One Old Orchard Rd.
Armonk, NY 10504
Oh, Mama, what a week this has been leading up to Mother's Day.
Tuesday marked not only your 77th birthday, but also a record day for the
Dow. As we celebrated your milestone at a fine restaurant, the conversation
between Dad and me drifted to the 7200 Dow and my utter delight over my
15-month-old IBM investment. With IBM closing at $166 and change, I was bragging
about a 90% return as your eyes glazed over at all this "stock talk."
As we prepared to leave the restaurant, Dad became engrossed in a WWII display
in the lobby. Along with the obligatory front page headlines screaming "WAR
ENDS" in 78-point type, some enterprising collector had also framed the stock
quotes page from that same 1945 newspaper.
"Hah!" you crowed, "look at this. IBM was at $192 in 1945, and now it's only
$166? Doesn't seem so great to me."
Dad grinned at us both and recalled how when he was discharged from duty
at the end of WWII, the Army gave him separation pay of $200. "Just enough
to buy one share of IBM at that time," he laughed, remembering that $200
was about a month's pay in those days.
Ah, but just think, Mom... if Dad had sacrificed his Army bonus money to
purchase that one share of IBM in 1945... and if he had held it all these
years (to give to me, perhaps?), that one share would today be worth over
How? Well, take a look at the dividends that IBM has paid to shareholders
since then. From 1946 to 1968 they only missed three years in paying dividends
in either cash or stock. The '70s slowed down a bit, paying two stock dividends
of 25% in '73 and a four-for-one split in '79 -- their last stock split,
by the way.
Sure, the 1980's weren't so great for IBM, but even considering an entire
decade without dividends, one share of IBM bought in August 1945 would have
become 288 shares today.
So, Mom, without even factoring in all those years of cash dividends, let's
just look at the stock dividends and see where you'd be. Well, 288 shares
of IBM at Tuesday's closing price of $166 looks like $47,808. Quite a bit
more than the $192 you saw in that old newspaper, huh?
Happy Mother's Day, Mom. I love you very much, and please be kind to Daddy
even if he didn't buy you that one share of IBM when he came home from the