It’s safe to say that reading filings isn’t the type of thing that typically sparks witty cocktail party conversations, such as the type footnoted readers are likely to have this upcoming Memorial Day weekend. But the 8-K that Expeditors International filed yesterday afternoon is clearly an exception to the rule.
We’ve footnoted before about Expeditors, which has practically made an art form out of filing with the SEC. And yesterday’s filing didn’t disappoint. While the filing was a routine Q&A response to questions that Expeditors says it has received from investors, it was hardly the usual dry affair that these sorts of filings typically are. In a filing that answered 45 questions — purportedly from investors — the company drops a wide range of names and takes stabs at an even wider range of people, from its competitors to large banks and their teams of smart MBAs. Here’s a snip that caught our attention in response to a question on why Expeditors doesn’t engage in currency hedging. The response started out by talking about Ben Stein’s latest book and then had this to say about currency trading:
”Just because we have the wherewithal to speculate, doesn’t mean we have to make some banker rich in doing so. Over the years we’ve lost and we’ve gained but we’re pretty sure that we’ve not lost anywhere near what we’d have paid in banking fees to run an expensive hedging operation that has some form of speculation at its core. Currency speculators seem to be very much like your neighbor who makes frequent trips to Las Vegas. One soon learns that the correct inquiry of your neighbor upon his or her return is not ‘How much did you win?’ If they won, they tell you about it. If they lose, you might see a “For Sale” sign on the BMW in the driveway…and in extreme cases…a realtor’s sign in front of the house, soon to be followed by a large moving van blocking your drive way.”
But the filing isn’t just content with knocking large banks once. It then goes into more detail and takes casinos and the government down in the process:
“As we all know, everyone wins in Las Vegas…and it’s the winning most people talk about. Unfortunately (or fortunately if you are a casino owner), everyone who gambles in Las Vegas also loses in Las Vegas…and the existence of all those marvelous edifices in the desert are ample proof that what’s lost in Las Vegas stays in Las Vegas….and obviously your neighbor and other visitors lose more than they win...Big financial institutions do a lot of currency speculation. But with them, if they win, like your gambling next door neighbor, they tell everyone about it. If they lose, they don’t talk about it…and if they lose a lot, unlike your gambling neighbor who just had to move, their own governments (We the People in other words), who they might well have even bet against, bail them out. Nice work if you can get it…and can still look yourself in the mirror in the morning.“
Another question — about falling prices in the freight business — also caught our attention for its mention of Sir Isaac Newton. While this wasn’t the first time that the noted physicist who’s been dead for 286 years was mentioned in filings, he’s not exactly a regular. Here’s a snip from that question, which also knocks some of Expeditors competitors for growing by acquisition. These acquisitions are “feted as “brilliant” and “accretive” in their announcement, to only later, with whispered funereal soberness and amid crushing lay-offs and large write-offs of “goodwill,” be divested, de-emphasized or closed outright. Unlike gravity, when it comes to logistics pricing, in defiance of Sir Isaac Newton’s often repeated “What goes up, must come down” observation, in the minds of some shippers, “What goes down, must stay there because that must be the ‘real’ price it should have been all along” seems to be the most acceptable response, self-justifying as it might be.”
Trust us, we spend a lot of time at the buffet and this is not the typical SEC filings fare.
We also really liked Question 20, which asked why Expeditors is a publicly traded company. Here’s the response:
“Because someone, no longer here, thought it would be a good idea back in 1984 to become more liquid. Being a public company is a little bit like being a crab in one of the crab pots on “Deadliest Catch.” It’s very easy to get into that pot and well-nigh impossible to get out of it. From a financial perspective, we have never needed the capital. We still have the money from our initial IPO (all $40 million of it) sitting in one of our bank accounts.”
We have no idea if investors really submitted these questions, since some companies have been known to write their own Q&As. But there’s clearly a very talented writer on Expeditors payroll. Then again, if filings were to start becoming this interesting to read, we might find ourselves with some competition on our hands.