If, in 1999 and 2000, when Colgate-Palmolive, Hershey, and Brown-Forman were each trading for 30x profits, you decided to buy shares anyway, the results would look like this:
The Colgate shares would have compounded at 8.15% annually, turning a $10,000 investment into $30,200.
Shares of Hershey, despite even higher valuation compared to Colgate, would have compounded at 11.50% annually over that time frame, turning a $10,000 investment into $46,500.
Shares of Brown-Forman, the excellent alcohol company that almost no one outside of Louisville or the investor community has ever heard of, has compounded at 15.60% annually since that time, turning $10,000 into over $77,500.
That adds a nuance to the investor’s dilemma: Value … Read the rest of this article!
In 2010, Coca-Cola made the decision to buy its North American bottling operations for $12.2 billion. Before that point, when you owned shares of the famous KO stock, you were really owning the maker of the syrup inside that can, cup, or bottle, as the bottlers were run by different families, and in some cases, publicly traded corporations. The reason why Coca-Cola did not own its bottlers previously is because it’s much easier to take over the globe through a model that mimics franchising rather than doing it yourself: it was a lot easier for Ray Kroc to hire wealthy individuals to put up a McDonald’s and then demand a share of their … Read the rest of this article!
When I was a sophomore in college during the financial crisis, I was an assistant (TA by another name) for a senior that was best friends with a professor. The senior I was working for was an accounting major, and she would frequently discuss individual stocks and general portfolio management with the professor in question.
One day, in 2009, the professor said, “I just lost a million dollars officially. I can’t do this anymore.” She sold all her individual stocks, mutual fund holdings, and went to cash. I didn’t say anything because (1) I wasn’t part of the conversation, (2) I was an English major, and believe it or not, millionaires don’t want … Read the rest of this article!
Coca-Cola. PepsiCo. Chevron. Exxon. Colgate-Palmolive. Procter & Gamble. Johnson & Johnson. Those are the companies that I have in mind as signature “this is my largest investment which I will rely on for retirement income” companies that ought to be a hallmark of blue-chip portfolios build to last throughout whatever economic environment presents itself in the coming decades. There is another company that deserves consideration on that list: Nestle.
It is widely underrepresented in the financial literature on long-term investing for a couple of reasons: it is a foreign business, and the reported profits and dividends don’t quite have the smoothness that you get from, say, checking out a profit and dividend history … Read the rest of this article!
Every now and then, when I am looking to procrastinate before I get down to write an article, I check through the search engine traffic to see what is bringing new people to the site. Pretty consistently over the past several months, many of you have stumbled onto here by looking for ways to buy shares of Exxon through Computershare.
Although googling something and actually doing it are two separate things (imagine a chart comparing people who googled “how to lose 20 pounds” compared to those that actually do it), I am glad to see that topic be on the minds of people because regular investing with Exxon Mobil is probably one of … Read the rest of this article!