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The following was brought to my attention by an alert reader.

It purports to be a recent posting by Patrick Byrne, CEO of Overstock.com, on the Motley Fool web site.

Long-time readers know that when it comes to Patrick Byrne and the company he runs, I follow the old Gurdjieff-Ouspensky philosophy: “believe nothing that you cannot verify yourself.”

After all, this is a man whose company calls itself “Earth’s Biggest Discounter,” yet generates one one-thousandth the sales of Wal-Mart.

Furthermore, unlike, for example, the founders of Google, who make no promises about anything but have delivered $1.7 billion in accumulated profits in that company’s brief lifespan; Patrick Byrne has promised much and delivered $94 million of accumulated losses to date.

But Byrne is very, very good at one thing: attacking people (“tools of Satan,” he has called them) who point out his company’s faults, despite telling shareholders he practices a “Buddhist non-attachment” towards his critics and “ignores the barking dog.”

Readers will recall that during a bizarre August conference call (see “I’m Not a Cokehead and Other Truths from Patrick Byrne, CEO”), Byrne claimed his company was the victim of a coordinated attack by a group of hedge fund louts, myself included, plus veteran journalists and Attorney General Eliot Spitzer, all masterminded by a “Sith Lord” with the tacit blessing of the SEC.

I am not making that up.

Now, the following Motley Fool post contains enough of the Patrick Byrne-style paranoid-attack-dog DNA to make me think he really did write it.

Calling Herb Greenberg a “crooked reporter,” for example, may appear reckless and manifestly non-Buddhist, but Byrne obsesses about Herb the way Nixon obsessed about Woodward and Bernstein. (For the record, Herb Greenberg is no more a “crooked reporter” than Patrick Byrne’s father, legendary insurance ace Jack Byrne, was a crooked CEO.)

But it’s the apparent anti-Semitism that makes me wonder whether this is a legitimate post.

For mid-way through it, Byrne’s rant makes a bizarre and gratuitous jab at the supposed pro-Israel bias of the New York Times’ excellent and highly respected Middle East reporter, Thomas L. Friedman.

I can think of no clear reason for making the analogy to Friedman and Israel except one: the enemies cited in the post (Herb Greenberg, David Rocker and Jim Cramer) are all Jewish.

Even for the CEO of Overstock.com, hints of a Jewish conspiracy would represent a rather disturbing twist in the ongoing saga.

***

Dear Fools,

For those of you who don’t know, Herb Greenberg is a crooked reporter who formerly worked at thestreet.com, then moved to MarketWatch, where he makes a living doing hatchet jobs on whatever companies David Rocker is short.

Sometimes for variety he goes on Mad Money with Jim Cramer (founder of thestreet.com), and together they do hatchet jobs on companies David Rocker is short. (Did I mention that Rocker has been the #1 or #2 owner in thestreet.com, owning as much as 15% of thestreet.com through various on-shore and off-shore entities, such as Helmsman and Compass Holdings …?)

Cramer and Greenberg’s hatchet jobs take an unusual form. They resemble Thomas Friedman’s write-ups on the Arab-Israeli conflict: “Let’s see, Arabs, Israel, Arabs… Israel, Arabs…….. Israel…… okay, I gotta call this one for the Israeli’s.” In op-ed after op-ed.

Similarly, when Greenberg adn [sic] Cramer attack me together, it generally takes the form of Cramer saying, “Byrne might be a good guy,” Greenberg saying something like , “No no, he’s a bad guy,” “Are you sure? ‘Cause I thought he might be a good guy…” “Oh no, he’s definitely a bad guy.” “Well…OK OK, he’s a bad guy.”

Oh, did I mention that Cramer founded thestreet.com, Greenberg cut his teeth there, and Rocker has been the most significant owner outside of Cramer himself?

Anyway…. Herb came to his end of year piece on worst CEO’s of the year. I think he must have written a couple dozen on me in the last two years, but I did not mind, except for the creepy ones (complaining about how I don’t always answer his email promptly? Geeesh: he reminded me of a scorned woman.)

And yet,after all this love, he left me out. I did not even the [sic] make the #1 spot here! I’m hurt. Of course, maybe he is getting some legal advice at the moment that explains his ducking his pat writings now….

Best,
Patrick

***

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

That’s how many headlines appear right now (9:16 p.m. Thursday night) on my Bloomberg regarding Intel’s revenue guidance press release and conference call.

By Friday morning, this number will surely expand, what with the morning research commentary from Wall Street’s Finest, as well as the CNBC-related talking-head piling on.

Precisely what earth-shaking, paradigm-shifting, time/space continuum-warping announcement did Intel make that merits such attention?

The company said, and I am quoting the headline of the press release itself: “Business Consistent with Expectations.”

That’s it.

The news was so bland, in fact, that the mid-point of the updated revenue guidance Intel announced last night ($10.5 billion) was exactly the same as the mid-point of the revenue guidance it replaced.

Is that really worth 45 headlines on the Bloomberg machine?

Yes, I know the drill: Wall Street was hopeful Intel would, in Street lingo, “raise guidance” and therefore give the traders and tape-readers who have been bidding up the stock in recent weeks on nothing more than the hope that Intel would “raise guidance” the ability to sell their stock at a profit.

And I know too that, as the saying used to apply to General Motors (see “McClellan Awaits Battle…In Detroit” below), what’s good for Intel is good for technology–and therefore Intel’s pronouncements about the state of its own business are taken as a barometer of the entire techno-food chain.

But I am reminded of our dog, a Jack Russell, and its most endearing feature.

By way of preface, this Jack Russell’s least endearing feature is its complete inability to share space, food or attention with our aging mutt Lucy, not to mention the three cats that live in mortal terror of being caught by a dog whose miniscule brain is wired to do nothing more than hunt down and kill small, moving, long-tailed mammals.

Its most endearing feature, on the other hand, is far less lethal: this involves countless hours in the back yard, sniffing out and digging up pieces of slate from an old, long overgrown patio, and carrying those pieces of slate–which can be the size of Frisbees–in its mouth to some other part of the yard and burying them in a furious display of rapidly moving paws and flying dirt.

Days or weeks later, the Jack Russell will sniff out those very same pieces of buried slate and dig them up with great relish and immense satisfaction, as though they are priceless gifts unexpectedly bestowed upon it by the God of Dogs.

The net gain, of course, is zero: she is finding dirty pieces of rock that she herself buried.

But it makes her happy.

And I suppose this fascination with Intel–a company that for all practical purposes manufactures automobile engines–gives great comfort to those who enjoy speculating on whether a company will sound “upbeat” or “downbeat” or have “good body language” on the call.

But at the end of the day, Intel told us nothing we didn’t already know: the computer business is doing okay, but AMD is taking market share and the company that really matters in this business is neither one.

It is Apple.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

In the early years of the American Civil War, President Lincoln’s greatest frustration was his inability to find the right commanding general for the Union Army.

Lincoln went through generals the way George Steinbrenner used to go through baseball managers—one after the other. And like Steinbrenner, Lincoln even hired the same general twice, and fired him twice.

That general was George McClellan.

Vain, self-righteous, arrogant, and supremely competent at organizing and outfitting an army, McClellan was loved and admired by his troops almost as much as he loved and admired himself. In his first term as leader of what came to be called the Army of the Potomac, McClellan did a terrific job of organizing, drilling and molding into soldiers what had been a disorganized and dispirited bunch of raw recruits.

McClellan had just one big flaw: he couldn’t bring himself to fight.

Every time Lincoln expected “Little Mac,” as he was known, to finally move against the poorly equipped, ill-clad and undersupplied Army of Northern Virginia (brilliantly handled by Robert E. Lee), “Little Mac” protested that the troops weren’t ready or he didn’t have enough wagons or the roads were too muddy or his plans needed perfecting or the Confederate Army was too strong.

With McClellan, as the expression goes, it was always something.

I got to thinking about Little Mac while reading a remarkable op-ed piece by Rick Wagoner, the man at the center of perhaps the nation’s greatest current economic crisis—the melt-down of the U.S. automobile industry—in yesterday’s Wall Street Journal.

That piece is called “A Portrait of My Industry,” but it might just as well have been titled “It’s Always Something,” and its author could have been a corporate ancestor of Little Mac himself.

Mr. Wagoner sets up his premise—that GM is not merely suffering from self-inflicted wounds, but is, along with Ford and Chrysler, the victim of an uneven playing field—with the following howler of a statement:

Despite public perception, the answer [to the question of why GM is in trouble] is not that foreign auto makers are more productive or offer better-quality or more fuel-efficient vehicles. In this year’s Harbour Report, which measures manufacturing productivity, GM plants took three of the top five spots in North America, including first and second place.

This is written by the CEO of a car company whose dependence on gas-guzzling SUVs caused its sales to collapse 24% in September, while sales for Toyota—led by the Prius hybrid—rose 10%; Nissan rose 16%; and Honda rose 12% the same month.

Mr. Wagoner compounds his McClellan-like obsession with self-justification in the very next sentence:

In the latest J.D. Power Initial Quality Study, GM’s Buick and Cadillac ranked among the top five vehicle brands sold in America, ahead of nameplates like Toyota, Honda, Acura, Nissan, Infiniti and Mercedes-Benz.

Read that carefully: Mr. Wagoner cites the Buick and Cadillac brands, but leaves out Chevrolet, Pontiac, Saturn—in fact, he leaves out 85% of GM’s vehicle sales from the quality comparison.

Thus, like Little Mac, who, before complaining about his lack of horses, guns, blankets, and whatever else was keeping him from marching, was careful to lard his dispatches to Lincoln with encomiums about his soldiers’ parade-ground capabilities, Mr. Wagoner puffs up his own situation with meaningless statistics.

Then, like Little Mac, he proceeds to the it’s-always-something that he regards as the real problem—in this case, the uneven playing field upon which GM finds itself.

First, Mr. Wagoner blames the “social contract” made by “traditional manufacturers” to provide good benefits to American workers, which have left a staggering legacy of health-care costs on domestic auto companies.

Second, he decries the explosion of litigation abuse made possible by an irrational American judicial system.

Third—and I am not making this up—Mr. Wagoner decries a deliberate effort by Japanese policy makers “to artificially weaken the yen.”

I’m no expert in the car business, but I do rent a wide variety of automobiles when I travel, in order to see what is happening in the world of automobile market share.

And I always find it profoundly depressing to open the door of a Ford Taurus or Chevrolet Whatever and feel—just opening the door and getting behind the wheel—the poor quality of a Big Three automobile, compared to a comparable Toyota.

Mr. Wagoner’s protests aside, The Problem has nothing to do the Japanese currency or the health care burden with which Mr. Wagoner finds himself saddled. And the last time I checked, lawsuits do not directly impede the ability of any company to assemble a great car.

I have a brother-in-law in the auto business. I know how it works: everybody gets a nice car as part of their work. They drive it for a while and then they get another, newer model.

And I imagine Mr. Wagoner gets the pick of the GM litter—not a Chevy or a Saturn, but an Escalade or a Hummer.

And I don’t doubt that he honestly believes GM’s problem is not in the cars themselves, but in all the other problems his top lieutenants blame their troubles on at every monthly sales meeting.

But if the CEO of General Motors wants to learn something about the quality of the 85% of GM’s production that is being systematically replaced by better-built cars with foreign nameplates—many of them assembled right here in America—he ought to be given a Toyota to drive around for a month.

Then I believe he would stop wasting time writing self-justifying op-ed pieces and more time trying to fix what’s broken at GM: the cars.

Like “Little Mac,” whose organizational abilities were unsurpassed, I imagine Mr. Wagoner is a very good executive for handling certain aspects of a large automobile business.

But not, if his Wall Street Journal piece is any indication, during wartime.

And while I know nothing about the politics within GM, I suspect that, like Lincoln, whose search for a general “who fights” only ended when he brought in U.S. (“Unconditional Surrender”) Grant from the western theater to get down to the bloody but necessary business of fighting Bobby Lee on the battlefields of Virginia, the GM board has not yet found its wartime commander.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

FedEx will increase 2006 standard list rates for FedEx Ground and FedEx Home Delivery by an average of 3.9%…

Thus reads a headline that came across my screen late Friday afternoon.

Lest it be dismissed as a mere “energy-related” price adjustment and, therefore, dismissible as a “one-time” item to be stricken from the “ex-food and energy” Consumer Price Index, or the “core” Producer Price Index, or whatever adjusted, reconfigured, massaged or otherwise made-up Price Index the bond market wants to look at in order to feel better about owning short term notes that just barely cover the FedEx price hike—keep in mind that the correlation of the U.S. GDP to the index of air cargo activity is 70%.

Consequently, when FedEx and its brethren raise prices, attention, as Mrs. Loman once said, must be paid.

Furthermore, the FedEx headline happened to come on the heals of a Del Monte Foods company conference call in which it was disclosed that unexpected increases in logistics, packing and energy costs added $40 million to cost increases over and above previously anticipated cost increases in the quarter.

The good news, at least for Del Monte? That consumers did not appear to mind the price increase, because volumes held up better than feared.

Perhaps the American consumer is ready for some good old fashioned everything-goes-up inflation, at the very moment that the government has trained the bond market to focus solely on stripped-down, “ex-food and energy and housing and packaging and FedEx and healthcare and insurance and haircuts” number.

I added “haircuts” to the stripped-down CPI based on a very personal experience this weekend: I visited my local barber for my usual $17 haircut.

Only he is no longer charging $17, as he has for the last seven or eight years that I have been using him.

He now charges $22.

Hmmm. $22 divided by $17 is…well, it’s a lot more than whatever the so-called CPI number would like to pretend it is.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

So what is it—Blackberry or Treo?

That’s the question before the house, and I am looking for informed commentary, which is to say you actually own and use one or the other wireless device, and are willing to share what you like about it, what you don’t like, and whether you plan to switch from one to the other (or to a third).

Blackberry dominates the Wall Street world, but I have found the Treo in heavy use in all kinds of places I hadn’t expected to—radiology conventions, for one.

I am not a fan of PALM—I think management is, well, let’s just say that while they’re not as out-there as the Overstock crew, they don’t inspire confidence. But if the product works at its basic mission, which is delivering email to busy people around the country, then perhaps the company is worth a harder look.

The biggest complaint I hear about the Treo is the phone being clunky to use. With Blackberry I get some complaints about the phone and other complaints about back-office issues.

So let me know, if you will, the following:

1. How did you get your device—is it company supplied?

2. What do you use it for—email, phone, calendar, contacts?

3. What do you like best about it? What do you dislike about it?

4. Are you/your company staying with it or planning to switch?

We’ve done this before—audience participation—and it worked pretty well in sorting out the satellite radio companies (Sirius versus XM).

The more feedback, the better for everyone.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

When Lexmark pre-announced a truly horrific quarter the first week of October—on a $100 million revenue miss (out of $1.2 billion in revenue) the company guided operating income down by, well, $100 million.

In other words, every dollar of lost sales cost the company a dollar in operating income.

And it would have been worse if the company hadn’t gotten a $35 million pre-tax benefit from some inventory shuffling within its supply chain that was not disclosed until the 10Q came out November 1.

I can’t recall a company—at least since the dot-com days—that reduced net income guidance by more than its revenue shortfall.

At an analyst meeting on November 15, Lexmark management was long on buzzwords (“distributed output market” “vertical integration” “cost and price performance”) and short on specifics, although, to be fair, the company had warned ahead of time that it was not going to “address business conditions” at the meeting.

Which was probably wise, because “business conditions” for Lexmark aren’t too perky.

A look at Amazon’s Top Sellers in the inkjet printer category brings up no Lexmark product in the Top 10 or even the Top 50 sellers. The first Lexmark appears at number 58, behind pretty much every other brand in the business.

As for the brick and mortar side of retailing, Lexmark’s performance during the crucial holiday season won’t be known for a few more weeks—but Target was selling a Lexmark model for all of $17 on Black Friday.

Hardly the mark of a hot product.

Why then has Lexmark’s stock price risen 15% from its get-me-out-before-I-have-to-show-this-pig-on-my-sheet-at-the-end-of-the-month late October low?

Because talk of a leveraged buyout has been making the rounds.

On November 10, Sanford Bernstein analyst Toni Sacconaghi (who, for the record, was recommending Lexmark strongly prior to the blow-up) raised the notion that an LBO of Lexmark “appears economically viable,” citing the company’s “strong cash generation” and the potential for a divestiture of the money-losing inkjet business in order to “milk the supplies annuity on its existing installed base [of printers].”

At yesterday’s close of $47.62, Lexmark shares are approaching the price Sacconaghi had derived when he expressed his opinion that an LBO buyer might pay a 20% premium to the $42 stock price, despite a total absence of decent news regarding Lexmark, the printer business, or consumer electronics outside of iPods and plasma television sets.

Clearly somebody in the this-cash-is-burning-a-hole-in-our-pockets world of private equity is doing some serious homework on Lexmark.
Anybody with an informed opinion on what the answers might be would be welcome.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

Preparing to leave Chicago—home of “Da Bears”—after two days of stalking the floor of the McCormick Place Convention Center along with 60,000 doctors, salesmen and investors at the annual radiology show, one scene that sticks in my mind illustrates better than any what makes Chicago, well, Chicago.

It did not occur during the Bulls game that I attended at the United Center (Bulls beat the Magic by 9)—although the legacy of Michael Jordan that still grips this city hangs from every rafter in the joint.

It did not occur at the McCormick Center itself, being, as it was, inundated with about as diverse a population from around the world as you could find under one roof, all talking animatedly and in great detail about those areas of the human body that most people do not talk about—radiologists deal with breasts and colons the way auto mechanics deal with brake pads.

And it certainly wasn’t at Fogo de Chao, the restaurant I went to with a group of radiologists where “The Gaucho Way of Preparing Meat” was demonstrated by a swarm of waiters slicing pieces of lamb, steak, pork and chicken from long metal stakes right onto your place without giving you time to inhale—thereby providing future customers for the radiologists at our table.

It was at a Starbucks.

Early in the morning most Starbucks look the same. Two weeks ago near Carlsbad California, the early morning Starbucks line-up consisted largely of forty-somethingish women weighing all of ninety pounds with their blond hair pulled back beneath a pink baseball cap, just finished with their morning run.

Yesterday in Chicago it was a sixty-somethingish guy who looked like he could have come from watching a football game at Solder Field—leather jacket, cap and a matter-of-fact manner. He got his coffee and joined a couple of friends already sitting down at a corner table, talking about Da Bulls.

Great town.

In a future post we will examine some investment ideas coming out of this conference. In brief, though, think digital.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

One of the more obvious mistakes the mainstream media usually makes at this time of year is to refer to the American Shopper via the male-gendered third person pronoun He.

I guarantee that during some news report about holiday sales this weekend, some Talking Head will use this form when describing the shopping results from Black Friday, as in:

The American consumer is still spending; in fact Wal-Mart stores says he spent 4.3 per-cent more in November than last year…

The fact is that any retailer except maybe AutoZone and online engagement-ring seller Blue Nile will tell you that women drive their business.

Blue Nile, indeed, has made a business out of the fact that men hate to go to malls. More specifically, they hate to look for parking spaces, they hate to walk long distances past kiosks with stupid names, they hate to ask for help from some guy who knows nothing but how much commission he will earn selling this particular ring, they hate that awful fake smile and handshake when they’ve finally chosen a ring to buy, they hate to wait while the ring is boxed and wrapped, they hate to talk to the lady who takes their credit card and they hate to be smiled at and thanked and wished have a nice day! by the vaguely androgynous guy hanging around the exit…because men know deep down in their guts that they are being ripped off at every step of the way.

Blue Nile’s simple online ring selection converts what had been a shoot-me-please-before-I-have-to-listen-to-another-sweaty-salesman-tell-me-about-the-four-C’s-or-whatever-the-hell-it-is torture session into a sort of paint-by-numbers process that is so simple even a guy can now buy an engagement ring, in his pajamas.

No parking, no salesman, no problem.

Fortunately for most retailers, however, Blue Nile is still a small company with a very limited product line. Walk any mall in America and you will see women, mostly, leading the charge. Even tough guys—including, and I am not making this up, major league baseball managers—let their wives do most of the shopping.

How do I know this?

Well, I once spotted Mike Hargrove, now managing the Seattle Mariners but back then Manager of the red-hot Cleveland Indians, at a shopping mall in downtown Baltimore. It was 1997 and the Indians were in town to play the Orioles—believe or not, the Orioles had a good team back then—in the American League playoffs.

Hargrove was not, as a baseball fan might have expected, leading a bunch of rowdy Indian coaches and players on the late-morning tag-end of an all-night pub-crawl (his great team included a young right-fielder named Manny Ramirez).

No, the manager of the mighty Cleveland Indians was following his wife from store to store around the mall, and he was carrying the shopping bags for her.

I saw immediately that Mike was exhibiting all the signs of Husband Shopping Coma Syndrome (HSCS), in which the male’s arms become strained from carrying various cutesy shopping bags from various cutesy stores such that the blood has drained down into the hands, depriving the brain of vital red blood cells necessary to stay awake, which results in, first, sloth, then lethargy, and finally despondency.

I put Mike in the post-lethargy stage, dangerously close to despondency, though still functional, walking as he was in the staggering steps of a man ready to give up.

Furthermore, it was clear that noxious vapors—probably from the leather purses in the Coach store—had shut off the oxygen flow to his brain, causing his eyes to begin rolling back into his head.

His debilitated condition allowed me to catch up with him as he put the bags down and leaned against a railing overlooking the huge atrium at the center of the mall—looking, I thought, like a man weighing the merits of ending it all right then and there.

It was the first autograph I ever got in which the famous person giving the autograph seemed genuinely relieved to see me. (I will tell the Story of the Sting Autograph some other day.) We even had a nice, brief chat about the playoff game that was happening that very night.

And then his wife came out of the store, with another shopping bag, and I left.

Which is why I say that even major league baseball managers let their wives do most of the shopping, and why the key to this holiday season’s sales is in her, not his, hands.

And since gasoline prices have collapsed in the last month—from over $3.00 a gallon at their post-hurricane peak all the way down to $2.17 a gallon currently, according to AAA, which is up a mere 12% from the same time last year, as compared to up 50% at the end of September—I think she is feeling a little better lately.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

Every business morning my instant message light starts flashing around 7:30 with the first of as many as a dozen morning research summaries from around Wall Street.

These usually take a highly abbreviated form, with stock tickers used for company names and recommendations such as “Strong Buy” or “Outperform” abbreviated to “SB” and “OP”—the goal being to pass along as much information as possible in as few words as possible.

For example, last week this came in one morning:

SNDK overreaction, Samsung and Toshiba not meeting demand, MU better for sale yesterday, prlly same today…

In a nutshell, the broker’s research analyst was saying that Sandisk’s ten-point price drop (following Intel and Micron announcement of a joint venture to manufacture flash memory for Apple) was an overreaction, because currently the largest flash producers—Samsung and Toshiba—could not meet demand anyway. Also, their trading desk saw Micron stock probably being for sale prior to the open, as it had been the day before.

Understand that these things come one after the other, usually about stuff in which I only have peripheral interest (WEBX downgrade to EW from OW—WebEx Communications being a stock I have on my radar screen as an eventual Microsoft casualty) to that which I have no interest in at all (Cont’d seller of SPY & sold 2mm XLE…—having, as I do, as little ability to play index futures as I would a roulette wheel).

What I am looking for is good stuff—anything new, interesting and fundamentally based.

So this morning when the first message popped on my screen from Charlie O’Connor, my ace contact at Leerink Swann, a healthcare research boutique, I clicked on it expecting Charlie’s usual brief, helpful, information-packed, fundamentally based briefing from his analysts.

What I got was the following (keep in mind, “OP” stands for “Outperform”):

TURK-OP-basted with garlic and herbs, was moist and tender…dont want to overload as can cause s-t coma like symptoms.

STUFF-OP-made with brown rice, cracked rye bread, marsala soaked mushrooms…reit the buy rating.

MASH-OP-White and sweet potato blend, sourcream, butter salt and pepper, needs nothing else.

CORN-OP-spoonbread, half cake, half pudding, loaded with corn,onions and spices…new tradition over here

GRAVY-OP-pour over entire plate, garnish with cranberry sauce.

PIE-OP-must have been 5 or 6 to choose, lost count tried em all…

This morning, I am raising my rating on Charlie O’Connor from “OP” to “SB.”

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.

Look, if you had one shot, one opportunity to seize everything you’ve ever wanted… “Lose Yourself”—Eminem

Like the Eminem alter-ego in “Lose Yourself,” Wal-Mart—one of the world’s truly great companies—has, thanks to union protests, California Luddites and a consumer base dealing with hurricanes and gasoline prices, been “chewed up and spit out and booed off stage” for the better part of the last two years.

There is an irony, I know, in using Eminem lyrics to describe the world’s biggest retailer, given that Wal-Mart stores do not themselves carry Eminem’s cds—what with the f-words and all.

But that song sprang to mind reading this morning’s articles about Wal-Mart’s plans to, as the song says, “seize everything” this coming Friday on the busiest shopping day of the year.

Despite all the recent bad press, including that very lame CNBC probing of Wal-Mart’s so-called dark side—the low point of which had to be a David Faber interview with the bitter ex-manager of Pillowtex, the former high-flying textile consolidator that crashed and burned, who predictably blamed most of his terrible operating record on his largest customer—Wal-Mart more or less has kept rhyming, adding $20 billion in sales the first nine months of 2005 alone. That amount is, annualized, the equivalent of half the entire Target chain’s full year sales.

And today we see that Wal-Mart is set to tear the roof off.

“According to early copies of Black Friday circulars,” the New York Times reports, Wal-Mart will offer “doorbuster” deals to get customers in the stores—it will match competitors’ circular prices while offering some whopping discounts of its own, such as a 42-inch plasma TV for $997, compared to $1,499 at Best Buy.

Toys “R” Us, which I’ve long thought of as Toys “Aren’t” Selling, dismisses the Wal-Mart onslaught by saying “You can’t match what you don’t have,” claiming that 80% of the discounts Toys “Aren’t” Selling will offer on Black Friday can’t be found at Wal-Mart.

Before it went private, Toys “Aren’t” Selling was a highly seasonal retailer with flat sales growth and awful stores in desirable locations. Despite a 33% gross profit it brought less than 2% to pre-tax profits—implying a cost structure amounting to 31% of sales.

And that was before the company went private.

Wal-Mart—which is still growing 10% a year with a quarter trillion in sales—generates more than 5% in pre-tax profits on a 23% gross profit margin, implying a cost structure of about 18% of sales.

Hmmm….18% cost structure versus 31% cost structure…

I think we know who is going to capture the moment on Black Friday. Like the song says, you can do anything you set your mind to, man.

Jeff Matthews
I Am Not Making This Up

© 2005 Jeff Matthews

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.