Listening to the radio a radio program by Terry O’Reilly called Under the Influence was heard. The program is about the advertising industry, brands in the marketplace and as a regular consumer it is interesting to know what the industry is trying to do. The show on the radio featured brands that have existed for hundreds of years. One such brand is a beer called Stella Artois. If you order the beer it will be priced as a premium beer. The company has existed for over 600 years and Mr. O’Reilly said the company wanted to enlarge its market and tried distribution at supermarkets. People shop there and they could easily pick up beer which is the good part. What they did not put in the contract was supermarkets use items as loss leaders to ensure people come into the supermarket. The price was considered cheap, and binge drinkers started to drink it and creating chaos on the streets, particularly after soccer games. The TV crews coverage of the atmosphere and people could see the rowdies  were drinking Stella Artois. This caused their base premium buyers not buying the product and what should the company do?  The company after 600 years of positioning itself as a premium beer, dropped the supermarket distribution deal and changed its advertising agency to go back to the element of quality beer or what it is now. The moral of the story is no matter how old the brand is, troubles can appear for what was a simple idea (increase distribution).

Linking to dividend paying stocks, even though one would think after 600 years of promoting the beer as a quality product very few things could go wrong, they can. Outside of general cycles in the economy, quality of management, and normal people’s lifestyle there are a host of elements which can go wrong and since 80% of companies fail in their first 18 months, much does go wrong. For your profitable stocks which pay a dividend, things will happen as an investor you may prefer few things to happen but challenges exist. See how the company is meeting their challenges and if you do not believe, management has their fingers on the pace of the business, ensure you have alternatives to switch to.

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