3 ms·

Coke and Pepsi don't compete only with themselves, they compete for a "share of stomach" with a huge number of other drinks and foods. Rising prices for soft dr

Coke and Pepsi don't compete only with themselves, they compete for a "share of stomach" with a huge number of other drinks and foods. Rising prices for soft drinks can drive people to those other drinks, eventually eroding profits.

ethbro 11y ago
I am intrigued by your more broadly diversified stomach-based ETF and wish to subscribe to your newsletter. (Or, in other words, hypothetically as a high-level investors, you'd want indices that track needs, not particular fulfillment thereof.)
- ucaetano 11y ago
  I don't have any, but there are plenty of needs-focused ETFs in the market, just pick and choose. For example: http://money.usnews.com/funds/etfs/consumer-goods-funds/vanguard-consumer-staples-index-fund/vdc http://money.usnews.com/funds/etfs/consumer-goods-funds/vang... That's the beauty of ETFs, there is a massive number to pick and choose from, representing so many different sectors of the economy.
avn2109 11y ago
However those "other drinks and foods" are also owned by Kraft, Altria, Nestle, and FritoLay, which are in turned owned by the same index investors, so we've just pushed our antitrust argument up one level of metaness. Yes, I know some of these have probably bought others of these, I'm not up on food industry M&A
- ucaetano 11y ago
  It's way more complex than that. Coke and Pepsi compete with tap water, owned by the local utility, as well as fruits and even the local snack stand, since sometimes people have enough money to buy a coke OR a snack, but not both. In other words, it is far too complex. In Brazil, for example, a major competitor of Pepsi and Coke on the at-home segment if fruit sellers on traffic lights. People can buy a bag of oranges for a buck or so, and make a lot of healthy juice out of it, instead of spending 5X for a sugary drink. And if there's opportunity to invest in companies which are undervalued due to being out of indexes, believe me, there will be plenty of people doing it.
  - sjwright 11y ago
    A drink made from a bag of oranges is just as sugary and unhealthy as Pepsi or Coke.

ethbro 11y ago

I am intrigued by your more broadly diversified stomach-based ETF and wish to subscribe to your newsletter. (Or, in other words, hypothetically as a high-level investors, you'd want indices that track needs, not particular fulfillment thereof.)

ucaetano 11y ago
I don't have any, but there are plenty of needs-focused ETFs in the market, just pick and choose. For example: http://money.usnews.com/funds/etfs/consumer-goods-funds/vanguard-consumer-staples-index-fund/vdc http://money.usnews.com/funds/etfs/consumer-goods-funds/vang... That's the beauty of ETFs, there is a massive number to pick and choose from, representing so many different sectors of the economy.

avn2109 11y ago

However those "other drinks and foods" are also owned by Kraft, Altria, Nestle, and FritoLay, which are in turned owned by the same index investors, so we've just pushed our antitrust argument up one level of metaness. Yes, I know some of these have probably bought others of these, I'm not up on food industry M&A

ucaetano 11y ago
It's way more complex than that. Coke and Pepsi compete with tap water, owned by the local utility, as well as fruits and even the local snack stand, since sometimes people have enough money to buy a coke OR a snack, but not both. In other words, it is far too complex. In Brazil, for example, a major competitor of Pepsi and Coke on the at-home segment if fruit sellers on traffic lights. People can buy a bag of oranges for a buck or so, and make a lot of healthy juice out of it, instead of spending 5X for a sugary drink. And if there's opportunity to invest in companies which are undervalued due to being out of indexes, believe me, there will be plenty of people doing it.
- sjwright 11y ago
  A drink made from a bag of oranges is just as sugary and unhealthy as Pepsi or Coke.