Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Our business


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Posted by Rick Denney on May 07, 2003 at 14:28:43:

In Reply to: Re: Re: Re: Re: Re: Re: Re: Re: Re: Our business posted by Warren Buffet on May 07, 2003 at 13:24:04:

Buffet and Carl Icahn and others like them are part of the problem. Their strategy is to buy corporations, break them up, liquidate the parts that don't add to the stock price, pump up the parts that do, sell the now overpriced stock for as much as possible, and then move on. Companies that turn their profits into dividends instead of capital gains are anathema to him.

I'm much more interested in the opinions of CEO's of companies that actually make things and continue to do so for many years. But even then I keep my own counsel.

A good book to read on the subject: Good to Great. (Sorry, can't remember the author's name.) He picked companies that met very tough standards of growth, one of those standards being growth through growth and not through acquisition. They were measured by their ability to outperform the market by a factor of four for at least 15 years, or something like that. None of the corporate raider companies were on the list. The CEO's of those long-term success stories tended to be different sorts of people than the stereotype, with none of them being either movie-star CEOs or corporate raider types (of which Buffet is both).

Rick "who, contrary to characterizations, has neither love nor trust for corporate CEO's" Denney


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