One year ago this week, I invested my annual bonus in The Procter & Gamble Company (NYSE symbol PG). How has my investment performed? Rather well, thank you.

On March 19, 2007, I paid $61.72 a share. Friday, PG closed at $66.74. During the year, PG provided a dividend of $1.40 per share, resulting in a 10.4% return on investment.

Over the same timeframe, the Dow Jones Industrial Average was down 1.3%, the NASDAQ was down 6.8%, and the S&P 500 was down 7.1%.

I am pleased with the results of Procter & Gamble, given the tough market conditions we experienced the past year.

Why do I own Procter & Gamble?

PG is recognized as one of the most innovative companies in the world. The company's economics are great, posting annual double digit growth for the past five years in sales, earnings per share, book value, and return on invested capital. PG is also a huge cash cow, generating $13.5 billion in cash from operatons last year and sports a beta of .58. The management team, led by CEO A. G. Lafley, is great. According to Warren Buffett, great people work for great leaders. So, I am concluding PG has attracted great talent.

And speaking of Warren Buffett, Mr. Buffett has made PG his fourth largest publically traded company in the Berkshire Hathaway (NYSE symbol BRK.A) portfolio. If PG is good enough for Buffett, then it certainly is good enough for me.

One concern that I have with PG is it appears to be selling at a 30% premium to fair market value (I calculate the fair market value of PG to be $51.12). But based on its historical P/E ratio of 22.7 and analysts' projected earnings growth rate of 11.6%, the share price has room to grow to $77 in twelve months, providing a potential return on investment of 17.5% at the current price. $77 is realistic as PG's 52-week high is $75.18.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 3:16 PM | Permalink

According to Sacramento-based Magazine Comstock's, the lack of a college education is costly to the average Californian.

Last year in California, the average income for a high school graduate was $27,000. That's compared to $56,000 for a bachelor's degree, according to the California Postsecondary Education Commission.

What is the State of California thinking? Duh!!!!

Once again, the Government is taking a short-sighted approach to spending on education.

The lack of education is the root of most evil. When will our politicians realize this and set a proper course for our educational system?

Pierre Cutler
The Sacramento Executive.

Posted by Gillian Parrillo at 2:57 PM | Permalink

My daughter is working on her Masters Degree at West Virginia University. She plans to be a history teacher. So far, she has racked up $88,000 in school loans. Can this be a good thing? I just don't see how it can be. Why?

Simple math tells me otherwise. Last year, the starting salary in the Dallas Independent School District was $32,266. Assuming the interest rate on her private loan is 12% and she paid $1,000 a month, it would take twenty years to pay off the loans. Paying $1,000 a month on her initial teacher's salary would be a tall order.

The cost of college education for the average American student is becoming prohibitive. The system needs to be overhauled. Perhaps a community or government service program might be an option. Private financing from the banks is not the answer. Afterall, the banks are in business to make money. And make money they do. Our college students deserve better. The Government must step in and prevent companies like Wells Fargo and Bank of America from taking advantage of students.

Any ideas? Let's hear them!

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 2:26 PM | Permalink | Comments (2)

The Sacramento International Film Festival will run from March 29th through April 6th at the Crest Theater in downtown Sacramento. Check out the lineup.

One of the segments of the festival will feature entries from Northern California, including drector Mike Posehn's Placerqatsi:

Inspired by director Ron Fricke's films, Koyaanisqatsi, Baraka, and Chronos, Placerqatsi is a look at life in Placer County, California. Qatsi is the Hopi word 'life' giving Placerqatsi's the simple meaning 'Life in Placer County'. Ordinary human activities seem boring and mundane until seen in a different time scale revealing a pattern and rhythm of movement not otherwise apparent. Placer county activities captured over a one year time span are shown as if they occurred during a prototypical single day. People are shown working, playing, eating and shopping in the midst of the natural beauty that surrounds them.

Check out the NorCal entries on Saturday, March 29th at 6:30 PM.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 1:34 AM | Permalink

The Central Valley Fund, a private investment fund focused on middle market Central Valley companies, today announced a mezzanine investment of $3.35M in Ultra Gro, LLC.

The capital was used to fund a buyout of the Company by the management team which, the Central Valley Fund states, has deep agricultural experience, several of whom have tenure with the Company in complementary sales, consulting, and financial capacities.

Originally founded in 1985, Ultra Gro formulates, blends, and distributes liquid agricultural fertilizers customized for a diverse group of crop growers, primarily in the Central San Joaquin Valley.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 8:11 AM | Permalink