The Joys of Ownership: Seeing Your Stocks as Pieces of Real Companies
Yesterday they sent me their semiannual report, the first I’ve gotten from them. This booklet tells me what securities I own, all the nice companies, corporations and conglomerates I have a share in. More importantly, I get to peer over the shoulder of the A-shares crowd and see what they’re getting that I’m not entitled to.
Looks like my top holding is in JP Morgan. Say that name and I think of a rich, corpulent old coot with a top hat, monocle, diamond-topped cane and a bunch of enslaved foreign children working in the coal mines to fatten the plutocrats. This strikes me as a safe and sensible economic model and helps me sleep at night. And hey, 2.8% of our holdings are in Bayer. I like that TV ad where we learn Bayer can save your life, and they play the sound from that beep-beep-beep machine that tells us if hospital patients are alive or not.
I’ve got Northrop Grumman. Not much, but enough to be concerned because a guy I know from college works there. He’d better be working hard. I don’t want to find out he’s playing sudoku on the job like I do. And Honda I’m not so thrilled about either. I think Honda, I think of boxy old sky-blue rust buckets driven by depressed eighth-grade English teachers. And don’t get me started on Hewlett-Packard. I’m ethically very uncertain about being a shareholder of the company responsible for all those paper jams at work.
But there’s a few things that perk me up, too. Wal-Mart’s a good stock to hold. If Wal-Mart wasn’t a strong and powerful company, no one would be complaining about it. And General Electric’s a fine security. I for one use electricity every day, primarily to view pornography. And Verizon! I own stock in Verizon! Maybe I can get James Earl Jones to do some Darth Vader lines at my next geek party, as a favor to his boss.
Disney’s a good stock to own, after all, “Pirates of the Caribbean 2” did big business this summer and “Cars” made decent bank as well. Now I feel guilty about not buying more of those direct-to-video sequels to beloved animated classics.
Seems I own a piece of the Kohl’s department store chain. That’s where I buy my sneakers. And McDonald’s and Coca-Cola? Hey, I’m a fat white guy! I’m practically paying my own dividend at this point! Why didn’t anyone tell me this was such a great mutual fund? I just bought it because the ticker symbol looks like the noise you make when you sneeze.
I’m sure you’re happy that I’m enjoying my taste of the big-business lifestyle. But the point isn’t to be amused over individual stocks. It’s to remember that all these stocks and funds and securities we buy, they’re not just numbers on paper. They’re real companies with stores and factories and offices and employees that do real things in the real world, our world. And when we buy a stock, we’re buying a piece of that company. Therefore, we owe it to ourselves to know what we’re getting into.
Okay, my frequent purchasing of sneakers isn’t going to move the price of the stock, let alone the whole mutual fund. And my penchant for late-night Mickey D’s isn’t going to make me a McMillionaire. But I understand the companies. I know someone out there is going to buy and drink Coke, and pay to see a Disney movie, and make phone calls with Verizon lest he upset Lord Vader.
When my mutual fund goes down, it’s because of what’s happening with these companies. The activities of consumers and businessmen and people just like us, buying and selling and consuming burgers and shoes and electricity and soft drinks. As investors, we must concretely (if not completely) understand the companies behind our stocks, because we are investing in their business.
I don’t have a degree in economics and I don’t understand the peculiarities of the market. But I understand the companies I hold. And that makes me, to a small extent, an informed investor. And knowledge is power.
But why is there all this freakin’ Pepsi in my fridge?
