Microsoft’s Deal With Yahoo!: A Win-Win?

The buzz in technology and investment circles over the past few days has centered on analyzing the economic and technological implications of Microsoft’s search deal with Yahoo!. While both Microsoft CEO Steve Ballmer and Yahoo! CEO Carol Bartz claim that the deal represents a “win-win” arrangement for both companies, investors would beg to differ. Microsoft shares jumped strongly on the news and Yahoo! shares have plummeted. Despite the stock market’s tendency to overreact to news, in this particular case it appears that, at least from a directional perspective, Mr. Market may be on to something. Read this article more more details.

In-N-Out Burger’s Remarkable Moat

In-N-Out Burger’s Remarkable Moat

At a time when California’s economic and political foundation appears to be in tatters, it is easy to overlook how the state has often been on the leading edge of cultural changes in American society. Californians need no introduction to the success of In-N-Out Burger, a relatively small and privately held fast food chain that until recently had a presence mainly in Southern California. In-N-Out Burger’s founder invented the fast food drive through, a cultural milestone that changed the landscape of America. Read this article for more on In-N-Out and a video providing background on the company.

Exchange Traded Hurricane Contracts

The National Oceanic and Atmospheric Administration (NOAA) forecasts a “near normal” hurricane season, and so far there have not been any named storms in the Atlantic. NOAA forecasts are closely watched by insurers, investors, and property owners for obvious reasons. After a number of active years, most everyone would like a boring season for 2009. Read this article for information on new option contracts that are now trading based on the outcome of the hurricane season.

Safeway’s Approach to Health Care Cost Containment

Safeway Chairman and CEO Steven Burd wrote an op-ed article for the Wall Street Journal in June that has not received as much attention as it deserves. Safeway is a self insured employer and designed a plan that has kept costs flat for the past four years in comparison to the 38% increase in costs that most plans experienced. Read this post for more information and a video appearance by Mr. Burd on CNBC.

Twitter’s Uses for Online Scuttlebutt

Twitter’s Uses for Online Scuttlebutt

Legendary investor Philip A. Fisher was a great believer in the utility of the “business grapevine” when it comes to researching candidates for investment. In Common Stocks and Uncommon Profits, which was reviewed here in April, Mr. Fisher lays out a step by step approach that can be used to identify businesses that are not merely “cheap” but have excellent future prospects. Scuttlebutt is an approach that attempts to gain valuable insights into businesses through multiple channels. Read this article for some ideas on how Twitter can be used as a form of “online scuttlebutt”.

You Can Be a Stock Market Genius by Joel Greenblatt

You Can Be a Stock Market Genius by Joel Greenblatt

While reading Joel Greenblatt’s book, You Can Be a Stock Market Genius, it occurred to me that I exhibited the exact behavior that he predicted when I almost immediately sold the shares in Hospira that I received from Abbott Laboratories’ spin off of the subsidiary in 2004. Since I had purchased shares of Abbott based on the overall characteristics of the parent company rather than the attributes of any one unit, I viewed the relatively small position I received inHospira as a distraction that was not worth the time required to own (in terms of keeping up with corporate developments, reading reports, etc). Read this article for the full story …

Personal History by Katharine Graham

Personal History by Katharine Graham

Berkshire Hathaway Vice Chairman Charlie Munger has often advocated the practice of “making friends with the eminent dead who had the right ideas.” This concept may initially sound strange, but it is based on the belief that it is a mistake to fail to learn from the life and experiences of others who have had success in business and in life, and particularly those who have succeeded despitesignificant adversity. It is in this spirit that I decided to read Personal History, the Pulitzer Prize winning memoirs of Katharine Graham, the longtime leader of the Washington Post. Read this article for a review of the book.

Thomas Sowell on The Housing Boom and Bust

I first became familiar with Thomas Sowell’s work when I read The Vision of the Anointed over a decade ago. Dr. Sowell has written a new book focusing on the recent (and still ongoing) housing debacle in the United States. In this video interview, Dr. Sowell speaks at length about the housing market but he goes far beyond the recent crisis and also speaks about the economic philosophy that sowed the seeds for the crisis.

Digital Barbarism: A Writer’s Manifesto

Digital Barbarism: A Writer’s Manifesto

I remember clearly the morning in May when, though the marvels of Google’s search technology, I detected that one of my blog articles had been stolen by a website in Asia that I never previously heard of. I may have been outraged by I was hardly shocked the incident, at least not at first. Read this post for more on this experience and a review of Mark Helprin’s “Digital Barbarism: A Writer’s Manifesto”.

How Useful is Berkshire’s Book Value for Valuation Purposes?

In today’s edition of Barron’s, Andrew Bary presents a bullish case for Berkshire Hathaway with a target price of $110,000 per share based on a valuation of 1.4 times Barron’s estimate of Berkshire’s book value per share in one year. Please click on this link for a preview of the Barron’s article which is only available in full to paid subscribers. This article provides some insight into whether book value is a good metric for estimating the intrinsic value of Berkshire Hathaway.

The Pickens Plan Revisited

As oil prices escalated to nearly $150 one year ago, T. Boone Pickens appeared on CNBC to explain his proposals for energy independence. At the time, Mr. Pickens certainly did not predict the huge collapse in oil prices in the ensuing months, but appears adamant that his plan is still viable today. Let’s listen to what Mr.Pickens had to say in an interview today on CNBC.

Microsoft CEO Ballmer Reflects on Vista’s Lessons

Even companies with great brands suffer from setbacks from time to time. In Microsoft’s case, the release of Windows Vista was met with much criticism from industry critics, developers, and regular end users. In my opinion, much of this criticism was not fully justified by the facts. However, Microsoft faced a real risk that the value of the Windows brand would erode over time. In this video interview, Steve Ballmer talks about Microsoft’s experience with Windows Vista and lessons learned that have been incorporated in the development of the upcoming release of Windows 7.