Searching for Charlie Buckets
...most "Golden Ticket" holders prove unworthy
by Rick Aristotle Munarriz
(TMF [email protected])
MIAMI, FL (Sep. 23, 1998) -- Say what you will, Charlie Bucket was a Cash-King natural. Who? If you ever read Roald Dahl's classic Charlie and the Chocolate Factory or saw "Willy Wonka and the Chocolate Factory" you will remember Charlie as the humble pauper who overcomes adversity to inherit the lavish factory.
Wait a minute. How can Charlie be a cash-king or money-heavy you ask? His four grandparents, all kinky references aside, shared the same bed! He is, you'll see. But you are getting ahead of yourself. There is so much time and so little to see. Hold it. Strike that. Reverse it.
Let's start by looking at the four other gold ticket tour winners, the flawed kids whose imperfections ultimately lead to their demise. In order of appearance and disappearance...
Augustus Gloop falls victim to his gluttony. How many times have you seen companies grow chubby on debt? They feast on the leverage to the point, hello Trump Casinos (NYSE: DJT), that all it takes is one tumble into the chocolate pond and they clog operations to the point of obliteration. Borrowed capital, like sweets, are fine when consumed in moderation.
Veruca Salt wanted it all -- NOW! Later was not an option. You'll find this in companies that cook their books like Cendant (NYSE: CD) or Fine Host (Nasdaq: HOST) who are too busy trying to prop up the shares today to worry about being caught tomorrow. You also find this in a company like 3DO (Nasdaq: THDO), whose rush to put out a video game console before there are any games ready to market found it failing to recover from a dreadful first impression.
And poor Violet Beaureguard, whose penchant for chewing gum was unwavering. How many companies go through life with blinders on, never sensing changes in the marketplace. Violet was proud of chewing the same piece of gum for ages, just like Novell (Nasdaq: NOVL) and Apple (Nasdaq: AAPL) found complacency in their pioneering success in networking and personal computing respectively. Focus means little without a little bit of peripheral vision.
Then we have Mike Teevee, addicted to the tube. He lived his life obsessed with glitz and glamour, meeting his fate when he was shrunken down to television size. Companies who become obsessed with the spotlight to the point of ignoring the mundane day-to-day operations get sized down as well. Planet Hollywood (NYSE: PHL) knows this.
All four kids failed but Charlie cleared the hurdles and eventually won over the trust of Willy Wonka, and ownership of his chocolate factory. Let's go over some of the Cash-King traits that the young Bucket possesses.
Repeat Purchase Business. Charlie had a paper route. Perfect. Every day, a new read on every doorstep. He also landed the perfect gig in the impulsive chocolate candy bar industry.
Global Consumer Brand. Worldwide, kids were wolfing down Wonka bars. Charlie wasn't the reason for the success, but he was quick to recognize it and acquire it. Is this Charlie Bucket or Charlie Buffett?
Without the financials to Wonka Plc we are hard pressed to dig into the other fine points of Cash-King Investing. However, knowing the faithful employee diligence of the Oompa Loompas, and the quality product churned out, it would be a bit more than pure imagination to assume that the fiscal criteria would fall right in. Because, this is a Bucket we're talking about. They catch all. And cash all.
- Rick Aristotle Munarriz (TMF Edible)
Cash-King Strategy Folder
Cash-King Companies Folder
Stock Change Bid AXP +2 3/16 83.44 CHV +3 5/8 84.69 CSCO +3 3/8 66.25 KO +1 11/16 58.00 GPS -1 1/16 57.81 EK + 5/8 84.06 XON +3 1/4 70.31 GM +1 3/4 58.75 INTC +3 1/2 87.06 MSFT +4 7/16 113.63 PFE +4 7/8 106.31 SGP +3 104.63 TROW +2 23/32 29.38 |
Day Month Year History
C-K 3.62% 10.95% 9.34% 9.34%
S&P 500 3.52% 11.34% 5.97% 5.97%
Nasdaq 3.68% 17.41% 5.64% 5.64%
Cash-King Stocks
Rec'd # Security In At Now Change
2/3/98 24 Microsoft 78.27 113.63 45.17%
2/3/98 22 Pfizer 82.30 106.31 29.18%
6/23/98 34.5 Cisco Syst 57.56 66.25 15.09%
5/1/98 37 Gap Inc. 51.09 57.81 13.16%
8/21/98 22 Schering-P 95.99 104.63 9.00%
2/13/98 22 Intel 84.67 87.06 2.82%
2/6/98 56 T. Rowe Pr 33.67 29.38 -12.76%
2/27/98 27 Coca-Cola 69.11 58.00 -16.07%
5/26/98 18 AmExpress 104.07 83.44 -19.82%
Foolish Four Stocks
Rec'd # Security In At Value Change
3/12/98 20 Eastman Ko 63.15 84.06 33.12%
3/12/98 20 Exxon 64.34 70.31 9.29%
3/12/98 15 Chevron 83.34 84.69 1.61%
3/12/98 17 General Mo 72.41 58.75 -18.86%
Cash-King Stocks
Rec'd # Security In At Value Change
2/3/98 24 Microsoft 1878.45 2727.00 $848.55
2/3/98 22 Pfizer 1810.58 2338.88 $528.30
6/23/98 34.5 Cisco Syst 1985.95 2285.63 $299.68
5/1/98 37 Gap Inc. 1890.33 2139.06 $248.73
8/21/98 22 Schering-P 2111.7 2301.75 $190.05
2/13/98 22 Intel 1862.83 1915.38 $52.55
2/6/98 56 T. Rowe Pr 1885.70 1645.00 -$240.70
2/27/98 27 Coca-Cola 1865.89 1566.00 -$299.89
5/26/98 18 AmExpress 1873.20 1501.88 -$371.33
Foolish Four Stocks
Rec'd # Security In At Value Change
3/12/98 20 Eastman Ko 1262.95 1681.25 $418.30
3/12/98 20 Exxon 1286.70 1406.25 $119.55
3/12/98 15 Chevron 1250.14 1270.31 $20.17
3/12/98 17 General Mo 1230.89 998.75 -$232.14
CASH $48.07
TOTAL $23825.20
*Please note: On 8/4/98 $2,000 cash was added to the
portfolio for future investment. This will be reflected
in the numbers as soon as possible.
*The year for the S&P and Nasdaq will be as of 02/03/98
