Category: Articles

“Plaintiffs cannot state a cognizable claim consistent with the well-recognized parameters of the common-law tort of public nuisance. To find otherwise would be directly contrary to legislative pronouncements governing both lead paint abatement programs and products liability claims.” With that, the NJ Supreme court correctly ended the lead paint litigation in the Garden State. You can view the decision here.

The defendants, the deep pocketed crew of Sherwin Williams (SHW), Dupont (DD), NL Industries (NL) and others are savoring their second State Supreme Court victory in less than a week following Missouri’s earlier decision. It would appear Wall St. is finally catching on as shares of Sherwin rallied 2.3% during the day and another 1.4% after the close Friday.

Said defendant’s spokesperson Bonnie Campbell, “”With this long-awaited and significant ruling, the Supreme Court of New Jersey has taken an important step by joining Missouri, Illinois and other state courts in rejecting the distortion of public nuisance law.”

“Today the Court found that the plaintiffs’ nuisance claim is inconsistent with the well-recognized parameters of public nuisance law, and that to find otherwise would be directly contrary to the legislature’s pronouncements on both lead paint abatement programs and products liability law. These companies are not responsible for risks today from poorly maintained lead paint …”

So, what has to happen now to finally put this to bed? The Ohio Supremes are expected to rule soon on Senate Bill 117 that would have prohibited the use of public nuisance in lead paint litigation and by next summer. Expect them to rule in favor of the Senate that is bringing the case to block the veto. Next summer Rhode Island extricates itself from the near felonious behavior of AG Patrick Lynch and Judge Silverstein as it Supreme Court will now assuredly toss the verdict there on it’s ear. The only question in Rhode Island left to decide is whether or not Lynch or Silverstein are sanctioned for their actions during the trial.

So what were these cases really about? The court today summed it up when they said:

“less support exists for the notion that the Legislature intended to permit these plaintiffs to supplant an ordinary product liability claim with a separate cause of action as to which there are apparently no bounds. We cannot help but agree with the observation that,were we to find a cause of action here, “nuisance law” would become a monster that would devour in one gulp the entire law of tort.’”

Yes, money. Not poor folks, poisoned kids or “public good”. Just plain old money and another way the fleece business. Here is cheering the courts in NJ and MO this week. They got this one right. Maybe now the states can actually get around to stopping the onslaught of toys with lead paint that are being recalled almost daily?

I received an email about a site that that “ranks” the various stock market blogs out there, well, the “Top 100” anyway. They do it in a very democratic way also, which is always nice.

They are ranked by Technorati and Alexa rankings. The Technorati rankings I feel are more accurate because Alexa ranking do not take into account Firefox browser users as their software is not compatible with it and all browsers work with Technorati. This Alexa oddity causes a whole batch of visitors and page views on your site not to be recognized by it. Unless you have an Alexa toolbar downloaded to your computer, they do not see you.

So, according to the Instant Bull site, ValuePlays is the 29th ranked site (as of 6/15).After 5 months, I can live with that (for now) They update the rankings weekly so I guess on Monday we will have a different number.

It is a neat site in that they direct link to the blogs there and you can veiw them in the same window. Check it out.

Everyone probably knows my feelings (or ambivalence) about the upcoming iPhone. A poll was published today in the Wall St. Journal.

I will abstain from adding my two cents because I think the poll results speak for themselves.

It is a cell phone, price rules, not fancy features. Ok, just one cent.

You can read the whole article here

Here are the top individual stocks in term of money flow. A negative number means that as the stock rises, there is increased selling of shares, a positive number means that as shares sink, buyers come rushing in.

Inflows (buying on weakness):

Google (GOOG)= +$70 million
Citigroup (C) = +$66 million
CVS (CVS)= +$51 million
Ciena (CIEN) = +$35 million

Outflows (selling on strength):

Kraft (KFT) = -$137 million
Apple (AAPL) = -$119 million
AT&T (T) = -$99 million
Microsoft (MSFT) = -70 million

Here are some upgrades and downgrades this morning.

Upgrades:

Freddie Mac (FRE)– outperform
Nationwide (NFS)– buy
Netflix (NFLX)– buy
Pantry (PNTY)– buy
Kendle (KNDL)– buy

Downgrades:

Pheonix Group (PNX)– hold
Watsco (WSO) – hold

So, do you think that if you do not vote your shares when you receive those shareholder notices in the mail that those potential votes just do not get cast? Think again.

The Wall St. Journal reported Wednesday:

Investors who are growing increasingly vocal about the performance of executives and directors may soon get a boost, as the role of shareholder votes cast by brokers comes under closer scrutiny.

In routine matters at annual meetings, such as the election of uncontested directors, shares not voted by shareholders can instead be voted by the brokers who hold those shares, any way they want. That’s created controversy in some votes recently, and has gained the attention of regulators, some of which are pushing for a change.

ROCKING THE VOTE

• The Issue: Brokers can vote the shares held in client accounts on regular director elections if the client hasn’t told them how to vote.

• Twist: Some investors in CVS (CVS) Caremark say the “broker vote” unfairly swung the election of a director in a recent contest.

• What’s Next: The SEC is deciding whether to take on a NYSE rule change that would ban such voting.

This question arose most recently in the case of Minnesota businessman Roger Headrick, who was re-elected to the board of CVS Caremark Corp. last month after receiving 606 million votes, or 57.2% of the total cast. CtW Investment Group, an arm of Change to Win, a coalition of labor unions, says the contest was swung by 264 million “phantom” votes cast by brokers who hadn’t received specific instructions from their clients.

Exclude those votes, CtW says, and Mr. Headrick loses, having won only 43% of the votes.

Carolyn Castel, a spokeswoman for CVS Caremark, says the 264-million-vote figure is “potentially correct,” though she notes that CtW assumes all the broker votes went for Mr. Headrick. “This is pure conjecture,” she says, declining to be more specific.

Mr. Headrick didn’t return calls seeking comment.

Brokers generally vote for management, partly, they say, because if clients wanted them to oppose management they would let them know. Shareholder votes rarely mattered in the past since most proposals needed only a plurality to pass. In the U.S., as much as 80% of stocks are held in accounts at brokerage houses.

Complaints about the system go back for years. In 2003, the proxy advisory firm Institutional Shareholder Services said that the system was hurting investors’ ability to express dissatisfaction. At Tyco International Ltd.(TYC) and Sprint, now Sprint Nextel Corp. (S), ISS said, unhappiness with the companies’ boards was “watered down by broker votes.”

In 2004, the issue surfaced during the re-election vote of then-Walt Disney Co. (DIS) Chairman and CEO Michael Eisner, when 43% of voters opted to withhold support; he was then pressured to resign. The Council of Institutional Investors, which lobbies for major investors said excluding broker votes, more than 50% of the votes cast would have been withheld for Mr. Eisner.

NYSE’s Proposal

Already, NYSE Euronext’s New York Stock Exchange (NYX) has proposed amending the broker-vote rule. It would redefine director elections as “non routine,” no longer allowing brokers to vote shares without instruction. At the same time, the Securities and Exchange Commission is reviewing the entire voting system, from allowing companies to send proxies to shareholders over the Internet to allowing shareholders to nominate their own directors on corporate ballots. The NYSE rule change would require SEC approval.

Some business groups warn eliminating broker votes may raise election costs for companies, because of the extra effort needed to get shareholders to vote. Some firms say they will accept the change if they can communicate directly with these investors; currently, they have to go through brokerage houses.

Other groups have advocated other changes, such as having brokers vote uninstructed shares in proportion to those cast by individual or “retail” investors, generally matching the totals from their own individual clients who give instructions. In this year’s proxy season, Goldman Sachs Group Inc., Merrill Lynch & Co., and Morgan Stanley did just that. Charles Schwab Corp. has been following that practice since 2005.

‘Stuffing the Ballot Box’?

Now, the close CVS election has spurred investor groups, including the Council of Institutional Investors, to push for changes. In a letter to NYSE Regulation last year, the exchange’s regulatory arm, the council said counting broker votes is “akin to stuffing the ballot box.”

CVS Caremark says the 264 million shares voted by brokers were split for and against Mr. Headrick, but it won’t divulge further details. Companies aren’t required to calculate how the vote would have turned out if the broker votes didn’t count, nor are they required to break out that category into votes for and against. The treasurer for North Carolina, Richard Moore, the sole trustee of the state’s pension fund, which owns $2 million of CVS stock, wrote a letter last week to the chairman of CVS Caremark asking him to disclose how many uninstructed broker votes were included in Mr. Headrick’s ‘for’ category.

CtW, originally a Caremark investor, has been battling the new company for a while. This year it sought to rally shareholders to vote against CVS’s $27 billion acquisition of Caremark, saying the board should have negotiated with another company that made an offer.

CtW also opposes Mr. Headrick because he was on the Caremark board at the time of the merger. Union pension funds affiliated with CtW own an estimated 12 million shares in the new company, less than 1% of the total.

Article originally appeared Here.

Well, it is out there for all the hear. Drop me a line and let me know what you think..

Here is the link. A special thank you to Denis Olson and the Wall St. Radio group for including me in a program that I was a fan of even before they invited me to take part in it.

So, can we now stop suing companies that have not produced lead paint for over 50 years for injuries happening today? Especially when you consider 1.5 MILLION Thomas The Tank Engine wooden toy trains are being recalled today by RC2 (RCRC)

ABC News reported today

“Consumers should take the recalled toys away from young children immediately,” the Consumer Product Safety Commission said in the recall notice. The company said this recall accounts for about 4 percent of the total wooden trains it sells in the United States (Click here for a list of the recalled Thomas products.)

“As part of a thorough investigation, RC2 identified the issue, isolated the manufacturing facility, and has implemented a corrective action plan,” the company said in a prepared statement released by the PR firm Salmon Borre Group.

Enough is enough!!

Here are more recent lead paint based recalls, and this only includes children toys.

1-Children’s jewelery. May 31st

2-Children’s gardening gloves , May 16th

3-Children’s rings, May 15th

4-Children’s Jewelry, May 15th

5-Children’s rings (Again), May 2nd

6-Children’s necklace, May 2nd

7-900,000 children’s necklaces, April 17th

8-Dollar General key chains, April 3rd

9-Children’s bracelets, April 3rd

10-Children’s mood necklace, March 15th

11-Claire’s Store children’s necklace, March 15th

12-Children’s mood necklace, March 13th

13-Children’s 2-sided painting easels, March 7th

14-Big Lots , children’s rings, February 23rd.

15-Boys jackets, February 13th

16-“Cars” Toy chest sold at Toys R” Us, Nov, 2006

There are dozens more lead paint based recalls and you can see the Consumer Products Safety Commissions entire list here The total number of just children’s items recalled due to lead? Over 10,000,000. The kicker? 100% have been imported, virtually all from China and Mexico.

These are products being produced today, sold today, used today by our children, poisoning them today and will be imported again tomorrow for our kids to play with. Why are you as tax payers in Rhode Island, Milwaukee and possibly Ohio watching and cheering as your DA’s sue Sherwin Williams (SHW) and NL Industries (NL) when they have had nothing to do with this product in over 50 YEARS and when they did, it was because the very gov’t now suing them asked them to add lead to paint. Talk about irony?

Why aren’t you calling your state reps and the DA office and asking them what they are doing to stop the current onslaught of lead paint at our children? Who are they going to hold responsible, anyone? Are they even aware of this? Better yet, go look in the mirror and ask yourself, “what am I doing?”

Another in follow ups this week. As I have said before, it is important to review your past decisions so that you may make better ones in the future. If your analysis and reasoning is proving to be correct, keep it up, if flawed, change it. Let’s look under the hood again.

On April 12th, I posted about Peabody Energy (BTU). As usual, please read the complete first post first to better understand this one.

In April with shares trading at $45, I wrote:

“Just as investing in alternative fuels begins and end with Archer -Daniels Midland (ADM), commercial roofing and insulation with Owens Corning (OC) and paint and coatings with Sherwin Williams (SHW), investing in coal begins and ends with Peabody Energy (BTU) . Since their initial public offering on May 22, 2001, at $28 per share, or $7 per share on a split-adjusted basis following the March 2005 and February 2006 two-for-one stock split, shares hit a high of $75 in May of 2006. Since then, shares have fallen steadily (40%) to their current level of $45 despite growing earnings last year 60% . The world’s largest public coal company, their products fuel approximately 10 percent of America’s and 3 percent of the world’s electricity.”

I finished by saying:

“So, all this now has us considering buying shares of a company that is the world leader in its industry, with increasing demand and pricing power for its products selling at historically low levels….

ValuePlay anyone?”

So, I sold a few puts, hoping for the price to fall a bit so i would be able to pick up shares for less than the $45 they were trading at. What happened? They immediately began a March up to $55 for a 20% gain. Why? In the weeks after my post 7 analysts came out and either raised the rating or their price target for the stock and Peabody announced they were going to spin off their Appalachian assets that had been viewed as a drag on earnings. Oh well, at least we made good money on the puts we sold. The most important takeaway is that we are still picking winners and given the choice of making a pick and watching it drop vs watching it rise, I’ll take this any day. It means we are picking stocks that when we do buy, based on our criteria, have a better chance of success.

What to do now? Shares have given up some of their gains recently and now sit at $50. With the money we made on the initial puts and what we can sell new ones for, we may actually be able to get into this thing at the original $45. Could happen….

In the now-classic Apple(AAPL) commercials, Mac Guy occasionally remarks to PC Guy that Macs don’t have the security Relevant Products/Services problems of PCs. But now, Mac Guy might have PC Guy’s problems. Within hours of Monday’s announcement that Safari 3 beta was available for Windows, three security blogs identified vulnerabilities in the Apple-made browser.

While Apple’s marketing information suggests Safari has been “designed to be secure from day one,” security experts Aviv Raff, David Maynor, and Thor Larholm found otherwise — in some cases simply by opening a malicious Web site in Safari.

Bloggers Unveil Issues

Writing on the Errata Security blog, David Maynor said on Monday that using “publicly available tools,” he and associates found “six bugs in an afternoon; four DoS and two remote code execution bugs.” DoS refers to a denial-of-service attack in which packets of data can overwhelm and then crash a computer.

The bugs work not only on the Windows version of Safari, Maynor wrote, but also on the version for Apple’s OS X. “Same code base for a lot of stuff,” he said.

Maynor said that his disclosure policy was to “give vendors as long as they need to fix problems.” But “if the vendor is unresponsive” or makes threats, he wrote, after 30 days he will release the full details. In any case, he said, the information on the vulnerabilities will not be sold to a third party.

Thor Larholm, on his blog Larholm.com, wrote today that, within two hours of downloading, installing, and using Safari for Windows, he found a “fully functional command execution vulnerability, triggered without user interaction simply by visiting a Web site.”

He pointed out that Safari was originally designed for tight integration with OS X, but “the breadth of knowledge is crippled when the software is released on other systems and mistakes and mishaps occur.” When Apple released Safari for Windows, he noted, the company neglected to implement Windows-specific URL protocol handlers. The result is that a malicious user can “break out of the intended confines and wreak havoc.”

On his blog, aviv.raffon.net, Aviv Raff said that he found “memory corruption” that “might be exploitable,” although he added that he’ll “have to dig more to be sure of that.”

Hackers have long wanted to get their hand on the iPod and you can bet the iPhone is just too tempting for them. With the planned integration between the browser and the devices, the security breaches in Safari will open that door. How long before Microsoft’s (MSFT) PC guy has his own commercial out there?

Full Article Here

A major victory for the former lead paint companies, today the Supreme Court of Missouri ruled, “… product identification requirement applies with equal force to public nuisance cases brought by governmental entities for monetary damages accrued as an alleged result of public nuisance.” Blog’s Jane Genova at Law and More. The case is City of St. Louis v. Benjamin Moore, a subsidary of Berkshire Hathaway (BRK.A); Company, et al., et al. Respondents.” Unofficial copy of interim court opinion available free from Mgenova981@aol.com.

This ruling is in direct conflict with the set of instructions to the jury issued by Judge Michael Silverstein in the Rhode Island lead paint trial vs. Sherwin Williams (SHW) and Milwaukee’s case against NL Industries (NL). And it affirms the trial court’s earlier decision in summary judgment. The opinion states, “The trial court did not err in entering summary judgment against the city [of St. Louis] based on its inability to provide any product identification evidence.” The city had appealed that decision.

In the original case, as in lead paint public nuisance litigation in general, there was no way to link the paint on the walls of buildings to a specific lead paint brand or to a specific manufacturer. Therefore, the city of St. Louis attempted to use “market-share evidence.” The trial court disagreed. It characterized that evidence as perhaps relevant but not sufficient to prove causation and entered a summary judgment for the paint companies.

Can we lead-paint watchers also expect similar good news from the RI Supreme Court where the verdict from the RI lead paint trial is being appealed?