Saturday, August 17, 2013

A quick thank you to Bill Ackman

My visit to a Herbalife club in Queens inspired me. If those guys could lose weight on a protein shake meal replacement diet so could I.

So I started mostly with local Australian brand products (but a few Herbalife products, notably the tea). Anyway I am now 9kg (20 pounds) lighter and I can fit into trousers I purchased on a trip to New York in 2004. [They have sat unused in the cupboard for about six years!]

And so the new svelte me (well not really svelte - this is relative) is off to Claudes - a Sydney dining institution - and I suspect I can knock off the evil even that will do to my waistline.

And not just the dining performance that has improved. Going long the stock has rather helped my stock picking performance.

And so Bill Ackman,

Thank you.


Friday, August 16, 2013

The distinctly cooler Mr Hempton is the Odd Man Out

Nick Hempton (far cooler than your blogger) has a new recording out:

This time he is paired up (for four tracks anyway) with the great Michael Dease on trombone.

I won't repeat the expletives of this review - but it is accurate.

Buy it at Positone - and you too can be up with the hippest jazz.


Tuesday, August 13, 2013

Strange stock assessment from a value investor I kind of admire: a note on the transition of Apple into a "value stock"

In my email today I received a missive from a value investor I kind of admire - a peon to the value in Apple shares. To quote:

My mother-in-law had an Android tablet, and it quickly turned into an expensive paperweight on her kitchen counter.  Six months ago she got an iPad mini, and she is inseparable from it.  She won’t be buying another non-Apple phone or tablet.  There is a lot of bearishness on Apple in the media and blogosphere, but if these headlines start scaring you out of the stock, just visit a few Apple stores and your fears will all go away – the one we dropped in on recently in Denver was swarming with Apple fanatics, while the Microsoft store next door and the Samsung store at Best Buy were almost empty.  These folks will be buying whatever comes out of Cupertino for a long, long time.

Value investors must be the only people who assess tech stocks by what the grandmothers like. And they do it without any trace of irony.

Just like the classic Samsung advert but without the humour:

But of course my value friend does have a point. What with increasing longevity Apple will be here for a long time. I am not killing granny off yet - and the trail of some declining tech stock is clearly worth a lot of money.

What is Microsoft worth?


(No position in either stock - but generally I want to leave declining tech alone. Someone pitched me Blackberry the other day based on the qualities of their latest phone. You can make a pitch for Blackberry - but it is a patent-installed base pitch, not a pitch on the future...)

Sunday, August 4, 2013

The bad guys won one this time...

Jeff Matthews has a funny blog post about how someone bought call options over 760 thousand shares of Booz Allen Hamilton (NYSE:BAH). The strike price for these options was $20.

This is an enormous trade - over seven times the open interest in all options of all stripes for BAH.

The next day comes a headline:
Accenture in Talks to Buy Booz & Co.  An Acquisition Would Beef Up Strategy and Operations Consulting
As Jeff Matthews tartly notes Booz & Co is not the same company as Booz Allen Hamilton - they separated years ago.

And so our want-to-be insider trader has blown his dough - 760 thousand times 85c worth - or a little over 650 grand if you include brokerage. This was a costly error, but less costly than the criminal trial and almost certain conviction for insider trading if our imbecilic crook had been right. I mean he didn't think he could get away with that did he?

As luck would be Booze Allen Hamilton "crushed" earnings estimates. Here is the stock chart:

And so our asinine aspiring insider trader has made quite a decent profit proving once again that it is better to be lucky than good on Wall Street.

Notch one for the bad guys.

In my darker moments I imagine there is enough inside information around that someone knew about both the Booz & Co takeover and the Booz Allen Hamilton earnings beat and were Machiavellian enough to know they could trade this information aggressively and not get pinged for insider trading. But that couldn't possibly be true... could it?


Friday, August 2, 2013

A little Herbalife red-herring

Here - linked - and from the SEC's Edgar database is the original Herbalife IPO prospectus. This document was filed on 1 October 2004.

Remember back then. George Bush was President yet to win his second term. Barrack Obama was a Illinois State Senator and you needed to be a political junkie to have heard of him. Almost nobody could have identified his family in a photo.

And so - lurking - unnoticed in the prospectus - is this photo presumably representing Herbalife customers or distributors:

The photo is there - you can go check it.

It occupied my mind for a while - but it is alas not the First Family much as I wish it were. It is just one of life's little coincidences.

Then of course I may be wrong. Been wrong before. Appearances might not be deceiving...


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The content contained in this blog represents the opinions of Mr. Hempton. You should assume Mr. Hempton and his affiliates have positions in the securities discussed in this blog, and such beneficial ownership can create a conflict of interest regarding the objectivity of this blog. Statements in the blog are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. Certain information in this blog concerning economic trends and performance is based on or derived from information provided by third-party sources. Mr. Hempton does not guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Such information may change after it is posted and Mr. Hempton is not obligated to, and may not, update it. The commentary in this blog in no way constitutes a solicitation of business, an offer of a security or a solicitation to purchase a security, or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.