The Week in Review -- May 14, 1999

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Too Much Obi-Wan, Not Enough Buffett
by Jerry Thomas (

Greetings, Fools.

This is the third week in a row that Warren Buffett, the fabled Wizard of Omaha, figures prominently in my weekly Notes. And why not? If anyone is worthy of prolonged study, it's our Cherry Coke-slurping pal from Nebraska.

Buffett-watching is an industry these days. Enter Warren's name into the book search engine at and you'll get at list of replies 30 titles long. Yi-Hsin Chang (TMF Puck) and Dale Wettlaufer (TMF Ralegh) have written the reams of material examining the venerated Berkshire CEO that have graced our Web pages over the past few weeks. This week, you can can find a three-part interview with Robert Hagstrom who Yi-Hsin and Dale spoke with prior to this year's Berkhshire annual meeting.

Hagstrom, you may know, is the author of The Warren Buffett Way, one of the most popular books devoted to the study of this uncommon man's uncommonly successful approach to investing. Hagstrom is a portfolio manager with Legg Mason Focus Trust, and his new book, The NASCAR Way, is getting some well-deserved attention. Their conversation is lively, substantial, and informative. When you read it, you'll be eavesdropping on three people who enjoy investing and who don't mind expressing that pleasure.

Flash back to 1977. I was living in a tent that summer, mopping floors at the dining hall of a wilderness camp in the New Mexico mountains. One day a camper came through with a copy of Time Magazine sporting a picture of two robots on the cover, robots I would later come to know as "R2-D2" and "C-3PO." This was my first inkling of the Star Wars frenzy sweeping the country at that time. Being so removed from civilization, I missed the initial wave of cultural euphoria that greeted the film, and while I have seen and enjoyed those first three installments of the Jedi saga since, I still feel somehow detached from the fanfare attending next week's release of Episode I � The Phantom Menace.

I dunno -- "Phantom Menace," as a title, seems somehow more suited to a Scoobie Doo cartoon than a cultural touchstone for the ages. However, as a Fool, I feel compelled to study this phenomenon and the people who are working behind it. George Lucas' imagination moves whole industries, and some top Fools, in a special Star Wars series, have lent their expertise to examine the enormous impact this film is having in several key business sectors. Yi-Hsin "May the Force Be With You" Chang looks at Fox Entertainment (NYSE: FOX) and a number of other entertainment-industry companies that stand to gain, or lose, from the much-anticipated film. Then Louis "These Aren't The Droids You're Looking For" Corrigan (TMF Seymor) examines the toy industry, which will undoubtedly see a significant infestation of Star Wars product in the months to come. Finally, Rick "I Am Your Father, Luke" Munarriz (TMF Edible) takes on the food and beverage industry as it braces itself for a serious onslaught of Jedi collector cups and cheap promotional trinkets.

Rick, by the way, is pulling extra duty this week. He profiles Tricon Global Restaurants Inc. (NYSE: YUM) in Monday's Daily Double. Tricon will be hawking Phantom Menace merchandise all summer long, and thus your Star Wars research will be incomplete if you miss this report.

Now let us cast our attention to the Fool Portfolio Pages, where you'll find some fine standouts this week. In the Foolish Four Portfolio, beginning Monday, Ann Coleman (TMF AnnC) responds to criticism of the Foolish Four that appeared in a recent academic journal. Is the success of this mechanical investment approach merely a chance combination of statistical anomalies and wishful thinking? Read Ann's reports and judge for yourself.

Meanwhile, over in the Rule Maker Portfolio, the Rule Maker gang has been running a great series if you're interested in learning how to evaluate stocks the Rule Maker Way. They're doing it by spotlighting companies that you might expect are Making the Rules in their own particular industries, but for one reason or another, fail to meet the full Rule Maker criteria. You'll see why household names like Wal-Mart (NYSE: WMT) and Nike (NYSE: NKE) just can't seem to make the cut. Start out with Tom Gardner's review of Disney (NYSE: DIS) in Monday's report, and then follow through all week.

Then there's Jeff Fischer (TMF Jeff), who always seems to find a fresh way to express the importance of long-term investing. This time he actually travels into the future to report back from the year 2003, describing the changes that will be evident those four years hence. How he manages to do this, I don't know, but those Rule Breaker guys always seem to be ahead of everyone, including (and especially) the S&P 500. Will (Nasdaq: AMZN) be offering its own pool-cleaning service by then? Check out Monday's report and see for yourself.

Anyway, given my dislike for crowds, I'll be carefully avoiding the theatres this week, especially for a film which, for me, has "wait for cable" written all over it. Oh, perhaps eventually I'll surrender to the hype and actually see Episode I on the big screen. But it'll be in August, after the crowds have thinned out, while it's showing on a double bill with a Planet of the Apes movie.

One last thing -- if you know a June grad, or someone who would one day like to be one, point her to our special For the Grads feature. It's a comprehensive listing of all the resources we provide for college students and other young investors.

Until next week,
Fool on!


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