Portfolio Revisited
Elizabeth Spiers Reviews The Second Issue Of The New Magazine
When the second issue of Portfolio, Condé Nast's big-budget business mag, came in over the transom, our first thoughts were various kinds of disappointment. There were pictures of cars on the cover. Very little about subprime, commercial paper, Chinese monetary policy, quant funds or the other things we've been obsessing over lately. And if it wasn't participating in the conversation that's been going on in board rooms and Wall Street, it also didn't seem to be setting the agenda for a new kind of conversation.
In our best hopes, Portfolio will be like a glamorous girl who, if she's not actually hosting the party, at least draws a crowd around her with bright, insightful and witty remarks about the passing scene. Instead she just seemed to be have a nice smile, a dullish dress and not much to say.
What's worse, it looked like we were actually going to have to read the thing. When the first issue showed up, we turned it over to our founder Elizabeth Spiers, who penned a three-thousand word critique. Now that she's moved on and is concentrating on her novel, we figured the chances of getting her to review the second issue were pretty slim.
Obviously we underestimated Spiers. She's back wielding her pen against Portfolio once again, this time in the pages of The New Republic.
[More after the jump]
Spiers starts off lamenting the lack of a high-end business magazine. "But if Portfolio were a high-end business magazine, I'd be an enthusiastic subscriber. The problem is that it's not. Press coverage has referred to it as a 'Vanity Fair for business.' It's not that, either," she writes.
And she's just getting started. The piece concludes by calling for the head of Joanne Lipman, Portfolio's top editor. Spiers suggests hiring Tina Brown to run the magazine.
Why Tina Brown? Isn't she the one who let Rosy O'Donnell edit the New Yorker? To understand why Spiers thinks Brown should get the job is to understand where exactly Spiers thinks Portfolio made a wrong turn. At the heart of the magazine's problem is a lack of an appreciation of power in business, according to Spiers. "Any magazine about power elites in America these days would be, by default, a magazine about business people--the people who, in Godfather-speak, inevitably 'pull the strings,'" Spiers writes. "And if Brown didn't know who those people were immediately, she'd figure it out, probably as much from personal interest as professional."
Traditionally, a new magazine is supposed to be given at least one year of publishing before it can be properly reviewed. It takes time for editorial direction to take shape, for writers, editors and subjects to understand each other and for readers to appreciate a new approach. So we're not ready to call for anyone's head just yet. Portfolio might be underperforming but so are a lot things these days. And, at the very least, it's editors can pat themselves on the back for having accomplished this much: they've now been reviewed by Spiers twice. As far as we know, that's a new record.
Distressed Asset [The New Republic]
Comments
i read her critique yesterday and i think Spiers is totally on point on all accounts. Joanne Lipman is an embarassment as an editor and the Weekend Journal is hardly a model for interesting reporting- she must have turned some tricks for Newhouse. Tina Brown would be fantastic
Posted by: mini ballerette. | August 23, 2007 09:37 AM
Well...I don't have a clue who Lipman, Brown or Spiers are. But here is what I know: I checked out this mag a few days back, and I was glad I did before purchasing. It was almost like a test drive..you get in a BMW only to discover it has a Honda DelSol engine.
Posted by: Optimus subprime | August 23, 2007 09:50 AM
My BMW has a BMW engine in it, not one from Honda.
Posted by: Stupid Robot | August 23, 2007 09:55 AM
"Their were pictures of cars "
a little hungover at DB this morning are we?
Posted by: Passed 3rd Grade Grammar | August 23, 2007 10:00 AM
Awesome catch "Passed"!
Posted by: Anonymous | August 23, 2007 10:08 AM
Spiers thinks Tina Brown should replace lipman as EIC, but perhaps it's Spiers who should land the gig?? She seems to be on point with all that’s wrong with Portfolio!! Then again, just because someone can spot the problems doesn't mean they can fix them right? Well there will always be the vets like Fortune, Business Week and Forbes to name a few, if Portfolio ends up in the CondeNast grave yard.
Posted by: SDH | August 23, 2007 10:09 AM
Didn't that person used to write for Deal Breaker, whatever happened to that... I thought she started this placed, why'd she go? Carney I'm looking at you....
Also you'll notice a week ago I predicted BofA would invest in Countrywide if CFC got into trouble. I'm like some sort of stock picking robot sent from the future. (and if some of you are thinking, "Why didn't you put your money where your mouth is"... I did, so suck it.
Posted by: Random Banker | August 23, 2007 10:09 AM
Re: Robot
Yes, you are stupid.
Posted by: Optimus subprime | August 23, 2007 10:11 AM
Random Banker, I would have bought some CFC myself but on the way to work a strawberry truck turned over and created a hell of a jam......
Posted by: Tim Sykes Wannabe | August 23, 2007 10:14 AM
stock picking robot from the future...every little boy's dream
Posted by: mini ballerette. | August 23, 2007 10:17 AM
Where did you predict the BoA financing? Please dig up the URL. Thanks.
Posted by: prove it | August 23, 2007 10:19 AM
Random Banker - you put your money where your mouth is? How? What price did you pay for your CFC equity? I hope it wasn't more than the $18 with a 7.5% coupon that BofA paid... OOOPS!!!
$2bn buys them about 2 weeks of liquidity when they are originating $200 to 450bn of non-agency loans that go straight to their balance sheet a DAY!!!
Posted by: Turkey Hunter | August 23, 2007 10:21 AM
Jan 2010 $40 calls. I don't give a fuck about the yield and I don't care if its underwater for a year. 2 or 3 years from now I'll be paid.
Posted by: Random Banker | August 23, 2007 10:26 AM
Jan 2010! way to water down your gamma.
Posted by: Anonymous | August 23, 2007 10:27 AM
I mean, really?
How many Jan 10 $40 calls do you want? I sell as many as you can buy...
Random by name, Random by nature...
Posted by: Turkey Hunter | August 23, 2007 10:32 AM
yeah, its called value investing. I'm not actually from the future, if I'd know BofA was gonna invest this week I would have bought September 07 $22 calls.
Posted by: Random Banker | August 23, 2007 10:34 AM
Joanne Lipman has been on Conde Nast payroll for at least two years by my count. That's a long time to put out two issues.
Posted by: Anon | August 23, 2007 10:38 AM
Methinks this was not a liquidity-generating move so much as a confidence boosting move with a hopeful signaling effect to the rest of the market re: CFC's business prospects/chances of survival.
Good deal for BofA it seems though. I wonder what sort of under-the-radar fun Citadel is having (besides gourging on Sentinel)
Posted by: JT | August 23, 2007 10:38 AM
Total abuse of the word transom... do you even know what it is? hint: it is not a series of tubes
Posted by: No | August 23, 2007 10:42 AM
Turkey Hunter: watch and learn.
Posted by: Random Banker | August 23, 2007 10:43 AM
@Random Banker: You bought long-dated OOM calls? Were you the only trade of the day? "Just" 30% of the volume? Was the spread over 500bp? Think you got pwned on that?
It would have been cheaper to just find a buddy and bet him for the same payoff. At least then you wouldn't have to pay the ridiculous spread.
I'm not impressed by BofA's history of strategic investments. Plenty of funds have blown through $2B as they went all China Syndrome. What do you see in CFC that's different?
Posted by: pshaw | August 23, 2007 10:44 AM
Hey Random Banker, when did you say you bought those calls? A week ago right? Is that the 16th or the 15th?
Here is the trading price / volume history for CFC Jan 2010 40 calls:
T 8/23 3.40 25
W 8/22 N/A 0
T 8/21 3.30 10
M 8/20 4.10 20
F 8/17 4.80 20
T 8/16 4.00 25
W 8/15 4.43 195
Are you the guy who bought $3,300 worth of calls? That's not much of an investment now is it? What kind of putting money where mouth is was that?
OR are you the guy who bought 195 calls at 4.43? That's over $86,000, which is quite a bit of money in mouth. But then it would mean that your investment has lost 25%in less than a week! That's not too good either...
Posted by: anon | August 23, 2007 10:49 AM
The BAC deal reeks of desperation. BAC's not CFCs, more to come.
Posted by: anon | August 23, 2007 10:53 AM
Right... watching and learning... If this was anything more than a publicity stunt Angelo Mozillo a.k.a The Human Tanning Bed wouldn't have shown up to the BofA offices last night in his canary yellow lambo, surrounded by press.
How do they say Smoke and Mirrors in the Random Banking world?
CFC has 55000 employees and strictly limited cashflow now that they can only move agency paper... not to mention having 42% of their hugely levered bank balance sheet in option ARMs that have just started negatively amortizing...
Posted by: Turkey Hunter | August 23, 2007 10:54 AM
What do I care if I'm down 25%? I only need the price to be up when I want to sell.
To paraphrase Warren Buffet "I don't try to make money in the market. I assume that after I invest the market will be closed for the next 5 (...er 2-3) years."
Posted by: Random Banker | August 23, 2007 11:08 AM
Did anyone really think that Spiers would like the second issue after that glowing review of the first? Please. She has no credibility. There is nothing Portfolio could have done to gain her respect, so why should anyone listen to her?
Posted by: susie | August 23, 2007 11:17 AM
Random Banker, I think you know how we feel about Warren Buffet... but leaving that aside, I really don't think that Buffetologists would consider financial WMDs to be a form of value investing...
Posted by: anon | August 23, 2007 11:20 AM
Random Banker:
No one cares. Please stop patting yourself on the back. You brought this up completely out of the blue, in a thread about a biz mag. Everyone likes to brag when they make a good trade, but honestly, DB comments section? get some drinking buddies.
Posted by: Anonymous | August 23, 2007 11:22 AM
Anon 11:22 - The irony is that this isn't even a good trade... Random Banker is bragging about a 25% paper loss.
That and he/she has no freakin' clue about CFC's business or the problems it has... did he watch the same interview with Leather Face on CNBC i did? Since when is 2bn worth of a $18 note with a 7.5% coupon a fair market price for a $22 stock...??????????
Posted by: Turkey Hunter | August 23, 2007 11:41 AM
Wow. One douchebag makes a douchebag comment and you all are off and running...
There were plenty of douchebag comments in this post and the TNR article. Wonder why you guys aren't all over that?
Posted by: elizabeth | August 23, 2007 11:51 AM
Funny, I thought I was reading comments relating to a post about the embarrassment that is Portfolio magazine
Posted by: I'm just saying | August 23, 2007 11:53 AM
I hunt wherever the turkeys are.
Posted by: Turkey Hunter | August 23, 2007 12:04 PM
I'm having ******* for lunch today (in case anyone in the office also patronizes DB). They are so good. NOW THAT'S RANDOM PEOPLE. Portfolio the mag sucks, mildly enjoy the website.
Posted by: inIT4the$ | August 23, 2007 12:35 PM
Admit it, Ms. Spiers, you miss all the inanity from the troll gallery, don't you?
Posted by: Zbignew | August 23, 2007 12:37 PM
Can someone please explain how drunk Carney got last night that he woke up this morning thinking that he's a woman writing for Vogue through the entire second paragraph? Faran, is that you?
Posted by: MH | August 23, 2007 12:55 PM
First of all I do happen to know a little bit about the mortgage lending space.
Second, you guys are so fucking myopic it retarded. Not only do I not care about a 25% paper loss. I expect to have a 25% paper loss at some point when I buy options that are 100% out of the money.
Posted by: Random Banker | August 23, 2007 02:10 PM
Retarded is making an unhedged bet that CFC will even be open for business in 3 yrs time.
I'm glad you "happen to know a little" something about mortgage lending... Does that extend to reading a balance sheet? I still haven't heard a response from you about why a company purchasing $2bn at 7.5% against a $18 option isn't in serious trouble... especially when they'll burn through that liquidity by Labor Day....
Posted by: Anonymous | August 23, 2007 03:20 PM
@Random Banker: 25% down in a week? Even on paper, that isn't good. Do you work for GSAM? Please tell me you didn't buy these on margin or with borrowed funds.
I'm not myopic; I just hate losing money in a way that would look foolish in hindsight. And you're getting emotional, defending yourself too much. You're not staying "cold and controlled" about your trading. Why are you letting emotions cloud your judgement?
Posted by: pshaw | August 23, 2007 04:10 PM
Its not unhedged its a long/short trade.
I do think they have serious problems. I like companies with serious problems. I don't think they're going bankrupt.
I'm not emotional at all. If I were emotional I wouldn't buy I company in the middle of a credit crisis. I have to assume I'm going be down, because I know that I am not good enough to call the exact bottom. I like contrarian positions so the more people arguing against me, the more confident I fee about the trade.
Posted by: Random Banker | August 23, 2007 06:21 PM