Nasdaq Goes Full Circle

Well, six weeks of advances on the Nasdaq are now followed by five-and-a-half weeks of declines. The result: The Nasdaq Composite index is almost exactly back to where it was at the start of the year.

Tale of Three Bubbles

Good “Where are they now?” story in today’s Wall Street Journal about the stockmarket bubble of the late 1990s. Here is an interesting chart from it comparing the Dow crash of 1928, the Nikkei correction beginning in 1987, and the ongoing Nasdaq’s travels:

Biovail: To Investigate, or Not to Investigate?

It is never reassuring when a company gets caught in a counterfactual statement. Case in point: Biovail.

Word was going around last week the Canadian drug-maker was being investigated by the Ontario Securities Commission (OSC). A company spokesperson dutifully came out and told people the OSC was not probing the company.

Well, later the same day the OSC contradicted that statement, saying that it was investigating Biovail. It said it was having a look at “suspicious trading activity”, plus it was reviewing company disclosure records.

Perhaps unsurprisingly, the Biovail spokesperson could not be reached for comment. It must have been too hard to reach their cell phone while tied to the rails of that train track.

Michael Eisner on Larry King

Fascinating and somewhat bizarre interview with Disney Chairman Michael Eisner on Larry King last night. The consummate corporate politician, Eisner consistently rapped Larry King’s (and callers’) softball questions out into left field for easy base hits.

For example, he got away with saying that the reason the Disney board rejected the Comcast deal was because the bid was too low:

“They were … over $3 less than the current market price of the company, which means, as opposed to being a premium, it was the opposite.”

As Eisner well knows, Comcast’s bid was under the Disney share price only because Disney’s shares stormed upward after Comcast made its offer. When the bid was announced it was at a (small) premium to Disney’s price, not a discount. The only reason Disney’s price went higher than Comcast’s original offer was because people speculated that Comcast would likely bid again, or a new bidder would appear.

Ranking the Universities

Is it possible to meaningfully rank universities across countries, with no regard for individual departments? Some researchers at Shanghai Jiao Tong University have tried, and the results are here.

How Win Friends & Influence Board Members

Conrad Black’s Hollinger vs Hollinger case is underway in Delaware, and it is predictably juicy. The gist of the three-day trial in Delaware’s Chancery Court is that Hollinger International (not Black) is trying to block the sale of Hollinger Inc. (Black-controlled) to the Barclay Brothers of Britain.

Hollinger International board members have taken heat for their “flexible” history with respect to Conrad’s prior edicts. According to testimony from former SEC chair Richard Breeden today, Black had ways of making people agree:

“I’ve heard [Black] start several meetings by saying he’d sue every individual member of the board of they didn’t go along with what he wanted.”

Not only that, he apparently made faces at board members and taunted them mercilessly:

One conversation “began with Mr. Black glaring at us … He said he’d fix their wagon good, [although] those weren’t his exact words.”

Darth Vader, Disclosures, and Chapman Capital

I’m a tireless reader of corrections in the financial press and so I thought I had seen it all. But this correction from today’s WSJ concerning a recent Money & Investing story is a classic:

Corrections & Amplifications

Chapman Capital LLC didn’t state in a 13D filed with the Securities and Exchange Commission that it had earned $1.4 million from trading in Footstar stock. The $1.4 million estimate in a Jan. 28 Money & Investing article actually was taken from an article on and should have been attributed properly. Chapman Capital hasn’t specified the correct number.

The offices of Robert Chapman, head of the firm, aren’t decorated with sharks teeth and he doesn’t liken himself to the fictional characters Darth Vader and the Terminator, as incorrectly stated in the Jan. 28 article.

The article incorrectly attributed certain comments to a representative of the firm who had been identified as Robert Lewis; after publication, Mr. Chapman said he had made those comments himself.

Warren Buffett’s Sweet Tooth

What is really going on with Warren Buffett and Cadbury-Schweppes? First, on Tuesday, Buffett’s Berkshire-Hathaway told the SEC that as of December 31st, 2003, it controlled $73.3-million in Cadbury-Schweppes ADRs (American Depository Receipts).

Then, two days later, Buffett’s filed with the SEC to say that it didn’t actually hold said ADRs. Instead, it held Cadbury-Schweppes shares (say that ten times fast) that it had purchased on the London exchange. In other words, it didn’t have to disclose the holding to the SEC, but it had made a mistake (it seems) and did so anyways.

Now, however, we have another 13F-HR filing from the increasingly prolific Berkshire. The Cadbury-Schweppes holding has been excised, but there is a new disclaimer saying that a disclaimer was missing in the last filing:

“This amendment is being filed to add a statement which was inadvertently omitted from the original filing made on February 17, 2004. The statement which is on the 13F summary page is as follows: ‘Confidential Information has been omitted from the public form 13F and filed separately with the commission.'”

In other words, Berkshire hasn’t disclosed some positions that it actually holds. While Berkshire is an aggressive pursuer of such allowances from the SEC — it likes to claim that disclosing all its positions would put it at a competitive disadvantage — this one is baffling. Because if it means that Cadbury-Schweppes is the thing not being disclosed, then it’s too late — Berkshire already accidentally filed about the holding.

I’m not the only one confused. I see that Fortune columnist Andy Serwer has gotten all muddled about the difference between Lou Simpson, who runs the public-market money at Berkshire, and Berkshire itself:

As for “Buffett’s” purchase of some Cadbury Schweppes stock, my understanding is that was Lou Simpson, not Buffett.

Note to Andy: It is, of course, Simpson who owns the Cadbury stock, but Simpson is still part of Berkshire so the holding gets disclosed in the latter firm’s quarterly 13F. Mind you, it’s all secret so we don’t actually know any of this. I think.

Nature’s RSS Feed

Somewhat off-topic, because I don’t do much science here or much straight-up pointer stuff, but Nature now has an RSS feed. Indulge your inner scientist here.

Google as Research Junk Food

Funny that this piece on Google’s dumbing-down of research has come out when it has. I just went through a similar exercise, one where I weaned myself off the knee-jerk reflex of immediately going to Google every time I want to look up some financial markets papers. It’s a bad habit, and it leads to cluttered thinking.

This quote from the piece was particularly appropriate concerning students’ attitudes toward university research:

“Oh, our campus has a library? I didn’t know that, but now that you mention it, why would I go there?”