ON THE Happier Note

Reading over some of recent cash flow write-ups, I realize that I’m often complaining that Wall Street isn’t providing a lot of my portfolio companies what I consider to be always a fair shake. But considering that I seek out the unloved intentionally, misunderstood, and undervalued, what else should I expect? Consequently, while it seems that experts and establishments aren’t heading to go out of their way to love 3M (NYSE: MMM), that is just part of my investment thesis. While 3M’s fourth-quarter results were not super, they were okay and the impressive free cash flow production here has me content to hold on some time longer.

3M experienced a fourth quarter that was sufficient for a junkie like me but not good enough to win over the Street probably. 100 million, but a fair bit short of the high estimate. Although the healthcare and Safety did okay from a high collection perspective, a lot of other segments (Industrial, Consumer/Office, Display, and Electro/Comm) were a little softer than I would like.

  • Attention to fine detail, plus excellent organisational and time management skills
  • European equity – e.g. Infinity European Stock Index [root finance is a Vanguard indexed finance]
  • 2003 – Assume the economy is within a severe downturn with no inflation
  • Subscriptions to financial updates etc are not deductible
  • Google: pension

Unfortunately, it got just a little worse on the margin part. For reasons that weren’t completely apparent from the news release, the margins in the Display business were disappointing, which weighed down the total performance certainly. Given that Display is a lucrative business (but one where competition has been expected for quite a while now), that might be a problem in the years ahead.

All in all, 3M’s operating margins were a bit disappointing, and the company’s bottom-line EPS performance was a little much better than expected, but nothing at all to get excited about. On the happier note, the ongoing company did a fair bit better than I expected for full-year free cash flow, and that counts to me considerably more when compared to a quarterly EPS or margin amount. While I’m discouraged by the performance in Display, strength in the healthcare is good to see. I would have liked to have seen 3Mbump up its organic revenue growth estimate for the year, but I suppose it is better to under-promise at this time rather than disappoint the road. 3M has a valuable health care franchise (with real strength in dental, infection prevention, and wound care), as well as strong positions in segments like adhesives, abrasives, paint/finish/filler, optical films, and personal safety gear.

The most important feature is tax benefits it offers which can result in more than 10% yield in fixed debris, which is the best, no risk investment option in my opinion. NRE accounts are also the most convenient way to use your international cash flow in India and it also fully and freely repatriable.

And as the word goes, “The first casualty of war is truth.” I felt that the Bush doctrine of pre-emption was dangerous foreign policy. I don’t think it has made America safer. Look at the proceedings now: We are quickly closing in on what appears an awful lot like the Vietnamization of the Iraq war. John McCain says we’re able to be there for ten or two decades, and John Kerry says four years.

How many of our best teenagers will die between now and that time and what exactly for? Initially I thought I would take my acoustic guitar and play in some theaters, find some organizations to work for and do what I possibly could. I would lend my tone of voice for a big change in the administration and a change in direction of the country. Waiting in the wings will be a betrayal of the ideas I’d discussed for a long time. Not getting involved, just sort of maintaining my silence or being coy about any of it in some way, just wasn’t going to work this time out.

I felt that it was an extremely clear historical instant. Q: So there wasn’t an instant of doubt in your mind about what the right move to make was? A: It had been something that gestated over a period, and as occasions unfolded and the election got closer, it became clearer. I don’t want to view the country devolve into an oligarchy, this season watch the division of prosperity increase and find out another million people under the poverty series. Q: Are you looking to have your motives severely criticized? A: That’s only a part of what goes on. You understand you’re going to be attacked in different ways.

That just includes it. That wasn’t any concern. Q: Do you consider there’s a climate of aiming to intimidate artists and creative people? A: People are always wanting to shut in the people they don’t really agree with — through any means necessary, usually. There was an attempt to intimidate the Dixie Chicks certainly.

What happened to them was due to battle fever – simple as that, battle fever. They’ve handled it extremely. They are very smart, challenging women, plus they did not back down. Q: A lot of people believe that you haven’t any right as an artist to comment on this or are likely involved in politics. A: I don’t know if a lot of individuals think that. It really is something that is said. It’s the type of area of the “Punch and Judy” show that goes on when people disagree with what you’re stating.