Midas Mulligan

Buying Berkshire: The Ultimate No-Brainer

While past performance of Berkshire Hathaway common has been undeniably superb under the rigorous eye of WEB, potential investors must be mindful of the fact that Mr. Buffett turned 78 years-old on 30 August.

Five Great Companies to Buy at a Drop

RE: KO, CL, PG

The points you make regarding cost-input inflation and the ability to take pricing can be applied to the entire universe of consumer products and packaged food/beverage companies. Recent earnings reports from WWY, PEP, KFT, CL and others appear to demonstrate that the consumer companies are navigating cost-input inflation waters effectively, and are taking sufficient pricing to remain quite profitable.

As for multiple contraction, Coca-Cola, for example -- if the stock traded down 15% from the current quotation -- would be trading at a multiple of slightly over 12x FY09 consensus. Twelve times forward earnings would be less a "gift" and more of a "miracle" for it to collapse to a multiple not seen since the Second World War. "Black Swan" event indeed.

A broad market decline could see these companies visit valuation lows not seen in generations, but if it ever were to occur, investors should not expect them to remain there long -- and as such, be nimble ( with liquidity at the ready ) on any such "catastrophic" decline.