Synopsis:
Tired of gambling away your savings on investments that don't pay off?
Buy Companies, Not Stocks. This simple phrase is the foundation of veteran consultant Jim Huguet's innovative approach to investing, a strategy that focuses on the lasting strengths of the companies you're investing in and yields great returns that consistently outperform the Dow Jones Industrial Average. Designed for investors who are fed up with the taxes they're paying on excessive trading, stressed out by the gambling mentality that predominates today's stock market, and eager for safe investments that pay off big in the long term, Great Companies, Great Returns provides the ideal strategy for peace of mind through bull and bear markets.
While other investment books tend to focus on mathematical formulas that ignore the companies themselves, the Great Company approach uniquely identifies the qualities to look for in a company--not just a stock--that make that company the best long-term investment. In Great Companies, Great Returns, Jim Huguet explains the twelve traits that separate Great Companies from the rest. After decades of working closely with the Fortune 500 and top CEOs as a consultant, Huguet used his valuable experience to research which companies were likely to give the best returns in order to invest his own money. The twelve key traits he discovered--which look at the business as a whole, not just the stock price--form the basis for his groundbreaking strategy.
The fourteen companies that make the cut, including such superstars as GE, Coca-Cola, and Johnson & Johnson, as well as some surprises like AIG and Medtronic, fulfill all twelve requirements, and form a perfect list of stocks that investors can use to create a Great Company portfolio. In fact, if this book had existed ten years ago, everyone who invested in the Great Company Portfolio would have beaten the Dow Jones Industrial Average by over 20 percent.
Filled with valuable, easy to access investment advice, including checklists for comparing your existing portfolio with the twelve-point Great Company system, stock performance and volatility charts, and detailed information on the fourteen companies, Great Companies, Great Returns shows readers how to sell off shaky holdings, add the great ones, and spot up-and-comers that might become tomorrow's Great Companies. It also features exclusive interviews with CEOs of Great Companies, including Jack Welch of GE, Alfred M. Zeien of Gillette, Maurice R. Greenberg of American International Group, and William C. Steere, Jr. of Pfizer, for the ultimate insider's perspective.
This proven investment strategy has consistently beaten the Dow Jones, and even outperformed Warren Buffet's portfolio of stocks. A simple strategy that beginners can understand and experts can learn from, the Great Companies approach to investing is one no serious investor can afford to be without.
How do you invest in the best stock? Pick the best companies.
As veteran consultant Jim Huguet's research has shown, most Wall Street money managers are buying stocks for the short term, not companies for the long term. It's one of the reasons that 88 percent of all domestic mutual funds failed to beat the S&P 500 index in 1998, while Jim's Great Companies portfolio consistently beats both the S&P 500 and the Dow Jones. But now, in Great Companies, Great Returns, every investor can learn the twelve traits that make a company great, and why Great Companies really do make Great Returns.
The Twelve Traits of All Great Companies:
Highly Regarded by Knowledgeable Experts
Publicly Traded
Headquartered in the United States
In Business at Least Fifty Years and Survived the Founder
Market Cap in Excess of $15 Billion
Global Company with at Least 40 Percent of Revenues/Profits from International Operations
Outstanding Shareholder Returns
Terrific Businesses
Protected by Strong Barriers--"The Moat Effect"
People Are the Company's Most Important Asset
Outstanding Management Team That Keeps the Company in "Prime"
Innovation Driven Company That Turns Changes into Opportunties
Review:
Great Companies, Great Returns shows that anyone can trounce the stock market over time just by investing in "the crown jewels of the best economic system on the globe." Jim Huguet builds a convincing case for accumulating a portfolio of stocks in American International Group, Bristol-Myers Squibb, Citigroup, Coca-Cola, Colgate-Palmolive, General Electric, Gillette, Johnson & Johnson, Medtronic, Merck, Merrill Lynch, Pfizer, Procter & Gamble, and Schering-Plough. "These Great Companies don't have just good quarters or years; they consistently have good decades. They are not just great American companies, they are companies that can compete with and win against any company anywhere in the world, and they do, day after day after day."
According to Huguet's research, anyone who invested equally in all these 14 stocks for the 10 years between December 31, 1988 and 1998 would have beaten the S&P 500 index by an amazing 56 percent. The results are nearly as impressive for the 20 years ending in 1998. Why do these blue chips perform so well? Huguet says they share important traits: they derive no less than 40 percent of revenues from international operations; and they have superior management, dependable earnings growth, outstanding shareholder returns, distinctive brands, and track records of at least 50 years. The author also provides the details of his investing style, along with interviews with CEOs John Welch of GE, Maurice Greenberg of AIG, Alfred Zeien of Gillette, and William Steere Jr. of Pfizer. An excellent book for people looking for a relatively simple and safe way to invest for the long term. --Dan Ring
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