Donald Keough a former President of Coca Cola wrote a book called the 10 Commandments for Business Failure, Portfolio Books, 2008. The numbers are correct in 2008 as well they will be in 3008. The first 5 commands are

1. Quit Taking Risks
2. Be Inflexible
3. Isolate Yourself
4. Assume Infallibility
5. Play the Game Close to the Foul Line

Each of the above and part two tomorrow are designed to ensure you do all the things you wanted to do when you were starting out. Although owning dividend producing stocks suggests you want the status quo, it does not mean the status quo will remain just because you want it to. Things change and so do the basic assumptions – in the world of Coca-Cola the 6 oz bottle was a blessing and a curse. It was successful and people began to believe the reason the company was successful was the bottle. When Pepsi introduced the larger containers you see in the grocery store, it was a revolution and something it took Coke a great deal of time to adjust to. When they finally adjusted, many of the long standing beliefs they had were changed – from a personal stand point – it was the drink, not the bottle. Coca-Cola is back on top, but it has gone and will continue to go through a variety off trials and tribulations. Mr. Keough talks about the bottling divisions, when they were set up the regions was where a horse and carriage could deliver. Did that apply in the 1950’s, 70’s? If you owned a franchise would you want to give it up? Eventually the issue was sorted out, but the concern is always what is the underlying assumptions of the business? are they still relevant? what would need to be changed? As dividend holders, we have to ask the questions to ensure the dividend is safe.

There are more questions than answers, till the next time – to raising questions.