An Investing Lesson: Going with your Gut

Individuals know so much more about "hot" stocks because the public determines winners and losers, (Sorry, President Obama). However, they have not gotten into the habit of connecting the dots. Take restaurants for instance: as much as disruptive technology and business models are associated with technology, it goes for all industries, including fast food. Recently, Consumer Reports surveyed 32,000 subscribers to rate the best-tasting food chains, divided into four categories (burgers, sandwich, chicken, and burrito).

Amazingly, the biggest names in the industry came in at the bottom of their categories with McDonald's finishing dead last out of all 42 restaurants surveyed. We spend a lot of time talking about disruptive technology and business models in other industries, but the fact is that every industry goes through phases where someone comes up with a better mousetrap. It is one of the reasons I am not a big fan of anti-monopoly action by the government.

The free market will find a way to challenge the biggest company with the largest market share and eventually make a dent. In the meantime, for those grousing about the market being intimidating, hard to understand or rigged, here is a lesson on why you are brilliant and need to listen to your gut.

Category	Restaurants	Top Rating	Lowest Rating
Burgers	21	The Habit Burger	McDonalds
Sandwich	15	Portillo’s Hot Dogs	Au Bon Pain
Chicken	8	Chick-fil-A	KFC
Burrito	8	Chipotle Mexican Grill	Taco Bell

In the chicken category, Popeye's Louisiana Chicken tied for the second-highest ranking on taste. So, for those who have made the shift away from KFC, it would not be a surprise that the shares of their new favorite have outperformed the larger rival. Yet, I would be shocked if more than 1% of the regular Popeye's diners actually own the stock.

The Money Pit

I guess it had to happen sooner or later. I marvel at how rich actors, athletes, and business people get a free pass on their net worth and avoid ridicule reserved for those other wealthy people. Some take it a step further and promote rich-hate, even as their bank accounts bulge at the seams. Well, it is all beginning to haunt Hillary and it is not going to get any easier; just look at the kind of cash she's scarfed down.

Check out a typical stretch of her time:

      9 months
      8 university speeches
      $1.8 million in fees

Making the largesse even more difficult to swallow is that several of those universities increased college tuition shortly after having to cut checks for $200,000 or more.

It is hard to run for president of the United States, as an everyday average person who understands struggles and backs the notion of the redistribution of being wealthy. This is Hillary Clinton's challenge and why she tried to get ahead of the issue with a series of disastrous interviews, where she said the family was "broke" and paid "ordinary taxes."

However, the lid has blown off this family's saga by several sources, pointing to a combined income of $163 million from 2001 to 2012.

This is a lot of money for giving speeches. Don't get me wrong, I am paid to give speeches as well, and I would love to command $200,000, but there's no way anyone should confuse that source of income with blood, sweat, and tears; no matter how much toil and perspiration goes into preparation.

I get why Hillary is nervous. Her party has riled up the public so much that no one wants to vote for a member of the 1% of the 1%. However, this situation has not developed overnight; it's been brewing for some time.

Look at the last three losers of presidential elections:

Losers	Wealth	Source
John Kerry	$287 million	Marriage
John McCain	$100 million	Marriage
Mitt Romney	$250 million	Self-Made

John Kerry thought windsurfing would put him in touch with the common man; John McCain had no idea how many houses he owned; and Mitt Romney's numerous gaffes made him look like the most tone-deaf rich dude ever.

Nevertheless, there was a time when Americans looked up to fabulously wealthy people and voted them into office, no matter the source of those riches.

President	Net Worth	Source
John Tyler	$51 million	Inheritance/marriage
FDR	$60 million	Inheritance/marriage
Herbert Hoover	$75 million	Self
LBJ	$98 million	Self
James Madison	$101 million	Self
Andrew Jackson	$119 million	Self/marriage
Teddy Roosevelt	$155 million	Inheritance
Thomas Jefferson	$212 million	Inheritance
George Washington	$525 million	Self/marriage
John F. Kennedy	$1.0 billion	Inheritance

Americans voted in the Bushes, despite their wealth, but there seems to be a serious problem with massive wealth like the kind Hillary and Bill have cobbled together, while the rest of the nation has struggled to get by...

Today's Session

The total nonfarm payrolls for the month of June increased by 288K from a revised 224K in May (from 217K), and was well above consensus at 211K. This caused the unemployment rate to drop to 6.1% from 6.3% in the previous two months. We are skimming through the massive report now. On the surface things are looking good, but we must re-examine to make sure.

Comments

This looks like the beginning of The French Revolution". Hillary is letting us eat cake. Meanwhile I am dusting off the old guillotine : ) Robin Thompson on 7/3/2014 10:39:25 AM

Is the President net worth list adjusted for inflation? Either way, wow that's a lot of money. Deb on 7/3/2014 3:17:39 PM

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