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Time to Own Up

Companies like Coke and Gillette won't own up to their shrinking sales because investors like Buffett would dump them, and their shares would crater. Plus, join the discussion on our message boards.
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When will

Warren Buffett




? He sold the



when he stopped believing in the company. Now Gillette is seeing negative sales trends. That's right, its sales are declining.

Should Buffett cut loose the maker of the Mach3? Talk about it on our

message board.

Hardly a day goes by when I don't get an email about what is wrong with

Berkshire Hathaway


. To me the answer is easy: Some of the companies he owns are strictly finessing earnings in a kind of silly way. And they can't go up.

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Take this Gillette announcement just now. As is typical of this cohort of Buffett stocks, the company has failed to meet the sales targets but managed to hit the earnings per share target.

To which I say, so what? Forget the EPS. You only make the situation worse when you hit the EPS numbers as the sales fall. That just makes the injury more insulting.

Again, the problem with the



and the Gillettes is that they refuse to own up to their shrinking sales. To do so would lose growth status. If they did that, they would lose Buffett as a shareholder. If that happened, their stocks would just crater.

So they keep up the charade. They blow up, but then they say don't worry, everything will get better.

And then it doesn't.

The charade should stop. Just own up. We are all sick of the assurances. They never get realized.

Random musings

: Painful day for the pandas. Things just aren't that black and white bad right now ... Don't forget to chat with me on

America Online


(which, by the way, I am glad I stuck with) at 5 p.m. And stop restraining yourselves, ask me anything ... except for small cap.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long America Online. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at