, look beyond what’s in front of you. My friend’s father could easily have invested more money in his own business and quite likely have grown it, maybe considerably. But in looking at what enabled his business, he saw something with broader potential.

That is how best to invest!

Keep your curiosity alive and looking around. Not everyone will find an early IBM, of course. But good old common sense still has great VALUE.

It is hard at this moment to find such businesses to like. With so much froth in the market waves, clarity will be a rare occurrence.

But, with strong curiosity and persistence, it still is possible!

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