A Warren Buffett Valuation – Coca-Cola

The following is an excerpt from ‘The Warren Buffett Way‘, by Robert Hagstrom.


“When Buffett first purchased Coca-Cola in 1988, people asked: “Where is the value of Coke?”  The company’s stock price was 15 times earnings and 12 times cash flow – a 30 percent and 50 percent premium to the market average.  Buffett paid five times book value for a company with 6.6 percent earnings yield at a time when long-term bonds were yielding 9 percent.

Warren Buffett

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I Have Yet to be Punched in the Mouth


“Everyone has a plan, until they get punched in the mouth” – Mike Tyson

I’ve been investing seriously for nearly two years now.   In that time the FTSE All-Share index has returned 16.9% (minus dividends), and I have been fortunate in that my portfolio currently stands up over 40%.  But we are currently in year eight of a bull market and, like many, I am yet to experience a severe draw-down in portfolio value.  I have yet to be punched in the mouth, so to speak.

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Portfolio Performance – Q2 2017

In the Q2 2017 update, performance has again been more than satisfactory.  The portfolio has returned 21.12% year-to-date against 5.50% for my designated benchmark, the FTSE All-Share Total Return Index.  Total return since inception in August 2015 therefore is now 39.96%.  You can view the current portfolio here.  For the (almost) two years this portfolio has been running there has been an annualised return of 20.52%.

It’s been a slower quarter compared to Q1, which returned just under 17.5% for the first three months of the year.  Most of the performance change has been down to large movements in a few positions, namely Wizz Air and Creightons to the upside, and Dialog Semiconductor to the downside.

Q2 2017
Source: Morningstar.co.uk

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