Archive for 2006

• Twinkie Lasagna!
  Eddy Elfenbein, June 27th, 2006 at 11:32 am

  
  I’m not sure about this:

  Twinkies — they’re not just for dessert anymore. The new “Twinkies Cookbook” has recipes for everything from a Twinkie Burrito to Twinkie Lasagna.
  Theresa Cogswell compiled about 50 recipes for the book.
  Many were submitted to Hostess, as part of Twinkies’ 75th anniversary celebration last year.
  Cogswell tells Illinois’ Daily Southtown newspaper that one of her favorites is a berry-laden Patriotic Twinkie Pie.
  It’s red, white and blue.
  Cogswell says it makes a great centerpiece for a Fourth of July picnic, which you can also eat for dessert.

  Twinkies are owned by Interstate Bakeries (IBCIQ.PK), which isn’t looking too hot lately.

• EU Upholds Anheuser’s Right to “Bud”
  Eddy Elfenbein, June 26th, 2006 at 1:59 pm

  From AP:

  The Board of Appeal for the European Union’s Office for Harmonization in the Internal Market (the what??) ruled that Anheuser-Busch can register it’s trademark “Bud” beer throughout Europe, the company announced in a news release.
  The ruling is just one piece of a massive legal fight in several European courts between Anheuser-Busch and the Czech brewer Budejovicky Budvar. At issue is the famous Budweiser brand, which both companies claim an historical right to use.
  The Czech brewery was founded in 1895 in a town called “Budweiser” by the German immigrants who founded it, while Anheuser-Busch launched its own U.S. Budweiser brand in 1876.

  Do they really think Europeans will buy Budweiser? Dear lord! They’re in worse shape than I thought.

• J&J Buys Pfizer’s Consumer Health Unit
  Eddy Elfenbein, June 26th, 2006 at 1:39 pm

  Losing Guidant to Boston Scientific was one of the best things that could have happened to Johnson & Johnson (JNJ). That merger had troubled written all over it. It’s usually a bad sign when the company you’re thinking of buying sues you. Yep, you want to avoid that.
  The wait was worth it. Today we learn that JNJ is buying Pfizer’s consumer health division (Listerine, Sudafed, Nicorette). This is a much better move for JNJ. The company has been sitting on a mountain of cash (nearly $6 a share).
  At the end of last year, I wondered if a good paired trade would be to go long Merck (MRK) and short Pfizer (PFE). It was (at least so far). The troubles for Pfizer are still pretty bad. They needed this deal.

• Expeditors Splits 2-for-1
  Eddy Elfenbein, June 26th, 2006 at 10:36 am

  Shares of Expeditors (EXPD) split 2-for-1 this morning. For Buy List track record purposes, I’ve adjusted the cost basis to $33.755.

• Biomet Subpoenad by DOJ
  Eddy Elfenbein, June 26th, 2006 at 8:51 am

  From MarketWatch:

  Biomet Inc. said Monday it’s received a federal grand jury subpoena from the anti-trust division of the Department of Justice. The company said the subpoena is related to possible violations of anti-trust laws involving the manufacturing and sale of orthopedic implant devices. Biomet, based in Warsaw, Ind., said the subpoena requests documents from Jan. 1, 2001 through the present, and it believes similar inquiries have been directed at other companies in the industry . The company plans to fully cooperate with the probe. The stock closed Friday at $34.98, down 21 cents.

  The stock is down about 10% in the pre-market. Earnings are due on Wednesday.

• Buffett to Give Away Fortune
  Eddy Elfenbein, June 25th, 2006 at 8:52 pm

  
  From Fortune:”

  Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world’s largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett’s (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates).
  The Gateses credit Buffett, says Bill, with having “inspired” their thinking about giving money back to society. Their foundation’s activities, internationally famous, are focused on world health — fighting such diseases as malaria, HIV/AIDS, and tuberculosis — and on improving U.S. libraries and high schools.
  Up to now, the two Gateses have been the only trustees of their foundation. But as his plan gets underway, Buffett will be joining them. Bill Gates says he and his wife are “thrilled” by that and by knowing that Buffett’s money will allow the foundation to “both deepen and accelerate” its work. “The generosity and trust Warren has shown,” Gates adds, “is incredible.” Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares – starting with 602,500 in 2006 and then decreasing by 5% per year – to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair — Bill, now 50, or Melinda, 41 — is active in it.

• Crossing Smith Island
  Eddy Elfenbein, June 24th, 2006 at 7:40 pm

  
  I spent last weekend on Smith Island which is a tiny island in the middle of the Chesapeake Bay. There are two ways to get to Smith Island, get born there or take the ferry. I chose the latter.
  Smith Island is truly a place out of time. The island is absolutely beautiful (I took the picture above at dusk). It’s one of the few inhabited islands in the Chesapeake Bay that’s not connected to the mainland by a bridge. Its isolation has served it well.
  The island was settled by English speakers over 300 years ago. I should use the phrase “English-speaking” rather delicately. Smith Islanders do indeed speak English, but their accent is…well, I’m not sure how to describe it. They beat their A’s and O’s into submission. I’m sure Professor Higgins would be appalled. And when the islanders talk to each other, they speak backward. No, seriously.
  Smith Island, and it neighbor to south, Tangier Island, are often studied by linguists. Some believe that the resident’s speech is the closest to Elizabethan English.
  The island is very small but very charming. Think of it as Gilligan’s Island meets Jamestown. Most men there are crabbers, like their fathers and grandfathers before them. There are about 380 inhabitants in three “cities.” I rented a small cottage in Ewell, which is, for lack of a better word, the capital.
  Smith Island is a libertarian’s dream. There’s no government. No mayor or town council. No police. The people simply govern themselves. Many of the cars don’t bother with license plates. There are only two roads, and not much to crash into, perhaps a wayward crab. The highest point on the island is five feet. Strangely, the Maryland-Virginia border runs across the southern tip of the island (I’m told this is a sore subject). You can easily see across the entire island.
  There are no banks or ATM’s. No McDonald’s. No hedge funds. No SEC. The entire island is cash-only. There are, however, three Methodist churches. There’s one elementary school. The high school kids take a boat to the mainland each day. The island cemetery has many of the same names: Evans, Tyler, Bradshaw, Marsh. (No Elfenbeins, I checked.)
  Smith Islanders are unfailingly polite. I’m not exaggerating when I say that every single person I passed either waved or said hello. No exceptions.
  The sad part is that Smith Island is slowing fading away. Crabbing is hard work, and there are more job opportunities on the mainland. One hundred years ago, Smith Island was home to nearly a thousand people. Steamers went straight from Ewell to Baltimore. Not anymore. Most of the young folks are moving away. For such a teeny place, I saw a surprising number of “for sale” signs.
  If you’re ever in the mid-Atlantic and want to forget about your e-mail for a weekend, I highly recommend a visit to little Smith Island.

• The Buy List So Far
  Eddy Elfenbein, June 23rd, 2006 at 9:06 pm

  The Buy List is down -0.20% for the year, and the S&P 500 is down -0.30% (not including dividends). The daily volatility of the Buy List is 7.15% greater than the S&P 500.
  Here’s the graph based on a $1 million equally weighted in the 20 stocks at the beginning of the year.
  
  By avoiding the heavy cyclicals, we avoided much of the pain of the correction.

• From Oracle’s Conference Call
  Eddy Elfenbein, June 23rd, 2006 at 8:50 pm

  Courtesy of Seeking Alpha:

  Kash Rangan – Merrill Lynch
  Larry, since we have you on, could you elaborate on your comments in the press related to getting into the Linux operating systems business? How should we think about that?
  Larry Ellison
  Well, I’m thinking a general comment about Open Source. The interesting thing about Open Source — and I don’t want to spend a lot of time on it today — the interesting thing about Open Source is it’s free to everybody, even Oracle. So, Oracle could choose to just take a copy of anyone’s Open Source, and as long as we could support it better than an Open Source company, we could suddenly leap frog them and become the number one distributor.
  It was just interesting. It is interesting to evaluate Open Source and understand that they don’t own any of their intellectual property. It is free for us to take and support, which we may in fact, do in the future.

• Lunch With Warren
  Eddy Elfenbein, June 23rd, 2006 at 10:04 am

  Get your bids in now. On eBay, a charity is auctioning off a lunch with Warren Buffett. The current bid is $455,100.