Einsteinknows.com
On April 1st, 2007, Wellfleet Partners, Inc. proudly celebrated its ninth year anniversary. As we undergo certain changes, this author apologizes for missing both fall and winter of 2006 – 07. We have been working diligently with numerous internationally based companies and our travels have brought us to Munich, Frankfurt, Marbella, Dublin, London, Burmingham, Milan, Lugano and Brussels during the past two quarters. I must admit I’m quite surprised how many readers noticed the missing newsletters! Recently a new book by Walter Isaacson, a current bestseller called Einstein reminded me of one of our first purchases made in 1998. As the dot com era raged, one of the first venture capital projects we worked on was a Company called register.com. My former partner had been actively involved in the initial financings of the Company at $1.00 a share and $7.00 a share. When the Company went public in 1999, the stock went to $126! The Company was a domain name registrant, it was neither novel nor unique, just very timely. There was a wild rush to acquire domain names and as I have always been, like many, a great fan of Albert Einstein and we were working on an internet educational platform, we purchased the name einsteinknows.com for $70.00. While we failed to maintain payments and have lost the rights to the name, had we continued to own it today it would probably be worth about the same for what we originally paid for it. Investors and the “Street” are littered with dot com stocks that can not say the same. Einstein was known for his cocky contempt for authority and always questioned the prevailing wisdom in ways that others did not. I wonder if he was alive today what he would have thought of the dot com era, the advent of Google and Microsoft, the demise of companies like Enron and WorldCom and the continuing warlike nature of mankind in spite of being a in a prolific nuclear era.
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“He was an impertinent patent clerk who became mind reader of the creator of the cosmos.”
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- From Einstein
Walter Isaacson
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Over the past several years, one of the most successful financial service industries has been the meteoric rise of private equity firms. Without the excessive regulations involved in the public markets, private equity firms are able to buy public Companies, restructure them and either sell off the parts or take them public again. This manner of business has allowed private equity firms to return to its investors rates that have exceeded those achieved in the public markets. Recently, the largest of such, the Blackstone Group, filed to go public. For the past twenty years Blackstone has been converting public companies into private ones. It has invested in over 100 companies including recently Cardinal Health. In 2006 investors made $1.55 Billion in profits and the estimated valuation of the Company is between $30- $40 Billion. According to Fortune Magazine, the new “King of Wall Street”, Stephen Schwartzman makes more then $300 Million a year and has accumulated already over $10 Billion dollars in personal wealth. Undoubtedly, many private equity funds will follow suit assuming the success of this initial public offering.
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“Go to the edge of the cliff and jump off. Build your wings on the way down.”
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- Ray Bradbury
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Recently the market has been quite ebullient and Dow Jones has exceeded the 13,000 mark. The recent drop in oil prices as well as several important barometer Company’s increases (IBM, Amazon...) have buoyed the market. Buyback activity has risen 36% so far this year and a barrel of crude have decreased to the mid $60’s. With first quarter earnings blooming, corporate profits are anticipated to continue its bullish trend. Multi-national countries are particularly benefiting as global growth is strong yet the dollar is weak. A slowing economy, a dramatic increase in oil prices could stunt corporate profits and send the stock market tumbling. Caution is always the better part of valor.
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"A fool’s paradise is a wise man’s hell.”
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- Thomas Fuller
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It’s not by coincidence that today, April 1st marks two important occasions in this author’s life. First, it would have been my blessed fathers’ 87th birthday. He is gone 12 years now and we at WP still feel his presence everywhere; and Second, today also marks WP’s 8th year birthday. I would like to acknowledge and thank in particular the efforts of our Office Manager, Marissa McKelvey. Her tireless efforts on our behalf are greatly appreciated.
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“Happiness is a direction, not a place”
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- Sydney J. Harris
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As the war rages on in Iraq, it’s safe to assume at this point that what could have gone wrong has gone wrong. Saddam Hussein, who created one of the most corrupt, brutal and violent regimes in history, was deposed. This should have been a good thing for both Iraq and the world yet his trial was seen in the Arab world as a farce and today Iraqi discontent with US Troops’ presence approaches 70%. The Iraqi state has a deep security vacuum, is in administrative chaos, has soaring unemployment and the Sunnis and Shiite are at Civil War. The combination of ignorance and naiveté that marked the Bush Administration’s policies, while well intentioned, belie belief. Perhaps the administration never fully understood the sectarian nature of the Muslim politics or the dysfunction of the Iraqi culture. Today the entire region is in a State of Emergency, an additional 20,000 soldiers may soon be in harms way and the Democrats and Republicans are gearing up for a vicious battle for the White House using the current administrations’ failures as the chief talking points. These are certainly trying and troubling times.
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“There are no hopeless situations; there are only people who have grown hopeless about them.”
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- Clare Booth Luc
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We are pleased to welcome to WPs Corporate Consulting Clientele’s list the following new members: Herborium (Teaneck, NJ) (“HBRM”); African Fair Trade (Los Angeles, CA); Patent Pool Trust GmbH (Munich, Germany); Sub-Urban Brands (Los Angeles, CA) (“SUUB”); Notting Hill, Inc. (New Jersey); Halo Technologies Holdings, Inc. (Greenwich, CT) (“HTHO”); Caltex Drilling Company (Luling, TX); Somerset International Group (Bedminster, NJ) (“SOSI”); Tag Entertainment (Los Angles, CA) (“TAGE”); Sunrise Energy Corporation (Kiev, Ukraine) (“SEYR”); Penta Water (San Diego, CA); Infrared Sciences Corporation (Stoneybrook, NY); Worldwide Spreads (Dublin, Ireland); Tally-Ho Ventures, Inc. (Merger & Acquisitions); M1 (Birmingham, England); and International Power Group, LTD. (Celebration, FL).
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"What lies behind us and what lies before us are tiny matters compared to what lies within us.”
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- Ralph Waldo Emerson
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On behalf of all the members of Wellfleet Partners, Inc. we wish you an enjoyable spring season, continued prayers for the safe and swift return of our troops and peace in our time.
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"Man is born to live, not to prepare for life.”
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- Boris Pasternak
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