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The Coca-Cola Company Message Board

  • canucanoe1 canucanoe1 Mar 5, 2002 10:43 AM Flag

    Buffett's not leading here...

    For this article, I think the story wasn't Buffett. Mr. White had the most important thing to say:

    http://biz.yahoo.com/djus/020304/200203041720000624_1.html

    Monday March 4, 5:20 pm Eastern Time
    Buffett Tells Investors To Get Tough With Companies

    Mr. White said:

    >>>"Good disclosure trumps bad accounting," said White.<<<

    Mr. Buffett said:

    >>>"It's a very tough problem," <<<

    I too agree it is a tough problem, made tougher when for 6 years the off balance sheet, special purpose entity that KO created used a different time period to accept a payment than KO used for the expense accounting. And CCE called it an expense while KO feels it was an investment.

    The SAME transaction! LOL!!

    It's a tougher problem for the auditors, who were one and the same for both sides of the transaction. Mr. White said good disclosure trumps bad accounting. Well, the disclosure here was non-existent. Nowhere did either party say they treated the transaction differently than the other! Hence, bad disclosure. Especially since KO has controlling ownership of CCE.

    So why was this done? Maybe to support the inverted pyramid of debt and franchise rights parked at CCE. KO, king of financial engineering, pioneer of some techniques since the '80s, maybe felt is wasn't such a leap to amortize an expense while it's off balance sheet entity, CCE, took the cash and income in the year given. After all, it was just a little further out on the ice. Back then the ice was thick. And that inverted pyramid of debt and franchise rights needed the help. Why not help with the least amount of impact on KO's income statement?

    First step is to get the auditors to buy in. Yet how did Ernst & YOung approve this? After all, the same transaction, occuring over and over again for 6 years, can't have different time frames for each party. That is nonsense, even if some can shriek "GAAP".

    Just how did an auditor approve this? And how does an auditor now approve a "one time" charge to adjust for 6 years of nonsense accounting? And how does the SEC approve the cookie jar CCE now is doing? Nonsense accounting. It isn't a "tough" problem as Mr. Buffett says. It is a "tough extraction" from the problem that was generated by overly aggressive, nonsense accounting.

    Mr. White remains correct in his thoughts. But who follows Mr. White vs. Mr. Buffett?

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    • pretty neat......i only see one flaw..."assuming" that etc..have learned a few years ago..NOT to assume anything...

      but a neat site..thanks

    • <<Any thoughts/ideas on every investor's Inherent Enemy, TIME? - Whether they realise it or not!>>

      Forget about investing. Isn't time the inherent enemy of every living being, considering that it is running out for all of us, one day at a time.

    • <<nasdaq..long shot perhaps 800 (JMHO) (as opposed to 2200 nasdaq i heard predicted yesterday) ( IMHO -- bottomline anyway)>>

      We should see Nasdaq 2200 and more AND 800 and less. It's called volatility.

      http://photos.yahoo.com/bc/paulohl/vwp?.dir=/hm&.dnm=Nasdaq+Waves+Feb+22+02.jpg&
      .src=ph&.view=t&.hires=t

    • RE: Noticed how analysts say things like "XXX upgraded to Strong Buy....price target $100"?
      ......and then omit completely WHEN it's supposed to reach $100!!!!
      Of course, if the $100 arrives quicky, they seek acclaim. If it takes longer, the item is consigned to the clouds of History, and never recalled....



      (IMHO):i don't know how that works over there across the big pond....BUT over here is usually a technique used to unload excess inventory... and perhaps not always the game you have addressed above..UNLESS it is an IPO or some new U/W business

      when referred to regarding board posters..commonly referred to as P&D

      be careful...

    • Anyone thinking that the DJIA is good value should see the charts!
      http://finance.yahoo.com/q?d=c&c=&k=c1&t=2y&s=%5Edji&a=v&p=s&l=on&z=m&q=l&y=on
      OK, the Naz suffered the dotcom bust cycle, but 60% is 60%!
      I think the Dow is at least 30% overvalued.
      That doesn't mean that its necessarily going to take a correction anytime soon though!.....
      But is DOES give quite solid assurance that taking the short side of any plays with DJIA components has probability very firmly on your side, IMHO. For the Dow to rise much further brings in all kinds of "cusp" precipices. All lead DOWN!

      I believe that, under the right conditions, the Dow could quite readily slip way below 8,000. So I think it's important not to be overexposed on the Long side. Cash is King in this climate.

      But as always, some companies do well when the majority don't. There's always rising stars...IF you can find them beforehand. Hindsight never paid my bills!
      I need CASH to do that. Not Wall Street paper that's 60% ahead of a corrected Naz in traded value (as opposed to whatever it's REAL value is). I don't believe that the Naz is UNDER-valued, BTW!!!!

      Stay lucky,
      Chap

    • take a look at small caps if you ever play stuff long...

      pretty much agree...(there are stks going up tho..just depends on where you looking/what you see)....dow 7400..nasdaq..long shot perhaps 800 (JMHO) (as opposed to 2200 nasdaq i heard predicted yesterday) ( IMHO -- bottomline anyway)

    • I think that the only parameter of real consequence is again TIME.
      Most fires generate smoke for a long time before you see real flames.
      I'm quite convinced that KO is going to take a substantial backlash for its shenanegins, but the jury's out on how long it's going to be before the Dow establishment decide to prise open the lid, publicly.
      Probability guides me into thinking "iceberg" theory: if you can see something dangerous, there's probably a lot more that you can't see yet! That's why I'm in a short position on KO.
      But I'm as certain as I can be that nothing that gets posted at places like this has any measurable effect on what gets printed, and when, in the Rags (UK slang for newspapers, sorry!)

      I know we've had a few articles already, but the dust has been drifted away quite effectively. A cynic might well say deliberately.
      Unless you'd taken the trouble to back-search for those articles, you'd be inclined to think that nothing happened!
      ......And that's the way the establishment LIKES things to be. NO controversy. No open sores. Only admit to being wrong when it's impossible to do otherwise. Silence is preferred to speculation.
      It would be REALLY interesting to know what strategies the big KO shareholders are employing right now!!!!!
      I just can't believe that they're in "accumulate" mode.....but who knows? What if KO can show themselves to be squeaky clean, but are holding back on revealing why....just so those who hold a lot of stock can buy on the cheap?
      Stranger things have happened.....
      (Nah! A bit TOO strange that!)

      Stay lucky,
      Chap

 
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