The New York Times (NYT) has had an interesting series of articles over the past year or so discussing the tug of war over control of the personal finances and estate of socialite and philanthropist Brooke Astor’s fortune. The story gets interesting as her son, Anthony D. Marshall (son with her first husband but he took the last name of her second husband) is at odds with his son Philip and the trust division of JP Morgan Chase (JPM). If you are into soap operas then stop reading now. However, if you are interested in asset management then please read on.
Today’s installment in the NYT times of the Astor/Marshall story disclosed the findings of an audit over Astor’s investments. The entire estate was valued at $131 million. Real estate accounted for $41.2 of the estate. Personal property was valued at $10.3 million including some baubles that Mrs. Astor owns. Private equity and hedge funds accounted for over 1/3 of her assets or $46.8 million. It was disclosed in the NYT that a $20.6 million investment was in the Optima Fund, L.P. hedge fund which I am not familiar with and hence have no opinion. Bonds and cash equivalents were just over $9 million. Finally stock holdings were $23.5 million.
The stock portfolio is a compendium of big cap investing including, according to the NYT: Morgan Stanley (MS), Johnson & Johnson (JNJ), Citigroup (C), Eli Lilly (LLY), Four Seasons Hotels (FS), Google (GOOG), Molson Coors (TAP), PepsiCo (PEP), Proctor & Gamble (PG), Staples (SPLS), XTO Energy (XTO) , Encana (ECA), Cimarex (XEC), Cicso Systems (CSCO) and United Technologies (UTX). MS was her largest individual holding valued at $3.4 million.
What is strange is that her grandson accused her son of mismanaging the portfolio. I guess you have to call it as you see it and the son deserves some accolades because this is one splendid portfolio with lots of big safe growth and income names. As for the other charges leveled by her grandson at her son of stealing from and mistreating Mrs. Astor, that we can leave to the courts.
Saturday, June 9, 2007
Son's Bar Mitzvah Portfolio
My wife and I have been busy getting ready for our son’s Bar Mitzvah (the fourth of our five children) which will take place in June. We allow each child to buy a new computer with their monetary gifts and the rest I will invest in a portfolio of five of my favorite stocks as part of their college custody account. These five stocks are also amongst the top holdings for the client accounts at LakeView Asset Management, LLC and me personally. What follows is what I affectionately call the Bar Mitzvah Portfolio:
1. Apple (AAPL) – AAPL is not just an iPod company. AAPL iTunes is the largest site for digital downloads. The company is growing its core Macintosh desktop computer sales as more users continue to migrate away from the Microsoft (MSFT) Windows operating system platform. MSFT
operating system is such a disaster that it turns out to be the best marketing tool for the Apple Mac. For his Bar Mitzvah computer purchase my son and I went shopping for a Mac this week at the Apple store in the Short Hills Mall. We picked out a model as we now plan to take that first big step away from Windows. AAPL is making a move into home entertainment with Apple TV. Next to launch is the greatly anticipated iPhone. My guess, and this is only a guess, is that AAPL will develop its own video game system with digital download capability to compete against the Xbox and take more business away from MSFT
2. Google (GOOG) – Google is set to report earnings today after the market closes and I expect the company to far exceed analyst expectations for EPS of $3.30 cents. This should come as no surprise especially as we know how strong the company’s business model is performing and how poorly Yahoo (YHOO) is executing after that company reported a disappointing quarter earlier this week. The best way to look at this relationship is in SAT terms. GOOG:YHOO as AAPL:MSFT. GOOG continues to expand its reach into advertising, the internet, and the digital media. Just last week GOOG announced that it would acquire DoubleClick and entered into a radio advertising arrangement with Clear Channel Communications (CCU). Expect this company under its very astute management team to continue to innovate and grow. A price of $600 in the next year for GOOG is not out of the question.
3. McDonald’s (MCD) – I have held this stock for several years. Despite the unexpected passing of two CEOs in a short period of time, the company continues to be the best managed restaurant chain in the world. You can credit: the deep pool of management talent; innovative menu changes; increased operating hours; turnarounds in Europe and
; and, expansion in
for MCD continued success. Just last week MCD surprised analysts and investors by guiding to significantly higher than expected 1q07 EPS and sales. On top of all this, MCD has a dividend yield of 2% which should get a boost later this year on top of a healthy stock buy back plan.
4. Goldman Sachs (GS) – Oldie Goldie is the investment banker to the world. When it comes to investment banking, mergers & acquisitions, investment advisory, and sales & trading GS is the New York Yankees, Los Angeles Lakers, Montreal Canadians and Green Bay Packers all rolled up into one. It’s a proven winner. GS attracts the best talent, has the best stable of clientele, is well connected politically (in the
and abroad) and should attract your investment dollars.
5. Sears Holdings (SHLD) – I came upon SHLD many years ago when it was still Kmart not long after Eddie Lampert took it out of bankruptcy while I was doing my research into Martha Stewart Living Omnimedia (MSO) during the several months leading up to Ms Stewart's trial. I had correctly positioned our portfolios short MSO for a guilty verdict but also bought Kmart in the process. A few months later Lampert and Kmart gobbled up Sears turning the combined company into SHLD. I highlighted SHLD as one of the most compelling investments in a LakeView Asset Management blog entry last month. Recently Lampert put a plan into motion to harvest some benefits from its
, Craftsman and DieHard brands by securitizing those intellectual properties as part of a complex structured transaction. Expect Lampert to make some savvy acquisitions in the future. When people ask me if Lampert is the next Warren Buffet I always answer “No. He’s the first Eddie Lampert.”
At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC were long shares of AAPL, GOOG, MCD, GS and SHLD -- although positions can change at any time.
1. Apple (AAPL) – AAPL is not just an iPod company. AAPL iTunes is the largest site for digital downloads. The company is growing its core Macintosh desktop computer sales as more users continue to migrate away from the Microsoft (MSFT) Windows operating system platform. MSFT
operating system is such a disaster that it turns out to be the best marketing tool for the Apple Mac. For his Bar Mitzvah computer purchase my son and I went shopping for a Mac this week at the Apple store in the Short Hills Mall. We picked out a model as we now plan to take that first big step away from Windows. AAPL is making a move into home entertainment with Apple TV. Next to launch is the greatly anticipated iPhone. My guess, and this is only a guess, is that AAPL will develop its own video game system with digital download capability to compete against the Xbox and take more business away from MSFT
2. Google (GOOG) – Google is set to report earnings today after the market closes and I expect the company to far exceed analyst expectations for EPS of $3.30 cents. This should come as no surprise especially as we know how strong the company’s business model is performing and how poorly Yahoo (YHOO) is executing after that company reported a disappointing quarter earlier this week. The best way to look at this relationship is in SAT terms. GOOG:YHOO as AAPL:MSFT. GOOG continues to expand its reach into advertising, the internet, and the digital media. Just last week GOOG announced that it would acquire DoubleClick and entered into a radio advertising arrangement with Clear Channel Communications (CCU). Expect this company under its very astute management team to continue to innovate and grow. A price of $600 in the next year for GOOG is not out of the question.
3. McDonald’s (MCD) – I have held this stock for several years. Despite the unexpected passing of two CEOs in a short period of time, the company continues to be the best managed restaurant chain in the world. You can credit: the deep pool of management talent; innovative menu changes; increased operating hours; turnarounds in Europe and
; and, expansion in
for MCD continued success. Just last week MCD surprised analysts and investors by guiding to significantly higher than expected 1q07 EPS and sales. On top of all this, MCD has a dividend yield of 2% which should get a boost later this year on top of a healthy stock buy back plan.
4. Goldman Sachs (GS) – Oldie Goldie is the investment banker to the world. When it comes to investment banking, mergers & acquisitions, investment advisory, and sales & trading GS is the New York Yankees, Los Angeles Lakers, Montreal Canadians and Green Bay Packers all rolled up into one. It’s a proven winner. GS attracts the best talent, has the best stable of clientele, is well connected politically (in the
and abroad) and should attract your investment dollars.
5. Sears Holdings (SHLD) – I came upon SHLD many years ago when it was still Kmart not long after Eddie Lampert took it out of bankruptcy while I was doing my research into Martha Stewart Living Omnimedia (MSO) during the several months leading up to Ms Stewart's trial. I had correctly positioned our portfolios short MSO for a guilty verdict but also bought Kmart in the process. A few months later Lampert and Kmart gobbled up Sears turning the combined company into SHLD. I highlighted SHLD as one of the most compelling investments in a LakeView Asset Management blog entry last month. Recently Lampert put a plan into motion to harvest some benefits from its
, Craftsman and DieHard brands by securitizing those intellectual properties as part of a complex structured transaction. Expect Lampert to make some savvy acquisitions in the future. When people ask me if Lampert is the next Warren Buffet I always answer “No. He’s the first Eddie Lampert.”
At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC were long shares of AAPL, GOOG, MCD, GS and SHLD -- although positions can change at any time.
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