End of Month Review

It has been a week since I last posted, for which I apologize. I want to cover a few topics with this post, which is technically a violation of the rules of good blogging, but it just doesn’t make sense to have a bunch of really short posts.

First, I would like to thank all of you who have been visiting. March 2008 is, by my standards, the most successful month in the history of this blog. Daily traffic has been rising along with inbound links and this blog now ranks in the upper half of finance blogs in TopBlogSites, an improvement of about 100 positions inside of a month. Even more satisfying to me, the frequency of comments has increased as well. My goal is continously to improve the quality and value of the content here. More on how I plan to do this in a following post.

Second, I want to criticize a few points in my most recent Bear Stearns post. Given the willingness of JPM to quintuple its bid to $10 per share, one can only conclude that, indeed, the $2 bid was too low. If I were being obstinate, I might argue that the need to increase the bid so dramatically was the result of a negotiating mistake. JPM agreed to guarantee the debt of Bear (beyond the guarantees of the Fed) without being certain that they would consummate the deal. Thus, JPM apparently faced the possibility of guaranteeing the debt while Bear was free to find other suitors. The new arrangement involves issuance of new equity to JPM, which means that it gets to vote on its own deal – just wait until the lawyers get a hold of this one. Still, there was clearly enough “margin of safety” in the deal to add $8 per share, about $900 million based on 113 million shares outstanding. So I was wrong.

Third, the results of our first poll are in. The question was who was most likely to succeed Warren Buffett as the chief investment manager of Berkshire Hathaway, since increasingly this seems to be the focus of the Board. Several candidates were proposed, all of whom have money management experience. It’s a tie. There were only two votes, one for Eddie Lampert and one for J Christopher Flowers. Since it’s a tie, I guess I will have to break it. I think they are both candidates, but Lampert’s investing style and breadth of investment focus better suit Berkshire’s portfolio. Flowers, a brilliant investor, is too focused on the financial sector. His focus is what makes him successful. He might be an ideal manager of the insurance business, but Berkshire already has that talent available in house. I vote for Lampert.

Finally, I want to discuss my posting schedule. It is my objective to publish something every day the markets are open, but it is difficult to do meaningful analytical writing at that pace. For the month of April, I will endeavor to publish four days of the week - Monday through Thursday, though some weekend posting is also likely.

Again, thanks for reading and responding, it makes this blog much, much better