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FedEx will increase 2006 standard list rates for FedEx Ground and FedEx Home Delivery by an average of 3.9%… Thus reads a headline that came across my screen late Friday afternoon. Lest it be dismissed as a mere “energy-related” price adjustment and, therefore, dismissible as a “one-time” item to be stricken from the “ex-food and energy” Consumer Price Index, or the “core” Producer Price Index, or whatever adjusted, reconfigured, massaged or otherwise made-up Price Index the bond market wants to look at in order to feel better about owning short term notes that just barely cover the FedEx price hike—keep in mind that the correlation of the U.S. GDP to the index of air cargo activity is 70%. Consequently, when FedEx and its brethren raise prices, attention, as Mrs. Loman once said, must be paid. Furthermore, the FedEx headline happened to come on the heals of a Del Monte Foods company conference call in which it was disclosed that unexpected increases in logistics, packing and energy costs added $40 million to cost increases over and above previously anticipated cost increases in the quarter. The good news, at least for Del Monte? That consumers did not appear to mind the price increase, because volumes held up better than feared. Perhaps the American consumer is ready for some good old fashioned everything-goes-up inflation, at the very moment that the government has trained the bond market to focus solely on stripped-down, “ex-food and energy and housing and packaging and FedEx and healthcare and insurance and haircuts” number. I added “haircuts” to the stripped-down CPI based on a very personal experience this weekend: I visited my local barber for my usual $17 haircut. Only he is no longer charging $17, as he has for the last seven or eight years that I have been using him. He now charges $22. Hmmm. $22 divided by $17 is…well, it’s a lot more than whatever the so-called CPI number would like to pretend it is. Jeff Matthews I Am Not Making This Up © 2005 Jeff Matthews The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

I bought Time Magazine today for the first time since…probably since 9/11, when I bought every newspaper and magazine available with a cover story on the World Trade Center attacks. The relevance of a weekly “news magazine” these days is, after all, right up there with “Book-of-the-Month” clubs and the Sears Catalogue. Nevertheless, I bought this new issue of Time Magazine because the front cover is titled “Home Sweet Home” (stamped in large letters, the “S” converted into a Dollar sign) with an illustration showing a man covetously hugging a house. The sub-title reads: “Why we’re going gaga over real estate.” I bought it, quite simply, because this Time Magazine is as good a “cover story” kind of market-mania, surely-we-are-approaching-a-top indicator as I have ever seen. Now, careful readers who’ve been asking about the promised follow-up to last Thursday’s piece on internet-jewelry retailer Blue Nile will have to excuse me. As fun as it is to chronicle the bizarre public musings of Overstock.com CEO Patrick Byrne and his company’s failure at pretty much every new venture he touts to Wall Street—the latest being a Blue Nile knockoff—the current issue of Time is both fecund and worth a good look. So we will get back to Doctor Byrne and his false-rumor-spreading appearance at the Bear Stearns conference, eventually. It’s just that, when a Time Magazine comes along declaring “Record home prices are inflaming passions—and pocketbooks—as never before,” well, as Willy Loman’s wife said, attention must be paid. After all, this is still a magazine with a circulation of something like four million, and its sole function in the world is to sell as many copies as possible before they get recycled into cat litter or something else. Obviously, the editors of Time believe that a feel-good article about the joys of home-ownership—actually, more precisely, about the ability of average people to strike it rich by buying, flipping, or just putting down deposits on as-yet-to-be-built condos—will sell a lot of copies. Making it, of course, red meat to anyone who’s seen more than one cycle on Wall Street. So let’s take a look. Opening the “Home Sweet Home” cover of this latest Time Magazine, one finds an article titled “America’s House Party” which begins with the Siren Song of all bubbles, whether the South Sea Bubble of the 1700’s or the Internet Bubble of the late 1990’s or the Tulip Bubble of the 1600’s or the Oil & Gas Bubble of 1980: the guy who sees his friends doing it: “I saw so many friends and colleagues getting rich,” John Williams, a disc jockey from Long Beach, tells the magazine, “I wanted to get rich too.” So Williams is buying houses, fixing them up and, according to the article, “flipping them for a quick profit.” Furthermore, unlike most of the Housing Bubble stories recently appearing in various newspapers and magazines, this article is a straightforward encomium to the financial rewards of buying, selling, trading or owning a house: The stock market may be dragging, but home prices are soaring, fueling a national obsession with real estate. Your house is now your piggy bank. House gawking is a hobby; remodeling, both entertainment and an investment. Folks brag about having bought their home in the ‘90s the way they used to brag about having bought Microsoft in the ‘80s. Real estate isn’t so much about nesting today as it is about nest feathering. And—I’m not making this up—that’s just in the first two paragraphs. The article goes on, with the usual Time Magazine-ish snappy quotes from newly-minted tycoons; weirdly all-encompassing-yet-inane statements (“It’s about the giddy tabulation of how many plasma TVs your house’s appreciation could buy and the embarrassment of feeling too poor for your neighborhood as houses around you are torn down for McMansions…”); and, of course, simplified, happy graphics. However, as in all manias and bubbles, lurking within the happy graphics are some potentially disconcerting statistics, if you really look at the Time Magazine charts. They show, for example, that the number of second homes purchased in America stayed within a range of 300,000 to 400,000 a year from 1989 to 2002—then suddenly doubled to over 800,000 in 2003 and broke 1 million in 2004. Home equity loans have also spiked, at the same time that rates appear to have bottomed and are moving higher. And in several non-sexy, non-condo, non-second-home-inflated states, mmortgage foreclosure rates have tripled. But you will not read about all that in the article itself, for Time readers presumably do not want to read about anything except how much fun this house flipping thing is. There’s a trivia “test,” although it is not designed to test the reader’s knowledge of issues that might have a bearing on whether they are familiar with ARMs and IOs and transaction costs—knowledge that might be useful as they toss their chips into the game. Rather, it asks things like “Which of these entertainers has sold at least seven homes in the past 10 years?” (Answer: Courteney Cox, although why anybody would care about that is beyond me.) More interesting than the graphics or the cute quotes, is a look at a single block in a Chicago neighborhood, detailing how the real estate boom has affected seven different houses: House 1 has a middle aged owner who did a tear-down/rebuild on the house, and is reinvesting the equity in other properties, the profits from which “will put my kids through college.” House 2 has a long-time owner “using it as a piggy bank,” via home equity loans. House 3 is an eventual tear-down whose long-time owner hates what has happened in her neighborhood. House 4 was sold by its previous owner after property taxes rose 1,059% in 10 years. House 5 is being sold by its long-time owner to support her retirement. House 6 has been flipped twice in seven years. House 7 was inherited; the owner did a recent tear-down/rebuild. Further on, and like the dot-com stories from the late 1990’s, the article is chock-full of real-world people throwing off the shackles of benighted thinking and plowing their worldly savings into housing. Maybe you’re like Mike Oakley, 43, who has poured $100,000 into redecorating his Chicago house, figuring it is already worth $150,000 more than when he bought it. “Rather than invest in stocks,” Oakley says, “invest money in your home.” You shouldn’t get the impression that you can make six figures in real estate by snapping your fingers. Just ask Max Kaiser. It once took him a whole hour. “Buildable land here [in Las Vegas] is running out. We have only one place to go, and that’s up.” “We might be riding that wave,” he [a General Mills operations manager considering switching to the real estate business] says. “But the wave is there. So I’m going to get on it.” And it’s not just Young (and-never-seen-a-down-cycle) Turks grabbing for the gold who are being celebrated here; it’s the old-timers, too: Of course, you don’t need a portfolio of condos to have made a pile. Average homeowners who bought in the ‘90s…are now, like modern-day Clampetts, sitting atop newly discovered gushers of wealth. As I recall the “Beverly Hillbillies,” the kids were morons and Granny was a lunatic. The only smart one in the bunch was Jed Clampett, a cagey old redneck, and he had wisely sold his “newly discovered gusher of wealth” and put the money in the bank…giving Jed the right to drive poor Mr. Drysdale insane. Of course, nobody here in Time-land is doing anything of the sort, except a few renters, as the article notes in a brief piece called “The (Surprising) Case For Renting” appended to the end of the eight-page “America’s House Party.” Yet buried within the “Case For Renting” is a cautionary paragraph containing the seeds of what will, I expect, mark the germination of the seed containing the eventual reversal in the Housing Bubble: The Choes aren’t alone in finding value in the rental market. With so many people buying homes in the past few years, landlords in certain frothy markets, like San Diego, Miami, Las Vegas and Washington, have gone begging. Not a few are collecting less rent than they are paying in mortgage expense. Their bet is that in the end, rising values will make up for their losses. They “will make up for their losses,” of course, because, as we have been told by a Las Vegas player earlier in the article, “We have only one place to go, and that’s up.” Anybody who reads this article—and I mean anybody, whether they are the last remaining Communist still farming onions on a collective outside Vladivostok, or a jet-setting, highly-leveraged real estate mogul who pretends to be worth more than he is, like Donald Trump—will feel that internal sense of failure, jealousy and greed that they, too, are missing out on something more. Gushers of wealth…nest feathering…piggy banks…getting on the wave…only one place to go, and that’s up…. It’s all here in Time Magazine, available on your newsstand today: The Case for Owning Real Estate in America. You have to excuse homeowners for getting a little giddy. When they look at the rest of the economy, they see little else to be excited about. Employment has picked up, but wages haven’t [not true: just last week it was reported that wages rose 6.3% last quarter, the largest first-quarter increase in years]. Inflation has risen from the grave. The stock market is crawling to get back to where it was five years ago [also not true: most stocks are higher than they were five years ago]. Savings accounts throw off barely enough interest to feed a parking meter [also not true: short rates have tripled in a year]. So people see their homes as their last, best hope for prosperity—as not just houses but also lifeboats. Compelling, is it not? Very nearly as compelling as a previous Time cover story on a similarly widespread investment mania that also, according to many, looked like the “last, best hope for prosperity.” You may recall that Time Magazine cover story. It was published in the fall of 1999—September 27th, to be precise. It was titled: “Get Rich.Com: Secrets of the New Silicon Valley.” Jeff Matthews I Am Not Making This Up The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

SEC Moves to Curb Short-Selling By KARA SCANNELL and JENNY STRASBURG July 16, 2008 WASHINGTON — The Securities and Exchange Commission took unprecedented action against short sellers on Tuesday, acting on a widespread concern that negative bets against bank and brokerage stocks might be exacerbating the financial sector’s woes. In a dramatic emergency order, the SEC said it would immediately move to curb improper short selling in the stocks of struggling mortgage giants Fannie Mae and Freddie Mac, as well as those of 17 financial firms…—The Wall Street Journal Remember when “naked short selling” was ruining America? Remember when the government’s move to restrict “naked short selling” was hailed as a rescue salve for America’s financial system? We sure do. We also remember where Fannie Mae’s stock price was that day: it was $25.60 a share. Last trade: $0.59 a share. Turns out, maybe “naked short selling” was not the real problem at Fannie Mae. Now, we have said many times in these virtual pages that we have never known any hedge fund investor who actually shorted stocks “naked”—that is, without properly borrowing the shares before selling them short. And after the government’s move it almost immediately became clear that the reason some stocks appeared to be shorted “naked” was not because hedge funds were improperly shorting stocks without a borrow. It turned out the problem was that the brokers themselves weren’t properly locking up stock they had loaned out. Yet we do not begrudge the government for attempting to clean up the short-selling process so that “naked short selling” can’t be done. If it shouldn’t be done, it shouldn’t be done period, by anybody. But the mid-summer frenzy over “naked short selling” reminded us of something Warren Buffett said when asked about the so-called problem at the Berkshire annual meeting in May, 2007, while answering dozens of questions alongside his partner, Charlie Munger. Here’s how we recorded it in these pages at the time: Buffett begins his response with a sort of amused recap of the question for Munger, who for the first and only time of the day could not make out the question: “It’s about this so-called failure-to-deliver and naked shorting,” he tells his partner, clearly unimpressed by any supposed naked shorting crisis. He doesn’t even have a problem with legitimate short-selling. “I do not see the problem with shorting stocks,” Buffett says, “But it’s a tough way to make a living.” Recalling that Berkshire Hathaway made good money lending shares of US Gypsum to short-sellers when it was under siege from asbestos lawsuits, before the stock went up ten-fold, Buffett says: “If anyone wants to naked short Berkshire, they can do it until the cows come home. In fact, we’ll hold a special meeting for them,” he says, to laughter. If the stock action in Fannie Mae following the end of “naked short selling” is any indication, Warren Buffett was dead right. You can read more about this, and much else, in “Pilgrimage to Warren Buffett’s Omaha,” due out next month. Jeff Matthews I Am Not Making This Up © 2008 NotMakingThisUp, LLC The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.

BP’s Accidents Put Its Celebrated CEO On the Hot Seat So reads today’s Wall Street Journal above a story about environmentally-unfriendly accidents at BP. For those unfamiliar with it, BP has been transformed from a stodgy old oil and gas company by its impatient and intense CEO, John Browne, into a world energy powerhouse through acquisition and big bets on new drilling frontiers while—according to the Journal—“embracing the green movement years before it was cool in the executive suite.” Call me a cynic, but as far as I can tell, Lord Browne’s “embracing the green movement” involved placing cheery ads about the company’s environment awareness in the Wall Street Journal and the New York Times while replacing the old BP gas station signs with cheery new gas station signs that have a brightly colored green-and-yellow sort of sunny logo implying ecological enlightenment. Otherwise, those gas stations appear to operate pretty much the same way they always did, by which I mean dispensing volatile fuels for combustion engines which are destroying the atmosphere of the planet. Still, it seems the greens were so taken with Lord Browne’s slick marketing campaign and sunny new gas station signs that “Vanity Fair featured him in its recent environmental issue alongside such green darlings as Al Gore and Julia Roberts.” Now, the Fate of the Earth got a lot of press recently when science genius Stephen Hawking told an audience in Hong Kong that earthlings better start visiting other planets near us, and soon, in order to escape ecological devastation and other possible disasters that we have already inflicted on ourselves or will be inflicted upon us. And while I’d like to think a sudden call to action will save us from the worst, I happen to think we’ve already gone beyond the point of no return as far as global warming goes—ethanol initiatives or no ethanol initiatives—and I can’t imagine what the greens are thinking when they make the CEO of BP their corporate hero. I have news for the greens at Vanity Fair: the “P” in “BP” stands for “Petroleum.” BP’s goal in life—its entire reason for existing—is to extract crude oil from wells drilled in environmentally irreplaceable areas such as northern Alaska and the Gulf of Mexico, transport it via oil-leaking pipelines or water-polluting tankers to pollutant-emitting refineries which operate 24/7 distilling the crude via energy-intensive, atmosphere-warming processes into a range of products that either permanently scar the land (asphalt), pollute the air (diesel, kerosene, gasoline) or destroy the atmosphere (solvents). And to do all this in such a way that British PETROLEUM shareholders make money. Now, it happens that today’s paper also contains a full page ad from Lord Browne’s sunny, green marketing campaign with this bold headline: Our plans for biofuels are growing. The copy boasts of plans “to invest $500 million over the next 10 years to create the Energy Bioscience Institute, the world’s first integrated research center dedicating to applying biotechnology to the energy industry.” $500 million sounds like a lot of money. Spread out over ten years, however, it becomes a rounding error, or perhaps an option grant for the CEO, at $50 million a year for a company that generated $32 billion in pre-tax income last year. If the greens truly believe that, by putting up nice bright signs with green flowery buds on gas stations dispensing volatile fuels to feed combustible engines that have probably already rendered the planet fatally wounded an oil company can become some sort of environmentally “friendly” business, then we are in even worse trouble than anybody—including Stephen Hawking—could imagine. Jeff Matthews I Am Not Making This Up © 2006 Jeff Matthews The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

Preparing to leave Chicago—home of “Da Bears”—after two days of stalking the floor of the McCormick Place Convention Center along with 60,000 doctors, salesmen and investors at the annual radiology show, one scene that sticks in my mind illustrates better than any what makes Chicago, well, Chicago. It did not occur during the Bulls game that I attended at the United Center (Bulls beat the Magic by 9)—although the legacy of Michael Jordan that still grips this city hangs from every rafter in the joint. It did not occur at the McCormick Center itself, being, as it was, inundated with about as diverse a population from around the world as you could find under one roof, all talking animatedly and in great detail about those areas of the human body that most people do not talk about—radiologists deal with breasts and colons the way auto mechanics deal with brake pads. And it certainly wasn’t at Fogo de Chao, the restaurant I went to with a group of radiologists where “The Gaucho Way of Preparing Meat” was demonstrated by a swarm of waiters slicing pieces of lamb, steak, pork and chicken from long metal stakes right onto your place without giving you time to inhale—thereby providing future customers for the radiologists at our table. It was at a Starbucks. Early in the morning most Starbucks look the same. Two weeks ago near Carlsbad California, the early morning Starbucks line-up consisted largely of forty-somethingish women weighing all of ninety pounds with their blond hair pulled back beneath a pink baseball cap, just finished with their morning run. Yesterday in Chicago it was a sixty-somethingish guy who looked like he could have come from watching a football game at Solder Field—leather jacket, cap and a matter-of-fact manner. He got his coffee and joined a couple of friends already sitting down at a corner table, talking about Da Bulls. Great town. In a future post we will examine some investment ideas coming out of this conference. In brief, though, think digital. Jeff Matthews I Am Not Making This Up © 2005 Jeff Matthews The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

That’s how many headlines appear right now (9:16 p.m. Thursday night) on my Bloomberg regarding Intel’s revenue guidance press release and conference call. By Friday morning, this number will surely expand, what with the morning research commentary from Wall Street’s Finest, as well as the CNBC-related talking-head piling on. Precisely what earth-shaking, paradigm-shifting, time/space continuum-warping announcement did Intel make that merits such attention? The company said, and I am quoting the headline of the press release itself: “Business Consistent with Expectations.” That’s it. The news was so bland, in fact, that the mid-point of the updated revenue guidance Intel announced last night ($10.5 billion) was exactly the same as the mid-point of the revenue guidance it replaced. Is that really worth 45 headlines on the Bloomberg machine? Yes, I know the drill: Wall Street was hopeful Intel would, in Street lingo, “raise guidance” and therefore give the traders and tape-readers who have been bidding up the stock in recent weeks on nothing more than the hope that Intel would “raise guidance” the ability to sell their stock at a profit. And I know too that, as the saying used to apply to General Motors (see “McClellan Awaits Battle…In Detroit” below), what’s good for Intel is good for technology–and therefore Intel’s pronouncements about the state of its own business are taken as a barometer of the entire techno-food chain. But I am reminded of our dog, a Jack Russell, and its most endearing feature. By way of preface, this Jack Russell’s least endearing feature is its complete inability to share space, food or attention with our aging mutt Lucy, not to mention the three cats that live in mortal terror of being caught by a dog whose miniscule brain is wired to do nothing more than hunt down and kill small, moving, long-tailed mammals. Its most endearing feature, on the other hand, is far less lethal: this involves countless hours in the back yard, sniffing out and digging up pieces of slate from an old, long overgrown patio, and carrying those pieces of slate–which can be the size of Frisbees–in its mouth to some other part of the yard and burying them in a furious display of rapidly moving paws and flying dirt. Days or weeks later, the Jack Russell will sniff out those very same pieces of buried slate and dig them up with great relish and immense satisfaction, as though they are priceless gifts unexpectedly bestowed upon it by the God of Dogs. The net gain, of course, is zero: she is finding dirty pieces of rock that she herself buried. But it makes her happy. And I suppose this fascination with Intel–a company that for all practical purposes manufactures automobile engines–gives great comfort to those who enjoy speculating on whether a company will sound “upbeat” or “downbeat” or have “good body language” on the call. But at the end of the day, Intel told us nothing we didn’t already know: the computer business is doing okay, but AMD is taking market share and the company that really matters in this business is neither one. It is Apple. Jeff Matthews I Am Not Making This Up © 2005 Jeff Matthews The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

Even here, in the cool, quiet dawn of the northernmost point of Michigan’s Lower Peninsula, major worldwide economic trends make themselves known. For starters, the daily parade of iron ore ships that first appear on the western horizon heading towards us under the five-mile Mackinac Bridge and then plow inexorably through the narrow channel between Bois Blanc Island and Mackinac Island, are greater in number than I have seen in a decade—and they are always startlingly huge beasts. Those ships are taking iron ore from mines in Minnesota to steel plants in Hamilton Ontario and the Detroit area—which are having the best years of their lives thanks to booming consumption in China and India. For another, the woman at the front desk of the hotel—this is a 118 year old hotel in the heart of the Midwest—is from Bulgaria. So is the kid in the coffee shop, and so is the girl who serves coffee at breakfast. Before they arrived this year, the only seasonal staff was the local kids from the area and the Jamaican men and women who have been handling the dining room for years. Turns out, the Bulgarians responded to a jobs fair and came over here to work. That’s globalization. One more economic trend: inflation, or at least whatever it is you call price increases which the bond bulls wants to pretend don’t exist. The ferry to the island—diesel fuel costs, you know; the hotel itself—being fully occupied and consuming millions of BTUs of electricity for running the building and gas for cooking the food; and even the local fudge-makers who churn out cubic yards of the thick, fattening stuff—which requires that pesky, ever-present and highly costly thing that the government and the bond buyers deduct from the various inflation indicators as if it doesn’t matter…also known as “energy.” They’ve all raised prices. Let the bond market beware. Jeff Matthews I Am Not Making This Up

Like a series of old-fashioned Hardy Boys adventures, the Overstock.com story, as told through the words and writings of CEO Patrick Byrne, contains mysteries aplenty—each with its own twists and turns—that leave outside observers guessing each outcome until a final conclusion is revealed. In the Hardy Boys’ cases, the ending was always the same: Hardy brothers Frank and Joe, sometimes with the help of their good chums Chet and Biff, would unravel the mystery, catch the true perpetrator, and receive hearty thanks from dear old Dad, Detective Fenton Hardy, along with mild but affectionate admonishments from Mother. Overstock.com’s adventures, however, do not always tie together so neatly. Some are easily resolved, others not. Why, a new mystery appeared just last week. But to begin with, I offer a two-part recap of the adventures thus far. One of the first Overstock mysteries was The Riddle of the Disadvantaged Artisans, arising from a 2001 Overstock venture known as “Worldstock.” “Worldstock is the brainchild of Overstock.com’s CEO, Patrick Byrne,” the company trumpeted in a 2002 release, “who holds a doctorate from Stanford University centered upon issues related to poverty and social justice.” (The doctorate is important to Byrne: he made certain Charlie Rose’s viewers knew about it during a recent interview.) Byrne “conceived of Worldstock as a global network of disadvantaged artisans plugging into the modern advantages of a 21st century business.” The concept was a genuinely noble effort to nurture third-world artisans by offering their hand-crafted wares on the Overstock site—“our own little United Nations Development Program.” Setting a pattern for subsequent Overstock mysteries, the company (in the same 2002 press release) boasted that the “overwhelming popularity of Worldstock among Overstock’s customers” had led to its swift expansion among the disadvantaged artisans—then stopped mentioning Worldstock until the CEO’s 1/28/04 letter to investors, where Byrne gave it “Overstock’s 2003 ‘Most Improved Player’ award” for a “remarkable turn-around.” “Turn-around” from what was not entirely clear, but Worldstock has since disappeared from discussions, save in a brief, feel-good mention during the Charlie Rose interview. The odd thing about such a radical enterprise is that each item under the “Worldstock” tab gets listed just like any other Overstock item—with a “List Price” and a substantially lower “Our Price.” The difference being a huge theoretical savings for the Overstock buyers—and by definition, lost profit to the “disadvantaged artisans.” For example, a “Turkoman Hand-Knotted Rug (Afghanistan)” comes with a $1,400 “List Price” and a $449.99 “Our Price.” Now, take at face value the company’s noble statement that “Overstock adheres to an audited net-5% profit ceiling for their [the disadvantaged artisans] goods, stimulating sales at prices that maximize the artisans’ return.” At a $449.99 “Our Price,” it would appear that the disadvantaged Turkoman rug artisan is receiving something like $425 for a rug that would “List” for $1,400. Hardly seems like the way to end poverty and social injustice. In The Case of the Vanishing Milestones, the company introduced a membership loyalty program called “Club O.” Byrne promised shareholders, “I will announce it if and when we reach the following levels: 10,000; 25,000; 50,000; 100,000; 250,000; 500,000; 1 million,” noting “I do not anticipate that we ever will reach 1 million members, or anything close to that, but if we do, I will let you know.” For a while there it looked like Byrne might have an easy time announcing those milestones. After a company visit just two months later, Legg Mason analyst Thomas Underwood wrote “Given the success that Overstock has already seen in its ‘Club O’ campaign, the company will introduce ‘Club O Gold’” Shortly thereafter, Byrne announced his first “Club O” milestone—it had breached 10,000 members. But he also pulled the plug on the milestone pronouncements: “I previously promised to inform shareholders when certain thresholds had been reached…I now withdraw that commitment because I have trouble sleeping with open-ended commitments.” (7/22/04) Apparently Byrne knows how to sleep, because “Club O” numbers—while not forthcoming from the company—were placed at something above 40,000 in a late-2004 analyst report estimate, a good bit closer to the low end of the 10,000 to 1 million range than to even the middle of that range. The Mystery of the Pristine Inventory began in early 2004, when Byrne told investors: “In the closing weeks of 2003 your chairman seized an opportunity to buy over $5 million of Franck Muller watches…they represent a sizable fraction of our inventory. Pick one, write me…and I’ll make you a deal.” One year later, Byrne announced a large inventory clean-out, which cost the company $1.5 million. “The dead inventory that I had accumulated over the years, both from my own bad buys and those that I let buyers ‘put’ to me, has been almost entirely flushed (including the Franck Muller watches).” However, on the investor call the next day, he led investors to believe there was nothing left in the way of “dead inventory”: “I decided in early December, let’s just flush everything that has been around more than a few months. Our inventory has never been this clean. We just marked down, promoted, did whatever we had to do to blow out the older inventory. I lost $1.5 million on that inventory to move it all. But our inventory has never been this pristine.” It is not clear whether the inventory is “pristine,” as stated to the analyst community, or whether some “dead inventory” remains, as implied in his shareholder letter. The answer may partly be found in the brief Case of the Forgotten Movie. Here, another big Byrne bet—a film called “FarenHYPE 9/11”—went from “a unique business opportunity” (10/21/04) to $700,000 worth of losses in just a couple of months (1/28/05). The Enigma of the Sputtering Rocket was the first involving several “skunkworks” projects at the company. Byrne delights in tantalizing shareholders and Wall Street alike with Hardy Boy-esque code names for projects from the so-called “skunkworks.” This one was named “Rocket,” and it began some time in early 2003, when something called “mCommerce,” which stands for “mobile commerce” (commerce conducted via cell phones), became a short-lived faddish buzzword: “We decided that there would be an opportunity to lead the field with a push-based mCommerce application that delivered special bargains to subscribers.” After some delays, Byrne announced a break-through in April of 2004: “We have applied for a patent on push-based mCommerce and a certain kind of transaction through mCommerce. I think you’re going to hear a lot more about mCommerce. It’s like the Internet of five or six years ago. And I think people ought to look hard at different companies that are emerging in there.” Never lacking in ability to jump on a trend that might, to use a favorite Byrne phrase, “super-size” the P/E in shares of Overstock.com stock, he wrote: “To give an idea of the size of this market; there are 150 million cell phones in the U.S….” Shortly thereafter—three short months later, in fact—Byrne admitted the obvious: “I am not giving up, but this has been a dud… mCommerce just has not yet caught on in the United States. If and when it comes, Overstock.com has staked out some high ground without a huge investment.” Next up in this three-part series will be The Mystery of the Shallow Ocean—a rather involved tale involving yet another “skunkworks” project… Until tomorrow. Jeff Matthews I Am Not Making This Up

The emails came pouring in yesterday, from friends and family, all with one, innocuous question: “What did you think of the ‘Why I Am Leaving Goldman Sachs’ editorial in the New York Times?” The fact is I hadn’t read it: the day-to-day utility of op-ed pieces in any newspaper are slim-to-none, and the Times—with its special brand of high-and-mightiness combined with the kind of straight-faced hypocrisy only a family-controlled institution can maintain in the public marketplace (the recently ‘retired’ CEO at that organization, which prides itself on a devotion to egalitarian causes such as unjust CEO payouts, recently received a $23.7 million exit package for leading the Times over a 7 year period during which its share price dropped 80%)—is no exception. Nevertheless, I did read the piece, and I am still scratching my head at why it got so much attention. After all, the odd mix of shameless self promotion [“I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video”] and playing-to-the-audience self-righteousness [“It makes me ill how callously people talk about ripping their clients off”] sure sounds like a Goldman guy talking. Besides, did he think he was taking his “bronze medal for table tennis” to work for UNICEF? Anybody who has worked with, around and against Goldman Sachs (and I’ve been doing that, on and off, for almost 30 years) knows what apparently never crossed one man’s noble mind: Goldman Sachs is, and was, and always will be, run for the benefit of its partners and shareholders. How otherwise to explain the fact that Goldman’s return on equity—the most basic measure of a company’s profitability—puts its peers to shame year after year (40% in a good year, 5% in 2008, the worst-year-since-the-Great-Depression)? More personally, I first became aware of Goldman’s clout well before Mr. Smith Went to Goldman Sachs. It was in the early 1990’s, and Robert Maxwell, “the Bouncing Czech,” was using company pension money to prop up shares of Mirror Communications Corp—a company I was short (betting against) because of its obvious financial shortcomings. So obvious were those shortcomings that the only wonder (in my mind) was the stock never seemed to go down. The firm I was with—a client of Goldman Sachs at the time—eventually threw in the towel on our Mirror Corp short when the cost of borrowing the shares (through Goldman Sachs, I might add) made it too expensive to bother with. While Mirror Corp eventually collapsed (after Maxwell was found floating dead in the Atlantic Ocean), it was too late to help: we had already moved on. But it was a great lesson that has stayed with me to this day: I learned, the hard way, that whoever was backing up Robert Maxwell had more money than we did…and in the end, money, rather than noble intentions, wins on Wall Street. Still, did I write an op-ed for the Wall Street Journal about how unfair the Mirror Corp short squeeze was? No. We bit the bullet, and moved on. That’s what you do on Wall Street. Now, in case you are wondering who was helping Robert Maxwell in those days, the answer is contained here, in the UK Department of Trade and Industry report on the Maxwell scam. For the record, the report states: “The investment bank with whom he principally dealt was Goldman Sachs.” Mr. Smith should have done his homework. Jeff Matthews Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” (eBooks on Investing, 2011) 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. The content herein is intended solely for the entertainment of the reader, and the author.

It is Saturday morning, May 1, 2010, and the Berkshire Hathaway annual meeting has been under way for a little less than an hour—or two hours, if you include the movie that traditionally kicks things off at precisely 8:30 a.m. And already things here seem very familiar: Warren Buffett and Charlie Munger are doing what has evolved over the years into something like an extremely intelligent comedy act. Buffett plays the ebullient, eager-to-please elucidator of all things financial; while Munger provides the dryly cantankerous Voice of Reason…and all to the crowd’s amusement and pleasure, not to mention intellectual stimulation. This is, after all, a shareholder meeting with 17,000 people hanging on the two men’s words—not a comedy club. Nevertheless, so familiar are some of the routines that I find myself at times writing a kind of short-hand when Buffett’s answers drift into familiar ground. This ranges from the substantive—such as “Gen Re Derivatives Story,” when Buffett rehashes his account of the 23,000 derivatives contracts Berkshire inherited when it acquired Gen Re, an experience that gave Buffett an early heads up into the dangers of those instruments—to the mildly amusing, such as “Mae West Joke,” when Buffett retells a hoary line from that vaudeville-era actress. It is a joke he has used over many years, in annual letters and here on stage, and it gets fewer laughs each passing year. Having come early to Omaha—three days ago—to deal with book-related issues as well as to get prepared for today’s meeting, hearing old stories getting dredged up is a bit of a let-down, particularly after the most interesting topic (Buffett’s investment in Goldman Sachs) has been entirely dispensed with in the first 45 minutes. But it was worth coming early, before the Friday crush. Indeed, arriving Thursday morning at Eppley Airfield—that is the official name of Omaha’s airport, and I find the term ‘airfield’ to be a pleasant reminder that we are in the Midwest, where established nouns, such as soda ‘pop,’ hang on longer—had a very different feel. The pace was quite relaxed, and the shareholders getting off the planes all seemed to hail from long distances, far away from both Omaha and America. In fact, the very first person I met after checking in with Jim—the friendly and hyperactive Hudson manager at the airport Hudson Bookseller, where Buffett and Munger book titles crowd the shelves—was a young, professional Buffett follower from Sydney, Australia. The investor introduced himself as “Wine”—at least that’s how his name sounded to ears still plugged from connecting flights and a brain groggy from a 4 a.m. wake-up call—and I repeated it dutifully, as in, “Wine, it’s nice to meet you.” Now, putting aside the unusual name—at least as I caught it—the fact that a mutual fund manager from Sydney, Australia, was the first person I met in Omaha was not nearly as exotic as it might seem in the first place. Buffett’s patient, informed, long-term style of investing—with its particular premium on family-owned and run businesses—seems to resonate especially forcefully with non-U.S. business owners. Chalk this up perhaps to America’s brand of naked capitalism and Roosevelt-era trust-busting, which fostered Buffett’s cherished American ‘meritocracy’ while outside the U.S. capital was able to remain far more concentrated, with a larger portion of important businesses to this day under family control. Indeed, the non-U.S. contingent of investors has grown so large that Buffett cancelled the meet-and-greet with international investors he and Munger used to hold Saturday afternoon. As he explained the change in his February shareholder letter, at last year’s international gathering “my simply signing one item per person took about 2 ½ hours.” But that hasn’t stopped them from coming. And as the world has grown smaller, degrees of separation have diminished. For example, “Wine,” it turned out, knew a friend and terrific analyst from Sydney. Turns out they had been on opposite sides of a somewhat controversial but immensely successful financial company whose CEO reminds Wine and others of Warren Buffett. We chatted about what Wine does for a living (he runs a mutual fund), where he’d been before coming to Omaha (in Canada visiting Fairfax Financial, the aforementioned company), and where he was going afterwards (to Los Angeles, along with a healthy minority of fellow international Berkshire shareholders, to watch Charlie Munger hold forth at the Wesco Financial meeting the following week). Wine’s extended stay in North America is not, it turns out, at all unusual. Most of the international investors use the annual Berkshire meeting as a chance to visit friends, investors, and other companies here in the United States and elsewhere. Hence, the extraordinary portion of international fliers coming in early, including “Wine.” Before leaving the Hudson bookstore and heading to my hotel, I said goodbye to “Wine.” When he smiled at my pronunciation, I asked if I’d gotten it wrong. “Well,” he said, “it’s ‘Wine.’” “Wine,” I repeated. “No,” he said, and then he Americanized the pronunciation for me: ‘Wayne.’” Somewhere here at the Qwest Center, among the sea of 17,000 shareholders listening to Buffett and Munger holder forth, Wayne is listening, along with hundreds—perhaps thousands—of others from countries around the world. In fact, one of them—from Bonn, Germany—is right now asking Buffett about how he plans to protect Berkshire from fallout over the financial implosion in Greece. Buffett, who knows how to play a crowd for laughs, answers: “What happens in the Greek situation and what may fall out from that is gonna be very important, and Charlie’s gonna explain what that might be.” To be continued… 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.

It was a cool Florida evening one year ago next month when your editor joined a distinguished investment strategist, familiar from near-constant CNBC exposure, and a third market observer on a makeshift stage in the dining room of a country club to discuss the economy and the prospects for the stock market—such as they were, in those gloomy days—before a solemn group of Chartered Financial Analysts from the local financial community. The crowd had reason to be solemn. The news was horrible and getting worse. Indeed, the financial crisis then gathering steam outside the tree-shaded windows of the club would not reach a peak for another four weeks before finally culminating in that apocalyptic March, 2009 print of “666” on the S&P 500. The lessons of Warren Buffett—whose high-profile, crisis-defying investments in Goldman Sachs and GE were looking pretty stupid—seemed quaint, old-school and positively out-dated as we faced the crowd. Who wanted to “put all your eggs in one basket and watch that basket,” as Buffett liked to say, when Buffett acolytes such as Bill Miller—his so-called “Value Trust” fund had lost a third of its value in the previous ten years—were watching their concentrated portfolios getting crushed in the financial collapse? And so it came as no surprise that your editor was figuratively elbowed aside when the Famous Strategist took control of the discussion, delivering in a loud and booming voice a vision of the future that no doubt made the hot coffee turn to ice in the throats of the gathered host. Your editor kept only a few notes of the session, being seated on a stage next to the Famous Strategist and being more concerned with addressing the questions at hand, as opposed to writing down what the Famous Strategist was advising the CFAs in attendance, but we did jot down enough to preserve the gist. And it was not pretty. “The economy is gonna be an underachiever for several years…the consumer has adjusted to a new reality,” was one line. So far, nothing shocking here: both statements are quite reasonable, even for stock-market optimists. “There’s another trillion dollars in losses that are gonna be taken by the banks.” Now, pessimists would argue that the verdict on this statement isn’t in yet—that the Alt-A mortgage time bomb has yet to explode, for one thing.But by our Bloomberg, the combined trailing-12-month losses of the 21 institutions that comprise JP Morgan, Citigroup, BB&T, Bank of America and the whole rotten crew of banks described by our Famous Strategist, amount to not-losses at all, but profits. Specifically, they amount to operating profits of $10 billion and net income of $5 billion for the twelve months encompassing the worst of the crisis—from fourth quarter 2008 through the first three quarters of 2009. Of course, JP Morgan alone has taken $30 billion in loan loss provisions during that time, and the rest of the bunch has likewise been taking losses along the way on their Bubble-Era loan books. So, “another trillion dollars” of loan loss provisions, as predicted by the Famous Strategist, may well be the final tally when the cycle is concluded. But, thus far, those losses have been more than made up for by profits. As for investment advice, our Famous Strategist couldn’t have been clearer: “The financials are a graveyard of bad investment, and they’re illiquid, most of the large ones…” he warned the audience. “The government can say what they want, but they’re gonna have to nationalize these institutions—treat ‘em like Fannie and Freddie, which is the walking dead.” Since those words were spoken, however, the “walking dead” have acted more like sprinters: BankAmerica was trading around $5 that dark night, and can’t be had for less than $15 as we write this. So too JP Morgan, a share of which cost $25 then, but now fetches more than $40. Wells Fargo, which was $17, is now $27. Only Citigroup, among the big banks, and was trading at $3.50 at the time, costs less today. And not one has been nationalized. Hard to imagine a better batch of investments than the large financials in the last twelve months. But it was, perhaps, the career advice our Famous Strategist gave to the CFAs that resonated most loudly, and most threateningly, that dark night: “We live in an era of reduced expectations,” he said, and that included equities. Pointing out the lousy ten-year history of the S&P 500 (which made the papers during the last few weeks of 2009, the concluding year of the stock market’s first-ever negative decade), he suggested the CFAs focus on fixed income and safety for their clients. “Get used to it,” he said. “It’s going to last for years.” Now, the real lesson here is not, to be clear, that a Famous Strategist could be dead wrong—like, 99% wrong—and that Warren Buffett, who would eventually turn a profit on his Goldman Sachs investment, is usually, eventually, right. Hey, Buffett actually sold puts on the markets near their all-time highs. Yes, they’re “European” puts and don’t get exercised for another decade, and yes, he’ll probably make money on them. But the fact is the best investor who ever lived actually sold insurance on world markets at their all-time peaks. Nor is the point here that the Financial Crisis was a short-term blip whose after-effects will be smoothed over by the subsequent near-doubling in the S&P 500 from its 666 low in 2009, and great things to come in 2010. If anything, the Crash of 2008 appeared to us to mark the end of US economic supremacy, much as the Crash of 1929 marked the end of Great Britain’s, and our displacement by China is something we will be dealing with for decades. The lesson is something all investors eventually learn, and it is this: think for yourself. Those CFAs who took the Famous Strategist’s advice that dark February night and dumped their financials and stashed the proceeds in safe Treasuries are certainly wishing they had. Jeff Matthews I Am Not Making This Up © 2009 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

Originally published May 14, 2007 _________________________ The contrast to most annual meetings couldn’t be greater. Whereas except during times of crisis, the average large company annual meeting—and Berkshire-Hathaway is a large company, with almost $100 billion in revenue last year, almost three-fifths the size of GE and four-times the size of Coke—gets modest shareholder attendance and gadfly-dominated questions from the floor, the Berkshire annual meeting draws shareholders from, quite literally, around the world. German, Australian, Swiss, Canadian and Japanese investors—not to mention those from California, New York, Connecticut, Kentucky and elsewhere—have lined up early to ask Buffett their questions. And it’s impossible to say how many other states and countries are represented, given the fact that only slightly more than one tenth of one tenth of one percent of all those in attendance will get to ask a question before the five-and-a-half hours are up. What we do know is that so many international shareholders have come that Warren and Charlie will host a meet-and-great with them later in the day, for more than an hour. Buffett explains that he feels if so many shareholders have come all that way to be in Omaha, he just feels he ought to thank them. Why is it that, hearing Buffett talk this way about his shareholders, I begin thinking about Bob Nardelli? Nardelli is, of course, the infamous ex-GE Power Systems star whose stormy tenure as CEO of Home Depot—during which time sales doubled, earnings rose almost 150%, and yet the stock price languished—ended not long after a Nixonian shareholder’s meeting at which the public company CEO did not respond to a single question from the Home Depot shareholders who dared ask one, aside from saying “Thank you.” In true “Final Days” style, Nardelli’s Board of Directors—the folks nominally in charge of the company—did not witness the mockery of corporate governance for the simple reason that not one of them attended the meeting. Nevertheless, after the shareholders finally revolted, that same Board of Directors later gave Nardelli a fine send-off—$210 million worth—for what, to the stock market, looked very much like failure. (See “The Tragedie of Home Depot,” January 6, 2007.) Still, you might well ask if it is fair that the increased sales and earnings which occurred under Nardelli should be considered “failure” merely because Home Depot’s share price flat-lined during his reign of errors? The answer, I think, is: yes, absolutely. While stock prices in the short run are, as Buffett repeatedly tells shareholders, quite irrelevant, and one should be comfortable owning a stock without regard to near-term fluctuations, stocks can also be quite accurate leading indicators of the business itself. And in this case, the stock market knew what Bob Nardelli did not: it knew that his militaristic, top-down, numbers-obsessed operating style—which worked quite well at GE Power Systems—was destroying what had been an egalitarian, bottoms-up, customer-obsessed culture that, prior to his tenure, had transformed a sleepy, cyclical, low-margin industry and created one of the great retail success-stories of all-time. The failure wasn’t hard to spot: all you had to do was visit stores and ask. But Nardelli did not even listen to his own shareholders, so why should he listen to ex-store managers? Now, I don’t particularly like thinking about Bob Nardelli, so this is unfortunate, having him come to mind right now. The shareholder questions are moving along and I want to pay attention. But the next question is about the seemingly outrageous compensation packages offered like candy by today’s corporate Boards desperate to get the next Jack Welch, even if he turns out to be—you guessed where I was going—Bob Nardelli. Buffett flat out does not care much for meticulously crafted compensation systems in the first place, and he states something at once obvious and profound: “There are more problems with having the wrong manager than having the wrong compensation system.” It is a lesson the Home Depot Board of Directors learned the hard way. Buffett riffs further on the topic, noting that despite serving on 19 corporate boards he has only been nominated to a single compensation committee: “They’re looking for Cocker Spaniels to go on comp committees, not Dobermans.” As for what’s to blame for outsized compensation packages, Buffett and his partner place it squarely on the public disclosure rules which, well intentioned though they might be, have the unintended consequence of fueling compensation inflation because everybody knows what everybody else earns. The “envy” which drives the ensuing compensation one-upmanship is hard for Buffett to grasp: “Envy—where the hell is the upside?” he asks rhetorically. “You feel miserable…but the other guy has no idea how you’re feeling.” Noting that envy is one of the original “seven deadly sins,” Buffett picks up a chocolate candy from the See’s box on the table before him—something he will do frequently throughout the meeting, both before the lunch break and after—and declares gluttony to be a far more worthwhile sin. While there’s no upside to envy, “there’s upside to gluttony,” he declares, happily popping the See’s in his mouth, to laughter. One of the less-well known aspects of Buffett’s career is that he ran a hedge fund before turning Berkshire-Hathaway into his own personal investment vehicle. And it is no wonder the model attracted him, for Buffett is a pay-for-performance kind of guy. Following the discourse on gluttony, Buffett is asked by a Swiss investor about how to cure the executive compensation arms race, and he uses the example of an oil company that benefits from a sudden rise in the price of crude oil: “If oil goes from $30 (a barrel) to $60, it’s crazy to pay more” to the executive management team. “But if their finding costs (for oil) were lower (than the industry finding costs), I’d pay ‘em like crazy.” It is simple, concise and clear, and hard to argue with. I begin to wonder how Nardelli’s tenure at Home Depot—and his impact on the company itself—might have ended differently if Nardelli, and his Board of Directors, had allowed themselves to be subjected to just such an annual session in which everything was on the table? How many ex-store managers might have given the military-obsessed Nardelli a piece of their mind—and a real-life view from the trenches—about what was happening to the stores and their customers when his efficiency experts replaced the plumbers, carpenters and electricians with junior military officers and self-checkout stands? How many former Home Depot customers and long-suffering shareholders might have educated Nardelli, who by then was no longer eating lunch with the masses, having created an executive dining room for himself and his Team, on the distinction between running a time-and-materials factory line and a flesh-and-blood store, if they’d been allowed to ask him a question before his fellow Directors? Is it just the GE culture that created such an out-of-touch CEO? Or have Wall Street’s financial innovations—Mutual Funds, Exchange-Traded Funds, Hedge Funds, Funds-of-Funds—so removed the shareholders and their money from the companies they fund that management and their handpicked Boards of Directors no longer have to answer to the shareholders in the flesh and articulate why they do what they do? Buffett, who sets his own example of a CEO’s accountability—and willingness to hear dissenting views directly—during the five-plus hours of Q&A at his meeting, doesn’t even think the CEO should let somebody else write the CEO letter for the annual report. “If the CEO isn’t willing to talk [through a letter] directly to the people who gave him the money…I’ve got a problem with that.” I wonder how many other CEOs even think that way? To be continued… Jeff Matthews I Am Not Making This Up © 2007, 2008 NotMakingThisUp LLC The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.