Replies to post #5102 on The Rising Influence of Rising Affluence

[DewDiligence]

Then there are the commodity companies who bend in the wind primarily because they don't have control of their product pricing. They should be a short-term investment when the times are right.

My view (see prologue of #msg-75569303) is that we’re still in a long-term uptrend for commodities because sharply increased demand for such materials as oil and iron ore are obligate components of the global population growth, increasing affluence, and migration from rural to urban areas that are expected to occur during the next couple of decades. I’m not smart enough to figure out when commodity prices are reaching a temporary summit, so I prefer to remain invested in a set of blue-chip commodity companies (e.g. BHP, VALE, CLF, Shell, XOM, CVX, HES) rather than trying to trade in and out of them.

p.s. Of the four companies you cited in #msg-76033014 as weak beneficiaries of The Global Demographic Tailwind based on historical data—HNZ, PG, ABT, and MON—none is a commodity company.

[DewDiligence]

Companies like CAT, Boeing, Sap, IBM or Microsoft are in a class of their own because of their size and competition.

I agree with your take on IBM, in which I know have a decent-sized position. I used to think that IBM’s quarterly numbers were too good to be believed insofar as the company produced quarter after quarter of robust profit growth on little or no increase in revenue. Eventually, I relented and acknowledged that IBM is indeed putting up great numbers because its business model and steam of annuity-like service revenues is unduly compelling, and the aggressive share buybacks are highly accretive to EPS.

p.s. I sold BA about nine months ago and haven’t looked back. I’ve never owned MSFT, although it might be tempting at some point.