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Johnson & Johnson
Good Ol' JnJ

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By JohnEBgood
April 7, 2008

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This stock is my oldest (10 yrs) and largest holding. I rarely post on this board, and in fact, I don't often look at the price of JNJ stock. It's good ole JNJ, after all. The stock I've planned to hold for a LONG time. Has the return over the 10 yr period blown me away? No - but I accumulated shares during down cycles, so it's not bad.

But - I realize that any investor should evaluate his positions periodically. So, when the JNJ annual report arrived with the mail, I started reading. Now - I'm NOT one of those guys who carefully studies the financial data, it's just "not my thing". I LOVE an annual report filled with pictures and propaganda about the company's products. Of course, I wasn't disappointed with this report.

Far from it. I was really impressed by the diversity of products and
markets. And the KINDS of products. I even decided to go buy some
Neutrogena stuff to try to slow down the inevitable facial wrinkling ;o)

But - back to the stock. Should I sell? Hold? Buy more? My philosophy is that, if you would not BUY a stock today, you have no business HOLDing it. So I pretended that I was researching a stock for possible purchase.

I'm happy to say that JNJ "made it". I'd buy today, for the following reasons:

1) I like their businesses. Healthcare products rule! Especially in
the current economy.

2) I like huge companies whose growth prospects are mainly overseas.

3) I want a decent dividend.

4) The stock must be reasonably priced. According to Standard & Poors,
JNJ stock is pretty close to "fair value".

5) Morningstar likes JNJ stock both short- and long-term.

My criteria might seem simple-minded. But they work for me.
Obviously, I plan to hold onto my JNJ stock. I'd buy more, but I don't
allow any one stock position to exceed a certain percentage of my account.

I'd welcome your thoughts. Then I can crawl back into my cave, and
come out again in the Spring of 2009 ;o)

Good Ole Jack