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Strategies & Market Trends : WILL COCA-COLA ALWAYS GO UP? -- Ignore unavailable to you. Want to Upgrade?

To: John O'Neill who wrote (1142)	7/13/1998 12:11:00 AM
From: jethro	Read Replies (1) \| Respond to of 1462

sorry John but as a 9 yr shareholder, i'm going to have to disagree with you. KO continues to go up because its long term earnings and sales growth are very dependable, with the exception of currency problems. It is a market leader that continues to increase its market share over the competition. As for a p/e of 90, i don't think anyone could justify that for coke, since it averages earnings increases in the mid to upper-teens, and revenue increases by ten percent or less. even though i live in Atlanta, and loyally worship/drink coke, i would be forced to sell if the company could not maintain these targets. jethro

To: John O'Neill who wrote (1142)	7/13/1998 11:24:00 AM
From: Ming	Read Replies (2) \| Respond to of 1462

It's more like a Pyramid scheme(Internet stocks?)...high potential gains lure more investors in, until the party ends at some point, and the liquidity disappears overnight. Sure, indexing has been a verp popular option for fund investors, because they're sick and tired of managers underperforming the S&P 500. And KO is at the heart of every single major index. And mind you it is not the only large company with liquidity out there. One merely has to look at GE, INTC, MSFT, CPQ, DELL, CSCO, T, AXP, MRK, etc, all of which are just as liquid, if not more so. So if KO's earnings are slashed or disappoint, it will be punished.(Look at Disney and DUpont recently.)And liquidity goes elsewhere. But the question now becmes: when this will happen? Maybe this quarter, maybe next quarter... sooner or later, reality will be factored into the stock's price. The question is when. the street has rather modest expectations this quarter, so we're going to have to wait a while for a drop in KO, IMO. In a sense, this is true for the market overall. During each of the previous bull market peaks, people have said similar things about star-performers. Remember the Nifty-Fifty in 1973? People were saying that you could just hold one of these for 20 years, you would be rich. The truth is that if you did, you would have underperformed money under the mattress, even at today's levels for most of those stocks. IBM was at 170 in 1973, and today is at 230, split-adjusted. That's a gain of 35% in 25 years, not accounting for the paltry dividends that the company gave out in the meantime. Sure, you can play for momentum gains right now. But keep a sharp eye on developments around you, and be ready to exit at the first sign of trouble. Speculative bubbles seem to last forever, but they don't.