By: Yale Bock, CFA
The first car I ever drove was a urine-colored Mercury Cougar. I was a teenager, and like most responsible parents, mine were concerned that if I made a poor driving decision, the car would be able to withstand an accident. I never had a problem in the Mercury Cougar, but not because of my driving ability. There was no accident because the car kept breaking down. For those of you who aren’t familiar with Las Vegas, for six to nine months out of the year, the weather is rather good but on the hot side. In the summer months, it is extremely hot. Yes, I know, they call this a ‘dry heat’, but 110 is tough. For example, this is when the air conditioning breaks. Anyway, on multiple occasions, when driving up a hill on one of the major streets, I would watch the engine die, steam gently rising out of the hood, the lights on the dashboard suddenly disappear, with the car stopping on the upslope of a hill. I would have to navigate the situation and get it towed to our local mechanic. Let’s call him Bill. He looked like a bulldog, you know, the little hounds with the squished-up faces. Bill was the typical automobile repair person in that he was more concerned with the amount he could extract from his vulnerable customer than the quality of the repair work he would perform on the now non-functioning ultimate driving machine. On many occasions, and you probably experienced this as well, you bring in a car for x repair, and the mechanic wants to fix not just x, but a, b, c, and the whole alphabet. Great. Let’s just see if we can fix X, ok? From this driving experience, and others, I have concluded that my best alternative is to own what I think are reliable cars.
Many things can cause a car to stop performing, whether it has an internal combustion engine or electric. It could be the transmission, carburetor, alternator, belts, fluids, tires, oil, antifreeze, coolant, or who knows what else. For someone fixing cars, they must go underneath the hood and analyze what is wrong. It is much easier now because they put the car on the rack and, with sophisticated tools, can diagnose the problem. My man Bill is long out of business, and those who have replaced him have it much easier.
I mention this because, as an investor, it is worth your time to extensively research assets when allocating capital. Like today’s advanced garage with a complete set of diagnostic tools that analyze a car’s function, investors need an extremely comprehensive approach when considering where to put money. Today’s environment makes it extremely easy to click or tap a button and have yourself some stock, even one-tenth of one-tenth of one-tenth of one-quarter of a share. Just because you can buy something easily doesn’t mean it is something worth owning.
A simple question to ask yourself about owning any asset is: What is it about this that makes me believe it will be worth more in one, three, five, ten, or twenty years? This is the starting point for any investment, but just the beginning. Like the car owner with a non-functioning car who is dependent on his trustworthy auto mechanic to get it running, minority investors rely on the management teams of the companies they invest in. You want the best. You want to avoid the Bills of the world who have questionable backgrounds or come off as promotional. It is why part of your toolkit has to be learning about every member of the management team (CEO, CFO, Controller, President of Operations, VP of Operations) and the Board of Directors. Evaluating the quality of the people who run these organizations might be the most important aspect of your analytical process, although business quality must be right there as well. Like a car owner who drives a vehicle for ten or twenty years, you want to own assets for a prolonged period that will create wealth for you. A comprehensive and rigorous approach when researching and analyzing assets helps make this happen.
Originally published on August 2, 2026 in Y H & C Investments blog/ newsletter
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DISCLOSURES:
Y H & C Investments may have positions in companies mentioned in this newsletter. Nothing in the newsletter should be taken as an offer to buy or sell individual securities. It is the responsibility of each investor to research the investments mentioned so they can decide on the appropriateness and suitability of the investments consistent with their risk tolerance, risk constraints, and return objectives.
