"Investing is simple, but not easy."  - Warren Buffet


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

How a bubble stayed under the radar
http://www.nytimes.com/2008/03/02/business/02view.html
"The failure to recognize the housing bubble is the core reason for the
collapsing house of cards we are seeing in financial markets in the United
States and around the world. If people do not see any risk, and see only the
prospect of outsized investment returns, they will pursue those returns
with disregard for the risks. Were all these people stupid? It can't be. We
have to consider the possibility that perfectly rational people can get
caught up in a bubble. In this connection, it is helpful to refer to an
important bit of economic theory about herd behavior."

Berkshire Hathaway 2007 Letter
http://www.berkshirehathaway.com/2007ar/2007ar.pdf
"Some major financial institutions have, however, experienced staggering
problems because they engaged in the "weakened lending practices" I
described in last year's letter. John Stumpf, CEO of Wells Fargo, aptly dissected
the recent behavior of many lenders: "It is interesting that the industry
has invented new ways to lose money when the old ways seemed to work just
fine." You may recall a 2003 Silicon Valley bumper sticker that implored,
"Please, God, Just One More Bubble." Unfortunately, this wish was promptly
granted, as just about all Americans came to believe that house prices
would forever rise. That conviction made a borrower's income and cash equity
seem unimportant to lenders, who shoveled out money, confident that HPA -
house price appreciation - would cure all problems. Today, our country is
experiencing widespread pain because of that erroneous belief. As house
prices fall, a huge amount of financial folly is being exposed. You only
learn who has been swimming naked when the tide goes out - and what we are
witnessing at some of our largest financial institutions is an ugly sight."

Money for old hope
http://www.economist.com/opinion/displaystory.cfm?story_id=10715946
"Under the normal rules of capitalism, any industry that can produce
double-digit annual growth should soon be swamped by eager competitors until
returns are driven down. But in fund management that does not seem to be
happening. The average profit margin of the fund managers that took part in a
survey by Boston Consulting Group was a staggering 42%. In part, this is
because most fund managers do not compete on price. Instead, they persuade
their clients to select their funds on the basis of past performance, even
though there is little evidence to show that this is a good predictor of
future success. Nor can investors be sure that the intermediaries who sell
the funds - brokers, advisers and bankers - will steer them in the right
direction. These middlemen often get a cut of the fund managers' fees, so
they have little interest in recommending low-cost alternatives."

Canada's total government fiscal performance
http://www.budget.gc.ca/2008/plan/ann1-eng.asp
"To enable international comparisons, the OECD publishes National Accounts
data for the total government sector. For Canada, the figures include the
federal, provincial-territorial and local government sectors, as well as
the Canada Pension Plan and the Qu bec Pension Plan. Based on OECD data,
Canada's fiscal position is stronger than that of the other G7 countries
(United States, United Kingdom, France, Germany, Japan and Italy). *The OECD
expects Canada to record the largest budgetary surplus as a share of GDP
in the G7 in 2007, 2008 and 2009. *It projects that Canada's total
government net debt-to-GDP ratio, which has been the lowest in the G7 since 2004,
will continue to decline in future years. *Canada is on track to eliminate
its total government net debt by 2021. By doing so, it will be able to
count itself among the few OECD countries that are in a net asset position."

Asset growth and stock returns
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=760967
"Asset growth rates are strong predictors of future abnormal returns. Asset
growth retains its forecasting ability even on large capitalization
stocks, a subgroup of firms for which other documented predictors of the
cross-section lose much of their predictive ability. When we compare asset
growth rates with the previously documented determinants of the cross-section
of returns (i.e., book-to-market ratios, firm capitalization, lagged
returns, accruals, and other growth measures), we find that a firm's annual
asset growth rate emerges as an economically and statistically significant
predictor of the cross-section of U.S. stock returns."

Dividend tax slides below budget radar
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20080228/RCARRICK28
"The status quo will hold in dividend taxation until 2010, when a
three-year phased adjustment begins. Myron Knodel, manager of tax and estate
planning at Investors Group in Winnipeg, illustrated how this will work with an
example involving $100 in dividends paid by a bank. The current federal
tax rate on dividends means you'd net $85.46, assuming you were in the top
tax bracket. By 2012, your net take on the same $100 would be $80.68, a
decline of $4.78, or 5.6 per cent."

Walter J. Schloss Q&A 2008
http://www.bengrahaminvesting.ca/Resources/Video_Presentations/Walter_J_Schloss.wmv
"Mr. Schloss started his limited partnership in the middle of 1955. In
1963, he earned the Chartered Financial Analyst designation. Waller's son
Edwin joined the partnership in 1973 and the fund changed its name to Walter &
Edwin Schloss Associates. Over the period 1956 to 2000, Mr. Schloss and
his son Edwin provided investors a compounded return of 15.3% compared with
the S&P 500.s annual compounded return on 11.5%."

Dividend growth beyond the TSX 60
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20080227/RCRUNCHER27
"The best dividend growth for stocks beyond the TSX 60 can be found in the
financial sector - similar to the blue chips of the TSX 60. From 1995 to
last July, however, mid-cap financial dividend stocks posted annualized
gains of 20.2 per cent, compared with 17.9 per cent for their large-cap
financial peers, and 10.8 per cent for the TSX Completion Index. Those figures
do not include dividends."

Advice gets interesting
http://www.advisor.ca/news/article.jsp?content=20080227_153728_7476
"In the United States, with its plethora of tax-assisted vehicles, from 401
(k) to Individual Retirement Accounts to Roth IRAs, the calculation of
where to put what asset to get the best after-tax yield has elicited some
debate and a lot of actuarially inclined mathematics. Now it comes to
Canada. A few years ago, when the capital gains inclusion rate was reduced the
question became pointed: Why put assets that would yield capital gains in
an account whose withdrawals would be taxed as interest? Still, it was a
two-option universe, subject to asset allocation decisions: bonds inside and
stocks outside. TFSAs change that simple calculation. Why not put
interest and dividend-paying assets in the TFSA? There's no tax on withdrawals.
What about stocks? As with an RSP, there's no potential for deducting
capital losses. So the emphasis will be on finding steady performers with low
volatility. This is where advice gets interesting is in determining the
balance and types assets among all three accounts: open, registered and
tax-free."

Canadian budget in brief
http://www.budget.gc.ca/2008/glance-apercu/brief-bref-eng.asp
"Maintaining strong fiscal management and continuing to reduce debt.
Planned debt reduction for 2007.08 is $10.2 billion, and a total of $13.8
billion over the budget-planning period (2007.08 to 2009.10)."

Global investment returns yearbook 2008
http://www.london.edu/assets/documents/786_GIRY2008Synopsis.pdf
"This year's thematic studies are about momentum, a subject of importance
to all investors, whether their investment style favours it or not. We show
that momentum profits in equities have been large and pervasive across
time and markets, and present findings from the longest momentum study ever
undertaken. We also discuss how supply and demand as well as financing
mechanisms can work as important multipliers of momentum for real estate and
for commodity prices. Our focus throughout is on the practical
implications for investors."

Dark days for hedge fund king
http://money.cnn.com/2008/02/22/news/newsmakers/aqr_asness.fortune/index.htm?postversion=2008022213
"The steep losses have dealt a major blow to Asness, a University of
Chicago-trained mathematician whose investing prowess catapulted him into the
ranks of the super-rich, and his firm. Founded a decade ago with fellow
Goldman Sachs alumni, AQR now faces the daunting prospect of employee
defections, falling management fees, and credit problems."


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)                                   5   5   3   5   5    5
Bank of Montreal (BMO)                          4   4   4   1   5    5
CIBC (CM)                                       5   4   5   5   5    5
National Bank of Canada (NA)                    3   4   4   5   5    5
BCE (BCE)                                       3   3   4   5   5    5
Royal Bank (RY)                                 4   3   4   5   5    5
Telus (T)                                       3   4   4   5   5    5
Bank of Nova Scotia (BNS)                       4   3   3   1   5    5
Shaw Comm Cl.B (SJR.B)                          2   1   2   4   5    5
TransCanada (TRP)                               3   4   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
============================================== === === === === === =====
Biovail (BVF)                                   5   5   3   5   5   0.6
CIBC (CM)                                       5   4   5   5   5   1.3
Thomson (TOC)                                   5   5   2   2   4   1.5
Bank of Montreal (BMO)                          4   4   4   1   5   2.1
Royal Bank (RY)                                 4   3   4   5   5   2.8
National Bank of Canada (NA)                    3   4   4   5   5   2.9
Bank of Nova Scotia (BNS)                       4   3   3   1   5   3.0
BCE (BCE)                                       3   3   4   5   5   3.1
Toronto Dominion Bank (TD)                      4   4   3   2   4   3.3
Telus (T)                                       3   4   4   5   5   3.4
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                                  P/E P/B P/D   G$   dG$(%)
============================================== === === === ====== ======
ACE Aviation Holdings Inc. (ACE.B)              5   5   0   92.65 290.12
MDS Inc. (MDS)                                  5   5   0   47.19 186.35
Lundin Mining Corporation (LUN)                 5   5   0   18.37 118.46
Thomson (TOC)                                   5   5   4   55.66  69.84
Magna Cl.A (MG.A)                               4   5   3  104.52  44.80
Biovail (BVF)                                   5   5   5   19.57  40.10
CIBC (CM)                                       5   4   5   83.40  24.86
Petro Canada (PCA)                              5   4   2   53.94  14.49
Canadian Tire Corporation Limited (CTC.A)       4   5   2   66.18   8.10
Talisman Energy (TLM)                           5   3   2   17.85   6.69
Sun Life (SLF)                                  3   4   4   49.33   4.63
Bank of Montreal (BMO)                          4   4   5   51.53   3.69
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

Buffett: The Making of an American Capitalist
by Roger Lowenstein

The Making of an American Capitalist is the best biography of
Warren Buffett that I've read. By reading this book, you'll find
out how a young Buffett made money selling Coca-Cola to his
friends and how an older Buffett cashed in with Coke's stock. You'll
also discover why Warren started buying Berkshire Hathaway's
stock below $8 per share and how he boosted its value to lofty
heights (currently near $80,000 per share). The Making of an American
Capitalist is a must have for Buffett fans.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0385484917/


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
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Rothery Report Performance (03/31/2001 to 12/31/2007)
  Average Capital Gain    Average Holding Period
          45.2%                   2.4 Years

Learn More
http://www.rotheryreport.com/store/store.shtml

Subscribe Today
http://www.rotheryreport.com/store/order.shtml 



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ISSN 1499-2795 Copyright Dan Hallett and Associates Inc., 2008.
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
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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
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publication.  DH&A is registered as Investment Counsel in the province
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