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Has the Pepsi special situation that I have been waiting for finally arrived?



May 16, 2012 – Comments (3) | RELATED TICKERS: PEP


Has the Pepsi special situation that I have been waiting for finally arrived?  This one is music to my ears, or eyes I suppose that I should say because I read it and didn't hear it. One of the more successful activist investors that I follow, Ralph Whitworth’s hedge fund Relational Investors, reportedly has established a large position in Pepsi (PEP).

I established a smaller position in the company a while ago after Mario Gabelli mentioned that he liked the company because it is cheap on a sum-of-the-parts basis and that it might eventually unlock value by splitting up into a couple of different companies.

Many analysts now believe that a break-up of Pepsi is inevitable. I certainly hops so. I have a feeling that the move would cause the stock to soar.

PepsiCo Rises On Whitworth Stake


Here's a few other random links that caught my eye. 

As someone who used to think of "organic" food as a joke, the following article doesn't surprise me in the least:

High Fructose Corn Syrup Makes You Stupid

I have made some significant changes in my views over the past year or two.  I now try to eat much healthier than I did in the past.  No, that doesn't exactly mean eliminating burgers and deserts from by diet, but I do try to pay attention to what I am eating.  I have been making a concerted effort to feed myself and my family more organic foods, and less genetically-modified, hormone fed, corn syrup filled, diet-anything, artificially colored using petroleum byproducts (Red 40), etc... food. I'm not to the point where I'm anal about it yet, but overall at least I am paying attention and making an effort.

Here's a funny story on the subject of corn syrup.  My father used to work for a company called CPC...Corn Products Corporation.  Back when I was really little I used to put sugar or honey on my morning cereal to make it sweeter.  It's not like I was tossing sugar on top of Fruity Cocoa Puffs or something like that which was already sickly sweet, but I threw a little on Cheerios or Wheat Chex.  Anyhow, one day my Dad came home from work with a bunch of generic unmarked bottles of some stuff.  I asked him what it was and he said that it was some new sweetener that they were working on.  I tried a little and of course liked it.  I proceeded to pour gallons of what turned out to be corn syrup on my cereal over the next several weeks.  Who knew that something that's derived from corn could be so bad for you?  Fortunately, our private stash eventually ran out.


As someone who has become a huge believer in the power of meditation, which is not nearly as mystical as it sounds...but actually is more training one's self to concentrate than anything, I found the following article on "flow" particularly interesting:

Nine Steps to Achieving Flow in Your Work

Have you ever lost yourself in your work, so much so that you lost track of time? Being consumed by a task like that, while it can be rare for most people, is a state of being called Flow.

In my experience, it’s one of the keys to happiness at work, and a nice side benefit is that it not only reduces stress but increases your productivity. Not bad, huh?

But what is Flow? Why is it important? And how can we achieve it on a regular basis for increased productivity and happiness at work?


Anyhow, thanks for reading and have a great evening everyone!


3 Comments – Post Your Own

#1) On May 17, 2012 at 1:32 PM, leohaas (30.02) wrote:

Am I the only one here, or is nobody bothering to ask the obvious question:

In one blog you vilify HFCS, and you are gloating about having invested in a company that puts HFCS by the boatloads in many of its products. What's wrong with this picture?

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#2) On May 17, 2012 at 2:01 PM, TMFDeej (97.70) wrote:

That's an excellent point, leohaas.  I never really thought about it like that.  Just because I don't want to eat HFCS doesn't mean that I can eliminate every single company that uses it in its products from my portfolio.  I would guess that just about every single major publically listed food company uses the stuff in at least some of its products.  Not only that, but are you going to the not invest in the companies that sell items that contain HFCS in their stores from consideration?  How about the ones that truck the products to stores?  Or anyone that benefits from the sale of corn for that matter?  Or how about companies that use anything artificial in their products.  Heck Starbucks just switched from using red dye in certain drinks to using crushed up beetles instead.  Wait, what about the beetle's feelings?  I'm not trynig to be sarcastic, just to make a point.  I'm not about to limit the world of stocks that I invest in to Annie's (BNNY) and a few others.  It's hard enough to find good opportunities out there.

You may have noticed that I have talked about raising my moral investing standards significantly over the years, causing me to miss out on some opportunities that I had a high conviction in, such as PM. 

It's not like Pepsi is selling asbestos pajamas in third world nations.  Again excellent point.  I think that brining awareness to the HFCS issue is even more important than avoiding investing in companies that use it.  If everyone paid more attention to what they and their families injested these companies might just switch to more natural ingredients as the market dictated.  I know that Pepsi does sell some sort of retro soda that uses real sugar instead of HFCS.

Thanks for the comment.


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#3) On May 17, 2012 at 2:33 PM, Hawmps (< 20) wrote:

On that note Deej, Coke and Pepsi both produce a version of their respective colas with real sugar from beats or cane, like you said.  It is usually more widely available in parts of the world other than the US, but you can find Pepsi made with real sugar in many grocery stores.  I suspect that if there was a major public backlash against HFCS (which there probably should be) these two companies will do just fine switching over to real sugar entitrely... as well as that poison they call aspartame in the diet drinks and about 5,000 other products. 

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