Milk Your Profits

  • The Intelligent Investor milks the profits of a good business and doesn't sell unless the business has gone bad.

"Milk your profits" mean to never sell a highly profitable business.

Owning stock in a highly profitable company give us the following:

  • Increasing Dividend Yield
  • Compounding Interest
  • Rising Stock Price
  • All of the above for a very long time

 

Example 1: Coca-Cola

From 1988 to 1994, Warren Buffett accumulated stock in Coca-Cola for $1.30 Billion. As of 2014, his investment is worth $17 Billion. A 1,200% return in his original investment.

 

Initial Investment in 1994 Value as of Year 2014 Return on Original Investment
$1.30 Billion $17 Billion 1,200%

 

Coca-Cola's Stock Chart:
Stock Chart of Coca-Cola
Source: Thinkorswim by TDAmeritrade

 

Example 2: Wells Fargo

Warren Buffett's initial investment in Wells Fargo was in 1990. He invested $289 Million in the company. In 2014, the value of his investment ballooned to around $16 Billion. His return on his original investment is over 5,400%.

 

Initial Investment in 1990 Value as of Year 2014 Return on Original Investment
$289 Million $16 Billion 5,400%

 

Wells Fargo's Stock Chart:
Stock Chart of Wells Fargo
Source: Thinkorswim by TDAmeritrade

 

Example 3: American Express

From 1963 to 1964, American Express' stock price plunged from $67 per share to $37 per share. Knowing it was a highly profitable business, Warren Buffett started accumulating its stock. He had invested around $20 Million at that time. As of December 2014, the value of his investment has skyrocketed to the moon at a value of close to $2 Billion. That equates to almost a 10,000% return on his original investment.

 

Initial Investment in 1964 Value as of Year 2014 Return on Original Investment
$20 Million $2 Billion 10,000%

 

American Express' Stock Chart:Stock Chart of American Express
Source: Thinkorswim by TDAmeritrade

 

My Financial Analysis of Stocks

  • We are still Accumulating our Favorite Value Stock Paramount Global (PARA) For the past several months we are still accumulating shares in Paramount Global (PARA) formerly known as ViacomCBS. And we are glad that our research has been validated by Berkshire ...
    Posted May 23, 2022, 8:29 AM by Intelligent Investor
  • Archive: My Stock Holdings 2021 View My Analysis: My Stock Holdings 2021
    Posted May 4, 2022, 1:53 PM by Intelligent Investor
  • Archive: My Stock Research 2021 View My Analysis: My Stock Research 2021
    Posted Apr 30, 2022, 8:40 PM by Intelligent Investor
  • We Think the Bottom for this Mild Correction may have Happened this Past Thursday on February 24th We do not see a recession in the near horizon. The U.S. economy is still growing. The Federal Reserve is still accommodative. The only thing we see is people ...
    Posted Mar 2, 2022, 3:08 PM by Intelligent Investor
  • Our Plan is to Buy the Dips. Buy Whenever We See Red. We believe the geopolitical issue occurring in Ukraine will be short-lived. We also believe that amidst a high-inflationary environment, many U.S. Equities will prevail. We plan to ...
    Posted Feb 26, 2022, 11:04 PM by Intelligent Investor
  • Swapped Disney (DIS) for more Paramount Global (PARA) A couple of months ago, we sold most of our shares in Disney (DIS) in exchange for Paramount Global (PARA), formerly known as ViacomCBS (VIAC). Unfortunately for us, we had ...
    Posted Mar 2, 2022, 7:28 AM by Intelligent Investor
  • Archive: My Stock Holdings 2020 View My Analysis: My Stock Holdings 2020
    Posted Jan 23, 2022, 6:55 PM by Intelligent Investor
  • Archive: My Stock Research 2020 View My Analysis: My Stock Research 2020
    Posted Jan 23, 2022, 6:56 PM by Intelligent Investor
  • Buying the Dip in ViacomCBS (VIAC) and Sold Pfizer (PFE) A very big opportunity came today to buy ViacomCBS (VIAC) at a ridiculously low price. Unfortunately we had to sell Pfizer (PFE). Pfizer has been a big disappointment for us ...
    Posted Mar 29, 2021, 12:09 AM by Intelligent Investor
  • Accumulating ViacomCBS (VIAC) We believe there is a greater opportunity in ViacomCBS (VIAC). We have been accumulating the stock for the past year. Our analysis is a mere common sense. During the course ...
    Posted Jan 25, 2021, 5:25 PM by Intelligent Investor
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