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Major Minor Thoughts II: The Back Nine


"At $3.00 a gallon, it's a rough time to run out of gas... even metaphorically!"


In contrast to Tiger Woods, Jack Nicklaus didn't ask much of his caddies. Where most golfers look for a caddy who is equal parts friend, shrink and scapegoat, Nicklaus asked his loopers to only speak when spoken to with only one exception. If the competition was getting tight, and Jack showed signs of faltering, Nicklaus wanted his caddy remind the Golden Bear of just two things: "You are Jack Nicklaus. You are the greatest golfer in the world."

Mr. Collins, you are on the bag. I'm three over par, after nine Thoughts. You know your role, son. Let's go after it...

#10 (460 Yards Par 4) Celebrity Minyan Mailbag!

"Absolutely brutal hole to start the back nine. Prepare the Billy Baroo, Collins. It's time to announce our presence with authority via some shameless name-dropping. I'm just glad he didn't ask about TiVo..."

Exalted Slinger of Insightful Prose,

Not to lapse into semi-seriousness, but a chat I just had with a hedgie prompts this Mike Myers-as-Linda Richman-esque question:

Blockbuster (BBI) at $1.3 bil market cap and $6 bil in sales is to NetFlix (NFLX) at $1.1 bil and $650 mil in sales as Toys R Us (TOY) was to eToys in '99. Discuss amongst yourselves. I recognize this is, at minimum, a gross exagerration.

I saw that you opined on MV (without advising) this week that(NFLX) was looking full, but I thought I'd wing this half-thought out to you to see your take.

Minyan Michael Santoli

Minyan Michael,

Before digging into this, my Midwestern aversion to "thinking I'm neat" requires me to note that NetFlix, as of today, is higher than where I sold it. The only two explanations for this that I can think of are: 1. I'm an idiot 2. NetFlix has gone from a "Full" valuation to "an absurdly overpriced example of speculative excess."

I found the comparison more interesting from the perspective of the Blockbuster / Toys R Us comparison. As I'm sure you recall, Toys didn't exactly make a straight line from "undervalued" to getting bought earlier this year for $25+. Specifically, they spent years watching their balance sheet erode, complaining the whole time about the terrible fundamentals of their industry.

That strategy didn't work for Toys then and it's not working for Blockbuster now. Only when Toys got new management and morphed into Babies did they pull out of their death-spiral. Blockbuster, in contrast, is in an increasingly steep plunge.

As for "NetFlix equals eToys"... nah. When the toy industry sneezed, eToys died. NetFlix is the only movie-related concern to hit their numbers and not whine about Hollywood's product. They seem to intuit what Blockbuster can't grasp; they are in the business of delivering entertainment content (not "stores" or even "on-line dvd mail rentals").

They may or may not make it work but their broad-scope thinking alone makes them smarter than eToys, Blockbuster or Toys (circa 1999) right out of the chutes.

#11 (440 Yard Par 4) "Thank you, sir! May I have another?"

"The Santoli Star Rub has gotten me back to 2-over. Stay in the flow, Big Daddy"

Moody's Investor Service, S&P and Fitch all downgraded the long-term and speculative debt ratings of Blockbuster Inc. Moody's cited second quarter results which were weaker than expectations.

First, if Moody's was surprised by the quarter, they simply haven't been paying attention. Second, the downgrade couldn't have been a shock at BBI HQ, given that the CEO has been all but writing the logic behind the cut for the debt agencies.

To paraphrase scores of comments in BBI's last two reports: "Trends in the store-based video rental industry our in a long term, permanent decline."

That's not only bad CEO'ing, it may be the most motivation-crushing stance to which I've ever heard a CEO dedicate himself.

#12 (218 Yard Par 3) The Immediacy of Internet Commentary

"I'm taking a birdie on the last, if only out of recognition of my own persistence on BBI. One over and climbing."

The previously mentioned Tiger Woods started the day at 5 over par. He made birdie on the first hole then three-putted from 5 feet for bogey on the second. He bogied the third then put his tee ball into the water on the fourth (see: "dont think about the water... don't think about the water" from yesterday).

As Tiger took his drop on four, a large nearby tree-branch inexplicably crashed to the ground.

This turn of events, happening just moments ago, allows me to be the first on-line columnist anywhere to ponder a topic not heard since Tiger won the British Open, last month:

"What's wrong with Tiger's game? He won two Majors this year, sure, but not by much. Is he a has-been?"

As a special Minyanville Exclusive, I can answer the question and solve the problem: Tiger's caddy, Steve Williams, has offended the Golf Mojo God by snapping at one too many spectators. Williams was the "target' of the falling branch.

The only solution involves Tiger personally tossing Williams into a live volcano. Now we'll see whether or not Tiger has earned his legendary "Will to Win" reputation.

#13 (424 Yards Par 4) More on Golf Karma and Ojai

"I know I'm the snarkiest financial commentator alive, Mr. Collins. Tell me sometime when I haven't started Birdie-Birdie-Birdie..."

Davis Love III, had been on the Golf Mojo God's hit list yesterday, when he wore a trucker-style cap. Mr. Love (a Minyan?) changed to a more traditional hat today and is now back amongst the leaders, at 4-under par.

This raises a sartorial question... is it possible for a bald, 13-index, ex-hedge fund manager whose "under re-construction" swing feels as natural and flowing as a German Jazz Band to successfully compete in next week's Minyanville Ojai Open while wearing plaid plus-fours?

Answer: Almost certainly not but, if it's under 80 degrees, I may have to dig them out, anyway.

#14 (430 Yard Par 4) Personal Response Mail Bag!

"Now that I've made a cocky bogey to go back to 1-over, it would be a good time to build me up, Collins. Let's go back to the mail bag, taking a confidential, and anonymous by request, email from "Minyan MS/Barron's guy who will be Emcee'ing in Ojai"

Dear "Italian Mike",

1. Stick with your writing! Just try to relax and try to find your own voice. The rest should take care of itself.

2. I've honestly never signed an autograph; I'm flattered and a little sheepish that you would ask (and so nicely! Tip on the writing: by the time you get to the third "PLEASE" you get diminishing returns. Also, "Knee pads" is two words). I'd be happy to sign something and make it out to your kid sister, who is also named "Mike."

That must have been confusing growing up, huh?

Generously Yours,

Mr. Macke

#15 (430 Yard Par 4) I am Fortune's Fool

"Back to even and coming down the stretch!"

NetFlix, which I don't own, is up over a dollar today with the NASDAQ down nearly 1%.

Yes, I do take that personally.

# 16 (230 Yard Par 3) Let's all go to the movies...

"Still even and starting to whither in the late-Friday blahs. I've got rice in one pocket and seasoning in the other. Fried rice for dinner tonight, Collins!"

Top 3 Markets-Themed Movies of all Time:

1. Trading Places

20-years later and still the undisputed champ. If you haven't seen this movie you will "miss" roughly 20% of the conversational references when talking to traders.

2. Wall St.

An obvious classic.

3. Rogue Trader

Underseen. Contains scenes almost uncomfortably evocative.

4. Boiler Room

Widely avoided due to the presence of Vin Deisel. While understandable, this is unfair. Boiler Room was for Deisel what Good Will Hunting was to Affleck and what Real Genius was to Val Kilmer: The movie in which their promise was nearly blinding and it seemed destiny that these men would be stars... blindingly bright stars capable of of going on Tom Hanks from Bachelor Party until Terminal runs of ever growing skill and box office.

Looking back, we felt "wise" at the time but we were merely children... children in a world where all seemed possible. Before the cynicism had creeped in through the air. The darkness seeped into our very joints and limbic system. We now to react to the site of Vin, Ben or Val on screen by turning the channel, just as naturally as we would draw our finger away from a hot stove.

The darkness cackles; hotly mocking our younger selves.

Regardless, Boiler Room is rock-solid. As a bonus, an Affleck cameo which nearly derails the entire film juxtaposes sharply, almost shockingly, with an upward-shooting Deisel.

#17 (650 Yard Par 5) I need Ojai.

"One under but grinding. 650 yards? I'm 50/50 to survive all the way to the green"


I really need Ojai.

#18 (550 Yard Par 5) A Personally Redeeming Movie Pick!

"Double bogey and about to miss the cut. Collins, right now I don't need you to say anything except 'they'll have your Guinness ready in the clubhouse, Boss'."

March of the Penguins

I was a little creeped out in a Hitchcockian-Birds way, but this was still the best movie theater experience I've had in ages. Good story, the voice of Morgan Freeman (who could make a menu sound gripping) and it clocks in at just over an hour.

If you must endure the theatre, March is my actual advice.

Which should more than make up for my recommendation of Jenna Jameson's book, moral-influence-on-the-Minyans wise.

See you in Ojai!

#19 (3rd Guinness Special!)

"I can state for a moral certainty that the best three voices modern cinema (scored by ability to convey (the intended) emotion and general velveteen-rabbitish sonic quality) belong to James Earl Jones, Morgan Freeman and Ashley Judd.

"These voices are equally perfect and will not be 'ranked' in my presence!"

Position in TIVO

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