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Have you ever seen company shares act like rabbits??

Posted by joyfulguy (My Page) on
Tue, Jan 8, 08 at 3:12

Greetings, everyone.

Let's say that your uncle, as a young man, after taking his first employment position forty years ago in 1968, saved up some money and bought 100 shares of JNJ on January 2, 1970. I have no idea of the price that he would have paid per share, or of the amount of dividend that each share paid annually at that time.

But I think that you would find it interesting to visit a major branch of your public library and look up those two amounts - N.Y.Times, Wall Street Journal, Barrons.

In the beginning, some of your family kidded him about having gone without a car for a while, then having bought an old clunker ... while putting some valuable money into those pieces of paper called stock certificates.

Later that year, about May, they did a little laughing on the other side of their faces when, for each share that he owned, JNJ sent two more shares for each one that he owned - so that then he had 300 shares. Each share, of course, starting out at about 1/3 the value of each share just before the split.

Not much more was said over the years, but some heard rumours that in 1981 (again, in May, as a matter of fact) he received two more shares for each that he owned - then he had 900 shares in all.

Uncle died last month, and when his executor and the family looked through his papers, they found a surprisingly large number of share certificates of JNJ (assuming that he had not sold any, or bought any more).

Here's your assignment for homework tonight: find out how many shares there were. And the price at which each share could be sold now.

You may have your own method of seeking that information, but if you don't, here's a way.

Go to Yahoo.com. Part way down the left side of screen, click on "Finance".

Near top left of the "Finance" page, there's a box labelled, "Get quotes".

Enter "JNJ" into that space, click on "Go".

You will be taken to a page showing a good deal of information about current share price of JNJ.

If you look at the lower right, you'll see a chart that shows how the share price moved through the hours of trading today (Mon.-Fri.).

Under the chart you can see letters and numbers that allow you to bring up charts of the share price movement for 1 week, 3 or 6 months, or 1 - 5 years or so.

If you click on some of those items, you can see charts covering variation in JNJ stock price over those periods - and you can choose bar charts rather than line charts, if you choose. You will also see info under the chart that you can use to calculate how many shares Uncle owned at the time of his death.

There were several 2:1 stock splits.

While you're at the library, should you choose to check the share prices annually, or even quarterly, and the rate of dividend that each share paid, you might find it interesting.

I'm fairly sure that I read a while ago that JNJ has increased the rate of dividend that they pay annually for the past 40 years. But I don't follow that stock closely.

Please note this caution: I have referred to this situation as a means of illustration.

I am not suggesting that you should or should not buy JNJ shares - now or at any other time. I don't own any.

Good wishes for various nice surprises for you and yours through this New Year.

ole joyful


Follow-Up Postings:

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RE: Have you ever seen company shares act like rabbits??

I spent much of the day yesterday watching the "charts". I bought a stock early Monday and watched it go down all day long. lol It had been one which had over 800% increase in the past year. I'm hoping it will make a comeback. I'll check out JNJ. Thanks, Ole Joyful
Lu


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RE: It's Going UP!!

I know there's a long day ahead of us, but so far, it's steadily going up. :-)
I'll let you know at the end of the day what it did.
Haven't had a chance to check out JNJ yet, but I will.
Lu


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RE: Have you ever seen company shares act like rabbits??

The market always goes up and down. A few of mine aren't doing so well this week, either, but they'll bounce back eventually.

As to stocks multiplying? I bought 26 shares of a specific stock about 15 years ago. Without adding any to it, I now have over 130 in that company, and some shares (I really forget how many) in another company that were just given to me as the result of some sort of sale/agreement between the 2. And the total value is about 10 times what I paid for them originally.

I'm waiting daily to hear that DH's from his employer are splitting--they used to be in the mid-20's, but now are about $100/share.

Hopefully, with good choices and solid management behind them, your stocks WILL increase in value and number over the years.


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RE: Have you ever seen company shares act like rabbits??

Always interested in this type of info.

ivamae


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RE: Have you ever seen company shares act like rabbits??

I also had stocks split several times. When i was a teenager i worked at McD's. I had a really good relationship with my boss. For the longest time he would nag me about buying McD stock. He would say "One of these days this world will see a depression like your GG talks about. And where are they all going to eat? It aint Red Lobster!" As silly as he was he made sense. So i bought McD's stock. It split several times but after 9/11 it has not split at all. Im hopeful it will soon.


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RE: Have you ever seen company shares act like rabbits??

Ok...I'm up to the challenge.

Here's your assignment for homework tonight: find out how many shares there were. And the price at which each share could be sold now.

Initial investment
100 share at $180.00+$18,000.00.

After numerous splits, some of them being 3/1 and others being 2/1, there would now be 14,200 shares...right?

Each share was selling a few minutes ago for $67.31.
If one sold all the shares they would be worth $956,086.00 b4 taxes are paid...Zowie...nearly a million smakaroos!... right?

If the shares are not sold they would pay a dividend of $1.66 per share this year. The dividends earned for the year would be $23,572.00 ....right?

I just tallied this one time and did not double check things.

Was I right on all counts?

Its very interesting to see how well JNJ (Johnson and Johnson) has done over the years. I held a little of it for a little while when I was in a small investment club.

Sue...who frequents Yahoo Finance along with other finance sites


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RE: Have you ever seen company shares act like rabbits??

I was looking over your info about Yahoo finance charts. I see they have US, Europe, etc. Do they have one for the TSE. If so, I would like to be able to locate it. If not, is there another similar site with that info. There is great info there for the others.

Thanks

ivamae


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RE: Have you ever seen company shares act like rabbits??

Do they have one for the TSE.

According to Wikipedia, TSE can refer to any of the below:
# Taiwan Stock Exchange
# Tallinn Stock Exchange
# Tokyo Stock Exchange
# Toronto Stock Exchange, which has since changed its abbreviation to TSX

It looks like one has to login b4 using the site, so I don't know how it might compare to Yahoo Finance.

Sue

Here is a link that might be useful: TSX (Toronto) Stock Exchange


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RE: Have you ever seen company shares act like rabbits??

Nino, I have some McDonald's stock also, and it has been one of my better ones. I'm holding on to it. Wish I had held on to my Wal Mart stock.


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RE: Have you ever seen company shares act like rabbits??

My financial advisor says SIT!


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RE: Have you ever seen company shares act like rabbits??

Hi Glenda,

When I used to tell daughter's Female Canine to "sit" she didn't seem to pay a lot of attention.
______________________

Chemocurl,

Well done. I didn't know the purchase price.

I calculate, though, that one share grew to 144 ... which would make the 100 shares grow to 14,400. ... for better than $969,000. If the guy had started with 104 shares, which would have grown to 14,976 ... at Tuesday's closing price of $66.94 (somewhat lower than when you calculated earlier that day) ... today's value would have been $1,002,493.40.

At your quote, it would have been $1,008,034.50 ... $5,541.10 more (a reasonably decent month's pay).

Plus ... the dividend rate grew, over the years, more or less in tandem with the share price.

Iva Mae,

When you go to the "Stock quotes" on Yahoo->Finance, put in "RY.TO", for Royal Bank. If on Yahoo Canada, if you put in "RY" the ".TO" will be added on its own.

Try "ENB" for Enbridge, "BCE" for BCE, "GWO" for Great-West Life, "TCK-B" for Teck Cominco, "TA" for TransAlta Utilities, "TD" for TD Canada Trust.

There's a place where they offer "Symbol lookup" and if you write the company name in there, it'll tell you the symbol.

If you ask for "Bar" chArts, instead of a line joining the daily closing prices over a period, it will give a bar linking the highest and lowest prices at which transactions took place that day, with a little line to the left showing the opening price that day, and one to the right showing the closing price.

If, when you have a page where the price information of a given stock is showing, you look over to the left, near the top, there's a place where you can click on "Historical prices" and it will allow you to check the daily, weekly, monthly, etc. price levels of that stock over a given period.

As a matter of fact, the price list for JNJ goes back to Jan 2, 1970.

And, believe it or not, I didn't know that when I set up the project in the first place. The criteria that I used was to start a couple of years before the first split that appeared on the database that I was using. And not far from the 40-year period that I've heard to be the period during which they increased dividend rate every year.

I must confess that I thought it more relevant to put this thread over on "Money Saving Tips" or "Household Finance" ... but thought that it would receive greater exposure here.

And that a number of the residents here might find it interesting.

Good wishes for managing your income and assets with increasing skilfullness.

ole joyful


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RE: Have you ever seen company shares act like rabbits??

As I confessed above, I hadn't known the initial price of JNJ stock, 40 years ago ... it was the supposed matter of their having increased dividend rate every year for the last 40 years that was the main guide.

I had expected the amount to be something like $20. - 25.00 per share ... which would mean a youth would have saved and invested about $2,000. - 2,500. during that 1 - 2 year period.

I was quite surprised when Sue reported that the price per share originally was $180.00!!

However ... the business of saving something like $18,000. over a year or two would be something else!

Not easily achievable.

In our modern circumstance.

But if you have some personal financial records going back 40 years, perhaps they include what your annual income was then.

I don't know what annual income was then, but ...

... I began work in 1953 and ...

... if I remember correctly - my annual income in my first year of work was $1,900.00!!

So my original story is oversimplified.

It shows a fine level of growth rate over many years.

But the initial amount as reported in this example is inflated to a rather improbable level.

But most of us don't just invest once and let it ride.

We start (and it's best if we start at an early age) with a modest amount.

And add to it as the years go by.

Which would mean that, as only a small portion of the total amount invested, is there working for the full time, the rest of it would all be working for a shorter period.

Which would mean that the total amount invested would have to be much larger, in total, than if most of it had been there working for the full period.

But, lacking the improbable good fortune of benefitting from a bequest from a wealthy uncle/aunt/grandma early in our career, most of us can't figure to operate that way.

But ... going from one share to 144 in 40 years is a bit like the rabbit tradition, no?

I'm interested in your comments.

ole joyful


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RE: Have you ever seen company shares act like rabbits??

Greetings everyone,

Recent prices of JNJ stock: Yahoo->Finance->Get quotes->Historical prices

........... High ... Low ... Close .... value 14,400 shares
Fri Dec 28 $67.93
...................$67.03
........................... $67.38 ....... $970,272.00
Mon Dec 31 $67.33
.................. $66.55
........................... $66.70 ....... $960,480.00
Fri Jan. 4 $66.40
.................. $65.72
........................... $65.84 ....... $948,096.00
Tue Jan. 8 $67.75
(Chemocurl $67.31) $66.60
(Joyful [close]) ......... $66.94 ....... $963,936.00
Fri Jan 11 $68.03
................... $67.34
........................... $67.88 ....... $977,472.00

Using Chemocurl/Sue's quoted price on Tues. Jan. 8 of $67.31, total value of the 14,400 shares would have been $969,264.00.

Using my quoted price on Tues. Jan 8 close of $66.94, value of 14,400 shares would have been $963,936.00, $5,328.00 lower.

Before you get yourself all bent out of shape with concern in such a large variation in value during one day, don't forget that this is moving on a base of almost $1,000,000.00. ... about 0.52%.

Which is an extension from a base 38 years ago of $18,000.00.

Putting $18,000.00 into a bond or a GIC wouldn't have grown to anything like such a level.

And, though the dividend rate paid by JNJ 38 years ago almost certainly would have been lower than the rate of interest paid by a GIC or bond at that time, as the value of the underlying asset grew, so did the dividend rate, commensurately.

As the principal amount of a bond would have grown more slowly, so would have been the rate of growth of the amount of interest that it would have paid throughout.

As Sue said, at $1.60 per share, the annual dividend paid by JNJ now is $23,040.00 ... 28% more than the amount originally invested, 38 years ago.

Not too shabby a record, that, in my opinion.

As I cautioned earlier - I'm using this situation for demonstration only. I'm not recommending either that you buy or not buy shares of JNJ. Or hold or sell them, if you own them now.

I do not own any, myself.

I think that it's fair to say that this record is somewhat above average. As I said, this is for illustration purposes.

Learning how money works - an interesting hobby ... *that pays well*!!

Good wishes for increasing your skills in money management. The one that gets paid for that is - you!

ole joyful

P.S. Sorry I wasn't able to configure the chart better. I hope that you can figure it out.

If not - ask.

o j


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RE: Have you ever seen company shares act like rabbits??

Error report, folks.

Please accept my apologies.

In the earlier message, I reported current dividend rate, thinking it to be from memory of Sue's report, and without checking it myself, being in the middle of composing.

I reported current dividend rate as being $1.60.

I was wrong - the actual current rate is $1.66, increased in May '07 to $0.415 quarterly rate from $0.375 quarterly, which had been increased from $0.33 quarterly in May '06, which was up from $0.285 in May '05.

Moving up from $0.285 to $0.415 per quarter in 2 years is a 45.6% increase.

I'd call that substantial!

Thus the current dividend rate of $1.66 per share produces annual income of $23,904.00.

That is annual income of 33% greater than the total amount theoretically invested 38 years ago in 1970.

Again, I apologize for my error.

Good wishes for getting more useful mileage out of your current income ...

... and making your assets work more effectivey.

ole joyful


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RE: Have you ever seen company shares act like rabbits??

Hello everyone,

Some of you who didn't see this earlier may find it interesting.

ole joyful


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