2007

Good News, Not So Bad News

We read in the Hellenic Shipping News that Soros Fund Management (“Soros”), the investment vehicle of one of the premier investors of our times, George Soros, purchased 600,000 common units of Navios Maritime Partners and now controls 5.71% of its shares. In it’s filing which was submitted as a “passive investor,” Soros disclaims any intention to change or take part in any decisionmaking processes within a company’s board of directors. More importantly, they do not have to disclose their trading activity. On the other hand, having Mr. Soros looking over your shoulder does provide a certain focus.

The Downside of Stock Buybacks Appears

Once in a while we feel we get things right or at least are vindicated for our views. Unfortunately, it required a credit crisis to make the cracks appear. We noted that WSJ’s “Heard on the Street” column on November 21st noted the ill effects of share buybacks. The laws of economics particularly those related to supply and demand remain relentless and immutable.

“Driven by billions of dollars in share buybacks, record-setting buyouts and a wave of mergers, the amount of stock in the market shrank by hundreds of billions of dollars in the past four years. With the supply of stock down and demand strong, the market rallied. Now as the economy slows and credit market buckle, high profile companies are cutting back on buybacks, and some wish they held on to the cash they gave back to shareholders.”

This is only an excerpt of Market Commentary – 11/28/2007

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