Great Businesses That Cause Investors Trouble

From 2004 through 2014, BHP Billiton grew its profits from $0.86 per share to $5.18 per share, and raised its dividend from $0.33 per share to $2.36 per share. Over that same ten-year time frame, Aflac grew its profits from $2.30 to $6.20. And Aflac grew its dividend from $0.38 per share to $1.50 per share over that same period of time. And from 2004-2014, John Deere grew its profits from $2.74 to $8.63 per share, raising the dividend from $0.53 to $2.40 over that same stretch of time. These are healthy businesses in the commodity, insurance, and manufacturing sectors that over time grow profits and raise dividends like any long-term owner would hope at the time that he makes an investment.

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The Quiet Search For High Growth Investments

There are two sets of circumstances that can potentially lead to making a life-changing investment. The first type is the one that gets all of the attention: It involves a company gaining market share in an industry with a very large niche. An obvious example of this type of growth is Coca-Cola. People recognize that the soft drink industry is super huge (each of the seven billion people in the world are potential, realistic customers) and Coca-Cola has reached the point where 3.5% of all liquid consumed in the world can be traced to a beverage that is earning profits on behalf of Coca-Cola shareholders. Because the market is so large, and the profit margins are so great, shareholders in Coca-Cola have been able to turn $1 invested in 1970 into $190 today even though 96.5% of the liquid in the world is consumed through some other owner. When markets are that big, even a small slice of the pie results in riches.

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