It was either Peter Lynch, Warren Buffett, or Carrot Top who said that investors should seek to own companies that even a monkey could run -- because eventually, one will. Still, I'm not sure all these people who are fired up to put a monkey in charge of a public company have thought through the implications. Fortunately, I have.
I only had to watch nine or 10 of those Careerbuilder.com chimpanzee ads before I concluded that putting monkeys in charge might not be a great idea. But then I remembered that it's just a commercial. In all likelihood, those are just actors cast as chimpanzees. So, not much help there.
Regardless, it's quite a challenge to find a company that a monkey could run. I thought eBay (Nasdaq: EBAY ) might be a good candidate, but then I remembered that websites are pretty complicated beasts. And besides, how's a monkey going to tell whether a Fantastic Four #13 autographed by Stan Lee hisownself -- you know, the first appearance of the Red Ghost and his Super-Apes? -- is a fake or not?
Taking a page from Berkshire Hathaway's (NYSE: BRK-A ) Vice Chairman Charlie Munger, I thought the best way to tackle this problem would be to invert it. To determine what kinds of companies monkeys can run, I'll start by eliminating the ones that would least benefit from simian stewardship.
Topping my list: any companies producing unstable substances that combine violently with oxygen. As a case in point, I find it an indisputably bad idea to put a monkey in charge of Valero's (NYSE: VLO ) or Holly's (NYSE: HOC ) oil refineries. When "the worst that can happen" includes a fireball engulfing several square miles, it might be a good idea not to put the levers in a monkey's hands, opposable thumbs or no opposable thumbs. But maybe I'm just too conservative.
Of course, not all fireballs are physical in nature. If there's another thing that I know about monkeys, it's that they're horrible accountants. So firms that require high levels of financial engineering represent another group of companies that are just totally inappropriate for our genetic relatives to run. When Leucadia (NYSE: LUK ) bought teetering telecom carrier WilTel, the assets it received included millions of dollars in loss carryforwards that the company could use to offset taxes on future profits. You wouldn't want monkeys in charge of this sort of thing. Nor, for that matter, would you want a monkey in charge of advising others on that sort of thing, so you can scratch Huron Consulting (Nasdaq: HURN ) from the list, too.
Then I remembered the one thing monkeys were even worse at than harvesting tax-loss carryforwards or operating refineries: properly managing banana inventories. There may be more complicated businesses out there, but beyond a shadow of a doubt, Chiquita Brands (NYSE: CQB ) under monkey management would be a frightening, frightening thing.
Thus, by inverting our problem, we've come up with five companies that monkeys definitely shouldn't run. Using the transitive property, I think that it's safe to assume that monkeys could run every other publicly traded company. In fact, there are a number of companies I track whose results seem indistinguishable from what a monkey could achieve. Even though there's no evidence that the folks running them are actual monkeys, I'm simply saying that you can never be too sure.
Seriously, prehensile tails have to be useful at board meetings. Bill Mann is the advisor of the Motley Fool's international newsletter, Global Gains. He holds shares in Berkshire Hathaway, and really, really likes plantains. The Motley Fool's disclosure policy applies to baboons as well.