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James McRitchie

James McRitchie
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  • Further Research Into Whole Foods Market [View article]
    Why not list the names of cos 1-4?
    Mar 25 11:48 AM | 2 Likes Like |Link to Comment
  • Who Are The Big Investors? What Do They Buy? [View article]
    I presume rebalancing keeps funds within their target range of allocations. However, it also raises transaction costs.
    Feb 26 06:11 PM | Likes Like |Link to Comment
  • Quantifying Apple's Strategic Errors [View article]
    Too bad Icahn is focused so much on buybacks. His proxy proposal at Apple, now withdrawn, places too much attention on extraction. I wish candidates for the board would post not just their qualifications but their vision. I think you pose an interesting "plan B," worthy of discussion not just on Seeking Alpha but inside the board.

    There is a proposal still on the proxy that would encourage such discussions. Proxy access would allow shareowners collectively holding 1% of the stock, about $4.5B, for at least a year to place a nominee on the proxy. There is already a lot of discussion about Apple on Seeking Alpha. Imagine the volume if proxy access passes and director nominees have to actually run on a platform?

    I'm certainly not short Apple but I like your discussion. Informed debate is healthy. Don't get discouraged by a few negative comments. Your analysis is appreciated.
    Feb 13 12:46 PM | 3 Likes Like |Link to Comment
  • Apple: This Is Ridiculous [View article]
    Google Ventures is making a good return, investing in startups that could be huge. What is Apple doing with their pile of money? The answer is key to future growth.
    Feb 13 11:22 AM | Likes Like |Link to Comment
  • Whole Foods Market turns to Square to speed up lines [View news story]
    So, do patrons just help themselves, pay and leave? How will it work? More details please.
    Feb 12 01:17 PM | 1 Like Like |Link to Comment
  • The Secret Code To The Apple Cash Vault [View article]
    As shareowners, we don't have access to all the information Apple management and directors do. Maybe they have reasonable plans to deploy that capital, maybe they don't. However, we can look at the company and make some reasonable judgements about overall performance. If we don't think they are innovating enough, the best strategy is not to micromanage the company but to change the board.

    Instead of pushing for more buybacks, equivalent to something like fishing with dynamite since it isn't sustainable over a long period of time, it would have been more interesting if Ichan ran for the board and discussed a "plan B" for Apple. Wouldn't it be great if those nominated for director positions not only explained why they are qualified but what they intend to do? What's on their agenda?
    Feb 11 11:49 AM | 1 Like Like |Link to Comment
  • Icahn drops Apple buyback proposal [View news story]
    Yes, it is fine to have Ichan pushing but buybacks aren't the answer. They are like fishing with dynamite... works great for a short time. Investing in Treasuries at 1% is not responsible either. Apple needs a program like Google Ventures, investing in startups with promise, especially those that integrate well in the Apple universe.
    Feb 10 12:11 PM | 1 Like Like |Link to Comment
  • Apple's Buyback: Here Come The Critics [View article]
    Companies like Cisco and Microsoft (and now Apple) that have entrenched market share in existing products may remain highly profitable for a decade or two while their buybacks undermine the ability and incentives of its top executives to invest in the competitive products of the future. There are, however, companies such as Motorola, Blackberry, and HP that did billions in buybacks just prior to sustaining huge losses, and quickly went from great to almost gone. Buybacks don't add any productive capacity; they don't make products or services any more competitive. Buybacks are like fishing with dynamite. Lots of fish... but only in the short-run.
    Feb 10 11:23 AM | 1 Like Like |Link to Comment
  • Apple Mostly Just An Overvalued Hardware Stock; New Catalysts Needed [View article]
    Although Apple is far from a simple "hardware stock," you do have some valid points. The current Board fails to recognize that decision-makers with huge amounts of options or restricted stock units (RSUs) are incentivized to enhance the value of those equities through stock buybacks, instead of by allocating resources to innovation. Its like fishing with dynamite. Learn from history.

    Between 1986 and 1996, dividends totaled $457 million while stock buybacks totaled $1,761 million, nearly four times as much. While dividends rewarded shareholders for holding stock, repurchases rewarded shareholders for selling the stock. The purpose of stock buybacks was to boost the company’s stock price. Who were the prime beneficiaries? They were the company’s top executives, such as John Sculley and Michael Spindler, with their stock-based pay, running Apple into the ground.

    Today, incumbent management risks being too deeply in bed with value extractors. Apple is in danger of seeing productive employees as a profit-reducing expense, rather than as value-creating assets. One exception was instituting a new retention mechanisms, “Blue Sky,” which allows engineers to work on their own projects on company time. But instead of essentially ceasing the award of stock options to such initiatives (fearing a soaring stock price will lead too many employees to get too rich to retain), Apple needs to design incentives to reward internal entrepreneurs.

    My "proxy access" proposal will be voted on at the upcoming Apple shareholder's meeting. Under the current board configuration, the proxy access proposal would allow two parties to nominate one director each and they would be prohibited from coordinating campaigns. Apple’s Board opposes it because it could result in groups with a ‘specific agenda’ nominating. Of course, they wouldn’t get elected unless more shareowners voted for them than for incumbents or board nominees. Personally, I’d love to be able to vote for a director with a ‘specific agenda.’ See pages 10-12 of the proxy. Yes, two or three sentences on qualifications but noting on their agenda. Let’s hear what they stand for. What’s the specific agenda of incumbents?

    Apple's opposition statement says that under my proposal any group of 25 shareholders holding $50,000 of stock in the company for over a year would be able to place its nominee on the Apple proxy and that's too low. That's a huge distortion. If you read the proxy you will see the actual lower threshold is $5 billion. Don't be fooled.

    Vote for proxy access and create at least the possibility that one or two people focused on innovation and wealth creation, rather than extraction, can be nominated and elected by shareowners. Stop fishing with dynamite, which delivers high yields in the short run but destroys Apple’s seed corn. http://bit.ly/1fkGOEz
    Feb 4 08:58 PM | Likes Like |Link to Comment
  • Reed's' CEO Discusses Q3 2013 Results - Earnings Call Transcript [View article]
    Distribution is spotty at best. Reeds makes great products but governance is poor. Two out of five directors own no stock. The third has less than 10,000 shares. Directors are paid as little as $750 a year for 10 board meetings. What is their incentive (besides legal) to meet their fiduciary duty? Where are the grocery or wholesale distribution experts on the board? We need a change. See my video at http://bit.ly/19HTEYv
    Dec 13 04:48 PM | Likes Like |Link to Comment
  • Neat New Investor Tool: Sharegate [View instapost]
    Sharegate has some great tools. See how I've used it at http://bit.ly/18mjSEG

    Also posted on Sharegate itself at http://bit.ly/18mjR3A
    Dec 11 01:36 PM | Likes Like |Link to Comment
  • Reed's: New Age In Soft Drinks [View article]
    I'm the proponent of proxy proposal #5 to allow proxy access and, of course, would recommend a vote in favor of proxy access. As I mention in the proposal, two out of five board members own no stock. They are paid so little, one doesn't regularly attend board meetings. Also, look at their bios, can't we do better.

    Reeds has great products but needs more help in distribution. Check your local stores, how many have eight flavors of Reed's Culture Club Kombucha, or even one? Also, take a look at Reeds preliminary proxy filing and compare it to the final. You will see that neither management nor the attorney they hired knew the deadline for proxy proposals they announced in last year's proxy. Neither did they seem to know that two of their directors hold no stock!

    Vote against Mr. Muffoletto and Mr. Fischman. Without at least some investment in our company, they have little incentive to be diligent board members. Mr. Muffoletto receives $12,096 a year for his service, primarily for chairing the audit committee. However, Mr. Fischman received only $750 for his service as a board member. It is no wonder that, according to the proxy, “during 2012 Michael Fischman attended less than 75% of the aggregate board meetings and committee meetings held” (page 14 of the proxy). Preparing for and attending 10 board meetings is a lot to ask for $750, and that doesn’t count committee meetings. With nothing invested in Reeds and so little pay, can anyone really expect these two directors to spend much effort reviewing and advising management?

    I also recommend voting against item #4, which seeks shareowner approval of a say-when-on-pay only once every three years. See Council of Institutional Investors Policies on Corporate Governance, page 12, item 5.2.:
    "Advisory Shareowner Votes on Executive Pay: All companies should provide annually for advisory shareowner votes on the compensation of senior executives."

    Shareowners shouldn’t have to wait three years to advise our Board on its pay policies and practices.
    Dec 9 04:41 PM | Likes Like |Link to Comment
  • Reed's: 50% Potential Upside - Kombucha Is The Best Thing Since Craft Beer In Beverage Industry [View article]
    Reeds has great products but needs more help in distribution. You can't find eight flavors of Reed's Culture Club Kombucha, or even one, at most grocers.

    I filed a proxy proposal to allow shareowners access to the proxy at Reeds. See proposal # 5. Also, take a look at Reeds preliminary proxy filing and compare it to the final. You will see that neither management nor the attorney they hired knew the deadline for proxy proposals they announced in last year's proxy. Neither did they seem to know that two of their directors hold no stock!

    Vote against Mr. Muffoletto and Mr. Fischman; neither own stock in Reeds. Without at least some investment in our company, they have little incentive to be diligent board members. Mr. Muffoletto receives $12,096 a year for his service, primarily for chairing the audit committee. However, Mr. Fischman received only $750 for his service as a board member. It is no wonder that, according to the proxy, “during 2012 Michael Fischman attended less than 75% of the aggregate board meetings and committee meetings held” (page 14 of the proxy). Preparing for and attending 10 board meetings is a lot to ask for $750, and that doesn’t count committee meetings. With nothing invested in Reeds and so little pay, can anyone really expect these two directors to spend much effort reviewing and advising management?

    More at http://bit.ly/1iQJTkn
    Dec 9 04:37 PM | Likes Like |Link to Comment
  • Cisco Systems, Inc. Discusses Q1 2014 Results (Webcast) [View article]
    Cisco Systems ($CSCO) faces challenges as never before. For example, Cisco recently lost a $1B deal with Amazon.

    Meeting those challenges will take a concerted effort by management and the board of directors. Shareowners, who elect the board and vote on major proxy issues facing our company, also play an important role in Cisco staying competitive and profitable. Yet, most shareowners are passive.

    Most of us don’t even bother to vote our proxies and who can blame us? This year’s Proxy materials are over 80 pages long. Who has time to read, digest and make decisions on all that information?

    Finally, we could have the help we need with a proxy advisor contest paid by all shareowners (through Cisco) and chosen by a vote of shareowners. Shareowners will get analysis from at least four advisors. Several could have industry experience. My proposal is in the proxy. Please read it and vote for it. More information at http://bit.ly/1bDhCG7
    Nov 13 07:30 PM | Likes Like |Link to Comment
  • Cisco Reports: Here's What Hedge Fund Analysts Expect [View article]
    Interesting analysis. How about providing your thoughts on the Cisco proxy. How should shareowners vote?

    As a result of discussions with analysts at several funds I am concerned that many may have been misled by proxy advisor ISS labeling my proposal to its clients as "Hire Advisor," whereas my proposal's title in Cisco's proxy is more correctly "Proxy Advisor Competition,” with financial awards for four proxy advisors specified.

    Below are 11 questions raised by proxy analysts and my responses as posted at http://bit.ly/1bDhCG7. I also posted information on why Cisco was chosen for this proposal at http://bit.ly/1bDhExP I hope you and your readers find this information helpful.
    Nov 13 09:41 AM | Likes Like |Link to Comment
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