some believe Tiffany is suffering from brand dilution,and other lux brands might be better. dont have a view myself, except that if they are looking at the lux market in Asia, I'd bet on burberry before Tif. every schoolgirl wanst burb in Japan.and its an *obvious* brand w/out wearing a label on yr sleeve. Can you tell a Tif from a look-a-like .I cant, and I like jewelry.Burberry is a more *enduring* look.
on KO, think I've mentioned Mecca Cola before....in addition the Asian economies and Europe are not such soda drinking cultures, and compared to what I see in US, I dont think they will ever be to the same extent.
Don't know about Tiffany, but Coke is suffering from the same problem as many other companies such as Merck, Colgate and many others. Profit margins have expanded faster than sales and they have to go through a catch-up period. JMO Coke's long-term total return potential might be about the same as Pfizer's, maybe even a shade less depending on currency. 8%+ or so.
That's about what I estimated, although you are much more familiar with KO than I am. I was estimating 5-6%/yr IV growth plus 2.4% dividend yield = 8%/yr total return, assuming that the Price/IV is about equal to 1.0 today, so no benefit from P/IV expansion. I think that you and a few others have implied that the current P/IV is below 1.0, so are you saying that IV growth will be less than 5%-6%/yr? I know you've gone through the numbers before, so please excuse me for my poor memory.
I was being a little pessimistic and saying that IV growth would be slightly below the 6% long term average for large companies. Also sales/share, earnings/share and cash flow/share growth over the last eight years has been about 5%/yr. That's how I got to 5% to 6%/yr IV growth.
I listened to some of the conference call this morning, and here's what KO had to say (I think I got this right):
volume growth = 3% to 4%/yr price growth = inflation = 2%/yr gross profit growth = volume growth + inflation = 5% to 6%/yr operating profit = gross profit + 1 to 2 = 6% to 8%/yr net profit = operating profit + 1 to 2 = 7% to 10%/yr