If someone in your family had bought one share of Coca-Cola in 1919 at $40, the single share would be worth $102,000 in 1994 and if they had reinvested the dividends, the value to the shareholder would be over $ 2 million. That single fact is worthy of ensuring the bulk of your investments in the market is in dividend paying companies. In a book by Frederick Allen called Secret Formula – How Brilliant Marketing and Relentless Salesmanship Made Coca-Cola the Best-Known Product in the World, HarperCollins, NY, 1994. Since the book was published, the values listed in the first line have increased as the profits of Coca-Cola have increased, it is still a highly recommended stock to buy and hold.

Shortly after Coca-Cola was being sold, the company embarked on a selling campaign. At the time, it was one the biggest companies in the advertising business. It gave away millions of items including school supplies, clocks, lighters, trays, Japanese fans, tiffany-styled lampshades all marked with the Coca-Cola name. The idea was to make the drink part of everyone’s life or be part of the national culture. The company was the biggest advertiser on billboards and painted over 20,000 barns around the US, with the idea where people go they should be part of Coca-Cola. If the drink is part of people’s lives then they will order it by name. When the automobile was invented, the company ensured the driving public was served well.

Linking to dividend paying stocks, there was a large upfront payments for the advertising, but combined with a legal department which vigorously fought off similar named companies, Coca-Cola was able to prevail. Part of the reason why they prevailed was the company provided the raw materials (the syrup), the quality assurance (sent out its own inspectors) for independent franchise holders (bottlers) to sell the public. In many ways you can think of successful franchising companies. The company used franchising to save money and because the owner did not recognize the money that was to be made in doing it yourself.

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