"In the financial world it tends to be misleading to state, "There
is no free lunch." Rather the more meaningful comment is,
"Somebody has to pay for lunch.""  - Martin Whitman


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

Are you really such a daredevil?
http://money.cnn.com/2007/11/01/pf/daredevil.moneymag/?postversion=2007110117
"The point is to position your portfolio in a way that makes it less likely
that your emotions will get the better of you in a sharp downturn, and to
do so while giving up as little as possible of the long-term gains that
stocks offer. There are several sensible ways to do that."

A strategy to keep your prized stocks
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20071027/STCESTNICK27
"William's advisers suggested that he consider an equity monetization
strategy. Now, there are different strategies we could talk about. Today, let
me share what is probably the most common."

The many benefits of monetizing
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20071103/STCESTNICK03
"But the story could help you to: lock-in accrued gains on an investment;
defer tax on those accrued capital gains; create liquidity; diversify your
portfolio; create a tax deduction for interest costs, and avoid margin
calls on money borrowed to invest. These benefits could leave you laughing
after all - all the way to the bank."

Prisoners of debt
http://www.businessweek.com/bwdaily/dnflash/content/oct2007/db20071031_039775.htm
"In a financial version of Night of the Living Dead, debts forgiven by
bankruptcy courts are springing back to life to haunt consumers. Fueling these
miniature horror stories is an unlikely market in which seemingly
extinguished debts are avidly bought and sold."

Buffett testifies
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/30/AR2007103002292.html?nav=rss_business
"Billionaire investor Warren E. Buffett sat in front of a video camera in
Omaha, spelled his name for the record and minced no words as he testified
for the government yesterday in its case against former Freddie Mac chief
executive Leland C. Brendsel. Brendsel is accused of presiding over
accounting manipulations and running Freddie Mac in a reckless manner. Buffett,
one of the most successful and revered investors, sold a huge stake in the
mortgage funding company before the manipulations came to light, and the
government wanted him to explain why. Buffett said he was troubled in part
by a Freddie Mac investment that had nothing to do with its business. "I
follow the old dictum: There's never just one cockroach in the kitchen,"
Buffett said."

Tax reductions for Canadians
http://www.fin.gc.ca/ec2007/ec/ecc3e.html
"The goods and services tax (GST) will be reduced by a further 1 percentage
point as of January 1, 2008, fulfilling the Government.s commitment to
reduce the GST to 5 per cent. The lowest personal income tax rate will be
reduced to 15 per cent from 15.5 per cent, effective January 1, 2007. The
amount that all Canadians can earn without paying federal income tax will be
increased to $9,600 for 2007 and 2008, and to $10,100 for 2009."

Patient Capital Management's Q3 2007 letter
http://www.patientcapital.com/newsletters/newsletter-2007-09.pdf
"Which asset class has performed better since PCM's inception in March of
2000; T-Bills or the S & P 500? T-Bills have outperformed the S & P 500
during the March 31, 2000 to September 30, 2007 period. The S&P 500 has
generated a compound annual rate of return of only 1.92% compared to an average
yield of 3.18% for T-Bills over the same period. This fact may be a
surprise to many because of the strongly ingrained belief that equities always
outperform fixed income instruments."

David Einhorn's Graham & Dodd breakfast speech
http://nakedshorts.typepad.com/nakedshorts/files/EinhornOnCredit.pdf
"Without much fanfare the ratings agencies abandoned this practice of AAA
meaning AAA and BBB meaning BBB. Instead for each type of bond, they use a
different rating scale with different so-called 'idealized default rates'
for each rating. The idealized default rate for a municipal bond at a
given rating is less than the idealized default rate for a corporate bond,
which is less than the idealized default rate for an asset backed security
which is less than the idealized default rate for a CDO. As an example of
the soundness in this system, Nomura securities pointed out that
hypothetically, if you took a AA+ rated asset backed security and repackaged it all
by itself and called the repackaged instrument a CDO, it becomes AAA,
because the CDO has a higher idealized default rate than the asset backed
security."

The catastrophist view
http://nymag.com/guides/money/2007/39952/
"Their bearish arguments come in many shapes and sizes, but here's the
basic one: The past five or six years have been deceptively fortunate ones for
the U.S. economy. That's because any troublesome developments - the surge
in oil prices from $28 per barrel in 2003 to about $87 today, for example
- have been papered over by rising home prices. Home equity has been used
to buy flat-screen TVs, SUVs, and more homes. Wall Street bought up all
this debt from lenders, thereby allowing them to lend more. The softening
of real-estate prices in most parts of the United States put a crimp in
this system, but it hasn't stopped it. The question is, what, if anything,
will? What will bring on the apocalypse that Schiff and others believe is
inevitable?" [Scary Halloween stories for adults]

Citigroup: 'Gimme shelter'
http://money.cnn.com/2007/10/26/magazines/fortune/citishelter.fortune/index.htm?postversion=2007102914
"This may sound silly, but let me ask you a question. Let's say that I
maxed out my credit at Citigroup to speculate on a house whose market price is
now less than what I paid. Citi wants its money, but instead I say,
"Sorry, the house is selling for less than its true value. As soon as it sells
for what it should, I'll send you a check." What do you think Citi's
reaction would be? How about "Sir, where should I send the repo man?" Well,
folks, Citi seems to have put itself in just such a fix by borrowing lots of
money to buy assets that have dropped in market value. But instead of
summoning the repo (as in repossession) man, some of the world's biggest
hitters are trying to set up a huge fund to buy time for Citi and some other
institutions with similar problems. "

Financial forecasts likely to be wrong
http://www.cbc.ca/cp/business/071027/b10279A.html
"Studies of portfolio choice consistently show the toxic impact of
overtrading, the power of low-price-to-earnings investing and the value that
dividends and dividend growth bring to portfolio performance."


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)                                   3   4   2   5   5    5
Bank of Montreal (BMO)                          4   4   4   3   5    5
National Bank of Canada (NA)                    5   5   4   3   5    5
Royal Bank (RY)                                 4   3   3   2   5    5
BCE (BCE)                                       3   3   3   4   5    5
CIBC (CM)                                       5   2   4   2   5    5
Bank of Nova Scotia (BNS)                       4   3   2   2   5    5
TransCanada (TRP)                               3   4   2   3   5    5
Toronto Dominion Bank (TD)                      4   4   2   3   5    5
Telus (T)                                       3   4   3   4   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)                                   3   4   2   5   5   2.0
National Bank of Canada (NA)                    5   5   4   3   5   2.0
Bank of Montreal (BMO)                          4   4   4   3   5   2.8
CIBC (CM)                                       5   2   4   2   5   3.0
Thomson (TOC)                                   5   3   2   3   4   3.1
Royal Bank (RY)                                 4   3   3   2   5   3.4
Bank of Nova Scotia (BNS)                       4   3   2   2   5   3.8
Teck Cominco Limited (TCK.B)                    5   3   4   5   4   3.9
Toronto Dominion Bank (TD)                      4   4   2   3   5   4.1
BCE (BCE)                                       3   3   3   4   5   4.3
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                                  P/E P/B P/D   G$   dG$(%)
============================================== === === === ====== ======
MDS Inc. (MDS)                                  5   5   0   40.76  95.97
Lundin Mining Corporation (LUN)                 5   5   0   16.80  46.06
Thomson (TOC)                                   5   3   4   49.00  11.65
National Bank of Canada (NA)                    5   5   5   59.35  10.64
Magna Cl.A (MG.A)                               4   5   3   95.78  10.40
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.
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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 09/30/2007)
  Average Capital Gain    Average Holding Period
          53.4%                   2.5 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., 2007.
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
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securities mentioned.