Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory

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The Collapse of Wachovia – How a Bank with $38 in Book Value Per Share Became Almost Worthless Overnight

Sitting on my desk in front of me, as I type this article, is an analyst report by Morningstar for Wachovia dated December 31st, 2007.  This is the bank that was built almost entirely on the foundation of R.J. Reynolds Tobacco in Winston-Salem.  At the time, Wachovia common stock had closed at $38.03 and was paying a very rich 6.31% dividend yield.  The analysts at Morningstar valued the shares at $61.00, indicating they were nearly 40% undervalued. Within 10 months, those same shares of Wachovia were trading for $1.00 following a catastrophic collapse.

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RJ Reynolds Tobacco Shares Stock

Reynolds Tobacco Company and Its Legendary Employee Stock Ownership Plan

Following up on the article I wrote about cigarette market share in the United States, I thought this was a great story about the legendary employee stock ownership culture at Reynolds Tobacco back in the first half of the 20th century. It comes from Barbarians at the Gate: The Fall of RJR Nabisco, which you should buy.  It explains how R.J. Reynolds almost forced his employees to buy stock in the company and even created a special class of dividend shares for them!

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Cigarette Industry Market Share

Four Companies Control 94.8% Market Share of the Domestic Cigarette Industry in the United States

Four Companies Control 94.8% Market Share of the Domestic Cigarette Industry in the United States On this blog, in my articles, and even in my books, I have often used the example of how capital allocation determines the wealth one ultimately has.  Many times, I used the illustration of a married couple, both of whom…

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Wal-Mart 401(k) Plan Adjustments

Wal-Mart Ends Profit Sharing, Ups Retirement Plan to Offer 6% Dollar-for-Dollar Matching on 401(k) Savings, and More

Given my two Wal-Mart inspired articles a few days ago, I thought this was germane. [mainbodyad]Wal-Mart is ending its profit sharing plan and upgrading it to include a $1,000 contribution to employee health care accounts so there is a greater cushion before workers have to pay medical deductibles plus moving to a system whereby they…

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Walton Enterprises LLC – The Family Holding Company of Sam Walton and the Walton Family

Sam Walton’s heirs have an estimated net worth of more than $90 billion.  To put that into perspective, the Walton family is as rich as Bill Gates and Warren buffet combined. Virtually all of this wealth came from Wal-Mart Stores, Inc., the publicly traded company that operates as the world’s largest retailer, bringing in a…

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Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory