Coca-Cola Streamlines Its Structure-WSJ

Coca-Cola (KO) announced on Monday that it is organizing its operations around three divisions starting January 1st.  The 3 divisions are Coca-Cola Americas, Coca-Cola Eurasia and Africa, and the Bottling Investment Group.  I believe this is a very smart decision for Coca-Cola to avoid complexity and to attempt to minimize SG&A expenses.  I believe that Pepsi (PEP) would also benefit from a more simplistic operating structure and honestly I wouldn't be surprised to see them mimic Coke's move, with the exception that Pepsi has much larger food and snacks operations.

http://online.wsj.com/article/SB10000872396390444405804577558791535202550.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Coke in Talks to Buy Monster Beverage-WSJ

According to the Wall Street Journal Coca-Cola Co. (KO) is evaluating an $11 billion plus acquisition of Monster Beverage Corp. (MNST).  At over 30 times earnings I think this acquisition is not a good idea of Coca Cola.  While I'm sure Coke could increase Monster's sales through improved distribution, this is too large of an acquisition on a company that is facing increased competition, and which I would argue lacks the brand value to warrant such a price.  I think as an investor if Coca Cola were to invest $11 billion into their own energy brands, it is very likely that the result would be something greater than what Monster offers.  I'd be really curious to hear what Coca Cola's largest investor Warren Buffett thinks of this deal, but I would doubt that he is really excited about it at this price.

  http://online.wsj.com/article/SB10001424052702303916904577375900742730404.html?mod=WSJ_hp_LEFTTopStories

Warren Buffett Feasts on Goldman Scraps-WSJ

When most people think of Warren Buffett's investment philosophy they think of his large positions in iconic companies such as Coca Cola, Burlington Northern, Geico, Wells Fargo, etc.  These investments are core positions where he was able to allocate huge sums of money with the understanding that the franchise values would continue to grow over time.  These types of businesses aren't easy to buy at great prices so when he had the opportunity he bet big.

Before Berkshire Hathaway reached such a massive size Buffett engaged in a great deal of merger arbitrage investment which he termed as "workouts."  Distressed debt investing is a type of "workout" because the bonds will either pay off at par, or they will likely be converted into a combination of cash and equity through the bankruptcy process.  Buffett still executes these types of investments when he is allocating the massive float from his insurance operations, but because many of them aren't large enough to necessitate public disclosure we don't hear much about them.   At T&T Capital Management we attempt to emulate many of Buffett's strategies particularly those that he employed when he was running the Buffett Partnership L.P. prior to his acquisition of Berkshire Hathaway.  This WSJ piece describes Buffett taking advantage of pressured selling on a small quantity of bonds from Goldman Sachs and I think it is a fun and different perspective into Buffett's methods.

http://online.wsj.com/article/SB10001424052702303624004577338070658967732.html?mod=WSJ_hp_LEFTTopStories