Omakase

Monday, August 22, 2005

Air traffic - wow!

follow this link to see a graphic representation of a typical day's air traffic. At any time there can be >4,000 planes in the air, and by appearances, they're all coming or going to about 6 spots.

facet24.mov (video/quicktime Object)

Fuzzy Outlook for OSI-Eyetech Merger [Fool.com]

Interesting deal between OSI and Eyetech. The combinatin could theoretically be the world leader in therapies involving (v)EGF signaling, which I think would be lucrative. However, the polluting of the Genentech relationship might be a mistake......unless OSI thinks they can always sell the combination to Genentech or a larger pharma.

The other element that makes this deal interesting is the Eyetech valuation. The deal is at a 43% premium to Eyetech's recent close, AND a 58% DISCOUNT to what Eyetech was trading at the beginning of the year. I haven't run the numbers (yet) but suppose that the market overreacted to the good news of Genentech's Lucentis which now looks supperior to Eyetech's product. (However, Lucentis won't be on the market before 2007.)

The other possible interpretation: Eyetech was scared by Lucentis (the news came out in late May), and rapidly sought a suitor, with OSI being naive enough to strike a deal.

Either way, my OSIP stock has taken a 20% haircut today. I'm not sure what to do now.

Fuzzy Outlook for OSI-Eyetech Merger [Fool.com: Motley Fool Take] August 22, 2005

Sunday, August 21, 2005

Bad business, bad football......

Al Groh is 30-21 in 4 years as coach of UVa, though only 1-8 against our top conference peers (VT, FSU and Miami), yet just snagged a contract on par with the elite college coaches (i.e. those who go to BCS bowls), and a $1M raise. Groh's teams have finished his four seasons ranked in the ESPN Coaches' Poll as follows:

2001: unranked, with no votes for the team in any of the final polls
2002: 25th
2003: unranked, with only 3 votes
2004: 23rd.

I wonder what Groh would have gotten if he had ever had a final top 20 ranking, won the games that matter, and had UVa competitive nationally.

I can't fault Groh for asking to renegotiate his contract, and I'm sure there will be a ripple effect of coaches more successful than Groh asking to renegotiate (such as VT's Beamer, making "only" $1.3M), but this was an absolutely stupid decision by the athletic department.

For starters, I can't see how Groh's boss (es) perceive him as a top tier performer. Groh has pretty well-bamboozled the UVa establishment with his NFL credentials and style, but does it work at the end of the day? (I'm holding back here, as I'm convinced that Groh's "NFL-Style" is close to charlatanism.)

Second, whatever happened to rewarding performance instead of paying for promise?

Thirdly, how can UVa's athletic department support an additional $1M in salary expense? Groh's extra $1M equates to about 50,000 extra tickets sold every year, or almost one whole home game. (I'm assuming $20 profit per ticket.) This suggests that the 12th game on the schedule - to be added next year - will basically be to pay for the coaching staff.

Finally, I'm troubled by the notion that even if the athletic department has an extra $1M lying around, that investing in ongoing athletic department expense is the best thing for the university. I need to do more research, but I believe that the UVa athletic department is pretty much breakeven (even before the massive current expansion in expenses related to the basketball program.)

My impression is that problem is a serious lack of business savvy and discipline among University presidents. Their permissiveness has created a monster in the athletic dept. (AD), which the presidents view only slightly more favorably as a fundraising loss leader, as AD's have burgeoning revenues, but little total contribution to university support. Of course, the University contributes little more than it's name and some admission slots, and gets 5 or 6 fun weekends when little college towns become big league - if only for 6 hours - so who would want to kill the golden goose?

I think UVa (and other prominent universities) should instead demand a permanent return on AD revenues. I'd do this in the form of a 50% royalty to the University on all athletic department revenues. This concept is not unlike the royalties that colleges claim on logowear.

I have a vague recollectiuon that UVa athletic revenues total something like $20M, meaning the university would add $10M in annual support. Besides the support, this idea would not only introduce some fiscal sanity, but also reset on-campus priorities. Sure, UVa in particular would fall out of national athletic prominence, but really, with most universities familiar with prostituting themselves for smaller amounts, what wouldn't the university do for an extra $10M per year?

Friday, August 19, 2005

F.U.T.O! An Open letter to T.O. Terrell Owens

Hilarious open letter from a 12 year old (sort of) to my formerly favorite Eagle, Terrell Owens (T.O.). I hope someone backs up a truck full of 12 million hotdogs onto his front lawn.

F.U.T.O! An Open letter to T.O. Terrell Owens

Saturday, August 13, 2005

btw.....

Something to think on if you're deciding whether or not to buy BAC: my last recommendation (CBH on May 27), is up 27% since I recommended it.

(Honestly, though, I'm surprised at how much it's risen in such a short time.)

Friday, August 12, 2005

BUY: BAC

I promised that I would post my buys and sells, so I'm reporting here that I bought some BAC (Bank of America) at $42.70.

I wouldn't recommend it for everyone, but my buying rationale was as follows:

-the current stock price represents a buying opportunity, as a the MBNA acquisitions announcement and the Fed's increase in interest rates have pushed the stock down ~8% in the last month.

-the decline in price has driven the P/E down to only 10.5 (ttm) and 9.6 (forward.) If this stock gravitates to a 12X p/e in 12 months, the stock will trade at $53 next year, given the $4.43 earnings estimate. That would be a 24% gain, not including dividends.

-PEG ratio is at only 1.05, meaning that you're buying growth at a reasonable price.

-BAC pays a fat dividend (4.22%, equal to .6% after tax - much better than my 2% after tax cash yield.)

-I like Ken Lewis (CEO) and his intent to turn mergers into intended earnings synergies. The consistent pattern of earnings growth seems to prove this.

-I fundamentally believe in their intent to be the first (and probably only, for a while) bank with a nationwide footprint. Account opening stitistics indicate that people are figuring out there's value in having a bank present in both their primary home (say, Boston), and their vacation destination (Florida), and perhaps where they travel on business regular (St. Louis? Carolina? San Francisco?)

-Among competiting retail banks, B of A is close to gaining a lasting scale advantage - they're really separating themselves from the field.

I intend to hold these shares for more than one year. These shares won't double in value any time soon, but if they have just an OK year and provide 10% growth + 4.2% dividend equals a nice, safe annual return.

Thoughts?

One last bit about Macau and Skywalk.....





Here's a view of skywalkers in action. It's not our group, but representative, even down to the weather.

Also, I've got more Skywalk pictures on my personal webpage.

Finally, I've included a few maps to show you where Macau is in the grat big scheme of things.....

Macau Tower adventure





On my 1st full day in Hong Kong, I started off by taking one of the famous double decker trams which terminated in front of the ferry terminal to Macau. Macau, like Hong Kong, is a former European colony at the mouth of the Pearl River in China. It's a 60 minute jetfoil ride from Hong Kong to Macau, which I had planned to do anyway, but since I was in front of the ferry terminal, I decided to do it that day.

I mildly screwed up the ticketing process - assuming that I could get tickets on the next foil close to the departure time, and went to a McDonald's, where I had, of all things, Korean BBQ (which was very tasty.)

I made the jetfoil, because I bought a first class seat (only $4 more, which also included lunch - guh!). The jetfoil, to my disappointment, was a completely enclosed boat (w/ windows.) First class meant a free copy of the South China Morning Post, and I sat back to give it a read, until I spotted an advertisement on the seat tray table in front of me for the Macau Tower.

I had plans to see other sights in Macau, but I rapidly pushed them aside and made a beeline to the Tower as soon as we made land. (I took the bus from the Ferry terminal, though, so my beeline wasn't as rapid as desired!)

The Tower, which serves no commercial purpose (no offices, no communications equipment) runs a series of extreme adventure activities. I chose the Skywalk X - a walk around the outside of the Tower @ 233 meters (~725 feet) above the city, on a 5ft. wide walkway. (With winds blowing at altitude too.)

It dawned on me, as I was taking my first steps onto the walkway, that all of the other customers were smallish local folks who probably weighed 100 pounds less than me. This really got me thinking, as I could feel the metal walkway flex with each step.

While slightly scary, the Skywalk was exhilarating, with amazing views of Macau, China, and the Pearl River on a clear day, as you can see from these pictures.

(A little picture info: Macau is all of the area inside the mountains, a fully developed city. So developed in fact, that the land the Tower stood on was only recently engineered (reclaimed) in the late 90's.

We had an excellent tour guide who took these pictures. While in many of the pictures I stretched out off the Tower, the tour guide routinely clung on by his toes to get some great pictures.

Skywalk X was definitely one of the highlights of my trip.

The total adventure cost $190. Luckily, that's 190 Macau patacas, at roughly 8 to $1USD, making the total cost about $24.

Macau Tower


I'll be posting more about my trip through Asia just as soon as my pcitures arrive, but in the meantime, here's a little about one memorable activity: walking around the outside of the Macau Tower, ~800 feet off the ground!

With my new friends on the Great Wall of China

With my new friends on the Great Wall of China
Click to go to my online photography

World sun clock

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Uncommon Man's Creed

"I do not choose to be a common man. It is my right to be uncommon -- if I can. I seek opportunity -- not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me. I wish to take the calculated risk; to dream and to build, to fail and to succeed. I refuse to barter incentive for a dole, I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to the stale calm of utopia. I will not trade freedom for beneficence, nor my dignity for a handout. I will never cower before any master, nor bend to any threat. It is my heritage to stand erect, proud, and unafraid, to think and act for myself, to enjoy the benefit of my creations, and to face the world boldly and say, "this I have done." All this is what it means to be an American." -- Anonymous