Organic vs. Store-Bought Growth

In the announcement of TRIP’s CFO’s resignation there was a mention that during her four year tenure TRIP made 17 acquisitions. Years ago I was invested in a funeral services company that was busy acquiring mom and pop undertakers. CISCO, Litton, ITT, and Berkshire-Hathaway among others have a long history of acquisitions. GE has been acquiring and shedding businesses for ever.

Some like Litton and ITT have disappeared, some like CISCO have gone nowhere for years and others like GE and Berkshire-Hathaway are doing just fine (GE after a few bumps on the road). Organic vs. M&A depends on how it’s done. Buffett does it well. Bank of America was on an empire building rampage that I certainly didn’t like.

It’s interesting that many German firms like to stay mid-sized (Mittelstand). For private business staying the same size is fine but investors want their public companies to grow and reward growth handsomely. Investors not interested in growth go for “fixed income” securities.

Denny Schlesinger

I think the size limitation on German firms is that many of them don’t want to go public. Until the last few years of it’s existence the giant Krupp firm was owned by one man.
William Manchester wrote a great book on it “The Arms of Krupp”
I don’t know whether the desire to remain private has more to do with German corporate law or German psychology and tradition.
For instance I would love to buy some shares of Eos Manufacturing Solutions (http://www.eos.info/en) at any reasonable price. But it is privately owned.

For instance I would love to buy some shares of Eos Manufacturing Solutions (http://www.eos.info/en) at any reasonable price. But it is privately owned.

Perhaps you just need to approach them directly with a number of million? :slight_smile:

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