Thursday, March 10, 2011

Bought JNJ @ 59.43

The position makes 2% of my total portfolio and depending on the price movements I will be willing to put 5-10% of my portfolio in it.

JNJ had a tough 2010 and will have a tough 2011. But prospects for the company and the stock look good in the long term.

At 59 $/share I paid around 10.5x free cash flow of 2010 which is not too expensive but not cheap either. But as Buffett says "rather buy good business at a fair price than a fair business at a good price".

Other shares that are currently competing for my money are PKX, MSFT,BK and WFC

I bought this in my IRA account to avoid taxes on the dividends.JNJ pays around 45% of its FCF as dividends and buybacks.


  1. Landed on to your site. jnj is good but somehow theories and the stock price performance is not going hand in hand. i like the company.

  2. You said it right. But if that wouldn't have happened Mr Market wouldn't have presented this opportunity to us. In my opinion one should buy when you are paying cheap for a good business. Why others think that business is cheap can be important for short time investors even if the stock languishes for another 10 yrs. As long as the business does well and according to my expectation I will be happy.