Archive for April, 2007

  • Tom Wolfe Leads Off for Portfolio
    , April 16th, 2007 at 9:45 am

    Tom Wolfe looks at the New Masters of the Universe:

    While fathers all over America tend to become overzealous, even violent, these days in trying to turn their children into little sports superstars, in Greenwich a father who is one of these people will try to take control of every element in a game: his child’s teammates, their coach, the opposing team’s coach, its players, and most definitely the referees. In a famous instance, one of these people came to watch his teenage daughter play in an ice hockey game against a team from neighboring Port Chester, New York, a town known in Greenwich as the place where one’s plumbers, electricians, computer swamis, roofers, glaziers, air-conditioning mechanics, wall-to-wall-carpet humpers, and household servants live. The man began bellowing so loudly, nobody at the rink could shut out the sound. He upbraided the referees for their poor eyesight and worse judgment. He told his daughter’s coach how to play her and all her teammates and kept him abreast of his mistakes in strategy. He scolded the Port Chester coach and the players for their incessant cheating and malicious roughness. Finally a Port Chester player, a big girl, an Amazon on ice, skated to the stands, charged up the stairs on her skates, and accosted the Mouth, putting her gloved fist six inches from his face and saying, “If you don’t shut the fuck up, I’m gonna come back and beat the shit outta you!” He shut up. The tales are endless: the hedge fund founder desperate to get his son into one of Greenwich’s socially swell private schools who clips a six-figure check to the first page of the application, witlessly forcing the school to reject both his son and his check or lose all credibility—

  • Geoffrey Raymond’s Latest
    , April 16th, 2007 at 9:34 am

    I’m not sure what to say about this, but here’s Geoffrey Raymond describing his latest painting of Maria Bartiromo.

  • Happy 300th Leonhard Euler
    , April 15th, 2007 at 3:28 pm

    euler-1000.png
    The Washington Post has more on the “Mozart of Mathematics.”

  • Fama Factors Out French: “I Did All The Work”
    , April 15th, 2007 at 3:25 pm

    At long last, we now know the truth:

    After 15 years of sharing the credit for groundbreaking research with Ken French, Eugene Fama is on a mission to expose his former colleague, and himself. The result is an alarming behind-the-scenes look at how academic careers are made and broken.
    “I hired Ken French in 1990 when he was a driving instructor in Winnetka. Chicago was pressuring me to partner with another researcher; I couldn’t stand the idea so I hired a stooge. The man has never contributed a single idea to my research, and yet his name is constantly mentioned in the same breath as mine. On top of it all, the American Finance Association has nominated him as president-elect! That’s a travesty and I won’t have it.”

  • 2007 Wharton Economic Summit
    , April 13th, 2007 at 7:58 am

    Not much blogging today. I’ll be in Philadelphia at the 2007 Wharton Economic Summit.
    It’s sort of like Davos, except the odds of being car-jacked are a lot higher. Wish me luck.

  • Brady Quinn on Power Lunch
    , April 12th, 2007 at 12:12 pm

    p1.brady.quinn.pw
    Sue Herera adores him.

  • JOSB Down 8%
    , April 12th, 2007 at 11:10 am

    JoS. A. Bank Clothiers (JOSB) is down sharply today on a poor same-store sales report:

    Men’s clothing retailer JoS. A. Bank Clothiers Inc. said Thursday that its same-store sales grew 1.4 percent in March, but missed analysts’ expectations.
    Analysts polled by Thomson Financial were looking for a same-store sales increase of 2.7 percent for the month.
    Same-store sales, or sales at stores open at least a year, are a key measure of retailer (or restaurant) performance, because they measure growth at existing stores rather than from newly opened ones.
    Total sales for the period ended April 7 climbed 10.1 percent to $45.7 million from $41.5 million in the year-ago period.
    Quarter-to-date, same-store sales were up 2 percent while total sales were ahead 11.8 percent to $84.1 million versus $75.2 million in the prior-year period.

  • Bed Bath & Beyond Earned 79 Cents a Share
    , April 12th, 2007 at 8:28 am

    The company just wrapped up its 15th straight record year. For the fourth quarter, Bed Bath & Beyond (BBBY) earned 79 cents a share, although that doesn’t include a charge of seven cents a share.
    For the year, BBBY earned $2.15 a share, which is a nice improvement over the $1.92 a share it made last year. Annual sales rose from $5.8 billion to $6.6 billion.
    Here are the quarterly results going back a few years:

    Quarter Sales Gross Profit Operating Profit Net Profit EPS
    May-99 $356,633 $146,214 $28,015 $17,883 $0.06
    Aug-99 $451,715 $185,570 $53,580 $33,247 $0.12
    Nov-99 $480,145 $196,784 $50,607 $31,707 $0.11
    Feb-00 $569,012 $238,233 $77,138 $48,392 $0.17
    May-00 $459,163 $187,293 $36,339 $23,364 $0.08
    Aug-00 $589,381 $241,284 $70,009 $43,578 $0.15
    Nov-00 $602,004 $246,080 $64,592 $40,665 $0.14
    Feb-01 $746,107 $311,802 $101,898 $64,315 $0.22
    May-01 $575,833 $234,959 $45,602 $30,007 $0.10
    Aug-01 $713,636 $291,342 $84,672 $53,954 $0.18
    Nov-01 $759,438 $311,030 $83,749 $52,964 $0.18
    Feb-02 $879,055 $370,235 $132,077 $82,674 $0.28
    May-02 $776,798 $318,362 $72,701 $46,299 $0.15
    Aug-02 $903,044 $370,335 $119,687 $75,459 $0.25
    Nov-02 $936,030 $386,224 $119,228 $75,112 $0.25
    Feb-03 $1,049,292 $443,626 $168,441 $105,309 $0.35
    May-03 $893,868 $367,180 $90,450 $57,508 $0.19
    Aug-03 $1,111,445 $459,145 $155,867 $97,208 $0.32
    Nov-03 $1,174,740 $486,987 $161,459 $100,506 $0.33
    Feb-04 $1,297,928 $563,352 $231,567 $144,248 $0.47
    May-04 $1,100,917 $456,774 $128,707 $82,049 $0.27
    Aug-04 $1,273,960 $530,829 $189,108 $120,008 $0.39
    Nov-04 $1,305,155 $548,152 $190,978 $121,927 $0.40
    Feb-05 $1,467,646 $650,546 $283,621 $180,980 $0.59
    May-05 $1,244,421 $520,781 $150,884 $98,903 $0.33
    Aug-05 $1,431,182 $601,784 $217,877 $141,402 $0.47
    Nov-05 $1,448,680 $615,363 $205,493 $134,620 $0.45
    Feb-06 $1,685,279 $747,820 $304,917 $197,922 $0.67
    May-06 $1,395,963 $590,098 $148,750 $100,431 $0.35
    Aug-06 $1,607,239 $678,249 $219,622 $145,535 $0.51
    Nov-06 $1,619,240 $704,073 $211,134 $142,436 $0.50
    Feb-07 $1,994,987 $862,982 $309,895 $205,842 $0.72

    Two things to note. This last quarter was based on 14 weeks while the other quarters were just 13 weeks. Also, the 2006 fiscal year had 53 weeks compared with 52 for last year.
    Some analysts have noted the company’s lower gross margins. This is what BBBY had to say on their conference call:

    The gross profit margin for the full fiscal year improved slightly from fiscal 2005. The approximate 110 basis point decline in the fiscal fourth quarter was primarily due to higher inventory acquisition costs. Inventory acquisition costs were higher, primarily due to a shift in purchase volume incentives earned during our fiscal third quarter, which as we discussed in December, benefited that quarter.

    This is the first decline in gross margins in five years.

  • My Thoughts on Citi
    , April 11th, 2007 at 1:15 pm

    I have to add my thoughts about Citigroup (C). The company just announced plans to cut 17,000 jobs which is about 5% of the workforce. The Street, however, is unimpressed and the stock is down today.
    Much of the blame is being aimed at CEO Chuck Prince, but I’m going to make a slight defense of Prince. Or rather, the problems at Citi aren’t his entirely his fault. The most important problem is that the company, as it’s currently comprised, doesn’t make any sense.
    Shareholders are in denial and they’re blaming Prince for the effects of Citi’s problems, not the root. Here’s the deal: Sandy Weill built today’s Citigroup through very aggressive acquisitions. The idea was to throw a bunch of mediocre businesses together and that would (hopefully) make one really good company. Well, it doesn’t.
    Today, the company has nearly $2 trillion in assets and what do they have to show for it? A P/E ratio of 12. It’s the Austria-Hungry of stocks.
    I’ll give you a good example. Look at the major brokerage stocks. Merrill, Goldman, Morgan, Lehman, have all seen their stocks soar. But Citi’s stock has done nothing. Does anyone think that an independent Salomon Smith Barney wouldn’t have rallied? Maybe it wouldn’t have, but it would have taken some effort. Now, we’ll never know.
    Prince may be out the door soon. Next up will probably be Sallie Krawcheck (oh, how the media will love that!). But I think the CEO turnstile will continue to spin until someone finally decides to un group Citi.

  • Minyanville Gets Animated
    , April 11th, 2007 at 11:03 am