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The Stingy News Weekly (05/13/2012)


"Frugality and economy are home virtues, without which no household can prosper."
- Isabella Beeton


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Buy Low, Sell High
"“Buy low, sell high” is often quoted in finance. While its wisdom is hard to question, its application is hardly extensive. To understand why this is so, it is helpful to put ourselves in the shoes of a typical investor."


When Julia tried to start a business
"Last week, the Obama Administration released a campaign piece about the life of Julia, showing how Julia benefited from taxpayer largess and oversight by the state at many points in her life. But the campaign piece was incomplete, and missed the part where Julia attempted to start her own business. Long before she started a web business out of her home, she tried to start a retail business."


The devil in HML's details
"This paper challenges the standard method for measuring “value” used in academic work on factor pricing and behavioral finance. The standard method calculates book-to-price (B/P) at portfolio formation using lagged book data, aligns price data using the same lag (ignoring recent price movements), and hold these values constant until the next rebalance. We propose two simple alternatives that use timely price data while retaining the necessary lag for measuring book. We construct portfolios based on the different measures for a US sample (1950-2011) and an International sample (1983-2011). We show that B/P ratios based on timely prices better forecast true (unobservable) B/P ratios at fiscal yearend. Value portfolios based on the most timely measures earn statistically significant alphas ranging between 305 and 378 basis point per year against a 5-factor model itself containing the standard measure of value, as well as market, size, momentum and a short term reversal factor."


The flaws of finance
"James Montier discusses how bad models, bad behavior, bad incentives, and bad policies interact to create perfect storms for markets"


Red tape keeps poor people out of jobs
"One way to help improve the lives of low income people is to focus on how the government can give them more. Sometimes this can be very effective, and even desirable. But a far less common way is to look at how the government can stop doing stuff that is making them worse off. Occupational licensing is a great example of this."



DOW 30 Value Screens

High Dividend Yield StocksP/EP/BP/SYield
AT&T (T)1435
Verizon (VZ)1245
Merck (MRK)2425
Pfizer (PFE)2415
Johnson & Johnson (JNJ)2315
General Electric (GE)3435
Procter & Gamble (PG)2324
Chevron (CVX)5554
EI DuPont (DD)4134
Intel (INTC)4314
Notes | More Info...


Low Price/Earnings StocksP/EP/BP/SYield
Chevron (CVX)5554
Hewlett-Packard (HPQ)5552
JP Morgan Chase (JPM)5533
Exxon Mobil (XOM)5353
Microsoft (MSFT)5212
Intel (INTC)4314
Caterpillar (CAT)4241
Cisco (CSCO)4422
Boeing (BA)4152
Wal-Mart (WMT)4353
Notes | More Info...


Value Ratio StocksP/EP/BP/SYieldV.R.
Chevron (CVX)55542.15
JP Morgan Chase (JPM)55332.83
Exxon Mobil (XOM)53533.59
Intel (INTC)43143.77
Merck (MRK)24253.86
Hewlett-Packard (HPQ)55524.05
EI DuPont (DD)41344.19
General Electric (GE)34354.37
Microsoft (MSFT)52124.39
Johnson & Johnson (JNJ)23154.64
Notes | More Info...


US Stock SummaryYieldP/EV.R.
Chevron (CVX)YYY
Intel (INTC)YYY
EI DuPont (DD)YY
Exxon Mobil (XOM)YY
General Electric (GE)YY
Hewlett-Packard (HPQ)YY
JP Morgan Chase (JPM)YY
Johnson & Johnson (JNJ)YY
Merck (MRK)YY
Microsoft (MSFT)YY
AT&T (T)Y
Boeing (BA)Y
Caterpillar (CAT)Y
Cisco (CSCO)Y
Pfizer (PFE)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)1525
Penn West Petroleum (PWT)4525
TransAlta (TA)3445
Canadian Oil Sands (COS)5225
Sun Life Financial (SLF)0555
ARC Resources (ARX)1315
BCE Inc. (BCE)3135
Bank of Montreal (BMO)4335
Shaw (SJR.B)3235
CIBC (CM)4235
Notes | More Info...


Low Price/Earnings StocksP/EP/BP/SYield
Iamgold (IMG)5423
First Quantum (FM)5311
Research In Motion (RIM)5550
Teck Resources (TCK.B)5533
Barrick Gold (ABX)5322
Bombardier (BBD.B)5353
Canadian Oil Sands (COS)5225
Agrium (AGU)5241
Imperial Oil (IMO)5241
Magna (MG)5453
Notes | More Info...


Value Ratio StocksP/EP/BP/SYieldV.R.
Canadian Oil Sands (COS)52251.40
Penn West Petroleum (PWT)45251.46
TransAlta (TA)34451.87
Enerplus (ERF)15251.97
Iamgold (IMG)54232.11
CIBC (CM)42352.13
Husky Energy (HSE)54452.15
Bank of Montreal (BMO)43352.17
Power Corp of Canada (POW)44542.29
BCE Inc. (BCE)31352.60
Notes | More Info...


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



The Rothery Report
(Learn More | Subscribe)

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 03/31/2012)
Average Capital Gain
38.9%



Graham Value Stocks
(Learn More)

The Graham Value Stocks letter is designed for investors who want to keep up with our sensational stock selection methods inspired by Benjamin Graham. We comb through mountains of data to highlight U.S. and Canadian stocks that we believe to be both cheap and relatively safe.

Graham Portfolio Performance
(3/2009 to 3/2012)
Simple WayDividend WayDefensive
+147%C+131%U+46%C+120%U+176%U



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