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Stingy News Quarterly
2008: Q1 Q2 Q3 Q4
2007: Q1 Q2 Q3 Q4
2006: Q1 Q2 Q3 Q4
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Stingy News Weekly
2009
01: 04
2008
12: 07 14 21 28
11: 02 09 16 23 30
10: 05 12 19 26
09: 07 14 21 28
08: 01 10 17 24 31
07: 06 13 20 27
06: 01 08 15 22 29
05: 04 11 18 25
04: 06 13 20 27
03: 02 09 16 23 30
02: 03 10 17 24
01: 06 13 20 27
Dan's Reports
Perspective on the bear
Dilution excessive
Fund fees revisited
T class funds
Bonds vs. bond funds
Bear market protectors
Investing in bonds
Ignore bonds at your peril
Coping with change
Future of trust funds
Dilution trumps
Are fees excessive?
Performance anxiety
Top advisory model?
81-106 a step back
Poor fund classifications
Pension shortfall
A longer-term report card
Information overload
About Dan
Privacy Policy
"Any man who is a bear on the future of this country will go broke." - J.P.Morgan Stingy Links http://www.stingyinvestor.com/SI/articles/articlearchive.shtml Take a deep breath, calm yourself http://online.wsj.com/article/SB122428810219346585.html "You can catch other people's emotions as easily as you can catch a cold. In an experiment by neuroscientist Elizabeth Phelps at New York University, people either watched someone else get a mildly painful electric shock or suffered the shock themselves. Their brain responses and their dread before the shock were highly similar in both cases, suggesting that seeing another person's fear is all it takes to make us afraid. Even encountering the circumstances under which the other person was shocked is enough to trigger your own fear. Viewed this way, today's financial markets -- in which tens of millions of investors watch each other's fears unfolding in real time on television and online -- constitute one giant panic-transmission machine." Keep your money in the market http://www.theaustralian.news.com.au/business/story/0,28124,24509754-36418,00.html "We will have a serious recession now, but a 1930s-style depression is highly unlikely. We will not let the money supply decline by 25 per cent, as we did in the '30s, and automatic stabilizers (like unemployment insurance) are now a significant element of fiscal policy. Don't forget that the US economy is still the most flexible in the world and our "innovation machine" is alive and well. No one has consistently made money by selling America short, and I am confident the same lesson is true today." Q3 2008 Oakmark commentary http://www.oakmark.com/opencommentary.asp?commentary_id=514&news_from=c&fund_id=0 "In fact, we believe the decline in the market has created a very attractive environment for investing new capital. For most people, the right question to ask after a big decline is: 'Should I be investing more?'" Whitman sampler of value stocks http://www.forbes.com/finance/2008/10/14/whitman-value-toyota-pf-ii-in_ms_1014adviserqa_inl.html "Few investors in the market today are as bear-market-seasoned and savvy as Marty Whitman, 84-year-old founder of M.J. Whitman LLC, chairman and founder of Third Avenue Management and portfolio manager of Third Avenue Value Fund. Like Sam Zell, Leon Black and Eddie Lampert, Whitman's roots are in distressed-company investing." Concentrated value investing http://www.123jump.com/mutual-fund/Concentrated-Value-Investing/515/ "Mohnish Pabrai, the Managing Partner of the Pabrai Investment Funds, has outperformed market indices over the last nine years by consistently believing in concentrated value investing. Pabrai likes to hold fewer stocks positioned in industries that he understands well, paying attention to two key variables: the intrinsic value of a business and its current price." AIG: Europe's lethal loophole http://www.businessweek.com/magazine/content/08_43/b4105032835044.htm "Before the financial crisis hit, AIG did a booming business in credit default swaps, complex instruments originally designed to protect lenders if borrowers fail to make debt payments. The biggest buyers were European banks, whose deals last year with AIG totaled a staggering $426 billion. But the banks didn't always buy the swaps as insurance against defaults - they often used them to skirt capital requirements." Buy American. I Am. http://www.nytimes.com/2008/10/17/opinion/17buffett.html?_r=2&oref=slogin&oref=slogin "I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities." Former Vanguard guru is buying stocks http://www.philly.com/inquirer/business/homepage/20081015_Former_Vanguard_guru_is_buying_stocks.html "In a small office in West Conshohocken, a legendary stock market bottom feeder has been having a feast. John B. Neff, who racked up record gains as manager of Vanguard's Windsor Fund over three decades, is buying stocks again." Repeal the Glass-Steagall act http://query.nytimes.com/gst/fullpage.html?res=9C03E2DB1F3BF936A35752C1A96F958260&sec=&spon=&pagewanted=1 "I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010" [from 1999 ...] SEC agrees to accounting shift http://www.bloomberg.com/apps/news?pid=20601087&sid=a4Xt752wyajI&refer=home "The Center for Audit Quality, which represents accountants, said in a letter seven days later that perpetual preferred securities should be treated as equity because the holdings do not have a maturity date and 'the investor cannot recover its investment simply by holding the investment.'" Dimon, Munger, Rohatyn: No more vegas http://www.forbes.com/home/2008/10/13/rohatyn-munger-dimon-pf-ii-in_rl_1013croesus_inl.html "Munger wants Wall Street balance sheets reduced by 70% and insists that the firms "be a market maker, a broker, an underwriter and a custodian of securities but not the hedge funds they have become." He wants to restrict leverage to 50% on every securities transaction except for the Treasury trading desk where "you're dealing with the safest securities around." That 50% margin level, incidentally, is the maximum that ordinary investors can obtain from their broker when they purchase common stock. Before their respective demises, Bear Stearns and Lehman Brothers were leveraged to the tune of $30 of debt for every $1 of capital." Paulson urges banks to deploy capital http://www.bloomberg.com/apps/news?pid=20601087&sid=awVJK0Oh70IY&refer=home "Treasury Secretary Henry Paulson urged banks receiving $250 billion in capital injections from the government to use the funds to spur economic growth. 'We must restore confidence in our financial system,' Paulson said in a statement in Washington. 'The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it.'" Fear factor http://www.slate.com/id/2202054/ "There have been, and are, plenty of reasons for investors to freak out: the failure of banks; the demise of institutions like Lehman Bros.; the necessity for repeated, spastic government interventions. Nearly every economic indicator in the past few weeks, from auto sales to employment, has been negative. The stock of General Motors sunk to its lowest level since 1950. Banks are refusing to lend to one another. The traditional safe havens of investment, such as municipal bonds and money-market funds, have buckled. The trumpets of leadership are so uncertain, they sound like kazoos." America for sale: price reduced http://online.barrons.com/article/SB122369310004425503.html?mod=googlenews_barrons "At the depths of the 1973-74 bear market -- the worst of the post-war period -- when the Dow Jones industrial average was approaching its low of 577, Warren Buffett told Forbes magazine that he felt like "an oversexed guy in a whorehouse. This is the time to start investing." Buffett's words may have been indelicate -- Forbes ended up changing the world "whorehouse" to "harem" when the interview ran -- but the CEO of Berkshire Hathaway was on the mark because that era produced some of the best bargains of the past 50 years." Traders' worst fears realised at Lehmans auction http://www.independent.co.uk/news/business/news/traders-worst-fears-realised-as-lehmans-auction-begins-957953.html "Analysts say the amount of money that has to change hands could be more than $200bn. Some estimates put the value of outstanding credit default swaps on Lehman Brothers debt at $400bn, although some of these trades have already been netted out because some investors both sold and bought CDS contracts. Exact figures are not available because a CDS is a private contract and is not traded on an exchange, but the payout will certainly be the biggest in the 10-year history of the market." It's time to invest http://www.nytimes.com/2008/10/12/business/12stox.html?_r=1&oref=slogin "Martin J. Whitman, a professional investor for more than 50 years, said that as long as economies worldwide could avoid an outright depression, stocks were amazingly cheap." DOW 30 Value Screens http://www.stingyinvestor.com/SI/strategy.shtml High Dividend Yield Stocks P/E P/B P/S P/D Yield ============================================ === === === === ===== Citigroup (C) 0 5 2 5 5 Pfizer (PFE) 2 4 2 5 5 Verizon (VZ) 2 4 4 5 5 General Electric (GE) 4 4 3 5 5 AT&T (T) 3 5 3 5 5 Alcoa (AA) 5 5 5 4 4 Bank of America (BAC) 1 5 2 4 4 Merck (MRK) 2 2 1 4 4 EI DuPont (DD) 4 3 3 4 4 Home Depot (HD) 4 3 5 4 4 More Info: http://www.stingyinvestor.com/SI/strategy/dogs.shtml Value Ratio Stocks P/E P/B P/S P/D VR ============================================ === === === === ===== Alcoa (AA) 5 5 5 4 0.9 Caterpillar (CAT) 5 2 5 4 1.5 General Electric (GE) 4 4 3 5 1.5 Chevron (CVX) 5 4 5 3 1.5 Pfizer (PFE) 2 4 2 5 1.6 AT&T (T) 3 5 3 5 1.8 EI DuPont (DD) 4 3 3 4 1.8 Verizon (VZ) 2 4 4 5 1.9 Boeing (BA) 5 1 5 3 2.2 Home Depot (HD) 4 3 5 4 2.3 More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml Graham Stocks P/E P/B P/D G$ dG$(%) ======================================== === === === ====== ====== Alcoa (AA) 5 5 4 29.39 149.09 Chevron (CVX) 5 4 3 91.52 46.78 Walt Disney (DIS) 3 4 1 30.51 23.28 AT&T (T) 3 5 5 30.70 21.41 Bank of America (BAC) 1 5 4 27.25 17.24 General Electric (GE) 4 4 5 22.60 15.15 American Express (AXP) 5 3 2 26.65 14.25 Caterpillar (CAT) 5 2 4 44.49 13.16 Home Depot (HD) 4 3 4 22.19 9.79 JP Morgan Chase (JPM) 1 5 3 41.79 6.26 Verizon (VZ) 2 4 5 28.56 5.04 Pfizer (PFE) 2 4 5 17.15 1.43 EI DuPont (DD) 4 3 4 33.91 0.41 More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml S&P/TSX60 Value Screens http://www.stingyinvestor.com/SI/strategy.shtml High Dividend Yield Stocks P/E P/B P/S P/C P/D Yield* ======================================= === === === === === ====== Biovail (BVF) 1 4 3 5 5 5 Bank of Montreal (BMO) 3 4 2 1 5 5 CIBC (CM) 0 3 1 4 5 5 Husky Energy (HSE) 4 2 3 3 5 5 National Bank of Canada (NA) 2 4 2 4 5 5 Teck Cominco Limited (TCK.B) 5 4 3 4 5 5 Sun Life (SLF) 4 5 4 2 5 5 Telus (T) 4 3 3 4 5 5 Transalta (TA) 2 1 3 3 5 5 Royal Bank (RY) 3 2 2 5 4 4 More Info: http://www.stingyinvestor.com/SI/strategy/dogs.shtml Value Ratio Stocks P/E P/B P/S P/C P/D VR ======================================== === === === === === ===== First Quantum Minerals Ltd. (FM) 5 5 4 5 3 0.6 Teck Cominco Limited (TCK.B) 5 4 3 4 5 0.9 Petro Canada (PCA) 5 5 5 4 3 1.0 Husky Energy (HSE) 4 2 3 3 5 1.0 Biovail (BVF) 1 4 3 5 5 1.1 Sun Life (SLF) 4 5 4 2 5 1.3 Bank of Montreal (BMO) 3 4 2 1 5 1.3 Telus (T) 4 3 3 4 5 1.7 BCE (BCE) 4 3 3 4 4 1.8 Thomson (TOC) 5 0 0 0 3 1.9 More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml Graham Stocks P/E P/B P/D G$ dG$(%) ======================================== === === === ====== ====== ACE Aviation (ACE.B) 5 5 0 193.43 3475.4 First Quantum Minerals Ltd. (FM) 5 5 3 81.67 243.00 Petro Canada (PCA) 5 5 3 74.77 190.15 Magna Cl.A (MG.A) 4 5 4 99.33 132.85 Inmet Mining (IMN) 5 4 1 75.17 110.55 Teck Cominco Limited (TCK.B) 5 4 5 39.73 108.01 Sun Life (SLF) 4 5 5 52.21 89.50 Talisman Energy (TLM) 5 4 2 19.27 80.46 Nexen Inc. (NXY) 5 4 1 28.77 77.49 Nova (NCX) 5 4 2 33.89 73.45 Agrium (AGU) 5 3 1 63.02 46.22 Bank of Montreal (BMO) 3 4 5 54.27 45.70 Canadian Pacific Rail (CP) 4 4 3 65.99 42.13 Canadian Tire (CTC.A) 4 4 2 66.89 41.15 BCE (BCE) 4 3 4 45.22 33.01 Husky Energy (HSE) 4 2 5 41.28 29.08 Toronto Dominion Bank (TD) 3 4 4 67.13 27.86 Telus (T) 4 3 5 45.30 25.11 Suncor Energy (SU) 4 2 1 32.77 18.04 National Bank of Canada (NA) 2 4 5 49.75 17.07 Weston George (WN) 2 3 3 59.09 9.95 TransCanada (TRP) 3 3 4 35.46 8.80 Encana (ECA) 3 3 4 53.98 8.20 Manulife (MFC) 3 3 3 31.86 5.35 Bombardier Cl.B (BBD.B) 4 2 3 4.35 4.52 Bank of Nova Scotia (BNS) 3 2 4 42.54 2.98 MDS Inc. (MDS) 1 5 0 11.45 0.89 Yamana Gold Inc. (YRI) 1 5 2 7.83 0.18 More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml *Notes: http://www.stingyinvestor.com/SI/strategy/notes.shtml Switch to the HTML version if the tables aren't formatted properly. http://www.stingyinvestor.com/cgi-bin/email.cgi Books for Stingy Investors The Intelligent Investor by Benjamin Graham & Jason Zweig Follow Warren Buffett's advice and read "by far the best book on investing ever written". The latest edition provides the full text of Graham's original work and supplemental chapters with more modern commentary from Money Magazine editor Jason Zweig. I like to read this book every few years and would probably benefit by reading it even more frequently. Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0060555661/ 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 09/30/2008) Average Capital Gain Average Holding Period 36.2% 2.4 Years Learn More http://www.rotheryreport.com/store/store.shtml Subscribe Today http://www.rotheryreport.com/store/order.shtml If you'd like to suggest The Stingy News to a friend, please point them to: http://www.stingyinvestor.com/cgi-bin/email.cgi Please visit the StingyInvestor website at http://www.stingyinvestor.com To (un)subscribe please use our email centre at http://www.stingyinvestor.com/cgi-bin/email.cgi Email comments or questions to info@stingyinvestor.com Refer to legal & conflict of interest disclaimers at http://www.stingyinvestor.com/SI/legal.shtml Privacy Policy http://www.ndir.com/SI/legal/privacy.shtml We do not rent or sell our email list to third parties. 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.
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A Dan Hallett and Associates Inc. publication. Norm Rothery, Ph.D., CFA, is the Chief Investment Strategist at Dan Hallett and Associates Inc. (DH&A) and the founder of StingyInvestor.com. DH&A is registered as Investment Counsel in the province of Ontario. Norm, DH&A, or related-parties may have an interest in the securities mentioned. More...