ebook essays pieces of the puzzle
Monday, April 25th, 2011
flashback to fortune

I stumbled upon a Fortune magazine from 2002 the other day.  The cover was based upon a story within, “In search of the last honest analyst,” and featured a close-up of Sallie Krawcheck, then of AllianceBernstein (AB), who that fall moved to Citi (C), staying there until the tumultuous fall six years later.  She’s now at Bank of America (BAC).  The top panel of the chart shows the struggles faced by those firms since, as reflected in the total returns on their shares.

Also now at Bank of America is the brokerage firm Merrill Lynch.  Another piece in the issue was “Blodget in exile,” about the young Merrill Internet analyst.  James Altucher visited with Blodget recently, in case you’re not up to date on his story since then.

There were a number of interesting corporate stories in the publication (always Fortune‘s strength), including a couple illustrated in the middle panel:  One piece considered the battle between Sun and Oracle (ORCL) for customers in the wake of the dot-com break — Oracle bought Sun in early 2010 and its stock has been a big winner.  A short update about Martha Stewart, whose sale of ImClone a few months before was generating scrutiny even as the ink was drying on the magazine, didn’t hint at the impending plunge in her stock (MSO) or the long-term challenges it would face.

Excerpts from Larry Bossity’s book on how he turned Honeywell (HON) around were in the edition, although every indication from the bottom chart is that investors still see it as a cyclical play, to grab in good times and pitch in bad ones.

As with most business magazines, there were more pages and stories in the typical issue in 2002 than in today’s Fortune.  Among the other articles were ones concerning the insurance business after 9/11, challenges at ABC, energy trading in the wake of the Enron scandal, Pat Robertson’s empire, Islamic banking, and the options bite at companies (Cisco was front and center, as it was for my October pix on the topic).  Also in the magazine were recommendations for investments on “how to play the recovery,” and one called, “The Economy’s Biggest Problem:  Tightwad CEOs.”  Sound familiar?

Among the lifestyle stories was one about “the people’s Open” at Bethpage Black.  Tiger Woods would go on to win it, but his Grand Slam dreams came a cropper at Muirfield.  That August, he birdied the last four holes at Hazeltine — I believe the first finish of its kind by a contender in a major championship until Charl Schwartzel did it to win this year’s Masters.

For some thoughts on how looking back can help your investment process, check out the wayback machine.  (Chart:  Bloomberg terminal.)