"I have owned one stock since 1969, two since 1988 and one I
started buying in 1986 or so. That's my portfolio. Six stocks. I once
owned 17, but that was way too much"  - Philip Fisher


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

Subprime mortgages: Myths and reality
http://www.prefblog.com/?p=8371
"Subprime is just another boom and bust story; just another
example of the manner in which easy money will find an outlet.
Usually, of course, easy money will express itself in terms of
inflation; since there was not much inflation in the period 2001-07,
the Fed missed the underlying problem."

Is 'honest services fraud' a bogus charge?
http://www.time.com/time/business/article/0,8599,1931818,00.html
"Critics of the law say it unfairly gives prosecutors a way to
bring vague charges when they can't build a case for more
conventional crimes like bribery. "It's been very, very broadly
applied," says Patricia Pileggi, a former U.S. prosecutor who is now an
attorney with the firm Schiff Hardin in New York. "It's useful
to prosecutors because they are not required to prove that
somebody got a tangible, monetary benefit" from their actions."

Hu versus Sarkozy
http://www.realclearmarkets.com/blog/Hu%2520versus%2520Sarkozy.pdf
"There is no more reliable rule than the 95% rule: 95% of what
you read about economics and finance is either wrong or
irrelevant."

The dog ate your mortgage
http://www.nytimes.com/2009/10/25/business/economy/25gret.html?_r=1
"But some judges are starting to scrutinize the
rules-don't-matter methods used by lenders and their lawyers in the recent
foreclosure wave. On occasion, lenders are even getting slapped around
a bit. One surprising smackdown occurred on Oct. 9 in federal
bankruptcy court in the Southern District of New York. Ruling
that a lender, PHH Mortgage, hadn't proved its claim to a
delinquent borrower's home in White Plains, Judge Robert D. Drain wiped
out a $461,263 mortgage debt on the property. That's right: the
mortgage debt disappeared, via a court order."

American austerity is about to begin
http://seekingalpha.com/article/167101-american-austerity-is-about-to-begin?source=from_friend
"While all the talk at present is about economic corners turned
and markets charging ahead, no one is paying much notice to an
American economy deteriorating before our eyes. These myopic
commentators seem to be simply moving past the now almost-universally
held conclusion that before the crash of 2008, our economy was
on an unsustainable course. If these imbalances had been
corrected, then perhaps I too would be joining in the euphoria. But
evidence abounds that we have not veered at all from that dangerous
path."

The return of the Why-P.O.
http://thereformedbroker.com/2009/10/23/the-return-of-the-why-p-o/
"What in tarnation is a Why-P.O. you ask? It's an IPO so
pointless for investors to be involved with that you can only scratch
your head after reading the prospectus and ask 'Why?'."

Homebuyers' handout
http://online.barrons.com/article/SB125609957458798391.html?mod=BOL_hpp_dc
"Following the cash-for-clunkers idiocy, the federal government
may extend its subsidy for homebuyers. The $8,000 tax credit for
first-time homebuyers is due to expire Nov. 30, but our solons
in the Senate are looking to push back that deadline and possibly
expand the credit to $15,000 to most homebuyers, not just
newbies. As with the clunker cash, Uncle Sam is giving money to folks
to do what they would have done anyway."

Magic tricks on the corporate books
http://www.businessweek.com/magazine/content/09_44/b4153000349169.htm
"Accounting shenanigans bubble to the surface every few years. In
the dot-com days the trick was to book virtual revenues. After
the tech bust, tinkering with expenses was all the rage. Now
forensic auditors and analysts worry that troubled companies are
playing fast and loose with asset valuations and cash management."

Bond, Fake Bond
http://www.thebigmoney.com/articles/explainer/2009/10/21/bond-fake-bond?page=full
"It sounds like something out of a summer caper flick: Two men
carrying Japanese passports were apprehended trying to enter
Switzerland from Italy via commuter rail in June. The men looked out
of place on the train, which tends to carry low-income manual
laborers. That was enough to raise the suspicions of the Italian
authorities, who detained the passengers and rifled through one
of their briefcases. Inside was what appeared to be $134 billion
in U.S. Treasury bonds labeled with denominations of $500
million and $1 billion. (This despite the fact that the Treasury has
never produced bonds in denominations greater than $100,000.)
Later this summer, history seemed to repeat itself when Italian
authorities intercepted another cache of false T-bills from the
Philippines destined for the United States worth an alleged $116
billion. Why on earth would anybody create fake Treasury bonds -
in such eye-popping denominations?"

The pyramid principle
http://www.economist.com/businessfinance/displaystory.cfm?story_id=14710424
"Right now America.s banking system resembles a pyramid. At the
top, two or three firms are doing well. But beneath them are a
handful of giant conglomerates that are struggling towards
profits, a tier of middling banks with overexposure to risky assets,
and a vast base of small banks in deep, deep trouble."

Extremists share their opinions
http://researchnews.osu.edu/archive/majopinion.htm
"People with relatively extreme opinions may be more willing to
publicly share their views than those with more moderate views,
according to a new study. The key is that the extremists have to
believe that more people share their views than actually do, the
research found."

Cheap and ugly can be beautiful
http://www.ft.com/cms/93ece7c0-07af-11dd-a922-0000779fd2ac.html?_i_referralObject=10454662&fromSearch=n
"Bruce Greenwald talks value investing in 2 parts."

The warning
http://www.pbs.org/wgbh/pages/frontline/warning/
""We didn't truly know the dangers of the market, because it was
a dark market," says Brooksley Born, the head of an obscure
federal regulatory agency -- the Commodity Futures Trading
Commission [CFTC] -- who not only warned of the potential for economic
meltdown in the late 1990s, but also tried to convince the
country's key economic powerbrokers to take actions that could have
helped avert the crisis. "They were totally opposed to it," Born
says. "That puzzled me. What was it that was in this market that
had to be hidden?""

Investor timing ability
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=957728
"We examine the timing ability of mutual fund investors using
cash flow data at the individual fund level. Over 1991-2004 equity
fund investor timing decisions reduce fund investor average
returns by 1.56% annually. Underperformance due to poor timing is
greater in load funds and funds with relatively large
risk-adjusted returns. In particular, the magnitude of investor
underperformance due to poor timing largely offsets the risk-adjusted alpha
gains offered by good-performing funds. Investors in both
actively managed funds and index funds exhibit poor investment timing.
We demonstrate that our empirical results are consistent with
investor return-chasing behavior."

Downside by Style
http://www.ndir.com/SI/strategy/tipsheet/10-19-2009-Downside-by-Style.shtml
"Value stocks didn't fare well in the recent downturn. Even high
yield stocks, which provided downside protection in past bear
markets, did just as poorly as the markets. The winners were
growth stocks and dividend growth stocks. "



DOW 30 Value Screens

High Dividend Yield Stocks                   P/E P/B P/S P/D Yield
============================================ === === === === =====
Verizon  (VZ)                                 4   4   5   5    5
AT&T  (T)                                     4   5   3   5    5
EI DuPont  (DD)                               1   2   3   5    5
Merck  (MRK)                                  5   2   1   5    5
Kraft  (KFT)                                  4   4   4   5    5
McDonald's  (MCD)                             3   1   1   4    4
Pfizer  (PFE)                                 3   4   2   4    4
Chevron  (CVX)                                5   4   5   4    4
Boeing  (BA)                                  3   1   5   4    4
Home Depot  (HD)                              2   4   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
============================================ === === === === =====
AT&T  (T)                                     4   5   3   5   1.9
Verizon  (VZ)                                 4   4   5   5   2.0
Merck  (MRK)                                  5   2   1   5   2.5
Chevron  (CVX)                                5   4   5   4   2.6
Kraft  (KFT)                                  4   4   4   5   3.0
Pfizer  (PFE)                                 3   4   2   4   3.8
Johnson & Johnson  (JNJ)                      4   2   2   4   4.1
McDonald's  (MCD)                             3   1   1   4   4.2
Procter & Gamble  (PG)                        4   3   3   3   4.3
Boeing  (BA)                                  3   1   5   4   4.7
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                            P/E P/B P/D   G$   dG$(%)
======================================== === === === ====== ======
Travelers  (TRV)                          5   5   3   65.87  28.40
Chevron  (CVX)                            5   4   4   89.28  16.43
General Electric  (GE)                    4   5   2   16.32   7.39
AT&T  (T)                                 4   5   5   27.39   6.44
Kraft  (KFT)                              4   4   5   27.51   1.71
More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml 

Top US Stocks                                    Yield V.R. Graham
================================================ ===== ==== ======
AT&T  (T)                                          Y     Y     Y  
Chevron  (CVX)                                     Y     Y     Y  
Kraft  (KFT)                                       Y     Y     Y  
Boeing  (BA)                                       Y     Y        
McDonald's  (MCD)                                  Y     Y        
Merck  (MRK)                                       Y     Y        
Pfizer  (PFE)                                      Y     Y        
Verizon  (VZ)                                      Y     Y        
EI DuPont  (DD)                                    Y              
General Electric  (GE)                                         Y  
Home Depot  (HD)                                   Y              
Johnson & Johnson  (JNJ)                                 Y        
Procter & Gamble  (PG)                                   Y        
Travelers  (TRV)                                               Y  
Stocks score a Y for each test they pass.



S&P/TSX60 Value Screens

High Dividend Yield Stocks              P/E P/B P/S P/C P/D Yield*
======================================= === === === === === ======
BCE (BCE)                                2   4   4   5   5    5
Telus (T)                                5   4   4   5   5    5
Transalta (TA)                           2   4   3   4   5    5
CIBC (CM)                                1   2   3   5   5    5
Bank of Montreal (BMO)                   3   4   3   5   5    5
Sun Life (SLF)                           1   5   5   4   5    5
TransCanada (TRP)                        4   4   2   3   5    5
Shaw Comm Cl.B (SJR.B)                   3   1   2   3   5    5
Bank of Nova Scotia (BNS)                3   2   3   1   5    5
Power Corporation of Canada (POW)        1   4   5   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
======================================== === === === === === =====
Telus (T)                                 5   4   4   5   5   1.6
Weston George (WN)                        5   5   5   5   3   2.0
Encana (ECA)                              5   3   3   4   3   2.8
Enbridge (ENB)                            5   2   4   3   4   2.9
BCE (BCE)                                 2   4   4   5   5   3.0
Bank of Montreal (BMO)                    3   4   3   5   5   3.2
TransCanada (TRP)                         4   4   2   3   5   3.3
National Bank of Canada (NA)              4   3   3   0   4   3.6
Biovail (BVF)                             5   4   2   3   3   3.6
Shaw Comm Cl.B (SJR.B)                    3   1   2   3   5   3.7
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                            P/E P/B P/D   G$   dG$(%)
======================================== === === === ====== ======
Weston George (WN)                        5   5   3  114.49 103.78
Talisman Energy (TLM)                     5   3   2   28.22  45.69
Encana (ECA)                              5   3   3   83.16  31.80
Telus (T)                                 5   4   5   43.19  30.60
Biovail (BVF)                             5   4   3   17.84  21.35
Canadian Pacific Rail (CP)                4   5   3   57.39  16.64
Canadian Natural Resources (CNQ)          5   2   1   85.16  14.42
Canadian Tire (CTC.A)                     4   5   2   66.34  14.33
Agrium (AGU)                              5   3   1   62.94  13.37
Loblaw (L)                                4   4   4   33.90  10.58
Metro-Richelieu Cl.A (MRU.A)              4   3   2   37.47   9.08
Thomson Reuters (TRI)                     3   5   4   36.45   5.74
More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml 

Top Canadian Stocks                              Yield V.R. Graham
================================================ ===== ==== ======
Telus  (T)                                         Y     Y     Y  
BCE  (BCE)                                         Y     Y        
Bank of Montreal  (BMO)                            Y     Y        
Biovail  (BVF)                                           Y     Y  
Encana  (ECA)                                            Y     Y  
Shaw Comm Cl.B  (SJR.B)                            Y     Y        
TransCanada  (TRP)                                 Y     Y        
Weston George  (WN)                                      Y     Y  
Agrium  (AGU)                                                  Y  
Bank of Nova Scotia  (BNS)                         Y              
CIBC  (CM)                                         Y              
Canadian Natural Resources  (CNQ)                              Y  
Canadian Pacific Rail  (CP)                                    Y  
Canadian Tire  (CTC.A)                                         Y  
Enbridge  (ENB)                                          Y        
Loblaw  (L)                                                    Y  
Metro-Richelieu Cl.A  (MRU.A)                                  Y  
National Bank of Canada  (NA)                            Y        
Power Corporation of Canada  (POW)                 Y              
Sun Life  (SLF)                                    Y              
Talisman Energy  (TLM)                                         Y  
Thomson Reuters  (TRI)                                         Y  
Transalta  (TA)                                    Y              
Stocks score a Y for each test they pass.

* Notes: http://www.stingyinvestor.com/SI/strategy/notes.shtml 



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

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 09/30/2009)
  Average Capital Gain    Average Holding Period
          35.8%                   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 Norman Rothery, 2009.  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,
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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
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