Debt for Equity?

Just thought of something that would never happen.  What if the US Federal Govt did a debt-for-equity trade with shareholders of publicly-traded companies?  (Yes, I know shareholders aren't the real creditors, but just trying to have some fun here).

According to the US Debt Clock , the US National Debt stands at approximately $14,279.5 billion (as of 10:12PM Chicago-time).  What publicly-traded US companies could be bought for this pretty penny?

1. Exxon Mobil (XOM) $424B
2. Apple (AAPL) $312B
3. Chevron (CVX) $220B
4. Microsoft (MSFT) $217B
5. General Electric (GE) $216B
6. IBM (IBM) $200B
7. JP Morgan (JPM) $186B
8. Walmart (WMT) $184B
9. Google (GOOG) $183B
10. AT&T (T) $182B
11. Procter & Gamble (PG) $173B
12. Oracle (ORCL) $172B
13. Wells Fargo (WFC) $169B
14. Johnson & Johnson (JNJ) $164B
15. Coca-Cola (KO) $155B
16. Bank of America (BAC) $136B
17. Citigroup(C) $130B
18. Schlumberger (SLB) $126B
19. Philip Morris International (PM) $117B
20. ConocoPhillips (COP) $117B
21. Verizon (VZ) $108B
22. Intel (INTC) $106B
23. Pepsico (PEP) $105B
24. Merck (MRK) $102B
25. Cisco (CSCO) $95B
26. Hewlett-Packard (HPQ) $88B
27. Berkshire-Hathaway (BRKA) $87B
28. Qualcomm (QCOM) $86B
29. Amazon (AMZN) $84B
30. Goldman Sachs (GS) $83B
GRAND TOTAL Market Cap of 30 Companies = $4,727 Billion (only)

Basically, you could buy 30 very large companies THREE-times-over with the entire US National Debt.  (Of course, some of these companies have debt, but I can ignore that since this is a semi-pointless exercise).  The point is that the US Debt is uber-grando-giga-big...and it's a problem that needs to be resolved.

4 Horsemen of Tech (retired)

In the early 2000's, the 4 Horsemen of Tech (listed below) were monsters from the mid-1990's up until the dotcom bubble.

Microsoft $MSFT (all-time high near $60)
Intel $INTC (all-time high near $76)
Dell $DELL (all-time high near $60)
Cisco $CSCO (all-time high near $82)

In the aftermath of the dotcom bubble, these stocks have gone...nowhere (yes, I spilled the beans).

If you bought and held an equally-weighted basket of MSFT, INTC, DELL, CSCO, then your returns (excluding dividend) would be terrible regardless of your purchase date.

BOUGHT ON : RETURN : BASKET

End of 2001Q1 : -18.2% : $95.22

End of 2002Q1 : -24.3% : $102.93

End of 2003Q1 :   -4.2% : $81.28

End of 2004Q1 : -28.9% : $119.57

End of 2005Q1 : -25.2% : $104.13

End of 2006Q1 : -21.4% : $99.13

End of 2007Q1 : -18.7% : $95.80

End of 2008Q1 : -18.1% : $95.14

End of 2009Q1 : +32.4% : $58.84 (end of the world was a good buying opportunity)

End of 2010Q1 : -16.2% : $92.97

End of 2011Q1 :       0% : $77.88

End of 2001Q1 : MSFT at 27.4062, INTC at 26.0625, DELL at 25.8125, CSCO at 15.9375

End of 2011Q1 : MSFT at 25.53, INTC at 20.38, DELL at 14.68, CSCO at 17.29

Granted, if you bought and held from End of 2001Q1, you would have netted $9.14 of dividends in that 10-year span.  That said, the Original 4 Horsemen of Tech have been laggards (and have been replaced by AMZN, AAPL, GOOG, ORCL/RIMM...sorry I refuse to elevate NFLX or PCLN to this level yet).

Four Takeaways

1. "Buy and Hold" can be dangerous as an investor.  Take some money off the table and reallocate it.

2. Very important and successful companies may not be good long-term investments...the same can go for career politicians;)

3. Govt regulations/charges (anti-trust, etc.) can be the death-knell to stock appreciation.  The bigger you are, the bigger the target is on your back.  (Run a search on each company with 'antitrust' in the search phrase...and spend decades reading the results).

4. A Glorified Label can be a sign of a top in hot stocks.  Usually, we find out people are amazing after they've succeeded...the same can go for stocks.