socIal netwoRking

There is something about the word “Twitter” that makes my hair stand up. And then there’s the word “Tweet,” which really gets my goat. Why? Because I have this perception that all of these social networking activities are nothing more than digital pollutants, clogging up the arteries that feed the Internet.
 
From an investor relations perspective, many social networking tools are being utilized to promote stocks, whether justifiable or not. And therein lies the rub: How do you distinguish the good information from the bad?
 
Personally, I think it comes down to social responsibility. For example, if an IRO would like to Tweet about a company’s 20% increase in revenues, I say Tweet on, as long as the news has already been publicly disseminated. But how about the use of Twitter to spout off about unsubstantiated information? Ultimately, there is a certain social responsibility that Tweeters should abide by to ensure that important messages do not get lost amid the cacophony of superfluous Twits, I mean Tweets.
 
Instead of perceiving social media as another outlet to senselessly bombard audiences, they should be perceived as a privilege, a tool, an effective method that, when used judiciously, provide valuable information.

 

Evan Pondel, epondel@pondel.com
 
 

Beware the Bloggerwocky

With the proliferation of financial blogs it is becoming increasingly difficult to determine the credibility of supposed financial gurus and their stock recommendations. Compounding this is that popular Internet portals are publishing blog posts that appear to have compelling information but in reality are simply the regurgitate of already-public information (i.e., news releases, corporate Web sites, SEC filings, etc.), often with a little extra hyperbole to further entice the reader.
 
Public companies like to see their stocks go up. And glowing remarks are usually welcome, wherever they may come from. But what happens when an uninformed or even malicious blogger with a reasonable following begins to spew negative information? All of a sudden you find yourself at the mercy of an online smear campaign.
 
But before the vitriolic ping pong match begins, do your homework. Identify the source of the information. Study the extent of their “news” delivery platform. Google them. Use sites like www.alexa.com to see who else links to their blog. Study social networking sites, too. This will give you a reasonable sense for the author’s credibility. Then assess the content. If you find factually false and misleading information, there may be grounds for libel. If there are no factual errors and the source is simply expressing his or her opinion, make sure the context of the opinion is not written as a fact reported by the company. Look for transparency and see if the source discloses whether they are shareholders, long or short. This may provide further insight into their motives. And finally, be prepared to issue a formal statement to correct any misinformation before it spreads on the Internet. Nonsense verse can be fun and even enduring but when it challenges a company’s hard earned reputation, it may be time to remove that vorpel pen, go snicker-snack, take the bloggers head and go galumphing back.

 

Evan Pondel, epondel@pondel.com
 
 

Stay-cation Trumps Vacation

Plane ticket?  Check.  Sunblock?  Check.  Huge floppy sunhat and beach ball?  Check and check.  Money?  Check … or was that credit?
 
Going on vacation is on everyone’s minds these days as summer unfolds.  But with cash flow woes weighing on our savings accounts and credit scores, how about planning a “stay-cation” instead?  Part of enduring a recession is to accept that our plan for a great summer getaway dwindles as we delve into a bleak financial underworld.  However, with new situations come new and recycled ideas and experiments … a renaissance, so to speak.
 
By staying local, people can support their communities and businesses without breaking the bank.  Organize an itinerary of sightseeing activities that draws tourism to your area.  Rediscover museums, parks, and local eateries all the while reestablishing your connection to home.

 

PondelWilkinson, investor@pondel.com
 
 

Etymology

Strange Words from the New Yorker Not Typically Known to Most of Mankind
 
Since words play such an important role in what we do as corporate communicators, the editor-in-chief of this blog asked me to do a periodic posting on this subject, following the initial one I did late last year.
 
As a kid, I always read the Word Power feature in Reader’s Digest, a subscription to which I received from a great uncle. It was the only part of the magazine I read. For PW Insight, I will continue to bring unusual words to your attention from my favorite magazine, The New Yorker.
 
Try your luck at these ten, scrolling down for the answers. Scroll further to see if you can pick out the word that was invented by the mother of late author David Wallace:
 

  1. Maw
  2. Shtarkers
  3. Heterodoxy
  4. Fillip
  5. Greebles
  6. Abstemious
  7. Chockablock
  8. Krait

 
ANSWERS…
 

  1. Symbolic center of a voracious hunger of any kind
  2. Extremely tough guys
  3. Any opinions at variance with the official position
  4. Anything that tends to rouse, excite or revive
  5. Little bits of lint, especially those which feet bring into bed
  6. Characterized by moderation
  7. Extremely full
  8. Any of several large, banded, usually placid but highly venomous snakes

 

…As to the totally fabricated word by David Wallace’s mother—Number 5, greebles.

 

Roger Pondel, Chief Etymologist, PondelWilkinson, Inc., rpondel@pondel.com
 
 

Recessionary Cocktails

Honestly, we’re not big drinkers at PondelWilkinson, but who can resist a good cocktail recipe to take the edge off the recession? The following are suggestions from The New Yorker.
 
Long Island Iced 401(k) – Put hopes in shaker. Add dreams. Shake until dashed, then drink all the vodka, gin, tequila, and rum left in liquor cabinet.
 
Broke & Tan – Fall asleep in yard on weekday, wake up sunburned and so dehydrated that anything tastes good.
 
Nasdaiquiri – Add a dozen I.P.O.’s to portfolio, wait until bubble bursts, drink all day every day.
 
Blackberry Sling – Discover that your BlackBerry doesn’t work because you haven’t paid the bill. Sling it against the wall, then buy a prepaid phone and make some rum in your toilet.
 
Please feel free to submit other suggestions and they will magically appear on this blog. Cheers.

 

Evan Pondel, epondel@pondel.com
 
 

Margaritaville

It has yet to be determined whether Warren Buffet and Jimmy Buffet are related.  The two certainly have taken divergent paths in life, and yet they share one similarity that is undisputable:  Both have amassed wealth far beyond what the average American can fathom.
 
The two Buffets also share another characteristic:  humility.  Whether it’s Jimmy crooning about “Wastin’ away in Margaritaville,” or the self-deprecating, folksy tone of Warren’s shareholder letters, the Buffets have their way with words.
 
And so, as Jimmy says, “if you’re living on sponge cake … and there’s booze in your blender,” why not take a little time to consider the following key message points from Warren Buffet’s most recent musings in his 2008 shareholder letter for Berkshire Hathaway.
 
“By year end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.”
 
“The watchword throughout the country became the creed I saw on restaurant walls when I was young: ‘In God we trust; all others pay cash.’”
 
“The U.S. – and much of the world – became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear.”
 
“In poker terms, the Treasury and the Fed have gone ‘all in.’”
 
“Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel.”
 
“Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.”
 
“Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.”
 
“During 2008 I did some dumb things in investments.”
 
“Furthermore, I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.”
 
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
 
“We like buying underpriced securities, but we like buying fairly-priced operating businesses even more.”
 
“Home purchases should involve an honest-to-God down payment of at least 10% and monthly payments that can be comfortably handled by the borrower’s income.”
 
“Putting people into homes, though a desirable goal, shouldn’t be our country’s primary objective. Keeping them in their homes should be the ambition.”
 
“Beware of geeks bearing formulas.”
 
“We never want to count on the kindness of strangers in order to meet tomorrow’s obligations.”
 
“Beware of the investment activity that produces applause; the great moves are usually greeted by yawns.”
 
“Derivatives are dangerous.”
 
“Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with.”

 

Evan Pondel, epondel@pondel.com
 
 

Finally, Sound Fiscal Policy

…to get the economy on track.  Only, it’s more than two thousand years old.
 
“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”– Cicero, c. 55 BC

 

PondelWilkinson, investor@pondel.com
 
 

Poetry in Money

Where do people who work at hedge funds seek inspiration when times are tough? Try “The Heaven-Sent Leaf,” a collection of poems written by Katy Lederer, who worked at D.E. Shaw, one of the biggest hedge funds on Wall Street. I say worked because her poetry has provided enough financial wherewithal to leave her job at D.E. Shaw and travel the country on a book tour. An excerpt:
 

Today, from the bridge, the East River is sparkling.
 
The money is swirling around the tall buildings like tides or like tithes,
 
And I wonder, does anyone swim in the river, I wonder, does anyone pray?

 

— Evan Pondel, Vice President, epondel@pondel.com
 
 

Walk the Walk if You’re Going to Talk the Talk

Maybe I’m just naïve … and maybe I don’t understand corporate travel policies that well … but news this week that the heads of the Big Three auto makers flew private jets to Capitol Hill while asking for $25 billion in tax payer money to keep them liquid, seems a little out of whack to me. Certainly, if analysts are correct in assuming that each of the roundtrip flights by private jet cost about $20,000, there had to be a less expensive way to travel the 524 miles from Michigan to Washington, right?
 
I’m all for helping out the next guy, and genuinely believe we need to do what we can to help our severely ailing economy, but leadership comes from the top and by way of example.  If you ask me, Chrysler, Ford and GM need to do a little soul searching.

 

— Laurie Berman, Senior Vice President, lberman@pondel.com
 
 

It Was in the Cards

Sometime in late 2006, I was sitting at a blackjack table in Las Vegas listening to the dealer talk about how he had just purchased his fifth home.  My brain screamed out, “Wait a second! Something is just not right here!  I am a senior level executive at a nationally recognized investor relations firm and I definitely cannot afford five homes (in fact, I can barely afford one in Los Angeles).”  While I had no idea what the dealer’s earnings were, I was certain that it couldn’t possibly be high enough to justify five mortgages.  I knew my instinct was right, but what I failed to consider at the time was the unbelievable magnitude and spiraling damages from all of the mortgage lending excesses.
 
Guess the house doesn’t always win.

 

PondelWilkinson, investor@pondel.com