[Boatanchors] [Milsurplus] [BoatAnchors] Mackay Marine Mystery

[Robert Nickels]

On 1/12/2015 12:17 AM, Richard Knoppow wrote:
> mergers on the philosophy that you must diversify or die.
That was the in-vogue operating practice for the movers and shakers of 
the 1950s.  A former boss loved telling stories of his mentor, Jim Ling, 
who turned his Dallas electrical contracting business into America's 
largest conglomerate -  Ling-Temco-Vought  (LTV) - whose holdings 
included Altec, Vought Aircraft, Branniff Airlines, Wilson (sporting 
goods and meat),  and National Car Rental.   As long as the target 
company's earnings exceeded the interest on the loan or the company's 
price/earnings ratio was less than that of LTV's stock, the conglomerate 
became more profitable overall.   Market analysis wasn't as 
sophisticated back then, and there seemed to be no limit to growth - 
until investors realize the companies weren't growing any faster than 
they would have on their own.  After divesting major chunks, LTV wound 
up operations as a steel company in bankruptcy court in 2000.

My old boss's fall from the heights of Park Avenue took only a year or 
two, after he merged the company he'd started above the Woolworths 
dimestore,  Dale Electronics, with the Lionel Toy and Train Corp. of 
NYC.   He was fired as President after a year and a year after that the 
stock he'd been paid with was basically worthless.   But he started 
over, and his legacy company is still a leader in resistor manufacturing 
and became the cornerstone acquisition of the Vishay passive component 
empire.

Conglomerates still exist and perform well, but for many entrepreneurs 
the advice "stick to your knitting" has been good advice.

73, Bob W9RAN