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Apr 29, 2022Liked by Liberty

Coke was one of those blue-chip companies that traded at an incredible multiple at the time because they had "figured out" how to grow EPS at a steady 20% per year. In the case of Coke, because they were selling off pieces of their bottlers and recognizing the capital gains as operating earnings. Lots of others like GE doing this at the time too - basically all accounting shenanigans, but they all traded at incredible multiples as a result. People remember the dotcom bubble, but they forget the incredible split in valuations the giant blue chips (50x P/E) and small and mid-cap value (single digit P/E).

Coke is covered here on page 7, and The Snowball covers how Buffett was able to engineer a management behind the scenes at Coke to get the ship righted.

http://csinvesting.org/wp-content/uploads/2012/10/The-15-Percent-Delusion-by-Carol-Loomis.pdf

Pepsi is really more of a food company - their big asset was always Frito-Lay, which has a dominant position in chips (the potato kind) and the margins to match - remember Steve Jobs poaching John Sculley from Pepsi, then giving an interview to Playboy where he marvels at the lock Frito-Lay had on direct distribution ("sales and service") that gave them such control over market entry. Coke was much bigger globally in soft drinks - Pepsi does ok in a few markets here and there, but in most countries, Coke is dominant.

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The electricity map is fascinating. Just spent the last half an hour on it. Amazing what kind of data are publicly available.

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Funny observation about the bathroom fan covers. Looks like something Matt Stoller would be interested in.😀 Just think of all the other "stuff" that would also fall into this category.

Happy Birthday, Lib!

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The electricity map is fascinating. Just spent the last half an hour on it. Amazing what kind of data is publicly available.

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