Saturday, August 09, 2003

8/09/03 Clip Clip

About 500,000 men a year in the U.S. get a vasectomy. There’s good news! Vasclip, made by VMBC of Roseville, Minn., has been approved by the FDA. The new procedure takes about 10 minutes and does not involve cutting, suturing, or cauterizing. The procedure costs about $350, and patients can return to normal activities in about a day. The clip is the size of a rice grain. The company didn’t mention whether it’s organic.

David Kay, a former UN weapons inspector now working for the U.S., has a team of 1,400 investigators looking for Iraq’s chemical and biological weapons. Kay told Congress his team is searching new sites almost daily, interviewing scientists and captured leaders, and sifting through thousands of pages of documents. In four months, not a gram of anthrax has been found and not an ounce of mustard gas. During the past four months, however, we have witnessed our soldiers getting killed and injured and wounded. In the report of the 100 successes during the first 100 days of occupation in Iraq, Bush failed to focus on the disasters. Errors of omission seem to be commonplace in Washington, DC.

The Bureau of Labor Statistics forecasts 10 million new jobs through 2010. I suggest we deep six this governmental agency. These folks must be sniffing glue in the workplace.

Federal, state, and local government jobs account for 16% of California’s workforce. With the state’s budget crisis, cutbacks have begun, and 9600 government jobs were terminated in July. That’s a start!

California’s Santa Clara County lost 6200 jobs from June to July. The entire state lost 22,000 jobs during this period. Since the recession started, 20% of Santa Clara County’s job base has been lost. Bill Leake, 57, was laid off 2 years ago from LSI Logic. He says “I’m not going to sit here and send letters anymore when I’m not going to get any responses. The callbacks never come.” To try and make ends meet, he does substitute teaching, and pay approximates $100 per day.

The first month of the state of Georgia’s new fiscal year was July. Their state tax revenue was down 5.4% in the month. The state continues to trim spending to meet expected revenues. It’s too bad the Congress doesn’t follow in this path.

In discussing job hiring, Kevin Hassett, an economist at the American Enterprise Institute, a conservative think tank, says “the odds are that we’re almost at the point of no return for the next election… I wish them good luck thinking long-term. But short-term things seem out of the question.”

According to the Tax Policy Center, a left-leaning group, “in 2003 those making between $100,000 and $200,000 received 23.2% of the benefits of the latest Bush tax bill, while those making between $40,000 and $50,000 received only 4.8% of the benefits.”

Zahra Ward-Murphy, a currency analyst at Dresdner Kleinwort Wasserstein (try saying that fast 10 times. You run out of saliva.), said yesterday “people are focusing on a U.S. recovery and a pick-up in growth. We don’t believe all the optimism.” It took someone out of the country to agree with me. I had to search far and wide for this person. I had to hire a private investigator. It was almost as difficult as finding Iraq’s WMD. Almost but not quite. I think we could have a contest. Everyone gets one guess. The question is: on what day won’t the U.S. be able to attract about $1.5 billion in foreign investment to offset the daily current account deficit? The prize, to be announced, shall be paid in gold coin. The latter’s true worth can be established. By the way, gold has held up very well this year. After rising to $380 per ounce and then falling to $320 per ounce, it has recovered to $358 per ounce.

Jim Prevo is the chief information officer at Green Mountain Coffee Roasters in Waterbury, Vt. His company uses PeopleSoft’s ERP software for his company’s general ledger, supply-chain, and employee-benefits systems. Prevo observes “And what Oracle’s saying is, ‘We’re going to keep your brain’s function static for the rest of your life. Or you can switch to our software.’” He says switching to Oracle, or to a competitor, “is the equivalent of performing a brain transplant. It’s expensive, and it might kill us.” Prevo says “if Oracle is successful in acquiring PeopleSoft, I will recommend to my board that we bring software development in-house.”

Friday, August 08, 2003

8/08/03 “Everything Is Being Produced By Nobody”

That’s the description Greenspan provided to an economy where the GDP is growing and unemployment is declining. Sounds like what we have now. Second quarter productivity rose at a 5.7% rate, and yet, the number of people continuing to collect jobless benefits rose by 72,000 in the week ended July 26, and now totals almost 3.7 million. Companies, like Fruit of the Loom, close plants because of competition with Asian imports, and 791 workers lose their jobs. One should ask how is it possible for initial jobless claims to decline as more jobs are lost? Only the government could create statistics to reflect this incongruity. How is it that the economy expanded at a 2.4% annual rate in the latest quarter and companies cut 170,000 workers from their payrolls? How can Americans make ends meet with unit labor costs falling at a 2.1% annual rate in the second quarter and with hours worked falling at a 2.2% pace? As Ray Bingham, President and CEO of Cadence Design Systems notes, “the growth that we’re seeing in the electronics business is more growth in productivity as a result of cost-cutting than any meaningful amount of revenue growth.” As I have asked so often, what P/E do you pay for cost-cutting? There is a plus. Higher productivity lowers inflation as unit labor costs decline. Of course, what difference does it make if nobody is there to produce the goods? You can always complain about poor service via Sprint equipment. Since October 2001 this company has cut more than 18,000 jobs, and might cut some more as they consider outsourcing certain technology jobs and sending them overseas. Hopefully, those new employees will have a strong command of the English language and are able to handle your complaints.

U.S. 30-year fixed-rate mortgages rose for the seventh consecutive week and now average 6.34%. Rates on 15-year mortgages rose for an eighth straight week to an average of 5.78%, and this is the highest level since Oct. 23, 2002. To put it in real terms, the monthly payment for a $165,000 30-year fixed rate mortgage on June 11 at 5.28% was $914.20, but this week is $1,035.33. The increase of more than $121 per month amounts to more than $43,600 over the term of the loan. As mortgage rates and refinancing rates increase, there will be a lessening of borrowing demand. As such, mortgage investors will have a lesser prepayment risk with less frenetic refinancing. This will diminish their involvement in the treasury market.

According to the Tax Policy Center, payroll taxes make up 34.9% of federal revenues and are expected to increase to 36.3% by 2004. Payroll taxes currently constitute 15.3% of employee payroll and employee contributions combined. Robert Walker, president of Get America Working!, says “cutting the payroll tax by 10% would increase employment 3% in the short term.” Don’t hold your breath for this cut. Payroll taxes fund Medicare and Social Security.

The Federal Reserve reported that outstanding consumer credit declined by $400 million in June to $1.76 trillion. Economists had been expecting a $7 billion increase. I continue to believe that increasing job losses will undermine consumer confidence, and with it, consumer spending will decline. In addition, higher mortgage and refinancing rates will place a greater burden on monthly debt payments by consumers. With less consumer spending and business spending remaining mute, I anticipate an economy which will provide many unpleasant surprises for equity holders.

There is a growing concern that U.S. supplies of natural gas will be insufficient to meet upcoming winter demand. Unquestionably, the supply and demand situation has become more serious. With it, prices for natural gas have been hovering around $5 per million BTUs. Consumers will pay more for natural gas this winter, and this too shall restrict consumers’ cash flow.

NYC’s CENTRAL Park was America’s “first urban park” and 2003 marks its 150th anniversary. I grew up in NYC and this park continues to hold much wonder for me.

Should you be visiting NYC, I suggest a visit to Cooper Hewitt’s second National Design Triennial which showcases the works of 80 designers. Not to be missed is Yuske Obuchi’s Wave Garden, an extraordinary model of a power plant designed to float on the surface of the Pacific Ocean off Southern California. The plant generates clean energy by using the motion of the sea. Yuske Obuchi is a student at Princeton’s School of Architecture.

Thursday, August 07, 2003

8/07/03 Rust Not Bust

According to the National Association of Realtors, typical home prices have risen more than 20% since 2000, but typical monthly payments actually fell by 6.2% to $774. This irrational development was brought to you by the Fed’s 13 rate decreases. The Fed made the markets believe that a flick of interest rates could selectively countermand supply and demand. As home prices rose, the homeowner’s equity rose and helped to offset the “poor effect” created in the bear market between March, 2000 and March, 2003. At the same time, the Fed created the illusion that they just might go in and buy long term treasuries in an effort to counter the deflation threat. The Fed couldn’t pull this off without help. They got plenty of that from the home buyer and refi buyer, the mortgage companies, and bond buyers. For some, reality will never set in. There are many who believe that higher mortgage rates will not create a bust in the housing market. Richard Berner, chief economist at Morgan Stanley, says “home prices will rust, not bust, for the next few years.” Only time will tell the story. Maybe supply and demand don’t matter in the 21st century. If you believe that, I could sell you an oil well in Iraq.

WalMart’s same store sales in July rose 4.6% and they estimate a rise of between 3 and 5% for August. Their earnings for this quarter will be 52 cents, and that’s 2 cents above prior estimates. The stock should do pretty well today and possibly make a new high for the year. As you all know, WMT is my favorite stock holding. Fortunately, I only fall in love with my family and not stocks. WMT is now selling at about 29 times next year’s earnings. That’s a bit rich for me, and, as such, I will cut back on my holdings today. I will take a new look when and if the stock declines at least 10 points from here.

For 2004 the Fed estimates that the price index will rise between 1 and 1.5% in 2004. That’s a far cry from the near 4% growth they anticipate during this time period. Growth without inflation is a great mantra. The Fed must think they walk on water. I think they walk on quicksand.

According to Loan Performance, Inc. of San Francisco, more than twice as many loans in Los Angeles are seriously delinquent than have gone into foreclosure. “0.7% of all home loans in Los Angeles county went to foreclosure as of May 2003, but 0.18% are more than 90 days delinquent and headed for foreclosure. That’s an early warning signal of problems to come. Rising rates will likely accelerate this trend.”

According to the Mortgage Bankers Association of America, the barometer of refinancing applications fell 2.4% last week to its lowest level since the week ending Dec. 6. Refinancing applications have fallen almost 60% since their peak at the end of May.

U.S. light crude oil has risen in price to its highest level since the Iraq war, and now exceeds $32 a barrel. Demand has risen as supplies have dropped. It’s amazing. Supply and demand can mean something in certain markets.

Doug Streenland, President of Northwest Airlines: “We don’t see the light at the end of the tunnel.”

According to Credit Suisse First Boston, companies in the S&P 500 saw their aggregate pension assets shrink by $173 billion from 1999 through 2002 while collective pension obligations rose by $289 billion, and left those plans underfunded by $216 billion. The Fed wasn’t able to prevent this calamity. What else can’t they prevent? Will it be rust or bust?

Wednesday, August 06, 2003

8/06/03 Study The Pitcher’s Pick-off Move

To avoid getting picked-off, you’ll need to go beyond the headlines. The real moves take place in the fine print. Take Cisco. Their earnings, on the surface, took a nice jump; however, the topline and the margins have begun to stumble. The company’s CEO has lost his market swagger. There is a crack in the feeling of competitive dominance. Chambers describes the networking business as “fragile” and says “CEOs will wait to spend until their own profits and revenues pick up. All of us should be quick to remember that in 2002 there were many signs of economic pickup.” I wonder if he’s also talking about money managers.

Take the ISM Index reported yesterday which rose to 65 in July, up from June’s 60.6. This accelerating growth got everyone excited. It’s tough to avoid getting picked off if you limit yourself to the headlines. The fastest growths in July were in construction, farming, finance and banking, retail, and communications. The recent spurt in interest rates will place a damper on construction and finance and banking. Retail was helped by the child tax credit. That’s a one- time event. Farming is not a major player unless we are returning to an agrarian society. Communications has been up and down for several years. In sum, in my view, the ISM Index will decline from this height. The headlines don’t tell that story, and also ignore that, the index of prices paid, a measure of purchased materials and services, fell to 50.6 from 51 in June. The demand is not sufficiently great to raise prices for the materials and services in the Index. That is a key fact for me.

Lincoln Financial is a Philadelphia-based financial services company. They just announced cutting 800 to 1,000 jobs, mostly in Hartford, Conn. and Fort Wayne, Indiana. At the same time they made the layoff announcements, Lincoln agreed to pay $140 million over 20 years to have the new Philadelphia Eagles stadium bear its name. The company said the $140 million for the naming rights comes out of Lincoln’s existing budget for advertising and other branding opportunities. I think Lincoln’s top management should be branded.

Yesterday was a pretty bleak day for trading in treasury bonds. The auction of $24 billion in 3-year notes drew bids for just 1.32 times the amount offered. Today 5-year notes are auctioned and tomorrow 10-year bonds. The market had better get accustomed to this supply. It’s going to be here for a very long time. There’s no place to hide from the supply.

The Bay Area Business Confidence Index climbed from 48 to 55. That made for great headlines. Watch the pick-off move. Don’t take too much of a lead just yet. Unfortunately, the apparent brightening economic picture contrasts with a darkening employment picture. A surprising 70% of respondents agreed either strongly or somewhat with the statement “even if the local economy improves, I do not expect an increase in my company’s workforce.” The Bay Area of San Francisco has already lost more than 341,000 jobs in the past 30 months, the equivalent of more than half the entire working population of the City and County of San Francisco, or more than a third of the entire Santa Clara County workforce. In the next six months 18% of respondents plan to decrease their workforce and 67% plan to keep it the same. It gets worse. 23% plan to decrease their IT investments in the next six months. Only 3% expect to increase the money they spend on IT. Please note that 544 CEOs and senior executives in the Bay Area, the heartland for technology, made up this survey. When you read about cautious optimism and other more positive remarks about IT spending, please recall this survey. It’s relevant and was just completed on July 29.

Challenger Gray: “If companies were anticipating a 2001 turnaround, with an increase in demand for goods and services, we would not be witnessing the extraordinary number of job cuts.” Job reduction announcements rose 43% to 85,117 in July. Through the first 7 months of 2003, there have been a total of 715,649 layoffs.

Buddy Hackett: My mother’s menu consisted of 2 choices: take it or leave it.”

In the August 2003 issue of The Journal of Finance, Robert Connolly from the Kenan-Flagler Business School at UNC at Chapel Hill and Chris Stivers from the Terry College of Business at the University of Georgia wrote a study on “Momentum and Reversals in Equity-Index Returns During Periods of Abnormal Turnover and Return Dispersion.” Their conclusions: we find substantial momentum in consecutive weekly stock returns when the latter week has unexpectedly high turnover. Conversely, we find substantial reversals in consecutive weekly stock returns when the latter week has unexpectedly low turnover. Similarly, the autocorrelation of index returns also increases with the latter-week’s dispersion across individual firm returns.” This is an interesting study and will reinforce my daily focus to studying volume in the markets. I recall back to 1974, for example, when volumes would just dry up and stocks continued to decline in price. It was during the summer of 1974 that I placed a note firmly on my desk: “You can lose your ass on low volume.” For several months I did just that.

Tuesday, August 05, 2003

8/05/03 Flush With Care

If Fulton County, Georgia doesn’t approve a 1% increase in the countywide sales tax to 7%, it could cost three times more to flush a toilet in Atlanta. Atlanta Mayor Shirley Franklin has proposed a $3 billion sewer system overhaul. A federal court order requires the city to fix its combined sewers-pipes that carry both storm water and sewage- by 2007. A second order directs the city to limit leaks from its sewer pipes by 2014. The County needs to face the potential alternative. Should the sales tax fail to be passed, and it failed in March, will citizens drive to neighboring counties to flush? I’m seriously thinking of acquiring all the available honey pots in the County, and making them available for 25 cents a visit. I would have a BYOTP (bring your own toilet paper) policy.

Sung Won Sohn, economist for Wells Fargo: “Consumers are the ones who spend money and they need jobs. You cannot continue on with economic growth without employment gains.”

For Boeing, loan and lease payments over 90 days in arrears soared to about $800 million by June 30, up from $50 million at the end of 2002. United Airlines, one of Boeing’s largest customers, has paid Boeing Capital only $39 million in the first six months of 2003. Boeing did not take any charges against earnings in the second quarter reflecting reduced credit ratings of its customers.

The California Chamber of Commerce says in the past 30 months the state has lost 290,000 manufacturing jobs, and increased costs for workers’ comp is a big reason. More and more businesses are leaving the state. In California the average workers’ comp rates have about doubled over the past 3 years.

Costco is on my list of the great companies. On Tuesday the company lowered its earnings outlook for the fourth quarter and full fiscal year, and cited rising employee healthcare and workers’ comp costs, lower-than-expected margins, and efforts to improve customer service and speed up checkouts as the main reasons for the lower outlook. For the full year Costco forecasts a profit of $1.48 to $1.50 per share, and preliminary thoughts are for high single digit growth for 2004. With its current high p/e, the stock will come down this morning. The downside move could prove costly to recent buyers of the stock.

Martin Hutchinson, UPI Business and Economics Editor: “Of the $56.1 billion in real GDP growth recorded in the second quarter, a 2.4% annual rate, $31.7 billion was in government. GDP in the private sector, let’s call it Gross Private Product (GPP), grew at an annual rate of only 1.6%, following growth rates of 0.7% and 0.4% in the previous two quarters. If you deflate by estimated population growth, GPP per capita was 0.9% lower than three years ago … only government has grown since then, by 13.4% in real terms over the three years, or by 9.9% per capita.”

Marcus Tullius Cicero: “An unjust peace is better than a just war.”

From Fast Magazine: “In a study of 3000 companies, researchers at the University of Pennsylvania found that spending 10% of revenue on capital improvements boosts productivity by 3.9%, but a similar investment in developing human capital increases productivity by 8.5%.”

Many large pension plan sponsors in the U.S. like IBM have gravitated over the past 10 to 15 years toward hybrid plan formulas, including cash balance plans, rather than defined contribution plans. On July 31 an Illinois District court ruled that IBM’s pension plan violates age discrimination laws. If upheld on appeal, this decision would make nearly all cash balance and many other hybrid plans illegal.

Despite the recent rise in the Nikkei over the past several months, credit quality in Japan has remained weak with 63% of all rated issues either having a negative bias or being on CreditWatch. Only 2% had positive outlooks or a positive bias.

In this age of technology we have witnessed the acceptance of the smoking patch. The diet patch has recently come to market. I have been working on the market patch. The problem has been the inability of the technologists to overcome the daily infrastructure of BS. The good news is that the team is working hard to solve the problem. The bad news is the enormous growth in the BS index. Its popularity is on the rise, and there is discussion of a futures market for the index. That could delay the patch for years to come. This is not an excuse. This is a no BS zone.

Monday, August 04, 2003

8/04/03 Buy American

Newton, Iowa is the home of Maytag Corp. The company was founded in 1893. This is a town of 15,600 people, and Maytag is the largest employer. When you think of Newton, you think of Maytag. I’m an exception. I think of fig newton. Then again, I’m an acquired taste. There are 2400 production workers who are represented by Local 997 of the United Auto Workers union. The last time Maytag had so many layoffs was in the 1980s. Since then, 80% have been called back. This time the Maytagers do not expect to be called back. Maytag makes all of its appliances in the United States. They do have two parts plants in Mexico. Lower- cost appliances from foreign countries such as Korea and domestic manufacturers such as Whirlpool that have some of their operations in countries where their cost of production is lower. Maytag, in order to combat this competition, is building a refrigerator plant in Mexico. The company is in the process of laying off 510 salaried workers and earlier this year 460 blue-collar workers were cut from the payrolls. Randy Rhoads was a salary worker laid off in April. He says “I gave 20 years to that company.” He was promoted from a factory job to a salaried position in May 2001. He is “very bitter.” Mayor David Aldridge says “every family in Newton has been affected in one way or another. Personally, I feel for the individuals. It’s never easy to have a place of employment for 20 or 30 or 40 years and be out job-hunting.” The solutions are not pleasant. The company’s second quarter profits dropped 63% and sales declined too. Pat Teed, the union local president, observes that “ things aren’t right with the country. The government isn’t helping the working people. We do not blame our company. It’s a great company.”

The Windows operating system and office business solutions account for more than 60% of Microsoft’s $32 billion in annual sales. The third leg of the stool is server software which comprised 22% of the company’s sales and is contributing $2 billion in yearly operating profit and growing at close to 17% per year. In fiscal 2004 that growth will come closer to 10%. The company will roll out many new products over the next 12 months; however, none is expected to be a cash cow over the near term. Nevertheless, in my view, MSFT still provides the best bang for the buck in the tech area.

WalMart is increasing its push into the computer arena. In clothing, they have Levi Strauss designing a Levi’s line just for WalMart. It should be a huge success. In computers the company has rolled out a specially designed and priced notebook for under $800, and this comes with monthly internet access for under $10 per month. WalMart will have their suppliers working on bringing the notebook price lower and improving quality. In my view, this effort will put pressure on Dell’s profit margins. Dell is already selling at a high p/e. My readers know I consider Dell one of the great ones. It’s been in the portfolio for a dozen years. At $33.23 it’s time for us to part a bit. Should the stock decline as it did a couple of years ago into the teens, we’ll look again. As you remember, we added to the position in the $18 range.

I would like to re-emphasize the current unemployment status. I consider this area the most crucial one in America today. Non-farm payrolls gave shed 500,000 jobs since January, and peaked in Feb. 2001. Private-sector employment has fallen by 3.25 million jobs since Feb. 2001. Since July 2000, manufacturing employment has declined by about 16% or 2.75 million jobs. There are at least 3.6 million Americans who have been unemployed for 15 weeks or longer, the highest level in 11 years. Those unemployed for 27 weeks or longer number at least 2 million Americans, the highest in 11 years. 40% of those unemployed have been out of work for an average of 20 weeks, the highest since 1984. No matter what bullish economic numbers are released this week, no vital and enduring recovery will take place on the backs of the enormous unemployed ranks. It will not take place. You can listen to politicians and economists fill you with rosy forecasts. When employment improves, we’ll revisit this discussion. This is a BS-free zone.

Sunday, August 03, 2003

8/3/03 The Tax Credit

Approximately 25 million Americans are receiving the $400 per child tax credit. In 2001 86 million Americans received the tax rebate of up to $600. Not all parents receive the $400. The credit gets phased out should your adjusted gross income exceed $110,000 or with single parents above $75,000. The good news is that the money will find its way into retail sales figures in the month of August, and this shall make for more pleasant reading. Please keep in mind the improvement is temporary. WalMart is adding to this tax credit by providing tax-free day shopping and emphasizing their lay-away plans. Such promotions should prove beneficial to their near-term results.

A Rutgers University survey found that only 40% of workers who had been laid off in the past believe they have the power to reduce their chances of being laid off again in the next 3 to 5 years. 71% of unionized workers, including teachers’ associations, said there are no steps they can take to avoid potential layoffs.

The June jobless rate for Hispanics is 8.4%, the highest in 6 years, and for blacks, it was 11.8%. The unemployment rate for teenagers is 18.6%.

According to the Bureau of Labor Statistics, at least 500,000 Americans have given up hope of finding a job and have left the workforce. It might be useful to find out just how high that number truly might be.

Jon Markman does a great job writing an article for MSN and has received well-deserved praise and a recent award. In his latest weekend article he refers to a Mr. P, a hedge fund manager, who is bullish on bonds and bearish on stocks. There is a description given of the bond market: “the high levels of yield on risk-free government securities make bonds extremely attractive.” Whether bonds have a high level of yield or are attractive, the market will decide that. I do want to take issue with this reference- “risk-free government securities.” This is not meant to criticize the author. Rather, it is to clarify. Government bonds are not risk free. Recently, over the past 6 weeks, they just lost 10% of their value. Additionally, since the government is debt laden, the only way they can pay the interest and the principal on existing bonds is to have continual refundings. There is no guarantee against a default.

Parables...
>
> Management training for the day.
>
> Bill Price
> DSM Chemicals North America, Inc.
>
>
> >Parable Number 1:
> > A crow was sitting on a tree, doing nothing all day. A mouse saw the
> >crow, and asked him, "Can I also sit like you and do nothing all day
long?"
> >The crow answered: "Sure, why not." So, the mouse sat on the ground below
> >the crow, and rested. All of a sudden, a fox appeared, jumped on the
mouse
> >and ate it.
> >
> > Management Lesson: To be sitting and doing nothing, you must be
> > sitting very, very high up.
> > --------------------------
> > Parable Number 2:
> > A turkey was chatting with a bull. "I would love to be able to get to
> >the top of that tree," sighed the turkey, "but I haven't got the energy."
> > "Well, why don't you nibble on some of my droppings?" replied the bull.
> >"They're packed with nutrients." The turkey pecked at a lump of dung and
> >found
> >that it actually gave him enough strength to reach the first branch of
the
> >tree.
> > The next day, after eating some more dung, he reached the second
> > branch. Finally after a fourth night, there he was proudly perched at
> > the top of the tree. Soon thereafter he was spotted by a farmer, who
> > shot the turkey out of the tree.
> >
> > Management Lesson: Bullshit might get you to the top, but it won't
> > keep you there.
> > --------------------------
> > Parable Number 3:
> > A little bird was flying south for the winter. It was so cold the bird
> > froze and fell to the ground in a large field. While it was lying there,
> >a
> > cow came by and dropped some dung on it. As the frozen bird lay there
> > in the pile of cow dung, it began to realize how warm it was. The dung
> > was actually thawing him out! He lay there all warm and happy, and soon
> >began to
> > sing for joy. A passing cat heard the bird singing and came to
> >investigate.
> >
> > Following the sound, the cat discovered the bird under the pile of cow
> >dung, and
> > promptly dug him out and ate him!
> >
> > Management Lesson:
> > 1) Not everyone who drops shit on you is your enemy.
> > 2) Not everyone who gets you out of shit is your friend.
> > 3) And when you're in deep shit, keep your mouth SHUT!
> > --------------------------
> > Parable Number 4:
> > The boy rode on the donkey and the old man walked. As they went along,
> > they passed some people who remarked "it was a shame the old man was
> > walking and the boy was riding." The man and boy thought maybe the
critics
> >were
> >right, so they changed positions. Later, they passed some people that
> > remarked, "What a shame, he makes that little boy walk." They decided
> > they both would walk! Soon they passed some more people who thought
> > they were stupid to walk when they had a decent donkey to ride. So they
> >both rode the donkey!
> > Now they passed some people that shamed them by saying "how awful to
> > put such a load on a poor donkey." The boy and man said they
> >were probably right, and they carried the animal, but as they were
passing
> >over a bridge, they lost their grip on the animal and he fell into the
> >river
> >and drowned.
> >
> > Management Lesson: If you try to please everyone, you will eventually
> >lose your ass.
> >