Looking to grow one's income in conglomerates
From an investor's perspective, conglomerates could be an interesting way to achieve diversification through just one company
Add BT as a preferred sourceCONGLOMERATES tend to come and go out of fashion like flared jeans. But what happens to be in vogue or popular should not influence the way we invest. Our reasons for buying shares in any company should be governed by whether we think that it will be able to deliver a good return over the long term. Whether the market likes it is irrelevant.
Benjamin Graham, often referred to as the father of value investing, said we are neither right nor wrong because the market agrees with us. We are right because our reasoning is correct.
So what is a conglomerate? Quite simply, it is a company that is made up of apparently unrelated businesses, in which it might own significant stakes. The key is that these subsidiaries should operate independently. That said, the parent company - often because of its considerable ownership in them - will probably want to have some say in how they should be run.
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