Startups are hot, especially those with the words “social networking” in their description. They’re coming out of the woodwork, since there are seemingly zillions of dummy doctors and dummy dentists ready to part with their money on the sniff of a social networking company. I got one this morning. I’m not intelligent enough to understand exactly what they do. But I like their gross profit projections — $4 million in 2012. rising to $540 million in 2016. That’s a compound annual growth of 241%. If only projections actually happened. Sigh.
Chesapeake Energy (CHK) got upgraded, bounced and I covered my short. Meanwhile RadioShack (RSH) got downgraded. I should have held my CHKshort. It will be down substantially this morning. I was right about it being a cockroach stock. You win one. You lose one.
Interestingly, they kicked Aubrey McClendon out as chairman, but kept him on as CEO. That’s a change? CHKs earnings came out and disappointed.
Why do I think is funny? From the New York Times:
Research in Motion unveiled the new BlackBerry 10 phone and operating system that it hopes will be its salvation on Tuesday, in a form that looked quite rough around the edges, Ian Austen reports for The New York Times. Among the many features missing on the prototype phones that were given to software developers were the ability to actually make phone calls or access wireless networks.
…. While the remarkably unfinished state of the phones may add to RIM’s reputation for delivering products behind schedule and incomplete, Alec Saunders, the company’s vice president of developer relations, said it was necessary to get a “very, very stripped down” version out to developers now to avoid a more serious problem later.
Fun stuff to read:
+ Like it or not, our brains are enticing us to run. Click here.
+ Mexico is corrupt, thoroughly corrupt. Why are we surprised at Walmart and its Mexican bribes?
The New York Times article by a Mexican former ambassador ends:
The truth is, we have created a corrupt system that preys on both Mexicans and foreigners – how can we be outraged when an American company exploits it? At the same time, how can we hope for Mexicans to put an end to corruption when one of the most powerful and allegedly law abiding companies in the United States gives in to the same temptations? As a former governor of Chihuahua once said, after being accused of corruption, “If we put everyone who’s corrupt in jail, who will close the door?”
Oh to be a New York plumber. He charges $54.50 “to show up” and $54.00 for every half hour ever after. They won’t tell me what the job will cost, or even an estimate, but they do insist on taking my credit card info before they’ll even think of scheduling an appointment. If you figure the numbers, that’s $226,720 a year.
I mention this because unpredictable plumbing costs are one of the joys of owning a rental apartment.
Oh, yes, you ask about other plumbers? Well, this is the one the building’s management approves and encourages me to use.
You get the idea.
Debt gets you in the end. I’m skimming this book. the best part is its title.
Clearly the ill effects of borrowing too much are still with us and will negatively affect businesses and investments for another five to ten years (my prediction).
Don’t buy the book. It has no useful investment strategies, except limit your borrowings and (my advice) never give a personal guarantee.
From this morning’s DealB%k:
Once an Ambitious Law Firm, Reduced to Grim Dispatches On Monday, about 50 former Dewey partners opened their in-boxes to find a poignant note. A fellow former partner said he was starting an assistance fund for Dewey staff and junior lawyers who might find themselves unemployed. The same day, Dewey’s remaining partners received a grim dispatch from the firm’s leadership. Given Dewey’s state, management encouraged them to look for new jobs.
These are dark days for Dewey & LeBoeuf, the New York law firm on the brink of collapse amid a partner exodus. Forged by a 2007 merger, it had set its sights on quickly becoming a global powerhouse in corporate law, employing more than 1,300 lawyers in 26 offices across the globe at its peak. Now the firm is teetering under the weight of too much debt and outsize pay guarantees made to its star lawyers.
Lawyers and staff, unable to focus on their client matters, milled about Dewey’s office “shellshocked” on Tuesday, according to an employee. At one point, there was confusion over whether the firm’s health care provider had suspended medical coverage, leading the firm to send an officewide e-mail blaming an “administrative issue” for the apparent suspension and explaining that coverage would soon be fully restored.
“Law firms aren’t very joyful places even when things are going well,” said the Dewey employee, who spoke on the condition of anonymity. “How would I describe the atmosphere now? The first word that comes to mind is funereal.”
The world’s best short joke:
A 3-year-old boy examined his testicles while taking a bath. ‘Mum,’ he asked, ‘Are these my brains?’
‘Not yet,’ she replied.
Harry Newton who wonders what happened to the weather? Hayfever season has gotten worse, not better. And Claritin is increasingly ineffective against my sneezing and coughing. Here’s aregimen of cure:
+ Turn on your airconditioner. Make sure it has a new filter.
+ Wash your face several times a day. Apply a warm, moist washcloth to your face several times a day.
+ Drink plenty of fluids.
+ Inhale steam 2 – 4 times per day (for example, sitting in the bathroom with the shower running).
+ Spray with nasal saline several times per day.
+ Use a humidifier.
This is part of the breakfast menu at Normas, the restaurant in the Parker Meridien hotel on West 56 in New York.
Note the $1,000 dish. It has been bought 6 times (generally for PR, magazine editorials, and such). The $100 breakfast, however, with a smaller quantity of caviar, is sold several times a week. The place attracts a rich international crowd. Sitting next to us was a rich lady from Venezuela who drives around Caracas in an armored car, and has removed all her family’s money and most of her family to the U.S. eons ago. She said “express kidnappings” were now common in Venezuela. She said had to visit six different supermarkets to buy milk, cereal and meat. She’ll be leaving soon, also. Chavez has seriously screwed that nice country up.
I've already commented regarding CHK in the past.
With respect to the press, you should question why, after nearly 20 years in existence, the founder's well program is suddenly controversial. Why is a supposed hedge fund that McClendon was involved in from 5 plus years ago hitting the papers NOW?My experience with reporters is that they are pressured to produce copy every day, and can be fed a story easily- ESPECIALLY if it's negative. Negative is what sells papers. My belief- no facts- is that the press in CHK in this instance has been orchestrated, and once the muppets have sold, the 5 %+ holder- a raider like Icahn- will appear with a hostile 13-D filing.It's less fun, but I'd again suggest reading the actual 10-K's. Reporters don't go to jail if they print a fib. The SEC filings of all companies have Sarbanes Oxley certifications, and if the filings are lies the certifying officers go to jail.I know what source of information I trust!By the way, last year, the same CEO that you castigate sold CHK's Fayetteville shale assets to BHP for $4.7 billion compared to their cost of $700 million. Look at the numbers.
Take a look at the CHK presentation. Very impressive land holdings, drilling successes and future oil projections versus gas. 2014 expectation of a top 10 U.S. oil producer and probably cash flow positive with far lower debt.
Long term growth expectations may be the best in the industry.
Jeff
Harry, your comment on the plumber surprises me? Your calculation fails to take into account several obvious expenses/cost of doing business. First off, like you and I , I'm sure the plumber takes a couple weeks off for vacation each year. Next, on $200,000 a year, he/she is surely not able to afford to live in Manhattan. So they are most likely commuting into Manhattan from the Bronx, Brooklyn, Queens, LI, NJ, etc. So now lets factor in gas (at $4 per gallon in trucks that at best are getting 15 miles to the gallon), tolls, finding parking, cost of auto and liability insurnace to do business in NY, finding parking, truck being robbed several times per year, customers stiffing them on the bill, and they certainly are not billing a full 8 hours per day, 5 days a week.
Now add in the cost of a shop/warehouse if they can afford one and a good plumber is lucky if they are making $100 to $150k per year, not the $226,000 your calculating. In metro NY thats struggling to maintain a middleclass existance. Besides,who the hell wants to schlepp tools and broken toilets up and down 5 flights of stairs for a living.
You ran a business, I'm sure you weren't critical of the income you maintained in running that business.
Full disclosure, I'm not a plumber, I'm in the Information Technology industry. But for a young individual who is not right for college, the trades offer a great opportunity to create and run a respectable small business in this country. You can't outsource plumbing to the far east
I don't deny your careful calculations.
I'm not complaining about the cost of my plumber, simply commenting on it. Like many amateur landlords I am increasingly surprised at the costs of maintenance. I think many investors underestimate ongoing maintenance in an attempt to get their property investment to look more attractive.
I think the point is that a lot of “semi-retired” folks (like me) severely underestimate the difficulty of managing (i.e. not losing) their assets. Dealing with leaky toilets (today's task) is not as exciting as running a multimillion dollar publishing empire.
He charges $54.50 “to show up” and $54.00 for every half hour ever after. They won’t tell me what the job will cost, or even an estimate, but they do insist on taking my credit card info before they’ll even think of scheduling an appointment. If you figure the numbers, that’s $226,720 a year.
Morning Harry,
The plumbers I have used in high rise buildings in Philadelphia charge $110 per hour or more. The plumbers I use in the suburbs charge $85. I am surpirsed the plumber you describe in NY does not charge more. Do not discount the hidden overhead of being a skilled technician in an urban envvironment–parking, permits, licenses, insurance, access to supply houses, hobbling rules and regulations and schedules in each discreet building, bribes to local bureacrats. Skilled tradesmen are becoming an endangered species and free market forces obtain. Keep up you fine work and many thanks.
Roy
I'm not complaining about the cost of my plumber, simply commenting on it. Like many amateur landlords I am increasingly surprised at the costs of maintenance. I think many investors underestimate ongoing maintenance in an attempt to get their property investment to look more attractive.