November 20, 2008 | Posted by InvestorBlogger | Be the first to leave a comment 

With Christmas around the corner, and a season of festive blogging ahead of us, as I stare at the screen with my dirty lenses, I’m beginning to wonder if a new set of lenses and frames mightn’t be the answer to my squinting at the screen. It was something I was first aware of driving on the A9 to Inverness one morning. I couldn’t see the huge motorway signboards ahead clearly. I pulled over at Borders, downed a cup of coffee, and felt significantly better as a result.

But still, the thought my eyes were getting worse (or at least the left one) haunted my coffee and my reading. Here’s a problem I’ve had since I was 16 but it’s been stable. Could my eyesight be that poor? So I selected a pair of Rimless Metal Frames with Temples. These come in a Petal Style, which is perhaps a little gaudy for my taste. Of course, I’ll prefer the more conservative brown for the frames.

I don’t usually buy new glasses even with Holiday frames just for a single season. I prefer to own glasses for the longer term, but I already own three pairs of glasses (one old pair, one new pair, and one pair for driving with tints) so it doesn’t seem out of place to own a seasonal pair. There are so many styles of frames and lenses available, at the prices I saw, it would be affordable to buy a new pair for every day of the festive season from Lent to Ephiphany.

As a regular blogger, I do find that I spend a lot more time staring at the monitor of my computers; so it is important to look after my eyes. I would certainly add an anti-reflective coating as well to prevent glare in night driving, and might even help me with the glare from my computer monitor! At $4.95, it wouldn’t add much to the cost, and would seem to be in keeping with these more austere financial times.

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November 19, 2008 | Posted by InvestorBlogger | Be the first to leave a comment 

After my report on Kraft Foods, I thought you’d enjoy this video!

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November 19, 2008 | Posted by InvestorBlogger | Be the first to leave a comment 

Even in a recessionary period, we need to eat. The next company reminds us of traditional products, keeps new ones coming and delivers value along the ‘food’ chain. Only recently was it spun off from its much bigger (and more troubled) brother, we’re looking at a company that can be found in many millions of larders across the globe.

Kraft Foods (NYSE: KFT)

Kraft Foods began as a door-to-door cheese business in 1903 Chicago. James L. Kraft had a tough first year, losing a horse and $3,000. He persevered, however, and was joined by his four brothers in the J.L. Kraft and Bros. Company, as it came to be known. By 1914, their thirty one varieties of cheese were being sold throughout the country and with wise marketing and product development they opened a cheese factory in Illinois.

A big part of their success was due to the successful invention of a processed cheese that didn’t have to be refrigerated and they patented the process in 1916. The American military bought about six million pounds of that product during WWI and Kraft bought its first Canadian cheese company in 1919 with a portion of their profits.

Who’s the big cheese now?

Kraft has always been innovative, going public in 1924 and buying different cheese companies. The cream cheese we all enjoy today began with the Phoenix Cheese Company which Kraft acquired in 1928; by 1930 the company had forty percent of the United States cheese market! Not bad for a company that lost so much as a sole proprietorship in its first year. Indeed, many others would have given up after experiencing such a dismal start.

The Kraft brothers kept acquiring companies to complement its product-National Dairy Products, producer of Breyers ice cream and Breakstone’s cottage cheese and sour cream joined the Kraft family in 1930. Also in the 30’s Kraft began diversifying their products with such lines as salad dressings, macaroni and cheese dinners which we’ve all grown up with, margarines and caramel candies.

Diversifying and diverging

Kraft Brothers changed their name during World War II to reflect their diverse products, calling themselves Kraft Foods. After the way they invested in advertising and more product development. Sliced processed cheese and process cheese sauce appeared in the 1950’s, during which James Kraft died knowing he was leaving a wonderfully profitable yet socially enriching empire.

The company thrived when television became popular, sponsoring the Kraft Television Theatre. The product advertised on the program, McLaren’s Imperial Cheese, was in so much demand that groceries couldn’t keep their customers supplied!

Kraft Foods subsequently launched jellies, preserves, barbecue sauces, marshmallows and a number of other products. You would be hard pressed to pass even one grocery shelf without a Kraft product on it. It now encompasses Nabisco, Wrigley, Pet snacks, Juice drinks, candy, syrup and a vast number of other popular products. It’s very visible in global culture and its variety of products make the company a guaranteed investment. After all, everyone needs food and most people love good, wholesome foods such as Kraft Foods markets at reasonable prices.

The Larder of Yesterday: The Fridge of Tomorrow

Kraft Foods has been and remains a good, solid investment for the conservative investor as well as someone with a more diversified portfolio. The company now markets products in over 150 countries worldwide and the list of household names that they own covers everything from coffee to vegemite.

In recent years it was held back by the poor performance of its sibling, Altria from which it was spun off beginning in 2001. The final severance came just in 2007 when the final tranche of shares were given away to Altria shareholders. Prior to the spin-off, Altria had merged KFT with several large rivals over the years, including Nabisco and Philip Morris Foods. The yield has been rising since 2001 but one negative is the large debt that is currently on its books. Yahoo! Finance cites it at approx. US$20 billion, which is encouraging them to divest some assets to pay down debt. A wise move in this coming recession. KFT was recently added to the Dow Jones Industrial Average after AIG was removed.

I don’t personally own any shares in Kraft, but I do note that Warren Buffett has acquired a large stake. A stake that goes well with his purchase of other US and international staples, like Coca-Cola, and See’s Candy.

Would you buy this stock? What do you think about the debt ratio? Is it too high or not?

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