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Symbol Sentiment Start Return Closed KMB n/a PBI n/a MO n/a KR n/a WAG n/a NUE n/a ABT n/a WFC n/a Via BloggingStocks:   Filed under: Walgreen Co (WAG), Abbott Laboratories (ABT), Altria Group (MO), Kroger Co (KR), Kimberly-Clark (KMB), Nucor Corp (NUE), Books, Wells Fargo (WFC) Back in 2001, Jim Collins had a monster of a business bestseller with his book Good to Great: Why Some Companies Make the Leap. . . and Others Don't. In it, Collins explored companies that have become hugely successful and found that success generally comes as a result of focusing resources on things that you're good at instead of mindlessly diversifying. Arkansas Business writer Jeff Hankins read the book again to see how the companies profiled have weathered the downturn. The companies profiled were Abbot Laboratories (NYSE: ABT), Kroger (NYSE: KR), Kimberly-Clark (NYSE: KMB), Walgreens (NYSE: WAG), Altria (NYSE: MO), Nucor (NYSE: NUE), Pitney Bowes (NYSE: PBI), Wells Fargo (NYSE: WFC) and tragically, Fannie Mae and Circuit City. Gilette was eliminated from contention because of a merger. Over the past year, Collins' "great companies" have declined by 43.12% compared with 41.55% for the S&P 500, according to Hankins. Of course, that by itself doesn't tell us anything: Being a great company and being one that outperforms the expectations of investors are two very different things. It may well be that, with the exception of real freakshows and Fannie and Circuit City, the market had already priced in the greatness of these companies. The moral of the story is one of two things: Either Jim Collins is wrong or great companies do not necessarily make great investments. I'm inclined to go with the latter: The price you pay matters as much as the greatness of the company you invest in, and the greatness of companies like Altria and Kroger may simply have been too well-known.   Read | Permalink | Email this | Linking Blogs | Comments   Read the rest of original post »

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