Wednesday, August 27, 2008

The Day the Newspapers Died


Newspaper died last week.

Specifically, at 3 a.m. Eastern Standard Time, when Barack Obama texted his selection of Joe Biden as Vice President to the world.

Now, the death of newspapers is not exactly new-news.

Newspapers have been mortally wounded for probably half a decade. Sure, they’ve tried everything from color photos to shorter stories to keep people interested. And as the squeeze continued, they’ve resorted not just to thinner pages to stay viable.

They’ve also resorted—and we are not making this up—to higher newsstand prices.

Just two weeks ago, The New York Times raised its price 25c. If you weren’t going to pay $1.25 for a weekday edition, you probably didn’t bite at $1.50, either.

No matter what they do, newspapers are going the way of the compact disk, or, before that, the long-playing record; or before that, the orchestras that played in music halls, which was how people heard new music before the phonograph came along.

And like most gray-hairs who straddle the old economy and the new, we have mixed feelings about that fact.

A weekend morning with lots of coffee, free time and all the papers we can get—The Journal, The Times, Barron’s, and especially our Newspaper of Record, the New York Post—is our idea of a good way to start the day.

So when we bicycled up to Mike’s this past Saturday morning for the papers, with the selection of Joe Biden already on our cell phone, we were looking forward to getting our hands on every paper in sight—even the Boston Globe and the Hartford Courant—to get the whole story.


And of course not one paper had it, because, the actual news was only four hours old.

Now, four hours in Internet-Time may seem like about how long the dinosaurs roamed the earth. But in Newspaper-Time, it's barely long enough to get the printing presses warmed up.

We didn't bother getting anything but the Post.

And that’s why, if it’s worth putting a date on the actual event, Saturday August 24 is probably as a good a day as any to mark the Day the Newspapers Died.



Jeff Matthews
I Am Not Making This Up

© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.

Thursday, August 21, 2008

Buy Hillary?



McCain Closes Gap on Obama In Poll as Convention Looms

That’s today’s headline and we are not making it up.

Readers may recall that back in late June, we here at NotMakingThisUp suggested that Obama’s position in the Intrade prediction market—65.3%—would not last, and that while we never recommend stocks on these pages, we’d be willing to short Obama at that level.

As of today, we could cover that short at 58.9%. Of course, this is all theoretical: we have put down no money, nor are we suggesting anybody else do so either. Still, it feels too early to cover an Obama short. Way too early.

After all, Obama isn’t yet the official Democratic nominee, and there’s a convention coming up. And anybody counting out the Clintons before the votes are counted in Denver is, we think, making a mistake.

Conspiracy theorists we are not, but we do wonder why, all of a sudden, Obama-backer John Edwards’ affair is front-page news? Hasn’t that been around for a while?

And today's headline doesn’t look too perky for the rising star from Illinois: we have war, we have recession, we have inflation, we have icecaps melting and we have the biggest housing slump in a generation…and the best the presumed Democratic nominee can do is what today’s Wall Street Journal calls “a statistical dead heat” with his Republican opponent?

With McCain “closing the gap” now, and Edwards out of the picture, and Obama graciously—and naively—allowing Hillary’s name to be placed in nomination at the convention for a roll-call vote, we wouldn’t be shocked to see the Democratic convention turn into a free-for-all.

Hillary-as-nominee is offered at 3.4 on Intrade. That should be zero by the end of next week. But then again, it could be 100.

Stranger things have happened.


Jeff Matthews
I Am Not Making This Up

© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.

Monday, August 18, 2008

What Would Warren Do? Not This.


One of the most striking things at the Berkshire annual meeting is how few questions are actually asked about the business itself. Mostly, shareholders seem to ask the kind of questions they’d ask Dr. Phil, not the world’s richest human being.

You’ll read a few of the more extreme cases in Pilgrimage to Warren Buffett’s Omaha (release date October 4) but in the meantime we’ll take a look at something Warren Buffett would most certainly never do, which is to invest in Rick’s Cabaret.

Take the most degrading publicly-traded business in the world, add a faulty analytical premise, and you have an investment idea that ranks right up there with Berkshire’s investment in US Air.

What makes us bring this up is the headline that appeared on our indispensible Briefing.com late last week, under the ticker RICK:

3Q08 EPS weak on start-up costs; believe impact is temporary and co's acquisition outlook remains solid.

Now, Rick’s happens to be a strip club operator.

We know next-to-nothing about the company, except that the shares were once recommended in Barron’s by an old acquaintance from this business—the investment business, not the strip club business. We don’t recall the details, but the core of the investment idea seemed to be that it was a defensive play in an uncertain world.

Firm expects mgmt to take advantage of its access to capital to fuel the expansion of its three distinct strip club brands to take additional share within the industry.

Now, the idea of a “brand” in an “industry” not too many steps removed from the flesh-trade business would be laugh-out-loud funny, except of course that the subject itself is pathetic. Almost as pathetic is the analytic reasoning behind the next gem in the report:

Merriman believes RICK is in the enviable position of representing just about the only exit strategy for the 3,800 strip clubs in the United States.

Without much effort we can think of a few other “exit strategies” for any one of those 3,800 strip clubs not already owned by legitimate enterprises such as Rick’s—like being shut down for anything from money laundering to unpaid taxes to prostitution.

Charlie Munger explained the reason Berkshire had never invested in the gaming industry this way: “It is a dirty business.” And while we here at NotMakingThisUp don’t claim to be the world’s leading experts on Berkshire Hathaway, we’re pretty certain an investment in RICK is something Warren Buffett would not do.



Jeff Matthews
I Am Not Making This Up


© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.

Monday, August 11, 2008

Coming Somewhat Soon to a Bookstore New You...


Coming somewhat soon to a bookstore near you: one hedge fund manager, two Berkshire Hathaway shareholder meetings, and The Warren and Charlie Show.

Not to mention our NetJets story. (Not the NetJets story, our NetJets story.)

And if you like, you can order both Piligrimage to Warren Buffett's Omaha and The Snowball, at the same time, for $39.57.

http://www.amazon.com/Pilgrimage-Warren-Buffetts-Omaha-Matthews/dp/007160197X/ref=sr_1_1?ie=UTF8&s=books&qid=1218414601&sr=8-1

Publishing date is October 4th:


Jeff Matthews
I Am Not Making This Up

© 2008 Not Making This Up LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. The commentary in this blog in no way constitutes a solicitation of business 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.

Thursday, August 07, 2008

Least Helpful Call of the Week



Despite our last warning that no new posts would appear for at least a week, we feel it worth breaking our vow of silence to pass on what certainly must be the Least Helpful Call you will hear this week.

Friedman Billings, it seems, is throwing in the towel and downgrading insurance has-been AIG (last trade, $29), cutting their price target from $53 to $38.

We are not making that up.

AIG, of course, has an important connection to Berkshire Hathaway: four former executives of Berkshire subsidiary General Re were convicted earlier this year of a host of charges relating to an insurance deal with AIG that had nothing to do with insurance and everything to do with helping AIG gussy itself up for Wall Street’s Finest.

Looks like the gussying hasn’t worked.


Jeff Matthews

I Am Not Making This Up

© 2008 Not Making This Up LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. The commentary in this blog in no way constitutes a solicitation of business 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.

Tuesday, August 05, 2008

Not Exactly a Vacation-Break


NotMakingThisUp will not be published this week and possibly next, owing to the fact that we are meeting a deadline for a book.

Based in good part on the series published in these virtual pages last year, Pilgrimage to Warren Buffett’s Omaha is set to be published by McGraw-Hill on October 4th.

That’s the good news.

The bad news is that anyone familiar with book deadlines would understand that the proximity of that date is less suitable for good writing than it is for, oh, drug overdosing and other misery-ending procedures.

In any event, we leave readers with the following quiz: what U.S. metropolitan center at the heart of the subprime mortgage collapse showed a 14% increase in the number of home sales, and a 37% increase in the number of pending home sales?



Jeff Matthews

I Am Not Making This Up


© 2008 Not Making This Up LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. The commentary in this blog in no way constitutes a solicitation of business 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.