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The Stingy News Weekly (02/06/2011)


"I quickly convinced myself that the true key to happiness lay in a modest standard of living which could be achieved with little difficulty under almost all economic conditions."
- Ben Graham


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Think twice
"Business schools have long sold the promise that, like an F1 driver zipping into the pits for fresh tyres, it just takes a short hiatus on an MBA programme and you will come roaring back into the career race primed to win. After all, it signals to companies that you were good enough to be accepted by a decent business school (so must be good enough for them) it plugs you into a network of fellow MBAs and, to a much lesser extent, there’s the actual classroom education. Why not just pay the bill, sign here and reap the rewards? The problem is that these days it doesn’t work like that. Rather, more and more students are finding the promise of business schools to be hollow. The return on investment on an MBA has gone the way of Greek public debt. If you have a decent job in your mid- to late- 20s, unless you have the backing of a corporate sponsor, leaving it to get an MBA is a higher risk than ever. If you are getting good business experience already, the best strategy is to keep on getting it, thereby making yourself ever more useful rather than groping for the evanescent brass rings of business school."


When Irish Eyes Are Crying
"First Iceland. Then Greece. Now Ireland, which headed for bankruptcy with its own mysterious logic. In 2000, suddenly among the richest people in Europe, the Irish decided to buy their country—from one another. After which their banks and government really screwed them. So where’s the rage?"


Cowen's Great Stagnation
"Cowen’s way of thinking is rather common, that growth emanates from some limited resource, and like ‘peak oil’ goes through a natural cycle of growth and decline. The Physiocrats in the eighteenth century believed that the wealth of nations was derived solely from the value of things from soil like minerals and agriculture, all the rest—advertising, management, finance—just parasitic. Such thinking influenced Malthus’s idea that we are all doomed by a finite amount of land, which will ultimately constrain our population via starvation. Later the labor theory of value tried to make labor the source of all wealth, where capital was disembodied labor. This too is mistaken, and while no one promotes these theories anymore, their intuition lives on."


The Hot Spotters
"Brenner wasn’t all that interested in costs he was more interested in helping people who received bad health care. But in his experience the people with the highest medical costs—the people cycling in and out of the hospital—were usually the people receiving the worst care. “Emergency-room visits and hospital admissions should be considered failures of the health-care system until proven otherwise,” he told me—failures of prevention and of timely, effective care. If he could find the people whose use of medical care was highest, he figured, he could do something to help them. If he helped them, he would also be lowering their health-care costs. And, if the stats approach to crime was right, targeting those with the highest health-care costs would help lower the entire city’s health-care costs. His calculations revealed that just one per cent of the hundred thousand people who made use of Camden’s medical facilities accounted for thirty per cent of its costs. That’s only a thousand people—about half the size of a typical family physician’s panel of patients."


The misunderstood side of value investing
"Warren Buffett, on the other hand, whom many consider a value investor, has modified, if not deserted, the value approach he once employed. At the extreme, value investing is, in Mr. Buffett’s own words, like buying a three-puff cigar butt for the price of one puff, and selling it for two, leaving the remnant for the final holder. The cigar is merely a butt, intended for a one-time gain. This is how Mr. Buffett started investing, until his partner, Charlie Munger, convinced him to modify his approach. Instead of looking for more one-time gains, Mr. Buffet instead began looking for steady businesses that would keep growing, and buy them only when, once in a blue moon, they suffered non-terminal problems that made their stock temporarily cheap."


Follow the Cash
"'A company can transfer that free cash flow to shareholders even without sales growth. That's our theology!' jokes the former seminarian. Double-digit cash-flow yields look very attractive compared with 10-year Treasuries yielding roughly 3.5%."


In debt to Grandpa
"Sometimes the financial system can appear like one of those Escher drawings in which water flows simultaneously uphill and downhill. Governments rescued banks from the threat of failure in 2008, but banks are also big buyers of government bonds—so much so that a sovereign default in Europe might cause a banking crisis. Who is supporting whom? The same question can be asked of pension funds."


How to Tax the Rich
"The president was too polite to mention it during his State of the Union speech on Tuesday, but here's a quick summary of the problem: The U.S. is broke. The hole is too big to plug with cost cutting or economic growth alone. Rich people have money. No one else does. Rich people have enough clout to block higher taxes on themselves, and they will. Likely outcome: Your next home will be the box that your laser printer came in. I hope that you kept it."



DOW 30 Value Screens

High Dividend Yield StocksP/EP/BP/SP/DYield
AT&T (T)55455
Verizon (VZ)13555
Merck (MRK)44255
Pfizer (PFE)14255
Kraft (KFT)45455
Johnson & Johnson (JNJ)43144
Intel (INTC)54144
McDonald's (MCD)21144
EI DuPont (DD)31344
Procter & Gamble (PG)23244
Notes | More Info...


Value Ratio StocksP/EP/BP/SP/DVR
AT&T (T)55451.35
Merck (MRK)44252.83
Intel (INTC)54143.11
Kraft (KFT)45453.17
Chevron (CVX)54443.41
Travelers (TRV)55433.47
Johnson & Johnson (JNJ)43143.54
McDonald's (MCD)21144.90
EI DuPont (DD)31345.01
Microsoft (MSFT)42125.15
Notes | More Info...


Graham-Lite StocksP/EP/BP/DG$dG$(%)
Travelers (TRV)55393.4262.73
JP Morgan Chase (JPM)55161.2237.30
AT&T (T)55537.7434.94
Kraft (KFT)45534.3410.10
Chevron (CVX)544103.896.98
Notes | More Info...


Top US StocksYieldV.R.Graham
AT&T (T)YYY
Kraft (KFT)YYY
Chevron (CVX)YY
EI DuPont (DD)YY
Intel (INTC)YY
Johnson & Johnson (JNJ)YY
McDonald's (MCD)YY
Merck (MRK)YY
Travelers (TRV)YY
JP Morgan Chase (JPM)Y
Microsoft (MSFT)Y
Pfizer (PFE)Y
Procter & Gamble (PG)Y
Verizon (VZ)Y
Notes...



S&P/TSX60 Value Screens

High Dividend Yield StocksP/EP/BP/SP/DYield
Transalta (TA)34455
BCE (BCE)43455
Bank of Montreal (BMO)54355
CIBC (CM)52355
Husky Energy (HSE)24455
Sun Life (SLF)55555
Telus (T)43455
TransCanada (TRP)24255
Power Corp (POW)35555
Shaw Comm Cl.B (SJR.B)21355
Notes | More Info...


Value Ratio StocksP/EP/BP/SP/DVR
Bank of Montreal (BMO)54352.47
CIBC (CM)52352.98
BCE (BCE)43453.08
National Bank (NA)53343.19
Sun Life (SLF)55553.21
Transalta (TA)34453.49
Telus (T)43453.91
Rogers Comm Cl.B (RCI.B)51443.98
Encana (ECA)55344.31
Bank of Nova Scotia (BNS)42244.45
Notes | More Info...


Graham-Lite StocksP/EP/BP/DG$dG$(%)
Encana (ECA)55439.7925.59
Nexen (NXY)55129.1621.78
Sun Life (SLF)55539.2918.99
Canadian Tire (CTC.A)45369.986.89
Bank of Montreal (BMO)54561.945.16
Kinross Gold (K)45117.112.16
Metro (MRU.A)53343.511.76
National Bank (NA)53470.940.24
Notes | More Info...


Top Canadian StocksYieldV.R.Graham
Bank of Montreal (BMO)YYY
Sun Life (SLF)YYY
BCE (BCE)YY
CIBC (CM)YY
Encana (ECA)YY
National Bank (NA)YY
Telus (T)YY
Transalta (TA)YY
Bank of Nova Scotia (BNS)Y
Canadian Tire (CTC.A)Y
Husky Energy (HSE)Y
Kinross Gold (K)Y
Metro (MRU.A)Y
Nexen (NXY)Y
Power Corp (POW)Y
Rogers Comm Cl.B (RCI.B)Y
Shaw Comm Cl.B (SJR.B)Y
TransCanada (TRP)Y
Notes...



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