Decide What Kind Of Life You Want to Live - Daniel Frishberg

What Kind of Life Do You Want?

By Daniel Frishberg
The MoneyMan

To have a happy, well thought out, well planned, profitable, lucrative, affluent growing life, where finance supports your life, instead of taking over and detracting from it, you have to have investments that have high reward compared to their risk. Know what you're looking for in an investment, in a friend, in a spouse, in a job. Decide on the kind of life you want to have, and do things consistent with that life you want to have. You will reap what you sow, as some very smart people have been telling you all your life.

Then, once you adopt the right posture and attitude, know what you're doing before you do it. Like Wayne Gretsky, you have to skate to where the puck is going to be.
So here's a great new old idea that is exactly the kind of life I want to have. DD - Du Pont - for the stealth winner.

With the U.S. going through kind of a midlife crisis, resenting the progress in other parts of the world - fearing loss of dominance, A perfect analogy to what we are going through as a country is a cliché movie about an Indian tribe, in which the old chief has a personal crisis as he is replaced by the young up and coming chief. This is the natural course of events, but dramatic nonetheless, and painful for the outgoing chief until he adjusts and comes to terms with reality.

Du Pont is the grown-up company I'm looking for. We saw this coming years ago, and it is finally happening. Up until now, the markets were correlated. That is, they moved together. When the U.S. market suffered all stocks moved down together, and other parts of the world were also correlated. The investing world is coming to terms with the fact that there isn't going to be one U.S. or one global economy. The fast growing parts of the world and the companies that serve them, wherever they are domiciled, have a great future. They will be strong, sell for decent multiples and MAKE US MONEY over time. Daniel Frishberg

The companies that are tied to our domestic economy will struggle for a while. Depending on public policy decisions it could be a long while, or we could improve substantially in the coming year. That is impossible to predict. But the large portion of the planet where the middle class is persistently and rapidly developing, will offer terrific opportunity for U.S. companies with the skills and technologies they need, as well as for the domestic companies that serve those rapidly developing economies internally.

Well-positioned U.S. companies have the enormous advantage of living in a society with a strong legal system, patent protection, protection of ownership, safety from outside military attack, political stability and transparent financial accounting. Du Pont (DD) is a perfect example of how to play the schizophrenic world of bifurcated economic opportunity. Du Pont is in the right place at the right time, concentrating on smart, profitable, careful, well-planned growth in other parts of the world, but with access to all of our resources for success here at home. The stock is presently near 40, yet last time it was making the kind of profit it is making now it was a good 20% higher.

They are making more money now, facing far less uncertainty, paying around a 4 or 5% safe dividend and still retaining plenty of money to grow. Daniel Frishberg

Just about a 30% return on equity and they've been able to keep themselves in the high 20s through the last 5 difficult years. That means the years haven't been that difficult for Du Pont.

For that you have to be well run, well positioned. Smart. Experienced. Everything I want in my life.

Du Pont is engaged in science and technology in a range of disciplines, including high performance materials, electronics, safety and security, and biotechnology. The company operates on a global scale, manufacturing a wide range of products for distribution and sale to many different markets, including automotive, construction, agricultural, medical, protective apparel, electronics and nutrition. In 2009: R&D, 5.3% of sales; depreciation rate, 4.3%. Has approximately 58,000 employees.

Daniel Frishberg
Dan Frishberg The MoneyMan