Continue reading Red Sox catcher pays price for not understanding business of baseball

Red Sox catcher pays price for not understanding business of baseball originally appeared on BloggingStocks on Thu, 22 Jan 2009 17:15:00 EST. Please see our terms for use of feeds.

The Boston Globe reports that after handing out 24,000 rebate checks following the Boston Red Sox win in the 2007 World Series, Berkshire Hathaway (NYSE: BRK.A)'s Jordan's Furniture unit is taking a bet on a 2008 repeat.

In a furniture industry suffering from flat sales due to a weak housing market and rising gasoline prices, this promotion is seen as a critical tactic for keeping sales from tumbling. In 2007, Jordan's deal was that anyone who bought furniture at its stores -- which feature Imax theaters -- between March 7 and April 16 would get a rebate check if the Red Sox won the 2007 World Series.

This year, Jordan's is repeating the deal with a twist that lowers the odds of a payout. The "Monster Sweep 2008" will offer customers who make a purchase between today and April 27 rebates on their purchases of sofas, sectionals, dining room tables, beds, mattresses and rugs only if the Red Sox win the 2008 World Series in four consecutive games.

Continue reading Buffett's 'monster' bet on a Red Sox World Series victory

Buffett's 'monster' bet on a Red Sox World Series victory originally appeared on BloggingStocks on Tue, 25 Mar 2008 13:08:00 EST. Please see our terms for use of feeds.

Warren Buffett bought a prominent Massachusetts furniture company -- Jordan's Furniture -- in 1999 for between $200 million and $300 million. At the beginning of the season, Jordan's announced it would reimburse the furniture purchases of anyone who bought sofas, dining tables, beds, and mattresses there between March 7 and April 16 if the Red Sox won the World Series this year.

According to the Boston Globe, Jordan's took almost 30,000 orders during the contest. One customer stands to get back $40,000. Jordan's covered this bet through an insurance policy. It would not disclose which company issued the policy, but it would not shock me if it was issued by Berkshire Hathaway (NYSE: BRK.A).

As a lifelong Boston Red Sox fan, I am absolutely thrilled that they are in the World Series for the second time in a few years. And last night's blowout victory against Colorado was a great way to start. Unfortunately, my years of being disappointed by the Red Sox are making me wary about whether they can keep pulling off wins.

Continue reading Warren Buffett shouldn't have bet against the Red Sox

Warren Buffett shouldn't have bet against the Red Sox originally appeared on BloggingStocks on Thu, 25 Oct 2007 15:12:00 EST. Please see our terms for use of feeds.

John Henry acquired the Boston Red Sox in 2002, and led the team to its first first World Series victory since 1918 in 2004. This year, the team is off to a 26-11 start, good enough to give it the best record in baseball. However the hedge fund empire that gave Henry the money to buy the team has not fared so well. In fact it's performed more like the Kansas City Royals, who have the worst record in baseball. Since December of 2004 (2 months after the Red Sox won the Series), his fund has lost a mind-boggling 36% of its value, and assets under management have been cut in half to about $1.4 billion as investors flee in search of better returns.

The recent free-fall has given the investment legend a pretty poor long-term track record, and got me thinking: Is Henry just no longer that interested in trading commodities and such? He's already earned hundreds of millions, and one could hardly blame him for pursuing pennants instead of pork bellies.

This reminds me of a study I read about a few months ago, which suggests that companies whose CEO's have recently purchased large houses are likely to underperform the market. As I wrote then, "Building an expensive home may be a sign that a once-driven executive is getting bored with work. And besides, who has time to manage things like cash flow and strategic vision when there's wallpaper to pick out, home theater packages to choose from, and a wine cellar to design? Being a CEO takes a lot of time and energy, and so does building a palace. Something's gotta give."

My suggestion to investors: Avoid investments where the CEO or fund manager has interests other than making lots of money with your investment. This might sound cold-hearted, but it takes a super-human to build a great art collection and manage a company. As a loyal Red Sox fan, I'm thrilled that his fund has tanked as the Red Sox have soared, and I'm just glad I didn't have money in Mr. Henry's fund.

As Red Sox get off to a strong start, owner's hedge fund in freefall originally appeared on BloggingStocks on Tue, 15 May 2007 10:58:00 EST. Please see our terms for use of feeds.

eBay bans Manny Ramirez grill originally appeared on BloggingStocks on Thu, 22 Mar 2007 18:04:00 EST. Please see our terms for use of feeds.