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The Stingy News Weekly (03/11/2012)


"In the financial world it tends to be misleading to state, "There is no free lunch." Rather the more meaningful comment is, "Somebody has to pay for lunch.""
- Martin Whitman


New @ StingyInvestor

Index roulette
"The financial life of a prudent index investor is purposefully dull. You know the routine. Pick a balanced portfolio of basic low-fee funds and ETFs, rebalance occasionally, and hope to wake up comfortably rich one day. Where's the spark in that? Where's the pizzazz? Where are the piles of doubloons? To become stinking rich, you have to strap on the six shooters and shoot for higher targets."


Stingy Links

Concrete Equities fraud
"Viewers of the early seasons of CBC’s Dragons’ Den will remember the oft-repeated ad wherein an improbably young, somewhat swarthy company president touted the safe, superior returns of an investment company called Concrete Equities. Between static promo shots of office buildings, Vincenzo De Palma extolled the security of investing in income-producing real assets in lazy diction, as if an up-and-comer like him lacked the time to pronounce every consonant. But Concrete Equities was the entrepreneurial reality show’s lead sponsor, and that lent it a sheen of respectability. Had the producers at the CBC put the company’s management in front of the Dragons, they likely would have discovered De Palma and Co. were neither licensed nor qualified to market and manage a portfolio of real estate investments. Following a two-year investigation, he and three other principals in Calgary-based Concrete Equities were disciplined in January by the Alberta Securities Commission—including the largest fine ever imposed on an individual in the province—for having sold investments without being registered, and lying to investors. But their comeuppance didn’t occur before they had raised $118 million from 3,700 people and come close to losing it all."


Pity about your retirement
"Buying a house can wreck your retirement. Did your real estate agent or bank not tell you that? Of course not. All they worry about is whether you're making enough money to carry your debts. The question of whether there's enough money left over to save for retirement is of zero interest to them."


A monopoly a day
"As Apple prepared to introduce its first iPad, the late Steve Jobs, then its chief executive, suggested moving to an 'agency model,' under which the publishers would set the price of the book and Apple would take a 30% cut. Apple also stipulated that publishers couldn't let rival retailers sell the same book at a lower price."


QE is eating your pension
"Gilt yields are often used as a proxy for both investors’ future earnings and inflation, exacerbating shortfall estimates. Ms Segars argued that, as a result, companies whose pension schemes already had large shortfalls could be forced to make even bigger contributions. “That diverts money away from jobs and investment and will lead to further closures of final salary pensions in the private sector,” she said."


The Warren Buffett of….
"Our article on Paul Desmarais called him “The Warren Buffett of Canada,” which made us start wondering how many “Warren Buffett ofs” there are. We decided to do a deep Google search to try and put together a comprehensive list ..."


Mohnish Pabrai lecture
"Mohnish Pabrai, Managing Partner, Pabrai Investment Funds talks to Ivey students"


Behavioral Biases of Mutual Fund Investors
"We examine the effect of behavioral biases on the mutual fund choices of a large sample of U.S. discount brokerage investors using new measures of attention to news, tax awareness, and fund-level familiarity bias, in addition to behavioral and demographic characteristics of earlier studies. Behaviorally-biased investors typically make poor decisions about fund style and expenses, trading frequency, and timing, resulting in poor performance. Furthermore, trend-chasing appears related to behavioral biases, rather than to rationally inferring managerial skill from past performance. Factor analysis suggests that biased investors often conform to stereotypes that can be characterized as “gambler”, “smart”, “overconfident”, “narrow-framer”, and “mature”."


4 things to remember with today's low rates
"For those seeking a safe and dependable income source, today’s painfully low interest rates pose a real challenge. Bank of Canada Governor Mark Carney regularly reminds us that persistent low rates can be dangerous because they incent excessive borrowing. But low rates also pose some risk to the asset side of investors’ balance sheets. It looks like low rates will be here for a while so here are a few things to keep in mind when structuring investment portfolios."



DOW 30 Value Screens

High Dividend Yield StocksP/EP/BP/SYield
AT&T (T)1435
Verizon (VZ)1345
Merck (MRK)2425
Pfizer (PFE)3415
General Electric (GE)3535
Johnson & Johnson (JNJ)2215
EI DuPont (DD)4134
Procter & Gamble (PG)1324
Intel (INTC)5314
Kraft (KFT)1444
Notes | More Info...


Low Price/Earnings StocksP/EP/BP/SYield
Chevron (CVX)5454
Hewlett-Packard (HPQ)5552
JP Morgan Chase (JPM)5533
Exxon Mobil (XOM)5342
Intel (INTC)5314
Microsoft (MSFT)5213
American Express (AXP)4221
Wal-Mart (WMT)4353
Boeing (BA)4152
EI DuPont (DD)4134
Notes | More Info...


Value Ratio StocksP/EP/BP/SYieldV.R.
Chevron (CVX)54542.72
Intel (INTC)53143.66
JP Morgan Chase (JPM)55333.66
Pfizer (PFE)34154.12
Merck (MRK)24254.14
Hewlett-Packard (HPQ)55524.23
EI DuPont (DD)41344.24
General Electric (GE)35354.28
Exxon Mobil (XOM)53424.55
Microsoft (MSFT)52134.63
Notes | More Info...


US Stock SummaryYieldP/EV.R.
EI DuPont (DD)YYY
Intel (INTC)YYY
Chevron (CVX)YY
Exxon Mobil (XOM)YY
General Electric (GE)YY
Hewlett-Packard (HPQ)YY
JP Morgan Chase (JPM)YY
Merck (MRK)YY
Microsoft (MSFT)YY
Pfizer (PFE)YY
AT&T (T)Y
American Express (AXP)Y
Boeing (BA)Y
Johnson & Johnson (JNJ)Y
Kraft (KFT)Y
Procter & Gamble (PG)Y
Verizon (VZ)Y
Wal-Mart (WMT)Y
Notes...



S&P/TSX60 Value Screens

High Dividend Yield StocksP/EP/BP/SYield
Enerplus (ERF)1515
Sun Life Financial (SLF)0555
TransAlta (TA)3445
Canadian Oil Sands (COS)5225
Penn West Petroleum (PWT)3525
BCE Inc. (BCE)3145
ARC Resources (ARX)1215
Bank of Montreal (BMO)4435
Shaw (SJR.B)3235
CIBC (CM)5235
Notes | More Info...


Low Price/Earnings StocksP/EP/BP/SYield
Research In Motion (RIM)5550
Iamgold (IMG)5422
Teck Resources (TCK.B)5533
Bombardier (BBD.B)5153
Canadian Oil Sands (COS)5225
Agrium (AGU)5351
Barrick Gold (ABX)5322
CIBC (CM)5235
Husky Energy (HSE)5445
Brookfield (BAM.A)5442
Notes | More Info...


Value Ratio StocksP/EP/BP/SYieldV.R.
Canadian Oil Sands (COS)52251.78
CIBC (CM)52352.14
Husky Energy (HSE)54452.23
Bank of Montreal (BMO)44352.34
TransAlta (TA)34452.59
Power Corp of Canada (POW)44542.61
Bank of Nova Scotia (BNS)43342.83
BCE Inc. (BCE)31452.86
Penn West Petroleum (PWT)35252.94
Shaw (SJR.B)32352.96
Notes | More Info...


Canadian Stock SummaryYieldP/EV.R.
CIBC (CM)YYY
Canadian Oil Sands (COS)YYY
BCE Inc. (BCE)YY
Bank of Montreal (BMO)YY
Husky Energy (HSE)YY
Penn West Petroleum (PWT)YY
Shaw (SJR.B)YY
TransAlta (TA)YY
ARC Resources (ARX)Y
Agrium (AGU)Y
Bank of Nova Scotia (BNS)Y
Barrick Gold (ABX)Y
Bombardier (BBD.B)Y
Brookfield (BAM.A)Y
Enerplus (ERF)Y
Iamgold (IMG)Y
Power Corp of Canada (POW)Y
Research In Motion (RIM)Y
Sun Life Financial (SLF)Y
Teck Resources (TCK.B)Y
Notes...



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Simple WayDividend WayDefensive
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