Every year since 2002 I have closed out the year with my satirical look at the world through the eyes of a professional investor poking fun at what has transpired in our global society during the year we are about to turn the page on. You can access a complete list of all prior years’ articles at the LakeView Asset Management,
LLC website. 2012 has brought forth its own unique series of unexpected news, celebration, joy, disappointment, tragedy and of course several major elections. I hope that 2013 will be a year of health, happiness and prosperity to all of the members of my family, clientele, students, co-workers and readers. So without further ado, here is my List of 10 Things I Will Not Miss About 2012 (and never want to hear about ever again), in no particular order:
1. THE KARDASHIANS AND OTHER REALITY PSEUDO CELEBRITIES – In August, on a business trip to the West Coast my wife and I dined at a well know posh Beverly Hills dining establishment. My wife, upon returning from the ladies’ room reported that Kris Kardashian Jenner and husband, Olympian Bruce Jenner was dining at the same restaurant. During our meal, the paparazzi and TV celebrity show camera people were assembling outside on the sidewalk. I wondered; why would they care about where the Kardashian-Jenners were out for dinner or what they ate? If Warren Buffetf of Berkshire Hathaway (BRK/a; BRK/b) or Ford’s (F) Alan Mulally were dining there then it would be worth asking them upon their exit from the restaurant about investments or the economy. That was too “East Coast” in terms of thinking and I forgot that we were in TMZ territory. Who really cares about the Kardashians anyway? Have we really turned into a society of shallow celebrity or pseudo-celebrity (think Nicole "Snooki" Polizzi) “reality” show watching people? What have they contributed to society? What are their talents? The world needs more talented groups of sister entertainers like the Andrews Sisters and the Redgraves. From an investment perspective, I prefer to be long entertainment companies like Walt Disney (DIS) and CBS (CBS) and but have avoided the TMZ owner Time Warner (TWX).
2. GANGNAM STYLE – We had to endure the Electric Slide, the Hustle and, the Macarena. 2012 brought us, direct from South Korea, Gangnam
Style. I don’t get it. Still it received over one billion views on Google’s You Tube. Frankly it is stupid. However, it would be wise to invest in South Korea, a place I will be allocating more assets to in 2013. My investment of choice is the iShares South Korea (EWY).
3. SANDY – In October, Super Storm Sandy devastated the New York metropolitan area throughout New York City, Westchester, Long Island, New Jersey and Connecticut. That included Sandy Hook New Jersey. As it turns out, Sandy is the first name of my hometown mayor who in my opinion did a poor job in handling the post-super storm crisis. Then on December 14 the tragic massacre of students and employees of the Sandy Hook Elementary School in Newtown, Connecticut by a mentally deranged gunman took place. Hospitals should dissuade parents from naming their kids, girl or boy, Sandy or any other derivative thereof like Sanford. The name Sandy should be banned from being used in any way shape or form.
4. GREEK YOGHURT – What happened in Greece all of a sudden that now Greek Yoghurt is all the rage? Has an entire nation pinned its fiscal turnaround and future on the dietary and digestion needs and desires of the rest of the world? Has Danone (DANOY) missed the Greek Yogurt craze? Should Danone get a Greek Celebrity Goddess to push their Greek Yoghurt as did Jamie Lee for the company’s Activia product? What do you think? Jennifer Aniston? Tina Fey? Rita Wilson? Angie Harmon? They are all of Greek descent. I vote Angie Harmon. Let me know who you vote for.
5. NEW YORK YANKEES SPENDING TOO MUCH MONEY – How many times do we have to hear the same old refrain that the Yankees are buying a World Series? Spending by the Yankees is like capital investment for a major industrial corporation. You have to spend money to make money. The team has not won a World Series since 2009. However, the team is immensely profitable, has a large and loyal fan base and is part owner of the most successful regional sports network, YES. For the record, Yankee Global Enterprises, the holding company for the 27 time World Series champion baseball team holds 25% of YES after a recent sale of 49% to Rupert Murdoch’s News Corp (NWS) in a deal which values the network at $3 to $4 billion. It is one of the top three most valuable sports franchises in the world along with Manchester United and the Dallas Cowboys. Winning a World Series is an end game but you can hardly call the Yankees a failure. What have the Angels and Dodgers got for their highfalutin spending? One World Series each since 1988 and far less post season appearances. Yet they keep on spending in what amounts to a sports themed “keeping up with the Joneses.” The New York Metropolitans have a spending problem as well. I think they must be run by members of Congress. Let me put it this way, The Yankees are the Apple (AAPL) of baseball and the less profitable Major League Baseball equivalents of Research in Motion (RIMM) along with their fans just lament and complain. My suggestion is to put on the pinstripes and also take a position in Apple.
6. FISCAL CLIFF – Due to my chosen profession as an investment manager, I am required to read, watch and listen to the financial media. Also, as a frequent guest on financial media shows, I believe I have a responsibility to provide accurate information and valuable insight. Unfortunately the fiscal cliff dirge is dominating the press and air waves. It is a serious issue, I kid you not. However, there is a major disconnect between how politics operates in Washington, how Wall Street reacts to news or rumors and how the rest of the nation live their lives. In the end, the nation will win out and Wall Street will figure out how to profit from it. Until then, strap on a construction hat and put in your ear plugs. From an investment perspective, there will be many opportunities, so remain patient and do not fall victim to any fiscal cliff related panic while our elected leaders fritter away valuable time.
7. MAYAN CALENDAR – December 21, 2012 came and left. Wonder of wonders, miracle of miracles, the world did not end. The tailor, Motel Kamzoil was right after all, there is a higher power.
8. SOCIAL NETWORKING IPOS – The excitement was palpable. Would Hoodie Man Mark Zuckerberg wear a suit or his hoodie to the road show for Facebook (FB)? Was Facebook undervalued? Should I hock the house, sell the family jewels and trade down to a used Yugo to put everything on the line for the Facebook IPO? Clients were calling me to get into Facebook. They wanted to pay anything to be in for something that they had no clue about from a valuation and business model perspective. These were some of the same clients who complained when I trimmed back some Apple at $655 (after all, I started to accumulate the stock in the 40s; yet it does remain my largest position). I managed to get a few hundred shares of Facebook IPO stock for one client and sold it as soon as possible for a few points gain. I then proceeded to short Facebook and covered for a gain. It is for these reasons that I get paid by my clients to make investment decisions. In the fullness of time, Facebook will survive. The stock might eventually go higher than its IPO price. I am not risking any capital on the stock until it gets to a reasonable valuation and proves that it has a sustainable revenue model. Don’t fret though if you bought Hoodiebook on the IPO as it could be worse. You might have fallen for 2012 IPO hypes for Groupon (GRPN), Pandora (P) or Zynga (ZNGA) and would have gotten burnt even worse than the “Rippedoffyourfacebook” deal. However, and this is important to note, I began to buy Zynga shares when the stock got close to its cash value, trading at around $2.25, as was featured
on Bloomberg by my good friend and Bloomberg television and radio host of Taking Stock, Pimm Fox.
9. THE 1 PERCENTERS – I don’t know about you, but I am sick and tired of hearing about the “1 percenters.” Why does our society insist on the one hand deifying the rich and famous actors (see item #1 above) and athletes who are overpaid far more than bankers yet at the same time demonize successful entrepreneurs? Why can’t we think about the 100 percenters, that is everybody as a society in its entirety? Remember that more one percenters live in the “Sandy” states of New York, New Jersey and Connecticut than anywhere else. They are people too. Instead, politicians have to pit segments of society against each other. It is so counterproductive. We made it through World War II by being a nation of 100 percenters. We fought epidemics like AIDs as a nation of 100 percenters. Why change our strategy now?
10. THE HOPPER COMMERCIAL – Forget the fact that I prefer my Verizon (VZ) FIOS services over that of Dish Networks (DISH). The Dish Networks series of advertisements for its Hopper service was the worst and most annoying commercials in 2012. Maybe I am just talking like a true New Yorker (Noo Yawka?) but I would not be putting the Bunker Family – Archie, Edith, Gloria and Meathead in a commercial for Time Warner Cable (TWC). What about Da Super Fans shooting some commercials for Cablevision’s (CVC) Optimum? As one of my
worst run companies, Cablevision can use all the help it can get, so it may be worth a try.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AAPL, CBS, DIS, EWY, GOOG, VZ, ZNGA stock and AAPL and GOOG calls — although positions can change at any time.
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com
You can access more daily commentary from Scott Rothbort and live chat with him all during the trading day, on Wall Street All-Stars.
Scott is also a Senior Advisor to AAPLTrader
© 2012 LakeView Asset Management, LLC
Posted By Scott Rothbort at December 26, 2012
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