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The Coca-Cola Company Message Board

  • bowboe1015 bowboe1015 Sep 19, 2000 5:23 PM Flag

    poor cramer just had to warn that

    what is left of his company won't meet what
    little expectations were left.

    Anyone care to
    wager how long the Street.com will be around? Anyone
    care to wager how long KO will be around? Cramer
    wishes the extent of his troubles were a weak euro and
    strong oil prices.

    I have marked down that KO
    was at $52 and change when he recommended shorting.
    Let's see if Cramer can be counted on to be the
    contrarian indicator that he has been in the past.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • ogden....the euro is bottoming...when something
      bottoms...the next move is sideways or UP....so lets go with UP
      and how will that hurt KO....not sure you got a clue
      old buddy....sell CREE at 200?...oh no...owe too much
      tax!!!!

      PS>>>might also want to sell your Krispy creme about now!!!

    • Bow,

      I believe that the prune juice association just changed their name. Something close to "dried grapes" or "dehydrated grapes" garnered more sales. Maybe they are targeting the youth?

    • btween 12 and 19, according to Teenage Research
      Unlimited. That age group will grwoth to 35 million in 2010,
      making it the largest teen population in U.S.
      history.

      I want everyone who feels that the U.S. will be
      populated by nothing but prune juice drinkers in the next
      few decades to seriously look into this..

    • Market share data is being currently worked on.
      You may find updated data after 10/5/00
      at

      http://www.activemedia-guide.com/

      On that date all of your dreams will come true.
      We'll expect an apology after this date!!!!

      We
      have decided not to participate in what we believe
      could turn into an intellectual debate on this board
      anymore. Too much time and energy. We'll just keep doing
      our best and have our understudies write a book on us
      thirty years after we go on. By then they'll all be
      wealthy- morally and economically - do good things for
      people who are less fortunate, and donate all the book
      profits to kids with cancer. Good luck to all.

    • men_this_is_brass_hat,

      Neither a school
      teacher or accountant. A businessman, probably like the
      "we" in your group!

      If we guess wrong, both our
      strategies fail compared to those that figured things out
      correctly. It is useless to pursue "guessing
      wrong".

      As for your score of hedges over the past couple of
      years, has any of your prior long term KO profit been
      converted to short term, taxable gains?

      I like
      things clean and simple. Make a determination and then
      invest directly, with the least amount of risk and
      capital for a solid return. When I go to the horse races,
      I do not bet "show". I think that is what this
      hedge idea brings you. I know you disagree. But that's
      the difference in our styles.

      Have you found
      that PEP data yet where they are eating up Coca-Cola's
      marketshare?

    • We've made a significant amount of money on KO
      while we've held it. And yes all of your comments about
      taxes are valid to some extent. However, let's say we
      are both wrong. KO goes crazy, turns the ship around
      and becomes a growth company again.

      In the
      meantime you sold your KO for a $50,000,000.00 gain, paid
      the tax $20,000,000.00 and put the money in the bank.
      How long would it be before you're $30,000,000.00
      became $50,000,000.00 assuming 7%? Tick, tick, tick,
      tick.........that's right 7 1/2 years.

      Now, during those seven
      years we generate $65,000,000.00 in after tax gains
      while waiting for KO to turn the ship around AND we use
      the $65,000,000.00 to invest in other securities
      which hopefully will generate decent long-term
      ror.

      SORRY your argument doesn't fly. We've been there, done
      that. You can make any argument you like, but until you
      have all of the facts, review all of the scenarios you
      CAN'T make an intelligent decision.

      Making a
      blanket statement about selling, paying the tax and
      pocketing the cash on a low basis stock is NOT!!!! prudent.
      Why don't you sell any issue you currently hold that
      you think is similar in terms of long term prospects
      with KO and put it in a safe place for seven years and
      let us do what we've been doing and let see what
      happens. Because, even if KO never recovers to it's glory
      days, there will always be money made with it. Over
      time analyst's will recommend and downgrade it and in
      most instances it will be based on the value concept
      or PEP versus KO. Each time we will be there to
      scrape money off their actions.

      Hey, you never
      answered our question. Are you a teacher or an accountant?

    • ogden.

      There is a real chance that the
      trough may become the Mariana Trench.

      The dollar
      is rising against other currencies and that ought to
      hurt KO earnings.

      Slower growth in North
      America and depressed exchange rates in much of the rest
      of the world.

      Same old story for the past
      three years.

    • men_this_is_brass_hat,

      >>>What is
      wrong with our strategy? <<<

      You
      profess not to like KO for the short to intermediate
      term. That you knew it would be sliding down from
      historical highs over a period of significant time. You
      leave beaucoup bucks tied up in it, while straddles and
      spreads would have accomplished the same trading
      advantage.

      I would never leave such capital tied up. Just put
      it in the bank if you can't find another "low risk"
      piece of paper.

      Please, there are no tax
      considerations to worry about if you were so sure that KO was
      going to sink like it has. Sell, pay the tax, and enjoy
      the extra money jingling in your pocket.

      It
      would still be nice to see your data that PEP is eating
      KO's lunch. That is how we basically started.


      Note we both agree on the direction of KO, but for
      different reasons and different advisors. My premise for a
      year now is that KO was going to get hurt because of
      its/bottler balance sheets and the business plan. The premise
      remains well supported. As for PEP, it seems caught in
      the same beverage price/volume conflict. But their
      other businesses are doing very well (Tropicana, Frito
      Lay, etc.). Refer to their own docs to see this. I
      don't think PEP will remain complacent with their
      beverage group. PEP's balance sheet is much stronger as is
      their overall business. PEP has the wherewithal to take
      KO's business. Wielding price intelligently, they can
      eat up the KO distribution system and KO.

      PEP
      needs motivation and a beverage focus. Both have been
      lacking. If they don't get going soon, Cadbury and COTT,
      who are already benefitting (just look at the market
      stats and recent business moves), will take the duopoly
      to the cleaners. Just as Cosmos has done in the
      Philippines.

    • We have tried to be cordial, but you insist on
      being abusive. Last chance.

      Did you sell KO at
      $70 or $80? If so did you reinvest the proceeds?
      Where? What has been your ror after tax?

      Hedging
      AMPLIFIES THE POSITION!!!!!! Assume for argument sake, we
      own 1,000,000 shares of KO which is trading at
      $70.00/share. We believe Ko has run out of steam, but because
      of TAX consequences we CAN NOT sell, we decide to
      buy the 70 put at $4.00 and write the $85 call for
      $2.50. (Yes premium structures DO happen like this based
      on the momentum and trading patterns of the stock -
      even with old growth companies.) Subsequently, KO
      falls to $60.00. The put is now worth $12.00 and the
      call is worth $0.50.

      We believe Ko will make a
      short-term bounce. We sell the 1,000 puts for an $8.00 gain
      or ($800,000.00) and close out the calls for a $2
      gain or ($200,000.00).

      Subsequently, KO runs to
      66. We know buy the $65 puts for $3.00 and write the
      $80 calls for $1.50. It continues to trade like this
      over time. We keep pocketing the gains on each
      subsequent move. Then KO gets into a trading range premiums
      reduce, yet money can still be made!!!!

      What is
      wrong with our strategy? If there are circumstances
      that do not allow the sale of the position, what do
      you suggest we do? Yes there are times where closing
      out calls and selling puts results in a loss
      initially, but it means the issue is appreciating and we
      roll out further along the curve.

      We are not
      abdicating that everyone or anyone try this. We are saying
      it is another arrow in the quiver to help generate
      income on a position.

      If you feel KO is a useless
      issue then why are you writing on this
      board?

      Originally we came to defend Cramer's right to make a
      statement and what we've received is attack after attack
      after attack. we have done nothing but to express a
      different view.

      Hey if you don't agree with us, no
      problem. But, don't abuse us for trying to shed a little
      light on a different angle. By the way opportunity cost
      theory is garbage because you are espousing risk free
      investments on your last post, but talk about investing in
      another common stock on your previous post. Which one is
      it? Risk free or risky? Tell us today where you would
      have put your cash from selling KO!!!! What stocks
      will return a superior ror? We are waiting for that
      answer!!!!

      We are betting that you must be a college professor
      or an accountant.

    • men_this_is_brass_hat,

      You are starting to
      lose my interest. Your example does not show what the
      return would be on selling the KO stock and putting it
      into another investment, for simplicity sake, take 7%
      interest. You don't show what selling the asset at $70
      would have brought, while you hang on to the asset at
      $50 and hedge, etc. etc.

      "Opportunity cost
      theory" is a vague concept? That's total garbage. Your
      example says 1M shares of KO ($50M) is an asset known to
      be dead meat. So to improve returns you are
      "hedging". Better, take this investment to another
      opportunity and receive a real return on it, maybe just a
      bank account.

      Hedging is risk. Hedging is
      management of time as well as stock price direction. You are
      only protecting an asset instead of making money from
      it. You can achieve your example through a simple
      straddle, or spread, and free up $50M.

      And the tax
      is nowhere near the substantial price drop from $80+
      you have experienced. All while knowing KO was going
      to peak and trough (as you say) for quite a long
      period.

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KO
40.81-0.38(-0.92%)Jul 23 4:01 PMEDT

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