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No. of Recommendations: 31
The next question which springs to mind is, Warren avoids investing in tobacco companies.....
will these tastes affect his view on the food and drink industry? Perhaps not in his lifetime but one for the next generation.

It's an interesting question...where does Berkshire management draw the line of what's odious, and where will they draw the line in future?

Personally I'd be fine with a liquidation, for much more prosaic reasons.
I don't like the financial performance figures or their likely future prospects.

Mr Market is offering 33.2 times trailing earnings at the moment for what seems no longer to be a financially interesting holding.
Here is the company's net income, inflation adjusted, for the last decade:

2011  $10639  million
2012 10565
2013 10835
2014 10287
2015 9959
2016 9363
2017 9065
2018 9560
2019 9570
2020 8856

This year might come in a bit better, they might manage $9.3bn.

Per-share figures are slightly better because of buybacks, but...
* the yield on that capital allocation is dismal. I wouldn't want to buy Coke at over 30 times gently falling earnings, but if I did, I wouldn't want Coke to do that.
* if you think of it as a cash cow based on trend earnings, you have to be careful not to count that buyback money twice.
Either you get the earnings yield, or you get the rise in EPS due to buybacks, but not both.
* Real EPS still fell 1%/year on trend, despite the buybacks (!).
In effect, the money spent on buybacks seems to be a necessary, but insufficient, cost of maintaining the value of a share...not a part of owner earnings at all.

Obviously those comments are about the past...things might take a turn for the better. Or they might not.
Earnings are likely to take a nice upswing measured in US dollars if the US dollar falls, because they are very export oriented.
But of course, earnings in US dollars will be worth less because the US dollar will have fallen.
It's still a modest net real benefit because they have a higher percentage of costs in dollars than their percentage of revenues.

Even having to pay almost $11 a share in tax when we sell, it seems a poor place to have money.
The only argument for inaction right now is that there are few other places to put it.
The dividend yield is higher than the yield on cash.
(dividends have risen in real terms in the last decade, but only because the payout ratio has risen from 50% to 75-80%...not something to extrapolate)

But surely there are things that are more reasonably priced relative to future prospects.
As a random comparison, Apple is cheaper on current earnings, and Apple's earnings haven't exactly been falling in the last decade.
In that sense, I'd rather we had more Apple instead.

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