So I dropped 3M (MMM) from the Cara 100 on June 25 and replaced it (as a replacement for a major U.S. industrials manufacturer) with Boeing (BA). I wrote at the time that I wanted to wait until I could determine how the McNerney replacement would distinguish himself at 3M.

The reviews are in. Today I would like you to read the opening paragraphs of the Merrill Lynch report on 3M, under "Credibility". Download Merrill Lynch July 26 3M report.

Traders have to take these issues seriously. We don't really know what goes on in a corporate boardroom, so we give management the benefit of the doubt until we subsequently discover the culture that pervades a company following the hiring of a new CEO.

We can vote by selling or avoiding the shares of companies that don't measure up to our standards. That's something that a Board of Directors understands, and they are the ones who appoint the CEO to the position, and subsequently reaffirm their choice annually.

A company that carries a long-term average PE multiple of say 13 instead of 15, for instance, has a difficult road to hoe. We can make that road a really tough one for companies that are pulled by the wrong horse. In time, Boards will change horses when they see the problem.

As to 3M, I still think it's a great company, so I put it into the Cara 250 :-)

3M Company [GICS 20, Dow 30, ex-Cara 100]
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Investertech chart)
(MMM: ADVFN Financial Data)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report May 19: next one is due Aug. 18)