Everything is overpriced?

[DesertCat]

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on august 8, 1994, w. buffet purchased 257,640 shares of coca- cola's common stock for 21.95 a share .
Coca cola earned .84 per share in 1993, and .99 per share in 1994... meaning it was trading at a P/E of roughly 22 when he bought it. Did he make a bad investment because coke was "overpriced"? It may be worth paying a small premium for a premium company.

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He sure didn't but he bought one of the strongest global consumer monopolies, so just be careful what you buy at high multipliers.

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What made KO worth paying up for was the large "moat" around it's earnings. Buffett was very confident at the time that earnings would grow at a good rate for a long time. For a while he was right, but the perceived moat has shown a lot of cracks this century.