% | $
Quotes you view appear here for quick access.

Berkshire Hathaway Inc. Message Board

  • Novalis_97 Novalis_97 Aug 12, 1998 10:26 AM Flag

    Buffett buying Pepsi?

    I haven't been paying attention to the markets
    recently. Someone told me he heard on TV or somewhere that
    Buffett has already or is considering buying some Pepsi.
    My friend told me it was because Pepsi is now doing
    what Coke did many years ago -- sell off its
    capital-intensive bottling operations. In addition, Pepsi's
    decision to sell off its fast-food operations a while ago
    was a good decision. Anyone see anything about
    Buffett saying anything about Pepsi lately?

    think Buffett buying Pepsi sounds plausible:

    He used to drink Pepsi
    2) Pepsi sold off its
    fast-food operations and selling off its bottling
    3) Pepsi's stock price has been tanking

    What do you think?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I believe your gut is right.

      May the WEB be with you.


    • Mr. Banker:

      Of course,
      probably the best known brand worldwide is Coca

      In the US, I believe that honor goes to "Sony".
      Although my statistic may be a few years old, I don't
      believe it's changed.

    • I...would...suck..out...his...hole

    • ........a very good discussion on brand value
      today. I'm not sure that brand value can ever be totally
      pinned down. Here was my experiance.....whenever my old
      employer got ready to buy out another company, management
      would go round and round trying to decide just exactly
      how much the brands of the target company were worth.
      Even more ticklish was trying to decide the market
      share the target brands held. And that's where we
      really messed up once when we bought a company whose
      market share was believed to be 25%. After the sale,
      come to find out it was more like 18%. So the word
      went out to the sales force that by God you will
      achieve 25% market share with this brand by year's
      end.......and we did......but it was a hard year!

    • Barron's was 100% correct last weekend when it listed DIS as one of the 20 most overvalued companies. Its' price is STILL ridiculous even after the most recent correction for MISSING earnings.

    • ... movies. H20, Parent Trap, Armaggedon, Mulan, ... .
      These will show in next quarter's earnings. I don't like the amount being bid for the NHL rights.

      Good luck to all.

    • Where are you getting your numbers? Take a look
      at Value Line, not the Yahoo "profile" or whaerever
      you're getting the numbers.

      Second, you are
      correct that brand equity does show up in earnings.
      However, what makes a company with brand equity be valued
      higher is that you discount its future earnings back at
      a lower discount rate because the brand recognition
      makes earnings much more predictable. As an earlier
      post mentioned, it doesn't make them predictable
      forever, but in some cases almost.

      As for the Frito
      Lay thing, I don't have the Frito return on equity in
      front of me. I would be very surprised if it isn't far
      greater than the average American firm's ROE because of
      its strong brand name and resultant pricing power.

      Total capital is a number which includes all capital
      employed in the business. Debt+equity=total capital.
      Campbell's is doing a wonderful job if you use that as the
      only guide.

    • A very strong brand makes earnings more
      predictable, at least in most industries, and so commands a
      higher p/e due to discounting future earnings with a
      lower discount rate. Anyone who doesn't agree with
      that, prove me wrong.

    • I just came in on the brands discussion so you
      might have covered what I have to say. It seems to me
      that powerful brands help the owning company in two
      respects - 1) higher sales because of being so
      recognizable, and 2) higher margins because customers are
      willing to pay more. For example, if we set off across
      country traveling and lunch time comes we are more apt to
      stop at McDonalds, Wendy's, etc. because we know what
      to expect. We would probably be reluctant to stop at
      Joe's Dinner(about which we know nothing) and run the
      risk of wasting time and money on a bad meal. Even if
      it cost a little more at McDonald, Wendys, etc. most
      people would opt for the known brand.

      Of course,
      probably the best known brand worldwide is Coca
      There are probably many places where coke has to lower
      it prices because of competition from Pepsi, Sams
      Choice, etc., but there are many places particularly
      overseas where there is very little competition in the
      soft drink market. There coke can command a much
      higher price. Of course, being a dominant brand should
      lead to economies of scale. Coke sells more soft
      drinks (it sells about half of all the soft drinks sold
      worldwide), so it must be able to produce an 8 ounce serving
      of drink cheaper than other competitors who sell

      Anyway that is my thinking.

    • I am personally full of respect and admiration
      for Mr. Buffett, BUT it does not mean that I will
      always to the same things as he does.

      There are
      two things that make me act differently:

      1) My
      personal finances are different from Mr. Buffett in two
      important respects:
      1a) My asset allocation is
      1b) My risk tolerance is different
      2) I do not
      have the same universe of investment opportunities
      open as Mr. Buffett does.

      For example, I
      personally could not merge with General Re and change my
      asset allocation tax free.

      Or, an investor would
      not have 100% of his savings invested in stocks if a
      50-60% drop would leave him too exposed. Whereas the
      rich Mr. Buffett could do just that because he is very
      rich and his personal lifestyle is cheap compared to
      what he owns.

      So, my conclusion is, it is not
      illogical to invest differently from Mr. Buffett even if
      you think that he is investment God.

    • View More Messages
217,500.00-195.00(-0.09%)11:01 AMEDT