Stat of the day (9/6/08)

Image via Wikipedia According to the Economist, 1/3 of all leveraged buy-outs EVER (in inflation equated enterprise value) occured between 2006 and 2007.

Smack n' Cheese

Image via WikipediaIt's not often that I post on a company's quarterly earnings, but Kraft's Q2 announcement shows continued evidence that marketing is an investment, not an expense. For those of us who have experienced the Kellogg marketing education, this statement is far from controversial. However, I've learned that this is not a common maxim across American corporations.
As Kraft's recent performance suggests, without strong brand building, people would more likely choose private label foodstuffs to feed their families.

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Desperately Seeking Alpha

Image by Getty Images via DaylifeMark Hlbert of the New York Times provides an interesting, if not depressing report on the performance of mutual fund managers.

"There was once a small number of fund managers with genuine market-beating abilities, as judged by having past performance so good that their records could not be attributed to luck alone. But virtually none remain today. Index funds are the only rational alternative for almost all mutual fund investors, according to the study’s findings."

This information is taken from a year old study, “False Discoveries in Mutual Fund Performance: Measuring Luck in Estimating Alphas, " available here.

Derivatives Downside

Image via WikipediaGreat point by an Economist reader on an otherwise excellent piece explaining the current credit crisis and derivatives:

"SIR - ... It is true that one person's loss is another's gain, but there is no mechanism to ensure that the gainers will invest to match the disinvestments by those who lose. The gainers my bide their time or, in other words, hoard their winnings."
- Jonathan Michie, President of Kellogg College at Oxford

Source: Economist June 28, 2008, p. 19.