Much Muffti-Puffti On The Big Board

One recent day, in its opening hour, Tesla traded down 20 points on 50 million shares. Players long Tesla know their road is rocky, filled with potholes,  but such volatility can be unnerving. 

If Trump can rise from a gaming casino operator to the Presidency, why can’t Elon Musk do likewise? All this reminds me of when the 27-year-old Saul Steinberg decided to go after Chemical Bank New York. He was told by the big bankers, “no dice.”

Nobody would lend Saul a dime for his deal. He withdrew his bid and shrank back home to his new digs, a previously owned Rockefeller apartment on Park Avenue (13 rooms).

Grandiosity often becomes a coat filled with thorns. We were sitting around Saul’s living room, wallowing in ice cream, eaten straight out of the container. Saul’s wife, Lara,  was warning him that if he ever cheated on her she’d find out and cut out the eyes in all the classical portraits by old masters that covered the walls of their living room. Saul winced because he knew Lara for a tough cookie. She meant every word. 

Maybe pints of chocolate ice cream got Saul’s number. He died much too young.  From Saul, I learned how not to get stuck in grandiose situations. I ended up buying his block of the New York Times after he learned he couldn’t break the Sulzberger’s control of their B stock which held most of the voting power. 

I remained a silent but rewarded shareholder. The stock then was too cheap because nobody held the family in high regard. They were good newspapermen, but mediocre businessmen. 

Warren Buffett held a huge position in the Times Mirror, as an investment. It was very successful and Buffett would liken them to a powerful Franchise that held the keys to the gates through which everyone bought recognition with page advertising. 

This too, was a grandiose conclusion because advertising demand proved viciously cyclical in economic downturns. Berkshire eliminated its Times Mirror holding. 

Meanwhile, the Sulzbergers haven’t budged on the issue of buying out minority shareholders. NYT presently is a pricey stock selling at the top of its 12-month trading range. Years ago, the stock sold at half its current price. 

Passive shareholders should avoid special situation stocks and concentrate on properties that aren’t too tricky. You want to own a growth stock that compounds 2%, monthly, like Xerox did 60 years ago. Everyone could understand its franchise and put a growth rate on operations.

When  looking at a 5-year chart on Microsoft, you see marked appreciation from 150 to over 500, but there are serious down drafts, too. In 2022, we saw a decline from $350 to $250. Don’t ask me why.  Can’t remember. MSFT’s annual report is clearly laid out, easily readable. You can’t say the same for many other tech house reports in execution. 

Who makes the Caddy? If you know who, GM, you’re on your way to a knowledge base. But, the thickest files don’t always make you rich. I’ve filled waste baskets with failures. 

One of my relics is Macy's. I'm betting on a comeback in retailing, but it's not written in stone. Let’s hope the Macy Day parade stays in place for our grandchildren to watch. I own this ragamuffin but I’ll need a strong retailing environment for a pay-off. 

Now is not the time for luxuries, but I’ve got one here and it bounces around hurtfully.