Tag Archive: Sun Microsystems


Mark Parker of Nike is also one of my mutual fund advisors.

Ditto for Marc Benioff of Salesforce.com

Let’s not forget of Dennis Muilenburg of Boeing.

Can’t tell you how many times Almost DailyBrett has been told to invest anything and everything into mutual funds.

For the record 70 percent of your author’s Charles Schwab portfolio is held in mutual funds, the largest amount managed by William Danoff of the Fidelity Contrafund.

Having made this point, let’s take a contrarian stand.

Why can’t investors create their own mutual fund comprised of individual and diversified stocks within their own portfolios?

Whoa … aren’t you the investor taking on too much … risk? Shouldn’t you diversify?

The humble answers are “not necessarily” and “yes.”

As legendary investor Peter Lynch once said: “Know what you own, and know why you own it.”

When it comes to investing and in the spirit of Lynch’s axiom, Almost DailyBrett follows these self-formulated rules:

  • Never invest in a stock in which you personally detest/loathe the lead executive (e.g., Oracle’s Larry Ellison)
  • Buy shares in firms you personally use or have a 100 percent understanding of how the company makes money (e.g., Apple).

For example, ever cutesy Scott McNealy of extinct Sun Microsystems once labeled Microsoft’s Steve Ballmer and Bill Gates as Ballmer and Butthead. McNealy would have been funny, if his company stock wasn’t trading at the very same time at $3 per share.

Whatever happened to Scott McNealy? His company was devoured by Oracle.

Another example: your author won’t touch Bitcoin because even though it is the choice of money launderers around the world, the crypto currency is not associated with any country and there is zero logical explanation of how it makes money.

Isn’t Tim Cook A CEO?

Why is Tim Cook my mutual fund portfolio manager?

Doesn’t Cook run the largest capitalized – $1 trillion-plus – publicly traded company in the world? Absolutely.

Almost DailyBrett clearly understands that Apple is not a mutual fund, but still it offers the complexity, confidence and diversity of a mutual fund.

Apple plays in the hardware (i.e., smart phones, tablets, wearables, PCs) space. Ditto for software (e.g., iOS) and services (e.g., iTunes). Think of it this way, Apple has as many if more investors as any mutual fund … including mutual funds themselves – both buy side and sell side institutional investors – and 75 million shares recently bought by Warren Buffett too.

And who runs this diversified enterprise with the expectation of $60 billion to $62 billion on the top line in the next (fourth) quarter? Revenues grew 17 percent year-over-year. Gross margin remained steady at 38 percent. EPS jumped year-over-year from $1.67 to $2.34 and dividends grew from $0.63 to $0.73.

The dilemma for every Apple investor, particularly today, is when is it time to ring the register at least for a portion of the shares? Almost DailyBrett does not hear very many bells clanging.

There is little doubt that Apple is tearing the cover off the ball. Apple has proven it is not necessarily the number of smart phones sold – even though these mobile devices are an absolute must for our lives – in many ways it is the average sales price, climbing closer to four figures for every unit.

Back to Danoff and Fidelity Contrafund. Today it has a reported $130 billion in assets under management. Cook counters with $1 trillion in investor confidence in Apple’s shares.

Which “mutual fund” manager would you choose, if you could only select, one?

And for diversification, you package Apple with Boeing (U.S. commercial airliner and defense aircraft innovator and manufacturer) …

And Nike, the #1 athletic apparel manufacturer in die Welt.

Finally, Almost DailyBrett has bought Salesforce.com nine times and sold eight times for a profit. To describe Salesforce.com as business software company seriously understates its business strategy.

With all due respect to Satya Nadella of Microsoft, Salesforce.com is THE Cloud pioneer selling software as a service (SaaS) to enterprises around the world.

Let’s see: Apple, Boeing, Nike and Salesforce.com in the Almost DailyBrett mutual fund.

Is your author right? Only time will tell. Will this “mutual fund” adjust and change its holdings? No doubt.

Here’s the point: As Ken Fisher of Fisher Investments would say, it’s time to “graduate” from pure mutual funds.

There is risk associated with selecting stocks for your portfolio, but isn’t that also the case for mutual funds? Some think that mutual funds are no brainers. Not true, and let’s not forget the fees.

When it comes to my “mutual fund” portfolio — AAPL, BA, NKE, CRM — the only fees yours truly pays are $4.95 per trade.

Not bad, not bad at all.

https://fundresearch.fidelity.com/mutual-funds/summary/316071109

https://www.apple.com/newsroom/2018/07/apple-reports-third-quarter-results/

Whatever happened to Scott McNealy?

We know what happened to his company; Sun Microsystems was swallowed up by Oracle.

And Steve Ballmer? Well, he is the chief executive officer of Softwaremeister Microsoft (Nasdaq: MSFT) with a market capitalization in excess of $200 billion.

And what about “Butthead?” Not MTV’s Beavis and Butthead, but the object of McNealy’s snide quip…His name is Bill Gates, the founder of Microsoft, one of the wealthiest individuals on the planet and a philanthropist. You may have heard of him.

ballmergates

Sometimes reporters, editors, bloggers, analysts, investors bestow rock-star status on C-level executives. And in return, some of these very same executives earn their stripes in part by resorting to let’s say “provocative” activities or tactics. Are these antics, including old-fashioned name calling, in the best interest of shareholders, employees, customers, suppliers and partners…the very same people for whom they have taken a vow of fiduciary responsibility?

“Ballmer and Butthead” is like catnip to the Fourth Estate Crowd, but is it really that funny when the company’s stock is in single digits and heading further south? How about concentrating on your business…a business that is now a part of Silicon Valley’s history.

Why even bring this matter up when Nasdaq: SUNW does not even exist anymore? That’s just the point. As difficult as it may be, C-level executives should be discouraged from engaging in sophomoric behavior and statements by their public relations counsel. The very people who you are denigrating today, you may be facing across a negotiating table tomorrow. Sun ultimately accepted $2 billion from Microsoft to end the protracted litigation between the companies. And Sun was desperate for the cash.

Certainly Scott is not the only former or present executive guilty of bombastic rhetoric, but boardroom deportment is even more important in these days in which literally trillions of dollars of aggregate personal wealth is being erased in just a matter of days, if not hours.

Personally, I would never offer investment advice to anyone and you would wise to not accept Wall Street counsel from me, except for one point: I never invest in companies in which I do not condone the behavior of the CEO. I am also very wary of companies in which the CEO and the company are synonymous terms…Hello Steve Jobs. What’s your blood pressure today?

There is no denying that McNealy is super bright with an undergraduate degree from Harvard and a MBA from Stanford…after all, Sun stands for Stanford University Network. Having said that, there is a difference between bright and smart: “Ballmer and Butthead” in hindsight was barely clever and not smart.

mcnealy

I stayed away from investing in Hewlett-Packard during the imperial reign of Carly Fiorina. Her efforts to bludgeon the HP culture into acquiring Compaq left permanent scars. Her fights with the media, particularly the San Jose Mercury News, were undertaken without the prospect of an upside. She was forced to resign three years later as HP’s CEO. Last year, she ran and lost in her attempt to wrest a Senate seat away from Barbara Boxer in California. And today… (she just won’t simply go away), she is working with the GOP Senatorial Campaign Committee.

Another stock that had the effect of a crucifix to a vampire for me was Advanced Micro Devices or AMD under the notorious direction of Jerry Sanders. Brash and colorful, Jerry was the ultimate loose cannon beyond any kind of reasonable control by his PR handlers (probably too strong of a word). Jerry was going to say what Jerry was going to say.

There was the night that he concluded an annual Semiconductor Industry Association dinner with “We have come a long way since the days we were fighting the Japs (over trade access).” He is (mis)credited for inventing the term that “Real men have fabs,” prompting semiconductor makers without their own factories…or fabs…to establish their own trade association, the Fabless Semiconductor Association, now the Global Semiconductor Alliance.

And of course my all time favorite from Jerry: “Money is life’s report card.” Guess that means Mother Teresa really sucked at life.

When it comes to corporate excess, no one does it better than Larry Ellison of Oracle…The planes, the yachts, the mansions, the divorces…And how many people are unemployed in this country? How many are underwater on their mortgages? How many are afraid to open up their investment portfolios? Larry doesn’t need my money, but I have made a vow to never invest in Oracle regardless of the company’s financial results as long as Larry is in charge.

The bottom line is that C-Level behavior does matter. Some are willing to look the other way just as long as the company is doing well. And what happens when the sun starts sinking against the horizon and the stock heads south? The “Ballmer and Butthead” quotes aren’t so funny. As John Madden once said: “When you are winning no one can hurt you; when you are losing, no one can help you.”

http://www.edn.com/article/479110-Ballmer_Butthead_and_McNealy.php

http://www.cbronline.com/blogs/technology/best_mcnealy_qu

http://en.wikipedia.org/wiki/Scott_McNealy

http://en.wikipedia.org/wiki/Sun_Microsystems

http://en.wikipedia.org/wiki/Bill_Gates

http://content.usatoday.com/communities/onpolitics/post/2011/07/carly-fiorina-senate-republican-campaign-committee-nrsc/1

http://en.wikipedia.org/wiki/Jerry_Sanders_(businessman)

http://en.wikipedia.org/wiki/Larry_Ellison

http://www.youtube.com/watch?v=sAAirNeKWxQ

http://www.motherteresa.org/

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