Hamptons ATM Receipt – Bogus Maybe? Delinquent Children Perhaps? Rich People Check Your Records

Very well protected ATM (but I think the bars ...

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Dealbreaker yesterday posted an image of a Capital One ATM receipt with a remaining balance of around $99 million and change. The withdrawal is reputed at $400. Everyone wants to know who it is. The service fee is supposedly $2.75.

Is the ATM receipt a bogus plant designed to entice financial media? Would a mega rich guy need a $400 cash withdrawal? The charge cards should have pretty good limits.

Would a mega rich guy be paying $2.75 for transaction fees? Just having around $100 million in deposits gets you a lot of freebies from most banks.

Would a mega rich guy even bother to print a receipt or did it just come out accidentally? Maybe the mega rich guy is not used to using ATM’s?

Will Capital One review their security camera footage and find who this person is? To protect the client they should change the card.

Maybe there was a security breach and the thieves were just going for $400 and had no need for the receipt. Too bad they probably could have skimmed more.

Maybe the mega rich guy has teenage children who just wanted to get their hands on some cash for who know’s what and now the mega rich guy is embarrassed with a family problem. Maybe the teen ager was using their own card responsibly, took out $400 for an OK reason and like most teenagers of rich people not too good with the paper work.

Maybe rich people will stop using the ATM in question because they are annoyed with the media stake outs. Pretty soon the bank will wonder why they installed at that site as no one important is using it.

Disclosure: George Gutowski writes from a caveat emptor perspective. I do not have $100 million in any bank account. I do not know of any circumstance where this may change within the next 72 hours.

$KBH Changes Mortgage Providers! Who Cares? #homebuilders maybe #LBO

KB Homes (NYSE:KBH) met expectations and reported really terrible numbers. They are a home builder in a lousy market.

Jeffrey Mezger, president and chief executive officer has been reduced to simplistic comments as this quote illustrates: “We believe the current housing market conditions will likely continue until there are meaningful and sustained improvements in job growth and consumer confidence.”

Brilliant analysis. The signal to investors is “We are lost deep in the woods and cannot find our way out” Why would the CEO put out a comment like that? After all the negative housing news investors are painfully aware that the economy stinks. But the stock tanks another 13%.

The market cap is below $1 billion.  You have to believe Americans will fall back in love with house ownership some day. KB Homes is not generating wealth as it lists in windless markets. Investors would only be too happy to be bought out by a deep value investor with a long-term view.

So Jeffrey Mezger keep bad mouthing the stock so everyone becomes disheartened and the take over price is more attractive. Home builders may need to become self eviscerating to restructure for the future. Capitalism is a tough blood sport too bad for current investors. A solvent new mortgage provider is just pretty window dressing for the new team.

Hey isn’t this the spot when some Asian guy walks in and writes a cheque, scoops up the marbles and laughs on his way to his bank. Probably.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

$ITW Sells Off Assets, Buys Back Shares, Why is This Good? #sharebuyback

Illinois Tool Works (NYSE:ITW) to use the famous investment euphemism “as previously announced” reported they sold off some assets and therefore restated earnings and EPS. OK fair enough. The press release begs more questions than it solves.

ITW, who BTW does not quote any executives, could have confirmed how much capital was being redeployed and what was ITW going to do. Silence usually means embarrassment. Debts are over $2 Billion and interest rates will start popping soon. Why not cut debt and get the monkey off your back? Or at least get a smaller monkey. Don’t give me this locked in fixed rate stuff. Companies with little or no debt are more valuable. $2 billion is a lot and will remain a lot.

The EPS hit seems substantial for the quarters restated but they cover that up with re-affirmed guidance to pacify the gullible and easily distracted. They then follow-up proudly with how many shares they have re-purchased and what the supposed positive impact will be.

The stock yields about 2.5% and the company offers nothing about fundamentals. What about a dividend increase?

This is drip drip disclosure designed to allow executives in the future to say “as we previously announced”

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

Fuller Brush $FUL Margins Tipping Point Risks #fullerbrush

Fuller Brush (NYSE:FUL) announced results and improved guidance. Jim Owens, H. B. Fuller president and chief executive officer patted himself on the back by saying “Our performance this quarter demonstrates our ability to execute with rigor and speed” and then he added “In the face of continued raw material inflation, we performed well ….”

OK so some of the optics look good until you cast an eye over the international margins. North America clocks in at 12%. Every other region comes in under 6%. North America is growing at 6%. Other regions are growing well above that in some cases over 30%.

This is business 101. Low margins overwhelming high margins. Jim Owens says they are doing well. Needs some serious explanations.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

Goldman Sachs $GS Director Strategy Why Debora Spar?

Logo of The Goldman Sachs Group, Inc. Category...

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The Board of Directors of The Goldman Sachs Group, Inc. (NYSE: GS) today announced the election of Debora L. Spar as an independent director of the firm effective immediately. Dr. Spar’s election expands the Board to 11 directors, nine of whom are independent directors. Dr. Spar will be a member of each of the firm’s Audit, Risk, Compensation and Corporate Governance and Nominating committees.

Debora’s valuable and independent perspective on finance and business, emerging markets and recruitment, particularly of women, will be a tremendous asset for Goldman Sachs in the years ahead,” said Lloyd C. Blankfein, Chairman and CEO of The Goldman Sachs Group, Inc

So goes the press release issued on June 16, 2011 at 11:59 am. We can safely assume that no one thought this would affect the price of Goldman Sachs because they issued the announcements right at mid day. Probably between a board meeting and a fancy lunch. It’s always interesting to see how they justify a new board member. Gutsy move on Debora Spar’s part. Goldman Sachs is one of the most controversial boards. She may have a lot of emergency meetings coming up.

Goldman Sachs wants to be seen as feminine friendly. Well OK. How many women have become rich in say the past five or ten years compared to men. Men and women would have the same reason for joining. Make a lot of money very quickly. Will women figure prominently in the next Wall Street Scandal? Is that the progress they are looking for?

Debora Spar has done work in how emerging markets develop regulation. So to maintain Goldman Sachs reputation for the smartest guy in the room they are recruiting the intellectual headwaters into emerging market regulation. Hope the other side is matching the hires.  

Will the USA offer foreign aid to under-developed countries, contract Goldman Sachs to develop regulatory models for big fees and then drop in a few trading desks to take advantage of the nuances they built in months perhaps years in advance.

disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

 

Jarislowsky vs $RIMM Brilliance or Senility #Blackberry #Smartphone

Image representing Research In Motion as depic...

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Stephen Jarislowsky was recently quoted by Bloomberg saying he was selling off Research In Motion ( Nasdaq:RIMM) . Jarislowsky is one of the deans of the investment management world felt the smart phone was becoming a commodity and margins were compressing quickly.

Think what you may about Research In Motion; also think about why this supposedly brilliant guru has chosen to make such a public statement. According to the recent Bloomberg article at the end of Q1 Jarislowsky on behalf of investor funds held some 10.2 million shares valued at USD361 million. The article also contains a snippet saying the old guy is no longer involved in the research or active management of the funds.

Stephen Jarislowky is synonymous with the firm that bears his name. When the old guy speaks everyone assumes it is on behalf of the company. The market will not comprehend some nuanced corporate governance structure that looks like he is removed from day-to-day operations.

The article comes out as the media piles onto Research In Motion with negative stories during the mid June 2011 time frame. The last reported data for holdings is about ten weeks old. Conceivably the Jarislowsky machine has totalling exited their long position and may have some short positions which only profit from continued declines of RIM share prices.

Or Team Jarislowsky is looking to re-enter and establish a long position and would like the price to drop some more. Classic value investor methodology. I do not believe the old guy is senile so it must be brilliance in motion.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

Kroger Trojan Horse – Debt – Interest Rate Risk – Think About It

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Kroger (NYSE:KR) reported better results and all grocery store stories sound better for now. People need to eat and not everyone will stop shopping. Some of the operating fundamentals are better.

But investors need to look down the road. Many will prepare for a rising interest rate environment. Kroger is leveraged to the eye balls. Sure some of the obligations are leases. Sure some leases will be discontinued if the locations do not work out.

But leases are financial instruments. They are financed on the basis of Kroger’s credit worthiness. There is an imputed interest rate. As rates rise so will Kroger’s costs. This will be particularly true for top locations that Kroger wants to keep.  

Think about it. This will be the ugly trojan horse.

Disclosure: George Gutowski writes from a caveat emptor perspective. I have no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.