Professor Glen Arnold

The inventor of Coca-Cola only saw two years of (very small) sales of his now world-famous drink before he died in 1888.  Prior to his death he sold stakes to various people with the majority interest being bought by Asa G. Candler – the most valuable items being the formula for the syrup and the […]

Yesterday’s newsletter looked at the importance of Operant conditioning and Pavlovian conditioning in encouraging repeat purchases of Coca-Cola.  Today we look at some other factors giving the Coca-Cola Company the ability to price its products much higher than its cost. Social proof gives a boost Social proof is the psychological phenomenon of being influenced by […]

The first Coca-Cola was first drunk in 1886. A pharmacist, John Pemberton, mixed up a caramel-coloured liquid, then walked along his Atlanta street to Jacob’s Pharmacy where it was combined with carbonated water and sampled by customers.  With positive feedback from Jacob’s patrons the drink was launched at 5 cents a glass. In the first […]

The six-year old Buffett’s first entrepreneurial venture might have been with Coca-Cola, but by the time he was 10 he figured that the best seller was Pepsi because a customer could have 12 ounces for the same price as a 6-ounce Coke. For the next 45 years Buffett was a Pepsi drinker – I know, […]

To simplistic value investors the notion of paying an above market average multiple of 15 times the previous year’s earnings (what Berkshire Hathaway paid for Coke in 1988) didn’t make sense – value investors don’t pay high PERs, do they? But Coca-Cola is an example of an excellent value investment which, although it seems expensive […]

Warren Buffett had admired the Coca-Cola company ever since he was a six-year old (1936) buying packs of six Coca-Cola bottles for 25 cents and selling them individually for 5 cents each (he did this around his Omaha neighbourhood after buying from his grandfather’s grocery store, and on holiday at Lake Okoboji, Iowa), “I duly […]

I’ve considered each of Caledonian Trust’s (LSE:CNN) major property development sites to estimate current market value.  In what follows I’ve been forced to make assumptions.  I think these are conservative assumptions (as I understand commuter belt houses around Edinburgh sell for £250 – £300 per sqft,), but nevertheless you should read the numbers with a […]

Caledonian Trust (LSE:CNN) has many valuable sites ready for the building of houses and flats, but does not have ready cash to bring more than one or two to fruition in any one year. Even without speedy building, the value of the sites with planning is retained and may be worth much more than I […]

My wife and I attended the Caledonian Trust’s (LSE:CNN) AGM a few days ago, asked a few questions and chatted with the directors, and immediately bought more shares in the company at £2.30.  I figure they have a net current asset value, NCAV, of at least £3.62 per share, possibly much more. I first purchased […]

As Salomon grew in strength in the mid-1990s Berkshire spent $324m on its common stock.  That 6.6m shareholding, together with the rights attached to its preferred stock, gave Warren Buffett effective control of 20% of the voting rights.   This was reduced to 18% by the redemption of one-fifth of the preferred in 1995 – Berkshire […]