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

To: Uncle Frank who wrote (47984)10/16/2001 2:23:06 PM
From: Jurgis Bekepuris  Read Replies (1) | Respond to of 54805
 
UF,

>What do you think WB sees in it?

I partially answered this in my response to myself... :-)))
Couple other thoughts:
1. Cap gains taxes. WB's basis is really low and BRK
pays high cap gains taxes as a corporation.
2. KOs FCF is = income = ~$3B per year. That's about
3% FCF yield. Not great, but maybe it is enough for WB.

Jurgis - also BRK does not have many options at its size...



To: Uncle Frank who wrote (47984)10/16/2001 3:09:21 PM
From: Pirah Naman  Respond to of 54805
 
What do you think WB sees in it?

Comfort. From the BRK Owner's Manual:

11.You should be fully aware of one attitude Charlie and I share that hurts our financial performance: Regardless of price, we have no interest at all in selling any good businesses that Berkshire owns. We are also very reluctant to sell sub-par businesses as long as we expect them to generate at least some cash and as long as we feel good about their managers and labor relations.

He has, in other writings, stated that because of his relationship with certain companies, he will not sell them. It is his admission that this is not a pure business decision.

- Pirah



To: Uncle Frank who wrote (47984)10/16/2001 3:13:45 PM
From: EnricoPalazzo  Respond to of 54805
 
What do you think WB sees in it?

Maybe the best brand in the world, which gives them a tremendous competitive advantage over, say, pepsi.

Very little risk of fundamental deterioration in the business.

Good growth prospects (most of the world doesn't drink much coke, but would if income were higher).

He presumably admires and respects the folks that run the business.


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