WestyInvesty

Should Meg Whitman Go? Blodget thinks "maybe" by Nate Westheimer

I'm a sucker for good headlines, so when I read "Meg Whitman Should Go" in the subject of my email inbox this morning (yes, I receive news in more than just my RSS reader -- read about it here), I could do no less than make the Alley Insider article the first thing I read this morning. What makes his post especially interesting, is that Henry is speaking from a shareholder's perspective (he's long eBay and has been for some time, apparently). Blodget's stance is that eBay has had a long time to make itself (in the public eye) more than an auction-oriented retail outlet, and that in the process of trying to do just that, Whitman has failed.

I agree with him that there's a lot of wasted potential at eBay. I used to think it was one of the sexiest stocks around. During my first summer in college, I worked for portfolio manager in Cincinnati, getting a great hands-on experience with stocks on a fundamental level (we weren't traders).

It was then that I actually fell in love with Internet-based businesses -- and especially eBay -- for the simple model that they had (build software, pay incrementally for software to "work," and earn exponentially when the software and business work together). It was amazing to me that each time a new auction went up on eBay they would collect their three bucks and their costs wouldn't be effected at all.

Talk about utility.

Anyway, I loved eBay then for its simplicity. But I also hoped that they would revolutionize the online retail experience with more than just a critical (very critical) mass of commerce on their auction platform.

The purchase of Skype (one of Blodget's biggest criticisms) had many believing that a quick way for retailers and purchasers to talk would be a fabulous integration with their platform.

Didn't happen.

Same thing with the purchase of StumbleUpon (for much, much less cash, of course). Sure it made sense in a really un-simple way, but integration hasn't happened yet. eBay just owns it.

So, if Meg can't get eBay back to it's duh-simple roots and further revolutionize online retailing, then maybe she should go. I'm not screaming "kick her out" yet, like Blodget is, but I'm glad he's put her on notice. Something's got to change, and Amazon hasn't won this game outright yet.

Big Night Out and the Big Brothers and Big Sisters Legacy by Nate Westheimer

If you're a 20 or 30 something in New York City, there's an event you should check out this month that's bound to be incredibly fun and downright GOOD. Big Night Out, the annual event held by Big Brothers and Big Sisters of New York City's Young Professionals Committee, raises nearly $200,000 every year to sponsor hundreds of area youth in their leading mentoring program. Click here for more info and to buy your ticket. This will be one heck of a night, so I hope to see you there.

But, instead of begging you to come by telling you about how much fun the music, drinks, casino, and gift bags will be, I'd rather point you to the inspiring story of America's first Big Brother, as reported in the Cincinnati Post in 1999.

Here's an excerpt:

The phrase 'All men are created equal' echoed in [Irvin] Westheimer's mind, fresh from a re-reading of the Declaration of Independence that began his day. But the pitiful scene in the downtown alley struck him as a bleak contrast to Jefferson's powerful eloquence.

Westheimer ran downstairs and introduced himself. The boy, friendly but somewhat wary, said his name was Tom.

That Irvin Westheimer, seen below presenting Richard Nixon with a plaque naming him an Honorary Big Brother, was my Great Grandfather. (Click image to enlarge and read the funny quip Irvin said to Nixon at the event) Irvin Westheimer and President Nixon

Big Brothers and Big Sisters is an organization that means a great deal to me, and I'm sure to the thousands of young people nationwide who benefit from it's amazing mentoring program (a program, I should add, which was largely perfected by the NYC chapter, which formed in 1904 and is recognized as the first Big Brothers organization).

Your attendance at Big Night Out would be greatly appreciated. I hope to see you there (and if you do go, let me know)!

UPDATE: I just worked out a great deal with GOOD Magazine. VIP guests at the Big Night Out will receive one year free subscription. Yeah!

WSJ: 10 Ways We'll Consume Less Energy by Nate Westheimer

A great follow up to the Fast Company article I reported on last month was in a special section of the WSJ this morning: Less Power to the People (sub req) is a story that examines why Americans may soon begin to consumer less electrical power than they do today. The Journal lists 10 ways, from public policy to technological advances, this literally earth-saving trend could occur:

  1. Replacement of regular bulbs with LEDs, compact fluorescent bulbs, and prism enhanced skylights.
  2. Use more-efficient hardware
  3. Better sensors means more efficient climate control
  4. Easier measurement of energy consumption per device (so you can better regulate yourself)
  5. Govn't could set tighter standards on efficiency
  6. New building codes could mean more efficient structures
  7. Give incentives to Utilities to sponsor conservation efforts
  8. Use variable pricing to change supply/demand at peak and non-peak usage
  9. Offer rebates for using energy efficient appliances
  10. Consumer education

Also, check out this free podcast by the WSJ on why these 10 things might not do enough to power a growing population and why we'll need more electricity plants.

Ill Logic: Seasons Changing. What stocks should I buy? by Nate Westheimer

I remember "learning" about stocks in my high school econ class. After a few days of talking about them, my teacher set up a stock picking contest for the students, many of whom had gained no understanding whatsoever of the market during the tutorial. Anyway, one the biggest mistakes I remember people making - at least in my mind at the time - was thinking about what season it was and then was becoming to pick their stocks. "It's getting warm, so who makes swimsuits? was a question one student pondered).

Good investors look at trends, and I guess the whole four seasons to a year, hot-warm-cold-warm-hot-warm-cold-warm (etc) thing was the easiest trend for lazy high schoolers to digest and analyze. Unfortunately, it's tough to make money with that level of logic. Why? The markets already know that swimsuit maker is going to make more money in the Summer then the Winter, so it's already priced into the market (meaning the stock price already reflects this understanding).

So why am I bringing this up 6 years later? Well, for one, I organized a stock picking contest at my old job, and the same thing happened again. This time by college graduates with at least a basic understanding of the economy and stock market (some of them kept personal portfolios). Nonetheless, they made their decisions based on fairly basic trends, including those damn seasons.

I guess the point of this rambling post is that there are many levels of analyzing trends that effect the stock market, and there are people out there who choose some of the simplest trends to make their decisions. While I use the seasons as an example of something so obvious it's already priced into the stock price, also note that if enough people buy or sell based on such trends, the stock will move accordingly and there will be money made on the upside or downside; so even the most sophisticated investor may find instances that it makes sense to buy or sell based on seasons (though really he or she would be trading based on HUMAN trends, which are probably the most complex!!).

GOOD Goes Around (or at least gets published) by Nate Westheimer

Cousins, Brother, Imposters,
Last week I was reading the Wall Street Journal and came upon a very interesting article gracing the front of one its sections: "Wealthy Son Aims to Build His Legacy," shouted the headline. With an inclination that this would have some relevance for a Westheimer Investor, I read the article (and for the next 7 days you can find a copy of it here).
Turns out: the son of the founder of Inc. Magazine (an informative, yet at times pedestrian, magazine for entrepreneurs) was given a pretty interesting mandate by his father upon his death: tens of millions of dollars of inheritance that he could ONLY use for entrepreneurial endeavors. At 26, Ben has now figured out what he wants to do with that money. In September he ships the first issue of GOOD Magazine, which, according to its website, has this mission:
GOOD, a new voice in media, embraces this generation's merger of capitalism and idealism.
We provide an entertaining, thought-provoking, cultural platform for those who want to do well by doing good.
We engage and challenge the people, ideas and institutions driving change in the world.
Our mission is to stimulate the culture of good by creating dialogue around things that matter.

Basically, this is a magazine for rich kids that want to use their privledge to make a better world. Now, we can speculate on how good of a magazine this will be - I'm skeptical it will sustain itself or find enough subscribers (after this HUGE feature in the WSJ, the subscription counter on their web site bounced only 1,000 subscribers closer to their 50,000 goal), but I'm a fan of the idea and have subscribed already. I believe in the basic premise of their publication: capitalistic forces are not to be feared when trying to right the world; they are to be harnessed and directed in a positive direction. My hope for these young fellows is that they're able to articulate and convey this message, and hopefully bring an entrepreneurial spirit out of all of us "chosen" ones.
(Note: Ben also founded his own indie film house. Now that sounds fun!)