January 2010

How Not to Win Friends and Influence People

Sat, 01/30/2010 - 15:46

This is from O'Dwyer's Communications & New Media. by Michael Fineman. The actual title is "Top Ten PR Blunders of 2009."  In descending order 1 = worst. See note at end for distinction between PR Blunder and Moral Failure. Sometimes it's a fine line. And we have here some possible contenders for Darwin Awards.

1. Air Force One VC-25 does photo-op flyover of lower Manhattan, seemingly pursued by F-16 jet, causing office workers to stream out of buildings and run through streets in panic, fearing another 9/11. Obama orders internal review.

Gates on Economy

Sat, 01/30/2010 - 14:34

On a conference call with reporters last week Bill Gates made some comments about the economy. He was realistic: said it will likely take years for the economy to correct itself after years of unsustainably high spending rates, particularly in the United States. Although he said things are different now than in the Great Depression, he also noted that there are many factors putting pressure on the economy, many of which feed on one another.  "If Company A lays people off, that impacts...Company B," Gates said.

More on BNI

Thu, 01/28/2010 - 08:45

Erin would like more on the Burlington-Northern deal. (Refer here to Bloomberg column on this subject.) The BNI strikes me as a classic Buffett way to solve a group of unrelated problems with one stroke. Uses capital in a way that will earn steady predictable returns more or less forever. Some people have described it as a bullish bet on the economy -- I disagree and think that Buffett is, rightly, making a bearish bet on the economy (although BNI will do fine either way).

Discussion Forums are Now Open

Sun, 01/24/2010 - 11:49

As of this moment, discussion forums are up and running -- similar to the discussion boards on Facebook. You can post a topic, comment on a topic, and so forth. Rules for the discussion forums:

> The forums are divided into four general areas. You can set up as many topics as you like within each area. Please try to comment on a subject within the area that makes sense. Otherwise people won't be able to find or respond to your remarks. You can move a post from one location to another.

Why Fly? Private Jet Aviation

Tue, 01/19/2010 - 19:01

A couple of blog posts ago, the question came up: is flying fractional a luxury for those who can afford it? It matters because NetJets furloughed 482 pilots effective January 15. This move was announced on November 5th.

Buffett Orchestrates Kraft-Cadbury Deal

Mon, 01/18/2010 - 20:47

As of tonight (1/18) the press is reporting that Kraft and Cadbury will announce an 850p deal tomorrow with the increased price funded in cash. As the dust of the traveling media circus floats gently back to earth, we are still left with the question, why did Buffett make his announcement that Berkshire would vote against a deal that included more stock? Why didn’t he just tell Irene Rosenfeld that in private? Why set off a frenzy of rumors about a rift between the two of them? 

NetJets 1Q10 Earnings

Thu, 01/14/2010 - 22:11

A NetJets employee recently commented, "Check our financial performance at the end of the first quarter of 2010 to see the results of fractional aviation operated with more business acumen and less simple elegance and cow towing to the uber-rich." My response begins, "With all due respect, please remember that you are writing this on the blog of a financial analyst," and continues here.

R.I.P. Equities

Wed, 01/06/2010 - 21:13

Woah! Institutional Investor mag just arrived in mail: "The Future of Wall Street," special issue, and "R.I.P Equities" as story. Sound familiar?

Remember the BusinessWeek cover, "The Death of Equities"?

Kraft Boosts Cadbury Bid’s Cash; Buffett Opposes ‘Blank Check’

Tue, 01/05/2010 - 10:07

For awhile I have been nail-biting over Kraft's proposed deal to buy Cadbury. Irene Rosenfeld, CEO of Kraft, is much-admired, but Kraft has problems. Middle-market brands have lost their edge, and consumers are increasingly disinclined to pay a premium for them in the middle of the Great Recession. Cadbury increasingly has been positioned in the media as the unique, best, most important confectioner of all time -- the great white whale of chocolate. Buffett warned Rosenfeld not to overpay, and she said she would not let "animal spirits" take over.

What Happens at NetJets: Part 3

Mon, 01/04/2010 - 13:36

A comment on the last post raised a whole new series of questions and yes, I will address them. What I want to cover this time is another point.

The New York Times story on NetJets said that Sokol was first made chairman to address "allegations of excess spending and a consultant who was paid by both NetJets and a supplier. Those issues had been described in several letters to Berkshire from company employees, although the company has not identified the writers."