Inelegant Investor is a collection of real-world investing observations, focused on the edge cases that don’t show up in textbooks — restructurings, CVRs, spinoffs, and the strange outcomes that accumulate in actual portfolios. And whatever else interests me about investing. Investing isn't always pretty, it's usually quite inelegant.
Recent Series: The Portfolio Graveyard
You may recall my December post regarding Nuvelo(NUVO). The company reported that a pivotal trial for its lead compound, alfimeprase, had failed to meet its endpoints. On the release of this news, the stock fell 80%, and has continued to float downwards since. Nuvelo began 2006 trading at $8.11 and quickly jumped above $17 when the company partnered… Read More »
Charlie Munger, vice-chairman of Berkshire Hathaway and CEO of Wesco Financial recently spoke with the Los Angeles Times on the issue of executive compensation. As always, the 83 year old Munger provided colorful commentary. Munger derided compensation consultants, declaring that “I have always said that prostitution would be a step up for these people.” Munger pointed out that… Read More »
On November 22, after BJ’s(BJ) CEO Mike Wedge abruptly resigned and the stock jumped, I wrote expressing my concerns: Mr. Wedge’s departure raises troubling questions about the company’s performance. Same store sales have been lackluster of late, but last week’s earnings announcement was ahead of expectations and management expressed optimism regarding Q4. I have a sinking feeling that… Read More »
The company with the world’s most expensive stock announced Friday that it was purchasing a company that sells nothing for more than 4 cents. While the price per item may be low, they make it up in volume, hitting $990 million in sales in 2005 and projecting $1.2 billion in 2006. Profit numbers were not available nor was… Read More »
Maybe I was too harsh on Brian Hunter last week. This morning, I was greeted with a jolt of my own. One of my positions was down 80% in a single day. Fortunately for me, this isn’t the prelude to a death spiral. There’s no margin call to be answered. Such is the power of diversifying risk, especially… Read More »
Bloomberg has posted a piece which explains in wonderful detail the events leading up to the spectacular implosion of Amaranth several months ago. In many ways, it reads like a shorter version of When Genius Failed, Roger Lowenstein’s excellent account of the collapse of Long Term Capital Management. I wrote earlier about my belief that the stellar performance… Read More »
In honor of Thanksgiving, I’ve decided to write about my biggest turkey, Aurora Foods. Aurora Foods was born of private equity cobbling together a bunch of orphan brands from major food manufacturers and loading them up with debt. Brands you probably have in your pantry: Duncan Hines, Lenders Bagels, Van De Kamp, Mrs. Paul’s, Celeste Pizza, Aunt Jemima… Read More »
I previously wrote about BJ’S Wholesale(BJ) in September when the stock was at $26. Since then, the stock has slowly crept up prior today’s leap which has had it trading as high as $32. Today’s jump comes after the company announced that CEO Mike Wedge would be retiring. Reading the press release further gives additional color to the… Read More »
US Air(LCC) announced this morning that it plans to buy Delta(DALRQ). My friend at Flight Wisdom has a fine post summarizing the details, but the stock movements are a bit mystifying to me. US Air is up 12.5% now, down a bit from its high of the day, but still a substantial jump. Clearly investors applaud the idea… Read More »
In 1947, Bing Crosby, unhappy with the necessity of performing his radio broadcasts live, invested in a small company developing recording technology of sufficient quality to allow him to prerecord his show. It would prove a shrewd investment as not only was Crosby able to record his show ahead of time, but Ampex(AMPX) grew to dominate recording for… Read More »