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Hi All,

Years ago Buffett wrote about the "for every $1 retained should translate to $1 increase in market value" point on long-term capital allocation assessment.

Coca Cola, which he used some space in writing about in latest Letter, increased its retained earnings by about $13 Billion from 2013 to 2022. Over the same period, the market cap increased from $162B to $275B, up by $113B.

So for every $1 of increase in RE, $8.69 was created in market value. Looks like KO has passed the test after all these years! KO has been so long in the BRK portfolio that I have almost forgotten about it (Buffett said they used 7 years to get the initial position from '87 to '94!)

The way he phrased it in letter makes KO look like a dividend play with modest growth going forward. At 24x p/e and 3% nominal yield, probably not worth unloading it yet.

Back in late 1990's, its P/E went to almost 50x? (if memory serves right).

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