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When I think of Martin Luther King many notions come to mind, but today on a day our nation takes pause to recognize the man and his ideals I was thinking about the word dignity.While King had many ideals and made tremendous sacrifices to achieve them there is one thing he never gave up for one moment and would let no man take away -- that was his dignity.
I chose the picture of him receiving the Nobel peace prize because he was not only deserving of the prize but because he was actually a very noble man and it is more than ironic (spelling aside) to give such a prize to one such as he.
As we salute the man and his ideals is there anything that we can learn from his example that might be carried over into the investment world?
When I consider such things I often think about a company's credit worthiness. As measured by Standard and Poors: Credit ratings measure how likely companies are to pay back debt, which lets investors know the likelihood of getting their money back. Therefore AAA ratings generally go to large companies with tremendous financial resources. This list is very short.
Today the list includes Automatic Data Processing (NYSE: ADP), Berkshire Hathaway (NYSE: BRK.A), Exxon Mobil Corporation (NYSE: XOM), General Electric Company (NYSE: GE), Johnson and Johnson (NYSE: JNJ), Microsoft Corporation (NASDAQ: MSFT) Pfizer Inc. (NYSE: PFE) and among financial stocks Wells Fargo & Company (NYSE: WFC).
There are many more companies that could achieve an AAA rating if they chose to maintain lower debt ratios and higher cash reserves but they chose not to. Credit worthiness is only one measure of things but it goes hand in hand with being trustworthy. I think of Martin Luther King as being trustworthy.
Although we pay homage to Martin Luther King and all that is good today we should not confuse maintaining one's dignity with being passive. Even though King was a pacifist, he was not passive; these are two very different things. King was disruptive, stubborn, focused, bold, controversial, provocative, thoughtful, and much more. However, he was able to be all these things while being idealistic and pragmatic at the same time. Something that we hope our leading business can do in these economically trying times.
Martin Luther King pushed an agenda that would change a nation and he did it while trumpeting his message of peace and peaceful resistance. Give it some thought!
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.
DISCLOSURE: I currently own shares of BRK.B, GE, JNJ and WFC..
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