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.

One of the many reasons for the success of the company is their ability to change a negative to a positive. An example of this is the secret formula in Coca-Cola has sugar in it, during the World War years the ability to gain access to sugar was restricted by the government. The lobbyist were pounding on the doors of the government or lobbying behind the scenes, the company gave in gracefully when the cause was lost and then the company associated the product with the highest national interest. For example, the press releases of the day, said it was a privilege for the company to sacrifice its sugar to the American fighting man. The statement is half right for the company and all right to gain goodwill among the public.

Linking to dividend paying stocks, every company does lobbying with the government, most of the time it is to ensure the government does not interfere in the business too much. For a large institution what sounds like a small amount, ends up with a large bill to pay. For a company to have very goodwill with its customers, what happens when the company loses one of the battles is the important thing. All companies lobby for their interests, the ones that seemingly know how to compromise are the long term winners.

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