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.
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
PS>>>might also want to sell your Krispy creme about now!!!
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.
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
On that date all of your dreams will come true.
We'll expect an apology after this date!!!!
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.
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
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?
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
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.
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
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.
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?
There is a real chance that the
trough may become the Mariana Trench.
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
wrong with our strategy? <<<
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
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.
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.
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
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?
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!!!!
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
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
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
We are betting that you must be a college professor
or an accountant.
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.
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
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