Ultimate Hedge Position. Short Mcdonald’s $MCD Long Diabetes. Open to suggestions-Diabetes Contango.

Business Week has an interested cover of the reality of hedge funds. Long overdue.

Consider the ultimate hedge position. Play the Diabetes Contango. Short McDonald’s (NYSE:MCD) who with extra fries has done a lot to promote diabetes. Go long something with a Diabetes solution. Which raises the question which stock will be the financial standard-bearer in the fight against diabetes. Currently an epidemic in western countries with some 20% of general population affected. Drugs, health care provider, diabetes supply manufacturer. This is perhaps the next golden grail.  This is just the strategic big bet that Jack Welch and the old General Electric or GE (NYSE:GE) were famous for.

Who will make it this time?

George Gutowski writes from a caveat emptor perspective. Lots of home work to do after this post.

Welcome to My Nightmare New Director at Booz Allen Hamilton $BAH Joan Lordi Amble

Booz Allen Hamilton (NYSE:BAH) formed in 1914 has a whistle-blower making some huge allegations about the US government spying on citizens through the telecommunications infrastructure. One of its own employees or consultants who was working inside the NSA opened up his kimono and let the secret out. Edward Snowden a former employee of the CIA; I’m sure he knows what he is doing. Wonder if he will get whacked one day.

The very interesting side bar is Booz Allen Hamilton is appointing as at June 12 a brand new director of the board. Joan Lordi Amble is coming on board.

The big question is when she received her briefings to bring her up to speed as a member of the board, did Booz Allen Hamilton give her with any information on the lyrics the whistle-blower is singing. If they did what does that say about Joan Lordi Amble. If they did not what does that say about the corporate governance process of keeping directors particularly new directors up the curve so that they can discharge their fiduciary responsibilities.

Joan Lordi Amble probably wants a good meeting with her own lawyer. If her hands are clean you want to keep them that way.

Her background is impressive and she brings a lot to the table. Women director gets a big check mark here. The résumé includes being executive vice president at American Express. She is an alumnus of Ernst Young with work experience from 1977. she has spent 14 years at General Electric where she was chief operating officer and chief financial officer of GE Capital Markets. She is also a director of Brown Forman and Sirius XM Radio.

So before your lawyers meeting you want some ibuprofen and if you do lunch a martini would be understandable.

Good Luck. By the way do you remember who first approached you. That will speak volumes when those dots are connected.

George Gutowski writes from a caveat emptor perspective

GE the case against $GE. Hint: Too much retail and we are running out of Cheerleaders.

General Electric (NYSE:GE) has redeemed itself in the eyes of shareholders. Coming back from the 2008 financial meltdown the stock has climbed nicely and so has the dividend. You cannot help but notice all the positive feel good stories about why its a good idea to go long and stay long. Buy and hold heaven here we come.

Near its 52 week highs the dividend yield is 3.19%. The S&P 500 clocks in at 2.5%. Pretty good you’re thinking. Buying stocks at 52 weeks highs is tricky business, Sir.

Here are a few tidbits to think about.

Some 40% of shares are owned by retail investors. Season that with the understanding that margin debt is at or near record highs again. In a margin squeeze GE is big and liquid. It can solve a lot of emergency margin call pressure.

The short position has jumped but is still below 1% of float. The sharks are smelling the blood in the water.

Sell side analysts are overwhelmingly bullish. No significant sell or reduce calls from anyone. The cheerleaders are maxed out. You can re-issue the buy rating once in a while to make it look good but there is no one else to help with momentum.

Yes some of the fundamentals look good. GE is not going bankrupt. But the hype is starting to become excessive. All you need is a few down spikes and the spell will be broken. Retail investors will sell in a panic and institutions will go long on value.

Same old, same old.

George Gutowski writes from a caveat emptor perspective.

Monsanto Pleases Investors. Can Board take Responsibility? $MON

Applause for Monsanto (NYSE:MON) great numbers. Stock trading very close to 52 week high. Fwd PE of around 20 and a dividend yield of 1.3%. Stock has been on a steady climb for past six months in anticipation of todays type of results. Buy on rumor sell on news. Look at the board and see what responsibility they can take for the results. The company has been digging their way out of a few problems.

Average of directors is 61. Average tenure is 8 years. Which means Monsanto gets you on the board early. They currently have two people under the age of 50 and only one over the age of 70. Two women so the odds for the next few directors should tilt female. Lets look at the line up:

William Parfet 66 Chair, CEO and President of MPI Research a pre-clinical toxicology research lab. The guy is a scientist and should understand the complex formulae. But what does he add to commercialization. corporate bio does not delve into the matter.

Robert Stevens 61 Former Chair & CEO of Lockheed Martin. An arms merchant; and probably a very good one. Understands government and geo-politics which is probably closely aligned to food supply, malnutrition and discontent among the masses.

Steven Mcmillan 66. Chair of Sara Lee. Little bit busy with his own agenda. Bit down stream from Monsanto’s position in the food supply. He has the carbs and sugars to deal with. But globally gets the concerns.

Gwendolyn King 72 Senior statesman of the board. Founding partner of Directors Council a corporate board search firm. A former commissionaire of the social security administration and OMG look at this he has been on the board of Lockheed Martin. Probably the next guy to get changed out.

George Poste 68 CEO Health Technology Networks. Big background in Genomics Technology and Computing in Healthcare. Clearly the science guy in a science company. Age should not be a factor.

Arthur Harper 56 Managing Partner GenNx360 Capital Partners a PE firm focused on B2B. Formerly from the General Electric gene pool where he was the President and CEO Equipment Services.

Janice Fields 57 President McDonald’s USA. Career Hamburger fast food person. Women under 60 seems to be doing the right things.

Laura Ipsen 48 Has a lot of experience in public sector and regulatory affairs with Microsoft and previously Cisco. Another young women who is on the move. Maybe even a future CEO of Monsanto is the stars line up correctly.

David Chicoine 65. An academic and economist. This one should go soon.

Jon Moeller 48. CFO of Proctor & Gamble. A career P&G guy but probably from the finance side so he has transferable skills.  Again a young guy that Monsanto is bringing along.

George Gutowski writes from a caveat emptor persepctive.

GE Fakes Out Comcast Best Financial Head Fake $GE $CMCSA $TRI

Comcast (Nasdaq:CMCSA) decided to buy out GE’s (NYSE:GE) 49% and make it final. NBC and associated parts including CNBC are going to Comcast for $16.7 Billion. Everyone thought it would eventually break this way but Comcast put the hurry up on. Clearly it was a chess game and lets look at some of the strategists who influenced the outcome.

Comcast of course is off the opinion that owning content and delivery is the right way to go. GE is of the opinion that $16.7 Billion takes it all away.

On the Comcast side you have

Brian Roberts 52 who controls some 33% of voting control and has his fingerprints and family jewels on the deal. Wonder who got impatient with the corporate culture clash?

Drilling down to independent directors you have

Kenneth J Bacon 57 retired from Fannie Mae. Not exactly a case history of financial success.

Joseph J Collins 67 who was Chair and CEO of Time Warner followed by a short stint as Chair and CEO of AOL Time Warner Interactive Video. This basically is the worst merger of all times. He cannot be screaming in board meetings “don’t do it”

Jonathan Rodgers 66 President and CEO of TV One, former president for six years of Discovery Network. Prior to that a career CBS man who became president of CBS television stations division. This man’s DNA screams network and control.

So you can see why Comcast wants it. These guys are network oriented.

On the GE side

I’m sure it’s unanimous that selling something for a cash amount equal to about 7% of market cap sounds pretty good. Here are a few personality issues for GE independent directors.

W Geoffrey Beattie 51 President of Woodbridge. He is a quiet Canadian power player for a quiet Canadian billionaire who controls Thomson Reuters (NYSE:TRI). So he signed off and waved good-bye to CNBC and other media assets. He would have some uniquely accurate perspective on valuations in this business.

Andrea Jung 53 Chair and CEO of Avon is also co-lead independent director for Apple. She must have a few insights into the future of media and technology (like maybe Apple TV and other stuff). The Apple DNA with smart phones, tablets and iTunes is to disrupt existing networks not acquire them.

The GE board is very heavy with high-powered Chairman and CEO’s who look closely at the numbers. NBC Universal was a discard from way back when. No one was trying to reverse the process.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or follow his evil twin brother who is writing a Wall Street Murder thriller at twitter@georgegutowski