April 28, 2009

Great companies (and great investments) are bigger than their founders, bigger than their current CEO's, and larger than any one person. A truly great company will survive and flourish even with the departure of its founder or with the departure of a high profile CEO. The concerns over Warren Buffett and his legacy I believe are over blown. Berkshire appears to have the culture and the solid business foundations, particularly with the different businesses managed by individual former owners, to do well in the future. Microsoft will endure with or without the full commitment of Bill Gates. Who remembers all of the CEO's that have passed through Coke? Here is some food for thought. Company management is important, especially when they are aligned completely with increasing shareholder value. Narcissistic leaders like Donald Trump, Jack Welch, and Sandy Weil eventually leave a trail of pain. The companies that we want to own should have strong leadership but even a stronger business belief and business culture.

Diamonds and Dogs

Monday, April 27th, 2009
Diamonds
A blast from the past as Whirlpool rose $2.96 to close the day at $43.69. Earnings that were better than expected pushed this venerable household appliance company higher. The stock has now risen over 100% off the March lows.

Dogs
A pig in Mexico blows his nose and the hog producers catch the flu. With the swine flu from Mexico becoming more and more concerning to the US, pig producers fell hard. Smithfield Foods (SFD) fell 12% to $9.04 as all meat stocks got slaughtered. Look for a bounce as the flu does not travel through food.