My favorite commercial of all time ......




Am I watching SBUX?

Of coarse I am.

Starbucks is the kind of company I dream of owning but never get to buy because of the valuation. The stock has almost been halfed in the last 2 years but I am still not buying shares. My guess is that Frapaccino's are susceptible to the laws of economics just like any other consumer discretionary item and as the recession plays out there will be more pessimism and a better opportunity to buy the stock.

Buy I will enjoy this commercial while I wait.

Things that make me happy......

Ran across this great line in this Financial Times article. The article is your boiler plate summary of the current problems in the credit markets but this opening line blew me away and really made me happy.

"As the technology bubble imploded, fund managers stopped pretending to know what ethernet routers did and started asking what life would look like if all tech stocks halved in value. The structured credit market has yet to reach this moment of clarity. As is typical when the sky falls in, many specialists, obsessed with complexity, point to the impossibility of generalizing about the weather.


I have a perverse pleasure of seeing investment industry bullshit get exposed to the public. One of the most frustrating for me is the often voiced idea that portfolio managers and their army of analysts at trust departments or a mutual funds know something about advancements in technology or biotechnology.

Also, the tech bubble and the subsequent explosion holds a special place in my heart as I had the experience of being an equity analyst intern in 2000 and 2001 for a manger of a $1 billion tech fund who thought that it was actually his skill that was responsible for the 5 star Morningstar ranking and the doubling in NAV and assets over the previous 2 years.

I was also there when the music stopped and it became painfully apparent that none of us, me least of all, knew anything about ethernet routers. I am glad to see that I am not the only one who feels the current credit meltdown feels exactly the same as the tech bubble popping.

* DISCLOSURE: I or accounts I manage may be long or short any and/or all stocks mentioned in this post. This is not a recommendation to buy or sell any security. For informational and educational purposes only.

Things that make me happy......

Recently ran across an interesting article talking about the trend of nice restaurants putting a table in the kitchen. Here is a relevant quote

In the United States, the honor of the first restaurant to feature a kitchen table is claimed by Charlie Trotter's restaurant in Chicago.

"The Kitchen Table dining experience is a way to make everything transparent," Trotter said in an e-mail.
"In the old days, seeing inside the kitchen was forbidden. I wanted to do the opposite - stand it on its head - not only see and tour the kitchen but have the opportunity to dine inside the kitchen. We try to elevate and showcase the 'behind the scenes' and the high level of professionalism that exists inside a kitchen."

Trotter's kitchen table, seating four to six, was introduced more than 20 years ago and is now the restaurant's most requested spot.

How is this related to investing? and why does this make me happy?

Well, its this king of thinking that I believe separates the truly great investors and entrepreneurs from the mediocre. To have the ability to go completely against every conventional wisdom and current trend is in my opinion one the most important characteristics that the truly great investors have.

It also makes me happy to know that there are people out there thinking up new ideas and willing to take risks to be successful ......

Things that make me happy .....

Took a night off from the usual Friday night "dog and pony show" at the clubs, I suppose it will not kill me or my social life, and caught up on some recent conference calls for Q1.

This is part of Q&A from April with Universal Forest Products (UFPI) management. Since this is a stock I recently initiated a position in I will do a write-up on them before long, but one of the most attractive things about the stock to me is the management team. Here is one of the reasons why I want to let these guys run my business .......

April 17, 2007
Q from analyst: Okay. Finally, obviously, your cash flow is – cash flow numbers in from operations are quite solid. Can you just address share buybacks? Just looking at performance over the last number of years, we’ve been in a depressed market for about 12 months now. Your stock price has pretty much averaged at these levels for the last 12 months. The last time you bought stock was approximately two years ago at a little bit below where we are now. Can you just give me some thoughts there?

A from William Currie, Chairman: If we didn’t have an intercompany policy that stated there’d be no insider trading within 48 hours of our release, we would have been buying shares back this morning. Our focus is – it looks to us like our best return on investment over the near term, we’ll switch our focus from acquisitions to stock buybacks, number one; capital expenditures for our industrial operations, number two; and acquisitions, number three.

Q from analyst: Is there currently an authorization by the Board for stock buybacks?

A from William Currie: Yes.

A from Michael Cole, CFO: Yes, 1.5 million shares [1.5M shares represent almost 8% of current diluted shares outstanding] . So we have plenty of approved.

I will post my analysis of this company soon (eventually) but hearing stuff like this from one of the my management teams makes me happy ......

* DISCLOSURE: I or accounts I supervise are long UFPI. This is not a recommendation to buy or sell any security. For informational and educational purposes only.