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Old 03-14-2013, 04:05 PM   #43
Rhumb
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Join Date: Apr 2007
Location: Virginia
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Quote:
Originally Posted by 217Bimmer View Post
ummm no. maybe for a mom and pop store, but multinational corporations are in existence to make money. they couldn't care less what products or services they produce as long as they are making a return. does warren buffet buy coke stock because he likes the refreshing taste of cola? hell no, he wants to make money, lots and lots of money.
I would disagree, I think your analysis is too narrow and limited in scope, scale and time; perhaps even a touch cynical.

Warren Buffet buys Coca Cola stock because he thinks they make the best product, cola in this instance, for which they receive money in the form of sales profits and that will eventually enrich his investment for that very reason.

So yes, in an extended sense, Warren Buffet does care that Coca Cola produces and sells and excellent product for if they didn't they wouldn't receive as much money and by extension, then neither would Warren. Again though, in the end, it does come down to Coca Cola producting the best product.

A firm that didn't care and wasn't discerning about what products they were investing in would soon go out of business for investing in inferior products where neither the manufacturer nor the investor would receive money. Ultimately there has to be some real value of a real high-quality product -- be it manufactured, intellectual, service or whatever -- undergirding the value of an investment, especially in the long term.

Lacking that real value, you get your bubble economy that some may be able to play to their advantage in the short term but will ultimately collapse, often ruinously, in the end (reference to 2008, the real estate bubble and the Great Recession.)

Last edited by Rhumb; 03-14-2013 at 04:05 PM.
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