The Investment Times Issue Number Four THE INVESTMENT TIMES Million Dollar Mattress Issue 4, november Inside: How can you help? 2 Inflation 3 and 4 Anat (not her real name), a Tel Aviv resident thought it would be nice to get her mom a new mattress. Since her mom was older Anat thought it was good for her to be comfortable. Anat thought there were loose sprigs and clumps of wool sticking out. Anat brought the old one to the dump and got her a new one as a surprise. Her mom panicked! That mattress had her life savings in it! One Million Dollars was now at the dump. Anat panicked and headed to the dump. Was it too late? She couldn t find it in the 2,500 tons per day. She went to 3 different dumps, no luck. She tried to keep it to herself but the radio and newspaper didn t help. What if some person found it and got $1,000,000? This was her life savings! And now it is gone! This is a lesson about keeping you money in a safe place, like a bank. Also Read David Greer Apple entered the Bear market. Thank you for reading! 5 6 Me in the News! The magazine, Investment News, interviewed me about my newsletter and interest in investing. The editor asked one of his reporters, Liz Skinner, to interview me. Please look in Investment News for yours truly, Oliver Leopold. www.investmentnews.com, search Oliver Leopold. The Wall Street Journal interviewed and photographed me for an article on how children spend their allowance. I will be featured on the Online and Print version the week of November 19, 2012. If you are a member I will send you the link, if not, become one!
November 2012 The Investment Times Issue Four How can you help? Finance isn t only about you getting money! Instead of buying those nice earrings, what about the kid that can t even afford to get her ears pierced? Some people can t even afford the lunch that you eat everyday! I recommend putting aside 25% or more of your income and giving it to the less fortunate. If you have a computer or phone in your house you are in the top 2% of the richest people in the world! It s so important people s lives are depending on it! HELP THE LESS FORTUNATE! Donate on our website! How it all started. How did I start investing? It all started several years ago when I was going to the bank to make a deposit of the last 6 months savings Written We walked in to Chase bank. How may we help you? I heard. My mom said, Oliver wants to make a deposit. One of the bankers replied, Come with me and we can do that. Then we went to the banker s office. He looked up my name and took the money. There was a brochure on the desk. It said, Invest with Chase Bank! I blurted out What is investing? The banker explained how to invest and what it was. Then, my mom and I went to the library. Can I get investing books and print out a newspaper section? I said. My mom replied, Of course you can! We did both of those things and Here I am now! 2
The Investment Times Issue #4, November 2012 4 3.5 3 Inflation: Cost vs. Time 2.5 2 1.5 1 Fuel, Oil Gasoline Milk Bread 0.5 0 Year 2003 Year 2006 Year 2009 Year 2012 In 2009 we see a lot of drops in the economy, except for bread. Inflation What is inflation? Well the dictionary says it is: In economics, a general increase in prices and fall in the purchasing value of money. Based on the graph above: - When inflation happens the value of your dollar becomes smaller. Then you have to spend more money on things that aren t worth more. - In 1920, a one pound loaf of bread cost 5.6 11.5 cents! Milk went up only $0.14 in those nine years, unlike gasoline that went up $2.10. Inflation affected the price, although the value of the milk did not go up, the dollar got weaker. What does The dollar got weaker mean? It means that the value of the dollar decreased. Inflation did affect the price of the gas, but not as much as the milk. Oil was not affected incredibly by inflation. It was affected by $0.32 in 9 years. Oil increased exactly like the gas because you need oil to make gas. Review - Inflation changes the value of things. Continued on page 4 3
The Investment Times Issue Four November 2012 Continued from page 3. This is how much things cost in the year recorded. Year Recorded Fuel, Oil Gasoline Milk Bread Year 2003 1.283 1.628 2.666 0.996 Year 2006 2.649 2.985 3.019 1.088 Year 2009 2.559 2.627 2.979 1.375 Year 2012 3.66 3.707 3.474 1.407 Year $1 is worth the same as 2012 dollars 1913 23.27 1997 1.44 2000 1.37 2003 1.25 2006 1.14 2009 1.07 2012 1.00 This is the same amount translated to 2012 dollars. 2012 value of Dollars Fuel, Oil Gasoline Milk Bread Year 2003 1.603 2.035 3.3325 1.245 Year 2006 3.019 3.402 3.441 1.24032 Year 2009 2.736 2.81 3.1875 1.47125 Year 2012 3.66 3.707 3.474 1.407 Wonder Kids! Wonder Kids Bath Capes & More is an official sponsor of The Investment Times. They make capes, like you see above. Your kids will love them. You can pick any letter to be printed on the back. www.wonderkildsinc.com contact@wonderkidsinc.com 773.437.8025 4
The Investment Times Issue #4, November 2012 DAVID GREER: KEYSTONE CAPITAL, PERSONAL EQUITY Normally it's private equity, but not for David Greer. To us, PE stands for personal equity, the website of Keystone Capital reads. David Greer is 1 of 3 of the partners that own Keystone Capital. Keystone is a company that buys other companies, that is what "personal" equity means. For example, if he buys a company with $5 million of earnings, he might buy the company for 5 times the amount (5x5= $25 million). Then, he will borrow $15 million from the bank. And he will pay $10 million out of Keystone s funds. His company will reinvest their money. They are long-term investors. They own companies from CP (artificial grass) to VISTA (food packaging). The first time they bought companies they asked people (companies, universities, and wealthy individuals) to invest in them. They use the money that they earn to buy other companies. This time they earn 100% because there are no investors. "It requires a fair amount of knowledge," David said. Unlike the stock market, where you can buy and sell single shares, they have to sell all or nothing. David has 3 partners (including himself) and 5 other employees. Most companies he owns are valued from $4-$8 million in earnings. Keystone also has $2 million that is not invested. Keystone does not do this but there are companies called fund of funds. What fund of finds will do is raise money (e.g $100 million). Then, they will invest in about 20 different private (or personal) equities for you. This is just like a mutual fund, but instead of stocks, private equities. When Keystone wants to buy a company, they will come together and bid for the company. The private equity that offers the most money will buy the company. David started investing because he wanted to get involved in business. His company has a list of thirty to forty characteristics and criteria. He looks at how the business performed in the past. The most challenging aspect about his job is prioritization and how to allocate resources. David lives in Evanston, IL with his wife, three children, and dog. About David: From the Keystone Capital Website (keystonecapital.com) David A. Greer joined Keystone Capital in 2005 and serves as a Managing Director of the firm with primary responsibility for supporting Keystone companies with operational assistance and strategic direction. Prior to Keystone, he was General Manager of the RFID business unit for Motorola, Inc. and Executive Vice President of Participate Systems, Inc. His previous experience includes advising Fortune 100 clients as a member of The Boston Consulting Group and the mergers & acquisitions department of Goldman Sachs. Additionally, David served for five years as a surface warfare officer in the U.S. Navy. Education: Northwestern University; MBA, Kellogg, 1995 U.S. Naval Academy; BS, 1988 5
The Investment Times Issue Number Four Apple Entered the BEAR Market. About one month ago Apple was at a good $700. But, the day after the presidential election, Apple entered the Bear Market. From September 20, 2012 to November 7, 2012, Apple has lost over $20! And then the next day it lost another $20. The majority of the community has voted to sell Apple. Apple does not like this so their way of reacting is making more products. Many new Apple products are coming out because of this crash. Apple might not be doing so well but it is a good company because of how many people it employs. The Investment Times Thank you for reading The Investment Times. If you want to comment on a particular article, please visit our website. Click News. Search the article. Press comment. Fill out information. Oliver Brown Leopold is the writer of The Investment Times. He is ten years old! Oliver started the Investment Times about 6 months ago because he was interested in investing. He started sending it to people whose emails he had. Now there are viewers in Chicago, Evanston, Winnetka, Vermont, New York, and California! To think this is only the fourth issue! He says, Thank you for reading The Investment Times Web: www.theinvestmenttimes.webs.com Email: info.theinvestmenttimes@gmail.com