"Timidity prompted by past failures causes investors to miss the
most important bull markets."  - Walter Schloss


New @ StingyInvestor


Is your index too active?
http://www.ndir.com/SI/articles/1007.shtml
"Index funds are increasingly popular with savvy investors seeking low-cost
diversified portfolios. As an added bonus, they often outperform many
mutual funds. Indeed, Warren Buffett said in his 1993 annual letter to
shareholders, 'By periodically investing in an index fund, for example, the
know-nothing investor can actually out-perform most investment professionals.'
But there is an astonishingly easy way to beat the index at its own game.
It turns out that indexes are too active. That is, they tend to buy and
sell stocks too frequently which puts a damper on their performance."

Graham's Simple Way
http://www.ndir.com/SI/articles/0707.shtml
"Warren Buffett's insurance company GEICO is currently running a series of
humorous ads featuring the line, 'So easy even a caveman can do it'. In a
curious twist of fate, Buffett's mentor Benjamin Graham developed a way to
pick stocks that even cavemen would appreciate. Graham described his
Simple Way in a 1976 article called The Simplest Way to Select Bargain Stocks
that can be found in Janet Lowe's book The Rediscovered Benjamin Graham.
Given its recent success, these days stock-picking cavemen are dining out
on mammoth steak."


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

He has never been more bearish
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20071123/RFAIRFAXMARKET23
"Mr. Watsa never lost his image as a skilled investor. Hamblin Watsa
Investment Counsel, Fairfax's internal money management firm, earned 17.7 per
cent returns, compounded annually, on its stock investments between 1997 and
2006. "If they can make 7 per cent [on the whole portfolio, including
bonds], the earnings power is ridiculous," said Wade Burton, a portfolio
manager at Mackenzie Financial Corp.'s Cundill Investment unit, which is one
of Fairfax's largest shareholders. "They're in a really good place right
now." Mr. Watsa suggested the decision to put 75 to 80 per cent of Fairfax's
portfolio into government debt - "for the first time, I think, ever" -
reflects his view that credit markets will take a long time to digest the
problems in the U.S. real estate and mortgage business."

Shanghaied
http://www.forbes.com/home/personalfinance/forbes/2007/1210/095.html
"The U.S. used to have absurdities like this--companies in effect declaring
a profit from the rise in their own share prices. In the 1920s, that is.
Fast-forward to Shanghai and the roaring 2000s. In two years the Shanghai
Composite Index has quintupled and the Shenzhen Component Index has more
than sextupled. Now China's combined market of 1,500 companies with A
shares (the primary kind available on the mainland) is trading at 40 times
earnings. Chinese companies' shares also have soared in Hong Kong and abroad,
but not to the same degree. Circular ownership--with the potential for a
pair of companies to prop up each other's share price and earnings--is not
at all uncommon. "They actually support each other and increase the stock
price. More and more companies are like this, particularly the big
companies," says Xu Xianghua, a branch manager for First Capital Securities in
Beijing."

Of blind squirrels and flying pigs
http://seekingalpha.com/article/55099-of-blind-squirrels-and-flying-pigs-the-fallacy-of-market-predictions
"The dollar is collapsing and global investors are dumping dollars so it
will continue to fall. That in turn will lead to higher inflation and then
the Fed will have to raise interest rates. Oil is closing in on $100 a
barrel. We have the worst housing market since the Great Depression. There is
a financial crisis caused by the subprime mortgage debacle. Banks are
tightening credit standards. And if you needed more reasons to believe the
stock market was headed south you could always throw in global warming. Given
all of these obvious reasons to be bearish about stocks, what should
investors do? The answer is nothing, except to adhere to their
well-thought-out plans. There are many reasons for ignoring even what seems to be
obviously bearish information. Let.s see why this is the case."

My Hero, Benjamin Grossbaum
http://www.grantspub.com/articles/bengraham/
"I am a frankly worshipful admirer of Graham's. I love him for his heart as
much as for his head. Between 1929 and 1932, his investment partnership
lost 70% of its value. Not until 1936 did it recoup all it relinquished
since the Crash. Yet Graham persevered and, along with his partner, Jerry
Newman, went on to achieve a brilliant long-term investment record - not
excluding those three disastrous years. We have all heard the platitude, "The
first rule of investing is not to lose money and the second rule is not to
forget the first." Very helpful. Well, Graham shows that a debilitating
loss is no reason to give up. . . . Never quit."

Freddie, Fannie seek a few billion
http://money.cnn.com/2007/11/20/magazines/fortune/freddie_analysis.fortune/index.htm?postversion=2007112017
"Fannie and Freddie are seen to be an important source of demand for
mortgages, so any problems at these companies could end up reducing the amount
of mortgage lending that gets done by the banks that sell mortgages to
Fannie and Freddie. Because of their integral role, it would be no surprise if
OFHEO, as well as other financial regulators like the Federal Reserve,
were keen to see a ramp up in capital at both companies. Such capital
increases will have to be very large. Neither Fannie nor Freddie is close to
having sufficient capital to weather a full-blown recession."

A Buffett investment that wasn't
http://money.cnn.com/2007/11/19/magazines/fortune/taylor_motorworld_buffett.fortune/index.htm?postversion=2007112010
"Last week, it began to look as if CarMax, one of the pioneers of the
used-car superstore, had become the next target. Legndary investor Warren
Buffett was said to be buying in. Headlines like "Buffett buys major stake in
CarMax" and "Buffett Buy Sends CarMax shares soaring" appeared. Copycat
investors sent CarMax's stock price shooting up when the news broke on
November 15. CarMax's stock jumped $1.62, up 7.5%. But the story as reported by
many news outlets isn't accurate, because Buffett wasn't directly involved
in the purchase. The stock was bought by GEICO, the auto insurer and a
subsidiary of Buffett's company, Berkshire Hathway. There's a big
difference, as I'll explain."


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)                                   4   5   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
CIBC (CM)                                       5   3   4   2   5    5
Royal Bank (RY)                                 4   3   3   2   5    5
Telus (T)                                       3   4   3   4   5    5
BCE (BCE)                                       3   3   3   4   5    5
Bank of Nova Scotia (BNS)                       4   3   2   2   5    5
TransCanada (TRP)                               2   4   2   3   5    5
Toronto Dominion Bank (TD)                      4   4   2   3   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)                                   4   5   2   5   5   1.2
National Bank of Canada (NA)                    5   5   4   3   5   1.7
CIBC (CM)                                       5   3   4   2   5   2.3
Bank of Montreal (BMO)                          4   4   4   3   5   2.3
Thomson (TOC)                                   5   4   2   3   3   2.4
Teck Cominco Limited (TCK.B)                    5   3   4   4   4   2.7
Royal Bank (RY)                                 4   3   3   2   5   2.9
Bank of Nova Scotia (BNS)                       4   3   2   2   5   3.4
Toronto Dominion Bank (TD)                      4   4   2   3   4   3.7
Husky Energy (HSE)                              4   2   4   5   4   3.8
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   40.79 104.58
Lundin Mining Corporation (LUN)                 5   5   0   16.91  71.14
Thomson (TOC)                                   5   4   3   48.96  24.07
National Bank of Canada (NA)                    5   5   5   59.34  20.51
Magna Cl.A (MG.A)                               4   5   3   99.53  17.25
Teck Cominco Limited (TCK.B)                    5   3   4   41.91  11.78
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

Common Stocks and Uncommon Profits
by Philip A. Fisher

Fisher takes a qualitative view of stocks and stresses the
importance of intangible aspects of a firm with heavy emphasis on
research and human capital. He also falls into the focused camp of
investors who buy only a few carefully selected stocks and hold
them for long periods. As Warren Buffett's second favourite book
on investing, Common Stocks and Uncommon Profits is a must read
for students of the market.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0471445509/


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
of Ontario. DH&A, or related-parties may have an interest in the
securities mentioned.