Miss Kate is in the Details

In celebration of decisions made, an Oxford lass 20 years ago decided to give movies a try.

Minor stardom, major plastic surgery - you know the tale. As always, time for a sharp turn.

There has been a lot published in the last few years that makes it clear that short term, the stock markets of the world are thoroughly corrupted and exist to benefit the biggest, fastest and most ruthless insiders. Still, what other place is there to park the bits and pieces we manage to save? If you can find a solid company and share in their prosperity, that's what the whole joint stock concept was invented for all those years ago.

It's gotten a lot touger than the days when Uncle Billie was an outlier.

It is often said, and more often forgotten, that the most important part of financial statements is the footnotes. An ongoing blazingly blatant case is a royalty trust that trades under the symbol WHX. This thing was set up with rights to a well defined amount of oil. The remaining oil to be sold has been hedged. It is nearly certain that the trust will terminate in 2015, and completely certain that the total remaining payout is at most, $10.

Last week it was trading at $18. People saw the $2.86/ year payout, and valued it as though it would run forever. Many of these people ere qite upset when someone wrote up the obvious last week, and the price was halved. It rallied to $11.50 and has now fallen back to a reasonable $9.20. If you want to bet on stupidity, buy some, and be ready to bail on the next rally.

The footnotes I always found most useful are the ones on stock option compensation. Prior to SFAS 123, it was quite easy for management to award themselves options worth more than the companies annual profit. The challenge is a little steeper now, but it's still a good first place to look. If management is running the company for their entire personal benefit, buying stock is just paying tribute.

Anther thing to look for is exposure. On the up side this happens more often on little ones that aren't widely traded : There's a buyout offer. It's right there in the financials. The usual pattern is that holders who've loyally held on for years of low returns start getting offers. "Oh, we think it has some potential, and would like to hold some."

On the down side? The list of pending litigation can be longer than the rest of the financials put together. Don't worry too much, though. In American Jurisprudence, the only thing that can beat a corporation is a busload of nuns.

Nanny McPhee is not walking through that door. And if she did, she'd be old, gray & unable to dunk. Lettuce celebrate the harvest, as the drought spreads north.