Los toros y los osos: The best stocks of 2014

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Coca-Cola

52-week high: $43.43

52-week low: $35.58

Annual revenues: $47.3 billion

Projected 2014 earnings growth: 6.7 percent

Coca-Cola (KO) has trailed the market significantly for the past two years, under fire from competitors as well as from policymakers who want citizens to slim down.

But columnist Andrew Feinberg calls it a classic “faith-based” stock — a great company that, by means that can’t be predicted, always seems to bounce back. And the 2.8 percent yield will quench your thirst while you wait for the price to rise.

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Bank of America

52-week high: $15.79

52-week low: $9.38

Annual revenues: $80.7 billion

Projected 2014 earnings growth: 50.6 percent

Many investors have shunned Bank of America (BAC) because of problems related to Countrywide, which it bought in 2008. But those troubles now seem to be winding down. BofA’s deposits are growing, and the quality of its loans is improving. Columnist Andrew Feinberg says the stock could easily rise 50 percent over the coming year.

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Honeywell International

52-week high: $89.52

52-week low: $59.85

Annual revenues: $38.3 billion

Projected 2014 earnings growth: 12.3 percent

In 2010, when Honeywell International (HON) announced an ambitious five-year growth plan, analysts were skeptical. They acknowledged that the firm, which makes everything from thermostats to jet engines, was well run, but they thought it couldn’t wring enough efficiencies from its operations to overcome a struggling economy. But Honeywell hit all of its goals and has turned skeptics into believers, says Stifel Nicolaus analyst Jeff Osborne. Now, Honeywell is set to put out a new five-year plan that he thinks will be even more ambitious—and will help boost the stock.

 

Coca-Cola
52 semanas: $ 43.43

52 semanas: $ 35.58

Ingresos anuales: 47,3 mil millones dólares

Crecimiento proyectado de ganancias 2014: 6,7 por ciento

Coca-Cola (KO) ha arrastrado al mercado de manera significativa durante los últimos dos años, bajo el fuego de los competidores, así como de los responsables políticos que quieren los ciudadanos para bajar de peso.

Pero el columnista Andrew Feinberg llama un clásico de valores “basada en la fe” – una gran empresa que, por medios que no se pueden predecir, siempre parece recuperarse. Y el rendimiento de un 2,8 por ciento va a saciar su sed mientras espera a que el precio suba.

 

Bank of America
52 semanas: $ 15.79

52 semanas: $ 9.38

Ingresos anuales: $ 80.7 mil millones

Crecimiento proyectado de ganancias 2014: 50,6 por ciento

Muchos inversores han evitado Bank of America (BAC) a causa de problemas relacionados con Countrywide, que compró en 2008. Pero esos problemas ahora parecen estar terminando. Depósitos de BofA están creciendo, y la calidad de sus préstamos está mejorando. El columnista Andrew Feinberg dice que la acción podría subir fácilmente un 50 por ciento durante el próximo año.

52 semanas: $ 89.52

52 semanas: $ 59.85

Ingresos anuales: $ 38,3 mil millones

Crecimiento proyectado de ganancias 2014: 12,3 por ciento

En 2010, cuando Honeywell International (HON) ha anunciado un ambicioso plan de crecimiento a cinco años, los analistas se mostraron escépticos. Reconocieron que la empresa, que fabrica desde termostatos para motores a reacción, estaba bien dirigido, pero pensaron que no podía exprimir suficientes eficiencia de sus operaciones para superar la difícil situación económica. Pero Honeywell alcanzó todos sus objetivos y ha vuelto escépticos en creyentes, dice el analista de Stifel Nicolaus Jeff Osborne. Ahora, Honeywell está configurado para apagar un nuevo plan de cinco años que él piensa que va a ser aún más ambicioso-y ayudará a impulsar la acción.

Habilidades de hacer oro: Investing strategies

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Hedge Fund Strategy – Equity Long-Short

An equity long-short strategy is an investing strategy, used primarily by hedge funds, that involves taking long positions in stocks that are expected to increase in value and short positions in stocks that are expected to decrease in value.

You may know that taking a long position in a stock simply means buying it: If the stock increases in value, you will make money. On the other hand, taking a short position in a stock means borrowing a stock you don’t own (usually from your broker), selling it, then hoping it declines in value, at which time you can buy it back at a lower price than you paid for it and return the borrowed shares.

Hedge funds using equity long-short strategies simply do this on a grander scale. At its most basic level, an equity long-short strategy consists of buying an undervalued stock and shorting an overvalued stock. Ideally, the long position will increase in value, and the short position will decline in value. If this happens, and the positions are of equal size, the hedge fund will benefit. That said, the strategy will work even if the long position declines in value, provided that the long position outperforms the short position. Thus, the goal of any equity long-short strategy is to minimize exposure to the market in general, and profit from a change in the difference, or spread, between two stocks.

That may sound complicated, so let’s look at a hypothetical example. Let’s say a hedge fund takes a $1 million long position in Pfizer and a $1 million short position in Wyeth, both large pharmaceutical companies. With these positions, any event that causes all pharmaceutical stocks to fall will lead to a loss on the Pfizer position and a profit on the Wyeth position. Similarly, an event that causes both stocks to rise will have little effect, since the positions balance each other out. So, the market risk is minimal. Why, then, would a portfolio manager take such a position? Because he or she thinks Pfizer will perform better than Wyeth.

Equity long-short strategies such as the one described, which hold equal dollar amounts of long and short positions, are called market neutral strategies. But not all equity long-short strategies are market neutral. Some hedge fund managers will maintain a long bias, as is the case with so-called “130/30” strategies. With these strategies, hedge funds have 130% exposure to long positions and 30% exposure to short positions. Other structures are also used, such as 120% long and 20% short. (Few hedge funds have a long-term short bias, since the equity markets tend to move up over time.)

Equity long-short managers can also be distinguished by the geographic market in which they invest, the sector in which they invest (financial, health care or technology, for example) or their investment style (value or quantitative, for example). Buying and selling two related stocks—for example, two stocks in the same region or industry—is called a “paired trade” model. It may limit risk to a specific subset of the market instead of the market in general.

Equity long-short strategies have been used by sophisticated investors, such as institutions, for years. They became increasingly popular among individual investors as traditional strategies struggled in the most recent bear market, highlighting the need for investors to consider expanding their portfolios into innovative financial solutions.

Equity long-short strategies are not without risks. These strategies have all the generic hedge fund risks: For example, hedge funds are typically not as liquid as mutual funds, meaning it is more difficult to sell shares; the strategies they use could lead to significant losses; and they can have high fees. Additionally, equity long-short strategies have some unique risks. The main one is that the portfolio manager must correctly predict the relative performance of two stocks, which can be difficult. Another risk results from what is referred to in the industry as “beta mismatch.” While this is more complicated that we can explain in detail here, essentially, it means that

when the stock market declines sharply, long positions could lose more than short positions.

In summary, equity long-short strategies may help increase returns in difficult market environments, but also involve some risk. As a result, investors considering these strategies may want to ensure that their hedge funds follow strict rules to evaluate market risks and find good investment opportunities.

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Hedge Fund Strategy – Capital a Largo Corto

Una estrategia de largo-corto equidad es una estrategia de inversión, utilizado principalmente por los fondos de cobertura, que consiste en tomar posiciones largas en acciones que se espera que aumente en posiciones de valor y cortas en las poblaciones que se espera que disminuya su valor.

Usted puede saber que tomar una posición larga en una acción significa simplemente comprarlo: si los aumentos en las existencias en el valor, que van a ganar dinero. Por otra parte, tomando una posición corta en una acción significa pedir prestado una acción que usted no es dueño (por lo general de su corredor), la venta, entonces la esperanza de que declina en valor, momento en el que pueda volver a comprar a un precio inferior de lo que pagó por ella y regresar las acciones prestadas.

Los fondos de cobertura utilizando la equidad estrategias long-short simplemente hacen esto en una escala mayor . En su nivel más básico, un patrimonio estrategia a largo corto consiste en la compra de una acción infravalorada y cortocircuito una acción sobrevaluada . Lo ideal sería que la posición larga se incrementará en el valor, y la posición corta disminuirá en valor. Si esto sucede , y las posiciones son de igual tamaño, el fondo de cobertura se beneficiará . Dicho esto, la estrategia funcionará incluso si la posición larga disminuye en valor, siempre que la posición larga supera a la posición corta . Por lo tanto , el objetivo de cualquier estrategia a largo corto equidad es reducir al mínimo la exposición al mercado en general, y el beneficio de un cambio en la diferencia , o spread , entre dos poblaciones.

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Esto puede sonar complicado , así que vamos a ver un ejemplo hipotético. Digamos que un fondo de cobertura toma una posición larga $ 1000000 en Pfizer y una posición corta $ 1 millón en Wyeth, tanto las grandes empresas farmacéuticas. Con estas posiciones, cualquier evento que hace que todas las acciones farmacéuticas bajen dará lugar a una pérdida en la posición Pfizer y una ganancia en la posición de Wyeth. Del mismo modo, un evento que causa ambas poblaciones en aumento tendrá poco efecto , ya que las posiciones se equilibran entre sí . Por lo tanto, el riesgo de mercado es mínimo. ¿Por qué , entonces, sería un gestor de cartera tomar una posición? Debido a que él o ella piensa que Pfizer obtendrá mejores resultados que Wyeth.

Equidad estrategias de largo-corto , como el descrito , que mantenga la misma cantidad en dólares de las posiciones largas y cortas , se llaman estrategias neutrales de mercado. Pero no todos los de renta variable estrategias long-short son de mercado neutral. Algunos gestores de fondos de cobertura se mantienen un sesgo mucho tiempo, como es el caso de los llamados ” 130/30 ” estrategias . Con estas estrategias , los hedge funds tienen una exposición del 130% a las posiciones largas y la exposición 30 % a las posiciones cortas . También se utilizan otras estructuras , tales como 120 % de largo y 20 % a corto . ( Fondos de cobertura Pocos tienen un sesgo de corto a largo plazo , ya que los mercados de acciones tienden a subir con el tiempo. )

Equidad gerentes largo-corto también se pueden distinguir por el mercado geográfico en el que invierten , el sector en el que invierten ( , cuidado de la salud financiera o de la tecnología , por ejemplo) o su estilo de inversión (valor o cuantitativa , por ejemplo). Compra y venta de dos acciones -por ejemplo , relacionados con dos poblaciones de la misma región o industria – que se llama un modelo de ” comercio emparejado ” . Puede limitar el riesgo a un subconjunto específico del mercado en lugar de la del mercado en general.

Equidad estrategias long-short han sido utilizados por inversionistas sofisticados , como las instituciones , desde hace años. Se convirtieron en cada vez más popular entre los inversores individuales como las estrategias tradicionales luchaban en el mercado a la baja más reciente, destacando la necesidad de los inversores a considerar la ampliación de su cartera en soluciones financieras innovadoras.

Equidad estrategias a largo cortas no están exentos de riesgos. Estas estrategias tienen todos los riesgos genéricos de fondos de cobertura : Por ejemplo, los fondos de cobertura por lo general no son tan líquidos como fondos de inversión, lo que significa que es más difícil de vender acciones , las estrategias que utilizan podrían dar lugar a pérdidas significativas , y que pueden tener altas tarifas . Adicionalmente , la equidad estrategias long-short tienen algunos riesgos únicos. La principal es que el gestor de la cartera debe predecir correctamente el comportamiento relativo de dos poblaciones , lo que puede ser difícil. Otro riesgo resulta de lo que se conoce en la industria como ” falta de coincidencia beta . ” Si bien esto es más complicado que podemos explicar en detalle aquí, en esencia , significa que.

cuando el mercado de valores disminuye drásticamente , las posiciones largas podrían perder más de las posiciones cortas .

En resumen , la equidad estrategias a largo cortos pueden ayudar a aumentar la rentabilidad en entornos de mercado difíciles, pero también implican cierto riesgo. Como resultado, los inversores que estén considerando estas estrategias pueden querer asegurarse de que sus fondos de cobertura siguen reglas estrictas para evaluar los riesgos de mercado y encontrar buenas oportunidades de inversión .

Cima de la montaña: High performing investors of 2013

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George Soros

2013 Earnings: $4 billion
The legend continues. In 2013, George Soros had a pretty good year, with Soros Fund Management delivering returns north of 22%. That was not good enough to beat the U.S. stock market, but it still made Soros a lot of money. Soros is not involved in the day-to-day operations of Soros Fund Management, the $29 billion family office that manages Soros’ fortune and money he has given away to his foundations. The firm is overseen by Scott Bessent, Soros Fund Management’s chief investment officer, but Soros remains involved and the firm’s big short bet on the yen at the start of 2013 was vintage Soros. He continues to be a market moving force and his short of the yen after Japanese policy makers accelerated monetary easing was widely watched. The famous philanthropist was also involved in major hedge fund battleground stocks last year. Betting against fellow hedge fund billionaire Bill Ackman’s “pyramid scheme” hypothesis, Soros sided with Carl Icahn in going long the nutritional supplements company Herbalife, becoming one of the company’s largest shareholders. He trimmed the position near the end of the year. Born in Budapest, Soros survived the Nazi occupation of Hungary and went on to study at the London School of Economics before launching his hedge fund in 1969.

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Steve Cohen

2013 Earnings: $2.3 billion
In 2013, Cohen’s SAC Capital Advisors hedge fund firm pleaded guilty to criminal insider trading charges and agreed to pay $1.8 billion in fines and penalties to the federal government. Federal prosecutors in Manhattan worked on what turned out to be two more successful prosecutions of former SAC Capital employees and Cohen is transforming his Stamford, Ct., hedge fund firm into a family office, returning billions of dollars to outside investors. But through it all, Cohen, 58, continued to do what he does best—make profitable trades and earn lots of money. SAC Capital knocked out net returns of about 19% in 2013. That was not as good as what the U.S. stock market returned, but it beat most other hedge fund managers.

John Paulson

2013 Earnings: $1.9 billion
The biggest comeback ever? After three very tough years, Paulson, 58, came roaring back in 2013. His $2.7 billion Recovery Fund posted net returns of 63%, his Paulson Enhanced funds returned 33% and the Advantage funds generated net returns north of 26%. About 80% of the $20 billion in assets that Paulson’s Paulson & Co., hedge fund firm oversees are now above their high watermark, meaning the firm is charging rich performance fees again. The only trouble spot in 2013 was gold. The 28% plunge of the yellow metal in 2013 not only hurt the returns of his relatively small Gold Fund, in which he has a large stake, it also dented the returns of the gold-denominated holdings he personally keeps in his other hedge funds.

Carl Icahn

2013 Earnings: $1.7 billion
Carl Icahn was everywhere in 2013. He battled with Michael Dell, helped push Aubrey McClendon out of Chesapeake Energy, made a killer trade on Netflix, fought with William Ackman over Herbalife, and loudly lobbied for Apple to repurchase more of its stock. In the end, Icahn’s investment fund returned 31% in 2013, which is pretty impressive given that its portfolio was largely hedged.

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source:forbes

Los nuevos reyes del Antiguo: David Tepper

2013 Earnings: $3.5 billion
Tepper has set a new standard for hedge fund managers. His track record has long been phenomenal, but since the financial crisis his returns have reached a whole new level. In 2013, the 56-year-old founder of Appaloosa Management outperformed the U.S. stock market and the vast majority of hedge fund managers, with his biggest fund posting net returns of more than 42%. Over the last five years, Tepper’s main hedge fund has generated annualized net returns of nearly 40%—and gross returns of some 50%. In what has almost become an annual tradition, Tepper gave back some cash to his investors at the end of the year. In 2013, Tepper’s Appaloosa celebrated its 20th anniversary by pledging $20 million to various charities. Tepper also gave $67 million to Carnegie Mellon University last year—adding to the $55 million he previously gave the university—and continued to support other causes like basic needs and education.

Appaloosa Management is an American hedge fund founded in 1993 by David Tepper and Jack Walton specializing in distressed debt.Appaloosa Management invests in public equity and fixed income markets around the world.

In 1993 David Tepper and Jack Walton founded Appaloosa Management, an employee owned hedge fund, in Chatham, New Jersey.[4][5] The firm through the 1990s was known as a junk bond investment boutique and through the 2000s a hedge fund.

2002 Conseco & Marconi Corp.

In the fourth quarter of 2002 Appaloosa Management returns were heavily a result of junk-bond and distressed debt bets in Conseco and Marconi Corp. that the market was bottoming out.

2007 Delphi

Assets under management in 2007 were $5.3 billion. The Financial Times reports the company has “attracted interest for its large ownership position in Delphi, the bankrupt car parts supplier, and its clashes on whether management has the shareholders best interests in mind or those of GM and the UAW.”

2008 financial crisis through 2011

Appaloosa survived the financial crisis of 2008 with relatively few investor redemption orders.

From 2009 to 2010 Appaloosa Management’s assets under management grew from $5 billion to $12 billion.

In November 2010 the New York Times reported total assets under management of $14 billion.

In 2010 it was reported that since 1993 Appaloosa Management had returned $12.4 billion to clients—ranking it sixth on a ranking of total returns to clients by managers since inception.

In 2011 the company was awarded the Institutional Hedge Fund Firm of the Year award.

In Sep 2011, a Delaware bankruptcy court found that Appaloosa Management is one of four hedge funds that had played a role in Washington Mutual’s restructuring which might have received confidential information that could have been used to trade improperly in the bank’s debt.

Investment Strategy

Appaloosa Management’s investments focus on undiversified concentrated investment positions.Appaloosa invests in the global public equity and fixed income markets with a focus on “equities and debt of distressed companies, bonds, exchange warrants, optionsfutures, notes, and junk bonds.” According to BusinessWeek, the firm’s client base consists of high net worth individuals, pension and profit sharing plans, corporations, foreign governments, foundations, universities, and other organizations.” Investors commit to a locked period of three years during which their withdrawals are limited to 25 percent of their total investment.

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Palomino Fund

The Palomino Fund from its inception in 1995 to 1998 had a 25 percent return. After Russia defaulted, the fund lost 49 percent of its value between February to September 1998. The fund returned –26.7% percent in 2008 and 117.3 percent in 2009. The company was ranked by Bloomberg Markets as the top performing fund of any hedge fund manager managing over one billion dollars

source:businessweek

未来的国王:Top little known Hedge Funds

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Bridgewater manages approximately $150 billion in global investments for a wide array of institutional clients, including foreign governments and central banks, corporate and public pension funds, university endowments and charitable foundations. Approximately 1,400 people work at Bridgewater, which is based in Westport, Connecticut.

Founded in 1975 out of a two-bedroom apartment, Bridgewater remains an independent, employee-run organization. Throughout its 39-year history, Bridgewater has been recognized as a top-performing manager and an industry innovator, winning over 40 industry awards in the past five years alone. In both 2010 and 2011, Bridgewater ranked as the largest and best-performing hedge fund manager in the world and in both 2012 and 2013 Bridgewater was recognized for having earned its clients more than any other hedge fund in the history of the industry. Its clients and employees routinely give Bridgewater top satisfaction ratings in annual surveys.

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Management Firm, Location: Blue Harbour Group, U.S.

Strategy: Activist

Assets (in billions): $1.3

YTD Total Return: +19.8%

2012 Return: +16.2%

Read more: http://www.businessinsider.com/30-most-successful-hedge-funds-of-2013-2014-1?op=1#ixzz2uaE3WWpw

Blue Harbour Group, L.P., a Registered Investment Advisor, is an investment manager focused on investing in undervalued U.S. public companies. Our mandate is to serve as a trusted lead investor, working in a collaborative and supportive manner with companies to identify initiatives to unlock and create shareholder value. We are long term investors with a multi-year investment horizon.

 

Clifton S. Robbins is the Chief Executive Officer and Portfolio Manager of Blue Harbour Group, L.P. and has been an investor for over twenty-five years. Prior to founding Blue Harbour Group in 2004, Mr. Robbins had been a Managing Member of General Atlantic Partners, LLC. Prior to joining General Atlantic Partners in 2000, Mr. Robbins had been a General Partner of Kohlberg Kravis Roberts & Co. which he joined in 1987. Mr. Robbins began his career in Mergers & Acquisitions at Morgan Stanley & Co. in 1980.

 

Mr. Robbins is complemented by a team of senior professionals responsible for generating investment ideas, developing relationships with management teams, performing research and due diligence on prospective investments, and monitoring portfolio investments. The team consists of professionals with experience ranging from six to fifteen years in the areas of corporate finance, private and public market investing.

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INVESTMENT STRATEGY

Blue Harbour’s approach to investing in the public markets is similar in many respects to private equity investors. In this regard, Blue Harbour’s investment approach seeks to add value by working collaboratively with company management to design and to implement strategic initiatives that unlock and create shareholder value. We focus on U.S. public companies that could create significant value by implementing strategic or financial change. Much like private equity investors, a critical component of our strategy is to support superior management teams who are committed to creating value for shareholders. Importantly, unlike private equity investors, Blue Harbour’s mandate to invest in publicly traded securities affords us the advantages of not paying control premiums nor are we subject to the illiquidity and leverage of private equity models.

  • We source investment opportunities primarily through publicly traded markets but can also buy equity stakes directly from the issuer if appropriate
  • We acquire a significant minority stake and become a lead shareholder
  • We acquire our positions at the public market price instead of by auctions
  • We collaborate with company management on critical strategic and financial issues

 HT Capital Management – Hong Kong

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AP Images

Founded: 1997

AUM: $673.2 million

Manager: Ophelia Tong

  • Tong co-founded HT Capital with her husband Karl Hurst.

Strategies: Long Equity

  • HT’s two funds combined to return 6.08% last year.

 

Source:

http://www.htcapital.hk/

http://www.bwater.com/

El oro y la creencia más allá del petróleo dioses muertos ‘: John D. Rockefeller

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This is a rare example of how principle,business and investing can work. It is the secret behind Warren Buffet and some of the top Hedge Fund Managers. It is not about the money Warren Buffett quoted in speech to his company before others could speak his words. John D. Rockefeller was one of the best examples of this:

John Davison Rockefeller (July 8, 1839 – May 23, 1937) was an American business magnate and philanthropist. He was a co-founder of theStandard Oil Company, which dominated the oil industry and was the first great U.S. business trust. Rockefeller revolutionized the petroleum industry, and along with other key contemporary industrialists such as Andrew Carnegie, defined the structure of modern philanthropy. In 1870, he co-founded Standard Oil Company and aggressively ran it until he officially retired in 1897.

In spite of his father’s absences and frequent family moves, young John was a well-behaved, serious, and studious boy. His contemporaries described him as reserved, earnest, religious, methodical, and discreet. He was an excellent debater and expressed himself precisely. He also had a deep love of music and dreamed of it as a possible career.Early on, he displayed an excellent mind for numbers and detailed accounting.

His father, William Avery Rockefeller, was a “pitch man” — a “doctor” who claimed he could cure cancers and charged up to $25 a treatment. He was gone for months at a time traveling around the West from town to town and would return to wherever the family was living with substantial sums of cash. His mother, Eliza Davison Rockefeller, was very religious and very disciplined. She taught John to work, to save, and to give to charities.

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By the age of 12, he had saved over $50 from working for neighbors and raising some turkeys for his mother. At the urging of his mother, he loaned a local farmer $50 at 7% interest payable in one year. When the farmer paid him back with interest the next year Rockefeller was impressed and said of it in 1904: “The impression was gaining ground with me that it was a good thing to let the money be my servant and not make myself a slave to the money…”

From 1852 Rockefeller attended Owego Academy in Owego, New York, where the family had moved in 1851. Rockefeller excelled at mental arithmetic and was able to solve difficult arithmetic problems in his head — a talent that would be very useful to him throughout his business career. In other subjects Rockefeller was an average student but the quality of the education was very high.

In 1853, the Rockefellers moved to Cleveland, Ohio, and John attended high school from 1853 to 1855. He was very good at math and was on the debating team. The school encouraged public speaking and even though Rockefeller was only average, it was a skill that would prove to useful to him.

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It was the logic of this competitive structure that determined Rockefeller and Flagler’s course of action.

  1. They built high-quality, larger, better-planned refineries. They built permanent facilities using the best materials available.
  2. They owned their own cooperage (barrel making) plant, their own white-oak timber and drying facilities, and bought their own hoop iron. Consequently, they cut the cost of a barrel from about $3.00 to less than $1.50.
  3. They manufactured their own sulfuric acid (which was used in the purification process) and devised technology to recover it for re-use.
  4. They owned their own drayage service, consisting of at least 20 wagons in 1868.
  5. They owned their own warehouses in New York City and their own boats on the Hudson and East Rivers to transport their oil.
  6. They were the first to ship oil via tank cars (albeit big wooden tubs mounted in pairs on flat cars — later to evolve into the modern form of a tank car). And they owned their own fleet of tank cars.
  7. They built huge holding tanks near their refineries for storing crude and refined oil, with the equipment for drawing off the oil from the tank cars into the holding tanks.
  8. Their huge size made it economical to build the necessary physical plant to handle all the “waste” products from the refining of kerosene. They began manufacturing high quality lubricating oil that quickly replaced lard oil as a lubricant for machinery. Gasoline, which many refiners surreptitiously dumped into the Cuyahoga River at night (the river often caught fire), Rockefeller and Flagler used as fuel. They manufactured benzene (used as a cleaning fluid; a solvent for fat, gums, and resin; and to make varnish), paraffin (insoluble in water, used for making candles, waterproofing paper, preservative coatings, etc.), and petrolatum (used as a basis for ointments and as a protective dressing; as a local application in inflammation of mucous membrane; as an intestinal lubricant, etc. — white petrolatum later marketed under the brand name Vaseline). They shipped naphtha (volatile inflammable liquid used as a solvent in dry cleaning and in wax preparations, varnish and paint making, burning fluid for illumination, and as a fuel for motors) to gas plants and other users.