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Posts from the ‘Investing’ Category


JetBlue Opportunity

JetBlue Airways, a commercial airline providing excellent service and great prices, has been experiencing operational difficulties resulting in a string of money-losing quarters in addition to an unexpected loss of $30 million after canceling 1,200 flights due to an ice storm. The board of directors has replaced the CEO with an expert in operational management, leaving JetBlue’s founder and chairman free to focus on vision and strategy. The stock price rose 5% on the news. Everyone may sell, but only you may buy at this price.

Trading Range: $9 to $30

Today’s Price: $11

JetBlue 5 Year Stock Price History

With apologies to MSN Money Central and CashFlow Technologies.

Disclaimer: I own shares of JetBlue purchased just before the market closed on Thursday.


Equity Math for Startups

Paul Buchheit wrote a great article on how equity works in a startup:

The first thing to understand is that when shares are given to an employee or investor, they aren’t taken from someone else – they are newly created shares – the pie gets bigger. Of course, your slice of this newly enlarged pie is now a smaller percentage of the total. That’s dilution. A lot of people understand that. What they often don’t understand is deeper in the details.

He goes through several examples that made me even more suspicious of venture capital investment. A friend and I are starting a business together, so understanding how this works will (hopefully, assuming the business works out) be important.


Review: The Richest Man in Babylon

A few years ago, I picked up The Richest Man in Babylon by George S. Clason because I was interested in learning about money. It’s an amazing subject really, and I wanted to know more about it. The book more than fulfilled my hopes.

Written in 1926, the book is a collection of stories set in ancient Babylon, chosen because many of the financial principles still in use today originated there. The book opens with the story of Bansir and his friend Kobbi. Both have worked hard for many years and yet seem to have nothing to show for it. As they discuss how they would like to possess some of the riches they see around them, Kobbi asks what I consider to be a question so obvious I was surprised it had never occurred to me, “Might we not find out how others acquire gold and do as they do?”

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