"Thousands of experts study overbought indicators, oversold
indicators, head-and-shoulder patterns, put-call ratios, the Fed's
policy on money supply, foreign investment, the movement of the
constellations through the heavens, and the moss on oak trees, and
they can't predict markets with any useful consistency, any more
than the gizzard squeezers could tell the Roman emperors when
the Huns would attack."  - Peter Lynch


New @ StingyInvestor


Rebundling Passive Performance
http://www.ndir.com/SI/articles/AE-0608-Rebundling-Passive-Performance.shtml
"Advisors using actively managed funds have taken a beating from
index-fund advisors in the popular press over the issue of fees.
But the argument for indexing is usually made by relying on raw
index returns and usually targets investors who don't want
advice. The case for indexing is substantially weaker when all of
the costs associated with advice on passive portfolios are added
up."


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

The giant pool of money
http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355
"A special program about the housing crisis produced in a special
collaboration with NPR News. We explain it all to you. What
does the housing crisis have to do with the turmoil on Wall Street?
Why did banks make half-million dollar loans to people without
jobs or income? And why is everyone talking so much about the
1930s? It all comes back to the Giant Pool of Money."

Dazzling dandelions foment new commodities craze
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajng_KrbuVbA
"Commodities speculators have a new darling: dandelions. Each day
brings a new Wall Street report touting dandelion leaves and
flowers for use as both feed for livestock and fuel for vehicles."
[Drink some dandelion wine while soaking in the silliness.]

Three hours with Warren Buffett
http://www.cnbc.com/id/26337298/site/14081545/
"I think I said one time that, you know, you only find out who's
been swimming naked when the tide goes out. Well, we found out
that Wall Street has been kind of a nudist beach. There's--it's
just one discovery after another of firms that either didn't know
what they were doing or that did things that they shouldn't
have knowingly. And all of the troubles have not been revealed the
first time around, usually, so there's considerable
disillusionment that's set in in terms of are these guys telling us the
truth now or maybe they just don't know what the truth is."

Clouds gather again over the Pampas
http://www.economist.com/world/americas/displayStory.cfm?story_id=11966983
"At 55% of GDP, Argentina's public debt is still large. But the
cost of servicing it has been low, partly because of the tough
restructuring Mr Kirchner imposed on bondholders. Even so, to
service its debts, the government needs to find an extra $2.5
billion or so next year. It cannot tap the international capital
markets, because it has still not settled with some bondholders nor
its sovereign creditors in the Paris Club. Instead, it is relying
on Hugo Chavez. This month Venezuela's president bought another
$1 billion in Argentine bonds (taking his total purchases to $7
billion). The latest bonds pay interest of 15% - the same rate
agreed by Domingo Cavallo, a former finance minister, in a
notorious bond swap in 2001 on the eve of the collapse."

Investor timing and fund distribution channels
http://www.zeroalphagroup.com/news/Investor_Timing_final_final_12-4-07.pdf
"This study examines the investment timing performance of equity
mutual fund investors and its relationship to the distribution
arrangement of the fund. We find that investors who transact
through investment professionals using conventional distribution
arrangements experience substantially poorer timing performance
than investors who purchase pure no-load funds. Investors in all
three principal load-carrying retail share classes (A, B, and C)
significantly underperform a buy-and-hold strategy. Among all
load funds, Class B investors suffer from the poorest cash flow
timing, underperforming a buy-and-hold strategy by 2.28% annually,
compared with annual underperformance of 0.78% for investors in
pure no-load funds. No-load index funds are the only funds found
to show no evidence of poor investor timing. Although investors
are ultimately responsible for their own investment choices,
these findings question the value being added by investment
professionals who sell mutual fund shares through conventional
distribution arrangements."

Timing errors affect performance
http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=159&Id=43028&cat=22&IdSection=22&PageMem=&nbNews=
"treat your investments like a bar of soap; the more you touch
them, the smaller they get. This saying is so true. In practice,
I've rarely found any need to make many changes more often than
every two years. Advisors who can't resist the itch to rejig
client portfolios should at least keep a running score of how their
'new' advice fares against the 'old,' unchanged portfolio in
subsequent years. If the changes detract from performance more
often than not, this should be kept in mind the next time the itch
to switch returns."

Running a hedge fund is harder than it looks
http://www.nytimes.com/2008/08/19/business/19sorkin.html
"Do you remember a time, only a short while ago, when virtually
anybody could start a hedge fund? It seemed so easy: billions of
dollars were being thrown around like confetti, even at
first-time managers. You could make money with your eyes closed. Or so
it seemed."

The key to happiness is freedom not income
http://www.nakedcapitalism.com/2008/08/key-to-happiness-is-freedom-not-income.html
"Off and on, usually provoked by the release of a new study, the
media will turn to the question of happiness and incomes. While
the Wall Street Journal has exhibited a tendency to tout
research that shows that the rich are happier, the results are far less
clear-cut. Once a certain income level has been reached
(typically, enough to provide for a middle class standard of living in
that society and allow one to accumulate a cushion for
emergencies) more money does not produce much if any gains in happiness.
And some findings have been under-reported in the US. For
instance, while some studies have found that being in the top income
group or having high educational attainment is correlated with
higher levels of happiness, living in socially stratified
societies leads to less satisfaction across all groups. And remember,
Nigeria, hardly a bastion of wealth, has scored as the happiest
country in a multi-year international survey. An article today in
the Financial Times suggests that researchers may have been
looking at the wrong axis in looking for a strong correlation
between income and happiness. Roberto Foa (a researcher in the same
international survey mentioned above) contends that freedom is a
far more important factor than economic attainment."

A glossary of incompetence
http://www.time.com/time/magazine/article/0,9171,839972,00.html
"The "Peter Principle" states that "in a hierarchy, every
employee tends to rise to his level of incompetence; the cream rises
until it sours." People who show competence are promoted whether
or not they are qualified to perform competently at the next
level. Eventually they go beyond their limits, become incompetent,
and stop getting promoted. Macbeth, a success as a military
commander, rose to become an incompetent king. Which is to say,
"nothing fails like success."" [An oldie but a goodie.]

Two years inside the cauldron of capitalism
http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/books/article4443213.ece
"The weirdest and creepiest episode is when a student writes to
the entire school, confessing to a 'regrettable property-damage
incident', a gorgeous euphemism for urinating against a
neighbouring student's door. 'His behaviour had made him realise he still
had work to do figuring out exactly who he was.' Ye-es . . . or
maybe he should just resolve not to pee against people.s doors
in future. Even more creepily, Delves Broughton finds that he no
longer responds to such tosh with a healthy snort of laughter.
'It was serious, right? Leadership. Core values. Transformation.
Being true to oneself.' It takes his wife - his American wife -
to inject some common sense. 'These people are freaks..'"

Court upholds ABCP plan
http://www.globeinvestor.com/servlet/story/RTGAM.20080818.wabcp0818/GIStory/
"Investors whose funds have been locked up for more than a year
in frozen asset-backed commercial paper may get their money back
within as little as two months after an appeal court ruled a
$32-billion restructuring plan is fair and legal."

Abnormal returns from the U.S. senate
http://www.thenationalbusinessassociation.com/content/JFQA-394-Ziobrowski-Proofs.pdf
"The actions of the federal government can have a profound impact
on financial markets. As prominent participants in the
government decision making process, U.S. Senators are likely to have
knowledge of forthcoming government actions before the information
becomes public. This could provide them with an informational
advantage over other investors. We test for abnormal returns from
the common stock investments of members of the U.S. Senate
during the period 1993--1998. We document that a portfolio that
mimics the purchases of U.S. Senators beats the market by 85 basis
points per month, while a portfolio that mimics the sales of
Senators lags the market by 12 basis points per month. The large
difference in the returns of stocks bought and sold (nearly one
percentage point per month) is economically large and reliably
positive."


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)                               1   5   4   5   5    5
Bank of Montreal (BMO)                      4   4   4   1   5    5
CIBC (CM)                                   0   4   5   5   5    5
National Bank of Canada (NA)                3   4   4   5   5    5
Telus (T)                                   5   4   4   5   5    5
Royal Bank (RY)                             4   3   4   5   5    5
Husky Energy (HSE)                          5   2   2   3   5    5
Bank of Nova Scotia (BNS)                   3   2   3   1   5    5
Toronto Dominion Bank (TD)                  4   4   3   3   5    5
Shaw Comm Cl.B (SJR.B)                      3   1   2   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)                               1   5   4   5   5   1.7
Bank of Montreal (BMO)                      4   4   4   1   5   1.8
Thomson (TOC)                               5   4   2   2   4   1.9
Telus (T)                                   5   4   4   5   5   2.1
Husky Energy (HSE)                          5   2   2   3   5   2.2
BCE (BCE)                                   5   3   3   4   4   2.6
Toronto Dominion Bank (TD)                  4   4   3   3   5   2.7
Sun Life (SLF)                              4   5   5   1   4   2.8
Royal Bank (RY)                             4   3   4   5   5   2.8
Bank of Nova Scotia (BNS)                   3   2   3   1   5   3.1
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  124.53 1019.9
Magna Cl.A (MG.A)                           4   5   3   94.88  53.83
Thomson (TOC)                               5   4   4   55.77  48.79
Petro Canada (PCA)                          5   4   3   66.57  42.40
Canadian Tire (CTC.A)                       4   5   3   65.15  25.70
Sun Life (SLF)                              4   5   4   49.11  23.96
Nova (NCX)                                  5   4   2   32.30  14.30
Weston George (WN)                          4   5   4   52.57  11.65
Bank of Montreal (BMO)                      4   4   5   49.94  11.12
Telus (T)                                   5   4   5   44.84  10.96
Inmet Mining (IMN)                          5   3   1   68.82   6.72
Canadian Pacific Rail (CP)                  4   4   3   64.78   3.65
Toronto Dominion Bank (TD)                  4   4   5   60.20   1.26
MDS Inc. (MDS)                              2   5   0   15.93   0.66
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

Value Investing: A Balanced Approach
by Martin J. Whitman

Value Investing encourages investors to cast off the tyranny of
earnings and to focus instead on balance sheets and book values.
Well-capitalised firms can withstand an occasional headwind and
can be excellent values provided that they are bought for
reasonable prices. Safe and cheap are the driving factors for value
investors. Although Whitman's prose is occasionally a bit dry, his
useful ideas makes Value Investing well worth reading.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0471398101/


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 06/30/2008)
  Average Capital Gain    Average Holding Period
          40.7%                   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.