"Not everything that can be counted counts, and not everything
that counts can be counted."  - Albert Einstein


New @ StingyInvestor


The case for optimism
http://www.canadianbusiness.com/my_money/investing/article.jsp?content=20090201_20010_20010
"The greatest reason for optimism is that stocks are now offering
some of the best values in more than a decade. Many quality
companies are available at sharp discounts. Second-tier firms are
going for a song. Charlie Munger, the U.S. billionaire, says,
'Price is what you pay, value is what you get.' The value
indicators I see say that this is the best time to buy since the early
1990s."


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

Dispelling myths about the 1930s
http://online.barrons.com/article/SB123637914471857307.html?page=sp
"After examining several aspects of the stock market's behavior
during the 1930s, it would appear as though a replay of that
decade might very well be less scary than assumed by many of those
who superficially draw the analogy."

Slash and burn
http://www.economist.com/finance/displaystory.cfm?story_id=13240730
"For many firms dividend cuts are an unpleasant task that should
not be shirked. There is no point in starving a business and
endangering a firm.s balance-sheet in order to meet macho dividend
commitments. The counter-argument, that cuts remove an important
discipline on managers, hardly holds true today, when all firms
are counting the pennies. That being so, when firms announced
cuts why did their share prices slump? The reason has a lot to do
with signalling."

Bear market snapshots
http://www.ndir.com/SI/strategy/tipsheet/03-06-2009-Bear-Market-Snapshots.shtml
"Robert Shiller recently updated his S&P500 data to include
prices for the month of February. With the new data, and a little
update of my own to include today's closing price, I had fun
creating a slew of keen graphs."

The new f***ing Citibank
http://www.funnyordie.com/videos/c130f64d6f/the-new-f-ing-citibank
"After Citibank becomes nationalized, expect to see commercials
like this." [Warning: Harsh Language.]

Stimulus: a history of folly
http://www.commentarymagazine.com/viewarticle.cfm/stimulus--a-history-of-folly-14953
"Stimulus - that is, fiscal intervention with the express purpose
of speeding up the normal regenerative process that Grant
describes - is unnecessary and almost certainly harmful, a policy
based on hubris and anxiety, rather than on history and good sense.
Under such circumstances, the proper way to analyze discrete
proposals today for spending or taxing is on their own merits, not
on their supposed ability to stimulate something else. There
may, in fact, be a good reason for government to spend billions of
dollars today on building highways, and it has nothing to do
with stimulus. It is that long-term interest rates are at historic
lows and that the right highways can boost the economy in the
long term. There also may be a good reason, again far apart from
stimulus, for revising the tax code and reforming Social
Security and Medicare. It is that Americans now understand that the
economic future is not so assured as they believed a couple of
years ago, and it is time for decisions to be made - in a manner
careful, sensible, and unstimulated."

Attack of the condo craters
http://blog.macleans.ca/2009/03/04/attack-of-the-condo-craters/
"Many project failures are indeed just rumours at this point, but
the numbers indicate an imminent oversupply of boxes in the
sky. 'It's night and day from just a few months ago,' says Adam
Vaughan, a Toronto city councillor. On any given day for two years
he'd receive at least one application for a new condo project in
his Trinity-Spadina ward, but hasn't seen one in six months.
'There were more 50-storey buildings under construction in my ward
than Calgary has ever built,' he says. Will Dunning, a Toronto
real estate economist, says that although the fall-off in new
projects has certainly been dramatic, it may not have been fast
enough. Today, he says, there are roughly 35,000 units on the go
in Toronto. But in December, just 198 new condos were sold, a
stunning 81 per cent drop from the year before. 'This very large
pending inventory is setting the stage for a substantial
correction within the condo market,' he warned in a report late last
year."

Mortgage delinquencies rise to record
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJcQVxGs3oqc&refer=home
"Mortgage delinquencies increased to a seasonally adjusted 7.88
percent of all loans, the highest in records going back to 1972,
the Mortgage Bankers Association said today. Loans in
foreclosure rose to 3.30 percent, also an all-time high."

Yes, you can raise prices
http://money.cnn.com/2009/02/17/news/economy/colvin_pricing.fortune/index.htm
"The signs in the window of Jay Kos, an upscale men's wear
boutique on Park Avenue in Manhattan, seemed at best cheeky, at worst
clueless. Surrounded by glaring economic-crisis headlines cut
out of newspapers, they said, "Cashmere sweater: $2,500. Recession
price: $2,500." "Lamb's fleece jacket: $11,000. Recession
price: $11,000." It was an in-your-face declaration that the
business, whose clients include bankers and celebrities, wasn't going to
cave in to any mere economic collapse. "Some people hated it,"
says the shop's eponymous owner. "But most people loved it. And
some people even bought because of it." That story is worth
pondering because one of the most important decisions businesses
must make in this recession is what to do about prices."

What are the odds of a depression?
http://online.wsj.com/article/SB123612575524423967.html
"In the end, we learned two things. Periods without stock-market
crashes are very safe, in the sense that depressions are
extremely unlikely. However, periods experiencing stock-market crashes,
such as 2008-09 in the U.S., represent a serious threat. The
odds are roughly one-in-five that the current recession will
snowball into the macroeconomic decline of 10% or more that is the
hallmark of a depression. The bright side of a 20% depression
probability is the 80% chance of avoiding a depression."

Will value investors win the day?
http://online.wsj.com/article/SB123610542536621007.html?mod=
"In today's market, people may lose a lot of money before they
make more. Yet even times like these could prove profitable in the
long run for value investors."

1 in 5 mortgages underwater
http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db2009033_306801.htm
"It's bad enough when the value of your house is sinking like a
lead balloon. But for a growing number of Americans, their woes
are compounded by owing more on the mortgage than what that house
is now worth."

Hidden pension fiasco
http://www.bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA
"Public pension funds across the U.S. are hiding the size of a
crisis that.s been looming for years. Retirement plans play
accounting games with numbers, giving the illusion that the funds are
healthy."

Investment and the crisis
http://www.ft.com/cms/s/0/402675be-0760-11de-9294-000077b07658.html?nclick_check=1
"So despite the complexity of today.s markets, the lessons in all
this are oddly homespun. Mathematical models should not be
relied on without a proper understanding of the economic conditions
and behaviour that fed them. It is foolish to put blind faith in
credit rating agencies. Do not invest in what you cannot
understand. Shun arbitrage strategies that assume permanent access to
liquidity. Avoid investment vehicles that inflict swingeing
charges in exchange for what in most cases will amount to market
performance or worse. Treat leverage with due care. Recognise that
the conventional wisdom of the consulting fraternity is not
conducive to contrarian behaviour, one of the keys to successful
investing. Above all, beware what Charles Mackay, the 19th-century
historian, called the madness of crowds."

Wall Street on the tundra
http://www.vanityfair.com/politics/features/2009/04/iceland200904
"Iceland's de facto bankruptcy - its currency (the krona) is
kaput, its debt is 850 percent of G.D.P., its people are hoarding
food and cash and blowing up their new Range Rovers for the
insurance - resulted from a stunning collective madness. What led a
tiny fishing nation, population 300,000, to decide, around 2003,
to re-invent itself as a global financial power? In Reykjavik,
where men are men, and the women seem to have completely given up
on them, the author follows the peculiarly Icelandic logic
behind the meltdown."

Presidential Starts: 1900 - 2009
http://bespokeinvest.typepad.com/bespoke/2009/03/presidential-starts-1900-2009.html
"From the time President Obama was elected to his inauguration,
the DJIA put in its worst performance over all election to
inauguration periods since 1900, with a decline of 17.4%. And on the
day President Obama was sworn in, the DJIA put in its worst ever
inauguration day performance with a decline of 4%. Since then,
things haven't gotten much better. Not including the inauguration
day decline, the DJIA has dropped an additional 14.92% since
President Obama was sworn in. Over the last two weeks, these
declines have intensified with losses in ten out of the last twelve
trading days."

Lowering credit scores
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adCwmmkzFI3U
"Wayne Brown has a dilemma. If he reduces his credit-card
balance, American Express Co. will cut his credit limit to the amount
of the new balance, he said. If he doesn.t make a big payment,
his interest rate may skyrocket."

The start of 10 Fortune 500 firms
http://www.businesspundit.com/fortune-500-rags-to-riches/
"The following examples are businesses which have grown so large
to be included in the Fortune 500, or the world's largest 500
companies - but which have started from the humblest beginnings.
They are 'Rags to Riches' stories of unique brands, started by
unique individuals that only have accumulated wealth and vast
market share, but have created their own niche and never looked
back."

Value investors can't beat this bear
http://online.wsj.com/article/SB123586461228302487.html
"Usually, the silver lining for such a brutal market is that it
creates plenty of opportunities for bargain-hunting investors.
This downturn, however, has been especially cruel to "value"
investors, those who search for companies they believe are priced
lower than they should be."

Fund manager reports
http://news.morningstar.com/articlenet/article.aspx?id=269611
"Mutual fund managers' quarterly letters, market commentaries,
forecasts, and other reports are full of interesting tidbits and,
if one looks carefully, investment ideas. Every quarter, mutual
funds are required to publish reports, and many portfolio
managers, research chiefs, and advisors take the time to express their
opinions about the markets, individual stocks, or other items
on their minds. Some fund shops publish more frequently--on a
monthly or even weekly basis."

Snuggie rode silly ads to stardom
http://www.nytimes.com/2009/02/27/business/media/27adco.html?_r=1
"With similar products bound to appear soon and a lesser-known
sleeved blanket - the Freedom Blanket - predating Mr. Clegg's,
this throwdown of the throws suggests that it is not always the
first one to market who wins but the one with the most aggressive
marketing plan."

Bank stocks are hated
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_dorfman&sid=aE4LVBzCS.Aw
"For investors courageous enough to swim against the tide, now
may be a good time to pick up bargains in the rubble of the
banking industry. How can you tell which banks are on the safest
footing?"

February economic summary in graphs
http://www.calculatedriskblog.com/2009/02/february-economic-summary-in-graphs.html
"A collection of 20 real estate and economic graphs from
February"




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

Bear Market Snapshots
http://www.ndir.com/SI/strategy/tipsheet/03-06-2009-Bear-Market-Snapshots.shtml
Check out a slew of keen graphs based on Robert Shiller's S&P500 data.

Screening Trouble
http://www.ndir.com/SI/strategy/tipsheet/05-02-2009-Screening-Trouble.shtml
It's no secret that I like stock screens.  I think most modern
investors do because they help uncover interesting stocks.  But
screens aren't without their flaws.

Party like it's 1968
http://www.ndir.com/SI/strategy/tipsheet/03-02-2009-Party-like-it-s-1968.shtml
After another down day on the markets we're in shooting
distance of 1966 prices on the S&P500.  That is, if you take inflation
into account.




DOW 30 Value Screens
http://www.stingyinvestor.com/SI/strategy.shtml 

High Dividend Yield Stocks                   P/E P/B P/S P/D Yield
============================================ === === === === =====
Alcoa  (AA)                                   0   5   5   5    5
Pfizer  (PFE)                                 2   3   2   5    5
EI DuPont  (DD)                               4   2   4   5    5
AT&T  (T)                                     2   4   2   5    5
Caterpillar  (CAT)                            5   2   5   5    5
Verizon  (VZ)                                 1   3   3   4    4
Merck  (MRK)                                  4   2   1   4    4
American Express  (AXP)                       5   4   4   4    4
General Electric  (GE)                        5   5   5   4    4
Boeing  (BA)                                  3   0   5   4    4
More Info: http://www.stingyinvestor.com/SI/strategy/dogs.shtml 

Value Ratio Stocks                           P/E P/B P/S P/D  VR
============================================ === === === === =====
Caterpillar  (CAT)                            5   2   5   5   0.6
General Electric  (GE)                        5   5   5   4   0.7
American Express  (AXP)                       5   4   4   4   0.7
EI DuPont  (DD)                               4   2   4   5   0.8
Merck  (MRK)                                  4   2   1   4   0.9
Pfizer  (PFE)                                 2   3   2   5   1.0
Chevron  (CVX)                                5   4   4   3   1.1
AT&T  (T)                                     2   4   2   5   1.5
Boeing  (BA)                                  3   0   5   4   1.5
Verizon  (VZ)                                 1   3   3   4   1.8
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   18.86 500.73
General Electric  (GE)                    5   5   4   20.18 185.88
American Express  (AXP)                   5   4   4   22.80 122.25
JP Morgan Chase  (JPM)                    2   5   1   32.66 105.03
Chevron  (CVX)                            5   4   3  108.11  85.53
Walt Disney  (DIS)                        4   4   1   28.98  83.09
Caterpillar  (CAT)                        5   2   5   35.73  53.80
Hewlett-Packard  (HPQ)                    3   3   1   34.30  27.12
AT&T  (T)                                 2   4   5   28.21  24.91
Merck  (MRK)                              4   2   4   27.34  20.23
Kraft  (KFT)                              2   4   4   25.93  19.96
Pfizer  (PFE)                             2   3   5   15.19  19.36
EI DuPont  (DD)                           4   2   5   19.40  15.02
United Technologies  (UTX)                4   2   3   43.47  12.79
Exxon Mobil  (XOM)                        4   2   2   67.59   5.56
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)                            4   2   1   1   5    5
Manulife (MFC)                           1   5   5   5   5    5
Bank of Montreal (BMO)                   4   5   4   2   5    5
CIBC (CM)                                0   4   3   0   5    5
Sun Life (SLF)                           2   5   5   4   5    5
Bank of Nova Scotia (BNS)                4   3   3   5   5    5
Power Corporation of Canada (POW)        5   5   0   0   5    5
National Bank of Canada (NA)             3   4   4   0   5    5
Toronto Dominion Bank (TD)               4   4   3   5   5    5
Royal Bank (RY)                          3   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
======================================== === === === === === =====
Power Corporation of Canada (POW)         5   5   0   0   5   0.6
Biovail (BVF)                             4   2   1   1   5   0.6
Bank of Montreal (BMO)                    4   5   4   2   5   0.7
Petro Canada (PCA)                        5   5   5   4   3   0.9
Encana (ECA)                              5   3   2   4   3   1.1
Bank of Nova Scotia (BNS)                 4   3   3   5   5   1.1
Toronto Dominion Bank (TD)                4   4   3   5   5   1.1
Sun Life (SLF)                            2   5   5   4   5   1.2
First Quantum Minerals Ltd. (FM)          5   4   3   5   2   1.2
Royal Bank (RY)                           3   3   3   4   4   1.4
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   40.10 928.27
Petro Canada (PCA)                        5   5   3   81.61 214.85
Power Corporation of Canada (POW)         5   5   5   41.63 170.68
First Quantum Minerals Ltd. (FM)          5   4   2   88.39 165.90
Magna Cl.A (MG.A)                         3   5   3   67.26 158.81
Talisman Energy (TLM)                     5   4   2   27.65 141.67
Inmet Mining (IMN)                        4   5   1   60.08 112.96
Agrium (AGU)                              5   3   1   84.44 109.64
Nexen Inc. (NXY)                          5   4   1   31.49  93.43
Gildan Activewear Inc. (GIL)              4   4   0   14.53  92.14
Bombardier Cl.B (BBD.B)                   5   2   3    4.56  86.95
Bank of Montreal (BMO)                    4   5   5   50.82  84.93
Sun Life (SLF)                            2   5   5   28.86  84.07
Encana (ECA)                              5   3   3   87.49  80.36
Canadian Pacific Rail (CP)                4   4   3   58.27  76.63
Toronto Dominion Bank (TD)                4   4   5   61.07  72.72
Canadian Natural Resources (CNQ)          4   3   1   71.39  70.80
Canadian Tire (CTC.A)                     3   4   2   65.41  64.51
Husky Energy (HSE)                        4   2   0   40.84  55.96
Bank of Nova Scotia (BNS)                 4   3   5   35.92  37.93
Brookfield A.M. (BAM.A)                   3   3   4   20.14  35.43
National Bank of Canada (NA)              3   4   5   48.17  33.59
Telus (T)                                 3   3   4   41.85  31.93
Royal Bank (RY)                           3   3   4   37.59  27.86
Biovail (BVF)                             4   2   5   16.83  20.97
TransCanada (TRP)                         2   3   4   34.32  17.02
Manulife (MFC)                            1   5   5   11.02  14.20
CN Railway (CNR)                          3   2   3   44.30  13.60
Weston George (WN)                        3   2   3   68.04  11.69
Suncor Energy (SU)                        2   2   1   27.99   2.32
Transalta (TA)                            2   2   4   18.71   2.08
Enbridge (ENB)                            3   1   3   36.76   1.72
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

A Random Walk Down Wall Street
by Burton G. Malkiel

Take a random walk down Wall Street and you'll learn a great deal
about market history and current market theory. This book
provides an excellent introduction to the markets and gives readers a
good grounding in the efficient market hypothesis. Along the
way Malkiel makes a very strong case for indexing but even active
investors will find a great deal of useful information in his
book.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0393325350/


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
investment reports which provide detailed analysis of Canadian and
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subscribers informed about new opportunities and developments.

Rothery Report Performance (03/31/2001 to 12/31/2008)
  Average Capital Gain    Average Holding Period
          26.5%                   2.3 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 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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