Newsroom

His invention made another man rich first, but W.K. Kellogg’s genius for brand marketing helped him build a business empire and a philanthropic legacy.

Born in 1860 in Battle Creek, Michigan, Willie Keith Kellogg worked at his father’s broom factory from the age of seven. At the age of fourteen, W. K. quit school to sell brooms full time. W. K.’s work ethic and ambition attracted the attention of George King, who in 1878 hired Kellogg to run his Dallas Broom factory.

In September 2007, the Lincoln Journal Star ran an article about The Bridges, billed as “Nebraska’s first totally geothermal housing development.” The neighborhood is designed so that every lot is adjacent to water or woods. It features miles of walking and biking trails, two big waterfalls, and six covered bridges. Homes near ponds will feature underwater geothermal systems, while others will rely on more traditional underground systems.

Pundits across the political spectrum have weighed in on the bailouts and bankruptcies for the American automobile industry, but even history will not be able to tell whether the government has acted appropriately in its level of economic intervention, because no one will be able to say what “would have happened” under other scenarios.

However, some important principles have clearly been compromised, and regardless of the outcome, Americans should take note and decide whether this is the way we want to conduct business.

WCAM co-founder Paul Orfalea showed his University of California seminar students a story from the LA Times about businesses near Los Angeles International Airport struggling as the recession cuts into people’s travel budgets. The students’ assignment was to formulate questions based on the headline. The first few asked about political or global economic issues impacting travel, but the conversation came to life when a student asked, “Which businesses near the airport are thriving?”

The May 2nd issue of The Economist  magazine exposed some startling news about some of America and Europe’s largest public companies: Their balance sheets look good. Sure, companies like ExxonMobil (NYSE: XOM), Apple (NASDAQ: AAPL), and Microsoft (NASDAQ: MSFT) have their own problems, but they and many of their peers avoided the temptation of easy leverage that is now taking its toll on the economy.

Conventional wisdom holds that if you ask the average 85-year-old his or her opinion on the stock market, you will hear that it is a harsh, untrustworthy monster that caused the Great Depression, and no sensible person would ever risk hard-earned money by buying stock.

Many years ago, a Dilbert comic strip seems to have presaged the logical but unintended consequences of innovative hedging. In the strip, a company tries to save money by selling first aid supplies in vending machines rather than giving them away.  Later, the company realizes it can increase vending machine sales by generating workplace injuries. They did the math, at least for the short term.

Welcome to West Coast Asset Management’s Exclusive Outlook online newsletter, featuring periodic commentary on issues of interest to investors, entrepreneurs, and business enthusiasts. The newsletter will cover news of the day and economic concepts of the ages. Recommend topics or submit questions to eo@wcam.com.