The Stingy News Weekly (09/05/2010)
Stingy News Flash
I recently had the pleasure of dining with PrefBlog's James Hymas (a fixed income specialist) and discovered that he offers investment advice on a fee-for-service basis. That is, based on a hourly or flat-fee rate. To my knowledge, he is the only investment advisor in Canada that offers such a service. (I'm not counting financial planning services, which are often provided on a fee-for-service basis but do not provide advice on the buying or selling of securities.) But I might be missing a few other advisors. If you know an investment advisor that charges by the hour, or via a flat rate, for investment advice (as opposed to a percentage of assets or commissions) then please let me know!
Do financial statements tell the truth?
"Financial statements are like fictional works 'based on a true story'. They bear some relationship to actual events, but they are interpretations with their own biases and agendas."
The apathy trade
"Week before last, the poll of American Association of Individual Investors members showed the lowest percentage of bullish respondents since March 5, 2009, essentially at the moment of the 2009 low. The bullish percentage rebounded a bit this past week, but still lagged behind the number of bears. Ned Davis Research's "crowd sentiment poll" showed a parallel degree of pessimism, as did the Rydex/SGI Advisor Confidence Index, a measure of investment-advisor psychology that hit a 16-month low in August. Meantime, corporate insiders have all but quit selling shares of their employers."
Epidemic models of bubbles
"Contagion or epidemic models of financial markets are proposed in which interest in or attention to individual stocks is spread by word of mouth. The models give alternative interpretations of the random walk character of stock prices."
Thinking outside the stocks
"There is always a bull market somewhere. With the stock market continuing to whipsaw and bonds getting ever-pricier, investors are looking further afield for decent returns - and some are finding them. Self-storage buildings, anyone? How about abandoned railroad beds, cellular towers, student apartments or parking facilities? Such unglamorous niches, once shunned by the investing elite, are performing well in 2010, even as the Dow industrials limp along."
"It is possible to build a speculative case for bond investment (i.e. riding the deflationary news flow down), however, as ever this leaves participants with the conundrum of Cinderella's ball as described by Warren Buffett 'The giddy participants all plan to leave just seconds before midnight. There is a problem though: They are dancing in a room in which the clocks have no hands!' Personally I prefer to stick to investment rather than speculation."
Do countries graduate from crises?
"Are declarations of victory against the global crisis premature? This column argues that 'graduation' - the emergence from recurrent crisis bouts - is a long and painful process which neither developed nor developing countries look close to completing. Two centuries of evidence suggests that most countries need 50 years before the chances of further crises subside."
Graham PE and CPI
"Saturna Capital has an interesting take on the calculation of the Graham / Shiller PE10, otherwise known as the Cyclically Adjusted Price Earnings ratio (CAPE). Saturna argues that The Market May Be Cheaper Than It Looks because the Consumer Price Index (CPI) provided by the Bureau of Labor Statistics (BLS) understates the true rate of inflation, a key input to the CAPE calculation"
The elements of investing
"The Elements of Investing.written by former Vanguard board members Charles Ellis and Burton G. Malkiel.distills investing into five fundamental principles: save, index, diversify, avoid blunders, and keep it simple. Simply visit the publisher's website and download your copy today."
Lies, damned lies and economists
"It's established by now that economics didn't help stop some of the more spectacular misadventures of the financial community but it's a bit less obvious that it was directly responsible for many of the mishaps. It's all tied up with the dirty fact that economists are basically a bunch of untrustworthy, deceitful bums who shouldn't be left alone with your child's piggybank, let alone the world's economy. The trouble is that economists have a world-view that sees us all as self-interested moneygrubbers without an ethical thought in our heads. Perhaps that's because that's a pretty good description of economists themselves: they act like their models are true, the dirty rotten scoundrels."
DOW 30 Value Screens
S&P/TSX60 Value Screens
The Rothery Report
(Learn More | Subscribe Today)
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.
|Disclaimers: Consult with a qualified investment adviser before trading. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, financial advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. More...|