"A pack of lemmings looks like a group of rugged individualists
compared with Wall Street when it gets a concept in its teeth."  - Warren Buffett


New @ StingyInvestor


Canadian Discount Broker Commissions
http://www.ndir.com/SI/brokers/discount.shtml
"Our discount broker study referred to in Saturday's Financial Post"

Small stocks, big profits
http://www.ndir.com/SI/articles/MS0208.shtml
"Each December I grade the largest stocks in Canada for the MoneySense Top
200 ranking. But, as a personal project, I've also been grading Canada's
smaller stocks at the same time, using the same methodology. The result?
Over the past three years the top small stocks have actually done better
than their larger counterparts in the Top 200. In 2004 the top small stocks
gained 54.8%. In 2005 the tiny superstars climbed 44.6%. In 2006 the
pint-sized overachievers advanced a further 18.3%. If you had bought the
top-rated top small stocks in 2004 and rolled your gains into the new bunch each
subsequent year, you would now be up 170%, not including dividends. That
compares to a gain of about 152% for the top-rated stocks in the Top 200."


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

Taleb outsells Greenspan
http://www.bloomberg.com/apps/news?pid=20601109&sid=aHfkhe8.C._8&refer=exclusive
"On a freezing day in March 2007, Nassim Taleb walked into a conference
room at Morgan Stanley's Manhattan offices on 47th Street and Broadway to
address a group of the firm's risk managers. His message: Your models don't
work. Using a whiteboard to scribble out his calculations, Taleb, now 48,
began one of his rants, this time against stress tests -- Wall Street lingo
for examining how a market rout will play out. Stress tests are
inherently risky because they ignore rare but potentially devastating events, Taleb
said. 'Past shortfall doesn't predict future shortfall,' the options
trader turned best-selling author recalls telling the assembled group of about
40. The risk managers, part of a tribe of mathematical model makers known
in the finance world as quants, stared back at him blankly, and a debate
ensued, according to people who were there. Only six months later, Morgan
Stanley experienced its own rout. The world's second-biggest mergers
adviser announced in December that it had written down its subprime-related
holdings by $9.4 billion after the firm's traders misjudged how fast and far
prices of the debt would fall. Their risk management had failed."

Do-it-yourself broker
http://www.financialpost.com/analysis/columnists/story.html?id=ef589c5f-c4c9-46ce-870b-c386909c4f23&k=1250
"Individual investors continue to flock to online investing as a low-cost
alternative to full-service brokerage accounts. As of December, 2007,
Canadians had $179-billion invested in online or discount brokerage accounts,
according to Investor Economics Inc. That's no trivial amount, although
it's still dwarfed by the $720-billion stashed in full-service accounts, says
senior consultant Guy Armstrong. "We're still predominantly an
advice-oriented society.""

Buyers' revenge
http://online.wsj.com/article/SB120665586676569881.html
"Analysts predict that as many as two million homeowners could enter
foreclosure this year, caught by a slowing economy, falling house prices and, in
many cases, adjustable mortgages with rates rising from high to higher.
In Las Vegas, 1.9% of homes in the Las Vegas area were in the foreclosure
process in January, almost triple the rate of a year earlier, according to
First American CoreLogic Inc., a Santa Ana, Calif., real-estate and
mortgage data company."

The fool's gold of wholesale funding
http://www.bankstocks.com/article.asp?type=1&id=9881700
"Scan the laundry list of financial woe above, and a few common features
stand out: First, the companies that have come acropper, almost without
exception, let themselves get way, way too levered. Second, none of these
firms has a deep well of core deposit funding to fall back on when times get
unsettled. Finally, just about all the companies relied on short wholesale
funding much too much. In the end, all the firms fell victim to one form
or another of a modern-day run on the bank. The one thing they all lacked,
we now know, is a true unique business proposition that could endure when
the environment became uncertain."

Grim realty
http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=10903334
"According to the newly published S&P/Case-Shiller index, house prices in
ten metropolitan areas fell by 11.7% in January compared with the year
before, the biggest fall since the index was created in 1987. The larger
20-city index tumbled by 10.7%. Sunbelt cities which earlier saw the most
dramatic price rises are now enduring the hardest falls."

Berkshire's free money beats LBO model
http://www.bloomberg.com/apps/news?pid=20601109&sid=a61_4O7o1UdY&refer=home
"Credit-market gridlock has trapped Stephen Schwarzman, who relies on
lenders to fund acquisitions, while leaving Warren Buffett free to pursue the
debt-free deals that have helped make him the world's richest person.
Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., has $59
billion in cost-free money from insurance premiums to invest. Schwarzman's
New York-based Blackstone Group LP, manager of the biggest private-equity
fund, is being forced to bypass Wall Street banks after they stopped
financing most leveraged buyouts. Buffett and Schwarzman each takes a different
approach to the same goal: finding companies they consider undervalued.
Investors are betting Buffett's model will prevail, at least for now."

New Bear Stearns bid
http://www.nytimes.com/2008/03/24/business/24deal.html
"JPMorgan and Bear were prompted to renegotiate after shareholders began
threatening to block the deal and it emerged that several 'mistakes' were
included in the original, hastily written contract, according to people
involved in the talks. One sentence was 'inadvertently included,' according to
a person briefed on the talks, which requires JPMorgan to guarantee
Bear's trades even if shareholders voted down the deal. That provision could
allow Bear's shareholders to seek a higher bid while still forcing JPMorgan
to honor its guarantee, these people said. When the error was discovered,
James Dimon, JPMorgan's chief executive, who was described by one
participant as 'apoplectic,' began calling his lawyers at Wachtell, Lipton, Rosen
& Katz to seek a way to have the sentence modified, these people said.
Finger pointing over the mistakes in the contracts began as bankers blamed
the lawyers and vice versa. As it began to look more possible late last week
that the deal might be struck down, JPMorgan approached Bear in earnest
on Friday about renegotiating the sale price to guarantee its completion
and brought the Federal Reserve into the talks as well, people involved in
the negotiations said."

Partying like it's 1929
http://www.nytimes.com/2008/03/21/opinion/21krugman.html?_r=1&pagewanted=print&oref=slogin
"Normally, banks satisfy both desires: depositors have access to their
funds whenever they want, yet most of the money placed in a bank's care is
used to make long-term loans. The reason this works is that withdrawals are
usually more or less matched by new deposits, so that a bank only needs a
modest cash reserve to make good on its promises. But sometimes - often
based on nothing more than a rumor - banks face runs, in which many people
try to withdraw their money at the same time. And a bank that faces a run by
depositors, lacking the cash to meet their demands, may go bust even if
the rumor was false. Worse yet, bank runs can be contagious. If depositors
at one bank lose their money, depositors at other banks are likely to get
nervous, too, setting off a chain reaction. And there can be wider
economic effects: as the surviving banks try to raise cash by calling in loans,
there can be a vicious circle in which bank runs cause a credit crunch,
which leads to more business failures, which leads to more financial troubles
at banks, and so on. That, in brief, is what happened in 1930-1931,
making the Great Depression the disaster it was."

Too dumb to fail
http://www.newyorker.com/talk/financial/2008/03/31/080331ta_talk_surowiecki
"In 1984, Continental Illinois, then one of the country's largest banks,
found itself on the verge of collapse, after billions of dollars. worth of
its loans went bad. To avert a crisis, the government stepped in,
purchasing $3.5 billion of the soured loans and effectively taking over the bank.
Later that year, at a congressional subcommittee hearing, Representative
Stewart McKinney summed up the lesson of the rescue effort: 'Let us not
bandy words. We have a new kind of bank. It is called too big to fail.
T.B.T.F., and it is a wonderful bank.'"

10 ways to curb sleazy debt collectors
http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/10WaysToCurbSleazyDebtCollectors.aspx
"It's tough conditions like these that tempt collectors to get rough with
consumers. Given that the debt-collection industry has trouble restraining
itself during good times, you can imagine how bad this could get."

My big fat IRS case
http://www.forbes.com/forbes/2008/0407/038.html
"The young couple hauled in $40,000 in cash at their Greek wedding. They
knew if they deposited $10,000 or more at once, the bank would have to file
a "currency transaction report" and they'd have to wait in line to provide
information. So they deposited their loot in smaller lumps. Soon, they
were being investigated by Internal Revenue Service criminal agents and
paying Chicago attorney Robert E. McKenzie $500-plus an hour to help them
avoid seizure of their cash or worse. Carving up deposits to avoid a currency
report is "structuring." Structuring is a felony. "It's scary. If you know
of the $10,000 requirement and attempt to avoid it, you've committed a
crime," says McKenzie, who convinced the irs to let the newlyweds go. You
don't have to be dealing drugs, cheating on your taxes or paying prostitutes
to run afoul of the structuring law. Even if the money is from a legal
source and used legally, the government can charge you with a crime and/or
demand you forfeit cash. By contrast, with money laundering, the cash has
to be related to an underlying crime."


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   4   5   5    5
Bank of Montreal (BMO)                          4   5   4   1   5    5
National Bank of Canada (NA)                    3   4   5   5   5    5
CIBC (CM)                                       2   4   5   5   5    5
Royal Bank (RY)                                 4   3   4   5   5    5
Bank of Nova Scotia (BNS)                       3   3   3   2   5    5
BCE (BCE)                                       5   3   4   4   5    5
Telus (T)                                       4   4   4   5   5    5
Shaw Comm Cl.B (SJR.B)                          2   2   2   4   5    5
Toronto Dominion Bank (TD)                      4   4   3   3   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   4   5   5   0.5
Thomson (TOC)                                   5   5   2   2   4   1.6
BCE (BCE)                                       5   3   4   4   5   1.7
Bank of Montreal (BMO)                          4   5   4   1   5   1.7
National Bank of Canada (NA)                    3   4   5   5   5   2.5
Royal Bank (RY)                                 4   3   4   5   5   2.6
Telus (T)                                       4   4   4   5   5   2.7
Bank of Nova Scotia (BNS)                       3   3   3   2   5   2.8
Toronto Dominion Bank (TD)                      4   4   3   3   4   2.8
Husky Energy (HSE)                              4   2   3   3   4   3.2
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   92.79 342.90
Lundin Mining Corporation (LUN)                 5   5   0   18.43 161.74
MDS Inc. (MDS)                                  5   5   0   47.31 141.11
Thomson (TOC)                                   5   5   4   55.75  61.50
Biovail (BVF)                                   5   5   5   16.19  48.91
Magna Cl.A (MG.A)                               4   5   3  104.26  46.62
Nova (NCX)                                      5   4   3   36.05  46.19
Petro Canada (PCA)                              5   4   2   55.50  27.30
BCE (BCE)                                       5   3   5   41.28  17.17
Bank of Montreal (BMO)                          4   5   5   50.38  13.17
Weston George (WN)                              3   5   4   51.47   9.86
Canadian Pacific Rail (CP)                      4   4   2   70.06   4.88
Sun Life (SLF)                                  3   4   4   49.36   4.59
Canadian Tire Corporation Limited (CTC.A)       3   4   2   66.09   1.33
Talisman Energy (TLM)                           5   3   2   18.22   0.87
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

Common Stocks and Uncommon Profits
by Philip A. Fisher

Fisher takes a qualitative view of stocks and stresses the
importance of intangible aspects of a firm with heavy emphasis on
research and human capital. He also falls into the focused camp of
investors who buy only a few carefully selected stocks and hold
them for long periods. As Warren Buffett's second favourite book
on investing, Common Stocks and Uncommon Profits is a must read
for students of the market.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0471445509/


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
U.S. stocks.  Weekly email news and additional updates keep
subscribers informed about new opportunities and developments.

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
losses that may occur.  No compensation for suggesting particular
securities or financial advisors is solicited or accepted.  The
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
substantial losses.  A Dan Hallett and Associates Inc.(DH&A)
publication.  DH&A is registered as Investment Counsel in the province
of Ontario. DH&A, or related-parties may have an interest in the
securities mentioned.