The Secret Broker: The true measure of a man is just how much his stock tanks when he croaks
The Secret Broker
The Secret Broker
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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 — from the trading floor to the dealer’s desk.
Sad news this week on the passing of Charlie Munger, who was renowned for being the ‘sidekick’ to Warren Buffett, however, this is what Warren said once about him
“He marches to the beat of his own music, and it’s music like virtually no one else is listening to.”
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.
I can override their Bluetooth, lock the doors and take them on wild journeys through the 70’s and 80’s before dropping them off in a trance, jaws and eyes battling to see which is opened the widest.
Oh, the power!
I know I’m 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.
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.
May have to wait to see if it’s a dead cat or a dead Charlie kinda bounce – although, in the big scheme of things, it should really recover to where it was before the news came out.
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.
So, it would appear that things had been put in place by the company and hence the bounce in their share price.
Under the dynamic duo of Buffett’s Batman and Munger’s ever-present Robin, Berkshire’s share price had gone up by a mere 20,000x times, so a little blip downwards is not too hard to swallow.
Call me morbid, but one of the watch lists I’ve constructed over the years is simply named “Death” – just so I’m ready for the odd billionaire to fall off their perch, and give us all a chance to buy the dip.
I’m not too sure how much Gerry is involved in Hardly Normal’s day to day running, but I suspect it’s still quite a lot… and that even he may have noticed at some point everyone will die – whether they’re a billionaire or not.
I have my eyes on private equity coming in and swooping on his company, once his coffin has been put to rest.
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.
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 – and when neither would back down on that portion of the deal, eventually we all had to walk away.
Each of them would phone me after the collapse and want to know if, perhaps, they had paid more fees than the other guy… 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’s business card.
It’s been my experience over the years that women are, as ever, far more practical to deal with in many, many ways – but it’s worth making sure that you don’t have too many young and pretty ones in small meetings with them, as this can result in a few verbal put-downs that wouldn’t see the light of day in a meeting of men.
And for Christsake, never have anyone in your team with a more expensive handbag than they have… male or female.
We would literally have to get the female lawyers to use a Kmart jobbie and not the Hermès and more flat than high heels.
As one of my more camp colleagues would regularly say: “‘housewife heels’, darling… not ‘real estate heels’” and usher them back to their office to dress down a bit.
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 ‘em down and definitely no hair dye for any of the males.
“More sealing than appealing” would be our motto, when going in to pitch a deal to a female CEO.
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.
Who could ever forget Ray Williams from HIH, who had millions of dollars worth of artwork hanging in the company’s foyer – none of it his, and all of it paid for by his shareholders.
In the early morning, he could be spotted around Sydney’s 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.
Of course, it wasn’t his roller… it was the shareholder’s.
I think he did own the worn out tyre though.
Now if you had asked old Ray who’s in line to take over ‘if you… erm… drop dead while tugging a two tonne car around the park’, he probably couldn’t have answered you.
We all know what happened in the end – the Royal Commission into the whole sorry mess was as thorough as it was eye-opening.
HIH’s ticker ceased to tick on the ASX – and it was all because of Ray’s shareholder funded ego.
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?
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’s father had died), Rocco’s office informed Gerry that ‘Mr Forte was away on a shooting trip and would be back at the end of the week’.
It should be noted that call was made on a Monday and not the weekend – and that neatly tells the story of how a son lost his father’s business as when this story did the rounds in the City, his biggest shareholder, gleefully accepted the Granada Group offer.
In a nice British way, this is what they said:
“We supported Granada,” said Graham Wood, head of British asset management at British insurer Standard Life. “I found that Granada’s management could produce better returns on the assets than Forte’s could.”
However, John Cleese had other things to say, after Gerry Robinson had taken over Granada Group.
Upon the news of a ruthless Gerry sacking staff left right and centre, John Cleese sent him a fax which said: “Fuck off out of it, you ignorant, upstart caterer”.
Coming from the man who played Basil Fawlty in Fawlty Towers, that must have hit Gerry right between his ego’s.
Now, I will leave you with Gerry Robinson’s obituary to read, as he was quite an Irish character
And in case you were wondering what happened to Granada’s shares after Gerry died?
They went up… make of that what you will.
Feel free to contact him with your best stock tips and ideas.