The Compound Investor

Coca-Cola (KO) stock hasn’t been getting a lot of love lately on my Twitter feed, and judging by its recent history, that’s understandable. The shares trade around the $61.40 mark – roughly equal to a 4% earnings yield; 2.8% dividend yield – which may look a bit rich in light of the headwinds facing soda consumption in developed markets. Domestic sparkling drink volumes were basically…

As I mentioned in the last piece on First Hawaiian, a ‘safety first’ approach is definitely not the worst way to treat investing in bank stocks. I know Farmers & Merchants Bank of Long Beach (FMBL) isn’t for everyone (and that really is understating it), but it does dovetail nicely with that sentiment, and it’s just about as rock solid as you can ask for…

One thing’s for sure, quality isn’t going to be an issue when it comes to the Hawaiian banks. First Hawaiian (FHB) is just about the largest of the bunch with $25.5b in assets (Bank of Hawaii being a very close second), and they don’t get the love they deserve from the wider investing community in my view. In a way, that’s understandable. Earnings quality and…

Though a nasty ‘one-two’ punch on the way down, sensitivity to both consumer spending and loan losses was always going to lead to a strong recovery for credit card issuer American Express (AXP). The headline numbers maybe mask how lumpy that recovery is, but positive comps versus pre-COVID times were proof enough that things were heading in the right direction in Q3. I say ‘were’…

Q3 finally saw stocks take a little rest. The S&P 500 just about scratched out positive returns, with the NASDAQ doing the exact opposite. Inflation has been a big topic in recent months. Transitory? Or embedded? What effect will that have on equity valuations? Furthermore, what about the tens of billions of dollars in monthly bond purchases by the Fed? The latest news suggests that…