L.B. Foster, Incredible chart on investment fees, and Optimizing the Investment Process.

L.B. Foster News

Original article from Seeking Alpha here.

PITTSBURGH, July 25, 2012 /PRNewswire/ — Pittsburgh, Pennsylvania-based L.B. Foster Company (FSTR) has been awarded the company’s largest rail products contract, valued at approximately $60 million, by contractor Kiewit/Kobayashi, a Joint Venture for the county-wide construction of the Honolulu Authority for Rapid Transportation (HART) passenger transit system. L.B. Foster rail, concrete ties, direct fixation fasteners, third rail with accessories and special trackwork will be installed throughout the Honolulu Rail Transit Project’s new elevated railway system and maintenance yard.

(Logo: http://photos.prnewswire.com/prnh/20101222/MM21387LOGO)

L.B. Foster offered a comprehensive materials and logistics package that maximizes purchasing efficiencies and meets critical scheduling requirements for the HART project. “Our company provided the highest quality and value offering, most comprehensive logistics package and the professional project management team necessary to successfully satisfy the requirements of such a large municipal project,” noted Greg Lippard, Vice President of Rail Products Sales at L.B. Foster Company.

“Our L.B. Foster team has a long and successful relationship with Kiewit. We have worked closely with this leading contractor to provide quality products for signature projects throughout North America,” said Hakan Eksi, General Manager of L.B. Foster Transit Products.

Incredible chart from the Motley Fool

This chart is showing the difference in returns.  The Vanguard fund has a 0.05% fee, and the generic mutual fund in the chart has a 1% fee. It ends up being a difference of almost $600,000 over the time period.

I ran into the same problem this writer for the Fool did.  I saw that my parents were being charged 6% fees every time their investment advisor bought or sold any shares they owned.  That is not including the sometimes above 2% fees that were being charged by the mutual funds he had them in.  I was shocked to see those huge fees, especially since there are comparable funds or ETF’s that he could have put them in that had fees as low as 0.05%

Stated another way, and not even counting inflation, the way he had their funds set up, they had to produce returns of at least 8% a year just to break even.  Suffice it to say that I am now running their retirement funds.

Michael Mauboussin on Investment Process

This is a fantastic and very important article where Michael Mauboussin talks about how it is extremely important to come up with a great investment process and how that can lead to great returns over time.  This article also talks about how investment returns, especially short term, can sometimes be misleading.

“Mauboussin believes the main difference between good and great investors comes down to temperament and focus. Good processes and good outcomes deliver deserved success, just as bad processes and bad outcomes are a form of poetic justice. Conversely, bad processes that yield good outcomes are just dumb luck. Investors often confuse the two. Successful poker players and renowned economists agree that better decision making comes from evaluating decisions on how well they were made rather than on outcomes.”

 

I encourage you to read the whole article at the above link.