After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories \u2014 from the trading floor to the dealer\u2019s desk.<\/p>\n
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Sad news this week on the passing of Charlie Munger, who was renowned for being the \u2018sidekick\u2019 to Warren Buffett, however, this is what Warren said once about him<\/p>\n
\u201cHe marches to the beat of his own music, and it\u2019s music like virtually no one else is listening to.\u201d<\/p>\n
I must admit though, if Warren ever got hold of my spotify playlist, he would probably say the same thing about me as my kids do when they get in the car with me.<\/p>\n
I can override their Bluetooth, lock the doors and take them on wild journeys through the 70\u2019s and 80\u2019s before dropping them off in a trance, jaws and eyes battling to see which is opened the widest.<\/p>\n
Oh, the power!<\/p>\n
I know I\u2019m probably not the only one, but when people of importance to the markets pass, I immediately go to see what their stock price did on the news, to gauge just how important they were by how much their shares fell.<\/p>\n
Berkshire Hathaway Inc Class A shares actually went from U$547,499.99 to U$540,050.01 before they started to bounce today and head back towards U$546,550.<\/p>\n
May have to wait to see if it\u2019s a dead cat or a dead Charlie kinda bounce\u00a0 \u2013 although, in the big scheme of things, it should really recover to where it was before the news came out.<\/p>\n
Charlie really had been heading downhill for the past few years and I noticed a few times when he was being interviewed that he was sitting in a folding wheelchair in the studio.<\/p>\n
So, it would appear that things had been put in place by the company and hence the bounce in their share price.<\/p>\n
Under the dynamic duo of\u00a0 Buffett\u2019s Batman and Munger\u2019s ever-present Robin, Berkshire\u2019s share price had gone up by a mere 20,000x times, so a little blip downwards is not too hard to swallow.<\/p>\n
Call me morbid, but one of the watch lists I\u2019ve constructed over the years is simply named \u201cDeath\u201d \u2013 just so I\u2019m ready for the odd billionaire to fall off their perch, and give us all a chance to buy the dip.<\/p>\n
I\u2019m not too sure how much Gerry is involved in Hardly Normal<\/em>\u2019s day to day running, but I suspect it\u2019s still quite a lot\u2026 and that even he may have noticed at some point everyone will die \u2013 whether they\u2019re a billionaire or not.<\/p>\n I have my eyes on private equity coming in and swooping on his company, once his coffin has been put to rest.<\/p>\n It would appear though, that having a gold plated medicine cabinet in the bathroom may prolong the inevitable by a few years, plus the odd bottle of hair dye, just to keep the young bucks at bay and away from the wife.<\/p>\n Male ego is such a big thing these days and I have witnessed a few deals fall over because the two CEOs in a potential merger, both wanted to be at the helm of the new company \u2013 and when neither would back down on that portion of the deal, eventually we all had to walk away.<\/p>\n Each of them would phone me after the collapse and want to know if, perhaps, they had paid more fees than the other guy\u2026 which translated in their mind into a simple formula: whoever paid the bigger fee was the one who ended up with his name on the CEO\u2019s business card.<\/p>\n It\u2019s been my experience over the years that women are, as ever, far more practical to deal with in many, many ways \u2013 but it\u2019s worth making sure that you don\u2019t have too many young and pretty ones in small meetings with them, as this can result in a few verbal put-downs that wouldn\u2019t see the light of day in a meeting of men.<\/p>\n And for Christsake, never have anyone in your team with a more expensive handbag than they have\u2026 male or<\/em> female.<\/p>\n We would literally have to get the female lawyers to use a Kmart jobbie and not the Herm\u00e8s and more flat than high heels.<\/p>\n As one of my more camp colleagues would regularly say: \u201c\u2018housewife heels\u2019, darling\u2026\u00a0 not \u2018real estate heels\u2019\u201d and usher them back to their office to dress down a bit.<\/p>\n This bit of knowledge would never have come from Charlie or Warren, but I can assure you, if you want to pitch to a woman of substantial means, dress \u2018em down and definitely no hair dye for any of the males.<\/p>\n \u201cMore sealing than appealing\u201d would be our motto, when going in to pitch a deal to a female CEO.<\/p>\n In fact, it is not a bad exercise when looking at a company, to find out what kind of succession plan is in place, because an ego-driven and vain CEO can hold a company back from going forward.<\/p>\n Who could ever forget Ray Williams from HIH, who had millions of dollars worth of artwork hanging in the company\u2019s foyer \u2013 none of it his, and all of it paid for by his shareholders.<\/p>\n In the early morning, he could be spotted around Sydney\u2019s Centennial Park, with a tyre around his waist attached to the front bumper of his Rolls Royce, complete with a chauffeur behind the wheel to steer it as he dragged the car through the morning mists.<\/p>\n Of course, it wasn\u2019t his<\/em> roller\u2026 it was the shareholder\u2019s.<\/p>\n I think he did own the worn out tyre though.<\/p>\n It\u2019s a shame about Ray, indeed<\/a>.<\/p>\n Now if you had asked old Ray who\u2019s in line to take over \u2018if you\u2026 erm\u2026 drop dead while tugging a two tonne car around the park\u2019, he probably couldn\u2019t have answered you.<\/p>\n We all know what happened in the end \u2013 the Royal Commission into the whole sorry mess was as thorough as it was eye-opening.<\/p>\n HIH\u2019s ticker ceased to tick on the ASX \u2013 and it was all because of Ray\u2019s shareholder funded ego.<\/p>\n Or who could forget the time that Forte Hotels were bid for after Rocco Forte inherited the company from his father, and its shares underperformed heavily as he was seen as more Playboy than Cityboy?<\/p>\n When the chairman of Granada Group, Gerry Robinson made a courtesy call to say that they are going to bid for the company (after the disastrous last four years after Rocco\u2019s father had died), Rocco\u2019s office informed Gerry that \u2018Mr Forte was away on a shooting trip and would be back at the end of the week\u2019.<\/p>\n It should be noted that call was made on a Monday and not the weekend \u2013 and that neatly tells the story of how a son lost his father\u2019s business as when this story did the rounds in the City, his biggest shareholder, gleefully accepted the Granada Group offer.<\/p>\n In a nice British way, this is what they said:<\/p>\n \u201cWe supported Granada,\u201d said Graham Wood<\/a>, head of British asset management at British insurer Standard Life. \u201cI found that Granada\u2019s management could produce better returns on the assets than Forte\u2019s could.\u201d<\/p>\n However, John Cleese had other things to say, after Gerry Robinson had taken over Granada Group.<\/p>\n Upon the news of a ruthless Gerry sacking staff left right and centre, John Cleese sent him a fax which said: \u201cFuck off out of it, you ignorant, upstart caterer\u201d.<\/p>\n Coming from the man who played Basil Fawlty in Fawlty Towers, that must have hit Gerry right between his ego\u2019s.<\/p>\n Now, I will leave you with Gerry Robinson\u2019s obituary<\/a> to read, as he was quite an Irish character<\/p>\n And in case you were wondering what happened to Granada\u2019s shares after Gerry died?<\/p>\n They went up\u2026 make of that what you will.<\/p>\n \u00a0<\/p>\n The Secret Broker can be found on Twitter here\u00a0@SecretBrokerAU<\/a>\u00a0or on email at\u00a0thesecretbroker@stockhead.com.au.<\/strong><\/em><\/p>\n Feel free to contact him with your best stock tips and ideas.<\/strong><\/p>\n <\/span><\/p>\n The post The Secret Broker: The true measure of a man is just how much his stock tanks when he croaks<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"