The Friday Five

Five Quick Topics to Get Your Weekend Off to a Great Start

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1. Google: $287.90 per share, when I saw that price I thought there might be a buy one get one free sale going on, but there's not. At this price Google is trading at a P/E of 113.79, more than twice Yahoo's P/E. While Google is a great company and I love their products, this share price implies that Google will be able to grow earnings at a 45% compound annual rate for the next five years. Five years ago I was searching with HotBot, and the Google guys were cleaning out a dorm room at Stanford.

In the past I have thought about shorting Google, but this thing is on a roll. Remember: the market can stay irrational longer than you can stay solvent. When the P/E gets this high the price doesn't have anything to do with the earnings.

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2. Fire Dennis Moore is quickly turning into the hot stove league of Kansas politics. If you want to find the latest tip on who is running for what FDM is your site.

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3. Amnesty International needs to learn what a gulag is. It is irresponsible to throw around words like gulag or Nazi, it diminishes the impact of history. The Soviets used the gulag as a weapon of political destruction and institutional terror. Tens of millions of people were shot, worked to death as slaves, starved or frozen in Soviet gulags, referring to the (humane) treatment of 500 terror suspects as the "gulag of our time" is reprehensible. Amnesty International has further established that the only goal of their organization is to spread hatred towards George Bush. This is too bad, there are millions of people like those who died in the gulags in danger today and they could use an organization that would stand up for them.

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4. The Royals swept the Yankees for the first time in 11 years, the Yankee payroll dwarfs the Royal payroll making those wins even sweeter for all of us small market baseball fans.

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5. I watched "Britney and Kevin: Chaotic" tonight, it may be the most painful thing I have ever seen on TV.

Timothy Burger

Burger on Buffett

This Sunday I was quoted in an article in the Kansas City Star about my KU Securities analysis class's time with Warren Buffett.

"Another student, Timothy Burger, said this partnership notion accounts for why Berkshire Hathaway shares cost so much. Buffett refuses to do a stock split.

"The decision not to split the (Berkshire) shares may in a way impose Buffett's long-term discipline on an investor," Burger said. "In the long term it probably serves you."

-KC Star May 29, 2005

Timothy Burger

KU Top 10 in Barron's Investment Challenge

Barron's released the results of its most recent investment challenge on Monday. For the second time in a row, the KU MBA program had a top ten finisher.

KU MBA Student Will Fraley finished the three month challenge with a 13.8% gain during a period in which the S&P 500 lost 4.7% and the Dow lost 6.4%. Fraley's performance is notable because it follows KU finance Professor Mark Hirschey's top 10 performance among professors.

The KU MBA program is not a huge program in relation to other schools like Wharton that turn out classes with hundreds of members. The fact that with a much smaller pool of students KU has managed back to back top ten performances is impressive. It is a sign of the growing quality and quantity of MBAs coming from KU.

With recent visits to Omaha for time with Warren Buffett, strong performances in national case competitions, and the continued impressive performance of the KU APM portfolio KU is slowly developing a reputation as a top business school for investments.

Timothy Burger