Saturday, September 25, 2004

China Update

Professor Bittlingmayer's Investing in China conference went very well. The panels were great, filled with exceptional people displaying a wealth of information regarding all things Chinese.

The panel held diverse views from caution based on concerns that the rule of law is not yet real in China, to unabashed bullishness on the world's fasted growing large economy.

The keynote speaker was Kent McCarthy, who manages the Jayhawk China Fund, a long-short hedge fund with a long bias, investing in China. Kent is an exceptionally talented investor and a major asset for the KU School of Business. McCarthy provided a strong case for investing in China, refuting the bear case point by point.

I have owned a China UIT from UBS for well over a year and made Asian growth and development a major factor in the portfolios I built for clients at UBS. I firmly believe that Asian growth and affluence will be one of the top five stories in business and investing for the next ten years. The panels provided some strong information and overall I think the consensus is cautiously optimistic over the short term. The rule of law is a major cause for caution, but the movement is real, and conditions for business seem to be improving.

More to come...

Timothy Burger

Congratulations

This weekend my girlfriend Erin and I will resume our tour of every wedding facility in Kansas City.

Last night we had the pleasure of attending the wedding of our friends Bob and Chaundra.

Today we will wish my friend Andrew Marino and his bride well. I have know Andrew since I was 14 we became friends based on our appreciation of Rush Limbaugh and KU Basketball. Since then we were debating partners briefly, helped grow the KU College Republicans into the largest political organization at KU, and were part of a team that started and ran a student conservative paper, the Kansas Review. Andrew has since graduated from KU Law, and is now an attorney in Wichita, defending us all from frivolous lawsuits. I wish Andrew and his new wife all the best.

Timothy Burger

Thursday, September 23, 2004

Investing in China

Tomorrow I will spend the day at KU professor George Bittlingmayer's Investing in China Conference. Professor Bittlingmayer is a Wagnon Distinguished Professor of Finance and this conference should be a great event.

It is really a good deal for KU and for Kansas City, because there will be portfolio manager and expert in investing in China coming to Overland Park from all over the globe. This is part of the University of Kansas Business School's attempt to become a real opinion leader in finance and investing.

China is probably the hottest topic in the investment world. It is a huge country by virtually every measure possible, and growing faster than any large nation on the globe. China faces a series of challenges as it grows, and those challenges are part of what can make China a difficult and confusing place to invest and do business. The opportunities are virtually endless, but so are the potential pitfalls. Tomorrow we will hear from expert in Chinese business, investing, and culture, it should be an interesting day for anyone investing any money in the next ten years.

I will be writing a series of articles for Professor Bittlingmayer based on this conference, so I will keep everyone updated and will probably post some of the highlights to this site.

Timothy Burger

Monday, September 20, 2004

Michael Moore, War Profiteer

As of September 5th, Michael Moore’s Fahrenheit 9/11 has brought in about $118 million. The film cost approximately $6 million to make. Those revenues don’t include the profits Moore will make from the DVD release of F 9/11 in early October, or the two companion books Moore will release will the DVD. This is essentially blood money, Michael Moore is profiting from the death of U.S. service men in Iraq.

I don’t know exactly how revenue breaks down for movies and moviemakers, but if we assume that 40-60% of revenues may stay with the theaters and distributors that show the film to consumers, that leaves about $47 million coming back to Moore and the Weinstein brothers, who bought the film from Disney. If Moore only gets 10% of that money, he takes home $4.7 million dollars in pure profit. I think Moore probably has a better deal than that, so I would guess he took home something like $24 million.

Regardless of the exact breakdown, Michael Moore made at a minimum of $4.7 million off of the war in Iraq, and possibly much more.

Let me put this in context. Moore has been a rabid critic of Halliburton, the gigantic oil field services firm whose Brown & Root subsidy provides logistical support for U.S. troops. Halliburton’s military services are some of their lowest margin business, they make a lot more money on oil services, and Iraq makes up a small portion of their oil revenue. Vice-President Cheney was CEO of Halliburton and has a fixed deferred income package that is not affected by Halliburton’s profits. David Lesar, Chairman, President and CEO is the most highly compensated employee at Halliburton, he made $4.59 million last year, and Iraq profits were a very, very small part of that. The second highest compensated person at Halliburton was Christopher Gaut, CFO and Exec. VP who made $1.27 million last year.

Since Moore doesn’t work for a publicly traded company, he does not have to follow the strict disclosure standards corporate executives and companies like Halliburton must follow. Moore’s secrecy makes comparisons difficult, but back of the envelope calculations show that Moore may have made as more from the war in Iraq as Cheney and the top employees of Halliburton combined. Iraq war profits make up a small portion of the execs’ compensation, but almost 100% of Moore’s profit.

In short, Michael Moore has made more money off of the war in Iraq, in fact ten or twenty times as much as anyone else in the world.

So, has Moore given this money to the wounded soldiers he exploited in his film? No. Has Moore given the money to the families of soldiers who died liberating Iraq? No. Families of 9/11 victims? No. Ray Bradbury? No.

Moore has kept almost every penny for him self. Despite his criticism of uncaring companies, Moore didn’t help the families of Columbine when he made $20 million off of their suffering. Moore didn’t help unemployed autoworkers when he profited from “Rodger and Me” in fact the only person Michael Moore seems interested in helping is himself.

Moore has made a fortune by exploiting the suffering of others. Moore has made approximately $24,000 from each and every American death in Iraq. When there is death, Moore is on TV promoting his movie, when there is suffering Moore is out promoting.

Michael Moore is a war profiteer of the first class, a traitor to our nation, and a coward.

Timothy Burger