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Stingy News Quarterly
2009: Q1 Q2 Q3 Q4
2008: Q1 Q2 Q3 Q4
2007: Q1 Q2 Q3 Q4
2006: Q1 Q2 Q3 Q4
2005: Q1 Q2 Q3 Q4
2004: Q1 Q2 Q3 Q4
2003: Q1 Q2 Q3 Q4
2002: Q1 Q2 Q3 Q4
2001: Q1 Q2 Q3 Q4
Stingy News Weekly
2009
12: 06 13 20 27
11: 01 08 15 22 29
10: 04 11 18 25
09: 06 13 20 27
08: 09 16 23 30
07: 05 12 19 26 31
06: 07 14 21 28
05: 03 10 17 24 31
04: 05 12 19 26
03: 01 08 15 22 29
02: 01 08 15 22
01: 04 11 18 25
2008
12: 07 14 21 28
11: 02 09 16 23 30
10: 05 12 19 26
09: 07 14 21 28
08: 01 10 17 24 31
07: 06 13 20 27
06: 01 08 15 22 29
05: 04 11 18 25
04: 06 13 20 27
03: 02 09 16 23 30
02: 03 10 17 24
01: 06 13 20 27
Dan's Reports
Perspective on the bear
Dilution excessive
Fund fees revisited
T class funds
Bonds vs. bond funds
Bear market protectors
Investing in bonds
Ignore bonds at your peril
Coping with change
Future of trust funds
Dilution trumps
Are fees excessive?
Performance anxiety
Top advisory model?
81-106 a step back
Poor fund classifications
Pension shortfall
A longer-term report card
Information overload
About Dan
Privacy Policy
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." - Warren Buffett New @ StingyInvestor Stingy Investor Asset Mixer 2008 http://www.ndir.com/cgi-bin/downside_adv.cgi "Check out our new and improved Asset Mixer. Now with nominal return data to the end of 2008!" 4 Graham Stocks for 2009 http://www.ndir.com/SI/articles/1108.shtml "Over the past eight years I've used my take on Benjamin Graham's time-tested strategy for defensive investors to uncover undervalued U.S. stocks. I'm pleased to say that the overall results have been superb. Over the last year we handily beat the index. But even our 16.8 percentage point outperformance wasn't enough to turn a profit in what is shaping up to be a whopper of a bear market." Stingy Links http://www.stingyinvestor.com/SI/articles/articlearchive.shtml The growing foreclosure crisis http://www.washingtonpost.com/wp-dyn/content/article/2009/01/16/AR2009011604724.html One oft-repeated assertion no longer holds true. Those in trouble are not, primarily, lower-income borrowers. The foreclosure crisis has become a wave, afflicting neighborhoods of every stripe -- but particularly communities created by the boom itself."" Dickensian days http://www.forbes.com/finance/forbes/2009/0202/087.html "The time to buy value stocks is now. This is not to say that the market will immediately rebound. I don't know where the bottom is, and neither does anyone else. I can simply be confident that value stocks will do well over the long pull and that you're better off buying them when Wall Street is despondent than when it is ebullient. This Dickensian tale could have a happy ending." Zombie debtors http://www.businessweek.com/magazine/content/09_04/b4117024316675.htm "Zombies. Seen one lately? If not, you may soon, because they are about to menace the U.S. economy. In financial lingo, zombies are debtors that have little hope of recovery but manage to avoid being wiped out thanks to support from their lenders or the government. Zombies suck life out of an economy by consuming tax money, capital, and labor that would be better deployed in growing companies and sectors. Meanwhile, by slashing prices to generate sales, zombie companies can drag healthier rivals into insolvency." Glorification of smoothness http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_dorfman&sid=alapGXx_ZxYI "As Warren Buffett, one of the world's most successful investors, wrote in a 1996 report, 'I would much rather earn a lumpy 15 percent over time than a smooth 12 percent.' Some academics and investment practitioners place a great value on low standard deviation of returns. They reason that returns that don't vary greatly from one year to another are more likely to be replicated. The best returns, on a multiyear basis, come from investment managers who make bold decisions, and who often invest contrary to prevailing wisdom. People who follow these practices rarely have even, predictable annual results." Hugo crawls back http://www.ibdeditorial.com/IBDArticles.aspx?id=316915138121814 "Expropriation hasn't worked so well. Chavez's state oil company, PDVSA, had virtually nothing left in its coffers after squandering $700 billion in oil earnings on political schemes like light bulb and milk factories. It needs $20 billion to develop its Orinoco Basin projects, which could produce 1.2 million barrels a day, but it can only do it with partners who have both capital and technology." Court ruling offers a lesson on avoiding tax https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20090115/RCESTNICK15 "The court did confirm that GAAR should not generally apply when taxpayers rearrange their borrowings to minimize their taxes. In the Lipson case, the court was fine with the interest deduction itself, but took offence to Mr. Lipson claiming the deduction by relying on the attribution rules to give him the deduction (he was the higher-income spouse, and therefore benefited more from the interest deduction). And so, we should spend some time looking at ways to arrange debt to make the interest deductible." Biggest meltdown winner http://network.nationalpost.com/np/blogs/francis/archive/2009/01/14/biggest-meltdown-winner-be-very-wary.aspx "The danger signs are if any of the three disastrous policies from the 1930s rear their ugly heads again: tariff barriers; higher taxes to balance budgets or higher interest rates to support currencies." Fundamental value investors http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1323890 "We examine novel data on the detailed investment decisions of professional value investors. We find evidence that value investors are not easily defined: they exploit traditional tangible asset valuation discrepancies such as buying high book-to-market stocks, but spend more time analyzing intrinsic value, growth measures, and special situation investments. We also test whether fundamental value investors outperform the market in our sample (January 2000 to June 2008). Analyzing buy-and-hold abnormal returns and calendar-time portfolio regressions, we conclude that value investors have stock picking skills." Questrade rebating mutual fund trailer fees http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2009/01/14/questrade-rebating-mutual-fund-trailer-fees.aspx "Questrade says its Mutual Fund Maximizer makes it the only direct access brokerage to rebate this fee -- representing up to 1% or more of the value of their mutual fund investments -- back to its clients." Will Exxon Get Googled? http://spectator.org/archives/2009/01/14/will-exxon-get-googled "And while nothing in our current energy infrastructure operates at the theoretical limits, pretty much everything is within spitting distance of Mother Nature's hard stop in terms of energy density and efficiency. Of course, there's room for progress. A 20 to 30 percent gain in efficiency in our national energy bill translates into serious money. Airlines, as well as most businesses, do back handsprings for such efficiency gains. But compared to the efficiency-created disruptions in the digital-info world, 30 percent is chump change. The reality is that we are stuck with limitations imposed by things like, well, Earth's rotation and distance from the sun, which determine the maximum energy possible from solar power. Or the biochemistry of photosynthesis, which ultimately determines biofuel economics, or the physical chemistry that dictates potential energy per pound of oil, ethanol, or lithium. " America cannot spend its way to prosperity http://www.ft.com/cms/s/0/c56f6950-e240-11dd-b1dd-0000779fd2ac.html "While some stimulus is called for, we cannot spend our way into economic prosperity, especially when all new spending is debt-financed. It was troubling to see one prominent incoming senior economic official refer to the Obama administration's planned stimulus proposal as a 'down payment' on the future. How can something be a down payment when there is no equity involved? This is an example of how words used in Washington do not always fit Webster's definitions." Fear is back on Wall Street http://money.cnn.com/2009/01/14/news/banks.fears.fortune/index.htm?postversion=2009011413 "Fears about the health of big financial firms and the overall economy have roared back into play, sending the stock market tumbling toward its lowest levels since last November. The Dow Jones Industrial Average dropped about 300 points one point Wednesday morning following the latest round of dark economic news. Retail sales fell 2.7% from a year ago in December, a decline twice as large as economists had expected." Too big to succeed http://www.ritholtz.com/blog/2009/01/too-big-to-succeed/ "Indeed, when it comes to conglomerates, we tend to see a two-part cycle. During the first part, acquisitions, mergers, big combinations are all the rage. Its a giant ego stroke for the CEOs, and it generates lots of fees for the iBankers. The second half of the equation comes when the awful handiwork of the M&A binge needs to be unassembled. That generates criticism of the CEOs, and lots of fees for the iBankers." Trillion-dollar spree is road to ruin http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=aGgZR28hHCPk "We are in the midst of a crisis caused by so many financial institutions borrowing too much money. Somehow, a critical mass of policy makers now believes that the correct response is for the U.S. government to borrow too much money." Tip Sheet http://www.stingyinvestor.com/SI/strategy/tipsheet.shtml Merry Christmas! http://www.ndir.com/SI/strategy/tipsheet/12-25-2008-Merry-Christmas.shtml A collection of links to help inspire a little Christmas cheer. DOW 30 Value Screens http://www.stingyinvestor.com/SI/strategy.shtml High Dividend Yield Stocks P/E P/B P/S P/D Yield ============================================ === === === === ===== General Electric (GE) 5 5 4 5 5 Pfizer (PFE) 2 3 1 5 5 Alcoa (AA) 0 5 5 5 5 JP Morgan Chase (JPM) 3 5 2 5 5 EI DuPont (DD) 4 3 4 5 5 AT&T (T) 2 4 2 4 4 Verizon (VZ) 1 4 3 4 4 Merck (MRK) 2 2 1 4 4 Caterpillar (CAT) 5 2 5 4 4 American Express (AXP) 5 4 3 4 4 More Info: http://www.stingyinvestor.com/SI/strategy/dogs.shtml Value Ratio Stocks P/E P/B P/S P/D VR ============================================ === === === === ===== General Electric (GE) 5 5 4 5 0.7 EI DuPont (DD) 4 3 4 5 1.0 American Express (AXP) 5 4 3 4 1.4 Pfizer (PFE) 2 3 1 5 1.5 Caterpillar (CAT) 5 2 5 4 1.5 JP Morgan Chase (JPM) 3 5 2 5 1.5 AT&T (T) 2 4 2 4 1.7 Chevron (CVX) 5 4 4 3 1.7 Boeing (BA) 4 1 5 3 2.0 Verizon (VZ) 1 4 3 4 2.2 More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml Graham Stocks P/E P/B P/D G$ dG$(%) ======================================== === === === ====== ====== Bank of America (BAC) 5 5 1 25.77 258.91 JP Morgan Chase (JPM) 3 5 5 41.08 80.01 General Electric (GE) 5 5 5 22.89 63.96 American Express (AXP) 5 4 4 25.98 52.71 Chevron (CVX) 5 4 3 106.22 48.07 Walt Disney (DIS) 4 4 1 29.90 39.34 EI DuPont (DD) 4 3 5 33.11 32.58 AT&T (T) 2 4 4 31.24 23.81 Caterpillar (CAT) 5 2 4 46.88 18.53 Pfizer (PFE) 2 3 5 18.80 7.43 Kraft (KFT) 2 4 4 29.97 4.66 More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml S&P/TSX60 Value Screens http://www.stingyinvestor.com/SI/strategy.shtml High Dividend Yield Stocks P/E P/B P/S P/C P/D Yield* ======================================= === === === === === ====== Biovail (BVF) 1 3 1 2 5 5 Bank of Montreal (BMO) 4 4 4 2 5 5 National Bank of Canada (NA) 4 4 4 0 5 5 CIBC (CM) 0 3 2 0 5 5 Bank of Nova Scotia (BNS) 3 3 3 5 5 5 Husky Energy (HSE) 4 2 3 4 5 5 Royal Bank (RY) 3 3 3 4 5 5 BCE (BCE) 4 4 3 4 5 5 Nova (NCX) 5 5 5 5 5 5 Toronto Dominion Bank (TD) 3 4 2 5 4 4 More Info: http://www.stingyinvestor.com/SI/strategy/dogs.shtml Value Ratio Stocks P/E P/B P/S P/C P/D VR ======================================== === === === === === ===== Nova (NCX) 5 5 5 5 5 0.3 National Bank of Canada (NA) 4 4 4 0 5 0.9 First Quantum Minerals Ltd. (FM) 5 5 4 5 3 0.9 Bank of Montreal (BMO) 4 4 4 2 5 0.9 Husky Energy (HSE) 4 2 3 4 5 1.0 BCE (BCE) 4 4 3 4 5 1.0 Petro Canada (PCA) 5 5 5 4 3 1.2 Bank of Nova Scotia (BNS) 3 3 3 5 5 1.5 Toronto Dominion Bank (TD) 3 4 2 5 4 1.5 Royal Bank (RY) 3 3 3 4 5 1.6 More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml Graham Stocks P/E P/B P/D G$ dG$(%) ======================================== === === === ====== ====== Teck Cominco Limited (TCK.B) 5 5 0 39.58 583.66 Nova (NCX) 5 5 5 34.40 402.12 First Quantum Minerals Ltd. (FM) 5 5 3 78.57 249.22 Inmet Mining (IMN) 5 5 1 72.01 248.72 Petro Canada (PCA) 5 5 3 81.89 177.20 Talisman Energy (TLM) 5 4 2 25.50 112.70 Nexen Inc. (NXY) 5 4 1 35.28 81.57 Agrium (AGU) 5 4 1 75.47 79.44 National Bank of Canada (NA) 4 4 5 55.89 71.55 Canadian Pacific Rail (CP) 4 4 3 64.74 67.03 BCE (BCE) 4 4 5 40.91 64.70 Magna Cl.A (MG.A) 2 5 3 59.71 61.73 Bank of Montreal (BMO) 4 4 5 52.23 61.70 Canadian Tire (CTC.A) 3 4 2 67.43 50.81 Toronto Dominion Bank (TD) 3 4 4 64.79 48.27 Canadian Natural Resources (CNQ) 4 3 1 71.46 47.21 Sun Life (SLF) 3 5 4 36.04 37.77 Encana (ECA) 4 3 4 78.06 37.60 Husky Energy (HSE) 4 2 5 45.15 37.52 Manulife (MFC) 3 4 4 29.39 30.73 Suncor Energy (SU) 4 2 1 35.31 28.49 Telus (T) 3 3 4 43.85 24.22 Royal Bank (RY) 3 3 5 40.15 19.36 Bank of Nova Scotia (BNS) 3 3 5 36.14 18.69 Yamana Gold Inc. (YRI) 1 5 2 9.70 13.37 CN Railway (CNR) 3 2 2 47.09 10.72 TransCanada (TRP) 2 3 4 35.71 4.87 More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml *Notes: http://www.stingyinvestor.com/SI/strategy/notes.shtml Switch to the HTML version if the tables aren't formatted properly. http://www.stingyinvestor.com/cgi-bin/email.cgi Books for Stingy Investors What Works On Wall Street by James O'Shaughnessy Historical stock data is what O'Shaughnessy's book is all about. If you want to know how straightforward stock selection techniques have done, pick up What Works on Wall Street and you'll find out. O'Shaughnessy's book is a must have reference for any serious student of the market. Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0071452257/ Stock Research From Dan Hallett & Associates The Rothery Report http://www.rotheryreport.com/ The Rothery Report provides research on select deep-value stocks in North America. Discover overlooked and undervalued stocks in quarterly investment reports which provide detailed analysis of Canadian and U.S. stocks. Weekly email news and additional updates keep subscribers informed about new opportunities and developments. Rothery Report Performance (03/31/2001 to 09/30/2008) Average Capital Gain Average Holding Period 36.2% 2.4 Years Learn More http://www.rotheryreport.com/store/store.shtml Subscribe Today http://www.rotheryreport.com/store/order.shtml If you'd like to suggest The Stingy News to a friend, please point them to: http://www.stingyinvestor.com/cgi-bin/email.cgi Please visit the StingyInvestor website at http://www.stingyinvestor.com To (un)subscribe please use our email centre at http://www.stingyinvestor.com/cgi-bin/email.cgi Email comments or questions to info@stingyinvestor.com Refer to legal & conflict of interest disclaimers at http://www.stingyinvestor.com/SI/legal.shtml Privacy Policy http://www.ndir.com/SI/legal/privacy.shtml We do not rent or sell our email list to third parties. ISSN 1499-2795 Copyright Dan Hallett and Associates Inc., 2009. All rights reserved. The securities mentioned in this report are not appropriate for all investors. Consult your professional investment advisor before making any investment decision. While all reasonable effort is made to ensure the accuracy of information and data contained herein, accuracy can not be guaranteed. Past performance is not a good predictor of future performance. Results are not guaranteed and we assume no liability whatsoever for any material losses that may occur. No compensation for suggesting particular securities or financial advisors is solicited or accepted. The information in this newsletter, and in its related website, is not intended to be, nor does it constitute, financial advice or recommendations. Investing in stocks can be risky and may result in substantial losses. A Dan Hallett and Associates Inc.(DH&A) publication. DH&A is registered as Investment Counsel in the province of Ontario. DH&A, or related-parties may have an interest in the securities mentioned.
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