Hold the Gold, I'll Have a Coke

[haha]

Don Yacktman is interviewd in Barron's about his views and stock picks. He expects inflation to come out of recent political trends.

Q: What else is on your mind in picking stocks right now?
A: I really don't like to spend a lot of time on macro issues, because the reality is that it is the specific investment choices that really make the money. Fortunately there are plenty of good opportunities out there. But I would be very concerned about holding a lot of cash, and that's where people are moving toward. I think that's just the wrong place because when the economy does turn and things improve, it looks like there is going to be an awful lot of inflationary pressure.
Q: So do you guys have a position in gold?
A: No gold. I would rather have Coca-Cola than gold any day of the week. The ability [for them] to raise prices is like a machine that prints money.

A Value Investor's Dream - Barrons.com

Ha

 

[CuppaJoe]

Personally, I like a Coke during stressful times, like air travel and I have noticed that I crave the bubbles in the coke much more lately.

If I had any gold, maybe double the bets by holding it in Coke cans?

 

[haha]

Personally, I like a Coke during stressful times, like air travel and I have noticed that I crave the bubbles in the coke much more lately.

Great point, CJ. Coke's at my grandparents' house were bankable treats and tear fixers when I was little. Maybe at stressful times later in our lives we regress to that old reliable satisfaction a bit?

"Have a Coke and a smile".

Ha

 

[ziggy29]

"Have a Coke and a smile".

Please do!

(Yes, I'm long KO.)

 

[FUEGO]

I feel the same way about equities more generally. Prices of products and services sold can and will be increased when inflation occurs. In fact CPI is a measure of just that (a measure of consumer prices). As long as company profit margins stay constant, inflation is a wash when companies can raise prices.

Gold doesn't produce a profit every year like equities do (well, most years ). It just sits there in little lumps and the value either goes up or goes down.

 

[mathjak107]

considering a can of coke was 15 cents over 40 years ago and today it can be bought for about .50 cents in a 6 pack or .75 to a dollar singly ... dosent sound like it kept up with inflation .... most things i can think of are up 15-20x in price... ice cream .15 cents now 2 bucks pizza .15 cents now 2.00 bucks , the bus .15 cents now 2.00..... candy .06 cents now .75

 

[Running_Man]

considering a can of coke was 15 cents over 40 years ago and today it can be bought for about .50 cents in a 6 pack or .75 to a dollar singly ... dosent sound like it kept up with inflation .... most things i can think of are up 15-20x in price... ice cream .15 cents now 2 bucks pizza .15 cents now 2.00 bucks , the bus .15 cents now 2.00..... candy .06 cents now .75

1942] Advertisement placed in the Daily Record [Morristown, NJ] newspaper, Pepsi .05/bottle
[1944] Daily Record, Coca Cola, .05/bottle
[1945] Daily Record, Pepsi, .23/six 12 ounce bottles
[1968] Value of a Dollar, Pepsi, .59/6pack of 10oz bottles
[1972] Daily Record, Pepsi, .69/six-pack 12 oz cans
[1974] Daily Record, Pepsi Cola, .88/6 12oz cans
[1982] Daily Record, Coke, .99/1 litre bottle
[1985] Daily Record, Pepsi, .89/2 litre bottle
[1992] Daily Record, Coke, 6.98/two 12-packs 12 oz cans
[1994] Daily Record, Coca Cola, 3.99/two "12" packs
[1995] Daily Record, Coca Cola, .59-.99/2 litre bottle
[2002] Daily Record, Coca Cola .99/2 litre bottle
[2005] Daily Record, Coca Cola, 1.09/2 litre bottle

I think the price of can of Coca Cola more closely correlates with the price increases in the cost of sugar (about 15 cents a pound in the early 70's 27 lb now.
http://www.americansugarbeet.org/AS.../Filename/000000000254/Sugar Price Survey.doc

Excluding dividends from 1978 KO stock is up over 27X.

 

[TromboneAl]

No Coke, Pepsi.

http://www.hulu.com/watch/3533/saturday-night-live-the-olympia-restaurant

 

[mathjak107]

could be, but certainly not inflation linked

 

[Grep]

1942]
I think the price of can of Coca Cola more closely correlates with the price increases in the cost of sugar (about 15 cents a pound in the early 70's 27 lb now.

Unfortunately, Coke as sold in the United States is now made with corn syrup, not cane sugar.

Try the Coke from Mexico, using 100% cane sugar. That's the way it's supposed to taste! I can't stand the U.S. stuff any more.

Cheers.

 

[mathjak107]

ill bet your right about the taste,,,we forgot how its really supposed to be..


bet the company got so rich because they were ripping us on the price all those decades.... when a company can sell a product for decades and raise the price a fraction of what most prices went up they had to be over charging us back then

 

[mathjak107]

I feel the same way about equities more generally. Prices of products and services sold can and will be increased when inflation occurs. In fact CPI is a measure of just that (a measure of consumer prices). As long as company profit margins stay constant, inflation is a wash when companies can raise prices.

Gold doesn't produce a profit every year like equities do (well, most years ). It just sits there in little lumps and the value either goes up or goes down.

well we are going into the 12th year of equities not producing a profit at all long term ... gold is at a profit most of those years...we all so got in the habit of repeating things that we used to know to be true and i guess still want to believe to be true but hasnt been true for quite a while....

 

[Midpack]

Unfortunately, Coke as sold in the United States is now made with corn syrup, not cane sugar.

Try the Coke from Mexico, using 100% cane sugar. That's the way it's supposed to taste! I can't stand the U.S. stuff any more.

Cheers.

Agreed, but it's pretty hard to find...

 

[Tadpole]

Well, I missed the gold bubble and never have been comfortable with investments like gold.

But, with Coke, I don't know long term. If the government starts using junk food as a source of raising tax revenues, the stock of Coke might go the way of cigarettes, which I imagine were once a good investment.

 

[haha]

Well, I missed the gold bubble and never have been comfortable with investments like gold.

But, with Coke, I don't know long term. If the government starts using junk food as a source of raising tax revenues, the stock of Coke might go the way of cigarettes, which I imagine were once a good investment.

And still are. I wouldn't be retired if it were not for MO and UST.

Ha

 

[Dawg52]

Coke + bourbon = Med

Plus I own the stock too.

 

[Running_Man]

Agreed, but it's pretty hard to find...

Go to any good Mexican store. Mexicans coming into the United States pretty much demand the cane sugar version and it is available in most heavily Hispanic areas grocery stores

 

[FUEGO]

disfrute coca cola

 

[kybec29]

I like KO for its long term dividend payments. It is a strong portion of my portfolio because recently I got in at a 4% yield (and they have a history of increasing their dividends every year). And while I dont use tobbacco I am also long on MO and PM because of their strong cash flow and monster yields. I think each of these stocks are good to buy and hold for their dividends, especially at prices we have seen recently.

 

[haha]

I like KO for its long term dividend payments. It is a strong portion of my portfolio because recently I got in at a 4% yield (and they have a history of increasing their dividends every year). And while I dont use tobbacco I am also long on MO and PM because of their strong cash flow and monster yields. I think each of these stocks are good to buy and hold for their dividends, especially at prices we have seen recently.

I don't own MO any longer, I do own the other two as well as Imperial Tobacco.

Ha

 

[eridanus]

well we are going into the 12th year of equities not producing a profit at all long term ... gold is at a profit most of those years...we all so got in the habit of repeating things that we used to know to be true and i guess still want to believe to be true but hasnt been true for quite a while....

If I bought gold in April of 1996 and bought the S&P500 in April of 1996, which would have the highest return?

 

[TargaDave]

If I bought gold in April of 1996 and bought the S&P500 in April of 1996, which would have the highest return?

Sorta looks like $390ish in April 96.

Let's face it, the yellow-silver metal doesn't shine very often, it's a challenge to buy-sell-store, gold bugs can be a bit extreme (have one in the family), most investors love to hate it, and on it goes.

Still it's grown to about 10% of the current stash for me (hard metal) and I'll delay reallocating till the money printing frenzy winds down. On the other hand I certainly understand those sticking to other forms of inflation protection. It does sorta fit in with my living on an island and tearing up the high seas not far from some of Edward Teach's favorite hiding spots

Oh yeah, KO and PEP in there too.