Shazam! From the Boss to the King to How John & Paul & George & Ringo Desegregated the Gator Bowl in 1964


2017 Editor’s Note:
“I still remember that moment the first time Ringo played with us, ‘BANG!’ he kicks in, it was an ‘Oh my God’ moment.  I remember we’re all looking at each other, like ‘Yeah this is it!’  Phew, I’m gettin’ very emotional…”—Paul McCartney in ‘The Beatles: Eight Days a Week—The Touring Years.’
There is, or was, back in the day, an argument among amateur drummers that went like this:
“Ringo sucked!”
“Are you kidding?  Ringo was great!”
The drummers who dismissed Ringo were, by our experience, younger, jazz-oriented drummers who were technically brilliant and could not fathom why such a technically-limited drummer like Ringo had become rich and famous while they were stuck playing “I Can’t Help Falling in Love with You” at weddings to pay the rent.  They honestly didn’t get it.

The Gig Short

            A friend of mine did something recently that he’d never done before: he used Lyft instead of Uber on a business trip.
            He did this because he needed a ride, and the Lyft driver was going to get to him faster than Uber.  While he had never actually used Lyft before, he had downloaded the app and figured why not?  After all, the Ubers that he (and everyone else we know) has ridden lately have been not-much-better than a cab, which is quite a come-down from the early days of Uber, when the driver had a bottle of water ready for you and the car smelled like a car, instead of a dorm room, and the worst you could say was that the drivers were too reliant on Waze to get around.
In brief, Uber has become what the haters always sniffed:
Continue reading "The Gig Short"

Chipotle (pronounced chi-POAT-lay): “It’s Not Me, It’s You”

Chipotle (pronounced chi-POAT-lay) reports second quarter earnings this week, and far more interesting than the earnings themselves—quarterly reports are, after all, backward-looking—will be whatever management chooses to divulge about the impact of last week’s norovirus outbreak at the Sterling, Virginia Chipotle (pronounced chi-POAT-lay), not to mention the mouse video taken at a Dallas Chipotle (pronounced chi-POAT-lay) that went viral at about the same time as the Sterling headlines were peaking.
We’ll dispense with the pronunciation of Chipotle (pronounced chi-POAT-lay) from now on—we only included it because the company does so on its Investor Relations web site, apparently on the presumption that potential investors in CMG stock are morons who don’t know how to pronounce that word.  That presumption stems, we think, from the world view of Steve Ells, the self-described “classically-trained chef” who created the first Chipotle, saw its potential and, to his everlasting credit, ran with it, and
Continue reading "Chipotle (pronounced chi-POAT-lay): “It’s Not Me, It’s You”"

Watson Takes Wimbledon

The Wimbledon tennis tournament, which starts Monday, will use IBM's artificial intelligence agent Watson to help direct fans to the most exciting matches, automatically generate video highlight reels and guide guests through the grounds of the All England Lawn Tennis Club.
A voice-activated digital assistant called "Fred," named after British tennis great Fred Perry, will help those attending Wimbledon find their way around. Visitors can ask Fred for directions to the nearest strawberry stand, how to buy a Wimbledon towel or who is playing right now on Centre Court. Fred will also help visitors find other activities -- such as the children's play area -- they might want to check out while at the Club. The assistant is powered by Watson's natural language processing ability.
—Bloomberg, June 17

“Fred!  What’s the weather going to be like tomorrow afternoon?”
“Greetings!  Fred is a British interface to IBM’s massively Continue reading "Watson Takes Wimbledon"

If Donald Trump Ran a Publicly Traded Restaurant Chain The CEO Might Sound Like This

  You’d be forgiven if, after hearing the CEO of Chipotle describe its first ShopHouse Asian Kitchen restaurant concept that was opened in DuPont Circle a few years ago, you agreed with the cohort of Wall Street’s finest that declared ShopHouse might become the next leg of growth for the then-plenty-fast-growing-already purveyor of burritos and tacos “With Integrity.”
  You’d be forgiven because the CEO of Chipotle repeatedly—and by that, we mean more than a dozen times over the next few years—promoted the concept and often compared that first ShopHouse restaurant with the early days of Chipotle itself.
   In fact, so forcefully and frequently did the CEO push the ShopHouse-as-the-Next-Chipotle theme over the years, the more cynical among our readers would be forgiven for reading the following time-line of quotes from the Chipotle CEO and asking themselves, “Wait a minute, does Donald Trump run Chipotle on the side? Continue reading "If Donald Trump Ran a Publicly Traded Restaurant Chain The CEO Might Sound Like This"

Shazam! From The Boss to The King to John & Paul (but not George or Ringo), Not to Mention Jessica & Nick

2016 Editor’s Note:
  The switch to all-holiday music has started, and while we have not heard much new, it has, so far, been mercifully light on the Michael Bublé and wonderfully heavy on the Chrissie Hynde and Bing Crosby, although with no sign of The Boss, yet.
  Our beef this year is not with the current roll of holiday songs, or with any of the rock biographies weve been reading (Dee-Dee Ramone“Lobotomy: Surviving the Ramones, is even more hair-raising than Chrissie Hyndes book that we called out last year, and that takes some doing); our beef is with the SongFacts web site, which, as readers of this virtual column might imagine, ranks right up there with Bloomberg, FactSet and the Wall Street Journal as tools of our trade.
  Specifically, how does SongFacts not know that at 4 minutes 51 seconds Continue reading "Shazam! From The Boss to The King to John & Paul (but not George or Ringo), Not to Mention Jessica & Nick"

Shazam! From The Boss to The King to John & Paul (but not George or Ringo), Not to Mention Jessica & Nick

2016 Editor’s Note:
  The switch to all-holiday music has started, and while we have not heard much new, it has, so far, been mercifully light on the Michael Bublé and heavy on the Chrissie Hynde and Bing Crosby, although with no sign of The Boss, yet.
  Our beef this year is not with the current roll of holiday songs, or with any of the rock biographies weve been reading (Dee-Dee Ramone“Lobotomy: Surviving of the Ramones, is even more hair-raising than Chrissie Hyndes book that we called out last year, and that takes some doing); our beef is with the SongFacts web site, which, as readers of this virtual column might imagine, ranks right up there with Bloomberg, FactSet and the Wall Street Journal as tools of our trade.
  Specifically, how does SongFacts not know that at 4 minutes 51 seconds Continue reading "Shazam! From The Boss to The King to John & Paul (but not George or Ringo), Not to Mention Jessica & Nick"

So Is Chipotle “Buzz-worthy” or “Meh”? The Texas Alcoholic Beverage Commission Says “Meh.”

 Chipotle reports next week and we’ll finally get to see how the company’s “buzz-worthy” (their word, not ours) marketing efforts (like the online game “Friend or Faux,” the “Chiptopia” rewards program, and the online animated movie “A Love Story”) have been working to bring customers back after last year’s food-borne illness outbreaks linked to various Chipotle restaurants caused comp-store sales to tank, spurred a CDC investigation and forced the self-styled “Food with Integrity” chain to spend a lot of money upgrading the integrity of its food-handling procedures.
 Wall Street, for the most part, seems convinced the storm will blow over—if a 100-times next-year EPS multiple is any indication.
 Large shareholders have commissioned reports on the company’s turnaround efforts, interviewing food safety experts and “industry veterans” on the “timeline for Chipotle’s recovery,” as one wrote, and the consensus seems to be management will eventually convince the American public that
Continue reading "So Is Chipotle “Buzz-worthy” or “Meh”? The Texas Alcoholic Beverage Commission Says “Meh.”"

Well That Was a Shack-ingly Brief Run

  In the world of Shake-Shack, everything is about “The Shack.”  
 Where most restaurants report “same-store sales” and “store-level operating margins” and “store economics,” SHAK reports “same-shack” sales and “shack-level operating margins” and “shack-onomics.”
 It’s a cute, quirky culture the company has built from modest roots—the now-famous hot-dog stand in Madison Square Park—into an international phenomenon, in 12 short years.
 Of course, 12 years in today’s world is actually a long time, but things didn’t get serious until 2004 when the first Shake Shack restaurant opened, starting the launching pad that would shoot the rocket ship into orbit following the wildly hyped IPO just 16 months ago to the point where, by the end of the first quarter, there would be 88 such “Shacks,” with an inordinately large number—36 to be exact—licensed to other operators outside the U.S., mainly in the Middle Continue reading "Well That Was a Shack-ingly Brief Run"

When Analysts Surrender

 It’s bad enough when analysts thank CEOs for letting them ask a question on an company earnings call, at least when they do it in a way that goes beyond a simple act of politeness and more towards a cringe-making act of fawning, which too many analysts have a way of doing these days.
 This is, after all, a business: it’s an analyst’s job to ask questions; it’s a CEO’s job to answer them.   Get on with it.
 What’s worse, however—much worse—is when an analyst who asks a good question gets schmoozed by the CEO, and instead of following up and getting an answer, surrenders.
 It happened tonight on the Apple call.
 After thanking the company for “fitting me in” (really?) the analyst asked Tim Cook—all quotes are from the indispensable Seeking Alpha—a very reasonable question about the “top two or three things” Continue reading "When Analysts Surrender"

Berkshire Hathaway: Bad Deals All Over


 In case you thought Berkshire Hathaway was involved in only one bad deal—the $36 billion all-cash takeover of cyclical, airline-supplying Precision Castparts for 20-times what may (or may not) turn out to be peak-cycle earnings—well, there’s another deal Berkshire is involved in, indirectly, that is not looking great for the acquiring company and its shareholders: M&T Bank’s $5.4 billion all-stock acquisition of Hudson City Bancorp.
 Berkshire Hathaway has owned shares of M&T for years, maybe decades, and for good reason: run by down-to-earth Bob Wilmers, whose annual shareholder letter is required reading for anyone in this business, M&T is one of the few banks with $50 billion or more in assets that made it through the financial crisis without losing a dime, or needing a bailout, or both, thanks entirely due to the sober culture of the place.
 And while your editor owns M&T shares for exactly Continue reading "Berkshire Hathaway: Bad Deals All Over"

Fact-Checking William D. Cohan; Or, Paul Is Not Dead

 TV personality, author and commentator William D. Cohan is grumpy about a lot of things.
 There’s the Duke lacrosse scandal, for one, about which he’s just publish a “shocking, thought-provoking new book”—according to the description on his own web page.
 And for another there’s Wall Street, from whence he came, and about which he’s written plenty of grumpy, conspiracy-minded books.
 Hence it’s no surprise to find Cohan invited to speak at the Sun Valley Writer’s Conference, whose attendees tend to be wealthy, Wall Street-leery arts supporters from L.A.
 It’s even less surprising that one of the talks he gave to those same attendees was entitled “Who Has the Real Power Now on Wall Street?”—actually, less of a talk and more of a very grumpy, very conspiratorial dish about what he perceives to be the current state of Wall Street—and that the audience was
Continue reading "Fact-Checking William D. Cohan; Or, Paul Is Not Dead"

Sgt. Pepper! Joe Cocker! Jimmy Page! Oh, and Warren and Charlie…

                  The best part of this year’s Berkshire meeting—except seeing Charlie Munger in good form, which we’ll get to in a bit—was the movie.
            Not the movie itself, but the end of the movie, when the sing-along tribute to Berkshire’s managers, which always used to be set to the tune of “My Favorite Things,” turned out to use “Sgt. Pepper” instead.
            That’s some good taste there.
    But, actually, the best part of the Beatles-themed piece of the movie came as it died out and, miraculously, the “Sgt. Pepper Reprise”—the best two minutes of The Beatles ever recorded, in your editor’s opinion—began to play during the credits.  
   (Yes, we know—Dear Prudence…Across the Universe…Revolution…Oh! Darling…Something…Everybody’s Got Something To Hide…The End—are up there, but it all depends on what mood you’re in, right?   And the mood we were in Continue reading "Sgt. Pepper! Joe Cocker! Jimmy Page! Oh, and Warren and Charlie…"

Messi Announces Retirement, Reporter Asks About Half-Time Score

 Tom Prescott announced his retirement last night.   You may not have heard of him, but as CEO of Align Technologies (the inventors of Invisalign “invisible braces”) Prescott helped turn a $70 million revenue company with 35% gross margins, negative operating margins and a $127 million market value into a near-$800 million revenue company with near-80% gross margins and 25% operating margins.
 Oh, yeah, and a $4.5 billion market value, last we checked.
 More than that, Tom Prescott helped Invisalign develop from a niche product not much liked by the orthodontists who were supposed to use it (it’s far more expensive to them than the old-fashioned wires and brackets, plus, in the early days, before Prescott, the Invisalign treatment was far more limited in what it could do, teeth-moving-around-wise) into a near-standard of care in orthodontics around the world.
 And he did it the old-fashioned way: by spending on R&D to improve the product (a quarter billion in the last six years alone), marketing like crazy, and proselytizing every chance he had.
 Along the way, Prescott had to contend with a near-fatal copycat product (fought and won in courts of law), short-selling attacks (fought and won the best way possible: just running the business well) and big-company patent suits (smartly settled).
 If there ever exists a CEO Hall of Fame, Tom Prescott should get in on the first ballot.
 Thus it was quite a surprise to see the headline come across the tape after last night’s close that he would retire in June, with an outside-the-company successor to take his place.  No mention of such plans had ever passed his lips to anyone outside Align, and being the ripe young age of 59, nobody had ever bothered to ask him.
 Nevertheless, as the ensuing conference call made clear, the decision was voluntary, had been in the works for a year and a half, and had produced a successor who looks eminently worthy of filling some big shoes.
 Now you would think the first question on the call would be about the decision itself, with perhaps a follow-up on the successor and whatever plans he might have for the company.   
 But you would be wrong.  
 The first question was about what it’s always about for some of Wall Street’s Finest...near-term earnings:
 “Thanks.   Good afternoon.  Tom or David [White, the CFO], could you just elaborate on sort of the preliminary 1Q outlook in terms of revenues and EPS…?”
 It was as if Leo Messi suddenly announced his retirement from Barcelona during half-time, and the first question out of the reporters’ mouths was about who’s going to win the match.
 You could almost hear Prescott and his team restraining their incredulity, but, class acts that they are, restrain they did.
 Still, if there ever exists a Hall of Fame of Silly Analyst Questions, that one will get in on the first ballot.



Jeff Matthews