Postcards: Buy a Stock... or OWN a Company? There's Only One Choice

It's easy to buy a stock. It's harder to understand what drives a company and makes you want to own it for the long term. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Buy a Stock... or OWN a Company? There's Only One Choice]( It's easy to buy a stock. It's harder to understand what drives a company and makes you want to own it for the long term. [Garrett {NAME}](floridarepublic) Sep 26 floridarepublic   [READ IN APP](   Dear Fellow Expat: Two weeks ago, Dr. David Eifrig, the new CEO of Marketwise, asked me if I wanted to host a podcast. “What would it be about…” he wondered? The answer is simple… What you need to know to own a company… Not buy a stock… not swing trade… not look at technicals… or fundamental scores. I mean… understanding the core parts of a business that make it work. That will inherently drive performance in the years ahead… hand over fist. “Doc” and I both have MBAs… which is surprisingly rare in financial publishing. A lot of people either studied creative writing or they have a CFA. We’ve read Mark Scott's Wiley book Value Drivers: The Manager's Guide for Driving Corporate Value Creation, Mass Market. Don’t roll your eyes. This is one of the most important books you can read as a company shareholder. Because if you’re serious about investing… you need to know the things that make a business successful. You must understand what attracts customers, why companies allocate money as they do… and what ultimately delivers the massive cash flow that will boost your investment. Let me give you an example. You’re Going MBA On Us Now? I’ll keep this simple for you. Think of a business as a car. Value drivers are like the engine parts that make the car run well and go far. They are vital things that help a business grow and succeed over time. Value drivers affect a company's earnings and value to those who own it, buy from it, or work for it. These drivers do more than keep customers coming back. They cover all the essential parts of running a successful business. Some value drivers, like making customers happy, help build strong buyer bonds and brand awareness. Others focus on how the company works inside, like making things efficiently or managing money well. Familiar value drivers include: - Growing Sales: Selling more over time. It sounds simple. But it’s a real skill. - Making Profit: Keeping costs low while earning good money. - Working Smartly: Doing things efficiently to save time and money. - Keeping Customers Happy: Making sure buyers like the product and come back. - Creating New Things: Innovating and developing ideas to stay ahead. - Building a Strong Name: Making people trust and like the brand. - Spending Wisely: Using money in intelligent ways to grow. - Having Great Workers: Hiring skilled people to help the company do well. - Managing Cash: Having enough money to pay bills and invest. - Handling Risks: Planning for problems before they happen. Why are value drivers important? They help businesses: - Choose where to spend money - Decide what to focus on - Find ways to improve the business - Spot possible problems - Show others how valuable the company is Innovative companies always examine their value drivers and adjust them to stay strong and grow over time. But they also tell the history and success of the company in the past. And companies always bind their futures to these core drivers. Investors should know a company’s value drivers before they purchase a single share. Because when you see news or listen to a conference call and hear the company aligning with these specific values, you’ll know that they are sticking to the very things that drive market share and enhance their success. Let’s look at one of my favorite companies worldwide as an example… [Upgrade to paid]( John Deere: Nothing Runs Like A Deere Now, let's see how these ideas work in real life. We'll look at John Deere, a company that has used value drivers well for a long time. Let’s look at John Deere's Keys to Success… aka… their value drivers. 1. Making Great Products The name John Deere means something special in farming. It stands for quality, trust, and a company that understands farmers' needs. Deere started by making a plow that worked well in tough soil. This was back in 1837. Farmers loved it because it made their work easier. Later, in 1934, they made a tractor called Model A. This tractor could do many jobs on the farm. Farmers could change its wheels and add different tools to it. This was revolutionary and heightened its focus on giving the customers what they needed, even at the peak of the Great Depression. Great products have been a core driver of the business for over 100 years.In the 1970s, John Deere made planters that planted seeds just right. This helped farmers grow more food (which is the whole point…). Even today, John Deere continues to make better machines with AI functionality. They use computers to make tractors to effectively drive themselves and avoid field hazards. 2. A Trusted Name Brand People know John Deere by its green and yellow colors. When farmers see that paint in a field, they know it's John Deere. In the 1970s, the company used the slogan: "Nothing Runs Like a Deere." This helped people remember the name and told them that John Deere machines work well. Many families have used John Deere tools for generations. Grandfathers, fathers, and now their children choose John Deere. They trust the name because the products work well, and the company helps them when needed. To many farmers, John Deere is more than just a company. It's part of their way of life. 3. Always Making New Things John Deere loves to create new tools to help farmers. They are always thinking of ways to make farming easier and better. In the 1990s, they started using GPS in tractors. GPS is like a map that tells you exactly where you are. This helped farmers work their fields more precisely. They could plant seeds and spread fertilizer in the right spots. This saved time and money for farmers. In 2002, they made tractors that could drive themselves in the field. Farmers could set the tractor on a path, and it would follow it. This let farmers do other work while the tractor moved on its own. Now, John Deere is working on tractors that use electricity instead of gas. These tractors will reduce pollution. John Deere also makes intelligent machines that tell if plants are healthy or need more water. All these new ideas show that Deere is considering improving farming in the future. 4. International Focus In the 1980s, John Deere started selling their products in more countries. They wanted to reach farmers all around the world. So, they built factories in places like Germany, India, and Brazil. This meant they could make machines closer to where farmers needed them. They also opened many shops in different countries, selling John Deere products and fixing them when needed. John Deere also ensured people could get parts rapidly, often in one day. If a farmer's tractor breaks, they can get the parts to fix it fast, keeping farms running smoothly. By helping customers everywhere, John Deere has made loyal customers worldwide. Farmers in many countries now know and trust the John Deere name. 5. Working Smartly In the 2000s, John Deere found ways to make their factories work better. They call this the Deere Production System. It helps them make good products without wasting time or materials. They look at every step of creating a tractor or tool. If they find a way to do it faster or better, they change it. Their use of automation ensures the same job can be done repeatedly, which allows John Deere to make more products and keep them at attractive prices. They also use advanced analytics to check the quality of each machine they make. The name John Deere means something special in farming. It stands for quality, trust, and a company that understands farmers' needs. This ensures that every product works well when it leaves the factory. 6. Helping Customers Buy John Deere knows their machines cost a lot of money. A big tractor can cost as much as a house! In 1986, they started John Deere Financial. This is like a bank that helps farmers pay for machines over time instead of all at once. Farmers can get a loan from John Deere to buy a tractor. Then they spend a little bit each month. This makes it easier for farmers to get the tools they need, even when they don't have all the money right away. John Deere also lets farmers trade in old machines for new ones. It's like trading in an old car when you buy a new one. This helps farmers keep up with new technology without spending too much. Sometimes, John Deere even lets farmers rent machines instead of buying them. John Deere ensures farmers can always get the tools they need to do their jobs well. 7. Managing Money Well In the 1980s, many farmers had money problems. This was hard for companies that make farm tools. But John Deere found ways to save money and keep going. They closed some factories that weren't doing well. They also found cheaper ways to make things without making them worse. This helped them survive when other companies failed. John Deere is always looking for ways to use money wisely. They save money when they can, so they have it when they need it. This helps them keep making new products even when times are tough. They also spend money intelligently. They buy other companies that can help them grow. They spend money on making new products that will help farmers in the future. By managing money well, John Deere stays strong. They can keep assisting farmers and making new things year after year, no matter what happens. 8. Following Rules and Being Safe John Deere works hard to follow safety rules. They want to make sure their machines are safe for farmers to use. In the 1990s, they got a special certificate that shows they make safe products. This certificate is called ISO 9001. This means that John Deere follows strict rules when making its products. They often add safety features to their machines before they have to. For example, they put roll bars on tractors to protect drivers if the tractor tips over. They also add computers to machines to make them safer. These computers can stop the machine if something goes wrong. ohn Deere teaches farmers how to use their machines safely. They write easy-to-understand instructions and put warning signs on dangerous parts of the machines. By following rules and being safe, John Deere shows that it cares about the people who use its products. Safety is a big part of why John Deere has been successful for so long. What We Can Learn John Deere shows us how well using value drivers can help a company succeed for a long time. They keep making great products, developing new ideas, and caring for their customers. Seeing these drivers in the news can be a solid catalyst for the stock and its future. Should we create a podcast around these drivers, we’d dig deeper into each one and show you how the company’s history has centered on these drivers to build a strong customer base and deliver real shareholder value? If you’re interested… leave a note in the comments. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()