4 Horsemen of Tech (retired)

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In the early 2000's, the 4 Horsemen of Tech (listed below) were monsters from the mid-1990's up until the dotcom bubble.

Microsoft $MSFT (all-time high near $60)
Intel $INTC (all-time high near $76)
Dell $DELL (all-time high near $60)
Cisco $CSCO (all-time high near $82)


In the aftermath of the dotcom bubble, these stocks have gone...nowhere (yes, I spilled the beans).
If you bought and held an equally-weighted basket of MSFT, INTC, DELL, CSCO, then your returns (excluding dividend) would be terrible regardless of your purchase date.
BOUGHT ON : RETURN : BASKETEnd of 2001Q1 : -18.2% : $95.22End of 2002Q1 : -24.3% : $102.93End of 2003Q1 :   -4.2% : $81.28End of 2004Q1 : -28.9% : $119.57End of 2005Q1 : -25.2% : $104.13End of 2006Q1 : -21.4% : $99.13End of 2007Q1 : -18.7% : $95.80End of 2008Q1 : -18.1% : $95.14End of 2009Q1 : +32.4% : $58.84 (end of the world was a good buying opportunity)End of 2010Q1 : -16.2% : $92.97End of 2011Q1 :       0% : $77.88
End of 2001Q1 : MSFT at 27.4062, INTC at 26.0625, DELL at 25.8125, CSCO at 15.9375

End of 2011Q1 : MSFT at 25.53, INTC at 20.38, DELL at 14.68, CSCO at 17.29
Granted, if you bought and held from End of 2001Q1, you would have netted $9.14 of dividends in that 10-year span.  That said, the Original 4 Horsemen of Tech have been laggards (and have been replaced by AMZN, AAPL, GOOG, ORCL/RIMM...sorry I refuse to elevate NFLX or PCLN to this level yet).
Four Takeaways1. "Buy and Hold" can be dangerous as an investor.  Take some money off the table and reallocate it.
2. Very important and successful companies may not be good long-term investments...the same can go for career politicians;)
3. Govt regulations/charges (anti-trust, etc.) can be the death-knell to stock appreciation.  The bigger you are, the bigger the target is on your back.  (Run a search on each company with 'antitrust' in the search phrase...and spend decades reading the results).
4. A Glorified Label can be a sign of a top in hot stocks.  Usually, we find out people are amazing after they've succeeded...the same can go for stocks.

Debt for Equity?

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Just thought of something that would never happen.  What if the US Federal Govt did a debt-for-equity trade with shareholders of publicly-traded companies?  (Yes, I know shareholders aren't the real creditors, but just trying to have some fun here).

According to the US Debt Clock , the US National Debt stands at approximately $14,279.5 billion (as of 10:12PM Chicago-time).  What publicly-traded US companies could be bought for this pretty penny?

1. Exxon Mobil (XOM) $424B
2. Apple (AAPL) $312B
3. Chevron (CVX) $220B
4. Microsoft (MSFT) $217B
5. General Electric (GE) $216B
6. IBM (IBM) $200B
7. JP Morgan (JPM) $186B
8. Walmart (WMT) $184B
9. Google (GOOG) $183B
10. AT&T (T) $182B
11. Procter & Gamble (PG) $173B
12. Oracle (ORCL) $172B
13. Wells Fargo (WFC) $169B
14. Johnson & Johnson (JNJ) $164B
15. Coca-Cola (KO) $155B
16. Bank of America (BAC) $136B
17. Citigroup(C) $130B
18. Schlumberger (SLB) $126B
19. Philip Morris International (PM) $117B
20. ConocoPhillips (COP) $117B
21. Verizon (VZ) $108B
22. Intel (INTC) $106B
23. Pepsico (PEP) $105B
24. Merck (MRK) $102B
25. Cisco (CSCO) $95B
26. Hewlett-Packard (HPQ) $88B
27. Berkshire-Hathaway (BRKA) $87B
28. Qualcomm (QCOM) $86B
29. Amazon (AMZN) $84B
30. Goldman Sachs (GS) $83B
GRAND TOTAL Market Cap of 30 Companies = $4,727 Billion (only)

Basically, you could buy 30 very large companies THREE-times-over with the entire US National Debt.  (Of course, some of these companies have debt, but I can ignore that since this is a semi-pointless exercise).  The point is that the US Debt is uber-grando-giga-big...and it's a problem that needs to be resolved.

SodaStream vs. Coke trade-off

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The Sodastream "fad" seems to be catching on.  It's butting heads with the established (juggernaut) soda-makers, Coca-Cola and Pepsi.  I thought it would be fun to run a simple break-even analysis.

The analysis assumes the purchase of SodaStream's "Genesis Home Soda Maker" w/starter kit (includes 1x60L carbonator, 2-carbonating bottles, 12x1L sodamix).  After the starter kit is consumed, the user would have to purchase 1x60L carbonators and 1x12L sodamix packs.  The SodaStream option was compared to your standard 1-Liter Coke bottles.


Assumptions:
This analysis does not factor in the following 1) nutritional or environmental benefits/detriments for either product 2) water, electrical, wastage or replacement costs using the SodaStream unit 3) disposal or storage costs using the Coke bottles 4) opportunity or transportation costs associated with either option.

Unit to buy	Liters	Price	Price/L
Carbonator	60	$10	$0.167
Sodamix	12	$5	$0.417
Coke Bottle	1	$2	$2.000

Conclusion:
The SodaStream user would break-even around the 60th Liter of soda based on the table below.  After the 129th Liter, you could buy another maker for your friend with your savings!

However, if you bought 2L Coke Bottles for $2 each, then the Sodastream user would break-even around the 200th Liter.  That's a lot of soda to drink...although some studies show that males, between the ages of 12-29 years,  drink almost 2 liters a day.

Table:
(Key: L# = Liter, M = Maker, B = Bottle, C = Carbonator, P = Pack, $ = Cumulative Dollars)

L#	M	B	B	C	P	$	Coke	$	Diff
0	99	0	0	-	-	99	2	2	(97)
1	0	0	0	-	-	99	2	4	(95)
2	0	0	0	-	-	99	2	6	(93)
3	0	0	0	-	-	99	2	8	(91)
4	0	0	0	-	-	99	2	10	(89)
5	0	0	0	-	-	99	2	12	(87)
6	0	0	0	-	-	99	2	14	(85)
7	0	0	0	-	-	99	2	16	(83)
8	0	0	0	-	-	99	2	18	(81)
9	0	0	0	-	-	99	2	20	(79)
10	0	0	0	-	-	99	2	22	(77)
11	0	0	0	-	-	99	2	24	(75)
12	0	0	0	-	0.42	99	2	26	(73)
13	0	0	0	-	0.42	100	2	28	(72)
14	0	0	0	-	0.42	100	2	30	(70)
15	0	0	0	-	0.42	101	2	32	(69)
16	0	0	0	-	0.42	101	2	34	(67)
17	0	0	0	-	0.42	102	2	36	(66)
18	0	0	0	-	0.42	102	2	38	(64)
19	0	0	0	-	0.42	102	2	40	(62)
20	0	0	0	-	0.42	103	2	42	(61)
21	0	0	0	-	0.42	103	2	44	(59)
22	0	0	0	-	0.42	104	2	46	(58)
23	0	0	0	-	0.42	104	2	48	(56)
24	0	0	0	-	0.42	104	2	50	(54)
25	0	0	0	-	0.42	105	2	52	(53)
26	0	0	0	-	0.42	105	2	54	(51)
27	0	0	0	-	0.42	106	2	56	(50)
28	0	0	0	-	0.42	106	2	58	(48)
29	0	0	0	-	0.42	107	2	60	(47)
30	0	0	0	-	0.42	107	2	62	(45)
31	0	0	0	-	0.42	107	2	64	(43)
32	0	0	0	-	0.42	108	2	66	(42)
33	0	0	0	-	0.42	108	2	68	(40)
34	0	0	0	-	0.42	109	2	70	(39)
35	0	0	0	-	0.42	109	2	72	(37)
36	0	0	0	-	0.42	109	2	74	(35)
37	0	0	0	-	0.42	110	2	76	(34)
38	0	0	0	-	0.42	110	2	78	(32)
39	0	0	0	-	0.42	111	2	80	(31)
40	0	0	0	-	0.42	111	2	82	(29)
41	0	0	0	-	0.42	112	2	84	(28)
42	0	0	0	-	0.42	112	2	86	(26)
43	0	0	0	-	0.42	112	2	88	(24)
44	0	0	0	-	0.42	113	2	90	(23)
45	0	0	0	-	0.42	113	2	92	(21)
46	0	0	0	-	0.42	114	2	94	(20)
47	0	0	0	-	0.42	114	2	96	(18)
48	0	0	0	-	0.42	114	2	98	(16)
49	0	0	0	-	0.42	115	2	100	(15)
50	0	0	0	-	0.42	115	2	102	(13)
51	0	0	0	-	0.42	116	2	104	(12)
52	0	0	0	-	0.42	116	2	106	(10)
53	0	0	0	-	0.42	117	2	108	(9)
54	0	0	0	-	0.42	117	2	110	(7)
55	0	0	0	-	0.42	117	2	112	(5)
56	0	0	0	-	0.42	118	2	114	(4)
57	0	0	0	-	0.42	118	2	116	(2)
58	0	0	0	-	0.42	119	2	118	(1)
59	0	0	0	-	0.42	119	2	120	1
60	0	0	0	-	0.42	119	2	122	3
61	0	0	0	0.17	0.42	120	2	124	4
62	0	0	0	0.17	0.42	121	2	126	5
63	0	0	0	0.17	0.42	121	2	128	7
64	0	0	0	0.17	0.42	122	2	130	8
65	0	0	0	0.17	0.42	122	2	132	10
66	0	0	0	0.17	0.42	123	2	134	11
67	0	0	0	0.17	0.42	124	2	136	12
68	0	0	0	0.17	0.42	124	2	138	14
69	0	0	0	0.17	0.42	125	2	140	15
70	0	0	0	0.17	0.42	125	2	142	17
71	0	0	0	0.17	0.42	126	2	144	18
72	0	0	0	0.17	0.42	126	2	146	20
73	0	0	0	0.17	0.42	127	2	148	21
74	0	0	0	0.17	0.42	128	2	150	22
75	0	0	0	0.17	0.42	128	2	152	24
76	0	0	0	0.17	0.42	129	2	154	25
77	0	0	0	0.17	0.42	129	2	156	27
78	0	0	0	0.17	0.42	130	2	158	28
79	0	0	0	0.17	0.42	131	2	160	29
80	0	0	0	0.17	0.42	131	2	162	31
81	0	0	0	0.17	0.42	132	2	164	32
82	0	0	0	0.17	0.42	132	2	166	34
83	0	0	0	0.17	0.42	133	2	168	35
84	0	0	0	0.17	0.42	133	2	170	37
85	0	0	0	0.17	0.42	134	2	172	38
86	0	0	0	0.17	0.42	135	2	174	39
87	0	0	0	0.17	0.42	135	2	176	41
88	0	0	0	0.17	0.42	136	2	178	42
89	0	0	0	0.17	0.42	136	2	180	44
90	0	0	0	0.17	0.42	137	2	182	45
91	0	0	0	0.17	0.42	138	2	184	46
92	0	0	0	0.17	0.42	138	2	186	48
93	0	0	0	0.17	0.42	139	2	188	49
94	0	0	0	0.17	0.42	139	2	190	51
95	0	0	0	0.17	0.42	140	2	192	52
96	0	0	0	0.17	0.42	140	2	194	54
97	0	0	0	0.17	0.42	141	2	196	55
98	0	0	0	0.17	0.42	142	2	198	56
99	0	0	0	0.17	0.42	142	2	200	58
100	0	0	0	0.17	0.42	143	2	202	59
101	0	0	0	0.17	0.42	143	2	204	61
102	0	0	0	0.17	0.42	144	2	206	62
103	0	0	0	0.17	0.42	145	2	208	63
104	0	0	0	0.17	0.42	145	2	210	65
105	0	0	0	0.17	0.42	146	2	212	66
106	0	0	0	0.17	0.42	146	2	214	68
107	0	0	0	0.17	0.42	147	2	216	69
108	0	0	0	0.17	0.42	147	2	218	71
109	0	0	0	0.17	0.42	148	2	220	72
110	0	0	0	0.17	0.42	149	2	222	73
111	0	0	0	0.17	0.42	149	2	224	75
112	0	0	0	0.17	0.42	150	2	226	76
113	0	0	0	0.17	0.42	150	2	228	78
114	0	0	0	0.17	0.42	151	2	230	79
115	0	0	0	0.17	0.42	152	2	232	80
116	0	0	0	0.17	0.42	152	2	234	82
117	0	0	0	0.17	0.42	153	2	236	83
118	0	0	0	0.17	0.42	153	2	238	85
119	0	0	0	0.17	0.42	154	2	240	86
120	0	0	0	0.17	0.42	154	2	242	88
121	0	0	0	0.17	0.42	155	2	244	89
122	0	0	0	0.17	0.42	156	2	246	90
123	0	0	0	0.17	0.42	156	2	248	92
124	0	0	0	0.17	0.42	157	2	250	93
125	0	0	0	0.17	0.42	157	2	252	95
126	0	0	0	0.17	0.42	158	2	254	96
127	0	0	0	0.17	0.42	159	2	256	97
128	0	0	0	0.17	0.42	159	2	258	99
129	0	0	0	0.17	0.42	160	2	260	100

SODA closed at $31.06 on 12/2/2011