My Valuation of Fastenal (FAST)

Last week I wrote a post on the Income Surfer blog announcing that I had initiated an investment in Fastenal (FAST). I have been following Fastenal as a company since it opened its first store in my part of Florida. I’ve been following the stock price for about three years, but it always seemed too expensive. I will discuss valuation in a few minutes, but first let’s talk about the company.

Typically, purchases for my portfolios fall into one of two categories. Either they are “cigar butt stocks” (marginal businesses that are selling for less than their liquidation value or working capital), or they are powerful global brands such as our holdings in Coca-Cola (KO) or Johnson & Johnson (JNJ) which I like to hold in perpetuity. Fastenal represents a third category, growth at a reasonable price. Fastenal does not have a large defensive moat or an insurmountable competitive advantage. It is however a very well-run company which continues to grow the top and bottom line (as well as the quarterly dividend) year after year.

Read my complete thoughts on Fastenal as well as its valuation on Seeking Alpha

Dividends, a Purchase, and Thoughts on Oil

Well it’s a beautiful Saturday morning. Down here in Florida we’re enjoying the last gasps of winter. I’ll be taking the Little Man for a hike later today. We’ve got to give Mama a break, as she entertains him 90% of the time. My work week was uneventful……just a lot of meetings and trying to do the right thing to help our current residents. Ah, the life of a bureaucrat…….

Fortunately, this week the global markets gave us a little more excitement. The ECB laid out more of the plans for their quantitative easing, which is set to begin next week. A few more central banks cut interest rates, including China…..who also lowered their growth target to 7%. The dollar strengthened against most major currencies and the price of oil fell. As a result, US stocks and bonds both declined.  Continue reading

The Time-Value of Money and Three Potential Investments

It’s the last Saturday morning in February, and like investment nerds all across America I was waiting for the release of Warren Buffett’s annual shareholder letter. You can download it for free from Berkshire Hathaway’s website. I always enjoy Buffett’s annual letter, but I’d venture a guess that most readers of this blog do as well. If you’re looking for another annual letter that provides insight into the financial industry, check out Jamie Damon’s (CEO of JP Morgan) when it becomes available later this spring.

While relaxing on this rainy and cool Saturday morning, I’m was thinking about money in general…..and how we each use it for our own devices. Some folks are trying to accumulate money to buy fancy things, some to tell their employers to shove it, and some to buy time and flexibility to do as they wish. (There are thousands more specific reasons, but you get the idea.) For my wife and I, it’s all about flexibility. There is an often used cliché that, “money can’t buy happiness.” I don’t disagree, but I think the cliché is incomplete. Money can buy flexibility, which is what my wife and I are seeking. She has always wanted the freedom to spend most of her time at home with our children and we have achieved that goal. She is very happy and it feels good to see her so happy. Once the kiddos get a few years behind them……….our goal is that I leave traditional employment and get back to having the time/flexibility to write, volunteer, and travel. I gave that lifestyle a test run in 2014, and it was OUTSTANDING!

So how do we intend to make that happen?! By utilizing multiple streams of income, and keeping as much of that income passive as we can. I have a day job, but as I recently wrote……it leaves little time for the things I really enjoy in life. So we have:

  1. Invested in quality growing businesses (SEE A FEW WE ARE LOOKING AT BELOW)

  2. Generated affiliate income from this blog (THANK YOU FOR USING OUR AMAZON LINK)

  3. I write for online financial magazines to generate side income 

The missing components are real estate income and recurring royalty income. We’re working on a plan to incorporate these two in the near future. Obviously, passive revenue streams are best, but flexible revenue streams like freelancing and writing are pretty good too. We’ll post a more comprehensive plan, once we settle on one. For now, it’s satisfying to see our results moving in the correct direction. Now for some investment prospects…… Continue reading