Erich Sauer

Erich Sauer
Contributor since: 2011
I've seen news that S&P will be adding Post to the Mid Cap 400 index, of which Ralcorp is already a member, so unfortunately, no forced selling there.
Thanks for the positive feedback. I will definitely consider those as topics for future articles.
Thanks for the positive comments everyone! Much appreciated.
I did have to chuckle to myself when I was filling out the disclosure form. The research for this article was really the first close look I have taken at msft. I might look to open a position the next time the market takes a swing down.
I plan to hold my shares and continue reinvesting dividends (that answer probably won't change for 30-40 years), but will likely wait for a pullback before making any additional purchases.
Frank, thanks for the excellent article.
I actually considered that fact long and hard before buying the stock, and again before writing the article. I don't smoke, don't think anyone should smoke, and actively encourage smokers I do know to quit. But the fact remains that people smoke, and tobacco companies are highly profitable. I wrote the article solely on the investment merits of the company, and will leave the moral decisions to individual investors to make.
I very much appreciate the positive feedback, and I'm glad you liked the article!
I think your comments are right on the money. Investors outside the US definitely want to keep the fact that PM is an 80/20 company in mind. Your article on the subject does a great job of explaining it.
That is essentially the scenario I tried to outline in the article. The 1993 study I referenced found that stocks of spinoffs were more volatile than the market in their first three months of trading. In Joel Greenblatt's excellent book on special situation investing, "You Can Be a Stock Market Genius" he mentions that sometimes the initial selling pressure I outlined above can take a year to subside. What I recommend, if you are interested in any of the stocks of these new companies, is keeping a close eye on the stock and using the volatility to your advantage. I'm not talking about market timing, rather simply attempting to buy the stock when Mr. Market is offering it to you at an attractive valuation.
Brad - Thanks, I appreciate it. I'm very pleased that the response to the article has been positive, and I will definitely submit additional articles in the future.