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<blockquote data-quote="1995COBRA-R" data-source="post: 3882692" data-attributes="member: 9515"><p>Robert,</p><p>You are moving a bit over to macroeconomics (top-down economics). I concentrate on microeconomics (bottom-up). I also sense some concerns about how the American economy is changing from just that to a global economy. I'm just a little person trying to save for my retirement and have no control over those things (as if you didn't know that). I just try to play the cards that are dealt to me (rather than change decks).</p><p></p><p>I can explain an American company and how those profits go to shareholders (and to America in the form of taxes). I'll take Coca-Cola (although Home Depot would be easier; I own both and both are headquartered in Atlanta).</p><p></p><p>Coke (KO) sells more than 400 different beverage products all over the world. People all over the globe consume 1.3 billion KO produced beverages daily. Their biggest customer is North America (28%) with Latin America at 25%. Europe is next at 16%. Yes, some of the margins are left in the country that consumes the beverage (you have to pay the distributor in Paris as well as pay France a little in taxes). However, the profits still return to Atlanta. They pay federal taxes on those corporate taxes ($1.8B). The remaining profits ($4.87B) go to the stockholders in the from of dividends and retained earnings. So, KO does increase the GDP of France, but takes French Euro's out (the profits) and sends them to Atlanta. So, we buy oil from the Mideast but sell sugared water (and regular water, juices, diet drinks, etc) to France (and to the middle east).</p><p></p><p>I bought my first share of KO in 1980. Adjusted for splits and dividends that is a cost of $0.80/sh. I receive (today) $1.12 in annual dividends for those shares. So, I get back each year more in dividends than I originally paid for the stock (as adjusted). The shares closed yesterday at $44 ($43.20/sh in capital gains). Dividends and capital gains are taxed at lower rates than earned (or ordinary) income.</p><p></p><p>As I look at the balance sheet I see that KO owes $1.15B in debt. They also have $16.35B in retained earnings (see above). In other words they have $16in the bank for every $1 in debt. I like that.</p><p>--------</p><p></p><p>Macro thing.</p><p>That is our trade deficit. It's a problem (but without KO it would be worse). It is due to people buying foreign oil, foreign cars, and foreign made products (Sony TVs). </p><p></p><p>I live near the GM plant in N. Atlanta. It is closing. I have always been amazed by the parking lot there. Why does a worker whose job depends on an American product buy a foreign made car? :shrug: I guarantee you that if I worked for Ford; I would drive a Ford (heck, I drive Ford's anyway--five of them---oh, and a Cheby <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite8" alt=":D" title="Big Grin :D" loading="lazy" data-shortname=":D" />).</p><p>-------------</p><p>Macro:</p><p>The government has a budget deficit. It doesn't worry me that much. Our budget deficit is 4.5% of GDP. That is manageable. What isn't manageable is the government's unfunded liabilities (S.S. and Medicare liabilities). How can you help yourself? Vote for politicians that want to provide a solution (and prepare for your own retirement funds).</p><p>----</p><p>Macro:</p><p>The biggest torn in my hide is the American savings rate. People are spending everything they make. I have no solution except that I taught my kid to save at least 10% of his income. I have taught him to invest in American companies that will allow him a future stream of income (which also helps out trade deficit and avoidance of his budget deficit). I can't do anything about other people's kids (or them).</p><p></p><p>OK, wake up; I'm done <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite8" alt=":D" title="Big Grin :D" loading="lazy" data-shortname=":D" /></p><p>Doc</p></blockquote><p></p>
[QUOTE="1995COBRA-R, post: 3882692, member: 9515"] Robert, You are moving a bit over to macroeconomics (top-down economics). I concentrate on microeconomics (bottom-up). I also sense some concerns about how the American economy is changing from just that to a global economy. I'm just a little person trying to save for my retirement and have no control over those things (as if you didn't know that). I just try to play the cards that are dealt to me (rather than change decks). I can explain an American company and how those profits go to shareholders (and to America in the form of taxes). I'll take Coca-Cola (although Home Depot would be easier; I own both and both are headquartered in Atlanta). Coke (KO) sells more than 400 different beverage products all over the world. People all over the globe consume 1.3 billion KO produced beverages daily. Their biggest customer is North America (28%) with Latin America at 25%. Europe is next at 16%. Yes, some of the margins are left in the country that consumes the beverage (you have to pay the distributor in Paris as well as pay France a little in taxes). However, the profits still return to Atlanta. They pay federal taxes on those corporate taxes ($1.8B). The remaining profits ($4.87B) go to the stockholders in the from of dividends and retained earnings. So, KO does increase the GDP of France, but takes French Euro's out (the profits) and sends them to Atlanta. So, we buy oil from the Mideast but sell sugared water (and regular water, juices, diet drinks, etc) to France (and to the middle east). I bought my first share of KO in 1980. Adjusted for splits and dividends that is a cost of $0.80/sh. I receive (today) $1.12 in annual dividends for those shares. So, I get back each year more in dividends than I originally paid for the stock (as adjusted). The shares closed yesterday at $44 ($43.20/sh in capital gains). Dividends and capital gains are taxed at lower rates than earned (or ordinary) income. As I look at the balance sheet I see that KO owes $1.15B in debt. They also have $16.35B in retained earnings (see above). In other words they have $16in the bank for every $1 in debt. I like that. -------- Macro thing. That is our trade deficit. It's a problem (but without KO it would be worse). It is due to people buying foreign oil, foreign cars, and foreign made products (Sony TVs). I live near the GM plant in N. Atlanta. It is closing. I have always been amazed by the parking lot there. Why does a worker whose job depends on an American product buy a foreign made car? :shrug: I guarantee you that if I worked for Ford; I would drive a Ford (heck, I drive Ford's anyway--five of them---oh, and a Cheby :D). ------------- Macro: The government has a budget deficit. It doesn't worry me that much. Our budget deficit is 4.5% of GDP. That is manageable. What isn't manageable is the government's unfunded liabilities (S.S. and Medicare liabilities). How can you help yourself? Vote for politicians that want to provide a solution (and prepare for your own retirement funds). ---- Macro: The biggest torn in my hide is the American savings rate. People are spending everything they make. I have no solution except that I taught my kid to save at least 10% of his income. I have taught him to invest in American companies that will allow him a future stream of income (which also helps out trade deficit and avoidance of his budget deficit). I can't do anything about other people's kids (or them). OK, wake up; I'm done :D Doc [/QUOTE]
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