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Strategies & Market Trends : The Art of Investing

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Dec 2 4:00 PM EST

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To: Bald Man from Mars who wrote (31)	9/2/1998 6:10:00 PM
From: Michael Berkel	Read Replies (1) of 10655

Coke is going down! The Art of Investing is NOT paying 40 times earnings for a company that is hardly growing and which will most certainly be affected by the deterioration in the emerging markets. (Europe & USA are saturated markets. Coke is heavily relying on Asia, Japan, Russia and South America to expand & increase its numbers). Coke made $1.64 in 1997. If all goes well (which it won't) they will do $1.58 this year and - most unlikely - try to earn $1.70 in 1999. This is not a 40% growth stock folks, but that's what you have to pay for this Warren Buffet darling. So, we have a classic example here of an overvalued company which is rapidly losing Momentum. Investors are beginning to realize that they can get fair value from a lot of other companies elsewhere on WallStreet today, which are indeed substantially growing. The recent fall of COKE demonstrates: 1) That a highly recognized international brand does not provide shelter in times that markets collapse. Warning: A South America crisis is next on the agenda folks! 2) That the times that well-recognized consumer stocks like Coke and Gillette were considered "safe-havens" are over! Csco and Lu and Aol are much better value for money nowadays. My next target for Coke is $50. Bear with me! Happy Trading! Michael Berkel

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