Investment Letters

  • 12 Apr 2007 at 3:11 PM
  • Dan Loeb

The Poetry of Dan Loeb: A Study In Language

danloeb.jpgThird Point founder Dan Loeb has often been noted for his “poison pen” or “venomous tongue.” But focusing on the toxic properties of his letters to corporate executives and boards—and we’re not saying they aren’t enjoyably poisonous—risks missing their truly poetic value.
Loeb specializes in rhythmic alliteration and internal “sound rhymes.” In his recent letter to letter to the board of PDL Biopharma he writes, “Unfortunately, our initial optimism that we could work constructively with management quickly faded through a series of subsequent telephone calls with Mr. McDade, culminating in a “slap-in-the face” on Friday, April 6th, in which it became abundantly clear that Mr. McDade has no intention of pursuing a constructive dialogue.”
The starting gambit of repeated O sounds—unfortunately, our, optimism—gives way to a back and forth between consonant sounds. We, work, with plays off could, constructively, quickly. Then the W is exchanged for the S in its back-and-forth with C: series, subsequent, slap, calls, culminating. The word Face plays a special role, bringing together the alphabetical C and the audible S. Loeb drops away from the pattern until he returns to “constructive” which incorporates all the sounds he played with earlier—O, S, C—with the notable exception of W—the sound that was used for the togetherness words we, work, with. The message of the language: we’re not working with you anymore.
More on the Loeb Letter:A Kinder, Gentler Third Point? Don’t Count on It [DealBook]
Hedge fund activism – the Third Point way [FT Alphaville]
Loeb’s Letter to PDL BioPharma Inc. [PR Newsire]

Spy vs. Thief: Jim Grant Against Eaton Vance

jamesgrant1.jpgThere’s trouble brewing up in Bean Town. Boston Herald Business columnist Brett Arends reports today that Boston based Eaton Vance has filed a lawsuit in federal court claiming that spyware was implanted into their computers by Grant’s Interest Rate Observer, the must-see investment letter from the mind of James Grant.
It seems that Grant came to suspect that employees at Eaton Vance were printing out multiple copies of the newsletter and circulating them around the office, and decided to launch an investigation of his own.

According to a lawsuit just filed by Eaton Vance in federal court, Grant’s Web site planted spyware in their computers when they subscribed to his newsletter online. The spyware is able to track how many copies they were printing out.
Eaton Vance accuses Grant of “computer fraud,” “trespass” and “breach of faith” and is demanding $75,000 in damages.

Now you’re probably reading this and thinking, “Of course they were printing out multiple copies and sharing them around the office! Everyone does that!” Which is probably true. But you should probably file that under “lemming” and then go check your own computer for spyware.
Update: Still doubting that Grant’s Interest Rate Observer might be monitoring how you use their website? We spoke to GRO‘s attorney Tom Kirby, who pointed us to this language contained on the GRO subscription webpage: “THE SOFTWARE INSTALLED ON GRANT’S WEB SITE AND ON SUBSCRIBERS’ COMPUTERS ENABLES GRANT’S TO MONITOR SUBSCRIBERS’ COMPLIANCE WITH THESE TERMS OF USE, AND GRANT’S WILL DO SO.”
So, uhm, yeah. If you are a subscriber, you might want to quit being naughty.
Eaton Vance, Wall St. guru spar over ‘spyware,’ ‘fraud’ [Boston Herald]

Calling the South Korea Nuclear Test

koreannucleartests.jpgThis morning reports broke that North Korea was claiming to have tested a nuclear weapon, prompting President George Bush to hold a brief press conference denouncing the move. Will the US reaction to this test be the “October Surprise” that many have speculated might (a) boost GOP electoral hopes and/or (b) tank the stock market?
The International Harry Schultz Letter published on October 1st seems to have correctly predicted the move, or at least listed as a likely possibility. According to Peter Brimelow, Shultz writes:

October 2006 is potentially the most dangerous, risky month in modern history. That’s mostly because U.S. elections come on Nov 7. Geopolitically, the U.S. is bound like Gulliver … Its military is stretched to a danger point and its mostly bumbling politicians (red & blue) are unable to escape the clutches of two losing and unwinnable wars … literal tar pits. That makes the following otherwise-illogical moves as logical possibilities in October, when Washington would be acting or failing to act, for election reasons?

Brimelow goes on to note that:

Schultz’ list of possible October moves naturally leads with an attack on Iran by the U.S. and or Israel. Other possibilities include: Russia invading Abkhazia and South Ossetia; a Chinese invasion of Taiwan or the Spratly Islands; a North Korean “mega missile test” or attack on South Korea; a coup d’état in Pakistan. Because of U.S. overstretch and distraction, he writes, “October is a free pass month for wild/risky moves.”

Well, that just about covers everything, doesn’t it? We guess you don’t have to be that much of a seer to predict that a crisis might happen somewhere between a couple of somebodies. Still, there is some new information here. For instance, apparently places called Abkhazia and South Ossetia exist and yet are not just dance clubs in Coney Island.

Schultz Sees High Possibility Of October Mischief
[Dow Jones Newswire]