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Target to Ackman: We Don't Take Kindly to Strangers Round Here

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Highfalutin hedge-funder runs crying back to New York.

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Greetings from New York, where I was deeply ambivalent about Target (TGT) beating Bill Ackman - until the hedge-fund tough guy spent millions getting pounded into Mondale-hood in a shareholder vote. As it turns out, shareholders didn't regard this as a great time to sell off, then lease back, their prime real-estate holdings. Ackman famously bought millions in call options with Target stock in the $70s.

There's one thing Minnesotans despise above all else: New Yorkers who come to town, imply that the locals are hayseeds, and presume they can show them how to do business with their fancy, East Coast ways.

Ackman's folly calls to mind 22 years ago, when the Haft family made a run at Target, which was then called Dayton Hudson. On a "goodwill tour," Robert Haft, then 34, walked through a Target store, came out and sniffed into open mics: "It's a decent store; my family could really make it a player."

It was at that point my father prepared a response that became family legend: "Go [expletive deleted] yourselves. -Ken Macke." When Dayton Hudson's legal team all but tackled him before my dad could send the fax, he looked them in the eye and said, "Do you think the message will be too complicated for the Hafts to understand?"

My dad beat the Hafts back, humiliated them, and in a Churchillian manner, destroyed them in every way possible for their hubris. It was just years before my dad began to get sick - at the height of who he was and the way I'll always remember him.

Two decades later, Ackman broke into tears and evoked Martin Luther King Jr. and John F. Kennedy in terms of "pursuing what he felt was right." I can't speak for Ackman or 2 of the most revered leaders in history, but going out on a limb, I'd say that both MLK and JFK would have recognized that buying Target calls at the all-time high for both Target and the market as a whole, was an embarrassing mistake. It was Ackman's Bay of Pigs, and his fund is down 93% since its 2007 inception.

I don't recall JFK crying in public about the Bay of Pigs. He recognized it as a mistake, learned from it, and grew into the President who successfully handled the Cuban missile crisis. Mr. Ackman seemed to be under the impression that Minnesotans were so unsophisticated that they thought it made sense to spin off real estate into the depths of a commercial real-estate collapse. It was a horrific miscalculation for Ackman, and his investors paid for it.

I'm proud of Target for dropping the gloves and beating the outsider to a pulp. That was the right thing to do. I like to think my dad is wryly grinning somewhere

No positions in stocks mentioned.

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