Why Monsanto Shareholders Got Filthy Rich

Between 1950 and 2000, a period that included both privately held and public trading for Monsanto stock, the compounding rate was 18.5%. It was one of the businesses that was so inherently lucrative that it was able to compound at a rate that almost tracked Warren Buffett’s accomplishments with Berkshire Hathaway stock.

The secret to Monsanto’s business success is that it was able to participate in the “toll booth” business model, which Kinder Morgan founder and CEO Richard Kinder has described as follows: “If you own a toll road, you don’t care how many passengers are in each car or what kind of car it is. You just want as many cars to move down the road as possible, and you make certain that they pay their tolls.”

In the case of Monsanto, it was able to collect a significant “toll” from each acre of land farmed in the United … Read the rest of this article!