You have to be careful what you read on the Web.
A perfect example was an article I read the other day about consumer goods companies. The article was well-intentioned and, except for a few material misstatements, was well done.
Problem is, the average person assumes everything a writer says is true.
The author of the article said that legendary investor Warren Buffett took a significant stake in Kraft. That is true. However, he then said that Buffett has a significant stake in General Mills, which is not true.
Perhaps Lou Simpson of GEICO, which Berkshire owns, has taken a small position in General Mills, but nowhere on the Internet is there any evidence of Buffett or Berkshire taking a significant position in General Mills.
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Then he says Coca-Cola’s stock price has done nothing this decade, which is true. Then he says “coke seems to be turning around,” which is misleading.
Coca-Cola in this decade has had, in 67 percent of those years, earnings per share (EPS) growth of 8 percent or more, which is fantastic, and in 33 percent of those years it raised EPS 13 percent or more.
No offense but how many $75 billion-plus companies can grow their EPS at a rate that high?
The last three years for Coca-Cola, EPS grew 9.2 percent, 8.5 percent, and 17.5 percent, respectively
Does any reasonable investor believe that Coca-Cola can really grow its EPS much faster that they have in the past three-and-a-half years?
The overall theme of the article was decent but the reader who took everything that was said to be factual was shortchanged and was not properly educated and will not be “amused’ if he or she takes the author at his word.
Perhaps those of us who read this and can see the inaccuracies are amused, but these articles do not serve the prominent financial news organization that printed it.
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