Back to Basics – comparing companies

Okay – we’re taking a break from our adventures in conference-land to look at a revealing comparison chart that Yahoo! makes easy.

For a variety of reasons, we sold our Johnson & Johnson (JNJ) stock in Dec. 2008. This was a big company and a component of the Dow Jones Industrial Average. We got mad at the company for allowing anti-depressants to be prescribed for kids and teens. That was bad, but the last straw came when news came out that some JNJ medications had been contaminated.

At first blush, this looks like a pretty bad trade. In addition to a huge capital gains tax we had to pay, the current price of about $66 is higher than the price we sold at – $58. Dividend return is a bit higher, too, at 3.4% now compared to 3.2% then.

HOWEVER! Just look at this — we did get stock in two other drug companies – neither on the DJIA. Sorry I can’t show you the chart comparing the price action on all three. You’ll need to click on this link.

So, we guess those weren’t such bad trades after all. Dividends aren’t too shabby, either. BMY’s dividend pays 4.6%, NVS dividend is 3.3%. This is not high finance. We didn’t do any complicated financial analysis. IFO didn’t study the CEO, as she still strongly recommends. Her information came from the very public, old-news style pages of the Wall Street Journal, plus various items listed on the Yahoo!Finance pages.

IOW, any idiot can do this.



About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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