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A High-Wire Act No Longer

Now you might say that, if you split it 4-for-1 and the company reports a good number, the buyers will still have to pay up 3 points. You know what? You never feel like a chump paying up 3. That means nothing. If you know that it might fall 3, that's a level of pain that can be taken.

Yes, again, I know that this is alchemy. 50 shares of Salesforce.com in the $170s equals having 200 at $44. But they aren't equal if the stock doesn't work efficiently, if it moves too erratically on every bit of news. An erratic stock isn't something you want in your portfolio, even if it is attached to a fabulous, one-of-a-kind company.

I know that a split doesn't make Salesforce.com "cheaper." It's a high-multiple stock, and it deserves that multiple. But it doesn't deserve to swing as it does, not with this kind of earnings consistency.

I think this whole idea of letting your stock go up without splitting it, trying to imitate Warren Buffett's Berkshire Hathaway (BRK.A) -- that is usually the subtext -- has become a very bad call for most companies. Buffett's stock moved up during a time when hedge funds and short-sellers didn't rule the earth. He wanted shareholders for life, and he thought splitting the stock would cater to the "wrong kind" of shareholders, to the "hot" shareholders.

That's all well and good, but right now these high-dollar stocks are like high-wire acts for individual investors. They are needlessly dangerous when the companies themselves are just excellent growth stocks.

So laugh at Benioff, or at me. Joke that it means nothing and that the split is a sign of froth. As someone who has watched this company and this stock for a very long time, I think it will gain retail adherents and shake out hedge funds, the real goal of Buffett, in a different time. Yes, the liquidity will be a godsend -- and a 4-for-1, in one fell swoop, will provide it. No, it's not a reason to buy shares in the company. Yes, it is a reason that investors should no longer fear an unpredictable stock of what has become a very predictable company.

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