Bear Case Scenario Coca-Cola $KO, $PEP, $DPS, $MNST, $STBFY

Coca-Cola (NYSE:KO) is about to reveal earnings. A perennial Warren Buffett favourite ponder this Bear Case Scenario

Soft-Drink bottling operations are very capital-intensive. Recent acquisitions of North American bottling will strain margins somewhat before any massive improvements to distribution are realized.

Coke popularity is dropping and Coca-Cola will need to constantly innovate and acquire new brands. The world is more competitive and difficult.

Coca-Cola revenues are relatively undiversified when compared to Pepsi. Coca-Cola is therefore more vulnerable to missteps and miscues.

Sugar drives Diabetes. The rate of Diabetes  is reaching epidemic proportions in the western world. There will be significant political, health and regulatory distractions for senior management in the near future.

George Gutowski writes from a caveat emptor perspective.

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Ultimate Hedge Position. Short Mcdonald’s $MCD Long Diabetes. Open to suggestions-Diabetes Contango.

Business Week has an interested cover of the reality of hedge funds. Long overdue.

Consider the ultimate hedge position. Play the Diabetes Contango. Short McDonald’s (NYSE:MCD) who with extra fries has done a lot to promote diabetes. Go long something with a Diabetes solution. Which raises the question which stock will be the financial standard-bearer in the fight against diabetes. Currently an epidemic in western countries with some 20% of general population affected. Drugs, health care provider, diabetes supply manufacturer. This is perhaps the next golden grail.  This is just the strategic big bet that Jack Welch and the old General Electric or GE (NYSE:GE) were famous for.

Who will make it this time?

George Gutowski writes from a caveat emptor perspective. Lots of home work to do after this post.