Jam Factory

A focus on Real Return means looking through the noise. The default disclaimer for most investments is “past performance is no guarantee of future results”. Price is not Value, so regularly there will be things that increase in Price (even for extended periods) that make things appear like they are investments. I like to think of investments as Jam Factories. People want Jam at a price that attracts Capital Investment. Capital is invested. A Factory is built. Jam is made. Jam is sold. There is money left over to increase the size of the Factory. More Jam is made. 20 years later, much more Jam is made. The Factory is much bigger. The Dividends being paid are much higher. That, is an investment. If exactly the same thing is worth more, that is just a change in Price. Money is abstract. It allows smoke and mirrors through the story of cash, earnings, and dividends. You need to look through the show and see the Jam Factory. Real Return is created by adding value consistently for an extended period of time. Real Return is created by building something that wasn’t there, or solving real problems.