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Topic: Rankings ... ugh

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betarhoalphadelta

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Re: Rankings ... ugh
« Reply #1918 on: April 22, 2024, 11:21:17 AM »
Re-investment is not a bad thing for a company like Berkshire.
Berkshire is a superb example of a perpetual growth company. And given how their business works, that's not a bad thing. 

Cincydawg

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Re: Rankings ... ugh
« Reply #1919 on: April 22, 2024, 11:25:38 AM »
Berkshare caters to the truly wealthy who don't need taxable income, they don't want taxable income.  


847badgerfan

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Re: Rankings ... ugh
« Reply #1920 on: April 22, 2024, 11:29:12 AM »
I do not own any of that stock.
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MarqHusker

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Re: Rankings ... ugh
« Reply #1921 on: April 22, 2024, 04:56:37 PM »
I also don't believe people realize the stock market is puny compared to the fixed income/bond market.

There are also way more managed/registered funds (mutual funds and etfs) than there are individual stocks in the marketplace. 

OrangeAfroMan

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Re: Rankings ... ugh
« Reply #1922 on: April 22, 2024, 11:29:47 PM »
You realize that this "Wall Street requires perpetual growth" myth is, well, a myth, right?

A huge portion of large public companies (~75% of the Fortune 500) pay a dividend. Which, to a large extent, means that investors in those companies expect the company to pay out a large portion of their quarterly profits directly to shareholders, rather than constantly reinvesting in growth.

For those companies, the Street doesn't care ALL that much about growth much. They care about earnings (profit). Now, contraction can reduce earnings and growth can sometimes increase earnings, so growth may be good. But growth at the expense of earnings, i.e. buying market share through reducing prices, is bad.

Think about it. If you buy shares of Coca-Cola (KO), do you expect them to grow revenues 20% every year? They already DOMINATE the market share for the categories they play in. They simply can't perpetually grow. Their stock price has hovered between $50 and $60 for the last 5 years. There's no "buy low / sell high" in there. So why buy KO? For predictable income--their annual dividend yield is ~3% so just by parking your money in KO you're getting a very predictable and safe 3% annual ROI. Because while they're not likely to grow much, they're also not likely to go out of business or stop making money.
I understand this, but does Coca-Cola not have quarterly predicted earnings and/or marginally-increased or maintained (depending on the financial environment) market share they need/want to meet/exceed?

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OrangeAfroMan

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Re: Rankings ... ugh
« Reply #1923 on: April 22, 2024, 11:31:32 PM »
The over-arching idea being that these entities are runaway locomotives that can't ever stop being runaway locomotives.  
“The Swamp is where Gators live.  We feel comfortable there, but we hope our opponents feel tentative. A swamp is hot and sticky and can be dangerous." - Steve Spurrier

Cincydawg

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Re: Rankings ... ugh
« Reply #1924 on: April 23, 2024, 07:36:52 AM »
The companies like Coke do prefer to have rising earnings.  Whether they look like some runaray freight train or not is subjective.  Bear in mind, the figures are not adjusted for inflation.


Cincydawg

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Re: Rankings ... ugh
« Reply #1925 on: April 23, 2024, 07:43:42 AM »
I worked for a company of similar ilk (used to be called "widows and orphans companies").  The objective was a steady increase in sales and earnings, it didn't always happen of course.  And these companies are quite different from say an Invidia.

There are other companies, utilities for example, and insurance and bank companies, that tend to have pretty steady earnings (after inflation) and view that as OK.

And there are of course risky companies that want to post earnings increases of 20% or more.  They usually get high valuations (like price earnings ratios) and are considered to be "risky".  When they miss, they get hit hard, and they do miss.  And of course, in time, even very large companies can recede and disappear.  The list of companies on the Dow 30 even 50 years ago is fascinating, many of the companies listed are gone, and few remain on the list.  Actually, I only spot one company that remains.

August 9, 1976[edit]

Allied Chemical CorporationExxon Corporation †
(formerly Standard Oil Co. of New Jersey)
Owens-Illinois, Inc.
Aluminum Company of AmericaGeneral Electric CompanyThe Procter & Gamble Company
American Can CompanyGeneral Foods CorporationSears Roebuck & Company
American Telephone and Telegraph CompanyGeneral Motors CorporationStandard Oil Co. of California
American Tobacco Company (B shares)Goodyear Tire and Rubber CompanyTexaco Incorporated
Bethlehem Steel CorporationInco Limited †
(formerly International Nickel Company, Ltd.)
Union Carbide Corporation
Chrysler CorporationInternational Harvester CompanyUnited States Steel Corporation
E.I. du Pont de Nemours & CompanyInternational Paper CompanyUnited Technologies Corporation †
(formerly United Aircraft Corporation)
Eastman Kodak CompanyJohns-Manville CorporationWestinghouse Electric Corporation
Esmark Corporation †
(formerly Swift & Company)
Minnesota Mining & Manufacturing Company ↑F. W. Woolworth Company


847badgerfan

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Re: Rankings ... ugh
« Reply #1926 on: April 23, 2024, 07:54:14 AM »
Kodak, heh.

3M and P&G still listed. I think they are the only 2.
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Cincydawg

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Re: Rankings ... ugh
« Reply #1927 on: April 23, 2024, 07:57:58 AM »
Yeah, I thought 3M had been dropped, but they remain, 2 out of 30.  Many of the rest are MUCH smaller companies or were bought out or disappeared.

GE of course recently finalized their split into several operations.  They have done pretty well over the past year or so.

Cincydawg

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Re: Rankings ... ugh
« Reply #1928 on: April 23, 2024, 08:01:52 AM »
Here's earnings for PG, again not adjusted for inflation:



Not bad, not what I'd term some runaway locomotive.  I divested all I had once I retired.  

Here is my own power provider:


847badgerfan

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Re: Rankings ... ugh
« Reply #1929 on: April 23, 2024, 08:10:46 AM »
The companies like Coke do prefer to have rising earnings.  Whether they look like some runaray freight train or not is subjective.  Bear in mind, the figures are not adjusted for inflation.


Coke owns a lot of things other than Coke too. They do reinvest, to diversify their portfolio.


Brands (coca-colacompany.com)
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Cincydawg

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Re: Rankings ... ugh
« Reply #1930 on: April 23, 2024, 08:42:32 AM »
Pepsi turned itself into a snack company.  Most of their products aren't good for you.

Cincydawg

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Re: Rankings ... ugh
« Reply #1931 on: April 23, 2024, 08:45:47 AM »
It's interesting to me how often I see some post on FB denigrating "capitalism", or what they think that means, and the stock market, which I'd opine without exception they don't understand and think stocks are a think only for the wealthy.

And folks view coutries like Sweden as being ones to emulate, because they are "socialist", which they decidedly are not.  Most liberals admire how Europe does stuff without knowing how Europe really does stuff.  And I personally think Europe does some things better than we do, a few anyway.  But the US isn't going to adopt those things.  "Progressives" would have us adopt the things that Europe really doesn't do, or barely does.

 

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