Life of a Paperboy

Before the internet, there were these things called newspapers… [Wide Moat Daily]( Life of a Paperboy By Brad Thomas, Editor, Wide Moat Daily Editor’s Note: Today, we’re publishing a Brad Thomas original on the importance of dignity and knowing your worth as a customer… and investor. Read on for Life of a Paperboy, originally published in June of this year. --------------------------------------------------------------- Before the internet, there were these things called newspapers… And back in the 1970s, these newspapers were delivered directly to your doorstep every morning, usually by young kids looking to make some spending money. And at the tender age of 12, I was one of those paperboys. Most people’s image of the job comes from the movies. A young boy takes a leisurely bike ride, tossing papers over white picket fences to Mr. So-and-So, coffee mug in hand. It sounds idyllic. In reality, it was a lot of work with a lot of responsibility. Every day, I had to be up at 6:00 in the morning to attend to the stacks of papers my employer would leave at my door. That was pretty much the extent of their involvement in my operations. The rest was up to me, starting with counting the papers and sorting them. If I was looking at inclement weather for the day, then I also had to bag each one to keep it safe and dry from the elements. As paperboys went, I was pretty fortunate since I didn’t have to walk the whole route. My mom saved up to buy me a little scooter, and I rode that thing around the neighborhood, stopping at every subscriber’s house. Subscribers who I knew by name. I had to. They weren’t just addresses on a route for me. Part of my job was to know their preferences on how they wanted their papers delivered. Most were okay with me just throwing their papers on the driveway or sticking them in the appropriate slots beneath the mailbox. But others wanted them placed on their doorsteps or inside their screens. I also had to interact with them directly once every quarter to collect their dues. I got to know them that way. I knew if they had dogs and if they were mean. I knew when they were going on vacation, whether they liked to garden… When you talk to other paperboys of the 1970s, 1980s, or even 1990s, they’ll generally tell you how impactful the experience was. It may sound like a cliché. But I can promise it’s true. “That’s all very interesting,” I hear you say, “but what does it have to do with investing?” Well… A Customer Who Knows His Worth Lately, I’ve been thinking a lot about the topic of responsibility. As a paperboy, I knew that our customers relied on us no matter whether it was raining, snowing, or so muggy we were soaked with sweat by the time we finally got back home. There was no shirking that responsibility even if we weren’t feeling well or were off on vacation. In those cases, we had to delegate the job to someone else. And if they didn’t get that job done right for whatever reason, we were the ones to pay. Former paperboys also talk about how we learned to be respectful. Not that the 1970s are known for extremely rude children, but paperboys had to go the extra mile. Customer service was key to making tips, and so we had every incentive to make the route about the people instead of the company or ourselves alone. I can’t speak for all my fellow paperboys out there, but I still imagine I wasn’t alone in learning that people have value in and of themselves. Not just for the money they represented. But here’s a big benefit of being a paperboy that isn’t talked about very much. Not as far as I’ve heard, anyway… That job taught me how I should expect businesses to treat me as a customer. I know the effort, much less anything extra, can be tough. However, I also know it’s doable. If I could do it as a 12-year-old boy, then any adult can do it. Can and should. That’s especially true if that adult represents a multi-billion-dollar company, the type we often consider investing in. I’m not asking to be treated like a prince whenever I step into a Starbucks, let’s say. But I do look for pleasant tones of voice, clean facilities, my drinks done right – with quality ingredients – and, if a mistake does happen, proper steps taken to acknowledge the problem. That’s what I’m paying for. So that’s what I should get. No ifs, ands, or buts about it. The Companies You Buy Into Owe You. Literally. It should be equally simple to expect quality service from the companies you consider investing in. If you’re going to pay for shares of a company – which makes you a partial owner, not “just” a customer, for the record – you should be treated like you matter to that company. As a shareholder, I’m not asking for paperboy-level treatment. Management doesn’t need to know my name or what my personal preferences are. But I do expect them to treat their collective shareholders with respect, making decisions that directly benefit them alongside their customers, employees, and management. I’m more than happy for the latter two categories to be properly compensated, mind you – just as long as those salaries, bonuses, and other perks enhance their ability to make me money over the long term. This is a topic I could write about over and over again. But here’s a summary from the last book I published, REITs for Dummies: Companies thrive when they create real economic value for their investors, which happens when their rates of return exceed their cost of capital. And that happens under ethical, experienced, in-the-know management. … it’s management that assesses [buyable and sellable] options and chooses accordingly. This is why it’s extremely important to follow the money. You always want to make sure management is making the most of its opportunities to deliver steady earnings and grow dividends. This doesn’t mean they’re always buying or always selling. A company that’s obsessed with expansion is a company that doesn’t actually value its shareholders. Really, it’s more focused on the short-term spotlight for its own benefit that way than any long-term investor value. Management that prioritizes you prioritizes a healthy balance sheet, where growth and savings are both valued. They make opportune purchases of quality assets at fair value or better (i.e., bargain) prices. If there are no assets that fit that description, they don’t buy, instead putting more money aside for a time when worthwhile opportunities do present themselves. And they maintain that business mantra no matter the economic weather. Like all those paperboys from yesteryear who knew they had to deliver the news rain or shine… the companies you should invest in prove themselves over and over again no matter what. Even when they do make mistakes, they stand out by owning up to what happened and working hard to improve from there. It can take a bit more time and effort to spot these kinds of companies, admittedly. You’ll have to do research not only into how their stock price is performing but also who is behind that movement and how. You’ll have to monitor them and what they’re doing, paying attention to their news releases, quarterly statements, and everything in between. But don’t you think you’re worth the far-superior end results? This former paperboy definitely does. That’s why I run the services I do, demanding only the best not only from myself but the companies I recommend… All for the good of the customer. You. Regards, Brad Thomas Editor, Wide Moat Daily [Wide Moat Research]( Wide Moat Research 1125 N Charles St, Baltimore, MD 21201 [www.widemoatresearch.com]( You have received this e-mail as part of your subscription to Wide Moat Daily. 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