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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Pirah Naman who wrote (47939)	10/16/2001 7:59:00 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 54805

Pirah, >In the cases mentioned, I don't think they are doing >anything incorrect. Take a look, for example, at the > effect of buying back shares. I'm just saying that > compounding with ROE can give misleading growth figures. Hmmm, I understand that buying back shares reduces equity increasing the ROE. However, is that bad to the shareholder and does it reduce shareholder return? In my opinion - unless I am missing something again - no. Why? Because while the growth per company may not be X0%, the growth per share is - and that's what matters to the shareholder. The problem may occur if company buys overpriced shares - then the reduction of E does not increase R per share enough for shareholders to benefit. KO also played games with the bottlers (CCE, COKE? and a bunch of foreign guys) that increased their ROE. These were also OK, but perhaps more suspicious. In this sense, their business model is close to fabless semis - and maybe QCOM... :-))) Jurgis - is KO a Gorilla? :-P JUST KIDDING! :-))))