Can you believe ITIC reports 1st quarter 2003 earnings of $1 a share and the stock price does nothing on very low volume while Amazon.com reports another loss and makes new highs above $28 on huge volume? There is only one conclusion that any sane person can make-investors are absolutely nuts! The financial I.Q. of the average investor, including the professionals, is less than 0.
ClackClack: Today I am writing from the Kingman, Arizona library. I am driving cross country from California to Omaha, Nebraska where I will attend Berkshire Hathaway's annual meeting, otherwise known as the Woodstock for capitalists. Driving on route forty outside of Kingman, I spied an exit for Clack Canyon Road. Is that where you live?
I'll write again in about a week to see if you are going to be on the Forbes list of the 400 richest American's for this year.
Amazon has been behaving strangely. I don't short stocks, but if I did, I'd short Amazon. It is going to take a hit at some point. Market has been bullish in a number of areas lately. I think Amazon is lucking out on that -at some point the market will start to distinguish a little better.
ClackClack: Some guys have all the luck. I don't know how well you do in your other stock picks, but when it comes to apparel companies, you appear to have the magic touch. I have continued to track OXM but it never went down enough for me to want to buy it-to my current regret. I figure you may want to send me a finders fee or other token amount for the referral but you would probably prefer to repay me in "soft dollars" perhaps by telling me another stock you like.
Seriously, I understand that Tommy Bahama's parent company, Viewpoint International was a private concern and therefore you don't have access to its financial statements. My experience with acquisitions is that the biggest risk is that the buyer simply pays way too much. After this acquisition is completed and Oxford issues its next finincial statement I would look at the balance sheet and see how much "accounting goodwill" was recorded and then try to determine if the expected increase in earnings justifies that figure. Large amounts of goodwill and small increases in earnings usually result in later extra-ordinary charges.
Finally, I am struck at how quickly Wall Street decides that an acquisition is going to be successful. They aren't going to wait for proof. I remember a short while back when J. M. Smucker Co. bought Proctor and Gambles' Crisco and peanut butter businesses
. If I remember correctly, the stock very quickly went from somewhere around $20 to the low $40's. It now trades in the mid $30' and they have about $500,000,000 goodwill on their balance sheet.
I have continued to buy ITIC as high as $22.06 last week. The price hasn't moved up much yet but the earnings have not been reported in Investors Business Daily, The Wall Street Journal or Value Line. IBD and/or VL has to raise their ratings on the stock so that the mindless people who don't know what they are doing will buy it or it may not do much. I am also doing pretty well in NPK and have posted many messages on its board if you can't get enough of my voluminous messages.
Good luck to you and let me know when you decide to buy another apparel company. I will buy it sight unseen.