Tuesday, September 20, 2005

On the road again

Will be in Minneapolis on Monday to appear at the General Mills annual meeting to present the below shareholder proposal. Very similar to the Heinz proposal which drew about 14,000,000 votes.

Also speaking at the University of Minnisota--6 PM, September 28 at the Student Union. Thrust of my talk is the failure of our leadership elites to develop policies to enable most young adults to afford a middle class family stylestyle and keep their marriages together.

These are the things in life that really count.


General Mills Shareholder Proposal

The shareholders recommend General Mills hire an investment bank to explore the sale of the company.

Reasons:

The gold standard test of investment return is purchasing power with respect to the most sought after goods and services. In recent years General Mills share values failed that test. I believe such will continue to be the case into the foreseeable future.

Since 1999 General Mills share price increased about 21%. On January 1, 1999 General Mills share price was $38.88 The closing price on September 17, 2004 when this proposal was completed was $47.23.

Over the same period the share’s purchasing power value plummeted with respect to some of the most sought after consumer desirables such as homeownership.

Purchasing power-wise General Mills shares declined significantly with respect to homeownership. According to the National Association of Realtors the median home prices from 1999-2004 surged as follows: San Diego-105%, New York/New Jersey/Connecticut metro region-88%, Miami-87%, Los Angeles-84%, Washington (DC)-66%. The national median home price rose 32% over that period.

The driving forces for such severely escalating prices are the broadly negative economic effects of feminist careerism, ever increasing numbers of single head of households, and very high levels of legal and illegal immigration. Just Economics 101 supply and demand theory: Too much consumer demand chasing such scarce commodities like private education and homeownership.

In my opinion General Mills future share performance will not create sufficient purchasing power to keep up with the expected persistent escalation of such costs.

I believe the sale of company is the best way for shareholders to recover the highest value of their invested capital. I believe buyers would pay a significant premium over current market value because of the value of the General Mills name, well established branded products, physical plant and land assets, working capital, and the company’s very successful domestic and global marketing network.


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