A rchive Date
[ 18-06-2003 ]
Category
[ International Relations ]
sub-Categoy
[ Canada ]
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[http://www.webfin.com/en/home/columnists/unusual_items/column_detail.html/?id=8082
Unusual Items
Save the Monkeys!
Updated: 17/06/03
Well, I warned those Americans not to switch to eating monkeys as a replacement to Canadian beef but again my pleas for some sanity during this onslaught of exotic diseases continue to go unheeded
Imagine West Nile virus, monkey pox, Mad Cow disease, SARS, Dutch Elm Disease, Psittacosis, all coming to Toronto at the same time. As if Toronto was a modern-day Sodom or Gomorrah and we were being punished for the abominations that occur within our city limits. I shudder to think what plague would come next if, say, men married men and women married women...
But barbecued chimpanzee steaks are not the real issue bothering me. The other gross and disgusting stuff that American put in their mouths is. Yes, I'm talking about McDonald's.
Because last week I did something I hadn't done in a long, long time.
I bought a stock.
It was cool. Acting like a ghost from 1999, at the height of the stock market, I casually brought up my online brokerage site on my computer, while I pretending to be working on something else and I bought 100 shares as if I was playing a game of Super Mario.
McDonald's, MCD, which was trading at US$19.09. McDonald's is mired in problems and had dropped to $12 just a short time ago in March. Had I bought in then, I would be able to retire now and bludgeon pigeons and squirrels full-time.
But anyway, with McDonald's dropping from a high of $45 in 2000 (after splitting its shares), sliding down to $12 a share over three years does not really inspire anybody to buy into your company. Especially if what you sell is food and the food you sell is inedible.
New CEO Jim Cantalupo, who came on board in January, promised better food, better service and less hysteric expansion of those ubiquitous franchises. The price of the shares turned a corner in the spring and the stock chart has been making a classic V formation, signaling that it's Fat City once again for Fat Cats like me buying Fast Food.
The problem is, I hate McDonald's. The food has nothing over African bush meat in the revulsion category. The hamburgers taste like something warm, plastic and greasy like a bicycle seat. The only redeeming quality McDonald's has, as a fast-food restaurant, is that on the long drive home from the cottage, the golden arches have the cleanest restrooms.
What really bugs me is that, to get their claws into customers at a young age, they offer toys with the kids' meals. In this way they admit that kids wouldn't willingly eat that stuff without a toy Star Wars thingy to fondle as they force down a chicken nugget.
So why am I plunking down my hard-earned money on a company whose products I dislike? A company that pays its employees the minimum required by law and whose corporate business model leaked like a Coke overflowing with ice?
Well, it's just business, son. However poorly they cook, the Big Mac makers are actually really efficient at making scads of money. And, given that the company's P/E ratio is a measly 27.4 that means its market value is trading well below its actual value.
McDonald's is the Rolls Royce of fast food companies with a tried and true formula of producing high volume cheap food at low costs. I know it's reprehensible that I buy something I don't approve of but at least they don't make cigarettes or nuclear warheads.
Like the little secret operation Uncle Eddy had in his basement, it's a money machine. Sure it's had some bad times lately but what company hasn't? The company is not going under and it will no doubt continue to sell trillions of hamburgers and fries and other stuff.
What is more interesting is the currency hedge aspect. With the Canadian dollar high, American stocks are relatively inexpensive. When the universe slides back to the way it is supposed to, and the Canadian dollar is once again worth US$0.63, the value of my McDonald's shares will increase relative to the Canadian dollar.
Already McDonald's shares have risen 15% from when I bought then so I've made enough money to buy several monkeys from Toronto pet stores and set them free in the Don Valley.
But of course the major thing about this is, I actually invested in something. I believe there is a future in the stock market. The Dow has risen 10% in the past six months. There is light at the end of the tunnel. Soon, McDonald's will once again make huge profits as happy customers march under the Golden Arches to order their hamburgers.
Just don't look too closely under the bun.
 World Fact Book (CIA)]
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