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The Stingy News Weekly (01/24/2010)


"Nothing is so permanent as a temporary government program."
- Milton Friedman


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Asset Mixer Update
"We've just updated the popular Stingy Investor Asset Mixer and Periodic Table of Annual Returns for Canadians to include both nominal and real (or inflation-adjusted) returns for 2009."


Stingy Links

Tell me I'm wrong
"One thing is indisputable: the rally in financial markets worldwide has outpaced the fundamentals. At the beginning of 2009, most onlookers expected a generally weak economy and were concerned that the behavior of consumers and banks would remain conservative. They were 100% right, and fundamentals are still tenuous. And yet, the rally has exceeded all expectations of which I'm aware."


Oil windfalls and living standards
"When a country or a community discovers oil, should they rejoice or mourn? Should citizens be thrilled or worried when their governments receive fiscal windfalls? It might seem that the answers to these questions are obvious. How could finding an abundance of natural resources or stumbling on greater resources for the government to spend in the community be anything other than wonderful news? Yet economists are increasingly sceptical and many of them openly entertain the seemingly paradoxical notion that resources and windfalls may actually be bad news. In fact, some go so far as to speak of the "curse of natural resources""


The sweetest usurious bastards
"But it was the nature of the people I met that most stuck in memory. This was a business where if Jesus was alive he would pull down the Temple over them. It was precisely the sort of business the bible rails against. It offended my decency. But the people were lovely. I met management and a store owner - and - frankly they seemed exactly the sort of people you would like to have Friday drinks with. I liked them. This alarmed me of course - because I expected them to be scum. And maybe they are - but I couldn't tell. They were the sweetest usurious bastards (notwithstanding allegations in consumer complaints about the company)."


Underwater, but will they leave the pool?
"A provocative paper by Brent White, a law professor at the University of Arizona, makes the case that borrowers are actually suffering from a 'norm asymmetry.' In other words, they think they are obligated to repay their loans even if it is not in their financial interest to do so, while their lenders are free to do whatever maximizes profits. It's as if borrowers are playing in a poker game in which they are the only ones who think bluffing is unethical."


Paul Volcker
"In mid 2009, he joked that the only useful recent banking innovation was the invention of the ATM; by late last year, this was no longer presented in jest and he was deploring excesses in risk-taking and bonuses."


Better off deadbeat
"While most Americans with unpaid bills dread the collector's call, Cunningham sees them as lucrative opportunities. Many collection and credit card companies, intentionally or not, violate little-known consumer rights laws, and Cunningham's favorite pastime is catching them doing so and then suing them. In fact, it's a profitable side job."


6 impossible things before breakfast
"James Montier on how the EMH has damaged our industry."


Illinois enters a state of insolvency
"The sharp rise in pension payments is the biggest factor pushing Illinois toward what a legislative task force last November called "a 'tipping point' beyond which it will be impossible to reverse the fiscal slide into bankruptcy." The little-noticed report on the state's pension problems warned that "the radical cost-cutting and huge tax increases necessary to pay all the deferred costs from the past would become so large that many businesses and individuals would be driven out of Illinois, thereby magnifying the vicious cycle of contracting state services, increasing taxes, and loss of the state's tax base.""


China's silicon ceiling
"Can China get rich without becoming free? History suggests it can't."


Money for nothing
"I'm not even Andrew Ross Sorkin, the superstar financial writer at the New York Times. The advance for my new book wasn't in the millions of dollars. It wasn't even in the high six figures. Instead, we're talking more the, um, low five figures. After you deduct my agent's commission and the costs involved in research and writing, my take was in the very low five figures. This is, I'm sorry to say, more typical for authors. Indeed, most writers don't get published at all. Only giants like Sorkin or Palin command the great publishing sums. It raises a question that financial writers, for obvious questions, rarely ask: Should you really take financial advice from someone foolish enough to write for a living?"


Global tinderbox
"If the world appears to have escaped relatively unscathed by social unrest in 2009, despite suffering the worst recession since the 1930s, it might just prove the lull before the storm. Despite a tentative global recovery, for many people around the world economic and social conditions will continue to deteriorate in 2010."


Hoisington Q4 letter
"In 2009, the book This Time is Different.Eight Centuries of Financial Folly, by Reinhart and Rogoff, shed new light on the role of debt by compiling a database that looked at financial crises in 66 countries over a period of 800 years. The main standard in explaining more than 250 crises studied is whether debt is excessive relative to national income, even though idiosyncrasies apply in each case. They reiterate that this old rule (excessive debt) continues to apply, and this time is not different."


How America can rise again
"Are the fears of this moment our era's version of the 'missile gap'? Are they anything more than a combination of the two staple ingredients of doom-and-darkness statements through the whole course of our history? One of those ingredients is exaggerated complaint by whichever group is out of political power - those who thought America should be spelled with a 'k' under Nixon or Reagan, those who attend 'tea bag' rallies against the Obama administration now. The other is what historians call the bracing 'jeremiad' tradition of harsh warnings that reveal a faith that America can be better than it is. Football coaches roar and storm in their locker-room speeches at halftime to fire up the team, and American politicians, editorialists, and activists of various sorts have roared and stormed precisely because they have known this is the way the nation is roused to action."



DOW 30 Value Screens

High Dividend Yield StocksP/EP/BP/SP/DYield
AT&T (T)54355
Verizon (VZ)34555
EI DuPont (DD)12455
Kraft (KFT)34455
Merck (MRK)52155
Pfizer (PFE)34144
Chevron (CVX)54444
McDonald's (MCD)31244
Home Depot (HD)23544
Caterpillar (CAT)11544
Notes | More Info...


Value Ratio StocksP/EP/BP/SP/DVR
AT&T (T)54351.91
Verizon (VZ)34552.47
Merck (MRK)52152.62
Travelers (TRV)55433.33
Chevron (CVX)54443.37
Kraft (KFT)34453.91
Pfizer (PFE)34144.15
Johnson & Johnson (JNJ)42244.45
McDonald's (MCD)31244.68
Procter & Gamble (PG)43234.84
Notes | More Info...


Graham-Lite StocksP/EP/BP/DG$dG$(%)
Travelers (TRV)55378.0561.55
AT&T (T)54527.528.39
Chevron (CVX)54478.114.72
General Electric (GE)45316.431.99
Notes | More Info...


Top US StocksYieldV.R.Graham
AT&T (T)YYY
Chevron (CVX)YYY
Kraft (KFT)YY
McDonald's (MCD)YY
Merck (MRK)YY
Pfizer (PFE)YY
Travelers (TRV)YY
Verizon (VZ)YY
Caterpillar (CAT)Y
EI DuPont (DD)Y
General Electric (GE)Y
Home Depot (HD)Y
Johnson & Johnson (JNJ)Y
Procter & Gamble (PG)Y
Notes...



S&P/TSX60 Value Screens

High Dividend Yield StocksP/EP/BP/SP/DYield
BCE (BCE)34455
Telus (T)54455
CIBC (CM)12355
Bank of Montreal (BMO)43355
Transalta (TA)23455
Sun Life (SLF)15555
Bank of Nova Scotia (BNS)42355
National Bank of Canada (NA)53355
TransCanada (TRP)34255
Husky Energy (HSE)34444
Notes | More Info...


Value Ratio StocksP/EP/BP/SP/DVR
Telus (T)54451.63
National Bank of Canada (NA)53352.62
Enbridge (ENB)52442.76
Bank of Montreal (BMO)43352.95
Bank of Nova Scotia (BNS)42353.07
BCE (BCE)34453.10
Weston George (WN)55533.28
TransCanada (TRP)34253.92
Husky Energy (HSE)34444.08
Biovail (BVF)53234.23
Notes | More Info...


Graham-Lite StocksP/EP/BP/DG$dG$(%)
Weston George (WN)553110.0758.70
Encana (ECA)55350.9249.12
Telus (T)54543.3931.18
Talisman Energy (TLM)54220.8615.98
Canadian Tire (CTC.A)45264.4014.47
Biovail (BVF)53317.1210.66
Canadian Pacific Rail (CP)45358.328.55
National Bank of Canada (NA)53560.977.64
Notes | More Info...


Top Canadian StocksYieldV.R.Graham
National Bank of Canada (NA)YYY
Telus (T)YYY
BCE (BCE)YY
Bank of Montreal (BMO)YY
Bank of Nova Scotia (BNS)YY
Biovail (BVF)YY
Husky Energy (HSE)YY
TransCanada (TRP)YY
Weston George (WN)YY
CIBC (CM)Y
Canadian Pacific Rail (CP)Y
Canadian Tire (CTC.A)Y
Enbridge (ENB)Y
Encana (ECA)Y
Sun Life (SLF)Y
Talisman Energy (TLM)Y
Transalta (TA)Y
Notes...



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