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URL:  https://boards.fool.com/my-thoughts-on-jnj-12148192.aspx

Subject:  My thoughts on JNJ Date:  3/7/2000  2:36 PM
Author:  Spriteman Number:  1332 of 10474

Many of us on the JNJ board have been wondering why our beloved Johnson and Johnson has tumbled 40 points from its high made just a few months ago and is now setting 52-week lows daily. Many analysts and others have suggested that investors are fleeing from slower growing blue chips to get into the fast growing and always exciting technology sector. But why? Why would people give up solid companies with good products and a wonderful history to invest in internet companies with no profits and outlandish valuations? The people who invest in such tech companies merely say, "But technology is where the future is! Ten years from now, these internet companies will be making tens of billions of dollars." Oh, now I get it. It is all just speculation! Wall Street has turned into Caesar's Palace! Why am I not excited?

One of my favorite sayings of all time came from Paul Samuelson in The Ultimate Guide to Indexing. In that book, Paul says, "Investing should be like watching paint dry or grass grow. If you want excitement, take $800 to Las Vegas." Unfortunely for me and many other investors, Las Vegas has come to us. Investing in the stock market is not a game; it is a way to make money over the long term, not over 15 minutes! The people who continue to talk about how wonderful internet stocks are are the people who are trying to predict the future. Unfortunately for them, the future is not known by any person; only the past and the present are known. JNJ has a terrific past, and outstanding present, and (in my opinion) an impressive future. Unfortunately, most internet stocks don't even have a past, and their present is pretty ugly. Johnson and Johnson has increased revenues, profits, and dividends at an impressive rate for over 100 years. Give me JNJ any day over an internet venture!

In this months edition of Individual Investor, the magazine lists 10 top blue chips for the 21st century. Not surprisingly, JNJ is one of them, along with AOL, Walmart, Fedex, General Electric, Citigroup, MCI Worldcom, Home Depot, Nokia, and Oracle. If you ask me, that is quite nice company for JNJ to be with! Individual Investor goes on to tell the reader why it picked each stock that it did. Even though the article was written in early January, when JNJ was trading at 97, the fundamentals for the company have still not changed.

"Johnson & Johnson, which has no fewer than 150 websites, from herniasolutions.com to yourbaby.com, has been remarkably adept at reinventing itself, broadening its line of prescription and over-the-counter remedies and hospital and medical supplies by relentlessly acquiring firms with new products. During the past decade, it moved into skin care, surgical products, heart disease treatment, orthopedic devices, and, with its recent acquisition of Centocor, now has the world's second largest biotechnology business, after Amgen. The company is boosting its biomaterial business with such new products as joint replacements and angioplasty stents (the tiny mesh-like tubes that keep arteries clear). JNJ also has a well-stuffed pipeline containing drugs for Alzheimer's disease, influenza, obesity, and pain, all due to be introduced within the next two years. With an estimated $30 billion in revenue in 2000, JNJ is set to deliver a 15% annual profit growth rate through 2004. That prospect, along with a recent slide in share price to below $100, makes for a buying opportunity."

I am quite excited at JNJ recent price drop because that just enables me and many of you other Fools to stock up on a solid blue-chip company with the best reputation in America!

Always Long,
Spriteman
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