In the past such downturn slides with scare me
into a irrational sell- Although, I feel somewhat of a
novice investor it appears to me this is a good buy
opportunity. Eventually, it will reach the upper 40's and meet
just about everyone's expectations.
But the upside reaction seemed a tad excessive,
IMHO. A good signal of support for Latin American
economies, but a easing of U.S. interest rates is just one
component of a solution. Other high rate countries (esp
Germany) need to follow suit. And, more importantly, there
are still some tough domestic calls that need to be
made to deal with their issues.
Glad to see a
bit of a pullback this morning, actually. I prefer a
slower, more gradual, more sustainable movement.
Unfortunately, I should be used to this stock's gyrations by
Did anyone catch whether KO actually issued a warning
or what was the nature of the mysterious meeting
this morning? Did they talk about Latin American
You probably already know this, but the news is
that Greenspan strongly hinted that feds will drop
interest rates. Also todays news that they will help bail
out huge losses in a big hedge fund,Long Term Capitol
Mangaement. Also Clinton tapes were seen as helping him, and
the Linda Tripp tapes soon to be released will
My reading is the Feds are going to
support Brazil and Mexico.
Looks like we have lift-off today. Wonder how
sustainable it will be. Looks a bit much, a bit fast...of
course we dropped like a rocket too. I much prefer the
Is some earnings new leaking
out? Other news? Have they cancelled the financial
crisis in Latin America? (I must've missed the memo) Did
Bill promise to keep his pants on? Did Al Greenspan
scold us for irrational lack of exhuberance? Or are we
just correcting from our oversold condition? Anyone
have any thoughts?
Did everyone notice PB is
continuing to expand...picked up another Brazilian
I've seen a few articles like the attached.
Apparently many of the analysts and funds that were bailing
are concluding they over-reacted and are buying back
in. This probably helps explain the healthy runs
we've enjoyed the last few days (on high volumes). Hope
the long-term investors haven't been shaken by the
CocaCola is using this company to open and drive
their corporate growth in Latin America. During this
period of economic crisis, they will concentrate in
building their market. More smaller bottlers will be
aquired and advertising is cheaper. When the economic
rebound comes, they will be bigger and more profitable
than if the current crisis didn't happen. As
investors, we can take advantage of the weak holders and
margin squeezed sellers by buying it at tremendous
bargain prices. Coca-Cola is probably the best growth
trademark to dominate its Latin market.
I simply maintain that the market is
over-reacting to POTENTIAL bad news. And, yes, this stock
already has much of it already factored into the price.
Sure, a recession throughout Latin America is possible,
and one in the United States is possible. And the sky
really could fall.
PB's price drops generally
preceded the market drops in most of the relevant Latin
American countries. Recent activity has been fairly
modest, especially considering the continued hammering
those countries' markets are taking.
IMHO, recessions are far from certain, I'd even say
unlikely. Latin America is in a stronger position than the
Asian countries to resist some of the pressures they
are currently being subjected to, and several of
those countries are actually doing reasonably, from a
fundamental standpoint. PB is well-positioned to ride out
recessions, anyway, even if it covers the whole region. If
there is one, how deep and how long? Would you or
anyone else have predicted recession at the beginning of
this year? Recall, also, that PB is not a one-country
stock, it covers several countries.
If you happen
to be a good market timer, you'll make a lot of
money. And after you've got a record of doing it
successfully for several market cycles, I might actually pay
attention to your timing comments. I simply don't know many
good market timers.
I see much more upside
here, than downside, even in the short-mid term. For
the long-term, I certainly see significant upside,
and I think this a great entry price. Will there be a
better one...maybe...maybe not. You can wait and bet on
it, if you want to. I won't.
But I know I'll
be here to enjoy the next round up, however long
that takes. Trust me on this one, when this stock
moves, it's like lightning, in either direction (as
we've just seen on the downside). I prefer to catch a
falling knife than a shooting star.
You seem to think the market has already
"discounted" a worst-case scenario in Latin America. That's
the same logic Lehman was using when they were
shouting "buy" at 28, because FY99 EPS couldn't possibly
be worse than $1.66.
The market has
dicounted a finite probability of Venezuela suffering a
40-60% devaluation (probably about 90%), and a certain
probability of Brazil running into problems rolling over its
If Brazil does run into
problems, you can bet the stock will be lower than it is
today. Look at what happened to the P/E during Mexico's
problems in 1995. The shares recovered, but that doesn't
mean that the people who were too impatient made money
on call options.
I'm waiting for $12-13
before I'll buy; it might not get there, and then I
haven't lost anything. But you should give yourself a
little added protection when catching a falling knife.
P.S. There is a lot of talk on this board about Coke's
P/E multiple relative to PB's. Consider this: PB is
at about 12x (or more) FY99 earnings; Brazil's two
leading meat processers are at 4x FY99 EPS. That gives PB
a relative P/E of 3 to its Brazilian peers; about
the same as KO relative to U.S. peers. Does that make
One man's opinion on the talk about PB being a
good investment or not. From my perspective I'm a
small business owner who recently bought 2000 shares @
$30.00. Would I like to have bought the other day @
$15.75 sure who wouldn't. However, my position is simply
this: This is a long term play for me as a retirement
stock. From my research this stock is the kind of stock
you wake up to in 5 or 10 years and find tremendous
returns. The region is projected to grow more than North
America, the company has excellent management and is owned
25% by Coca Cola of America. The last time I was in
Mexico and orderd a soda I'm pretty darn sure it was
COKE! In my humble opnion this is a long term no
brainer. Short term? Play around with the Dells, and the
rest of Technology Stocks but good luck! For me I'm
sticking with PB.
I agree with PB_Fan - soda is one thing people
are going to keep buying, no matter how bad things
get in LatAm. PB has just gotten indiscrimantly
creamed along with the rest of the LatAm market. But,
once has to think, that once the fear factor subsides
a little, PB's steady earnings and solid management
will attract interest ahead of other companies, and
we'll see a rebound. Now, how long it will take to get
to 40 again is a good question...