The Rising Influence of Rising Affluence

[DewDiligence]

PG—This is getting to be a recurring story...

Agreed. After issuing a mea culpa and lowering guidance in May when reporting FY3Q12 results (#msg-75125839), it’s dismaying to see another reduction so soon.

My kneejerk response was that PG is a broken company that ought to be jettisoned from my portfolio, but on further reflection I decided to hold. Most big companies go through a funk from time to time—it happened to IBM, GE, UL, and even AAPL not so long ago. I’m confident that PG will get its margin problems under control in due course and the stock will justify being a core holding that benefits from The Global Demographic Tailwind. In the meantime, PG’s low very beta and plentiful dividend yield allows the stock to be treated as a bond proxy for asset-allocation purposes.