Thursday, December 03, 2009

Visiting St. Bart's

By Vahan Janjigian - We took two days day off from our seminars to enjoy the cruise. We also got off the ship at a couple of ports. I went on a five-mile hike today in St. Bart’s. Nonetheless, I also managed to hold a number of impromptu discussions with several attendees about the economy and markets. Most of these people are retired and have a high net worth. Many are sophisticated investors. Yet I have not spoken with anyone who I would call bullish. They are all cautious about the economy and extremely skeptical about the strength of the recent rally in stocks. They are also worried that the government’s efforts to revive the economy will ultimately fail, especially since there is so much talk about increasing both taxes and spending.

I was thrilled to meet Ed Breen, CEO of Tyco International (pictured above left). Ed and I had an interesting discussion about the interaction between equity research analysts and corporate managements. We agreed that since the SEC promulgated Reg FD, there is little value to one-on-one meetings between these two parties. Corporations are disclosing a lot more information these days in their SEC filings. I personally find that my research is much more objective if I do not meet the management team. Unlike Warren Buffett, I am not trying to marry good companies. I am just trying to buy good stocks. Nonetheless, I am glad I had the opportunity to meet Ed personally. He is doing an excellent job of bringing Tyco back from the disgrace it suffered several years ago.

Also pictured above (right) is Barry Ritholtz. He always manages to provide an original point of view on the markets. One of my friends went to law school with Barry some years ago. She claims he was one of the smartest students in the class. I can believe it.