Snake(like) Investors

Being in bed following a minor medical procedure yesterday brought me full frontal to the shenanigans playing out on the ‘news’ shows.  Edited clips framed to curry favor depending on the audience is the rule.  No longer can we – the consumer – decide whether a story is right or wrong without blatant editorializing.  As Sammy Davis, Jr. aptly stated in reference to The Huntley–Brinkley Report, “My only contact with reality. Whatever I’m doing, I stop to watch these guys.”  (Life magazine, 1964).  Or as Warren Buffett writes in his recent letter, “… media reports sometimes highlight figures that unnecessarily frighten or encourage many readers or viewers.”

My contact with reality was found in the (probably edited) recitation by our president of the lyrics to a song in his speech to CPAC members.

“Oh shut up, silly woman,” said the reptile with a grin
You knew damn well I was a snake before you took me in
The Snake by Oscar Brown, Jr., 1963

Applause erupted, a pregnant pause ensued, before he mentioned the words “immigration”.  I really thought he was referring to himself for a minute.  But it does provide a decent lead into this weeks’ post.

Snake –1. A scamming backstabber. Someone who does something just to get something out of it.
Urban Dictionary

I generally like to tie my musings  into an investment (rather than political) theme and this one will be no different.  The last couple of weeks have certainly uncovered a few snakes hiding in the grass, particularly with the 13F filings.  I – based a on a looser definition – could very well be one of those snakes too.

Let’s begin with the beloved practitioner of buy and hold investing.  Ol’ Warren previously increased his Apple and decreased his IBM positions stating at the time he preferred consumer over technology holdings.  Perhaps, but I’m thinking more that it’s a  protégé decision.  Then we have the Phillips 66 reduction.  Not mentioned in the annual letter (you could say it was a timing issue) but the reason provided in the press release was regulatory issues.  Yet he’s poised to increase his stake in Pilot Flying J (similar issues).  Perhaps a preference for retail versus downstream operators?  Another curiosity two airlines in his top holdings.  Although Delta is interesting as it bought their own refinery from none other than Phillips 66 in 2012.  At the time, it was reported that JP Morgan was involved as well.  Probably not snakelike, but is there a tangled web that’s being woven?

Most snakelike by far are the antics of Carl Icahn (once again).  First he postures Xerox  (successfully) for a spin (Conduent).  Then he agitates for a sale of the remaining Xerox shell.  When this too is successful, he sells a portion of his holdings.  He then initiates a proxy battle and files suit to block the deal.  You have to wonder where the SEC is hiding on this one.  Did I mention Icahn was a part of the current administration in the early days?

Update 4 Mar 2018 – It has been reported that Icahn sold some of his steel centric holdings recently.  Although telegraphed well in advance by the administration, one has to wonder if a leak occurred regarding timing …

Proving that little guys are equally capable of gamesmanship are my escapades in the Qualcomm saga.  The bruising battle between the two CEOs makes a cage fight look tame.  Sure Broadcom wants to underpay and Qualcomm wants a significant premium.  Taking this fight to the media only produces losers.  Therefore, last week I voted the blue proxy (Broadcom’s) while simultaneously adding to my QCOM stake.  If AVGO is successful at the current offer, I profit.  If the offer is increased, I win even more.  If AVGO walks – at least I reduced my QCOM cost basis.  Yes, I admit it.  Snakelike.

6 thoughts on “Snake(like) Investors

  1. Get well soon!

    Warren has been switching positions as of late!

    I remember about the story he bought silver and sold it when it was 3x, but silver might be now 10-20x … so that taught him to hold position for longer.

    Anyhow, as 10 year t-note hits 3%, maybe we’ll see more people will decrease their position in GE and WMT …. etc dividend sticks for bond.

    I might jump on the QCOM band wagon after I’m done with renovation, paid 2017 taxes, $43k in student loan this year. Now I’m just watching $GE, F, and other stocks that I might have to average down.

    Liked by 1 person

    • Thanks – just a reminder, don’t get old. Anyway, not sure how much credence to give any story regarding WB as I think he enjoys the mythology as much – or more – than the facts. Over the years I’ve seen the logic behind his moves – I don’t think he’s pulling all the strings now. The logic is different.

      You’re right on bonds. I haven’t been in bonds in years and don’t anticipate buying into a rising interest rate environment. My first check point will be when the 10 year exceeds my YoC (which is one of the few things that measurement is good for).

      QCOM – it’s like the inmates are running the asylum right now. The average down was my clincher. GE is on my average down list as well but have been waiting for the other shoe to drop. The sub-prime mortgage issue may be the shoe I was waiting for. 🙂

      Liked by 1 person

  2. Snakelike sounds a little harsh for your QCOM strategy Charlie, but interesting gamesmanship indeed! I’m a far simpler investor in that regard. Patience is one of the great tools the little guys have with investing.

    I must admit I avoid news on TV like the plague these days – and life seems much better for it. A good book is far more enjoyable and productive 🙂

    Liked by 1 person

  3. OK, maybe. But I did have to admit that I was talking out of both sides of my mouth on QCOM. I do acknowledge that it’s nowhere near as perverse as Icahn’s strategy 🙂

    I’m with you on the books. My preference is a long walk to clear my mind! Either is healthier than TV for sure.

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