The September edition of Donald Coxe’s Basic Points research report (subtitled “Dem Blues”) has just been published. His investment recommendations, as summarized in this document, are listed in the paragraphs below, but I do recommend you also read the full report at the bottom of the post. (Also note that Donald’s weekly webcasts can be accessed from the sidebar of the Investment Postcards site.)

1. Upgrade equity portfolios to reduce endogenous risk. Trade upward in quality, and, in balanced accounts, increase bond exposure. There is, at present, too much froth for comfort. After the grandest recession /recovery stock market rally on record, this is hardly a good time to commit new money into equities.

2. Emphasize Canadian stocks in North American portfolios. Canada has the best banks, and the best range of commodity-oriented stocks. And it has the best North American currency.

3. Continue to overweight commodity-oriented

Kraft Foods Inc.’s (NYSE: KFT) $16.7 billion unsolicited takeover attempt of Cadbury PLC (NYSE ADR: CBY) is the latest sign of consolidation in the highly competitive food industry, and will likely lead to two things: A bidding war for Cadbury and further consolidation in the sector.

The world’s second-largest foodmaker went public with its bid for Cadbury earlier this week after being snubbed privately. Kraft’s offer – a 31% premium to the chocolate maker’s Friday closing price of $37.46 a share, but less than  – “fundamentally undervalues” Cadbury, it said. The offer is less than 15 times Cadbury’s 2008 earnings before interest, tax, depreciation and amortization (EBITDA).

“Any follow-up offer by Kraft would likely involve a higher price,” Moody’s Investor Service senior analyst Brian Weddington said in a note. “The increased leverage that would result under the proposed transaction would be considerable.”

Increased leverage could be a boon to Cadbury

Pepsico and AmBev - a Cola and a Beer, Together?

Tony Daltorio, The Investment U Research Team

According to a recent research study for the Financial Times prepared by the consulting firm Wolff Olins, the world’s next top brands are set to rise in the east. A strategist at Wolff Olins, Melanie McShane, stated that “It used to be possible to be a global brand by dominating the US market. That’s changing rapidly. Now you have to be number one in Asia.”

The findings of the Wolff Olins research echo research by the US-based consulting firm, Bain & Co. Their research estimated that one-third of the FT Global 500 companies could come from emerging markets by 2015 thanks to what it calls a “seismic shift” away from developed markets.

A partner with Bain & Co. said that established western consumer