Archive for April, 2007

Right on Piratery

According to the AP, pirate attacks dropped worldwide in the first calendar quarter of 2007.

Pirates attacked 41 commercial vessels worldwide in the first three months of 2007, the lowest figure reported in the past decade, a global seafarers’ watchdog said Wednesday.

The January-to-March figure is a significant drop from the same period last year when 61 attacks were reported, the London-based International Maritime Bureau said in a statement through its piracy reporting center in Malaysia.

It was the lowest first-quarter total reported by the IMB since at least 1998.

Although many sell-side piratery analysts may have been surprised, readers of our research reports would not have been. This report comes on the heels of our 8-21-2006 report titled Peak Piratery: Time To Walk the Plank? in which we urged potential piratery participants to “Do Not Buy”. We of course, were correct and called the piratery market more accurately than any other investment research firm.

As our fiscal third quarter of 2007 comes to a close today, keep this in mind when deciding whether to continue to invest the time into our reports. We make the big bucks because we make YOU make the big bucks.

Quotes Entirely Relevant to Investing 4-29-07

Norville: What do you do if the envelope is too big for the slot?
Ancient Mail Sorter: Well, if you fold ’em, they fire you. I usually throw ’em out.
-An exchange from The Hudsucker Proxy

Past Quotes Entirely Relevant to Investing

Looking for Quality Finance Blogs To Link To

We are trying to find more quality finance blogs than the ones we have listed under “Best Resources”. Slants can include finance, investing, equity research, market commentary, private equity anonymous sardonic memoiring and any content which resembles the content we link to in “Best Resources”. We are especially interested in fresh site that not many people may be reading but are pretty good. The Epicurean Dealmaker is a good example. We do not care about current traffic, only current quality. Submit links below or by our submittal form or you can email them to

The Stalwart, the Stalwart of Financial Blogs, is Alive Again

We have read the Stalwart since they started and they are one of a few goto blogs we depend on to do the voodoo that we do so well. They are now back from an almost six month hiatus and we implore you to resume your reading of The Stalwart, if you had stopped. If it is new, commence your reading immediately. You will not be disappointed.

Pfizer Subtly Moves to Generics

Reader WrigleyDog pointed us towards a press release from Pfizer (NYSE: PFE) today, which was so generic that it can only mean one thing: the company will stop producing anything but generic pharmaceuticals. Here is the press release in its entirety:

Pfizer Focused on Delivering the Value Customers Expect and Shareholders Deserve, CEO Kindler Tells Shareholders

SOUTH BEND, Ind.–(BUSINESS WIRE)–In remarks at the annual shareholders meeting, Pfizer Chairman and Chief Executive Officer Jeffrey B. Kindler said, “We’re operating in an incredibly dynamic industry environment – one that, day in and day out, presents us with a whole range of promising opportunities. To succeed in this environment, we must fundamentally change the way we’ve done business in the past – and eventually transform just about every aspect of our company.

“We’ve accomplished a lot already. But it’s clear we need to do much more to get to where we want to be. All of our efforts are focused on achieving our ultimate goal – making significant improvements in the company’s performance and generating greater total returns for you, our shareholders.

“While it’s clear we’re operating in a very competitive business environment today, I also believe that we have a very wide and attractive set of opportunities to drive our success in the years ahead and enhance returns to our shareholders.

“We are focused on driving revenue growth, executing better, controlling costs, instilling greater accountability across the company and making sure we deliver the value our customers expect and our shareholders deserve.”

In other business, 12 of the company’s directors stood for and were re-elected to one-year terms. In other voting, shareholders ratified the selection of KPMG as Pfizer’s independent auditor for 2007. No shareholder resolutions received a majority vote.

Recommendation: There is not one thing in that entire speech which could not be recycled by 95% of public companies, which is amazing even for a press release. We think this is clear evidence that Pfizer will eschew its focus on patented pharmaceutical and switch entirely to generics. If Pfizer does this and if they can drive revenue growth, execute better, control costs, instill accountability and deliver value to shareholders, we rate the stock a “Buy this Stock in your Portfolio”.

Related: The Stalwart discusses the disappointing guidance provided by the most generically named company the Corporate Executive Board (NASDAQ: EXBD).

Eggo Waffles Are Not Sturdy Enough For Industrial Construction

Kellogg Co (NYSE:K), producer of Eggo Waffles of “Leggo my eggo” fame, finally made the logical step to tie-in Lego building blocks to their popular, nutritious, and delicious waffle product. The pronunciations of “lego” and “leggo” are identical and the overlap between the two consumer bases is high; it turns out that >86% of the people who build indoor structures using small plastic pieces also consume waffles regularly.

It also appears that as a secondary goal, Kellogg had hoped to capitalize on the real estate boom by positioning waffles as a substitute for common building materials used in new home construction. This belated effort is doomed to fail, not just because the worm has turned on real estate. I have personally attempted to build structures using their low-cost waffle material and have found that it fails to provide the necessary structural support. These issues are compounded when the waffle building supplies are covered in tasty maple syrup.

Recommendation: Only invest in Kellogg’s or any other cereal company as a housing and construction play, if you are looking for a big bowl of unprofitable investments with the high fiber ability to produce regular, large, soft, bulky investment losses.

The Prince of Papers, Now a Frog

Submitted by LoS reader Charlie

As a college student ten years ago, I fell in love with the Wall Street Journal (NYSE: DJ). A black-and-white broadsheet sans frivolity, it was the keeper of reporting and editorial standards that put all others to shame.

Alas, times have changed.

On a flight out of New Mexico on Friday, I had a chance to read my colorful, downsized copy front to back—and learn afresh what a turd this paper has become. On the banner atop the front page: “Record Home? A $125 Million Listing in L.A. W1.” Hmmm…that story was actually on W8.

In the lead article, we get the inside scoop on the fall of Don Imus. “The reaction moved at warp speed as the Internet circulated his racist words to millions of PC screens,” the authors tell us.

And regarding the press conference featuring the Rutgers basketball players: “Without a hint of professional polish, their remarks came across as heartfelt.”

Racist? Heartfelt? Is the front page still for news, or did the trio of female reporters (dare I say dunder-headed ho’s) somehow hijack it for their editorial purposes? Tell you what: you folks stick to the facts, and let us decide what’s racist and what’s heartfelt.

Later in the article, we learn what “a American Express spokeswoman says.” Well what did the copy-editor say? Was it the same guy who edited the story on the departure of Monster’s CEO? (“Mr. Pastore’s couldn’t be reached for comment.”) Or the Naomi Schaefer Riley column on the Taste page? (“The problem is not their own dependency but their willingness to let other depend on them.”)

I once adored you, you mangled beast. Short this stinker.

Quotes Entirely Relevant to Investing 4-22-07

The best lack all conviction, while the worst are full of passionate intensity.
William Butler Yeats

Past Quotes Entirely Relevant to Investing

Long Sticker, Short Prius

According to USA Today:

Californians appear willing to pay $4,000 more for used gasoline-electric hybrid vehicles that have state-issued carpool stickers than for hybrids that don’t.

We expect the markets for carpool-lane stickers to evolve, similar to the way the CDO market evolved for mortgages and other types of consumer debt. We see an opportunity for buying sticker-bearing hybrid cars, stripping off the stickers, and reselling both the sticker and the car separately. By selling the stickers to those who most want to avoid traffic — and the hybrid to those with the highest tree-hugging tendencies — one should be able to realize higher pricing versus the bundled buy that exists now.

The mortgage markets provide a clear path for success: hopefully, the collateralized sticker market will grow until it becomes completely out of control, encourages over-leveraged purchases of carpool lane stickers, and leading to a regulatory crackdown that starts an economic recession.

Recommendation: Short Prius cars, Long carpool lane stickers.

RIMM Jobbed

If you encounter nattily-dressed males shaking, shivering or otherwise acting erratically, do not be alarmed. There has been a disruption to Research in Motion’s (NASDAQ: RIMM) Blackberry service, preventing customers from being able to send and receive email reliably from last night through to today. If this continues, Blackberry users worldwide will be unable to:

  • affect the veneer of importance in public
  • take time off from vacation to stay addicted to work
  • ignore unwanted conversations at work-related social functions
  • pay complete inattention during investment meetings
  • achieve new high scores in Brickbreaker [ed note: 24k, bitches!]
  • ignore their girlfriends in the name of “last-minute requests from the PM”

Global markets could crash as this morning has given market participants a rude wake-up call from the sedated state induced by their Blackberry umbilical tethers to the hard reality of their empty existence and the abyss that is their communal soul.

Dogs Can Smell Fake DVD’s and Other Malaysian Lies

The AP is reporting that the Motion Picture Association of America has trained two labradors to sniff out pirated DVD’s. The dogs are named Lucky and Flo and they have reportedly help uncover 1.2 million pirated DVDs. As a result of this dog-gone amazing success:

Malaysian movie pirates have placed bounties on Lucky and Flo who have so far helped uncover $3.5million in fake CDs and DVDs during raids on warehouses….Theblack Labradors will participate in more Malaysian raids, but they also could be deployed to other countries for anti-piracy operations from time to time, Gane said. He declined to identify which countries were being considered, citing security. Lucky and Flo are the world’s only dogs trained to detect a chemical used in making discs, the MPAA has said.

I call bullsh-t. Bullsh-t. Bullsh-t. Bullsh-t. They are not the only ones. I recently trained my dog to smell forged signatures – now he sits at the bank teller and barks whenever someone tries to endorse a check that’s not theirs. He is the only dog in the world trained to smell a chemical used in forged signatures. He has put an end to identity fraud in New York City and he may be deployed to other cities which shall remain nameless for security reasons. He has a bounty and a blue bow on his head. Also he can smell fake orgasms, which was why I got rid of him in the first place.

Recommendation: Short lies and bullsh-t.

The Anti-Portfolio

Submitted by LoS reader Winston Wolfe

In our never ending search of good buy-side targets, we stumbled across Bessemer Venture Partners and their “Anti-Portfolio”. Said portfolio chronicles the venture opportunities that this all-knowing venture capital firm has passed on during the last 15 years. Opportunities include, but are not limited to, Apple, eBay, Federal Express (seven times), Google, Intel, and PayPal. Although publicly flaunting your failures might to most seem like a bad idea, we see this as an opportunity to explore a totally new growth area, what we call the “Anti-Space.” Accordingly, we are having our analysts flush out a plethora of new ideas including the:

Anti-Girls-I’ve-Slept-With Portfolio – Girls we had the chance with when they were ugly, and now won’t call us back (Links may not be SFW).

Anti-Comments Portfolio – Those opportunities we had to lay someone out with a cutting remark, but didn’t pull the trigger.

  • HR says: “I think we may need to spice up the office with some new plants.”

    Anti-Comment: “You moronic mouth breathing land-monster.”

  • Managing Director says: “Did you finish that DCF?”

    Anti-Comment: “That’s what she said”

  • IT says: “Maybe after I fix this printer we can grab a drink.”

    Anti-Comment: “Any connection between your reality and mine is purely coincidental.”

Recommendation: In line with our Anti-Investment Strategy, but we see significant hedging opportunities in investing in things you didn’t invest in and not investing in things you did invest in.

Quotes Entirely Relevant to Investing

Beware of the man who works hard to learn something, learns it, and finds himself no wiser than before. He is full of murderous resentment of people who are ignorant without having come by their ignorance the hard way.

-Kurt Vonnegut

Past Quotes Entirely Relevant to Investing

HT to PairofSox.

Vonnegut, Rest in Peace, you need it

Kurt Vonnegut died yesterday.

So it goes.

It will be a while before we get another author like him. You need a f*cked up life to be as darkly and ingeniously satirical as he was. His mother committed suicide on Mother’s Day when he was 21. That same year he dropped out of college and enlisted in the army during World War II. He fought on the front lines of the Battle of the Bulge (one of the bloodiest in American history), ended up stranded alone behind enemy lines and wandered for days before being taken as a POW. He then arrived in Dresden shortly after the Dresden fire bombing, where somewhere between 35-100k people died in grotesque fashion. He spent three days dragging bodies into mass graves. After it became clear that there were too many bodies to bury he watched Nazi’s incinerate the dead with flame-throwers.

One would think all that would ruin your sense of humor but it instead created Vonnegut’s.

I tell you, we are here on Earth to fart around, and don’t let anybody tell you different.

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