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I would prefer investing be very boring.
But Mr. Market has been reacting very dramatically lately.
Let’s update you on some of the recent developments in Our Portfolio!
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Dividend Increases
It’s earnings season, and a lot of Our Companies have reported.
The thing that excites us most?
Dividend increases!
So far we’ve received raises of:
15%
10%
8.5%
and a $6.15 per share special dividend
Every single year, Our Companies pay us more and more in dividends:
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But dividends raises aren’t the only thing going on.
Will PayPal Be Acquired?
PayPal’s stock is up more than 15% in the past few days.
Why?
Reports that there’s interest from other companies in buying PayPal.
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Yesterday, it was reported that Stripe is interested.
To be honest, I’d prefer that the company continue to operate and buy back cheap shares.
When shares get as cheap as PayPal’s currently are, there’s a risk that another company will buy the whole thing at a very low price.
But in this case, we may have some protection.
Follow the incentives
Charlie Munger thought he was in the top 5% in the world when it came to understanding how important incentives were, and that he still underestimated them.
Let’s look at the incentives of Enrique Lores, the new CEO.
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His new compensation plan is very interesting.
He gets a relatively low base salary ($1,450,000), and a lot of shares in the company if he can improve the financial performance.
Based on last year’s executive compensation packages, his performance based pay will likely be tied to:
Transaction Margin Dollars
Operating Income
PayPal’s stock performance relative to the S&P 500 (a metric called Relative Total Shareholder Return)