We woke up in Atlanta, Georgia this morning and decided to go to one of the most sacred spots in the entire Western Hemisphere: The World of Coca-Cola. What might appear as a mere beverage to some is practically a cult in the South. Coke reigns over this city like royalty thanks to the fact its shares are stuffed in trust funds that have been handed down for generations among wealthy families; are sitting on the balance sheets of non-profits, hospitals, and universities; are pumping out cash dividends for insurance companies and index fund investors. It is arguably the best long-term performing asset in the history of human civilization.
[mainbodyad]Our detour should not be a surprise to any of you. It is no secret that I’m nuts about The Coca-Cola Company. We woke up to its virtues as a business several years ago and now even decorate our home at Christmas in a Coca-Cola theme. Back in 2012, we looked at the 50-year historical investing results. For families that pass shares down through inheritance, a single share bought in 1919 at the IPO for $40 (a share which subsequently crashed to $19 shortly thereafter, by the way), is now worth more than $10,000,000 with dividends reinvested. We’ve talked about how it made Quincy, Florida the richest per capita city at one point thanks to the huge Coca-Cola fortunes built up after the local banker, Pat Munroe, convinced everyone of the merits of the company, going so far to underwrite conservative loans to facilitate the acquisition of shares for qualified borrowers. We’ve done a case study on how Thomas and Whitehead bought the bottling rights for $1 and, through synthetic equity, became incredibly wealthy. We’ve watched a video showing the behind-the-scenes look at the new, top-of-the-line automated factories. You know how we used the company’s DRIP plan to gift shares to my youngest sister since childhood so that she had a nice bonus of stock upon reaching the age of 21 when the UTMA is scheduled to end. (In fact, as of the last time I checked, she had just shy of $12,000 sitting there from the pocket change everyone contributed over the years. If she holds onto those shares, saves $50 a month for the rest of her life expectancy, and Coke performs perfectly average over that time period, she will be sitting on around $5,475,000 worth of the stock by the time she dies. If inflation runs around 3%, it would be equal to purchasing power of $930,000 or so today. Small amounts, in good assets, over long stretches of time, result in crazy outcomes relative to effort. Compounding is a force with which to be reckoned.) I even once laid out a plan for her to supercharge that and get to $250,000 by the time she was 35 years old.
We’ve talked about some of the controversies surrounding Coca-Cola. You know I load up on the cane sugar Mexican variety of Coca-Cola whenever I get a chance at my local Costco. You’ve shared my horror when my niece, whom I love with all of my heart, announced her betrayal, siding with her late grandfather when she proclaimed that Pepsi is better than Coke. We’ve examined the nine lessons you can learn from one of Coke’s famous CEO’s, Roberto Goizueta. We’ve talked about Berkshire Hathaway, which many of us own, having a huge stake in the business.
In other words, you know the drill. So imagine our excitement when we stepped foot upon this hallowed ground … (note, all of the pictures should enlarge if you click them) …
Everyone else made a direct run for The Coca-Cola Vault containing the secret formula. Instead, we went to the history wing first to see some of the archived documents.
Case in point … look at one of the original carbonated bottling machines from another exhibit:
These were my favorite. We are picking up a bunch on our way back home when we come through Atlanta, again … or we might order them online, instead, to avoid having to carry them with us.
I can’t ever imagine wanting to work for someone else but being the CEO of The Coca-Cola Company is one of the few exceptions to that rule. I love the business so much, and feel like it is such an important part of history, that it would be almost akin to being a trustee of a great cultural artifact.