SunTrust Sells Coca-cola Stake After 93 Years...

[Parsad]

...collects 2 million percent return.  Cheers!

 

http://www.forbes.com/sites/steveschaefer/2012/09/07/suntrust-dumps-93-year-old-stake-in-coca-cola-collects-a-tidy-two-million-percent-return/?partner=yahootix

[Liberty]

I wonder how much that is in purchasing power after adjusting for inflation. Anyone has an easy way to do the math?

 

Still sounds like a good deal, but probably a bit less impressive :)

[CONeal]

$100,000.00 in 1919 had the same buying power as $1,367,709.09 in 2012.

Annual inflation over this period was 2.85%.

 

Via dollartimes

[twacowfca]

$100,000.00 in 1919 had the same buying power as $1,367,709.09 in 2012.

Annual inflation over this period was 2.85%.

 

Via dollartimes

 

The 20,000 • gain in price doesn't include dividends received.  The dividends may have cancelled out the inflation of the dollar.  A guesstimate of inflation adjusted returns would be about 12%+/annum compounded.  That's a lot better than the bank did over the years. 

 

Yet Sun Trust is selling their Coke stock to "reduce risk" in the Alice in Wonderland world of bank regulators.  I suppose this will enable them to carry additional less risky assets like the ones that blew up in 2008.

 

Interestingly, one could have bought Coke for a small fraction of their initial placement price a couple of years later when inflation killed them on the price of sugar because they didn't have a cost escalator in their contract with their bottler.

 

Factoid:  Warren would sometimes buy Trust Company of GA stock instead of Coke stock when the price of the bank stock was attractive as they carried their hidden treasure of Coke stock on their books at cost.

 

:)

[shalab]

These guys were selling their coke stock before the financial crisis. So - they are continuing their old plan now...

 

The sti preferred were a great deal in 2009/2010.

[Liberty]

 

Factoid:  Warren would sometimes buy Trust Company of GA stock instead of Coke stock when the price of the bank stock was attractive as they carried their hidden treasure of Coke stock on their books at cost.

 

:)

 

That's interesting, I hadn't heard that one before. Thanks for sharing :)