April 27, 2008
Infrastructure, Commodities, Energies
From this week’s interview in Barron’s:
“Many people today still don’t realize that the growth companies of this decade are global infrastructure, commodity and energy companies and not necessarily firms making deodorant, soda, diapers or drugs. We’re not buying yesterday’s winners that are now trading for 20 times earnings.
Coca-Cola is a great company but it’s a 20-P/E stock that has annual earnings growth of 10%. I want to buy the reverse, a 10 P/E stock growing at 20%. For the past 20 years, people thought the only areas of secular growth were consumer products, health care and technology. They treated economically sensitive companies as deep cyclicals and didn’t value them properly. These are the growth industries of this decade.”
True, but I still like KO, and PEP for that matter.
April 27th, 2008 at 10:32 pm
complete interview, free @ marketwatch.com
April 27th, 2008 at 10:39 pm
j: Thanks for the backdoor link.
April 28th, 2008 at 3:31 pm
I listened to a statistical arbitrage guy talk about working for a large well known house, and how they played long/short spreads like PEP and KO. Their price ratio runs in a nice channel, and while not big money, it makes for steady income. Nothing exotic, just vanilla spreads of companies in the same sector.
April 28th, 2008 at 3:42 pm
cdn: I thought even the non-exotic statarb guys got murdered last year, but I don’t really know.
April 28th, 2008 at 3:58 pm
CM: Their systems did fail, indeed.