Coca-Cola Stock, The Great Depression, and J.D. Salinger’s Estate

For those of you interested in what I’ve been reading this weekend:

1. You can click here to read an article about a guy that bought some Palmer Oil stock and argued that it was worth 1.8 million shares of Coca-Cola by tracing a complex set of mergers. This would have entitled them to hundreds of millions in Coca-Cola stock, but alas, the Marohn family did not adjust for the extremely dilutive reverse stock splits when Palmer Oil became Palmer-Stendel Oil and then Petrocarbon Chemicals, which made the stock nearly worthless by the time it merged with Taylor Wine (which eventually got merged into Coca-Cola in 1977).

All along, Coca-Cola contended that the shares were worthless. Unfortunately, they did not include their rationale for claiming they were worthless, and the family dropped the claim once it became clear that in a best case scenario the shares would not have been worth much. Personally, I was hoping to see a determinative ruling as to whether Palmer Oil stock could have turned into Coca-Cola stock, but it looks like the stock-certificate watching world will be denied that pleasure.

If you want to read the court documents submitted, click here.

2. You can click here to read an article about how quickly it took patient stock market investors to recover during The Great Depression. Most people think that if you bought at the 1929 highs, it would have then took 20+ years for you to break even. In reality, it would have only taken 4-5 years due to dividends, deflation, and some weird treatment of IBM by the Dow Jones Index. It’s a good read for those of you interested in when popular headline knowledge is different from the underlying reality, as well as the power of dividends in digging investors out of even the worst jams.

3. About a month ago, three J.D. Salinger short stories got released online, potentially robbing the estate of millions of dollars in royalty streams (click here to read). The works had been kept at the University of Texas and Princeton, but someone anonymous has been able to upload them online.

Anyway, Salinger’s estate had planned to start publishing some of his works in 2015, and now they are potentially deprived of some of that income due to the leak. However, one of the stories released, “The Ocean Full of Bowling Balls” did not have Salinger’s permission to be published until 50 years after his death, or January 2060. In the next two years, it will be interesting to see how Salinger’s inheritors monetize the estate, given the stipulations he attached to his affairs and the secrecy surrounding some of his writings which he purportedly destroyed.