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Berkshire Hathaway Inc. Message Board

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  • AynRand23 AynRand23 Aug 12, 1998 12:04 PM Flag

    Buffett buying Pepsi?

    Pepsi isn't a turnaround company play as much as GEICO was when Buffett bought it on the brink of bankruptcy. If he understands the turnaround, he'll buy it. There are no hard and fast rules.

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    • I ran the numbers on Pepsi, and it is my opinion
      that there will be no purchase at current levels --
      the price would have to fall a GREAT deal before
      Buffett would consider a purchase.

      My
      opinon.

      Ahlgren

      • 1 Reply to paco_ahlgren
      • Will not give you the intrinsic value of the
        company. You have to take the intangibles into account.
        That's why Coke sells at a p/e of around 50. If you ran
        the numbers on Coke two years ago, it would have
        seemed wildly overvalued, and look what's happened since
        then. It's only growing 15% a year, why is the p/e 50?
        Brand equity, lack of meaningful competition, and low
        interest rates, among other things.

        Just my
        opinion. Buffett would never buy Pepsi anyway since he
        sits on Coke's board and it would be a huge conflict
        of interest.

    • I know the /a means a pre-effective ammendment
      but does that mean they ammended the document and
      after I spent about 2 hours reading it I will need to
      re-read it for the ammendment because I looked for the
      ammendment through the S-4/a. THanks

    • <<Pepsi isn't a turnaround company play as
      much as GEICO was when Buffett bought it on the brink
      of bankruptcy. If he understands the turnaround,
      he'll buy it. There are no hard and fast rules.
      >>

      Hehe
      Don't you get the feeling that Mr. Buffett always
      fantasized about owning GEICO, ever since he was a little
      boy? That's one of the few companies I believe he
      bought with his heart instead of his head. Now GRE...
      there's one he is buying with his head :)
      In any
      event, I wouldn't buy Pepsi yet. I could be wrong, but
      until Coke's business plan falters, I just don't see
      how it can compete.
      Having said that, I drink
      more Pepsi in a day then Mr. Buffett does Cherry Coke
      :)

 
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