The Excellence Dividend Quotes

The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee. The words "maximum prosperity" are used, in their broad sense, to mean not only large dividends for the company or owner, but the development of every branch of the business to its highest state of excellence, so that the prosperity may be permanent.

I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures: “How do I build a small firm for myself?” The answer seems obvious: Buy a very large one and just wait. —Paul Ormerod, economist, Why Most Things Fail: Evolution, Extinction and Economics

The German Volk will believe me when I say that I would have chosen peace over war. Because for me, peace meant a multitude of delightful assignments. What I was able to do for the German Volk in the few years from 1933 to 1939, thanks to Providence and the support of numerous excellent assistants, in terms of culture, education, as well as economic recovery, and, above all, in the social organization of our lives, this can surely one day be compared with what my enemies have done and achieved in the same period. In the long years of struggle for power, I often regretted that the realization of my plans was spoiled by incidents that were not only relatively unimportant, but also, above all, completely insignificant. I regret this war not only because of the sacrifices that it demands of my German Volk and of other people, but also because of the time it takes away from those who intend to carry out a great social and civilizing work and who want to complete it. After all, what Mr. Roosevelt is capable of achieving, he has proved. What Mr. Churchill has achieved, nobody knows. I can only feel profound regret at what this war will prevent me and the entire National Socialist movement from doing for many years. It is a shame that a person cannot do anything about true bunglers and lazy fellows stealing the valuable time that he wanted to dedicate to cultural, social, and economic projects for his Volk. The same applies to Fascist Italy. There, too, one man has perpetuated his name for all time through a civilizing and national revolution of worldwide dimensions. In the same way it cannot be compared to the democratic-political bungling of the idlers and dividend profiteers, who, in the Anglo-American countries, for instance, spend the wealth accumulated by their fathers or acquire new wealth through shady deals. It is precisely because this young Europe is involved in the resolution of truly great questions that it will not allow the representatives of a group of powers who tactfully call themselves the “have” states to rob them of everything that makes life worth living, namely, the value of one’s own people, their freedom, and their social and general human existence. Therefore, we understand that Japan, weary of the everlasting blackmail and impudent threats, has chosen to defend itself against the most infamous warmongers of all time. Now a mighty front of nation-states, reaching from the Channel to East Asia, has taken up the struggle against the international Jewish-capitalist and Bolshevik conspiracy. New Year’s Proclamation to the National Socialists and Party Comrades January 1, 1942

The valuation analysis was simple—anyone could see the stock was incredibly cheap. But it had been traded below net cash for several years before the company distributed cash to shareholders. Returning the cash was the critical factor in driving excellent returns. Assuming Buffett bought the stock in 1954 at $35 and sold in 1957 (having received the $50 per share distribution and a few dollars extra in dividends) when it traded between $20 and $28, he would have more than doubled his money and earned around a 30% IRR.135 The stock didn’t work because it was cheap—it worked because management returned capital to shareholders. The other securities discussed in this book were also incredible bargains—but it took action to drive wonderful returns for shareholders.

Refilling the pool will require us to believe in government so much that we hold it to the highest standard of excellence and commit our generation's best and brightest to careers designing public goods instead of photo-sharing apps. When we do, the potential is boundless.

I’ll bet (a pretty penny)… Bet #1: Five of ten CEOs see training as an expense rather than an investment. Bet #2: Five of ten CEOs see training as defense rather than offense. Bet #3: Five of ten CEOs see training as a necessary evil rather than a strategic opportunity. I’ll bet (many, many a pretty penny)… Bet #4: Eight of ten CEOs, in a forty-five-minute tour d’horizon of their business, would NOT mention training.

A man approached J. P. Morgan, held up an envelope, and said, “Sir, in my hand I hold a guaranteed formula for success, which I will gladly sell you for $25,000.” “Sir,” J. P. Morgan replied, “I do not know what is in the envelope; however, if you show me, and I like it, I give you my word as a gentleman that I will pay you what you ask.” The man agreed to the terms and handed over the envelope. J. P. Morgan opened it and extracted a single sheet of paper. He gave it one look, a mere glance, then handed the piece of paper back to the gent. And paid him the agreed-upon $25,000. On the paper… 1. Every morning, write a list of the things that need to be done that day. 2. Do them.

Everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way. —Viktor Frankl,

Pair 3: American Home Products Co. (drugs, cosmetics, household products, candy) and American Hospital Supply Co. (distributor and manufacturer of hospital supplies and equipment) These were two “billion-dollar good-will” companies at the end of 1969, representing different segments of the rapidly growing and immensely profitable “health industry.” We shall refer to them as Home and Hospital, respectively. Selected data on both are presented in Table 18-3. They had the following favorable points in common: excellent growth, with no setbacks since 1958 (i.e., 100% earnings stability); and strong financial condition. The growth rate of Hospital up to the end of 1969 was considerably higher than Home’s. On the other hand, Home enjoyed substantially better profitability on both sales and capital.† (In fact, the relatively low rate of Hospital’s earnings on its capital in 1969—only 9.7%—raises the intriguing question whether the business then was in fact a highly profitable one, despite its remarkable past growth rate in sales and earnings.) When comparative price is taken into account, Home offered much more for the money in terms of current (or past) earnings and dividends. The very low book value of Home illustrates a basic ambiguity or contradiction in common-stock analysis. On the one hand, it means that the company is earning a high return on its capital—which in general is a sign of strength and prosperity. On the other, it means that the investor at the current price would be especially vulnerable to any important adverse change in the company’s earnings situation. Since Hospital was selling at over four times its book value in 1969, this cautionary remark must be applied to both companies. TABLE 18-3. Pair 3. CONCLUSIONS: Our clear-cut view would be that both companies were too “rich” at their current prices to be considered by the investor who decides to follow our ideas of conservative selection. This does not mean that the companies were lacking in promise. The trouble is, rather, that their price contained too much “promise” and not enough actual performance. For the two enterprises combined, the 1969 price reflected almost $5 billion of good-will valuation. How many years of excellent future earnings would it take to “realize” that good-will factor in the form of dividends or tangible assets? SHORT-TERM SEQUEL: At the end of 1969 the market evidently thought more highly of the earnings prospects of Hospital than of Home, since it gave the former almost twice the multiplier of the latter. As it happened the favored issue showed a microscopic decline in earnings in 1970, while Home turned in a respectable 8% gain. The market price of Hospital reacted significantly to this one-year disappointment. It sold at 32 in February 1971—a loss of about 30% from its 1969 close—while Home was quoted slightly above its corresponding level.*