Whenever you see a deal like Mallinckrodt buying Questcor, you have to ask: Is this a case of smart seller, dumb buyer? I've done zero work on Questcor, but over the past few years I've talked to a few very serious short-sellers who have. When I saw the news this morning, the first thing that crossed my mind: Mattel buying The Learning Company....Hewlett Packard buying Autonomy...Medtronic buying Arterial Vascular Engineering. All three of the targets were the focus of short-sellers, and all three famously blew up, or otherwise caused havoc, once inside the new parent -- for the very reason the short-sellers had been short. Mattel was perhaps the most wounded, and almost taken down by what it found once it owned The Learning Company. No idea if that will happen here, but a quick peek at Mallinckrodt's history sure is a twisted tale....
While I still urge caution on the company, I am changing my flag on the name to yellow from red.
Nobody's always right when it comes to stocks.I've learned that the hard way more than a few times in decades of reporting, researching and writing about companies. Even the smartest -- yes, that includes Warren Buffett -- sometimes get it wrong.In the end, when I mess up, I fess up -- and I always do a personal post-mortem. It's humbling, but it helps and often comes in handy as a reference point, and hopefully a lesson learned.If there's any theme, it's this: The worst mistakes often come from being too smart for your own good, especially when putting too much trust in your experience, perspective and instincts. It's important to trust your instincts, and I think mine are very good when supported by what I believe to be solid research -- and often just common sense. But every now and then, they steer me wrong. (Moral: Trust, but verify -- and verify, again!)These are a few of my biggest blunders, which also turned into big stocks.
I have a confession: I'm all for shareholder rights, and generally side with the corporate governance crowd on almost everything. But when it comes to two or even the three classes of shares -- the latter being the route Google has just gone -- I just don't get exorcised. Class A and B shares are a growing trend, especially in Silicon Valley. Insiders tend to have the voting shares; everybody else (you and me) don't. By going so far as to create Class C shares, Google's not-so-subtle main goal is to ensure that founders Sergey Brin and Larry Page retain majority control. The downside of the A-B structure, of course, is that it can protect complacent management. I abhor management being run for the sake of protecting management. Shame on them! That's why, in general, I'm a fan of activists. But I equally abhor the rise of overzealous activists who swoop in, seeking some kind of short-term financial engineering to get a short-term pop in the stock, because they see an easy mark.
What you may have missed, including takes on Micron, SolarCity, Zagg, Fastenal, Family Dollar, Sysco and Nu Skin from the past week or so. When Micron reports earnings Thursday, expect a lot of focus on pricing in dynamic random-access memory (DRAM). In a piece on Reality Check headlined, Is Micron headed for a Tumble?, the issue in focus was whether DRAM capacity is quietly increasing -- and, if so, whether prices could start to slide. The battle lines, involving some very smart people, have been drawn: Bulls think prices could show surprising resilience, and bears don't. But, as I wrote, the answer isn't likely to come with this quarter's earnings. This is something that, if you believe the bears, is currently evolving. The bigger question is whether there is a new world order in memory.....
Intuitive Surgical's newest robot is giving investors something more to cheer about.
What you may have missed, including takes on Micron, SolarCity, Zagg, Fastenal, Family Dollar, Sysco and Nu Skin.
Before your eyes roll -- if you do nothing else, scan down to the bold-faced part of this story, and start reading from that point on. If you have a few minutes more: Last week's SEC suit against L&L Energy CEO Dickson Lee on fraud charges didn't make the headlines. Nor did the news that he landed in a Federal prison in Seattle, waiting for an arraignment Tuesday, as the Feds seek criminal charges against him on the same securities charges. My only question, even though these are just charges: What took 'em so long?
Prices are falling as industry capacity is rising.
Due to the company's admitted complexity, I am adding the stock to my Watch List with a yellow flag.