"Investing is simple, but not easy."  - Warren Buffet


New @ StingyInvestor


Income 2008
http://www.ndir.com/SI/articles/MS0708.shtml
"Do you dream of relaxing on a sunny beach, drink in hand, while
your investment portfolio throws off piles of cash? That's the
life of an income investor. To help you get to that beach as
quickly as possible, we have once again ranked the biggest trusts
and stocks in Canada based on their ability to put steady streams
of cash into your wallet."


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

Breakthrough on rescue plan
http://www.bloomberg.com/apps/news?pid=20601087&sid=asBqtU7twpAY&refer=home
"Companies that sell debt to the government will issue stock
warrants to the government so that taxpayers 'can gain as companies
recover' from economic difficulties, Conrad said. "

The monster that ate Wall Street
http://www.newsweek.com/id/161199
"What the bankers hit on was a sort of insurance policy: a third
party would assume the risk of the debt going sour, and in
exchange would receive regular payments from the bank, similar to
insurance premiums. JPMorgan would then get to remove the risk from
its books and free up the reserves."

Tumult jars bond-tracking ETFs
http://online.wsj.com/article/SB122239471119277791.html?mod=yahoo_hs&ru=yahoo
"Exchange-traded funds that track bonds have been running into
trouble trading at prices that match their underlying values,
raising questions about one of their key promises to investors."

Fate of bailout plan remains uncertain
http://www.nytimes.com/2008/09/26/business/26bailout.html?_r=1&hp&oref=slogin
"The talks broke up in angry recriminations, according to
accounts provided by a participant and others who were briefed on the
session, and were followed by dueling press conferences and
interviews rife with partisan finger-pointing. In the Roosevelt Room
after the session, the Treasury secretary, Henry M. Paulson Jr.
literally bent down on one knee as he pleaded with Nancy Pelosi,
the House Speaker, not to 'blow it up' by withdrawing her
party's support for the package over what Ms. Pelosi derided as a
Republican betrayal. "I didn't know you were Catholic," Ms. Pelosi
said, a wry reference to Mr. Paulson's kneeling, according to
someone who observed the exchange. She went on: "It's not me
blowing this up, it's the Republicans." Mr. Paulson sighed. "I know.
I know." It was the very outcome the White House had said it
intended to avoid, with partisan presidential politics appearing to
trample what had been exceedingly delicate Congressional
negotiations."

Economists urge congress not to rush
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNKGD.bJwmRA
"More than 150 prominent U.S. economists, including three Nobel
Prize winners, urged Congress to hold off on passing a $700
billion financial market rescue plan until it can be studied more
closely."

JPMorgan buys WaMu's deposits as thrift is seized
http://www.bloomberg.com/apps/news?pid=20601087&sid=av8gIaGIF6EY
"The U.S. government closed Seattle-based Washington Mutual amid
customer withdrawals of $16.7 billion since Sept. 15, the Office
of Thrift Supervision said in a statement. WaMu had
'insufficient liquidity' and was in an 'unsound' condition, the OTS said."

Housing costs: Half your income?
http://articles.moneycentral.msn.com/Banking/HomeFinancing/38-percent-burdened-by-housing-costs.aspx
"More than 7.5 million homeowners spend at least half of their
income on housing; 19 million are above 30%. That's 53% of all
homeowners with mortgages. No wonder Americans feel strained."

It's the bailout, stupid!
http://www.forbes.com/home/2008/09/24/buffett-goldman-bernanke-pf-ii-in_rl_0924croesus_inl.html
"Compared to the ham-handed hastiness in Washington, Warren
Buffett's helping hand to Goldman Sachs was an elegant and brilliant
stroke for both parties. The greatest investor of our time
becomes the largest shareholder of our finest investment bank turned
bank holding company."

I won't give Goldman my $200 Million lottery win
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=athwFHHY06e8
"Tomorrow's Europe-wide lottery offers a tax-free, lump-sum
jackpot worth about $200 million. When I hand over my winning ticket,
though, I will face a dilemma: Where do I stash my luck-gotten
gains?"

Warren Buffett explains his Goldman investment
http://www.cnbc.com/id/26867866
"Well, I can't tell you it's exactly the right time. I don't try
to time things, but I do try to price things. And I've got a
formula that says bet on brains, and bet of them when it's the
right type of deal. And in this case, there's no better firm on Wall
Street. We've done business with them for years, with Goldman,
and the price was right, the terms were right, the people were
right. I decided to write a check."

Beware ETNs
http://www.portfolio.com/views/blogs/market-movers/2008/09/17/beware-etns?tid=true
"Perhaps this might be a good time for a story to remind your
readers about the difference between an ETN and ETF: an ETN is just
a pre-paid forward contract, a form of debt security. There is
no underlying basket of assets, unlike mutual funds or ETFs."

Beware ETNs, Part 2
http://www.portfolio.com/views/blogs/market-movers/2008/09/23/beware-etns-part-2
"This alone makes it very dangerous to buy an ETN: you're taking
a huge amount of counterparty risk and not being paid for it at
all. If this had happened a couple of years ago, I might have
suggested a monoline wrap to set investors' fears at rest."

Credit traders sowing seeds of destruction
http://www.bloomberg.com/apps/news?pid=20601087&sid=alzAZyxH1qT4
"The $62 trillion market for credit- default swaps, created to
protect banks from loan losses, helped fuel a near-meltdown in the
financial system and now may be regulated for the first time."

Goldman to raise $7.5 billion from Berkshire
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0Rfcqk5UR60&refer=home
"Goldman Sachs Group Inc. will raise at least $7.5 billion from
Warren Buffett's Berkshire Hathaway Inc. and public investors in
a bid to quell concerns that pushed up the Wall Street firm's
borrowing costs and hurt its stock."

Retirees need only 60% of working income
http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2008/09/23/retirees-need-only-60-of-working-income-russell-survey-finds.aspx
"The Russell finding is closer to the 50 or 60% replacement ratio
that actuary Malcolm Hamilton has often cited, and for similar
reasons: "Certain living expenses tend to drop significantly
during retirement as most retirees are mortgage-free and no longer
incur employment costs such as daily transportation," says
Irshaad Ahmad, president and managing director for Russell Canada"

Stopping a financial crisis, the Swedish way
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html
"A banking system in crisis after the collapse of a housing
bubble. An economy hemorrhaging jobs. A market-oriented government
struggling to stem the panic. Sound familiar? It does to Sweden.
The country was so far in the hole in 1992 - after years of
imprudent regulation, short-sighted economic policy and the end of
its property boom - that its banking system was, for all practical
purposes, insolvent. But Sweden took a different course than
the one now being proposed by the United States Treasury. And
Swedish officials say there are lessons from their own nightmare
that Washington may be missing."

CEO murdered by mob of sacked Indian workers
http://www.timesonline.co.uk/tol/news/world/asia/article4810644.ece
"Corporate India is in shock after a mob of sacked workers
bludgeoned to death the chief executive who had dismissed them from a
factory in a suburb of Delhi."

A disability epidemic among a railroad's retirees
http://www.nytimes.com/2008/09/21/nyregion/21lirr.html?pagewanted=1&_r=1&hp
"Virtually every career employee - as many as 97 percent in one
recent year - applies for and gets disability payments soon after
retirement, a computer analysis of federal records by The New
York Times has found. Since 2000, those records show, about a
quarter of a billion dollars in federal disability money has gone
to former L.I.R.R. employees, including about 2,000 who retired
during that time. The L.I.R.R.'s disability rate suggests it is
one of the nation's most dangerous places to work. Yet in four of
the last five years, the railroad has won national awards for
improving worker safety. 'Short of the gulag, I can't imagine any
work force that would have a so-to-speak 90 percent disability
attrition rate,' said Glenn Scammel, long one of Capitol Hill's
top experts on railroads. 'That defies both logic and
experience.'"

Hedge fund returns money
http://www.ft.com/cms/s/0/d7ac8494-880f-11dd-b114-0000779fd18c.html?nclick_check=1
"The best-performing hedge fund manager of the past two years has
closed down his funds and is returning money to investors after
concluding that the danger of losing money from a bank collapse
is too high."

Lessons from a 'lost decade'
http://www.economist.com/finance/displaystory.cfm?story_id=11964819
"Most dismiss the idea that America could suffer the same fate as
Japan, but some of the differences are overstated. For example,
some claim that Japan's bubble was much bigger than America's.
Yet average house prices nationwide rose by 90% in America
between 2000 and 2006, compared with a gain of 51% in Japan between
1985 and early 1991, when Japanese home prices peaked"

Oil traders caught in squeeze
http://www.bloomberg.com/apps/news?pid=20601110&sid=aa2880cO2dNU
"Crude oil climbed more than $25 a barrel, the biggest gain ever,
as traders scrambled to unwind positions on the October
contract's last day of trading. The more-active November contract rose
$6.62."




Tip Sheet
http://www.stingyinvestor.com/SI/strategy/tipsheet.shtml

Sell, Sell, Sell, Eh?
http://www.ndir.com/SI/strategy/tipsheet/09-25-2008-Sell,-Sell,-Sell,-Eh.shtml
The downside risk in Canada is reasonably similar to that seen in the
U.S. but some of the fine detail is different.  Just like in the U.S.,
declines of 30% to 40% have been fairly common.

Builders Burning Book Value
http://www.ndir.com/SI/strategy/tipsheet/09-24-2008-Builders-Burning-Book-Value.shtml
I like looking at stocks that most people stay away from.
Beleaguered U.S. homebuilders fit the bill these days.  Most of them
crashed months ago and the sector remains a no-go zone.  That makes it
potentially interesting territory for value investors.

Value Stocks in the S&P500
http://www.ndir.com/SI/strategy/tipsheet/09-23-2008-Value-Stocks-in-the-SandP500.shtml
I like to search through the large companies of the S&P500 for
attractive value stocks.  Two main principles guide my quest.  First,
a stock must have relatively little debt.  Second, it should be
trading at a low price-to-sales ratio.

Sell, Sell, Sell!
http://www.ndir.com/SI/strategy/tipsheet/09-22-2008-Sell,-Sell,-Sell.shtml
I'm a little reluctant to even post this quick look at the
history of stock market declines in the United States.  I'm not really
interested in inspiring panic.  But I do want to take a look at what
history has to say about the downside risk for stocks.

Shorts squeezed
http://www.ndir.com/SI/strategy/tipsheet/09-19-2008-Shorts-squeezed.shtml
Let's be practical and look for stocks that made big gains
today but are down even more over the last year.  We're picking on
these stocks with the view that the short sellers might have been
right but were forced out of their positions.




DOW 30 Value Screens
http://www.stingyinvestor.com/SI/strategy.shtml 

High Dividend Yield Stocks                   P/E P/B P/S P/D Yield
============================================ === === === === =====
Bank of America (BAC)                         1   5   1   5    5
Pfizer (PFE)                                  3   4   2   5    5
Citigroup (C)                                 0   5   2   5    5
AT&T (T)                                      2   4   3   5    5
Verizon (VZ)                                  2   4   4   5    5
Merck (MRK)                                   2   2   1   4    4
General Electric (GE)                         4   4   3   4    4
AIG (AIG)                                     0   5   5   4    4
JP Morgan Chase (JPM)                         4   5   2   4    4
EI DuPont (DD)                                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/D  VR
============================================ === === === === =====
Pfizer (PFE)                                  3   4   2   5   2.0
Bank of America (BAC)                         1   5   1   5   2.2
Chevron (CVX)                                 5   4   5   4   2.6
AT&T (T)                                      2   4   3   5   2.8
General Electric (GE)                         4   4   3   4   2.9
EI DuPont (DD)                                4   3   3   4   3.2
Verizon (VZ)                                  2   4   4   5   3.3
Merck (MRK)                                   2   2   1   4   3.3
JP Morgan Chase (JPM)                         4   5   2   4   3.4
Caterpillar (CAT)                             5   2   4   3   3.9
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                            P/E P/B P/D   G$   dG$(%)
======================================== === === === ====== ======
JP Morgan Chase (JPM)                     4   5   4   50.11  26.53
Alcoa (AA)                                5   5   2   33.24  17.47
Chevron (CVX)                             5   4   4   91.63  14.22
Bank of America (BAC)                     1   5   5   35.50  10.14
More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml 



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   4   3   5   5    5
Bank of Montreal (BMO)                   3   4   2   1   5    5
CIBC (CM)                                0   3   1   5   5    5
National Bank of Canada (NA)             2   4   2   4   5    5
Telus (T)                                4   3   4   5   5    5
Husky Energy (HSE)                       4   2   3   3   5    5
Bank of Nova Scotia (BNS)                3   2   1   1   5    5
Royal Bank (RY)                          3   2   2   5   5    5
BCE (BCE)                                5   4   3   4   5    5
Sun Life (SLF)                           4   5   4   1   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   4   3   5   5   1.7
Thomson (TOC)                             5   0   0   0   4   1.9
Telus (T)                                 4   3   4   5   5   2.0
First Quantum Minerals Ltd. (FM)          5   4   4   4   3   2.0
Petro Canada (PCA)                        5   5   5   4   3   2.0
Bank of Montreal (BMO)                    3   4   2   1   5   2.1
BCE (BCE)                                 5   4   3   4   5   2.2
Husky Energy (HSE)                        4   2   3   3   5   2.2
Sun Life (SLF)                            4   5   4   1   4   2.4
Teck Cominco Limited (TCK.B)              5   3   3   3   4   3.0
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  187.27 2156.2
Petro Canada (PCA)                        5   5   3   74.92 105.59
First Quantum Minerals Ltd. (FM)          5   4   3   81.96  95.52
Magna Cl.A (MG.A)                         4   5   3   99.55  71.14
Sun Life (SLF)                            4   5   4   52.31  41.01
Nova (NCX)                                5   4   2   33.93  37.70
Inmet Mining (IMN)                        5   4   1   75.21  36.75
Canadian Tire (CTC.A)                     4   5   2   66.85  34.37
BCE (BCE)                                 5   4   5   45.33  21.86
Talisman Energy (TLM)                     5   3   2   19.25  19.50
Teck Cominco Limited (TCK.B)              5   3   4   39.57  17.87
Bank of Montreal (BMO)                    3   4   5   54.28  17.23
Weston George (WN)                        3   4   3   59.10  16.52
Telus (T)                                 4   3   5   45.34  15.95
Nexen Inc. (NXY)                          5   3   1   28.74  15.48
Canadian Pacific Rail (CP)                4   4   2   65.77  12.91
Toronto Dominion Bank (TD)                4   4   4   67.23   6.59
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

Contrarian Investment Strategies: The Next Generation
by David Dreman

David Dreman has provided perhaps the best modern book on value
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but the most grizzled market veteran will pick up a few good ideas
from Contrarian Investment Strategies: The Next Generation.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0684813505/


Stock Research From Dan Hallett & Associates

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http://www.rotheryreport.com/ 

The Rothery Report provides research on select deep-value stocks in
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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.