The Stingy News Weekly (01/16/2011)
| "The intelligent investor is likely to need considerable will
power to keep from following the crowd." | |
| - Benjamin Graham | |
Stingy Links
Worthless Stocks from China
"Bird's involvement would evolve from irritation that a company
could get away with making a claim that so obviously defies basic
business logic to the conviction that many pieces of the
Chinese miracle that trade in the U.S. are, in his words, 'flat-ass'
frauds. And what started as a retiree looking into a company has
turned into a dispute that has drawn in other shorts, the
Securities and Exchange Commission, auditors, and, according to recent
reports, the U.S. House Committee on Financial Services. It has
also revealed significant flaws in U.S. markets and how they
are regulated. Although the stocks trade on U.S. exchanges, and
thus project a sense of having to play by American rules, the
assets and the principals of many of the companies reside in China.
The companies operate on their terms, leaving injured parties
and the SEC powerless. Bird says the carnage is just beginning.
'The whole thing has no place to go but to blow up,' he says.
'That's a rational position for an investor to start with, that
every one of these Chinese reverse mergers is a fraud.'"
Is Law School a Losing Game?
"Based on the seething and regret you hear from some law school
grads, more than a few wish that someone had been patronizing
enough to say, “Oh no you don’t.” But it’s often hard to convince
students about the potential downside of law school, says Kimber
A. Russell, a 37-year-old graduate of DePaul, who writes the
Shilling Me Softly blog. “This idea of exceptionalism — I don’t
know if it’s a thing with millennials, or what,” she says,
referring to the generation now in its 20s. “Even if you tell them the
bottom has fallen out of the legal market, they’re all convinced
that none of the bad stuff will happen to them. It’s a serious,
life-altering decision, going to law school, and you’re dealing
with a lot of naïve students who have never had jobs, never paid
real bills.”"
A Brief Visual History of U.S. Taxes
"Tax reform might be The Issue of 2011. Or, like most years, it
might linger on the sidelines of the national debate, but never
press its way into the limelight. Either way, the Senate Finance
Committee is hearing the case for tax reform today -- and who
better to hear from first than the head of the Joint Committee on
Taxation, Congress' official oracle and arbiter of tax policy.
You can download the full testimony here, but I wanted to pass
along four easy charts from the presentation that explain some
major developments in the tax code over the last 40 years. I don't
want to say too much, as these charts speak for themselves."
Putting monthly distributions to the test
"I don’t make many bold predictions. But nearly a decade ago I
did just that. I challenged the most popular monthly income mutual
fund of the day, now known as IA Clarington Canadian Income. I
stated that this balanced fund’s 10% distribution rate at the
time could not be sustained and would have to be cut. No
recommendation has ever caused me such grief. I received angry phone
calls and e-mails. But I turned out to be right. Fast forward to
2011. In today’s Global and Mail I take readers through a process
for testing whether an investment’s monthly cash payout can
continue longer-term. It’s the same process I used to make my
Clarington prediction in 2001. While Clarington and some other firms
have adopted more flexible distribution policies, several funds
continue to sport unsustainable cash payouts. And I use a popular
big bank fund to illustrate our distribution sustainability test
in today’s article."
DOW 30 Value Screens
| High Dividend Yield Stocks | P/E | P/B | P/S | P/D | Yield | | AT&T (T) | 5 | 5 | 4 | 5 | 5 |
| Verizon (VZ) | 1 | 3 | 5 | 5 | 5 |
| Pfizer (PFE) | 1 | 4 | 2 | 5 | 5 |
| Merck (MRK) | 4 | 4 | 2 | 5 | 5 |
| Kraft (KFT) | 5 | 5 | 4 | 5 | 5 |
| Johnson & Johnson (JNJ) | 4 | 2 | 1 | 4 | 4 |
| McDonald's (MCD) | 2 | 1 | 1 | 4 | 4 |
| EI DuPont (DD) | 3 | 2 | 3 | 4 | 4 |
| Chevron (CVX) | 5 | 4 | 4 | 4 | 4 |
| General Electric (GE) | 1 | 4 | 4 | 4 | 4 |
| Notes | More Info... |
| Value Ratio Stocks | P/E | P/B | P/S | P/D | VR | | AT&T (T) | 5 | 5 | 4 | 5 | 1.29 |
| Travelers (TRV) | 5 | 5 | 4 | 3 | 2.85 |
| Merck (MRK) | 4 | 4 | 2 | 5 | 3.23 |
| Kraft (KFT) | 5 | 5 | 4 | 5 | 3.27 |
| Chevron (CVX) | 5 | 4 | 4 | 4 | 3.58 |
| Johnson & Johnson (JNJ) | 4 | 2 | 1 | 4 | 3.67 |
| Intel (INTC) | 5 | 3 | 1 | 3 | 3.80 |
| EI DuPont (DD) | 3 | 2 | 3 | 4 | 4.48 |
| McDonald's (MCD) | 2 | 1 | 1 | 4 | 4.95 |
| Procter & Gamble (PG) | 2 | 3 | 2 | 4 | 5.37 |
| Notes | More Info... |
| Graham-Lite Stocks | P/E | P/B | P/D | G$ | dG$(%) | | Travelers (TRV) | 5 | 5 | 3 | 97.36 | 78.22 |
| AT&T (T) | 5 | 5 | 5 | 40.03 | 40.82 |
| JP Morgan Chase (JPM) | 4 | 5 | 1 | 58.66 | 30.62 |
| Kraft (KFT) | 5 | 5 | 5 | 34.09 | 8.79 |
| Chevron (CVX) | 5 | 4 | 4 | 98.29 | 5.88 |
| Notes | More Info... |
| Top US Stocks | Yield | V.R. | Graham | | AT&T (T) | Y | Y | Y |
| Chevron (CVX) | Y | Y | Y |
| Kraft (KFT) | Y | Y | Y |
| EI DuPont (DD) | Y | Y | |
| Johnson & Johnson (JNJ) | Y | Y | |
| McDonald's (MCD) | Y | Y | |
| Merck (MRK) | Y | Y | |
| Travelers (TRV) | | Y | Y |
| General Electric (GE) | Y | | |
| Intel (INTC) | | Y | |
| JP Morgan Chase (JPM) | | | Y |
| Pfizer (PFE) | Y | | |
| Procter & Gamble (PG) | | Y | |
| Verizon (VZ) | Y | | |
| Notes... |
S&P/TSX60 Value Screens
| High Dividend Yield Stocks | P/E | P/B | P/S | P/D | Yield | | Transalta (TA) | 2 | 4 | 4 | 5 | 5 |
| BCE (BCE) | 4 | 3 | 4 | 5 | 5 |
| Bank of Montreal (BMO) | 5 | 4 | 3 | 5 | 5 |
| Telus (T) | 4 | 3 | 4 | 5 | 5 |
| Husky Energy (HSE) | 3 | 4 | 4 | 5 | 5 |
| Sun Life (SLF) | 5 | 5 | 5 | 5 | 5 |
| CIBC (CM) | 5 | 2 | 3 | 5 | 5 |
| TransCanada (TRP) | 2 | 4 | 2 | 5 | 5 |
| Power Corp (POW) | 3 | 5 | 5 | 5 | 5 |
| Shaw Comm Cl.B (SJR.B) | 3 | 1 | 2 | 5 | 5 |
| Notes | More Info... |
| Value Ratio Stocks | P/E | P/B | P/S | P/D | VR | | Bank of Montreal (BMO) | 5 | 4 | 3 | 5 | 2.58 |
| BCE (BCE) | 4 | 3 | 4 | 5 | 2.92 |
| Sun Life (SLF) | 5 | 5 | 5 | 5 | 2.93 |
| CIBC (CM) | 5 | 2 | 3 | 5 | 3.04 |
| National Bank (NA) | 5 | 3 | 3 | 4 | 3.21 |
| Telus (T) | 4 | 3 | 4 | 5 | 3.41 |
| Transalta (TA) | 2 | 4 | 4 | 5 | 3.81 |
| Rogers Comm Cl.B (RCI.B) | 5 | 1 | 4 | 4 | 4.05 |
| Shaw Comm Cl.B (SJR.B) | 3 | 1 | 2 | 5 | 4.16 |
| Bank of Nova Scotia (BNS) | 4 | 2 | 2 | 4 | 4.22 |
| Notes | More Info... |
| Graham-Lite Stocks | P/E | P/B | P/D | G$ | dG$(%) | | Encana (ECA) | 5 | 5 | 4 | 39.59 | 26.85 |
| Sun Life (SLF) | 5 | 5 | 5 | 39.36 | 25.20 |
| Nexen (NXY) | 5 | 5 | 1 | 29.21 | 21.31 |
| Canadian Tire (CTC.A) | 4 | 5 | 3 | 70.13 | 7.40 |
| Bank of Montreal (BMO) | 5 | 4 | 5 | 61.12 | 2.66 |
| Kinross Gold (K) | 4 | 5 | 1 | 17.03 | 2.46 |
| Notes | More Info... |
| Top Canadian Stocks | Yield | V.R. | Graham | | Bank of Montreal (BMO) | Y | Y | Y |
| Sun Life (SLF) | Y | Y | Y |
| BCE (BCE) | Y | Y | |
| CIBC (CM) | Y | Y | |
| Shaw Comm Cl.B (SJR.B) | Y | Y | |
| Telus (T) | Y | Y | |
| Transalta (TA) | Y | Y | |
| Bank of Nova Scotia (BNS) | | Y | |
| Canadian Tire (CTC.A) | | | Y |
| Encana (ECA) | | | Y |
| Husky Energy (HSE) | Y | | |
| Kinross Gold (K) | | | Y |
| National Bank (NA) | | Y | |
| Nexen (NXY) | | | Y |
| Power Corp (POW) | Y | | |
| Rogers Comm Cl.B (RCI.B) | | Y | |
| TransCanada (TRP) | Y | | |
| Notes... |
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