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59-635: Ling-Temco-Vought ( LTV ) was a large American conglomerate which existed from 1961 to 2001. At its peak, it was involved in aerospace , airlines , electronics , steel manufacturing , sporting goods , meat packing , car rentals , and pharmaceuticals , among other businesses. It began in 1947 as Ling Electric Company , later named Ling-Temco-Vought , followed by LTV Corporation and eventually LTV Steel until its end in 2001. In 1947, entrepreneur James Ling founded an electrical-contracting business, Ling Electric Company, in Dallas , Texas. He lived in

118-526: A Hilton Garden Inn hotel on the building's lower floors, while the upper floors were made into residential apartments. With reference to the building's history and previous tenants, the apartments were dubbed the LTV Tower Apartments. The building's new owners used the letters of the name to create a promotional tagline for the property: "Love The View". LTV spent its later years in Dallas in

177-422: A hostile takeover . The new company became Ling-Temco-Vought . With low interest rates allowing the company to borrow huge sums, Ling built one of the major 1960s conglomerates. As long as the target company's earnings exceeded the interest on the loan (or corporate bond ), or the company's price/earnings ratio was less than that of Ling-Temco-Vought's stock, the conglomerate became more profitable overall. Given

236-429: A market inefficiency , which undervalues the true strength of these stocks. In her 1999 book No Logo , Naomi Klein provides several examples of mergers and acquisitions between media companies designed to create conglomerates to create synergy between them: A relatively new development, Internet conglomerates, such as Alphabet , Google's parent company belong to the modern media conglomerate group and play

295-871: A parent company that owns and controls many subsidiaries , which are legally independent but financially and strategically dependent on the parent company. Conglomerates are often large and multinational corporations that have a global presence and a diversified portfolio of products and services. Conglomerates can be formed by merger and acquisitions , spin-offs , or joint ventures . Conglomerates are common in many countries and sectors, such as media , banking , energy , mining , manufacturing , retail , defense , and transportation . This type of organization aims to achieve economies of scale , market power, risk diversification , and financial synergy. However, they also face challenges such as complexity, bureaucracy , agency problems, and regulation . The popularity of conglomerates has varied over time and across regions. In

354-449: A bear market include: A market top (or market high) is usually not a dramatic event. The market has simply reached the highest point that it will, for some time. This identification is retrospective, as market participants are generally unaware of it when it occurs. Thus prices subsequently fall, either slowly or more rapidly. According to William O'Neil , since the 1950s, a market top is characterized by three to five distribution days in

413-446: A buyer, while bears rushed about devouring any shares they could find to close their short positions. An unrelated folk etymology supposes that the terms refer to a bear clawing downward to attack and a bull bucking upward with its horns. A secular market trend is a lasting long-term trend that lasts 5 to 25 years and consists of a series of primary trends. A secular bear market consists of smaller bull markets and larger bear markets;

472-438: A decline may be short-lived, and prices might resume their descent, resulting in a loss for the investor who purchased stocks during a misperceived or 'false' market bottom. Baron Rothschild is often quoted as advising that the best time to buy is when there is 'blood in the streets'—that is, when the markets have fallen drastically and investor sentiment is extremely negative. Some more examples of market bottoms, in terms of

531-486: A disorienting and demoralizing experience for executives at acquired companies—those who were not immediately laid off found themselves at the mercy of the conglomerate's executives in some other distant city. Most conglomerates' headquarters were located on the West Coast or East Coast , while many of their acquisitions were located in the country's interior. Many interior cities were devastated by repeatedly losing

590-549: A focus in Asia.) In Japan, a different model of conglomerate, the keiretsu , evolved. Whereas the Western model of conglomerate consists of a single corporation with multiple subsidiaries controlled by that corporation, the companies in a keiretsu are linked by interlocking shareholdings and a central role of a bank. Mitsui , Mitsubishi , Sumitomo are some of Japan's best-known keiretsu, reaching from automobile manufacturing to

649-508: A full recession , or earlier. Generally, bull markets begin when stocks rise 20% from their low and end when stocks experience a 20% drawdown. However, some analysts suggest a bull market cannot happen within a bear market. An analysis of Morningstar, Inc. stock market data from 1926 to 2014 revealed that, on average, a typical bull market lasted 8.5 years with a cumulative total return averaging 458%. Additionally, annualized gains for bull markets ranged from 14.9% to 34.1%. A bear market

SECTION 10

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708-533: A major stock market index occurring within a relatively short period of time. Distribution is identified as a decline in price with higher volume than the preceding session. The peak of the dot-com bubble , as measured by the NASDAQ-100 , occurred on March 24, 2000, when the index closed at 4,704.73. The Nasdaq peaked at 5,132.50 and the S&;P 500 Index at 1525.20. The peak of the U.S. stock market before

767-542: A major role within various industries, such as brand management . In most cases, Internet conglomerates consist of corporations that own several medium-sized online or hybrid online-offline projects. In many cases, newly joined corporations get higher returns on investment , access to business contacts, and better rates on loans from various banks. Similar to other industries many companies can be termed as conglomerates. Bear market A future market trend can only be determined in hindsight, since at any time prices in

826-570: A new complex, LTV Center, which opened in 1985 at 2001 Ross Avenue. After LTV departed its headquarters for Cleveland, the building was renamed the Trammell Crow Tower; it is now Trammell Crow Center . Notes Bibliography Conglomerate (company) A conglomerate ( / k ə ŋ ˈ ɡ l ɒ m ə r ə t / ) is a type of multi-industry company that consists of several different and unrelated business entities that operate in various industries. A conglomerate usually has

885-474: A secular bull market consists of larger bull markets and smaller bear markets. In a secular bull market, the prevailing trend is "bullish" or upward-moving. The United States stock market was described as being in a secular bull market from about 1983 to 2000 (or 2007), with brief upsets including Black Monday and the Stock market downturn of 2002 , triggered by the crash of the dot-com bubble . Another example

944-639: A small slice of many companies in a fund rather than owning shares in a conglomerate. Another example of a successful conglomerate is Warren Buffett 's Berkshire Hathaway , a holding company which used surplus capital from its insurance subsidiaries to invest in businesses across a variety of industries. The end of the First World War caused a brief economic crisis in Weimar Germany , permitting entrepreneurs to buy businesses at rock-bottom prices. The most successful, Hugo Stinnes , established

1003-510: A strategy of 'fading' investors' actions—buying when others are selling and selling when others are buying. A period when most investors are selling stocks is known as distribution, while a period when most investors are buying stocks is known as accumulation. "According to standard theory, a decrease in price typically leads to less supply and more demand, while an increase in price has the opposite effect. While this principle holds true for many assets, it often operates in reverse for stocks due to

1062-420: Is a general decline in the stock market over a period of time. It involves a transition from high investor optimism to widespread investor fear and pessimism. One generally accepted measure of a bear market is a price decline of 20% or more over at least a two-month period. A decline of 10% to 20% is classified as a correction . Bear markets conclude when stocks recover, reaching new highs. The bear market

1121-472: Is currently China's largest civilian-run conglomerate by revenue. In South Korea , the chaebol is a type of conglomerate owned and operated by a family. A chaebol is also inheritable, as most of the current presidents of chaebols succeeded their fathers or grandfathers. Some of the largest and most well-known Korean chaebols are Samsung , LG , Hyundai Kia and SK . In India, family-owned enterprises became some of Asia's largest conglomerates, such as

1180-543: Is the 2000s commodities boom . In a secular bear market, the prevailing trend is "bearish" or downward-moving. An example of a secular bear market occurred in gold from January 1980 to June 1999, culminating with the Brown Bottom . During this period, the market price of gold fell from a high of $ 850/oz ($ 30/g) to a low of $ 253/oz ($ 9/g). The stock market was also described as being in a secular bear market from 1929 to 1949. A primary trend has broad support throughout

1239-498: Is then assessed retrospectively from the recent highs to the lowest closing price, and its recovery period spans from the lowest closing price to the attainment of new highs. Another commonly accepted indicator of the end of a bear market is indices gaining 20% or more from their low. From 1926 to 2014, the average duration of a bear market was 13 months, accompanied by an average cumulative loss of 30%. Annualized declines for bear markets ranged from −19.7% to −47%. Some examples of

SECTION 20

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1298-571: The Aditya Birla Group , Tata Group , Emami , Kirloskar Group , Larsen & Toubro , Mahindra Group , Bajaj Group , ITC Limited , Essar Group , Reliance Industries , Adani Group and the Bharti Enterprises . In Brazil the most important conglomerates are J&F Investimentos , Odebrecht , Itaúsa , Camargo Corrêa , Votorantim Group , Andrade Gutierrez , and Queiroz Galvão. In New Zealand, Fletcher Challenge

1357-564: The American Stock Exchange . In 1968, Ling-Temco-Vought added Greatamerica Corporation, Troy Post 's holding company for Braniff International Airways and National Car Rental , and J & L Steel . In addition, it acquired resorts in Acapulco and Guerrero, Mexico , and Steamboat Springs, Colorado . By 1969, LTV had purchased 33 companies, employed 29,000 workers, and offered 15,000 separate products and services, and

1416-553: The Dow Jones Industrial Average index after the Wall Street Crash of 1929 , leading down to the market bottom in 1932, and throughout the late 1960s and early 1970s. The Japanese Nikkei 225 has had several bear-market rallies between the 1980s and 2011, while undergoing an overall long-term downward trend. The price of assets, such as stocks, is determined by supply and demand. By definition,

1475-775: The International Steel Group . Some of the railroad subsidiaries – Chicago Short Line Railway , Cuyahoga Valley Railway , and River Terminal Railway – went to ISG Railways , while the Ohio Central Railroad System acquired Aliquippa and Southern Railroad and Mahoning Valley Railway . The former Monongahela Connecting Railroad is now operated by the Allegheny Valley Railroad . In 2002, Lombard Metals Corp, located in Bala Cynwyd, Pennsylvania , purchased all

1534-652: The United States , conglomerates became popular in the 1960s as a form of economic bubble driven by low interest rates and leveraged buyouts. However, many of them collapsed or were broken up in the 1980s due to poor performance, accounting scandals, and antitrust regulation. In contrast, conglomerates have remained prevalent in Asia, especially in China , Japan , South Korea , and India . In mainland China , many state-affiliated enterprises have gone through high value mergers and acquisitions , resulting in some of

1593-492: The financial crisis of 2007–2008 occurred on October 9, 2007. The S&P 500 Index closed at 1,565 and the NASDAQ at 2,861.50. A market bottom marks a trend reversal, signifying the end of a market downturn and the commencement of an upward-moving trend (bull market). Identifying a market bottom, often referred to as 'bottom picking,' is a challenging task, as it's difficult to recognize before it passes. The upturn following

1652-579: The highest value business transactions of all time. These conglomerates have strong ties with the government and preferential policies and access to capital. During the 1960s, the United States was caught up in a "conglomerate fad " which turned out to be a form of an economic bubble . Due to a combination of low interest rates and a repeating bear-bull market , conglomerates were able to buy smaller companies in leveraged buyouts (sometimes at temporarily deflated values). Famous examples from

1711-440: The 1960s include Gulf and Western Industries , Ling-Temco-Vought , ITT Corporation , Litton Industries , Textron , and Teledyne . The trick was to look for acquisition targets with solid earnings and much lower price–earnings ratios than the acquirer. The conglomerate would make a tender offer to the target's shareholders at a princely premium to the target's current stock price. Upon obtaining shareholder approval,

1770-627: The 1980s, General Electric also moved into financing and financial services , which in 2005 accounted for about 45% of the company's net earnings. GE formerly owned a minority interest in NBCUniversal , which owns the NBC television network and several other cable networks . United Technologies was also a successful conglomerate until it was dismantled in the late 2010s. With the spread of mutual funds (especially index funds since 1976), investors could more easily obtain diversification by owning

1829-979: The 1984 merger of the Jones and Laughlin Steel Company subsidiary with Republic Steel Corporation , the company continued to exist primarily as a steel producer, renaming itself LTV Steel , and moved its headquarters to Cleveland, Ohio , in 1993. LTV did not leave Chapter 11 bankruptcy protection until June 28, 1993, in what was described in 1999 as one of the longest and most complicated bankruptcies in US history. In 1999, LTV acquired Pittsburgh -based Copperweld Corporation from Imétal S.A. of France. LTV Steel filed for Chapter 11 bankruptcy protection , on December 29, 2000. The company subsequently dissolved on December 18, 2001. Its assets were acquired in February 2002 by Wilbur Ross and merged with Weirton Steel to form

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1888-603: The United States, some of the examples are The Walt Disney Company , Warner Bros. Discovery and The Trump Organization (see below). In Canada, one of the examples is Hudson's Bay Company . Another such conglomerate is J.D. Irving, Limited , which controls a large portion of the economic activities as well as media in the Province of New Brunswick . Some cite the decreased cost of conglomerate stock (a phenomenon known as conglomerate discount ) as evidential of these disadvantages, while other traders believe this tendency to be

1947-427: The closing values of the Dow Jones Industrial Average (DJIA) include: Secondary trends are short-term changes in price direction within a primary trend, typically lasting for a few weeks or a few months. Similarly, a bear market rally , sometimes referred to as a 'sucker's rally' or ' dead cat bounce ', is characterized by a price increase of 5% or more before prices fall again. Bear market rallies were observed in

2006-433: The common mistake made by investors—buying high in a state of euphoria and selling low in a state of fear or panic, driven by the herding instinct. In cases where an increase in price leads to an increase in demand, or a decrease in price leads to an increase in supply, the expected negative feedback loop is disrupted, resulting in price instability. This phenomenon is evident in bubbles or market crashes. Market sentiment

2065-455: The conglomerate usually settled the transaction in something other than cash, like debentures , bonds , warrants or convertible debentures (issuing the latter two would effectively dilute its shareholders down the road, but many shareholders at the time were not thinking that far ahead). The conglomerate would then add the target's earnings to its earnings, thereby increasing the conglomerate's overall earnings per share . In finance jargon,

2124-606: The early 18th century, where traders who engaged in naked short selling were called "bear-skin jobbers" because they sold a bear's skin (the shares) before catching the bear. This was simplified to "bears," while traders who bought shares on credit were called "bulls." The latter term might have originated by analogy to bear-baiting and bull-baiting , two animal fighting sports of the time. Thomas Mortimer recorded both terms in his 1761 book Every Man His Own Broker . He remarked that bulls who bought in excess of present demand might be seen wandering among brokers' offices moaning for

2183-467: The end came in January 1968, when Litton shocked Wall Street by announcing a quarterly profit of only 21 cents per share, versus 63 cents for the previous year's quarter. This was "just a decline in earnings of about 19 percent", not an actual loss or a corporate scandal, and "yet the stock was crushed, plummeting from $ 90 to $ 53". It would take two more years before it was clear that the conglomerate fad

2242-407: The entire market, across most sectors, and lasts for a year or more. A bull market is a period of generally rising prices. The start of a bull market is marked by widespread pessimism . This point is when the "crowd" is the most "bearish". The feeling of despondency changes to hope, "optimism", and eventually euphoria as the bull runs its course. This often leads the economic cycle, for example, in

2301-771: The examples are Adamjee Group , Dawood Hercules , House of Habib , Lakson Group and Nishat Group . In the Philippines , the largest conglomerate of the country is the Ayala Corporation which focuses on malls , bank , real estate development , and telecommunications . The other big conglomerates in the Philippines included JG Summit Holdings , Lopez Holdings Corporation , ABS-CBN Corporation , GMA Network, Inc. , MediaQuest Holdings , TV5 Network, Inc. , SM Investments Corporation , Metro Pacific Investments Corporation , and San Miguel Corporation . In

2360-455: The fairly unsophisticated stock research of the era, the company appeared to be growing without bound, and its share price rose. In 1964, Ling turned Ling-Temco-Vought into a holding company and established three public companies as subsidiaries , LTV Aerospace, LTV Ling Altec, and LTV Electrosystems. LTV Aerospace received assets for Vought and a large part of Temco Aircraft. LTV Ling Altec contained Altec Electronics and other properties, and

2419-462: The future are not known. Past trends are identified by drawing lines, known as trendlines, that connect price action making higher highs and higher lows for an uptrend, or lower lows and lower highs for a downtrend. The terms "bull market" and "bear market" describe upward and downward market trends, respectively, and can be used to describe either the market as a whole or specific sectors and securities. The terms come from London's Exchange Alley in

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2478-719: The headquarters of corporations to mergers, in which independent ventures were reduced to subsidiaries of conglomerates based in New York or Los Angeles. Pittsburgh, for example, lost about a dozen. The terror instilled by the mere prospect of such harsh consequences for executives and their home cities meant that fending off takeovers, real or imagined, was a constant distraction for executives at all corporations seen as choice acquisition targets during this era. The chain reaction of rapid growth through acquisitions could not last forever. When interest rates rose to offset rising inflation, conglomerate profits began to fall. The beginning of

2537-526: The market balances buyers and sellers, making it impossible to have 'more buyers than sellers' or vice versa, despite the common use of that expression. During a surge in demand, buyers are willing to pay higher prices, while sellers seek higher prices in return. Conversely, in a surge in supply, the dynamics are reversed. Supply and demand dynamics vary as investors attempt to reallocate their investments between asset types. For instance, investors may seek to move funds from government bonds to 'tech' stocks, but

2596-503: The most powerful private economic conglomerate in 1920s Europe – Stinnes Enterprises – which embraced sectors as diverse as manufacturing, mining, shipbuilding, hotels, newspapers, and other enterprises. The best-known British conglomerate was Hanson plc . It followed a rather different timescale than the U.S. examples mentioned above, as it was founded in 1964 and ceased to be a conglomerate when it split itself into four separate listed companies between 1995 and 1997. In Hong Kong, some of

2655-652: The new businesses they had recently purchased, and by the mid-1970s most conglomerates had been reduced to shells. The conglomerate fad was subsequently replaced by newer ideas like focusing on a company's core competency and unlocking shareholder value (which often translate into spin-offs ). In other cases, conglomerates are formed for genuine interests of diversification rather than manipulation of paper return on investment. Companies with this orientation would only make acquisitions or start new branches in other sectors when they believed this would increase profitability or stability by sharing risks. Flush with cash during

2714-419: The outside inventory totaling 224,000,000 lb of steel from 58 locations throughout the country. A new office building was built at 1600 Pacific Avenue in downtown Dallas to house the operations of LTV, as well as a bank and other offices. The building opened in 1964. After LTV departed its offices there in the 1980s, the building went to other owners and various tenants before being repurposed in 2015 with

2773-714: The production of electronics such as televisions. While not a keiretsu, Sony is an example of a modern Japanese conglomerate with operations in consumer electronics , video games , the music industry , television and film production and distribution , financial services , and telecommunications . In China, many of the country's conglomerates are state-owned enterprises , but there is a substantial number of private conglomerates. Notable conglomerates include BYD , CIMC , China Merchants Bank , Huawei , JXD , Meizu , Ping An Insurance , TCL , Tencent , TP-Link , ZTE , Legend Holdings , Dalian Wanda Group , China Poly Group , Beijing Enterprises , and Fosun International . Fosun

2832-635: The rear of the shop. After incorporating and taking the company public in 1955, Ling found innovative ways to market the stock, including selling door-to-door and from a booth at the State Fair of Texas . In 1956, Ling bought L.M. Electronics, and in 1959, added Altec Electronics , a maker of stereo systems and speakers. In 1960, Ling merged the company with Temco Aircraft , best known for its missile work. In 1961, using additional funding from insurance businessman Troy Post and Texas oil baron David Harold Byrd , they acquired Chance Vought aerospace in

2891-471: The rest went to LTV Electrosystems. The intention was to make the sum of the parts appear to be worth more than the whole. Ling used this technique to raise capital and buy more companies. Portions of LTV Electrosystems were later spun off to E-Systems , then part of Raytheon IIS, and since 2002, part of L-3 Communications -Integrated Systems (L-3/IS). In 1965, Ling added the wire and cable company Okonite . In 1967, they took over Wilson and Company , which

2950-440: The success of this shift depends on finding buyers for the government bonds they are selling. Conversely, they might aim to move funds from 'tech' stocks to government bonds at another time. In each case, these actions influence the prices of both asset types. Ideally, investors aim to use market timing to buy low and sell high, but in practice, they may end up buying high and selling low. Contrarian investors and traders employ

3009-406: The transaction was " accretive to earnings." The relatively lax accounting standards of the time meant that accountants were often able to get away with creative mathematics in calculating the conglomerate's post-acquisition consolidated earnings numbers. In turn, the price of the conglomerate's stock would go up, thereby re-establishing its previous price-earnings ratio, and then it could repeat

SECTION 50

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3068-425: The well-known conglomerates include Jardine Matheson (AD1824), Swire Group (AD1816), (British companies, one Scottish one English; companies that have a history of over 150 years and have business interests that span across four continents with a focus in Asia.) C K Hutchison Whampoa (now CK Hutchison Holdings ), Sino Group , (both Asian-owned companies specialize business such as real estate and hospitality with

3127-668: The whole process with a new target. In plain English, conglomerates were using rapid acquisitions to create the illusion of rapid growth. In 1968, the peak year of the conglomerate fad, U.S. corporations completed a record number of mergers: approximately 4,500. In that year, at least 26 of the country's 500 largest corporations were acquired, of which 12 had assets above $ 250 million. All this complex company reorganization had very real consequences for people who worked for companies that were either acquired by conglomerates or were seen as likely to be acquired by them. Acquisitions were

3186-599: Was filed that year. Eventually, the board of directors demoted James Ling in 1970, and he left the company, to be replaced by former Ling-Temco-Vought executive Paul Thayer . As part of a 1971 antitrust settlement, the company sold its Braniff and Okonite components, and Thayer changed the company name from Ling-Temco-Vought to LTV Corporation . Thayer was succeeded by former Xerox executive Raymond Hay. In July 1986, LTV Corporation filed for Chapter 11 bankruptcy protection . With $ 6.14 billion ($ 17.1 billion today) in total assets and $ 4.59 billion in debt, it

3245-462: Was formed in 1981 from the merger of Fletcher Holdings , Challenge Corporation, and Tasman Pulp & Paper, in an attempt to create a New Zealand-based multi-national company. At the time, the newly merged company dealt in construction, building supplies, pulp and paper mills, forestry, and oil & gas. Following a series of bungled investments, the company demerged in the early 2000s to concentrate on building and construction. In Pakistan , some of

3304-487: Was on its way out. The stock market eventually figured out that the conglomerates' bloated and inefficient businesses were as cyclical as any others—indeed, it was that cyclical nature that had caused such businesses to be such undervalued acquisition targets in the first place —and their descent put "the lie to the claim that diversification allowed them to ride out a downturn." A major selloff of conglomerate shares ensued. To keep going, many conglomerates were forced to shed

3363-435: Was one of the 40 biggest industrial corporations. Ling-Temco-Vought had a combined sales of $ 3.6 billion in 1969 ($ 29.9 billion today), but investors found that the conglomerates were not growing any faster than the individual companies had before they were bought out. Share prices plummeted, sparking a bear market , and a general feeling arose that conglomerates were to blame for the market woes. An antitrust lawsuit

3422-478: Was the largest bankruptcy in US history to that point. The company went into a series of divestitures , most notably the entire LTV Aerospace division; the aerospace component retained the legacy Vought name as the independent Vought Corporation, while the missile component later became part of Loral Corporation and later became the Lockheed Martin Missiles and Fire Control division. After

3481-462: Was twice the size of Ling-Temco-Vought. Wilson was a diverse company involved in meat packing, sporting goods, and pharmaceuticals. Wilson's president Roscoe Haynie was not aware of the takeover scheme until two weeks before the takeover was complete. Ling later split Wilson into three parts (meat packing, sporting goods ( Wilson Sporting Goods ), and pharmaceuticals ( Wilson Pharmaceutical and Chemical ), and spun them off into separate companies traded on

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