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2014 Editor’s Note: Well, Michael Bublé’s computer is still releasing holiday songs, which is the worst we can say about this year’s holiday music survey. The best we can say—and it is truly good news—is that The Boss’s hard-driving, live version of “Santa Claus is Comin’ to Town,” done entirely without computer-aided Bublé-style vocals, seems to be gaining much deserved traction. Meanwhile, one of our previous also-ran mentions in the What-Did-We-Do-To-Deserve-This? category, one Taylor Swift, deserves a big boo-yah for telling the Spotify algorithms to stuff it, pulling her entire catalogue from the automated listening service—including, by definition, the song mentioned here last year, which should be no tragedy to Spotify customers anyhow. As for our usual review of the latest rock memoirs, which tend to flood the bookshelves right about now—only to turn up in the mark-down bins come spring, which is when your editor actually buys them—the best read during brief trips to our local, increasingly down-on-its-heals Barnes & Noble, has to be Mick Fleetwood’s “Play On.” Fleetwood is one of the most underrated drummers in rock music, being the kind who drives the beat without histrionics and stays well behind the kit while the front-people do their thing (it was Fleetwood and fellow Mac bassist John McVie who rescued “Werewolves of London” for Warren Zevon and producer Jackson Browne, after the house band could not make the song work) so his remembrances of the formation of Fleetwood Mac are insightful and compelling even for those—including your editor—who were never big Fleetwood Mac fans. Currently priced at $30.79 at Barnes & Noble for the hard copy version, or $21.00 on Amazon, I’ll wait until spring and pick it up for $5.99—sorry Mick, but that’s the business we’re in. Merry Christmas, Happy Hanukkah and a Good New Year to all! —JM, December 19, 2014 2013 Editor’s Note: The most unnerving aspect to this year’s holiday music survey is the unavoidable, near-totalitarian presence of an insipid cover version of George Michael’s already-plenty-insipid-for-our-taste-thank-you-very-much “Last Christmas,” which, as we point out below has one of the most inane choruses ever written (no mean feat there), which wouldn’t be so bad except it is repeated over and over and over until you want to hand yourself over to Vladimir Putin’s security forces and let them do their worst. The perpetrator of this latest holiday music outrage is, it turns out, Taylor Swift, about whom your editor knows nothing except she adds exceedingly little to a song that needed plenty of help to begin with. But, as always with these annual surveys, your editor digresses. On the happier side of the music world, this last year has seen a number of excellent new rock memoirs, of which Kinks front-man and songwriting genius Ray Davies’ is the most interesting. The centerpiece of the story line in Ray’s “Americana” is his getting shot by a mugger in New Orleans some years back, but interspersing that tale he manages to tell much of the story of his career. If you want to read how Ray came up with classics like “Better Things” (why couldn’t that be a Christmas song? It’s as much about the holidays as “Same Old Lang Syne,” about which your editor has plenty to say later on), this is your book. Neil Young’s “Waging Heavy Peace,” which came out last year, is even better than “Americana,” however, and more fun to keep picking up when the mood strikes: Neil’s recollections are loopy, digressive, and admittedly unsure in some cases (at one point he compares his memory of a drug bust with Stephen Stills’ recollection of the same drug bust—and given that Neil only stopped “smoking weed” the year before writing the book, as he admits, it’s no wonder their recollections are very different), but like all things Neil Young, he says what he means and means what he says. And if you’re wondering where songs come from—great songs, eternal songs—Neil’s book is the place to begin. Would that a holiday song may one day spring from the fecund mind of Neil Young himself, for while he professes more of a Native American religious spirit than a Judeo-Christian one, either way, it would be so long Taylor Swift. Merry Christmas, Happy Hanukkah and a Good New Year to all! —JM, December 7, 2013 2012 Editor’s Note: We interrupt this holiday music review to bring you a potential stocking-stuffer that ought to bring tidings of good cheer… Amazon.com: Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett (eBooks on Investing Series Book 1) eBook: Jeff Matthews: Kindle Store 2011 Editor’s Note: Back by popular demand, we’ll again try to keep this year’s update brief…but past performance would tell you not to hold your breath. Here goes. Our annual holiday music survey—highly biased, rankly unscientific and in no way comprehensive—covers new ground this year, to wit: the SiriusXM all-holiday-music channel. Actually, there are two such channels courtesy of the satellite radio monopolists at SiriusXM. There’s one for “traditional” music of the Bing Crosby kind, in which human beings sing traditional Christmas songs while other human beings play musical instruments to accompany those songs; and there’s another channel for everything else, including the Auto-Tune-dependent sensation Michael Bublé, who has only gotten more popular—unfortunately—this year, along with a new presence not entirely unexpected but nonetheless frightening in its implications: Justin Bieber. Enough said about that, for our main beef with SiriusXM is not the presence of yet another teen idol on the holiday music scene. Our beef lies with the soul-less quality of the entire SiriusXM gestalt, which requires its three thousand channels to carry songs strictly on the basis of whether they share either a common date of issue (as on the “40’s at 4,” “50’s at 5,” “60’s at 6” et al channels), or a common target audience demographic. Among the later, for example is the “Classic Vinyl” channel, which is essentially a “Classic Rock” channel (“Classic Rock” being a Baby Boomer euphemism for what our parents knew as “Oldies” radio) that plays the WNEW-FM playlist from around 1968 to 1978. And nothing else. And there is the “Classic Rewind” channel, which is another Oldies channel that plays the WPLR-FM playlist from about 1979 to the late 1980s. And nothing else. Then there’s “The Bridge,” a Baby Boomer euphemism for “Easy Listening.” It plays Oldies of the James Taylor/Carole King/Jackson Browne vein. And nothing else. Certainly there are one or two such channels that manage to jump around between genres (The Spectrum is worthwhile on that score). But, in the main, each SiriusXM channel is tightly focused on a specific, narrowly defined demographic…sometimes scarily so. Here we’re thinking of the “Metal” channel, which plays loosely defined “songs” that consist of young men screaming their apocalyptic guts out above what appears to be a single, head-banging, machine-gun-style guitar-and-drumming musical track that never, ever changes. You marvel at where these guys came from, what portion of the domestic methamphetamine supply they consume, and how many serial killers might be listening to “Metal” channel at the very same moment as you. If Beavis and Butt-Head could afford a car, this would be their channel. Unfortunately, no matter which channel you pick and who the purported “DJ” may be (there are a lot of old-time, smokey-voiced, recognizable DJs on the various Sirius Oldies channels) you’ll hear a sequence of songs that all sound like a computerized random-number-generator picked ‘em. Listening to the “60’s at 6” channel, for example, you may hear a great Beatles single like “Hello, Goodbye” from 1967, followed by the wretchedly excessive “MacAurther Park” from 1968, followed by an unrecognizable chart-topper from 1962 that nobody plays anymore because it wasn’t any good even in 1962. The listener ends up flipping around from channel to channel and wondering why the bandwidth-happy SiriusXM monopolists don’t just give each artist its own channel, as they in fact do for Springsteen, Elvis and Sinatra. Those are channels you might expect to find, but there is, oddly enough, no Bob Marley or Rolling Stones channel—and, head-scratcher of all head-scratchers, no Beatles channel. In fact, the absence of The Beatles from the SiriusXM digital bandwidth relative to, say, the Eagles and Fleetwood Mac, is one the great mysteries of our age. After all, the Beatles individually and collectively contributed 27of the Rolling Stone Top 500 Songs of All-Time or 5.4% of those songs, yet they get nowhere near 5.4% of the SiriusXM airplay, whether on “Classic Vinyl,” “Classic Rewind,” “The Bridge,” “60’s on 6, ” “70’s on 7,” “The Spectrum” or any of the other three thousand channels here. You quite literally have as much chance of hearing “Snoopy and the Red Barron” on SiriusXM as “Revolution.” So why then is there a Jimmy Buffett channel (called “Margaritaville,” of course)? Having gotten all that off our chest, we can move on, since SiriusXM’s holiday channels add no new material to our annual survey because most of the songs are widely played everywhere else. Furthermore, we’ve been asked to assemble a “Top Ten Worst” list of holiday songs for this review. The problem is there are just so many, as we’ll be getting to shortly. Rod Stewart’s somnambulant “My Favorite Things,” which sounds like he’s reading the lyrics from a child’s book of verses, is right up there, while Dan Fogelberg’s “Same Old Lang Syne” stands out in any crowd of non-favorites. Easier, then, to simply identify the All-Time, Number One, No-Question-About-It NotMakingThisUp Worst Holiday Song of All Time, and let everyone else argue about the remaining 9. It is “The 12 Pains of Christmas.” This so-called comedy song takeoff on “The 12 Days of Christmas,” a pleasant English Christmas carol discovered by a U.S. schoolteacher from Milwaukee and used by her in a Christmas pageant in 1910, is an easily forgettable humorous novelty song that is neither novel or humorous, in any way. It isn’t even fun writing about, so we won’t bother: we’ll simply move on to something pleasant, which happens to be an entirely different sort of humorous novelty song that is both novel and humorous, and, therefore, well worth a mention here. We’re talking about the wonderfully bizarre, catchy, Klezmer-style cover of “Must Be Santa,” from Bob Dylan’s 2009 Christmas album, “Christmas in the Heart.” (Yes, Bob Dylan made a Christmas album.) The music is fast and cheerful, and Dylan’s low, growly voice is almost indistinguishable from Tom Waits. (The truly bizarre music video is not to be missed, watch it here.) After you get over the initial shock of hearing Bob Dylan singing what most Baby Boomer parents will recall being a Raffi song, it becomes impossible to not enjoy. Another glaring absence from our previous years’ commentary is neither novel or humorous, and inconceivably does not appear to qualify for the SiriusXM random-song-generator holiday song playlist despite being many-times more worthwhile than most of the SiriusXM catalogue, whether holiday-themed or not. The song is “2000 Miles” by the Pretenders, and it belongs on anybody’s Holiday Top Ten. If hearing Chrissie Hynde on that original song (she’s also recorded some good Christmas covers, including one with the Blind Boys of Alabama) doesn’t get you in a mellow holiday mood, nothing will. Merry Christmas, Happy Hanukkah and Good New Year to all. —JM, December 4, 2011 2010 Editor’s Note: Back for the third consecutive year by popular demand, we’ll try to keep this year’s update brief—but don’t count on it. For starters, we’re going to plug a book: Keith Richards’ autobiography, “Life,” which happens to be one of the best books ever written—and we don’t just mean “Best in the Category of ‘Memoirs by Nearly-Dead Rock Stars’.” It is a great book, period. The story of how ‘Keef’ (as he signs sweet letters to his Mum while rampaging across America), Brian and Mick developed the Rolling Stones’ sound, for example, is worth the price alone (in short, they worked really hard; but the full story is much better than that). Yet there’s more—much more. Guitarists can soak up how Keith created his own guitar sound; drummers will learn—if they didn’t already know—Charlie Watts’ high-hat trick (and from whom he stole it); while songwriters had better prepare themselves to be depressed at how Mick wrote songs (‘As fast as his hand could write the words, he wrote the lyrics,’ according to one session man who watched him write “Brown Sugar”). And that’s just the rock-and-roll stuff. The sex-and-drugs stuff is also there, and the author lays it all out in his unfettered, matter-of-fact, straightforward style, often with the first-person help of friends and others-who-where-there (and presumably of sounder mind and body than you-know-who: the drug and alcohol intake is truly staggering) who write of their own experiences with the band. Okay, you may say, but how exactly is Keith Richards’ autobiography relevant to our annual review of holiday songs? Well, while furtively reading snatches of ‘Life’ during a stop at the local Borders (we expect to see the book under the Christmas tree sometime around the 25th of this month, hint-hint), we happened to hear another musical legend perform one of our favorite offbeat Christmas songs in the background, and it occurred to your Editor that of all the bands out there that could have done that same kind of interesting, worthwhile Christmas song, The Rolling Stones probably top the list. What with Keef’s bluesy undertones and Mick’s commercial-but-sinister instincts on top, it would have certainly made this review, for better or worse. (Along these lines, The Kinks’ cynical, working-class “Father Christmas” is one of the all-time greats, and doesn’t get nearly enough air-time these days.) Now, for the record, the offbeat Christmas song that triggered this excursion was “’Zat You Santa Claus?”—the Louis Armstrong and The Commanders version from the 1950’s. (The song was later covered, like everything else but the Raffi catalogue, by Harry Connick, Jr.) Starting out with jingle bells, blowing winds and a slide-whistle, you might initially dismiss “’Zat You?” as a sadly commercial attempt by Armstrong to get in on the Christmas song thing, except that his familiar, Mack-the-Knife-style vocal comes over a terrific backbeat that turns it into what we’d nominate for Funkiest Christmas Song Ever Recorded. It is a delight to hear, and the fact that it is suddenly getting more air-time this season is a step-up in quality for the entire category—or would be, if not for the apparent installation of Wham!’s “Last Christmas” in the pantheon of Christmas Classics. A 1980’s electro-synth Brit-Pop timepiece, “Last Christmas” combines a somewhat catchy tune with lyrics that make a trapped listener attempt to open the car door even at high speeds to get away: Last Christmas, I gave you my heart But the very next day you gave it away This year To save me from tears, I gave it to someone special Considering the fact that the songwriter (Wham!’s gay front-man, George Michael) decided to repeat that chorus six times, the full banality of the lyric eventually gives way to incredulity: “Let me get this straight,” you begin to ask yourself. “This year he’s giving his heart to ‘someone special’… so who’d he give it to last year? The mailman?” “Last Christmas” does have the distinction of being the biggest selling single in UK history that never made it to Number 1. Furthermore, all royalties from the single were donated to Ethiopian famine relief, the same cause which led to creation of what turned out to be the actual Number 1 UK single that year, “Do They Know It’s Christmas?” “Do They Know…” is a song that has received some push from readers to receive an honorable mention in these pages, and while it is certainly an interesting timepiece, with much earnest participation from the likes of Sting, Bono and even Sir Paul, it is not nearly as worthwhile as an album that seems just as prevalent these days: A Charlie Brown Christmas by jazz pianist Vince Guaraldi. How a jazz pianist was hired to create the music for a TV special with cartoon characters is this: the producer heard Guaraldi’s classic instrumental “Cast Your Fate to the Wind” on the radio while taking a cab across the Golden Gate Bridge. One thing led to another, and thanks to that odd bit of chance, future generations will have the immense pleasure of hearing a timeless, unique work of art every year around this time. (A second odd tidbit for our West Coast readers: Guaraldi died while staying at the Red Cottage Inn, in Menlo Park—of a heart attack, however, and not the usual, more gruesome fate of musicians who die in hotels.) One second-to-last note before we move on: we have been heavily lobbied by certain, er, close relations to include Mariah Carey’s “All I Want For Christmas is You” as a worthwhile holiday song—despite our previously expressed misgivings about her contribution to the genre (see below). And we have to admit, her “All I Want…” leaves behind the incessant vocal pyrotechnics that made some of her other Christmas covers (“Oh Holy Night,” for example) unbearable, at least to our ears. In this case she seems to trust the song to take care of itself, which it does in fine, driving, upbeat style. Now, as Your Editor previously hinted, all he wants for Christmas is Keef’s book. And it had better be there, if, as previously noted, you get our drift. Finally, and speaking of autobiographies, we happened to read Andy Williams’ own book this past year and must report that our reference to Williams below was overly harsh. For one thing, his book is as honest as Keef’s; for another, as a singer not necessarily born with the vocal equipment of, say, Mariah Carey, the man worked at his craft and succeeded mightily where many others failed. Which, we might add, is, after all, the hope of this season. And so, we wish for a Merry Christmas, Happy Hanukkah and Good New Year to all. —JM, December 13, 2010 2009 Editor’s Note: 
Back by popular demand, what follows is our year-end sampling of the Christmas songs playing incessantly on a radio station near you, and it demands from your editor only a few updates this holiday season. For starters, we have not heard the dreaded duet of Jessica Simpson and Nick Lachey singing “Baby, It’s Cold Outside” thus far in 2009, and for this we are most grateful. Indeed, if it turns out that their recording has been confiscated by Government Authorities for use as an alternative to lethal injections, we’ll consider ourselves a positive force for society. On the other hand, we are sorry to report an offset to that cheery development, in the form of a surge in playing time for Barry Manilow’s chirpy imitation of the classic Bing Crosby/Andrew Sisters version of “Jingle Bells.” For the record, “Jingle Bells” was written in 1857…for Thanksgiving, not for Christmas. And it’s hard to imagine making a better version than that recorded by Bing and the three Andrew Sisters 86 years later. But Manilow, it seems, didn’t bother to try.

 Instead, Barry and his back-up group, called Expos, simply copied Bing’s recording, right down to that stutter in the Andrews Sisters’ unique, roller-coaster vocals on the choruses, as well as Bing’s breezy, improvised, “oh we’re gonna have a lotta fun” throwaway line on the last chorus. Sharp-eared readers might say, “Well, so what else would you expect from a guy who sang ‘I Write the Songs’…which was in fact written by somebody else?” We can’t argue with that, but we will point out another annoyance this year: the enlarged presence of Rod Stewart in the Christmas play-lists. Don’t get us wrong: we like Rod Stewart—at least, the Rod Stewart who gave the world what Your Editor still considers the best coming-of-age song ever written and recorded: “Every Picture Tells a Story.” It’s the Rod Stewart who gave us “Do Ya Think I’m Sexy?” we’re less crazy about. So too the Rod who chose to cover “My Favorite Things” (for the definitive version of that classic, see: ‘Bennett, Tony’) and “Baby It’s Cold Outside” with Dolly Parton (for an only slightly more offensive version of this one, see: ‘Simpson, Jessica’ and ‘Lachey, Nick’). As an antidote to Rod, we suggest several doses of Jack Johnson’s sly, understated “Rudolph the Red-Nosed Reindeer,” which seems to be gaining recognition, and anything by James Taylor—especially his darkly melancholic “Have Yourself a Merry Little Christmas.” Of all the singers who recorded versions of this last—and Sinatra’s might be the best—it is Taylor, a former junkie, who probably expresses more of the intended spirit of this disarmingly titled song. After all, the original lyric ended not with the upbeat “Have yourself a merry little Christmas, let your heart be light/Next year all our troubles will be out of sight,” but with this: “Have yourself a merry little Christmas, it may be your last/Next year we may all be living in the past.” No, we are not making that up. The good news is it should keep Barry Manilow from be covering it any time soon. JM—December 19, 2009 Wednesday, December 24, 2008 Shazam! From the Boss to the King to John & Paul (But Not George or Ringo), Not to Mention Jessica & Nick Like everyone else out there, we’ve been hearing Christmas songs since the day our local radio station switched to holiday music sometime around, oh, July 4th, it feels like. And while it may just be a symptom of our own aging, the 24/7 holiday music programming appears to have stretched the song quality pool from what once seemed Olympic-deep to, nowadays, more of a wading pool-depth. What we recall in our youth to be a handful of mostly good, listenable songs—Nat King Cole’s incomparable cover of “The Christmas Song” (written by an insufferable bore: more on that later); Bing’s mellow, smoky, “White Christmas”; and even Brenda Lee’s country-tinged “Rockin’ Around the Christmas Tree” (recorded when she was 13: try to get your mind around that)—played over and over a few days a year…has evolved into a thousand mediocre-at-best covers played non-stop for months on end. Does anybody else out there wonder why Elvis bothered mumbling his way through “Here Comes Santa Claus”? 

It actually sounds like Elvis doing a parody of Elvis—as if he can’t wait to get the thing over with. Fortunately The King does get it over with, in just 1 minute, 54 seconds. Along with that and all the other covers, there are, occasionally, the odd original Christmas songs—the oddest of all surely being Dan Fogelburg’s “Same Old Lang Syne.” You’ve heard it: the singer meets his old lover in a grocery store, she drops her purse, they laugh, they cry, they get drunk and realize their lives have been a waste…and, oh, the snow turns to rain. So how, exactly, did that become a Christmas song? Then there’s ex-Beatle Paul McCartney’s “Wonderful Christmastime,” which combines an annoyingly catchy beat with dreadful lyrics, something McCartney often did when John Lennon wasn’t around.

 (After all, it was Lennon who replaced McCartney’s banal, teeny-boppish opening line for “I Saw Her Standing There”—“She was just seventeen/Never been a beauty queen” is what McCartney originally wrote—with the more suggestive “She was just seventeen/You know what I mean,” thereby turning a mediocre time-piece into a classic.) But Lennon was not around to save “Wonderful Christmastime” even though McCartney actually recorded this relatively new Christmas standard nearly thirty years ago, before Lennon was shot. It rightfully lay dormant until the advent of All-Christmas-All-The-Time programming a couple of years ago. Fortunately, by way of offset, Lennon’s own downbeat but enormously catchy “Happy Xmas (War is Over)” is played about as frequently as “Wonderful Christmastime.” Who but John Lennon would start a Christmas song: “And so this is Christmas/And what have you done…”? Of course, who but Paul McCartney would start a Christmas song, “The moon is right/The spirit’s up?” If anything explains the Beatles’ breakup better than these two songs, we haven’t heard it. Now, we don’t normally pay much attention to Christmas songs. If it isn’t one of the aforementioned, or an old standard sung by Nat, Bing, Frank, Tony, Ella and a few others, we’d be clueless. But thanks to a remarkable new technology, we here at NotMakingThisUp suddenly found ourselves able to distinguish, for example, which blandly indistinguishable female voice sings which blandly indistinguishable version of “O Holy Night”—Kelly Clarkson, Celine Dion, or Mariah Carey—without any effort at all. The technology is Shazam—an iPhone application that might possibly have received the greatest amount of buzz for the least amount of apparent usefulness since cameras on cell phones first came out. For readers who haven’t seen the ads or heard about Shazam’s wonders from a breathless sub-25 year old, Shazam software lets you point your iPhone towards any source of recorded music, like a car radio, the speaker in a Starbucks, or even the jukebox in a bar—and learn what song is playing. Shazam does this by recording a selection of the music and analyzing the data. It then displays the name of the song, the artist, the album, as well as lyrics, a band biography and other doodads right there on the iPhone. Now, you may well ask, what possible use could there be for identifying a song playing in a bar? And unless you’re a music critic or a song-obsessed sub-25 year old, we’re still not sure. But we can say that Shazam is pretty cool. In the course of testing it on a batch of Christmas songs—playing on a standard, nothing-special, low-fi kitchen radio—heard from across the room, without making the least effort to get the iPhone close to the source of the music, Shazam figured out every song but one (a nondescript version of a nondescript song that it never could get) without a hitch. And, as a result, we can now report the following: 1) It is astounding how many Christmas songs are out there nowadays, most of them not worth identifying, Shazam or no Shazam; 2) All Christmas covers recorded in the last 10 years sound pretty much alike, as if they all use the same backing track, and thus require something like Shazam to distinguish one from the other; 3) Nobody has yet done a cover version of Dan Fogelburg’s “Same Old Lang Syne,” which may be the truest sign of Hope in the holiday season; 4) None of this matters because Mariah Carey screwed up the entire holiday song thing, anyway. Now, why, you may ask, would we pick on Mariah Carey, as opposed to, say, someone who can’t actually sing? Well, her “O Holy Night” happened to be the first song in our mini-marathon, and it really does seem to have turned Christmas song interpretation into a kind of vocal competitive gymnastics aimed strictly at showing off how much of the singer’s five-octave vocal range can be used, not merely within this one particular song, but within each measure of the song. In fact Mariah’s voice jumps around so much it sounds like somebody in the studio is tickling her while she’s singing. More sedate than Mariah, and possibly less harmful to the general category, The Carpenters’ version of “(There’s No Place Like) Home for the Holidays” comes on next, and it makes you think you’re listening to an Amtrak commercial rather than a Christmas song (“From Atlantic to Pacific/Gee, the traffic is terrific!”), so innocuous and manufactured it sounds. Johnny Mathis is similarly harmless, although his oddly eunuch-like voice can give you the creeps, if you really think about it. Mercifully, his version of “It’s Beginning to Look a Lot Like Christmas” is short enough (2:16) that you don’t think about it for long. Now, without Shazam we never would have known the precise time duration of that song. On the other hand, we would we never have been able to identify the perpetrators of what may be the single greatest travesty of the holiday season—Jessica Simpson and Nick Lachey, singing “Baby it’s Cold Outside.” “Singing” is actually too strong a word for what they do. Simpson’s voice barely rises above a whisper, and you cringe when she reaches for a note, although she does manage to hit the last, sustained “outside,” no doubt thanks to the magic of electronics. Thus the major downside of Shazam might be that it can promote distinctly anti-social behavior: having correctly identified who was responsible for this blight on holiday radio music, the listener might decide that if they ever ran across the pair in his or her car while singing along with the radio too loudly to notice, they wouldn’t stop to identify the bodies. Fortunately, the bad taste left by that so-called duet is washed away when Nat King Cole’s “The Christmas Song” comes on next. Thanks to Shazam, we learn that this is actually the fourth version Nat recorded. The man worked at his craft, and it shows. This is the best version of the song on record, by anyone, and probably one of the two or three best Christmas songs out there, period. The second those strings sweetly announce the tune, you relax, and by the time Cole’s smoky, gorgeous voice begins to sing, you’re in a distinctly Christmas mood like no other recording ever creates. (Unfortunately, the song’s actual writer, Mel Tormé, had the personality of a man perpetually seething for not getting proper recognition for having written one of the most popular Christmas songs of all time. We did not learn this from Shazam: we once saw Tormé perform at a small lounge, during which he managed to mention that he, not Nat King Cole, wrote “The Christmas Song”—as if this common misperception was still on everybody’s mind 35 years later. When that news flash did not seem to make the appropriate impression on the audience, he later broke off singing to chew out a less-than-attentive audience member, completely destroying the mood for the rest of the set.) Like that long-ago performance by the “Velvet Fog,” the pleasant sensation left behind by Cole’s “Christmas Song” is quickly soured, this time by a male singer performing “Let it Snow, Let it Snow, Let it Snow” in the manner of Harry Connick, Jr. doing a second-rate version of Sinatra. Who is this guy, we wonder? Shazam tells us it’s Michael Bublé. We are pondering how such a vocal lightweight became such a sensation in recent years—the answer must surely be electronics, because his voice, very distinctly at times, sounds like it has been synthesized—when John Lennon’s “Happy Xmas” comes on. It’s a great song, demonstrating as it does Lennon’s advice to David Bowie on how to write a song: “Say what you mean, make it rhyme and give it a backbeat.” The fact that Lennon had the best voice in rock and roll also helps. Unfortunately, his wife had the worst voice in rock and roll, and a brief downer it is when Yoko comes in on the chorus like a banshee. (Fortunately she is quickly drowned out by the children’s chorus from the Harlem Community Choir.) The other songs in our Shazam song-identification session are, we fear, too many to relate. Sinatra, of course; Kelly Clarkson, an American Idol winner who essentially does a pale Mariah Carey impersonation; Blandy—er, Andy Williams; and one of the best: Tony Bennett. Then there’s Willie Nelson, who has a terrific, understated way of doing any song he wants—but sounds completely out of place singing “Frosty the Snowman.” One wonders exactly what kind of white powder Willie was thinking about while he was recording this, if you get our drift. Oh, and there’s Coldplay’s “Have Yourself a Merry Little Christmas,” which pairs the sweetest piano with the worst voice in any single Christmas song we heard; Amy Grant, a kind of female Andy Williams; the Ronettes, who are genuinely terrific—a great beat, no nonsense, and Ronnie singing her heart out with that New York accent; and then Mariah again, this time doing “Silent Night” with that same roller-coaster vocal gargling. Gene Autry’s all-too-popular version of “Here Comes Santa Claus” would be bearable except that he pronounces it “Santee Closs,” which is unfortunate in a song in which that word appears like 274 times. ‘N Sync is likewise unbearable doing “O Holy Night” a cappella, with harmonies the Brits would call cringe-making, and Mariah-type warbling to boot. Hall & Oates’s “Jingle Bell Rock” is too easy to confuse with the other versions of “Jingle Bell Rock”—thank you, Shazam, for clearing that up—while Martina McBride manages to sound eerily like Barbra Streisand imitating Linda Ronstadt singing “Have Yourself a Merry Little Christmas.” Winding things down is Dan Fogelburg’s aforementioned “Same Old Lang Syne,” and here we need to vent a little: something about the way he sings “liquor store”—he pronounces it “leeker store”—never fails to provoke powerful radio-smashing adrenalin surges. Fortunately, we suppress those urges today, because the Shazam experiment concludes with one of the best Christmas songs ever recorded. Better than Bing, and maybe even better than Nat, depending on your mood. It’s Bruce Springsteen. The Boss. Doing “Santa Claus is Comin’ to Town”…
live. Yes, this song was recorded live, and despite its age (more than 25 years old), the thing still jumps out of the radio and grabs you. Now, as Shazam informs us, this particular recording was actually the B-side of a single release called “My Hometown.” (Back in the day, kids, “singles” came with two songs, one on each side of a record: the “A” side was intended to be the hit song; the “B” side was, until the Beatles came along, for throwaway stuff.) Fortunately nobody threw this one away. Springsteen begins the familiar song with some audience patter and actual jingle bells; then he starts to sing and the band comes to life. Things move along smoothly through the verse and chorus…until ace drummer Max Weinberg kicks it into high gear and the band roars into a fast shuffle that takes the thing into a different realm altogether. Feeding off the audience, The Boss sings so hard his voice slightly breaks at times. Then he quiets down before roaring back into a tear-the-roof-off chorus, sometimes dropping words and laughing as he goes. This is real music—recorded in 1975 during a concert at the C.W. Post College—with no retakes, no production effects, and no electronic vocal repairs, either. Try doing that some time, Jessica and Nick. Actually, come to think of it, please don’t. Merry Christmas, Happy Hanukkah and a Good New Year to all. Jeff Matthews Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” (eBooks on Investing, 2014) Available now at Amazon.com © 2014 NotMakingThisUp, LLC The content contained in this blog represents only 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

IBM trades to highs on activist related speculation (161.85 +0.95) —Briefing.com, November 23, 2014 IBM Chief Counsel: “Ginni? Fred here.” IBM CEO Ginni Rometty: “What’s wrong?” Chief Counsel: “Activists are circling.” Rometty: “Oh geez.” Chief Counsel: “Yeah. I’ve got the biggest shark of all on hold. He wants to talk.” Rometty: “Carl Icahn??” Chief Counsel: “No. Icahn watches Netflix and uses an iPhone. He thinks we’re ‘old economy.’ Worse than Icahn.” Rometty: “Donald Trump?” Chief Counsel: “No. Even worse.” Rometty: “Worse than Donald Trump? How is that possible?” Chief Counsel: “It’s possible. It’s those guys from 3G.” Rometty: “Yikes. The Brazilians? The ones who took over Burger King and slashed and burned?” Chief Counsel: “Yeah. And they bought Heinz with Warren Buffett—your pal.” Rometty: “Well, he’s not my pal after we had to reset the ‘earnings roadmap’ and the stock tanked. Stupid roadmap. How did Palmisano ever come up with that idea?” Chief Counsel: “It worked, didn’t it?” Rometty: “Only long enough for Sam to exercise his stock options. Not me.” Chief Counsel: “Well your options may be in the money soon enough, if these 3G guys go ahead. You want to talk to them?” Rometty: “Put ‘em on.” Chief Counsel: “Right now?” Rometty: “It’s better than watching these Fast Money yahoos trash talk me on CNBC.” Chief Counsel: “Hold on… Okay, here we go. Oscar? You there?” Oscar: “Yes. I have seven minutes before I have to fire 37 people and figure out how to convince young males to buy hamburgers made with wood shavings. Let’s get going.” Rometty: “What do have in mind?” Oscar: “We at 3G would like to buy IBM—” Rometty: “Outright? That’s not activism, that’s a hostile takeover!” Oscar: “Call it what you like. We see great opportunity to run IBM more efficiently.” Rometty: “Oh yeah? Starting where?” Oscar: “Layoffs. IBM has too many employees.” Rometty: “Says who?” Oscar: “You have over 400,000 employees!” Rometty: “That number is so last week.” Oscar: “You’ve had layoffs in the last week? Well then, I must congratulate you.” Chief Counsel: “Careful, we haven’t publicly disclosed anything.” Rometty: “Okay. So what else does 3G think we need to change?” Oscar: “Well, according to our internal due diligence you have a very inefficient field staff reporting structure. At Burger King we have 14,000 field staff reporting to seventy-five MBAs who all work out of their cars.” Rometty: “That’s nothing. At IBM our entire field staff of 80,000 reports to three college grads and a transfer student.” Chief Counsel: “Ginni, that’s never been disclosed—” Rometty: “Relax, Fred. The transfer student doesn’t even speak English.” Oscar: “Somehow our due diligence did not discover that. Well played.” Rometty: “Thank you. What else you got?” Oscar: “Well, corporate overhead. At Burger King we eliminated all corporate jets except mine, and everyone takes a Greyhound bus when they travel more than 300 miles.” Rometty: “What do they do under 300 miles?” Oscar: “They hitch-hike.” Rometty: “That’s nothing. All travel requests at IBM have to get approved by a cardboard cut-out of Dilbert.” Oscar: “Brilliant!” Rometty: “It’s called returning value to shareholders, not employees.” Oscar: “And we admire that. But your headquarters staff appears bloated to us—” Rometty: “That’s because it doesn’t exist.” Oscar: “Doesn’t exist?” Rometty: “No. It was outsourced to India years ago.” Oscar: “Then why do our satellite images of the IBM headquarters parking lot show so many cars?” Rometty: “That’s my security detail. And my lawn service.” Chief Counsel: “Ginni, I really think this is inappropriate—” Rometty: “Not at all. If this guy thinks he can tell me how to run IBM even less for employees and customers than we already do, he’s got another thing coming. He’s a piker.” Oscar: “Well let’s discuss your taxes. We at 3G know how to operate tax-efficiently across all multi-national jurisdictions—” Rometty: “Our tax rate was 15.6% last year. How do you beat that?” Oscar: “We think applying a ‘Dutch Sandwich’ could move billions in pre-tax income to a lower tax rate nation without any change in your corporate headquarters—” Rometty: “Been there, done that.” Oscar: “Well, a ‘Double Irish’ would reduce taxes on intellectual property by shifting—” Rometty: “You’re five years too late pal. Next?” Oscar: “A ‘French Cuff’?” Rometty: “So ’90s.” Oscar: “The ‘Jamaican Bobsled’?” Rometty: “Who do you think invented the ‘Jamaican Bobsled’?” Oscar: “What about a ‘Hong Kong Stir-Fry’…a ‘Singapore Sling’…a ‘Portuguese Man-O-War’?” Rometty: “Is this the ’80s calling now? Puh-leeze.” Oscar: “Well, I must say, your tax avoidance strategies seem quite advanced. I’ve run out of options.” Rometty: “You didn’t ask about the ‘Belgian Waffle.’” Oscar: “Fala sério! We heard the rumors about it, but believed it to be a myth, like Bigfoot. You mean there is such a thing?” Rometty: “Wouldn’t you like to know?” Oscar: “Please? I beg of you.” Rometty: “If you guys drop this takeover idea, I might—.” Oscar: “Consider it dropped.” Rometty: “Alright. But first, make sure your door is closed, your auditor is nowhere nearby, and listen carefully… Now just imagine you found a way to merge with an entire country, whose citizens could be made to unwittingly pay your taxes for you—.” Chief Counsel: “This conversation is finished! Ms. Rometty has nothing further to add!” Oscar: “El Diablo!” ### Jeff Matthews Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” (eBooks on Investing, 2014) Available now at Amazon.com © 2014 NotMakingThisUp, LLC The content contained in this blog represents only 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

Former BB&T* CEO John Allison has written a book about, well, about his time at BB&T, during which it grew from $275 million in assets to $152 billion (profitably) and some lessons learned along the way. American Banker, one of the publications Warren Buffett reads every day, is publishing excerpts from the book, covering everything from how BB&T got into the subprime auto lending business to how it looks for acquisitions (100 and counting during Allison’s 35 years at the bank). And while Warren Buffett has long lambasted American CEOs for not providing shareholders with honest post-mortems about acquisitions where big things were promised but not delivered, Allison makes Buffett look like a piker when it comes to the notion that deals ought to be scrutinized in hindsight. Here’s what Allison says, and it’s so logical you wonder why everybody doesn’t do it. Well, actually, you understand why they do not… Of course, the economics had to work from our shareholders’ perspective…In this regard, the board members were told that for 10 years after an acquisition was effected, they would be provided with a report on how well the acquisition performed relative to our projections. It is tough to remind your board for 10 years that you made a significant mistake, so this discipline encouraged rational, objective analysis. JM 11/17/14 *Your editor has an interest in BB&T, just for the record, but we would have published this even if we didn’t.

Well the biggest stock-market levitation act since HP under Mark Hurd is going the way of all levitation acts: IBM is throwing in the towel on its $20 EPS “roadmap” (reportedly mocked as “roadkill” in some internal IBM quarters) and admitting what anybody with a calculator and the IBM 10Ks before them has understood for some time–it is exceedingly difficult to grow earnings regularly, not to mention with to-the-penny precision, when your sales are falling, hard, nearly everywhere, quarter after quarter…no matter how many people you lay off, how many “one-time” charges you take, how many lagging businesses you sell at fire-sale prices, how many shares you buy back at whatever price, or how often you try to direct the gaze of Wall Street’s Finest to shiny new objects like your years-too-late efforts in “the cloud,” which happens to be the very thing that is causing your revenues to fall in the first place. But shareholders–in particular the small investors who have clung to IBM’s earnings “roadmap”even when the potholes were there for any professional to see–should not direct their ire at IBM management. After all, IBM’s low-quality earnings were apparent and easily dissected, as you can read here, here and especially here if you like. Most companies (not all–Berkshire Hathaway is a notable exception, as are some others we could mention) report earnings in their best light possible, and IBM executives were simply doing what most of Wall Street’s Finest (not all–there were some skeptics) allowed them to, no questions asked. JM

Now that we have your attention with that admittedly provocative title, we are going to kill two birds with one stone here. Bird One is the fact that we haven’t posted anything in two months, mainly because whatever odd silliness visible in the darker corners of Wall Street seems irrelevant in a world where Vladimir Putin can invade his neighbors, take territory and shoot passenger planes from the sky while the civilized world sputters about such things not being fit for 21st Century-type behavior before moving onto actual 21st Century-type behavior like Tweeting about how sad it is that Joan Rivers died. Bird Two is something I’ve always wondered about when it comes to Berkshire Hathaway. But before getting to that, let me repeat, for the record and as I have said early and often in books, speeches and as a talking head, that Berkshire Hathaway is the product of the single best 49 ½-year investment track record that anyone in our lifetimes will likely ever witness, bar none. Now, I have met a lot of conspiracy theorists since writing “Secrets in Plain Sight” who claim that Warren Buffett is either a) just plain lucky (“he was born at the right time”), or b) not really all that great (“you could have done better with a leveraged bond fund,” e.g.), or c) a beneficiary of his left-wing political connections (“the Keystone Pipeline isn’t being approved because it would hurt Berkshire’s railroad”), or d) just such a lousy rotten hypocrite that who cares what his track record is? But none of them (or anybody else, for that matter) has ever, never, not once brought up the actual fact that Berkshire Hathaway is, as best anybody can tell, the largest cigarette dealer in the United States (outside of the tobacco companies themselves), thanks to its ownership of McLane Company, the giant wholesaler that Buffett acquired from Wal-Mart in 2003. The precise extent to which Berkshire Hathaway shareholders (your editor included) benefit from supplying smokes to addicts around the world (McLane has operations in other countries as well as the U.S.) are hard to come by, but, big picture, we know that a) McLane is the largest distributor of smokes, gum, candy and food to convenience stores in America, and that b) convenience stores are the largest source of smokes to cigarette addicts in America, which would mean Berkshire Hathaway owns what is very likely the biggest wholesaler of smokes (not to mention the kind of chewing tobacco that recently killed Padres great Tony Gwynn) in America. And despite all the efforts of government and regulators to end it, the tobacco business remains a very big business indeed. In fact, a press release on the McLane web site (copped from something called “Convenience Stores Decisions”) notes that $52 billion worth of cigarettes were sold at convenience stores in 2012, amounting to 8.75 billion smokes. And while both figures were down slightly from the previous year according to the same report, its authors noted approvingly that “visits to the c-store [convenience-store] by tobacco customers remains [sic] strong, and that provides a steady opportunity to boost the market basket.” So the next time people flip out about Warren Buffett making a perfectly rational decision to invest Berkshire’s money in a highly profitable tax-inversion deal despite his long-standing opposition to the use of tax-aversion strategies by others (as they did a couple of weeks ago during the Burger King-for-Tim Horton hysteria), ask them whether it’s really as bad as making money wholesaling a highly addictive, cancer-causing, birth-defect-causing and emphysema-causing product by the billions to people who really can’t afford it to begin with? And the next time you run into one of Berkshire’s “comfortably numb” shareholders—to cop an old Pink Floyd label—ask them when are they going to stop doing it? Jeff Matthews Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” (eBooks on Investing, 2014) $2.99 Kindle Version at Amazon.com © 2014 NotMakingThisUp, LLC The content contained in this blog represents only 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. And if you think Mr. Matthews is kidding about that, he is not. The content herein is intended solely for the entertainment of the reader, and the author.

Last night at 4:05 PM E.S.T. the news hit Bloomberg that the Federal Housing Financing Agency was proposing an astoundingly, stupidly strict set of standards for private mortgage insurers who do business with Fannie Mae and Freddie Mac, the net effect of which would be to reduce the availability of credit for home buyers at the very time that credit is needed to keep our economic recovery going. We are not here to explain the issue, only to point out to FINRA, the self-policing body in charge of sniffing out strange behavior in the public markets, the enormous–nay, ginormous–option trades in the two publicly traded stocks most affected by the proposed standards just hours before the news hit the tape, betting on a drop in those stocks. Those two stocks, Radian and MGIC, are tickers RDN and MTG, and they stand out in this screen shot from our Bloomberg on outsized options activity by a mile: So, we wonder: who had the call yesterday from the FHFA…before it hit the tape? JM

These are the headlines on my Bloomberg for Annie’s, the organic mac and cheese maker whose shares have fallen from unsustainable heights as the difficulties of running a public company while trying to meet the impatient quarterly targets of impatient quarterly-minded investors finally overcame the euphoria of a company that seemed to be in the right place at the right time. And this is one more reason why companies are leaving America. For the record, I like the new CFO (who helped flag the filing deficiencies) and would not bet against the company mending its ways. Nor would I blame them for moving to Ireland to get the Pittsburgh Law Office of Alfred G. Yates, Jr, the Lifshitz & Miller Law Firm, Brower Piven, Levi & Korsinsky, LLP, the Former Louisiana Attorney General, Federman & Sherwood, Morgan & Morgan, Fauqi & Faruqi, Holzer & Holzer, Crosby Stills Nash & Young, Peter Paul & Mary, and even John Paul George & Ringo off their backs. JM

If this is failure, I want more of it.” —Charlie Munger “The only succession for Ajit Jain is reincarnation.” —Warren Buffett Omaha, Nebraska, May 3, 2014. It’s one year later, and I’m driving in pre-dawn darkness through downtown Omaha to the 2014 Berkshire Hathaway shareholder meeting, which, up until about a week ago, was looking like another cakewalk for Warren Buffett. After all, Berkshire’s net worth increased 18% in 2013, representing a staggering $34 billion jump in value. And while, as some wet-blanket observers have pointed out, Berkshire’s 18% gain paled in comparison with the S&P 500 (up 32% including dividends—its best year since 1995), a $34 billion increase in value would be a grand slam home run for any company, in any year…let alone for a decentralized conglomerate in its 49th year under the watchful but aging eyes of two men, one in his early 80’s and the other who just turned 90. Indeed, so well did Berkshire’s businesses perform last year that Buffett—who so frequently dwells on the negatives in his self-assessments that Charlie Munger says, “Warren wants to make it eccentrically difficult for himself”—kicked off his year-end shareholder letter by writing, “just about everything turned out well for us last year.” Then along came Buffett’s April 23 CNBC interview with Becky Quick, and all anybody has talked about since is his Coca Cola vote. Kind of Un-American to Vote ‘No’ at a Coke Meeting During that fateful discussion, Quick—one of the three journalists asking questions at the meeting here today—brought up Buffett’s recent decision to abstain from voting Berkshire’s shares of Coca Cola against a large option package for Coke management. The Coke option grant had become something of a cause célèbre on Wall Street after one “activist” Coke shareholder calculated that the options could dilute existing Coke shareholders as much as 17% over time, and he publicly urged other shareholders to help him vote it down. Buffett, who doesn’t like to be railroaded into doing anything, let alone going against the wishes of his longstanding friends at Coca Cola, decided to abstain rather than vote against Coke management. When Buffett was pressed by Quick on his decision to avoid joining the activist uprising and merely abstain from voting Berkshire’s shares, Buffett—normally a harsh critic of corporate “fat cats”—seemed off his game. “I love Coke, I love the management, I love the directors, so I don’t want to vote no,” he told Quick and everyone watching. Then the investor most famous for staying rational in the frequently-irrational world of investing gave Becky the least rational reason he could have given for his decision: It’s “kind of un-American to vote ‘no’ at a Coke meeting,” he said. Cries of hypocrisy and corporate cronyism swiftly appeared in New York Times opinion pieces and across the Internet. It didn’t help that the options package had been approved by Coke’s board of directors, which happens to include Buffett’s oldest son, Howard. The resulting kerfuffle prompted Buffett to give several defensive TV interviews in response, but it was too late. The story has dominated the news leading up to the Berkshire Hathaway shareholder meeting ever since. And it will no doubt be the first topic of the question and answer session due to start soon. Hello, Goodbye The Coke controversy is one big difference between this year’s shareholder meeting and last year’s relatively quiet gathering, but it is not the only difference. For starters, the weather is way nicer this year—the air was positively balmy leaving the hotel this morning—and the Omaha skyline continues to sprout new buildings. The growth and optimism are palpable, with new restaurants and bars springing up seemingly everywhere, and apartment buildings going up in what used to be a very quiet downtown after hours. But the biggest difference between this weekend and any of the last half-dozen shareholder meeting weekends is that in three days of driving around Omaha, I still haven’t seen a picture of Warren Buffett. The billboards with his giant headshot, the airport displays with his face on them, and even the trucks driving around town with his photo on the sides—advertisements for the University of Nebraska (“Warren Buffett, Class of 1951”)—they’re all gone. Interestingly, Buffett’s public profile has been reduced recently in other ways as well. NetJets, for example, no longer advertises in the Wall Street Journal with photos of Warren Buffett flying in comfort on the Berkshire-owned company’s time-sharing jets. In his place, the Berkshire Hathaway name is promoted instead. Furthermore, the Berkshire brand was slapped on the company’s disparate real estate brokerage holdings last year—the first time since Buffett took control of Berkshire Hathaway in 1965 that the name had been used on anything outside its old textile business other than insurance. Just last week the company’s Mid-American Energy business was renamed “Berkshire Hathaway Energy.” The move away from Warren Buffett’s iconic image, and towards Berkshire Hathaway’s own name, seems clearly designed to ready the company for the day Buffett is no longer able to run the company he built, and a successor takes his place as CEO. It also makes what the radio happened to play when I first started up the car this morning a bit spooky. Like last year, it was a Beatles classic; unlike last year it wasn’t “Back in the USSR.” It was “Hello, Goodbye.” We’ll get some more clues about Buffett’s successor even before the question and answer session starts later this morning—during the cartoon, in case you’re wondering—and those clues may just be the most obvious yet. But we’ll also see that Warren Buffett isn’t going anywhere soon, and neither is Charlie Munger, by the looks of things. Both men will take the stage after the usual rousing movie, to the usual rousing applause, from the usual packed arena. And at ages 83 and 90 they’ll prove to be in top form, answering more than 60 questions during the course of more than five and a half hours of Q&A, while offering up a few more “secrets” for those who’ve made the journey to Omaha. First, however, they’ll have to deal with the Coke controversy. Forty-Five to One Easily the most disappointing part of the Berkshire Hathaway meeting weekend actually begins after the movie that kicks things off, but just before Buffett calls for the first question from Carol Loomis. That’s when Buffett typically spends five or ten minutes reviewing Berkshire’s quarterly earnings and any other unusual company business that might have come up ahead of the meeting. Today, that unusual company business happens to be a Berkshire Hathaway shareholder’s proposal calling on Berkshire to pay a dividend. It had been on the proxy statement voted on by Berkshire’s shareholders, and Buffett wants to discuss the voting. Now, we all know a dividend will never happen as long as Warren Buffett is around—after all, why give Berkshire’s cash to shareholders when Warren Buffett can invest it better?—but a shareholder had gotten it on the ballot anyway. Buffett first puts up a slide of the proposal, and while it reads kind of snarky, it’s very straightforward: “Whereas the corporation has more money than it needs and since the owners unlike Warren are not multi-billionaires, the board shall consider paying a meaningful annual dividend on the shares.” Buffett acknowledges the chuckles at the sarcastic language, and then puts up another slide showing how the voting came out. He is clearly pleased. It turns out the Berkshire shareholders sided with Buffett in a landslide, voting down the dividend proposal by an overwhelming forty-five to one margin, despite the fact, as Buffett says proudly, “we employed no proxy solicitation firm” to lobby shareholders to shoot down the idea. In fact, Buffett says, the result was “better than I expected.” The message from Buffett is clear: shareholder votes matter, and when something comes along a shareholder doesn’t like, they should go ahead and vote their conscience, because boards and their CEOs pay attention. He then calls on Fortune magazine Editor Carol Loomis to ask the first question, and almost immediately contradicts that message. This Very Un-Buffett-Like Behavior Carol Loomis kicks off the Q&A, as usual. She is a close friend of Buffett and longtime Berkshire investor, but despite their relationship Carol never shies from starting with the question that’s on everybody’s mind, no matter how uncomfortable. In this case, it’s about Buffett’s Coke vote. Or, rather, about Buffett abstaining from the Coke vote. The question Carol has chosen (the reporters get thousands of emailed questions prior to the meeting) asks Buffett to justify “this very un-Buffett-like behavior.” And Buffett begins his answer. He first explains that the option plan wasn’t as egregious as the calculations thrown around by the activist had made it seem, and goes into a typically Buffett-esque, to-the-decimal-point analysis of the numbers, which he clearly knows cold. Nevertheless, he says, he did think the plan was “excessive” and tells us he expressed that concern in a meeting with the Coke CEO “right here in Omaha.” All in all, however, he simply didn’t want to “go to war with Coca Cola,” and felt abstaining on the vote while making his opposition known to Coke’s CEO “was the most effective way of behaving for Berkshire Hathaway.” Charlie Munger backs up his friend, in his usual crisp, dry fashion, saying, “I think you handled the whole situation very well.” A Person Should Just Pick His Spots But many shareholders in the arena clearly don’t agree. During previous meetings when Buffett has been similarly challenged (during the David Sokol affair, for example), he had been applauded for staunchly defending his behavior. But he gets no applause this morning, and further muddies the waters a few questions later when Andrew Ross Sorkin asks a terrific follow-up question on behalf of yet another shareholder upset with Buffett’s behavior. Noting that Buffett’s son, Howard—who is expected to become Berkshire’s board chairman should anything happen to Warren—is not only on the board of Coke but voted for the same option plan his father thought was “excessive,” Sorkin’s questioner wants to know how in the world Howard Buffett would “enforce the Berkshire culture,” which is firmly against the kind of corporate self-enrichment the Coke plan represents, when Howard is running Berkshire’s board meetings after Warren is gone? This time Buffett launches into an unfortunate—but brutally honest—depiction of boards of directors that leaves some of us wondering if somebody spiked the Cherry Coke Buffett drinks while on stage. “The nature of boards,” says Buffett, “is such they’re part business organizations and part social organizations.” Buffett hammers home his point by noting that directors are “getting paid $200,000-$300,000 a year,” so “believe, me, they are not independent.” Now, everybody here either knew that already or suspected as much—but we’ve also had it drilled into our heads by Buffett and Munger in this same venue that boards are not supposed to be anything but representatives of the shareholders who own the company. The mood is sour enough after this preamble, but then Buffett drops the bombshell: “As a director,” he confesses, “I voted for comp plans, and some acquisitions, that didn’t make sense.” It’s like hearing Derek Jeter casually admit he’d helped inject Alex Rodriguez with steroids. Charlie Munger gamely backs up his friend, saying he doesn’t think “a person should just shout disapproval all day long,” and “If we all did that all day long you wouldn’t be able to hear each other.” That gets some applause and Munger follows it up by saying simply, “I think a person should just pick their spots.” Buffett tries to finish off the discussion with a classic Buffettism that is as unsatisfying as it is catchy: “If you keep belching at the dinner table you’ll be eating in the kitchen.” It’s unlikely anybody in this arena thought they’d ever hear Warren Buffett equate voting against management pocket-stuffing to “belching,” but he’s just done it. Coke discussion over, the Q&A session moves on to less jarring topics. I Don’t Think You Need to Squeeze the Last Nickel Out of a Business Thanks to the Q&A format—three reporters and three analysts alternating with shareholders—the focus this year is on the business, not on the personal stuff. As a result, Charlie Munger is doing a lot of the talking, and that’s always a good thing. When asked whether Berkshire plans to adopt the ferocious cost-cutting measures of 3G (his Brazilian partners in the Heinz acquisition), for example, Buffett demurs. “I do think 3G does a magnificent job running businesses,” he says, but adds without elaborating, “It’s a different style.” Munger, as he often does, puts Buffett’s thinking in plainer terms: “I think a lot of great businesses spill a little because they don’t want to be fanatic, and that’s alright. I don’t think you need to squeeze the last nickel out of a business.” That Was The Best Use of our $3 Billion That Day As usual, both men travel the same wavelength. (Buffett will later say, “Charlie and I have never had an argument,” and they’ve known each other 55 years.) When Buffett is asked a wonky question about Berkshire’s “cost of capital,” both men deliciously pick the concept apart. Now, “cost of capital” is a very hot topic among public companies. So long as the projected returns on an acquisition or new plant exceed a company’s “cost of capital,” they can tell shareholders, with a straight face, the investment makes sense. It leads to a lot of bad behavior, and both Buffett and Munger know it. “I figure our ‘cost of capital’ is what could be produced by our second-best idea,” Buffett says, employing a common-sense approach completely at odds with the highly theoretical, academic notion employed by most companies to justify whatever spending they were going to do anyway. “I’ve heard so many ideas about ‘cost of capital,’” Buffett begins to expand his answer, but Munger cuts him off. “I’ve never heard an intelligent one,” Charlie says flatly. When the laughter subsides, Buffett resumes the discussion, heavy on reality and light on theory: “We bought a company day before yesterday (an electricity transmission company in Alberta), and we are spending close to $3 billion (on the deal), and we think we will be better off financially, and that was the best use of our $3 billion that day.” “Cost of capital” dispensed with, the meeting moves on. Envy Dampeners A shareholder wants to know why Berkshire doesn’t disclose more about the salaries paid to its top earners in its securities filings, the way many other companies do. It’s an interesting and timely question, coming in the aftermath of the financial crisis, which started a trend towards more complete disclosure by all public companies, especially financial giants like Berkshire. Like “cost of capital,” this notion has a nice-sounding label: “transparency.” And like “cost of capital,” Buffett will have none of it, and neither will Munger. “There’s a real question whether it’s in the interest of the company,” Buffett says, recalling his days as interim CEO of Salomon Brothers, when disclosure of salaries backfired. “Virtually everybody was disappointed with what they were getting paid … they looked at what everyone else was getting and it drove them crazy.” Munger adds, “In a spirit of ‘transparency’ you’re asking for something that wouldn’t be good for shareholders …. I would say that envy is doing the country a lot of harm, and our practices are envy dampeners.” “Transparency” unmasked, Buffett is asked by another shareholder to describe Berkshire’s “weak points.” And his answer is itself a weak point. Sweep Accounts and the Alzheimer’s Home Buffett avoids the substance of the question altogether (the weak points at Berkshire Hathaway, as Buffett knows, would certainly include the retailing businesses, which are being undermined by the Internet in general and Amazon.com in particular) because he also knows that many of the managers of those businesses are sitting in the arena here today, and he would never want to embarrass them. So he gropes for something substantive to say that isn’t hurtful to anyone before latching onto the lack of “sweep accounts” at Berkshire’s many operating companies. The idea is that Berkshire could make a few extra dollars if it stripped all its companies’ cash out every night, but nobody’s buying it as a “weak point,” so Buffett moves on to one that is more substantive: the fact that he and his business partner are “slow to make management changes,” a well-known trait of theirs, but also not particularly offensive to anyone here in the arena. Munger swiftly elaborates on the management issue by telling a brief, Charlie-being-Charlie story about how he and Buffett act so slowly moving out aging CEOs that “you and I took one man from the executive chair to the Alzheimer’s home.” It shocks the audience when they realize he’s not kidding. Then, as the uncertain laughter dies down, Munger softens the matter-of-fact harshness of his story by adding, “we made it easy for the man.” Ignorance Removal Jonathan Brandt—one of the three analysts asking questions today—queries Buffett about the declining prospects at See’s Candies, one of the best acquisitions Berkshire ever made, but a business that now seems past its prime. Buffett has long lauded See’s profitability as well as its products, keeping a conspicuous box of See’s peanut brittle on the table between himself and Munger during the Q&A session every year. But—and quite surprisingly, given his reluctance to say anything less than glowing about a Berkshire business in public—he admits the prospects for boxed chocolate makers have diminished over the years. Even more surprisingly, he offers no prospect it will get better. Still, Buffett points out, as he has in the past, See’s “opened my eyes to the power of brands…. In 1972 we bought See’s and in 1988 we bought Coke.” Munger concurs. “There’s no question about the fact its main contribution to Berkshire was ignorance removal,” he says. “The secret to Berkshire is we are good at ignorance removal.” After some laughter, Munger adds, “The good news is we have a lot of ignorance left to remove.” A logical follow-up to the See’s question comes to mind: did Buffett’s habit of taking most of his companies’ cash to invest in other opportunities (see Chapter 36, Decline and Fall of the Sainted Seven, in “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett,” eBooks on Investing 2014) hurt See’s ability to expand over the years? Unfortunately, it isn’t asked. I Don’t Want to be Holier Than Thou What is asked is a question about a popular tax-dodge technique currently all the rage among major US corporations. Asked by a shareholder if Buffett would consider doing a “tax inversion”—whereby US companies buy foreign companies in low-tax jurisdictions, change their corporate address to the low-tax country and thereby massively cut their cash taxes—Buffett says flatly, “The answer to that is no.” Munger concurs. “I think it would be crazy to be as prosperous as Berkshire and get our taxes to zero.” When applause starts to ripple through the arena, however, Buffett tamps it down. “I don’t want to be holier-than-thou,” he says, noting, “The wind deals we do (Berkshire Hathaway Energy is the biggest wind farm operator in the country), the solar deals we do, those are tax-driven. They wouldn’t make economic sense otherwise.” It’s an answer that will drive more than a few editorial opinion writers crazy—Warren Buffett admitting he uses the tax code to cut Berkshire’s tax bill. But if they had been paying attention over the years it wouldn’t have surprised them in the least. What might have surprised them, however, is how well Warren and Charlie are doing here today. Both Lennon and McCartney Buffett and Munger haven’t slowed down one bit. The meeting started at 9:30 a.m., broke for lunch at noon, resumed a bit after 1 p.m. and will go until just after 3:30 p.m. Thanks to the more controlled format, with reporters and analysts sharing questions with shareholders, the number of “What should I do with my life?”-type questions has been cut almost to zero. Also, since Buffett didn’t give his usual warning about “no two-part questions” at the start, he and Munger have been getting a number of two-or-three-part questions all along. So while they will collectively take questions from 62 individuals today, the total number of questions they’ll answer will be closer to 70—nearly 50% more than when it was a shareholders-only Q&A. Even better, since so few of them are about life-lessons from Warren Buffett, Charlie Munger will speak up on all but three questions the entire day. It’s like getting both Lennon and McCartney, not just one or the other. In fact, the Beatles analogy seems exact: Buffett as Paul McCartney: amiable, eager to please, but very likely the smartest guy in the room. Munger, of course, as pure John Lennon: just as sharp and just as quick, but, best of all, more inclined so say exactly what’s on his mind. For example … We’re Very Peculiar On the returns generated by corporate acquisitions: “I think the sum total of all acquisitions done by American industry will be lousy,” says Munger. “It’s in the nature of corporations to be talked into dumb deals.” Berkshire’s acquisition style—buying great businesses at reasonable prices and holding them forever—is, he says, quite different from the norm. “We’re very peculiar. Luckily a lot of people don’t want to be peculiar in our way. The Pursuit of the Uneatable by the Unspeakable Not surprisingly, Munger disapproves of the current fad of “activist” investors pushing public companies to get their stock price up any way they can. “In the culture we live in most people don’t care how the money is earned, they just care about the money …. Reminds me of Oscar Wilde’s definition of fox-hunting: ‘The pursuit of the uneatable by the unspeakable.’” It’s Slow On why Berkshire doesn’t get more “copycats,” Munger says simply, “I think it just looks too hard to do. It’s slow.” The Behavior on Wall Street is Remarkably Improved On whether the U.S. government should bring criminal charges against bankers for their behavior during the financial crisis: “I think the behavior on Wall Street is remarkably improved,” he says, but adds, “Prosecution of individuals does more to stop bad behavior” than prosecuting companies. Where Do You Think We’re Vulnerable? On the topic of the Internet, Munger says flatly, “I think the Internet is very disruptive. It is changing the world. I think retail is especially going to be hurt.” Buffett immediately follows up by asking his partner, “Where do you think we’re most vulnerable?” It is a question that almost certainly rings in the ears of the many managers and employees from the Berkshire retail businesses, ranging from Borsheims to Ben Bridge Jeweler to Nebraska Furniture Mart, who are sitting in the arena today, but Munger demurs. “Well, I don’t want to say,” he says carefully. “Now you’ve got them all wondering,” Buffett grumbles, to laughter. If This Is Failure, I Want More Of It When the subject of Berkshire’s relative underperformance in 2013 comes up, both men defend the status quo—but Munger makes the case far more forcefully than his partner. “In the last two years the book value of Berkshire has gone up $90 billion pre-tax,” Munger says the first time the issue comes up. He lets that sink in before adding, “If this is failure, I want more of it.” It brings down the house. And when the topic reoccurs during the last question of the day—“Is there a practical way to break up Berkshire Hathaway into four companies?” a shareholder asks—Buffett tries to respond logically while his partner goes for the gut. “We would lose value,” Buffett says. “There are large advantages” to Berkshire staying together, he adds without elaborating. “There’s no advantage (to splitting up). It would be a terrible mistake.” Munger doesn’t argue the matter. He simply concludes the discussion, and ends the afternoon session, by referring to the move in Berkshire’s Class A stock during the last four years from below $100,000 per share to nearly $200,000 as of today’s meeting: “You’re not being deprived when the stock goes from $100 to $200,” he says drily. The Dynamic Duo There was one more difference between this year’s meeting and last, besides the lack of Warren Buffett photos around town and the brouhaha over the Coca Cola vote, and it involved something that’s been on the minds of Berkshire Hathaway shareholders for years. Calling Buffett and Munger a “dynamic duo,” a shareholder inquired whether there is “a successor for Charlie?” It’s a question that had never been asked before. Most 90-Year Old Men in the World Are Gone Soon Enough Buffett first responded with a joke about Charlie’s age—“Well, Charlie is my canary in the coal mine,” he said. “Charlie turned 90 and I’m finding it very encouraging how he’s handling middle age.” After the laughter died down, Buffett turned serious, describing how other companies such as Coca Cola and Cap Cities ran very successfully when a pair of “complementary” executives shared the load. “It’s a great way to operate,” he said, adding he’d be “very surprised” if his successor didn’t have an alter ego like Charlie. “But so far nobody’s brought up any successor to Charlie.” Munger dismissed the issue, and his own importance in the continued success of Berkshire Hathaway, as only he can. “I don’t think the world has much to worry about. Most 90 year-old men in the world are gone soon enough.” Sixty-two-year-old men, however, are a different matter. The Only Succession for Ajit Would Be Reincarnation Asked early in the meeting today who will succeed Ajit Jain, the 62 year-old head of Berkshire Hathaway’s giant reinsurance business, Buffett’s answer was swift and certain. “The only succession for Ajit would be reincarnation,” he said flatly. Buffett’s admiration for Ajit Jain is well known. He wrote, “Ajit’s mind is an idea factory” in this year’s shareholder letter, and has mentioned Jain glowingly several times today—and in ways that made it clear Ajit runs his own show. For example, asked about providing insurance for railroads moving crude oil—a high-risk business if ever there was one—Buffett says, “Ajit has offered some very high limits, but they (the railroads) don’t like his price.” Moreover, he has depicted Jain not merely as the head of a Berkshire subsidiary, but as a business partner, akin to Charlie Munger. For example, when asked about the impact of climate change on Berkshire’s operations, Buffett began his answer, “When Ajit and I talk about what we’ll charge for catastrophes …” It was a very telling moment, and left few doubts as to who has been tapped to be Berkshire Hathaway’s CEO if and when Warren Buffett can no longer fulfill that role. But it was the cartoon during today’s movie that really said it all. 87% Chance of Winning The cartoon is an innocuous bit of fun that always kicks off the movie that starts the Berkshire Hathaway annual meeting. And today’s cartoon seemed to be nothing special—a standard Berkshire-esque fantasy about a U.S.-Russia face off in the Olympics ice hockey final (the timing was unfortunate, because in the real world Russia has been ripping apart Ukraine)—but its subliminal message was very special. The premise is that the U.S. hockey team has been mysteriously taken ill at the last minute, and Buffett recruits his Berkshire friends to take their place—Charlie Munger, board members Bill Gates and Tom Murphy, GEICO’s Tony Nicely, and a cartoon version of “Mrs. See” from the Berkshire-owned candy company—against the Russians, who are drawn as large goons that say—and I am not making this up—“We make minced borsch out of you, ha ha ha.” (I said it was nothing special.) However, the coach of the Berkshire team just happens to be Ajit Jain. And when the team is in danger of losing, Coach Jain draws up an amusingly complex final play, as you’d expect from a guy who deals in complex reinsurance products. In Jain’s real voice, he declares it gives the U.S. team “an 87% chance of winning.” Of course, the play works: the U.S. scores the winning goal as time expires, and the cartoon Berkshire hockey team gathers to celebrate. While the credits roll, the Berkshire team tosses two figures in the air: Warren Buffett and Ajit Jain. But it’s not just cartoons and kind words that make Ajit Jain the likely successor to Warren Buffett at the helm of Berkshire Hathaway. Berkshire is, at its core, an insurance company—and one with an unusual book of business that, in the case of the Lloyds of London asbestos claims for example, covers unknowable obligations stretching out for decades. And Warren Buffett is not going to trust his legacy to just anybody: he wants someone as capable of assessing risk as he is—someone who, as he put it several years ago, can “envision things that have never happened” so that those obligations will be paid, and his legacy is never endangered. Which means that, like all the “secrets” in “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett,” the last “secret” we’ll reveal is sitting in plain sight: the most logical CEO successor to Warren Buffett at Berkshire Hathaway—and, since Warren Buffett is a very logical man, the likely choice of the Berkshire board—is Ajit Jain. And that should be immensely reassuring to Berkshire Hathaway’s managers and investors for years to come. Jeff Matthews Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” (eBooks on Investing, 2014) $2.99 Kindle Version at Amazon.com © 2014 NotMakingThisUp, LLC The content contained in this blog represents only 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. And if you think Mr. Matthews is kidding about that, he is not. The content herein is intended solely for the entertainment of the reader, and the author.

Jamie Dimon’s trip to Capitol Hill next week to explain his bank’s multibillion-dollar trading debacle could quickly devolve into Washington Gotcha Theater. But it shouldn’t. It should be used to draw out some real answers that will help inform the public and lawmakers about the risks of our banking system… So begins Andrew Ross Sorkin’s quite reasonable, and well-written, DealBook Column, “Some Questions to Ask Mr. Dimon,” which you can read here. The questions Sorkin fantasizes Congresspersons asking are all good, and it would be great fun and most interesting to hear them asked as written, without histrionics, so that Jamie can answer them, without histrionics. But they won’t be asked—at least the way they’re written. That’s because the Congresspersons asking the questions generally have the intelligence of spoons—and not just your basic cereal spoon, but spoons that have gotten caught in the garbage disposal and are mangled beyond recognition. Of course, mangled-spoon-intelligent though they might be, Congresspersons have one instinct that preserves their electability and drives their behavior: to get on TV. I know, because I testified before Barney Frank’s finance committee just prior to the 2008-9 financial meltdown. The hearing was about whether hedge funds could cause a market collapse. They didn’t ask about Lehman Brothers. In fact, they didn’t ask much that they didn’t want to hear. They came in (they never stayed for anything but their own turn in the spotlight); they made a statement; then asked something rhetorical; then made a pretense of listening to the answer; then left. It was all about theater, and not a bit about substance—except one guy, who I’ll get to. The most intellectually dishonest as I remember it was a New York rep, Caroline Maloney, but they were all pretty bad, Republicans playing Republicans and Democrats playing Democrats. The only exception was a guy from Mississippi who sat there the entire session—he was the only one who stayed from start to finish—and asked very straight, non-TV-camera-oriented questions about what would happen, for example, to the retiree from “the pipefitters union” if a hedge fund they’d invested in went down. He didn’t know much but, unlike Maloney and the rest, he didn’t pretend to know. And he listened to your answers and then asked another question. I wasn’t completely surprised at the mangled-spoon quality of the I.Q. quotient in the room—I once got a call from a Congressperson-friend on a financial sub-committee before the crisis when they were debating something to do with Wall Street. The conversation literally—literally—went like this: “I’m going into a session…now, remind me, ‘fixed income’ is what?” “Debt.” “Okay. And equity is…” “Stocks.” “Right, okay, thanks.” I am not making that up. If the guy from Mississippi is still there, Jamie Dimon will get some good questions. Otherwise, the Maloney types will do their best to bring out the worst. Jeff Matthews Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” (eBooks on Investing, 2012) Available now at Amazon.com © 2012 NotMakingThisUp, LLC The content contained in this blog represents only 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. And if you think Mr. Matthews is kidding about that, he is not. The content herein is intended solely for the entertainment of the reader, and the author.

Another day, another “Is Warren Buffett is Irreplaceable?” article. Today’s version, however, carries the imprimatur of the New York Times’ “DealBook” column, and it’s written by a professor to boot. The gist of the professor’s case appears right in the first two paragraphs, as follows: Acquisitions usually come with a nice premium for the seller. But when Warren E. Buffett is the buyer, there is typically something of a discount. The ability to make acquisitions on favorable terms is a testament to Mr. Buffett’s personality and skills as a deal maker. It also highlights an almost unsolvable problem for his company, Berkshire Hathaway, and its shareholders. When its 82-year-old chief executive is gone, who will negotiate such sweet deals? Exhibit A in the ensuing story is the recent Heinz deal, terms of which the professor parses in order to make the point that Buffett got a “really tasty” deal when considering the expense of the 9% preferred stock issued to Berkshire relative to the 4.25% yield on debt issued to help fund the balance of the acquisition: Mr. Buffett is getting 55 percent of Heinz plus an interest payment of $700 million a year. This is an extraordinarily good deal. Furthermore, the professor points out, the fact that “The Heinz board decided to deal only with Berkshire” fits the pattern established during the Burlington Northern and Lubrizol deals, where “neither board appeared to negotiate particularly hard.” Thus, he concludes, “When it comes to Mr. Buffett, boards roll over.” The analysis, however, leaves aside a few important facts. Fact one is that Berkshire (and its partner in the Heinz deal, 3G) is paying an all-time high price for Heinz stock since it was founded in 1869. Fact two is that no strategic buyer expressed any interest at all in outbidding Berkshire and 3G for Heinz. And the reason nobody else stepped in is that Berkshire and 3G are paying an extremely high multiple for Heinz—14.3-times EBITDA (a metric Buffett distrusts) and 17.4X pre-tax, pre-interest income, his preferred valuation measure. In fact, Buffett said at the recent shareholder meeting, “Charlie and I paid probably a little more than we would have if we’d bought it ourselves,” without 3G, who will run it. So the Heinz deal is hardly a steal—and if it were, surely any number of strategic buyers or Carl Icahn-types would have jumped into the fray to push up the price. (Witness the current bidding war for Sprint, which has an enterprise value of $39 billion, compared to Heinz at $27 billion.) As for the Burlington and Lubrizol boards “rolling over” for Buffett during their negotiations, well, again, the facts disagree with the superficial observation: Berkshire paid a record all-time high price for Lubrizol (specifically, $135 a share for a stock that had traded at $23.75 less than 24 months prior to the deal announcement). And in the case of Burlington Northern Santa Fe, a Class 1 railroad with almost no alternative bidder who could even theoretically buy the company, Buffett paid $100 a share for a stock that had traded above $100 a share for less than five months out of its 160 year history (during the housing bubble, just prior to the financial crisis). Just seven months before Berkshire’s bid the stock had touched $50.73 a share, and the day prior to the announcement it was $75.87 Oh, and Berkshire offered either cash or stock for Burlington’s shares, so whatever the Burlington board was theoretically leaving on the table by not soliciting somebody else—and who else could have topped Berkshire’s $35 billion bid in those dark days is a topic the professor does not address—will accrue to those Burlington shareholders who took Berkshire stock instead of cold, hard cash. There is one other major factor outside price and availability of other suitors that explains the ability of Buffett to court companies, and it is a big one not discussed in the DealBook article: Berkshire does not mess with the companies it buys. Unlike most acquirers, who promise their Wall Street investors zillions of dollars in synergies (i.e. layoffs and plant closures) resulting in all manner of earnings accretion, Buffett leaves his companies alone, and that is a tangible benefit which any board of directors ought to consider when deciding what should happen to the assets for which they are a fiduciary. In the case of Burlington Northern, for example, the ability to invest for growth, without the need to meet Wall Street forecasts, as part of Berkshire Hathaway has allowed the railroad to take advantage of a shale oil boom that has helped boost revenues by 40% and pre-tax earnings by 50% since the day the deal closed. And that is good for not just the Burlington Northern railroad, and for Berkshire Hathaway, and for Warren Buffett…it is good for the Burlington Northern shareholders who chose to take Berkshire stock, a key point missing from the DealBook analysis. As for the question asked by DealBook, “When its 82-year-old chief executive is gone, who will negotiate such sweet deals?” the answer is: a) there’s a guy; b) he’s already getting the same kinds of deals Warren Buffett is getting, and; c) his name is in this book: “Warren Buffett’s Successor: Who It Is and Why It Matters” (eBooks on Investing, 2013). Jeff Matthews Author “Warren Buffett’s Successor: Who It Is and Why It Matters” (eBooks on Investing, 2013) Available now at Amazon.com © 2013 NotMakingThisUp, LLC The content contained in this blog represents only 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. And if you think Mr. Matthews is kidding about that, he is not. The content herein is intended solely for the entertainment of the reader, and the author.

Well, Tiger Woods Syndrome is breaking out all over, even in Omaha, Nebraska. By “Tiger Woods Syndrome” we refer to what happens when the Mainstream Media has been sitting on a story it has long known of but couldn’t go with because the subject was too powerful: when the story suddenly, irrevocably blows wide open (like, oh, the guy’s wife tries to bash his head in with a golf club), well, suddenly everyone has a story to tell, and the press is happy to tell it. And while the David Sokol Affair didn’t involve sex or golf, it did involve enough bad judgment to blow the cover off the notion that Warren Buffett’s perceived successor had everything a Berkshire shareholder could ask for, which is precisely when the knives came out here in Omaha at the Berkshire Hathaway shareholder meeting. Friends and financial reporters who’d been told things over the years would say quietly to us, “Don’t quote me, but…” and then tell a Sokol story (more about judgment and personality than about anything you could put down as being wrong) that had either been dismissed as just sour grapes from a Sokol competitor or had been suppressed for the same reason nobody in the Mainstream Media ever bothered to investigate Tiger Woods’ extracurricular activities: the guy was too rich and too powerful. And, hey, David Sokol had Warren Buffett’s blessing. But with Sokol gone, so is the glow—and a lot of shareholders would like to know exactly how close did Berkshire Hathaway come to putting Warren Buffett’s life’s work in the hands of a guy willing to pick off a few points in a stock ahead of his employer’s acquisition of that company? Unfortunately, the real answer to that question—probably a lot closer than Warren Buffett would like to admit—was never actually addressed at the Berkshire meeting, either by Buffett or Charlie Munger. Indeed, because of the Sokol Affair, Buffett seemed on his guard and more defensive than usual. In contrast to last year’s defense of Berkshire’s relationship with Goldman Sachs, when Buffett came out swinging, this year he was more reflective and less direct in getting to the heart of the Sokol-related questions. He seemed still stunned at the whole turn of events. Charlie Munger, by contrast, was sharp, hard-nosed and positively voluble throughout. Munger also got the funniest line of the day in the video within the movie that kicked things off. (The video—the best in years—was a laugh-out-loud takeoff on the TV show “The Office,” called “Michael’s Replacement,” in which Buffett and Munger take over at Dunder Mifflin from the clueless Michael Scott and his conspiratorial number two, Dwight Schrute. When a jealous Dwight sizes up Munger, his replacement as Number Two, sneering, “You don’t look so tough,” Munger adjusts Dwight’s tie, leans in and says menacingly, “There are eighteen ways I could kill you.”) But it was in the six-hour Q&A following the movie that Munger demonstrated what has made him so valuable to Warren Buffett and to Berkshire Hathaway all these years, participating in an unprecedented number of questions, and with more substance and fewer jokes than usual. In fact, at one point Munger abruptly took over one of the Sokol questions from Buffett, saying sharply, “I’ll handle this,” when a shareholder suggested Lubrizol’s board of directors had violated its fiduciary duty by negotiating only with Berkshire Hathaway, and not auctioning the company. And whereas Buffett mainly played defense, with long-winded explanations of Sokol-related issues, Munger played offense, summing up matters crisply and, as usual, with no holds barred. Sisters Under the Skin For example, after Buffett explains in long and meandering detail how he came to believe Lubrizol belonged in the Berkshire family, despite its tainted upbringing, Munger simply says, “You know ISCAR and Lubrizol are to some extent sisters under the skin…very small markets…fanaticism in service. If you have any more like that, give Warren a call.” We Own So Many Wonderful Businesses When Buffett wrestles with an explanation for the current valuation of Berkshire’s stock ($125,000 a share at the time of the meeting) compared to one observer’s estimated intrinsic value of $185,000 (based on the faulty premise that Berkshire’s $95,000 per share worth of investments are somehow unrelated to the insurance businesses and therefore a cash-equivalent that should be added to $90,000 per share for the businesses themselves) Munger dismisses the premise that Berkshire’s share price is tied to any break-up calculation, and instead focuses the crowd on the long-term value of Berkshire: “It’s terrible trouble you people have…we own so many wonderful businesses we hate to part with them.” Europe Survived the Black Death… As usual, while Buffett takes the bright side of most issues in keeping with his inherent optimism in the future, Munger offers a dour, cynical view based on his broad knowledge of history and human behavior—but usually arrives in the same spot. Asked “How can a lousy long-term U.S. economy make you happy?” Buffett gives a long, enthusiastic, cheerleader’s answer, winding up with, “All I can tell you is…the power of capitalism is incredible.” Munger, on the other hand, dryly notes: “Europe survived the Black Death when a third of the people died, but we’re gonna move on.” Still, Buffett is crisper and forceful when it comes to his comfort zone: Berkshire and its legacy. He minces no words when asked about whether, and when, Berkshire will pay a dividend. “There will come a time, and who knows how soon because the numbers are getting big…when a dollar only buying 90c of value…but I predict the day Berkshire declares a dividend the stock will go down because that will mean it is no longer a compounding machine…” It Had Its Head Up Its— And Munger does hold back at least once in the six hours of Q&A, when they are asked about Berkshire’s position in Wells Fargo, one of the banking giants whose inherent profitability has been impaired by the Dodd-Frank legislation and the housing implosion. Buffett defends the investment without much input from Munger: “US banking profitability will be considerably less than early part of this century; one reason is the leverage will be reduced… If you keep out of trouble on the asset side, it’s a good business because credit is very cheap. I like our positions there.” Yet, months later, speaking to investors in Los Angeles, Munger will say that what he admired about Wells Fargo is its management didn’t hesitate to admit “it had its head up its ass” when it came to mortgage lending. But Munger bit his tongue here in Omaha. Not a Terribly Rational Thing Still, when he does speak here, it is just as straightforward as that observation in defense of Wells Fargo management. When asked about gold as an investment, for example, Buffett launches into almost a professorial discussion of investing. “There are three categories of investment,” Buffett begins, describing currency, which depends on the behavior of monetary authorities to maintain its value; gold and other commodities that “don’t produce anything and you hope somebody will pay you more for later one,” and then assets “that make things, like a business, a farm”—which is the category Buffett and Munger have generally stuck to, with a few bets on currencies and commodities along the way. Munger simply says: “Buying something that only goes up if the world goes to hell is not a terribly rational thing.” This Attitude of Trust When Buffett is prodded by a shareholder about Berkshire’s lack of formal compliance procedures “like most firms,” he gets defensive, first saying “I don’t think most companies have them” (which is absolutely not true when it comes to financial giants like Berkshire), then dismisses the idea altogether: “But we could have all the records in the world…they could be trading in their cousin’s name.” Munger, on the other hand, defends Berkshire’s culture entirely: “If you look at the greatest institutions in the world, they trust their people…it’s so liberating…I think your best compliance cultures are the ones that have this attitude of trust.” Glitches That “attitude of trust” may be Munger’s Achilles heel when it comes to BYD, the Chinese car company of which Munger was a shareholder and fan for their efforts in battery technology well before Berkshire invested in the company. BYD’s initials stand for “Build Your Dreams,” but the company has been accused of copying other carmaker’s designs in diplomatic cables uncovered by WikiLeaks, one of which read: “BYD seeks to ‘Build Your Dreams’—based on Someone Else’s Designs.” Asked by a shareholder about the company, whose earnings and share price have been under pressure, Buffett demurs, saying, “Charlie’s the BYD expert.” Munger begins his answer with the worst line of defense, BYD’s stock price, and then dismisses any issues with bland assurances as uncharacteristic as they are unenlightening: “Of course the price is still way higher than the price BRK paid… Any company that tries to move as fast…is going to have its glitches…I’m quite encouraged…” “Glitches” is the same term Munger employed to describe the Sokol stock trading affair in the immediate aftermath of that black eye, and it may be as understated an adjective when applied to BYD as it was to Sokol’s $10 million investment in Lubrizol in the weeks preceding Berkshire’s bid for the company. BYD thus far has failed to produce anything like its past promises, as contained in this 2009 Reuters article: BYD says that its new E6 electric car due out before the end of the year will do 250 miles (400km) on a single charge. This is a very big number. The Tesla electric sports car does almost as much, but has little room for anything else in the car but the battery. The E6 is roomy with space for five passengers and a good-sized boot. The battery tucks under the back seat. —Roger Harrabin, Reuters The E6 was not out “before the end of the year” 2009, nor was it out before the end of the year 2010. And when the Wall Street Journal inquired about the delay late last year, BYD gave the paper a howler of an excuse: Stella Li, BYD’s senior vice president and head of its U.S. operations, said the holdup was caused by BYD’s efforts to make the car roomier, especially its rear-seat area that was cramped thanks to a beefy battery pack that needs to be stored under the seat. Ms. Li told the Journal the E6 would be ready for sale in 2012. (We here at NotMakingThisUp would call that bluff.) A Star Rises in the East But, BYD aside, Munger has few blind spots, and enough blunt assessments about the ways of the world to keep Berkshire shareholders happy… On why Berkshire does not trade commodities like oil: “Oil trading worked best of all for the people who bribed Nigeria.” On what caused the financial collapse: “My answer is that past panics and depressions tended to involve great waves of speculation…. I think you can confidently expect a new mess before your career is over… Part of this mess is due to our academic institutions… Finance really attracts people who should be in snake charming.” On the political environment in Washington: “I remember an era when we had a bipartisan foreign policy, the Marshall plan. Now it seems we have two parties competing to be more stupid.” On CEO compensation: “I think somebody has to be an exemplar for not grabbing all you can…” On which asset class he would add to his ‘circle of competence’ if he were going to live another 50 years: “It would either be tech or energy.” But the best line of the day—one not picked up on by everyone in the arena, so fast and subtle it was—came towards the end, on a question asked by a very sincere investor. “If you were to have a baby in the next 5 years,” the shareholder begins, drawing titters from the crowd, “how would you incentivize them to compete against hungrier kids from other parts of the world…” Munger, whose age (six years older than Buffett and now approaching 90) has always been the subject of jokes between the two men, sits up in his chair and a huge smile crosses his face at the idea of becoming a father as an octogenarian: “A star rises in the east,” he says in an awe-struck voice, drawing broad laughter as Buffett begins his answer. A Fortune Fairly Won and Wisely Used Still, it is not wisecracking that makes Charlie Munger so important to Berkshire Hathaway. It is the genius of his recognition—forged as an attorney working with struggling companies in Los Angeles before hooking up with his fellow Omaha native in the 1960s—that buying good businesses at reasonable prices was better in the long run than buying bad businesses however cheap they appeared to be, which was how Warren Buffett came to take control of Berkshire Hathaway before Munger came along. It was Munger’s crucial notion about the long-term value of good businesses versus bad business (“Bad businesses throw tough decision after tough decision at you; good businesses throw cash,” was how he once put it) that led the two men to make their first acquisition together in 1972—See’s Candies, for $25 million. And See’s was a very good business. For one thing, it almost immediately began generating excess cash (well over a billion dollars so far) for Buffett to reinvest elsewhere. For another, it created the template by which Berkshire would amass a collection of good companies, bought at reasonable prices, that today employee over a quarter-million people and churn out a billion dollars a month in cash. Asked about their legacies at the Berkshire meeting, Buffett initially wisecracks that he would like it to be “Old age,” then says he’d like to be known as a teacher. Munger, who has always seemed more well-rounded, if less wealthy, than his partner, sums up his answer as succinctly, and appropriately, as you’d expect: “I have an uncle with a saying: ‘A fortune fairly won and wisely used.’” Indeed. The End. Jeff Matthews Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” (eBooks on Investing, 2011) Available now at Amazon.com © 2011 NotMakingThisUp, LLC The content contained in this blog represents only 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

Let’s start by making one thing clear: we here at NotMakingThisUp harbor no particular good will towards Goldman Sachs. In fact, not long ago we published in these virtual pages a column titled “Goldman 8, Public Zero…the Teachable Moment of Bare Escentuals (January 15).” It was a minor but explicit illumination of Goldman’s relationships with its clients—i.e. pretty much the same relationship a water moccasin has with a frog. Loyal readers will recall that we described how Goldman Sachs first sold a total of 36 million shares of cosmetics maker Bare Escentuals (sic) to the public at prices ranging from $22.00 to $34.50. Then, after the wheels came off the proverbial track at Bare, Goldman’s crack research team slapped a “Sell” rating on the company’s stock…but not until after it had already collapsed to $13 a share. Adding insult to injury, just a few weeks after that “Sell” rating—from Bare’s very own investment bank—sent the shares crashing, Bare Escentuals received a takeover bid for $18.20 a share. But wait, as they say, there’s more! Bare Escentuals then hired none other than Goldman Sachs to advise the cosmetics company on the $18.20 a share offer. Goldman, naturally, endorsed the price as fair—just weeks after its own research department had declared $13.00 as too rich a price for Goldman’s clients to pay—and received fees for doing so. By our count, that amounted to eight ways Goldman Sachs made money on Bare Escentuals at the expense of anybody on the other side of the table.And while we therefore do not have any particularly benign feelings towards Goldman Sachs, neither do we harbor ill-will towards the government institution which filed a complaint against that firm on Friday. Indeed, the SEC Chairman who, in our view, pulled the teeth out of that animal under the previous administration and then flailed ineffectually while the world collapsed thanks in part to his blunders—i.e. Chris Cox—is gone, and good riddance to him. (For an entertaining and insightful look at that sordid story, read Andrew Ross Sorkin’s excellent account of the Lehman collapse, “Too Big to Fail.”) Still, we’ve read the SEC’s complaint filed against Goldman Sachs Friday afternoon—headlines of which seemed so shocking they sent Goldman shares, and stock markets, crashing. And while the complaint portrays yet another sordid story—the account of some really awful paper Goldman helped package and sell to a dumb German bank at the behest of a smart U.S. hedge fund manager—we think the government doesn’t have a leg to stand on. The gist of the SEC’s complaint—and while we are not attorneys, we have been in this business a few decades and seen more than a few frauds in that time—appears to be, in part, that Goldman and an employee mislead IKB, the German bank in question, by not disclosing that John Paulson’s hedge fund had helped select the garbage Goldman was selling to IKB: In sum, GS&Co arranged a transaction at Paulson’s request in which Paulson heavily influenced the selections of the portfolio to suit its economic interest, but failed to disclose to investors…Paulson’s role in the portfolio selection process or its adverse economic interests. —Paragraph 3, SEC v. GOLDMAN SACHS & Co. and FABRICCE TOURRE. Let’s leave aside the obvious howler here—since when did it become a broker’s responsibility to violate the confidentiality of its clients by disclosing the seller’s identify to the buyer?—and focus on the specifics of the SEC charge, particularly the notion that IKB would not have proceeded with the transaction had Goldman not omitted Paulson’s name from the discussion, as spelled out here: IKB would not have invested in the transaction had it known that Paulson played a significant role in the collateral selection process while intending to take a short position in ABACUS 2007-AC1. —Paragraph 59, SEC v. GOLDMAN SACHS & Co. and FABRICCE TOURRE. Who, exactly, is this IKB that, if we are to believe the complaint, had been led like a lamb to slaughter by Goldman Sachs at the behest of John Paulson?Well, IKB is short for IKB Deutsche Industriebank, and it was once a sleepy German industrial lender that, during the 2000s, made the plunge into sub-prime CDOs for the same reason so many of its peers did: it seemed like a good idea at the time. Indeed, so good an idea did it seem, that IKB boasted of its prowess in evaluating exactly the kind of garbage the SEC is now trying to claim Goldman Sachs misled it into buying. Far from being an unwilling pawn on the financial chess-board, IKB issued press releases about its move into the exotic world of toxic mortgage structures even as John Paulson, the genius who sold the garbage to IKB, was deciding it was time to sell the same toxic mortgage structures short. Indeed, as far back as March, 2006—a year before the tainted transaction with Goldman Sachs—IKB issued a press release announcing the closing of a deal, chest-thumpingly-named “BACCHUS” (we are not making that up) which seems to make it very clear that IKB was not only a willing buyer, but a willing distributor of the same kind of garbage as the boys in lower Manhattan. Here begins that press release: IKB closes first “Bacchus” deal, strengthening its position as an asset manager for corporate loan portfolios. [Düsseldorf, Germany, 16 March 2006] IKB Deutsche Industriebank AG has successfully concluded “Bacchus 2006-1″, a funded securitisation of acquisition financings. With this deal, IKB further strengthened its position as a leading asset manager for corporate loan portfolios. The € 400 million Collateralised Loan Obligation was arranged and placed by JP Morgan… Bacchus, of course, was the Roman god who inspired the term “Bacchanalia.” Call us old-fashioned, but for our part, if we had been a stodgy old-line German bank packaging securities for resale, we would have selected a more sober god to name our deals after—“Apollo,” perhaps (god of music and healing; ‘associated with light, truth and the sun’), or “Artemis” (goddess of the hunt). Not the god of drunken orgies. Having discovered that IKB appears to have been no babe in the CDO woods, we now submit the following document that we suggest may well suffice as “Exhibit A” in Goldman’s defense. It is a presentation by Dr. Jörg Chittka, head of IKB investor relations, prepared for a Dresdner Kleinwort Day for Investor Relations on December 12, 2006—just a few months before the transaction in question—and it can be downloaded from the IKB web site. Let’s flip quickly through Dr. Chittka’s “slide deck”: “Slide 3: Highlights—Market Leader/Strong performance/Solid ratings…” —IKB Dresdner Kleinwort IR Day 12.12.2006 Hmm, IKB would seem to be no country bumpkin. This slide informs us that, among other things, IKB is a “Specialist in long-term corporate finance” and a “Market leader in long-term corporate lending in Germany” with a market share of 13%. “Slide 5: Focused market strategy—Specialisation(sic)/Lean sales system/Selective new business…” —IKB Dresdner Kleinwort IR Day 12.12.2006 Sounds good! Dr. Chittka informs us that IKB has a “Rating-oriented product and price strategy,” and that “New business” is “strictly oriented to rating and margin spread.” So how on earth did IKB end up owning a bunch of Goldman-packaged, Paulson-shorted garbage? The next slide holds a clue, in the form of a timeline showing IKB’s history: “Slide 6: Lines of Development · 1924: Foundation · 1930s: Pioneered long-term lending at fixed interest rates… · Entering 2000s: CLO-transactions and investments in international loan portfolios” —IKB Dresdner Kleinwort IR Day 12.12.2006 Ah, there we have it. IKB is getting into the CLO business, especially in international loan portfolios! But what does this little German bank know from CLOs? Well, it turns out this little German bank claims to possess an advantage: “Slide 9: Competitive edge · High expertise in all fields of corporate finance, incl. -rating advisory and -industry research” —IKB Dresdner Kleinwort IR Day 12.12.2006 There you have it: IKB claims to have “high expertise in all fields of corporate finance,” and that includes both “rating advisory and industry research.” Indeed, the IKB slide deck goes on, bragging in the kind of detail you can bet Goldman Sachs’ attorneys will be happy to share about the “excellent rating IKB enjoys” thanks to its “outstanding funding base”; the “Strong and stable customer relations based on relationship banking over decades”; the “High diversity of IKB loan book”; the “High granularity” of the IKB loan portfolio; the “Improving quality of the loan book” and the bank’s “Solid capital base for business growth.” So confident was IKB’s management of all these things that Slide 35 boasts that “IKB is going to meet the operating profit target for the financial year 2006/2007 as a whole.” How, exactly, would IKB perform this feat? Slide 36 informs us that one of the ways is by the “additional investments in international loan portfolios.” International loan portfolios such as ABACUS 2007-AC1, perhaps? There is more—60 pages in all—but from our brief review it would appear that this particular German bank took the other side of the Paulson trade not because it didn’t know Paulson was selling. After all, at the time the deal was structured in early 2007, John Paulson was just “John Paulson, merger arbitrage hedge fund guy,” not “John Paulson, billionaire hedge fund manager who bet against the housing bubble and won.” No, it would appear that IKB—creator of BACCHUS, self-proclaimed possessor of “high expertise in all fields of corporate finance,” and seeker of “additional investments in international loan portfolios”—simply wanted the other side of ABACUS, period. From BACCHUS to ABACUS really wasn’t too long a journey for IKB, but it was deadly.And while Goldman & Company may have showed IKB the way, they did not, it would seem, drag them kicking and screaming.More like skipping and singing.Jaded we may be, but we here at NotMakingThisUp will bet, as the saying goes, dollars to donuts that at the end of the day, the score in this case looks like this: Goldman 1, SEC 0. Jeff Matthews I Am Not Making This Up © 2010 NotMakingThisUp, LLC The content contained in this blog represents only the opinions of Mr. Matthews, who also acts as an advisor: 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. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.