Guest Post: Don’t Buy Candy. Buy The Company!

Good morning!

Today we have a guest post from Chris Pascale. Chris has written in the past about his oldest daughter opening up a Roth IRA at age 15. In this post, he shares the story of his youngest daughter bought a stock at 8!

It’s never too early to introduce your kids to the stock market. Teaching them about money when they are young will influence how their financial behaviors as adults. When you see someone who is a good saver and investor, there is a strong chance that that person will tell you his or her parents instilled money wisdom all along.

Don’t Buy Candy. Buy the Company!

by Christopher Pascale

My youngest daughter loves candy. She happens to be very good with money, but candy is the thing she likes best.

One day she wanted to take $30 to the candy store and spend it all, reasoning that it’s her money, so why shouldn’t she get to buy candy with all of it? Aside from the fact that I don’t want all of that candy in my house, she might need that money, like in the times she’s bailed us out (as noted in this GrumpusMaximus article).

Rather than just say no, I said, “why buy candy when you can buy the whole store?” This piqued her interest, and led her to figure she could purchase the local Sweet Street shoppe and then get free candy every time she went in.

Obviously, some more explaining was in order, because Sweet Street isn’t for sale, and she doesn’t have enough capital if it was, nor the ability to do the work. So we looked into the stock market.

The plan was to find a company with long-term potential and dividend income.

Getting Started Is So Hard

We know great ideas are everywhere, but to pull the trigger is to climb a mental mountain. It was not until months later that we finally got her trading account set up.

My original intent was to just have all 4 of my girls use Vanguard for index funds. I got as far as printing off the forms, but we never filled them out.

Finally, this month, after another college semester where I successfully bullied more than one student into not being poor when they are old, I got on Google and searched for candy companies. Up came the following results:

  • Hershey’s (NYSE: HSY)
  • Tootsie Roll (NYSE: TR)
  • Nestle (OTCMKTS: NSRGY)
  • Mondelez (NASDAQ: MDLZ)
  • Rocky Mountain Chocolate Factory (NASDAQ: RMCF)

What Candy Co. Has the Best Stock?

Having never heard of the Rocky Mountain Chocolate Factory, the R&D division of the Pascale household needed to find out more, leading us to order the Rose Crystal Gourmet Caramel Apple.

At $23.00 after shipping, I was excited about the potential for profits. We’d have visited a store, but there are none (yet) on Long Island, so if anyone wants to franchise, see here.

I’ll dive more into this company in a bit. We need to discuss company size, breadth of products, dividend opportunities, and more.

What we don’t need to solely focus on is share price. SHARE PRICE ALONE IS NOT A REASON TO BUY SOMETHING.

Share price is why dummies (I’m one of them) will buy penny stocks, because it feels so cool to get 10,000 of something, or a million, which makes sense when thinking that it could go to $1.00.

Not helping matters any is that The Gap used to be a penny stock, but what did The Gap also have? Great leadership and growing revenues.

I say this because you might shy away from Hershey’s at $90.00, which will pay reliable dividends every quarter, but dive into SolarWindow Technologies (OTCMKTS: WNDW), which hasn’t gotten around to selling a single solar panel! That’s right. While Hershey’s is terrific with consistent sales of $7-8 Billion, SolarWindow hasn’t gotten around to selling a dollar’s worth of anything.

So, while you can buy dozens of shares of SolarWindow for every 1 share of Hershey’s, keep in mind that with one you are investing in a company that is actually doing business, and with the other, it’s a mystery how it even made it onto the Wealthy Joe Investing site.

Hershey’s (NYSE: HSY)

The history of this company is a rich one that involves building a high-tech town where workers had electricity well before many others. On top of that, delicious, affordable products were brought into the lives of so many people who could not otherwise afford what may have been a luxury.

Should my daughter buy Hershey’s stock?

Price on 5/15/2019: $127.06

Dividend: 2.27%

Market Cap: $26.53 Billion

2018 Revenues: $7.79 Billion

2018 Net Profit: $1.18 Billion

Can Hershey’s grow? I think so, because it can infiltrate other nations, as Coke has in Southeast Asia and Africa.

But it can also grow as Nestle and Mondelez have, by diversifying its product line. After all, if Hershey’s came out with a bottled water, I’d drink it, especially if coupons suddenly landed in my mailbox.

RESULT: Strong Recommendation to Buy

Tootsie Roll (NYSE: TR)

What surprised me is that Tootsie Roll has a very slim product line, explaining why it’s smaller than the other giants mentioned here, but it could also explain why they are doing very well, too. After all, focus is important in business, and while Pepsi has done well to get into a variety of extremely unhealthy options to complement their terrible beverages, Coke is no less a big player while not spreading itself so thin.

Should my daughter buy Tootsie Roll stock?

Price on 5/15/2019: $38.85

Dividend: 0.93%

Market Cap: $2.4 Billion

2018 Revenues: $518.9 Million

2018 Net Profit: $56.9 Million

Can Tootsie Roll grow? Tootsie Roll can easily find its way into the same markets as Coke and Hershey’s, and can do so for so much less. The reason is because to get into some of these markets, companies have to provide infrastructure in order to have a factory. After all, what’s the point in having the ability to put your product in every store if there’s no way for tractor trailers to get from one place to another? By simply following the bigger giants, Tootsie Roll can draft off the leaders, if it so wishes.

Lastly, Tootsie Roll has an ideal product line because everything is so affordable. However, it offers the lowest dividend of the very big companies on this list, and also has the lowest profit margin for 2018.

RESULT: Recommendation Not to Buy Right Now


The Nestle product lines take their customers from cradle to grave with Gerber baby food, Pellegrino sparkling water, and so much more. For pets, they own the Purina brand. You can spend the whole day with nothing but Nestle foods and not miss out.

But should my daughter buy Nestle stock?

Price on 5/15/2019: $96.62

Dividend: 2.1%

Market Cap: $292.52 Billion

2018 Revenues: $ 91.75 Billion

2018 Net Profit: $10.14  Billion

Nestle’s growth isn’t what I’m thinking about so much as the idea that it can stick around. While Tootsie Roll is a one-trick pony that you shouldn’t be eating very often, Nestle takes one-trick ponies (maybe) and has your dog eat them every morning while you make yourself a Nespresso and your baby eats his applesauce.

For those investors who are worried about the morality of the companies they buy into, any company this size has controversy, and you can find out some of Nestle’s woes here.

RESULT: Strong Recommendation to Buy

Mondelez (NASDAQ: MDLZ)

Mondelez is a lot like Nestle. It’s a huge conglomerate, but from the United States instead of Europe. The brand family includes Hall’s (cough drops), Oreo, and Triscuit. It’s all complex carbs and rich, simple sugars. No water, wine or anything else.

Should my daughter buy Mondelez?

Price on 5/15/2019: $51.62

Dividend: 2.01%

Market Cap: $74.36 Billion

2018 Revenues: $25.94 Billion

2018 Net Profit: $3.38 Billion

Can Mondelez grow? I think so, especially with a product like Tate’s Bake Shop cookies, which has a label proclaiming to be from Southampton, NY, leading someone like me to think that I’m supporting a local-boy-done-good when the reality is that that boy did good back in 2018 when he sold his business for half a billion to Mondelez.

Like Nestle, Mondelez is not without controversy, but what I like about Mondelez, aside from it being a US company, is that it’s looking to grow, and all within its own specialty. In 2016, for example, it tried to buy Hershey’s.

What I don’t like is that the company isn’t as big as it used to be, which you can see in this revenue chart. As such, though, now could be a great time to get in. After all, sentiment is down with revenues, or at least should be, and rising sales should bolster profits for investors.

RESULT: Recommendation to Buy

Rocky Mountain Chocolate Factory (NASDAQ: RMCF)

As already mentioned, this company is a franchise operation, and at $23.00 to get a product delivered, there’s money to be made so long as people have money to spend. And this is where it gets iffy. In a bad economy, people need what Nestle sells, people can splurge on what Mondelez offers, and everyone can buy Hershey’s products. These items are for disposable income and special occasions, only. But let’s look at the numbers.

Should my daughter buy Rocky Mountain Chocolate Factory?

Price on 5/15/2019: $9.50

Dividend: 5.05%

Market Cap: $56,520,000

2018 Revenues: $7.79 Billion

2018 Net Profit: $1.18 Billion

In some ways this is the riskiest investment of the bunch, however, dividends have been paid out like clockwork since 2003, even following the dot-com crash and The Great Recession.

Also, because there are only 4 locations in New York, that means they could easily 10x in the next ten years. Lastly, in 2013, Kellogg’s released a cereal with them that has proven to be successful.

Our Final Decision

When our $23.00 apple arrived, I cut it up into 6 slices. My oldest daughter summed it up perfectly when she said, “I don’t really like apples or caramel, but this is the best thing I’ve ever tasted.”

And with our newfound, deep knowledge of the product line, my 8-year-old now owns 20 shares of the Rocky Mountain Chocolate Factory, and so do I.

Christopher Pascale is an author, accountant and adjunct professor from Long Island. He is the former CFO of Portfolios with Purpose, and is a current member of the IRS’ Office of the Chief Counsel.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page. 

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)




Money Ain’t Everything…Until You Have None

When people make a list of the things in life that are most important to them, money is never ranked at the top – but it’s usually among the top three or four.

The list typically starts with health, family, happiness, and then money, in that order.

It’s always bothered me when people made comments like “money isn’t everything.” It may not be everything – but when you have none, it’s everything.

In the words of  Zig Ziglar, “Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the ‘gotta have it’ scale.”

The only people in my life that I’ve ever heard make the statement “money isn’t everything” didn’t have any money. I’ve never heard someone that had money make that statement.

The fact of the matter is that to some degree – whether we like it or not – money is as close to “everything” as you can get without “being everything”. There are very few aspects of our lives that are not influenced by money either directly or indirectly.

Here are some examples of what I’m talking about:

1. The number one factor that determines where we end up in life is not our intelligence, hard work or ambition. I know this sounds contrary to what we’re taught, but it’s true.

The number one factor is the socioeconomic class we are born into.

This is not my opinion. It is a statistical fact.

If you are born wealthy, you are likely to die wealthy. And if you are born poor or middle class, you are likely to die that way as well.

2. Life expectancy increases as your socioeconomic status improves.

Fact is, the more your net worth, the longer your life expectancy.

People with more money usually have better health care and take better care of themselves.

3. Having money gives you options that you wouldn’t have otherwise. These include:

– The ability to not have to stay at a job that you hate, and/or to be able to venture out on your own and start a business.

– The ability to pay for your children’s education and spare them the burden of taking on an obscene amount of debt before they even start their lives.

– The ability to travel anywhere in the world whenever you feel like it, pay cash upfront, and not finance a trip that you’ll be paying off for the next five years.

4. If you want to live in a nice neighborhood – well, you better have a lot of dough. There is no way around it – living in a clean, low crime area that is well maintained costs money.

Let me share some of my personal story with you in closing.

I grew up in a what would be considered a lower middle class household.

My mother worked at NYNEX, which I believe is Verizon today. She made an annual salary of $30,000 – $35,000 in the 70s, 80s and 90s. She had great health insurance and a pension plan.

I graduated from college, and my first job out of college paid $18,000 a year.

My highest earning year in my life was in excess of $300,000.

I was never into cars, clothes or frivolous bullshit. The number one thing I wanted to do was travel and see the world.

I can tell you that I’ve been broke, and I’ve had money. And I will take the latter any day of the week.


My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page. 

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)