The Stingy News Weekly (01/29/2012)
New @ StingyInvestor
3 villains can steal your retirement dreams
"Building a strong financial castle to fund your retirement is hard. If you’re not careful, you may discover a hole in your vault and three villains sneaking off with the family jewels."
Is the Value Effect Seasonal?
"This paper extends the research on value premium by examining patterns of seasonality exhibited in the book-to-market effect in major global equity markets. The results provide evidence supporting the January effect in the value premium phenomenon. Using stock market indices for Asia Pacific Europe, Australasia, and Far East (EAFE) and Europe, with and without the U.K., Scandinavian countries, the U.K., U.S., and Japan form 1975 through 2007, the paper provides out-of-sample evidence from twenty-one countries that comprise different index portfolios. As a robustness measures, we use regression analysis, paired means tests, and non-parametric tests to examine whether the persistence of the anomalous January value premium is real and significant. The annualized excess January value premium ranges from 42.96 percent for Scandinavian countries to 9.24 percent for EAFE markets with 20.28 percent for U.S. Even though such a predictable pattern exists, our analysis suggests that large standard deviations would not allow a viable investment strategy."
How to buy a company for no money down
"At the beginning of 2012, for example, there was a grand total of 12 TSX-listed stocks which met the Ben Graham test. They had a median market capitalization of $100-million and a float of perhaps half that – barely sufficient to create a portfolio for a small investor. More important, the net-net valuation assumes that all of the current assets can be liquidated at 100 cents on the dollar. This is a reasonable assumption for cash and short-term investments, generous for accounts receivable and heroic for inventory. In addition, the decision to ignore all long term assets may be prudent with regard to intangibles, but many established companies hold undervalued fixed assets on their balance sheet. This is not a new problem, of course, and twenty five years ago I received screens from the New York-based brokerage firm Oppenheimer that addressed these issues. The official name was the collateral value screen, but Norm Weinger of Oppenheimer referred to it as his “Buy a company, no money down” list."
Invest like a legend: David Dreman
"How I'd invest $100,000 right now: I’d put it in good-quality stocks in a portfolio large enough to diversify, or, for the average investor, an index fund. Stocks have traditionally gone up if we see inflation coming. We’re not seeing much inflation yet, but we’ve been printing an awful lot of money in the United States, they’ve printed $7 trillion since 2008. I’ve never seen the two not meet."
Active or passive? Process should drive choice
"Too many view passive and active investment as mutually-exclusive strategies decided upon via some quasi-political debate. On the contrary, I view active and passive as two strategies on the same continuum. Indeed, the ETF industry – once synonymous with passive investing – has created a blurring of the lines between active and passive strategies. The likes of Fundamental Indexing, equal-weighted indexes and other quant-driven indexes are pushing so-called ‘passive’ approaches closer to the active management side of the spectrum. That notwithstanding, as highlighted in my most recent Investment Executive article I am indifferent between passive and active investing – a view shared by my HighView partners and, accordingly, written into our firm’s investment philosophy."
The constancy of safe asset demand
"The findings are preliminary, but the authors calculate that the safe asset share — the percentage of safe assets to total assets in the US economy — has been roughly the same since 1952, at about 33 per cent."
China housing set for hard landing
"The numbers are grim: China's property bubble is heading for a spectacular burst, and its effect on the country's economy will be widespread."
DOW 30 Value Screens
S&P/TSX60 Value Screens
The Rothery Report
(Learn More | Subscribe)
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.
Graham Value Stocks
The Graham Value Stocks letter is designed for investors who want to keep up with our sensational stock selection methods inspired by Benjamin Graham. We comb through mountains of data to highlight U.S. and Canadian stocks that we believe to be both cheap and relatively safe.
|Disclaimers: Consult with a qualified investment adviser before trading. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, financial advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. More...|