"In my whole life, I have known no wise people (over a broad
subject matter area) who didn't read all the time - none, zero. You'd
be amazed at how much Warren reads - at how much I read. My
children laugh at me. They think I'm a book with a couple of legs
sticking out."  - Charlie Munger


Stingy Links
http://www.stingyinvestor.com/SI/articles/articlearchive.shtml

Can talk of a depression lead to one?
http://www.nytimes.com/2009/02/22/business/economy/22view.html
"The attention paid to the Depression story may seem a logical
consequence of our economic situation. But the retelling, in fact,
is a cause of the current situation - because the Great
Depression serves as a model for our expectations, damping what John
Maynard Keynes called our 'animal spirits,' reducing consumers'
willingness to spend and businesses' willingness to hire and
expand. The Depression narrative could easily end up as a
self-fulfilling prophecy."

'Nationalize' the banks
http://online.wsj.com/article/SB123517380343437079.html
"How does Mr. Roubini think the media has covered the financial
crisis? "The problem," he says -- after first stating to me that
he intends "no offense!" -- "is that in the bubble years,
everyone becomes a cheerleader, including the media. This is the time
when journalists should be asking tough questions, and I think
there was a failure there. The Masters of the Universe were
always on the cover, or the front page -- the hedge-fund guys, the
imperial CEO, private equity. I wish there had been more financial
and business journalists, in the good years, who'd said, 'Wait
a moment, if this man, or this firm, is making a 100% return a
year, how do they do it? Is it because they're smarter than
everybody else . . . or because they're taking so much risk they'll
be bankrupt two years down the line?' "And I think, in the bubble
years, no one asked the hard questions. A good journalist has
to be one who, in good times, challenges the conventional wisdom.
If you don't do that, you fail in one of your duties."" [and in
the depression years?]

California's meltdown
http://www.usatoday.com/money/economy/housing/2009-02-19-california-hurting_N.htm
"California may still seem to be the dreamy land of movie stars
and swimming pools, beautiful beaches and endless summer. But the
reality - and perhaps the future - of the nation's largest
state looks more like this gritty city on San Pablo Bay north of San
Francisco, where past extravagance has collided with economic
recession and the collapse of home values to push it into
bankruptcy."

Double trouble
http://online.barrons.com/article/SB123517396995937201.html
"House prices, in our bloodshot view, have another 20% or so to
fall before hitting bottom and, at the earliest, we're talking
sometime next year. And, possibly more important, a meaningful
brightening of the current, profoundly bleak jobs picture, isn't in
the cards for certainly as long, if not longer."

How California became France
http://online.wsj.com/article/SB123517419077037281.html
"This week's deal likely won't keep the state in balance beyond
18 months, perhaps even fewer. "This budget will take us through
2010," says Karen Bass, the Assembly speaker, a Democrat from
Los Angeles. "I don't know if it will hold." Some Democrats and
Republicans privately say the best option may be failure. The
rough scenario is fiscal insolvency, followed perhaps by federal
receivership. No precedent or legal avenue exists for a state to
reorganize its affairs under a form of Chapter 11 protection, but
that striking suggestion sounds better by the day."

An interview with Robert Shiller
http://business.theatlantic.com/2009/02/an_interview_with_robert_shiller.php
"How do we explain the fluctuations of the business cycle, or the
existence of involuntary unemployment? In answering these
questions, Shiller and Akerlof turn to John Maynard Keynes's notion
of the animal spirits: "the restless and inconsistent element in
the economy" that is not easily explained by reference to
rational actors with simple economic motivations."

Real Bubble
http://www.ndir.com/SI/strategy/tipsheet/02-20-2009-Real-Bubble.shtml
"The graph shows the extent of the bubble and doesn't provide
much comfort for housing bulls. Home prices will have to fall much
further before reaching median levels."

Fairfax Financial's 2008 coup
http://network.nationalpost.com/np/blogs/francis/archive/2009/02/19/fairfax-financial-s-2008-coup.aspx
"The year 2008 will go down as one of history's worst, but it was
the best year in the history of Canada's Fairfax Financial
Holdings Limited. Its Chair and CEO, Prem Watsa, and his team, were
among the few money managers who forecasted, and profited, from
the economic catastrophe. As a result, Fairfax has become one of
North America's 10 largest property and casualty companies."

Why banks failed the stress test
http://www.bis.org/review/r090219d.pdf
"By any historical standard, the financial crisis of the past 18
months has been extraordinary. Some have suggested it is the
worst since the early 1970s; others, the worst since the Great
Depression; others still, the worst in human history. Time will
tell. Risk managers are of course known for their pessimistic
streak. Back in August 2007, the Chief Financial Officer of Goldman
Sachs, David Viniar, commented to the Financial Times: 'We are
seeing things that were 25-standard deviation moves, several days
in a row' To provide some context, assuming a normal
distribution, a 7.26-sigma daily loss would be expected to occur once every
13.7 billion or so years. That is roughly the estimated age of
the universe. A 25-sigma event would be expected to occur once
every 6 x 10**124 lives of the universe. That is quite a lot of
human histories. When I tried to calculate the probability of a
25-sigma event occurring on several successive days, the lights
visibly dimmed over London and, in a scene reminiscent of that
Little Britain sketch, the computer said 'No'. Suffice to say, time
is very unlikely to tell whether Mr Viniar's empirical
observation proves correct. Fortunately, there is a simpler explanation
- the model was wrong."

Stanford attorney's exit 'screams fraud'
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7cCkC33mzbg&refer=home
"Regulators pounced days after a lawyer at the Antigua bank at
the heart of the case 'disaffirmed' everything he had told
authorities. 'The attorney's withdrawal is a massive red flag' that
'screams fraud,' said Peter Henning, who teaches criminal and
securities law at Wayne State University in Detroit."

Dividend and conquer
http://www.marketwatch.com/News/Story/Story.aspx?guid=8883a0e779a043d1a077045371436928&siteid=nwhpf&sguid=C7jdYzqv1k-W67x_D2ZD6Q
"Dividends are delectable again. This is to say, the bear market
is renewing investors' appreciation of the contribution that
dividends make to the returns of their stock portfolios -- as
opposed to capital gains."

Which talking heads to trust
http://money.cnn.com/2009/02/17/pf/experts_Tetlock.moneymag/index.htm
"Which forecasters should you trust on the direction of the
economy and the markets? Ask Philip Tetlock, who knows the kind of
expert worth listening to - and what to listen for."

Housing starts at another record low
http://www.calculatedriskblog.com/2009/02/housing-starts-at-another-record-low.html
"Total housing starts were at 464 thousand (SAAR) in January, by
far the lowest level since the Census Bureau began tracking
housing starts in 1959."

Feeding a family in the depression
http://www.thestar.com/living/article/588371
"It was a time of making do and doing without. The Great
Depression forced thousands out of their jobs, but most of the burden
was shouldered by the homemaker, who had to keep the family fed."

A short history of the national debt
http://online.wsj.com/article/SB123491373049303821.html
"It was not ever thus. Before the Great Depression, balancing the
budget and paying down the debt were considered second only to
the defense of the country as an obligation of the federal
government. Before 1930, the government ran surpluses in two years
out of three. In 1865, the vast debt run up in the Civil War
amounted to about 30% of GDP; by 1916 it was less than a tenth of
that. There even was a time when the U.S. made it a deliberate
policy to pay off the national debt entirely -- and succeeded in
doing so."

Investors cannot rely on mainstream media
http://oldprof.typepad.com/a_dash_of_insight/2009/02/why-investors-cannot-rely-on-mainstream-media-sources.html
"Anyone who does not follow the dynamics of the labor market is
only telling part of the story. This is important. The net job
loss understates the perceived impact. It also overstates the
actual impact, since the job creation is ignored. Most people react
to actual gross job loss and layoff announcements. The new jobs
get no publicity."

For Japan, a long, slow slide
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200913.html
"As the United States frets noisily about a recession, Japan is
quietly enduring a far more fundamental economic slide, one that
seems irreversible. This country, which got rich quick in a
postwar miracle of manufacturing and alarmed Americans by buying up
baubles such as Rockefeller Center, is steadily slipping
backward as a major economic force."

Inside the meltdown
http://www.pbs.org/wgbh/pages/frontline/meltdown/view/
"On Thursday, Sept. 18, 2008, the astonished leadership of the
U.S. Congress was told in a private session by the chairman of the
Federal Reserve that the American economy was in grave danger
of a complete meltdown within a matter of days."

20 dividend plays for 2009
http://online.barrons.com/article/SB123457772049986949.html
"This year likely will see the largest annual decline since 1942
in dividends paid by the companies in the Standard & Poor's 500
index. S&P projects dividends will fall by 13% in 2009, and the
numbers could get worse. "We're taking an optimistic view," says
Howard Silverblatt, the senior index analyst at S&P. "If
corporations don't see better business conditions later this year,
dividend cuts could become more widespread.""

Third Avenue Q1 2009
http://www.thirdave.com/ta/documents/sl/shareholderletters-09Q1.pdf
"A Net-Net is defined as a common stock issue where the market
value of high quality assets, usually readily saleable, exceeds by
a comfortable margin the market value of the company's equity
capitalization after deducting all liabilities. The concept of
Net-Nets was invented by Graham and Dodd, the godfathers of value
investing. Third Avenue has refined the Graham and Dodd
definition of Net-Nets."

$8 Billion fraud
http://www.nytimes.com/2009/02/18/business/18stanford.html?_r=1
"The Securities and Exchange Commission accused Robert Allen
Stanford, the chief of the Stanford Financial Group, on Tuesday of
conducting 'a massive ongoing fraud' in the sale of about $8
billion of high-yielding certificates of deposit held in the firm's
bank in Antigua. Also named in the suit were two other
executives and some affiliates of the financial group."

Berkshire reduces stakes
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIayUGNXjxug&refer=home
"Known as the 'Oracle of Omaha,' Buffett, 78, has become a cult
figure among investors, drawing 31,000 people to that city's
Qwest Center arena for his annual shareholders meeting last year. He
makes most of the investment decisions at Berkshire, while Lou
Simpson, 72, manages the portfolio for car insurance unit Geico
Corp. Buffett has cautioned investors against assuming all moves
in the equity portfolio are his."

The no-stats all-star
http://www.nytimes.com/2009/02/15/magazine/15Battier-t.html?_r=2&em
"Here we have a basketball mystery: a player is widely regarded
inside the N.B.A. as, at best, a replaceable cog in a machine
driven by superstars. And yet every team he has ever played on has
acquired some magical ability to win."

Feds need to break up big banks
http://www.marketwatch.com/News/Story/Story.aspx?guid={578BDAD1-5FA5-4704-8157-6D265DDE84A4}&siteid=nbkh
"Nobody is going to put fresh capital into the banking business
when your major competitor is going to be continuously bailed out
by the United States government with more and more money."

Stocks now distinctly cheap
http://www.businessinsider.com/stocks-now-distinctly-cheap-2009-2
"One of the only silver linings of the current mess is that
stocks are increasingly priced to deliver a compelling long-term
return. Given that stocks had been overvalued for more than 15 years
through last summer, this is a refreshing change. If the S&P
does go to 600, which we think is possible, stocks will finally be
a screaming buy."

Markets in 19th century Britain
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1341328
"This article examines the size and value anomalies using an
original dataset consisting of monthly information on stock prices
and annual information on dividends for 1,051 stocks traded in
the London Stock Exchange between 1825 and 1870. In this
historical British stock market, smaller stocks are found to deliver
significantly higher returns than the larger ones. Value stocks
indicated by high dividend yield also have higher average returns
than growth stocks. The empirical evidence from this article
provides important and fresh new empirical evidence on the asset
pricing anomalies, suggesting that the size and value anomalies are
unlikely to be random events that just appeared by chance."




Tip Sheet
http://www.stingyinvestor.com/SI/strategy/tipsheet.shtml

Real Bubble
http://www.ndir.com/SI/strategy/tipsheet/02-20-2009-Real-Bubble.shtml
Long-term returns from real estate are grim.

Peak Earnings
http://www.ndir.com/SI/strategy/tipsheet/02-20-2009-Peak-Earnings.shtml
Check out a long-term graph of the S&P500's
price-to-peak-earnings ratio.

A Lost Decade, or Two
http://www.ndir.com/SI/strategy/tipsheet/02-19-2009-A-Lost-Decade,-or-Two.shtml
More than 75% of the stocks in the Dow Jones Industrial Average are
now trading below prices first seen more than a decade ago.  Almost
17% first hit today's closing price more than two decades ago.




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   4   4   5    5
Alcoa  (AA)                                   0   5   5   5    5
Pfizer  (PFE)                                 2   4   1   5    5
EI DuPont  (DD)                               4   2   4   5    5
JP Morgan Chase  (JPM)                        1   5   2   5    5
Verizon  (VZ)                                 2   3   3   4    4
Caterpillar  (CAT)                            5   2   5   4    4
American Express  (AXP)                       5   4   4   4    4
Merck  (MRK)                                  4   2   1   4    4
AT&T  (T)                                     1   3   2   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   4   4   5   0.4
Caterpillar  (CAT)                            5   2   5   4   0.7
American Express  (AXP)                       5   4   4   4   1.0
EI DuPont  (DD)                               4   2   4   5   1.1
Pfizer  (PFE)                                 2   4   1   5   1.2
Chevron  (CVX)                                5   4   4   3   1.3
Merck  (MRK)                                  4   2   1   4   1.4
JP Morgan Chase  (JPM)                        1   5   2   5   1.9
Verizon  (VZ)                                 2   3   3   4   2.0
Boeing  (BA)                                  3   0   5   3   2.1
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   18.37 384.69
General Electric  (GE)                    5   4   5   18.95 101.99
American Express  (AXP)                   5   4   4   23.14  78.40
Walt Disney  (DIS)                        4   5   1   28.92  64.96
JP Morgan Chase  (JPM)                    1   5   5   32.78  64.73
Chevron  (CVX)                            5   4   3  104.61  60.77
Caterpillar  (CAT)                        5   2   4   35.66  33.76
Pfizer  (PFE)                             2   4   5   16.21  18.23
Hewlett-Packard  (HPQ)                    3   3   1   34.31   9.81
Kraft  (KFT)                              2   4   4   25.20   7.20
Home Depot  (HD)                          2   3   3   20.45   5.07
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   2   1   2   5    5
Bank of Montreal (BMO)                   4   5   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
Royal Bank (RY)                          3   3   3   4   5    5
Toronto Dominion Bank (TD)               4   5   3   5   5    5
BCE (BCE)                                5   4   3   4   5    5
Sun Life (SLF)                           3   5   4   4   5    5
Telus (T)                                4   3   3   4   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
======================================== === === === === === =====
National Bank of Canada (NA)              4   4   4   0   5   0.8
Bank of Montreal (BMO)                    4   5   4   2   5   0.9
BCE (BCE)                                 5   4   3   4   5   1.0
Petro Canada (PCA)                        5   5   5   5   3   1.2
Toronto Dominion Bank (TD)                4   5   3   5   5   1.3
Husky Energy (HSE)                        5   2   4   4   4   1.4
Royal Bank (RY)                           3   3   3   4   5   1.4
Bank of Nova Scotia (BNS)                 3   3   3   5   5   1.5
Telus (T)                                 4   3   3   4   4   1.6
First Quantum Minerals Ltd. (FM)          5   4   4   5   2   1.8
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   39.92 654.54
Petro Canada (PCA)                        5   5   3   81.89 177.20
Inmet Mining (IMN)                        5   5   1   71.72 174.68
First Quantum Minerals Ltd. (FM)          5   4   2   78.53 155.81
Talisman Energy (TLM)                     5   4   2   25.53  99.33
Nexen Inc. (NXY)                          5   4   2   35.29  91.25
National Bank of Canada (NA)              4   4   5   56.05  74.01
Canadian Tire (CTC.A)                     4   5   3   67.40  67.98
BCE (BCE)                                 5   4   5   40.86  63.56
Bank of Montreal (BMO)                    4   5   5   52.27  63.08
Groupe Aeroplan (AER)                     2   5   4   16.70  62.80
Toronto Dominion Bank (TD)                4   5   5   64.69  62.55
Canadian Pacific Rail (CP)                4   4   3   64.82  62.08
Magna Cl.A (MG.A)                         2   5   3   60.07  60.71
Agrium (AGU)                              5   3   1   75.35  60.35
Canadian Natural Resources (CNQ)          5   4   1   71.42  57.21
Husky Energy (HSE)                        5   2   4   45.22  49.54
Sun Life (SLF)                            3   5   5   35.92  42.55
Manulife (MFC)                            3   4   4   29.44  38.67
Suncor Energy (SU)                        4   3   1   35.33  38.62
Encana (ECA)                              4   3   3   78.05  38.61
Power Corporation of Canada (POW)         3   4   2   37.47  31.42
Telus (T)                                 4   3   4   43.91  28.13
Royal Bank (RY)                           3   3   5   40.15  27.41
Bombardier Cl.B (BBD.B)                   4   1   3    4.16  19.91
Bank of Nova Scotia (BNS)                 3   3   5   36.11  18.09
Gildan Activewear Inc. (GIL)              3   3   0   14.13   9.72
Metro-Richelieu Cl.A (MRU.A)              3   2   4   41.12   8.07
TransCanada (TRP)                         2   3   4   35.69   5.53
CN Railway (CNR)                          3   2   2   47.00   1.45
More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml 

*Notes: http://www.stingyinvestor.com/SI/strategy/notes.shtml 


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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/


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The Rothery Report
http://www.rotheryreport.com/ 

The Rothery Report provides research on select deep-value stocks in
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http://www.rotheryreport.com/store/order.shtml 



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ISSN 1499-2795 Copyright Norman Rothery, 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,
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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
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