I saw a couple of interesting videos on Netflix this last week.
The first one is called FOUNDER.
It romanticizes the story of how Ray Kroc developed the McDonald's restaurant chain into the behemoth that it is. The first part of the story was especially interesting as it showed how the McDonald brothers used lean manufacturing principles to deliver meals in a tenth of a time as it took their competitors. There is a scene that showed them using a chalk on a tennis court to work through their value stream.
This reminded me of one of my customers who worked at the BlueSky laboratory for Boeing. They have a facility that creates pretend machines out of styrofoam to test possible shop layouts for their manufacturing processes.
The second video is from a PBS series by Ken Burns called THE WAR. It talks about how America mobilized from a backwater country to the world's greatest manufacturing superpower in a period of about six months. It was amazing to see what we could accomplish with a shared vision. The movie contained Japanese aerial footage of the attack on Pearl Harbor that I have never seen before. My father was on the destroyer USS Jarvis during the attack. This ship was credited with being the first ship to open up with 5 inch guns during the attack.
The internet has brought us a lot of unfiltered footage of the carnage of World War Two. It boggles my mind how in this day and age we could still have White Nationalist-KKK-Nazi sympathizers in this country.
How did it become socially acceptable to show your face on TV and say you embrace these principles?
If you haven't read it yet, everyone on here can benefit greatly by ready the E-Myth by Michael Gerber. The movie portrays the principles of this book perfectly. Ray Kroc was the entrepreneur, one of the MacDonald brothers was the manager, and the other the technician.
Yes The Founder was an amazing movie. If you think about it in a broad perspective, American's are the ones who invented lean manufacturing, and Taiachi Ohno (Toyota) admits he was inspired by American grocery stores just in time replenishment.
Another interesting tidbit I thought was that McDonald's besides being a franchisor was really much more of a real estate developer, that's where the money and long term recurring revenue comes form. Another perfect example of stepping back and realizing that hamburgers only make up a part of the business.
I've heard that Tom Hanks is working with HBO to do a mini series based on the book Factory Man. Anybody here anything else about that?
The Founder is a great movie, with a story that needs to be told.
One of the interesting parts of the Founder was the struggle between the McDonald brothers and Kroc to keep the quality high. Dry milk shakes were used to solve refrigeration costs, but at what cost at the counter? Kroc would not consider it. He was working for the franchisees, ruthlessly reducing costs - almost art whatever cost. They eventually went back to conventional milk shakes.
I think another point of the movie is a question about the tangent of McDonalds - is it good? It created wealth out of nowhere, but at a cost to the real founders and others - the customers that bought progressively lower quality, but those products were heavily marketed to overcome that fact. Business has no conscience we are told, so carry on.
But McD's has played a pivotal role in the fattening of America. Does it bear any responsibility for that? How would Kroc have handled that?
I wish we could hear a dialogue between the younger Kroc and Morgan Spurlock of the movie Supersize Me!
The McDonald brothers did Not create the franchise and had tried franchising and given up on the notion.
Ray Kroc created the franchise.
The wealth was created by hard work and capital investment. Was that domed wine room or the circular stair cases, you build, created out of nowhere?
Supersize me was a propaganda movie, which is an example of logic fallacy.
See the link below to see the real culprits of fattening up America.
How many jobs has McDonalds created? I would guess that the 99 cent menu has fed more indigent people than the government programs. How much wealth has been Created for and by the franchisees? McDonalds is a blue chip stock for a reason.
When I tell people that I work at the Foundation for Economic Education, they sometimes ask: “What economic ideas should people understand?”
We at FEE have thought about this quite a lot for our articles, courses, seminars, and videos. We have distilled “economic thinking” into 12 key concepts. The following list has guided us internally for a few years, and I figure it’s now time to share it with the world.
1. Gains from trade: In any economic exchange, freely chosen, both parties benefit–at least in their own minds.
2. Subjective value: The value of any good or service is determined by the individual human mind.
3. Opportunity cost: Nothing is free, and the cost of anything is what you give up to get it.
4. Spontaneous order: Society emerges not from top-down intention or planning but from individuals’ actions that result in unplanned outcomes for the whole.
5. Incentives: Individuals act to maximize their own reward.
6. Comparative advantage: Cooperation between individuals creates value when a seller can produce a given item or service at a lower cost than the buyer would spend to produce it himself.
7. Knowledge problem: No one person or group knows enough to plan (and force) social outcomes, because information necessary for social order is distributed among its members and revealed only in human choice.
8. Seen and Unseen: In addition to the tangible and quantifiable effects, there are quite often invisible costs and unmet opportunities to any action or policy.
9. Rules matter: Institutions influence the decisions individuals make. For example, property rights extend from the reality of scarcity which demands that ownership must be vested in individuals and not a collective.
10. Action is purposeful: Each person makes choices with the intention of improving his or her condition.
11. Civil society: Voluntary association permits people of all backgrounds to interact peaceably, create value, cultivate personal character, and build mutual trust.
12. Entrepreneurship: Acting on an opportunity to gather underused, misused, or undiscovered resources and ideas to create value for others.
You might think about all the ways and places these principles appear–as you shop, socialize, and plan your future. As we like to say, economics is everywhere!
Richard N. Lorenc
You don't have to be a McDonald's brother or Ray Kroc or a McDonald's franchisee or even particularly smart to have capitalized greatly on MCD.
All you had to do was buy 100 shares of MCD at 50 bucks anytime between 1965 and 1970. There were literally about a thousand trading days when that could have been routinely done.
And sit on it until today.
What happened to your 5K? (Call it 40K in 2017 dollars.)
9 MCD stock splits over the years have turned your 100 shares into 12,150 shares. Worth 159.38 at today's close. Total value $1,936,467.
A compound rate of return of about 7.8% for 52 years, not counting dividends. 52 years, year after year on average, come Hell or high water.
Today's annual dividend on 12,150 shares at $3.76 each? $45,684.
And about 500K of dividends paid over the previous 40 years (they started paying dividends in 1976.) The dividends take the annual compound real rate of return up to something around 11%. Not bad for a bunch of hamburger slingers.
So what does some schlub who was smart enough to buy a little MCD back in '65 to '70 have for doing absolutely nothing but sitting on it?
An asset worth almost 2 million that's paid him another 1/2 million in dividends along the way and currently pays him more than his initial (real) investment annually in dividends.
I say this as someone who owns MCD (and a lot of other similar stocks) and has owned it for years and years (but unfortunately not since 1970.) The point is that there is a lot of money to be made without being any sort of genius at all.
Now, most guys here don't have an investment horizon of 40 or 50 years, but beyond building your own business and maybe owning the real estate you do it in, one can buy index funds of the Dow or S&P or whatever and do very well over time without having to spend a single minute picking stocks. Or worrying about them.
What I do works for me. Due your own due diligence and don't take this as any sort of investment advice. All I can observe is that there is a case to be made for buying quality public companies and forgetting about them. MCD is just one example of hundreds of similar.
Anybody with a business and employees should consider having a top heavy profit sharing plan (401k).
Let a professional (not a retail broker) invest the plan money and always contribute to the plan. It will cost you between .30 and .45 to give an employee a dollar (including yourself) instead of giving it to Uncle Sam.
I sadly don't have a Netflix account at the moment to watch it either, but I've heard good things about The Founder. I'm tempted to renew my Netflix subscription just to see it.
Something else I'd recommend watching is The Minimalists documentary which went on Netflix a few months ago. It taught me how to cut the fat off my business. I realized that there was a lot of things that I was doing that was more complicated than it should be and found that when I simplified everything, it made my customers (and myself) understand my business much more. My sales have increased as a result of doing this. Definitely recommended watching.
FORUM GUIDELINES: Please review the guidelines below before posting at WOODWEB's Interactive Message Boards(return to top)
WOODWEB is a professional industrial woodworking site. Hobbyist and homeowner woodworking questions are inappropriate.
Messages should be kept reasonably short and on topic, relating to the focus of the forum. Responses should relate to the original question.
A valid email return address must be included with each message.
Advertising is inappropriate. The only exceptions are the Classified Ads Exchange, Machinery Exchange, Lumber Exchange, and Job Opportunities and Services Exchange. When posting listings in these areas, review the posting instructions carefully.
Subject lines may be edited for length and clarity.
"Cross posting" is not permitted. Choose the best forum for your question, and post your question at one forum only.
Messages requesting private responses will be removed - Forums are designed to provide information and assistance for all of our visitors. Private response requests are appropriate at WOODWEB's Exchanges and Job Opportunities and Services.
Messages that accuse businesses or individuals of alleged negative actions or behavior are inappropriate since WOODWEB is unable to verify or substantiate the claims.
Posts with the intent of soliciting answers to surveys are not appropriate. Contact WOODWEB for more information on initiating a survey.
Excessive forum participation by an individual upsets the balance of a healthy forum atmosphere. Individuals who excessively post responses containing marginal content will be considered repeat forum abusers.
Responses that initiate or support inappropriate and off-topic discussion of general politics detract from the professional woodworking focus of WOODWEB, and will be removed.
Participants are encouraged to use their real name when posting. Intentionally using another persons name is prohibited, and posts of this nature will be removed at WOODWEB's discretion.
Carefully review your message before clicking on the "Send Message" button - you will not be able to revise the message once it has been sent.
You will be notified of responses to the message(s) you posted via email. Be sure to enter your email address correctly.
WOODWEB's forums are a highly regarded resource for professional woodworkers. Messages and responses that are crafted in a professional and civil manner strengthen this resource. Messages that do not reflect a professional tone reduce the value of our forums.
Messages are inappropriate when their content: is deemed libelous in nature or is based on rumor, fails to meet basic standards of decorum, contains blatant advertising or inappropriate emphasis on self promotion (return to top).
Libel: Posts which defame an individual or organization, or employ a tone which can be viewed as malicious in nature. Words, pictures, or cartoons which expose a person or organization to public hatred, shame, disgrace, or ridicule, or induce an ill opinion of a person or organization, are libelous.
Improper Decorum: Posts which are profane, inciting, disrespectful or uncivil in tone, or maliciously worded. This also includes the venting of unsubstantiated opinions. Such messages do little to illuminate a given topic, and often have the opposite effect. Constructive criticism is acceptable (return to top).
Advertising: The purpose of WOODWEB Forums is to provide answers, not an advertising venue. Companies participating in a Forum discussion should provide specific answers to posted questions. WOODWEB suggests that businesses include an appropriately crafted signature in order to identify their company. A well meaning post that seems to be on-topic but contains a product reference may do your business more harm than good in the Forum environment. Forum users may perceive your references to specific products as unsolicited advertising (spam) and consciously avoid your web site or services. A well-crafted signature is an appropriate way to advertise your services that will not offend potential customers. Signatures should be limited to 4-6 lines, and may contain information that identifies the type of business you're in, your URL and email address (return to top).
Repeated Forum Abuse:
Forum participants who repeatedly fail to follow WOODWEB's Forum Guidelines may encounter difficulty when attempting to post messages.
There are often situations when the original message asks for opinions: "What is the best widget for my type of shop?". To a certain extent, the person posting the message is responsible for including specific questions within the message. An open ended question (like the one above) invites responses that may read as sales pitches. WOODWEB suggests that companies responding to such a question provide detailed and substantive replies rather than responses that read as a one-sided product promotion. It has been WOODWEB's experience that substantive responses are held in higher regard by our readers (return to top).
The staff of WOODWEB assume no responsibility for the accuracy, content, or outcome of any posting transmitted at WOODWEB's Message Boards. Participants should undertake the use of machinery, materials and methods discussed at WOODWEB's Message Boards after considerate evaluation, and at their own risk. WOODWEB reserves the right to delete any messages it deems inappropriate. (return to top)
Forum Posting Form Guidelines
The name you enter in this field will be the name that appears with your post or response (return to form).
Personal or business website links must point to the author's website. Inappropriate links will be removed without notice, and at WOODWEB's sole discretion. WOODWEB reserves the right to delete any messages with links it deems inappropriate. (return to form)
Your e-mail address will not be publicly viewable. Forum participants will be able to contact you using a contact link (included with your post) that is substituted for your actual address. You must include a valid email address in this field. (return to form)
Subject may be edited for length and clarity. Subject lines should provide an indication of the content of your post. (return to form)
Thread Related Link and Image Guidelines
Thread Related Links posted at WOODWEB's Forums and Exchanges should point to locations that provide supporting information for the topic being discussed in the current message thread. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related Link that directs visitors to an area with inappropriate content will be removed. WOODWEB reserves the right to delete any messages with links or images it deems inappropriate. (return to form)
Thread Related File Uploads
Thread Related Files posted at WOODWEB's Forums and Exchanges should provide supporting information for the topic being discussed in the current message thread. Video Files: acceptable video formats are: .MOV .AVI .WMV .MPEG .MPG .FLV .MP4 (Image Upload Tips) If you encounter any difficulty when uploading video files, E-mail WOODWEB for assistance. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related File that contains inappropriate content will be removed, and uploaded files that are not directly related to the message thread will be removed. WOODWEB reserves the right to delete any messages with links, files, or images it deems inappropriate. (return to form)
The editors, writers, and staff at WOODWEB try to promote safe practices.
What is safe for one woodworker under certain conditions may not be safe
for others in different circumstances. Readers should undertake the use
of materials and methods discussed at WOODWEB after considerate evaluation,
and at their own risk.