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Are there life stages of a company?
If so, does it matter at what life stage you put your money to work in any particular company?
IMHO, the answer to both questions is "YES"
I think about this every now and then, and again it was brought to my attention when ken mentioned kerim's top 10 list about some %'s in the top few companies--kerim responded but also added he did have some concerns about MO.
Well, I also have some concerns about MO and PM--I liquidated PM and sold a good percentage of MO. I see them as slow to no growth companies--they've had a good run for decades but are they near their last stage??
People will bring up how well they did with MO and some have been investors for decades.
PM/MO were one company once upon a time, they owned other investments such as General Foods, and Kraft, wineries, SAB Miller (beer), a home builder, yes they owned and were invested in a home builder from the 1960's to the 1980's. PM had multiple companies under it's umbrella.
But today, it's different--PM and MO are not the same company--not even close. Are they near the "end stage"?? I don't know, but if looking at these companies like a baseball game they're definitely not in the early innings. They are not the same businesses, they don't have the same support, from investors, from politicians, from customers--to be people in general.
If PM or MO would split up and dissolve into multiple companies as we speak, as investors what would we be stuck with??
Which brings me to companies in earlier life stages, even though some of these companies have been around for decades themselves now.
Microsoft--Apple--Amazon--Alphabet--Berkshire Hathaway--META...hell...even Tesla!!
As investors, let's assume all these companies were broken up, all of them--as investors what would we be left with?? The answer, IMHO, would be a lot more wealth accumulation than holding a company like MO or PM--the runways are further and longer.
We have more time with these latter companies, as investors.
Now, this is not to say MO or PM will cease to exist in our lifetime, but as investors in the later innings we as investors might not see the same high quality returns as earlier investors.
That's my thinking when I put money to work
There's a reason why I've been building up certain positions
Interested to hear your thoughts--I'm expecting a good one from Fenders because he see's the field through a broad scope.
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Counterpoint, take Eli Lilly. Been around since 1876 and going super strong now.
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The average S&P stock has a shorter lifespan than our time spent investing. One advantage to an index fund. Identifying when a company is transitioning from dominant to relevant to irrelevent is important. An oil or pharma might remain at the top of the sector for 100 years. They did if course. Tech not so much. I am very confident in most of FAANG, but a 20 year old buying FB or GOOGL today? The day will likely come that you better be paying attention. An then there are secular trends like tobacco. That requires monitoring as well. I sold them and they will be nothing but a trade unless they do a massive business model shift. That's all for the moment. I have nasty cold.
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(06-05-2022, 02:36 PM)ken-do-nim Wrote: Counterpoint, take Eli Lilly. Been around since 1876 and going super strong now.
Fenders
The average S&P stock has a shorter lifespan than our time spent investing. One advantage to an index fund. Identifying when a company is transitioning from dominant to relevant to irrelevent is important. An oil or pharma might remain at the top of the sector for 100 years. They did if course. Tech not so much. I am very confident in most of FAANG, but a 20 year old buying FB or GOOGL today? The day will likely come that you better be paying attention. An then there are secular trends like tobacco. That requires monitoring as well. I sold them and they will be nothing but a trade unless they do a massive business model shift. That's all for the moment. I have nasty cold.
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ken--yes quite a few have been around for a long time, take the top 5 canadian banks and they've been around for over 150 years
lilly--there's one i wish i invested in before GILD--a thorn in my side ugh
fenders, those are my exact thoughts in this, especially something like tobacco--i think tobacco is the perfect example and maybe one of the most relevant industries of this topic.
I'm going to have to look at the DOW and the changes it went through the years
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Top retailers by decade is an interesting list. Sears and K-Mart gone. It's one flaw I see in the plan of 40 years of DGI, then keep them all through your retirement. You'll be adjusting because half your picks will be mediocre before you retire. I wouldn't advise a 20yr old build a position in XOM, T, GE. All of those looked good when I started.
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(06-06-2022, 07:05 AM)fenders53 Wrote: Top retailers by decade is an interesting list. Sears and K-Mart gone. It's one flaw I see in the plan of 40 years of DGI, then keep them all through your retirement. You'll be adjusting because half your picks will be mediocre before you retire. I wouldn't advise a 20yr old build a position in XOM, T, GE. All of those looked good when I started.
Speaking of which, I'd like to get back into TGT now that it dropped to a nice price, but yeah, I know in 20 years it probably won't be as relevant. Retail is tough, unless you have a specific niche like Home Depot or Sherwin Williams.
(06-06-2022, 08:37 AM)ken-do-nim Wrote: (06-06-2022, 07:05 AM)fenders53 Wrote: Top retailers by decade is an interesting list. Sears and K-Mart gone. It's one flaw I see in the plan of 40 years of DGI, then keep them all through your retirement. You'll be adjusting because half your picks will be mediocre before you retire. I wouldn't advise a 20yr old build a position in XOM, T, GE. All of those looked good when I started.
Speaking of which, I'd like to get back into TGT now that it dropped to a nice price, but yeah, I know in 20 years it probably won't be as relevant. Retail is tough, unless you have a specific niche like Home Depot or Sherwin Williams.
You have to add DG to that list
In retail its LOW, HD, SHW, DG, WMT, ULTA, TJX and TGT.
The rest you cant bet on long term or to give you year in and year out results.
And TGT isn't going anywhere. No one will be able to duplicate what they do. Even in 20 years they will still be a around.
KMART we all knew would fail. Sears was the only player back in the 70 and 80's and then came the WalMarts and Targets and Amazon of the world.
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(06-06-2022, 08:53 AM)ConnerM Wrote: (06-06-2022, 08:37 AM)ken-do-nim Wrote: (06-06-2022, 07:05 AM)fenders53 Wrote: Top retailers by decade is an interesting list. Sears and K-Mart gone. It's one flaw I see in the plan of 40 years of DGI, then keep them all through your retirement. You'll be adjusting because half your picks will be mediocre before you retire. I wouldn't advise a 20yr old build a position in XOM, T, GE. All of those looked good when I started.
Speaking of which, I'd like to get back into TGT now that it dropped to a nice price, but yeah, I know in 20 years it probably won't be as relevant. Retail is tough, unless you have a specific niche like Home Depot or Sherwin Williams.
You have to add DG to that list
In retail its LOW, HD, SHW, DG, WMT, ULTA, TJX and TGT.
The rest you cant bet on long term or to give you year in and year out results.
And TGT isn't going anywhere. No one will be able to duplicate what they do. Even in 20 years they will still be a around.
KMART we all knew would fail. Sears was the only player back in the 70 and 80's and then came the WalMarts and Targets and Amazon of the world.
Swap WMT with COST and add TSCO and I like your list.
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I was referring to the K-Mart that existed before you guys were born. They looked quite investable until WMT showed up. K-Mart was strong for maybe 10 years, then spent 30 in the irrelevant stage. That was a slow death. Retail is competitive period. I will always keep an eye on them.
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06-06-2022, 05:51 PM
(This post was last modified: 06-06-2022, 05:55 PM by rayray.)
Sears Catalog
They had and did everything, you could even order a house!! It was a small house, a metal kit like an erector set, there’s a few still around in my area—I believe they had other types of homes too you’d be able to order.
Sears—they were Amazon before there was even a Amazon.
There’s a interview with Bezos, one of those programs I forget, he brought this up, that a company only lasts so long—and the interviewer said , so one day there won’t be a Amazon?? Bezos responded with. A most likely, some day no then added I hope so….then smiled
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(06-06-2022, 05:51 PM)rayray Wrote: Sears Catalog
They had and did everything, you could even order a house!! It was a small house, a metal kit like an erector set, there’s a few still around in my area—I believe they had other types of homes too you’d be able to order.
Sears—they were Amazon before there was even a Amazon.
There’s a interview with Bezos, one of those programs I forget, he brought this up, that a company only lasts so long—and the interviewer said , so one day there won’t be a Amazon?? Bezos responded with. A most likely, some day no then added I hope so….then smiled
I loved Sears. It was a success story. I read an article the other day. Roebuck was bought out early for peanuts. He actually worked at the store years later and it wasn't an executive job.
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