"Unless you can watch your stock holdings decline by 50% without
becoming panic-stricken, you should not be in the stock market."  - Warren Buffett


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

Buffett sees U.S. in recession
http://money.cnn.com/2008/05/25/news/economy/buffett_recession.ap/index.htm?postversion=2008052517
"Warren Buffett, whose business and investment acumen has made
him one of the world's wealthiest men, was quoted in an interview
published Sunday as saying the U.S. economy is already in a
recession. Asked by Germany's Der Spiegel weekly whether he thinks
the U.S. could still avoid a recession, he said that as far as
the average person is concerned, it is already here."

How the finance gurus get risk all wrong
http://www.fooledbyrandomness.com/fortune.pdf
"Your money is at risk. No matter what you've put it in - stocks,
bonds, derivatives, hedge funds, houses, annuities, even
mattresses - there's always the chance that you could lose it or miss
out on a bigger opportunity somewhere else. Anyone who would
tell you otherwise is either a fool or a huckster. Then there are
those who do warn of risk but package it into a simple numerical
measure that seems to put it within manageable bounds. They're
even more dangerous."

How thinking costs you
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/24/AR2008052400002.html
"Looking at data from every trade made by all investors in Taiwan
from 1995 to 1999, Odean discovered that the "aggregate
portfolio of individual investors suffers an annual performance penalty
of 3.8 percentage points," which includes trading costs. If
investors had simply bought the index and not traded at all, they
would have done about 3.5 percent better. The amount of money
lost was equivalent to 2.2 percent of Taiwan's gross domestic
product."

An old enemy rears its head
http://www.economist.com/opinion/displaystory.cfm?story_id=11402856
"Even as America's economy teeters on the brink of recession and
many European economies are slowing, central bankers in rich
countries fear rising inflation. Yet the risks they face are
smaller than those in emerging economies, where inflation has risen
far more over the past year to its highest for nine years. There
are also an alarming number of similarities between developing
economies today and developed economies in the early 1970s, when
the Great Inflation took off. Are the young upstarts heading for
trouble?"

Home prices take record drop
http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/HomePriceReport.aspx
"Though prices have dropped overall, homes still have retained
much of the value they gained in the housing run-up that began in
2003. And of course that is a good thing for owners of homes who
want to hold on to the value of their investments. But there
are those who look at the big picture and predict that the current
decline won't end until house prices are again affordable for
many more Americans. For that to happen, prices must fall to
about where they were before the bubble began, the theory goes. If
so, there's still considerable room to drop. Census Bureau
figures showed the median price (half cost more, half cost less) as
$227,600 in March, having retreated from last year's $262,000. But
even that deflated figure is 22% above the median price from
2003."

The question of global warming
http://www.nybooks.com/articles/21494
"It is likely that biotechnology will dominate our lives and our
economic activities during the second half of the twenty-first
century, just as computer technology dominated our lives and our
economy during the second half of the twentieth. Biotechnology
could be a great equalizer, spreading wealth over the world
wherever there is land and air and water and sunlight. This has
nothing to do with the misguided efforts that are now being made to
reduce carbon emissions by growing corn and converting it into
ethanol fuel. The ethanol program fails to reduce emissions and
incidentally hurts poor people all over the world by raising the
price of food. After we have mastered biotechnology, the rules of
the climate game will be radically changed. In a world economy
based on biotechnology, some low-cost and environmentally benign
backstop to carbon emissions is likely to become a reality."

Catch two-and-twenty
http://www.economist.com/finance/displaystory.cfm?story_id=11412714
"But suppose that every institution handed its portfolio to
hedge-fund managers. The average fund manager cannot earn more than
the market. After costs, he must earn less. An individual pension
fund or endowment might succeed in its search for higher
returns. But because hedge funds and private-equity fees are higher
than normal - often a 2% annual fee and a 20% performance fee -
the effect of the shift would be to lower the average return of
investors, not increase it. A 'catch two-and-twenty' is at work."

Is value dead?
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20080522/GIPG28
"The cookie-cutter office building stacked amid high-rise condos
and streetside retail is not where you'd expect to find the man
who oversees $1.2 billion in funds, and who is said to be
Canada's top stock-market bargain hunter. Taped to his door is a plain
piece of paper that has been run through a printer: "Chou
Associates Management Inc.," it reads, implying that nothing of much
importance is happening here. The door is locked, but jiggle the
handle of the door and out pops Francis Chou, whom I have come
to ask about the strange decline in the once-dominant school of
value investing. It's an investing style once described by the
late, great value guru Benjamin Graham as the equivalent of
rifling through a store's discount bin. In other words, if you are
patient enough to search endlessly and smart enough to know the
difference between a true bargain and a bad knockoff, then you can
make terrific money."

Bernanke's bubble laboratory
http://online.wsj.com/article/SB121089412378097011.html
"First came the tech-stock bubble. Then there were bubbles in
housing and credit. Chinese stocks took off like a rocket. Now, as
prices soar on every material from oil to corn, some suggest
there's a bubble in commodities. But how and why do bubbles form?
Economists traditionally haven't offered much insight. From World
War II till the mid-1990s, there weren't many U.S. investing
manias for them to look at. The study of bubbles was left to
economic historians sifting through musty records of 17th-century
Dutch tulip-bulb prices and the like. The dot-com boom began to
change that."

Moody's ratings error probe
http://www.bloomberg.com/apps/news?pid=20601009&sid=aSKnzNuiU1Rc&refer=bond
"Moody's Corp. plunged the most in nine years after the ratings
company said it is conducting 'a thorough review' of whether a
computer error caused it to assign Aaa rankings to debt securities
that later fell in value."

Banks keep $35 billion markdown off income statements
http://www.bloomberg.com/apps/news?pid=20601109&sid=aRict1yTdiBo&refer=home
"Banks and securities firms, reeling from record losses resulting
from the collapse of the mortgage securities market, are
failing to acknowledge in their income statements at least $35 billion
of additional writedowns included in their balance sheets,
regulatory filings show."


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   4   5   1   5    5
CIBC (CM)                                   2   4   5   5   5    5
National Bank of Canada (NA)                3   4   5   5   5    5
BCE (BCE)                                   5   4   4   5   5    5
Royal Bank (RY)                             4   3   4   5   5    5
Bank of Nova Scotia (BNS)                   4   3   4   1   5    5
Telus (T)                                   4   4   4   5   5    5
TransCanada (TRP)                           3   4   3   4   5    5
Toronto Dominion Bank (TD)                  4   4   3   2   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   0.9
BCE (BCE)                                   5   4   4   5   5   1.6
Thomson (TOC)                               5   4   2   2   4   1.9
Bank of Montreal (BMO)                      4   4   5   1   5   2.1
Royal Bank (RY)                             4   3   4   5   5   3.0
Bank of Nova Scotia (BNS)                   4   3   4   1   5   3.1
Telus (T)                                   4   4   4   5   5   3.1
National Bank of Canada (NA)                3   4   5   5   5   3.3
Toronto Dominion Bank (TD)                  4   4   3   2   4   3.5
Sun Life (SLF)                              5   5   4   1   4   3.7
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                              P/E P/B P/D   G$   dG$(%)
========================================== === === === ====== ======
ACE Aviation (ACE.B)                        5   5   0   84.68 303.23
MDS Inc. (MDS)                              5   5   0   47.23 147.30
Thomson (TOC)                               5   4   4   55.77  48.79
Magna Cl.A (MG.A)                           4   5   3  100.01  36.36
Nova (NCX)                                  5   4   3   36.01  31.66
BCE (BCE)                                   5   4   5   40.03  19.13
Biovail (BVF)                               5   5   5   14.13  18.32
Canadian Tire (CTC.A)                       4   5   2   66.12   9.56
Sun Life (SLF)                              5   5   4   49.83   8.24
Inmet Mining (IMN)                          5   3   1   75.38   5.17
Weston George (WN)                          4   5   4   52.88   4.60
Bank of Montreal (BMO)                      4   4   5   50.26   3.59
Petro Canada (PCA)                          5   3   2   60.48   2.19
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/ 

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  Average Capital Gain    Average Holding Period
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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.