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Arsuron Papartassee's  Instablog

As a self-taught investor, I began educating myself the methodology of investment through various publications and public domains. I utilize both fundamental and technical analysis to draw my investment decision. My primary focus are on companies whose prestige record of dividend payments set... More
My blog:
New Low Observer
  • Market Commentary
    We are at a very important inflection point. Let me explain. The Dow reached a low on March 9, 2009 at 6,547.05. The Dow then rallied to a high on August 13, 2009 at 9,398.19. This is a 44% rally within 5 months time frame.
     
    Now, I am going to take you back to the crash that marked the beginning of the Great Depression in 1929.
     
    The Dow reached a low on November 13, 1929 at 198.69. The Dow then rallied to a high on April 17, 1930 at 294.07. This is a 48% rally within 5 months time frame.

    Noticed the similarity? Please understand that I am not trying to draw any correlation or implying that we are in another Great Depression. The purpose of this is for investors to be award of market barometer. Investors faced the same question back then "Is this the return of good time?" and thus they piled into the market. Soon after, their hard earned money were lost. Please look at the chart below for reference.
    Great Depression Current Recession
    August 13, 2009 9398.19 April 17, 1930 294.07
    March 9, 2009 6547.05 November 13, 1929 198.69
    Gain 43.5% Gain 48.0%
    Duration 157 Days or 5 months Duration 155 Days or 5 months
    Before deploying your hard earn money, please be aware of the risk in investing. As for myself, I have a stake in the market (mostly cash) but due to the tremendous gain in the previous months, I will be protecting those gain and not trying to grow my capital.

    Findout more at artiinvest.blogspot.com
    Tags: DIA
    Aug 14 06:24 pm | Link | Comment!
  • Stock Checkup: Meridian Bioscience (VIVO)

    I wrote about Meridian Bioscience (VIVO) on April 7, 2009. This stock was trading at $16.90 then with a amazing yield of 4%. The stocks moved up 27% and closed today at $21.60.  I do not have any explanation for this movement except that Meridian at 4% yield is undervalued and should be bought. The chart below shows the performance of Meridian since 4/7/09.

    Note that this stock took a big hit on 4/16 and someone accused me of "pumping". Here is a direct quote from "Jolly_Rancher" from SeekingAlpha "Just like most of the crummy stocks that are pumped here on seekingalpha, VIVO took a major dive today on lower guidance. Glad I passed on this one."

    My model tells me Meridian is a buy at $14.50 range and strange enough this stock hit a yearly low of $14.79 on 4/16/09. I praised Meridian on their impressive dividend records and strong balance sheet. Today, I revised my model and strangely, my fair price for Meridian is at $21.60 (same as today closing price after falling 3.27% in a day).

    As a value investor, my strategy is to buy shares of companies that are considered undervalue and sell the one that I consider to be fairly value. This stock is a great long-term investment but only at the right price. At this point, the shares have outperformed the Dow, S&P 500, Nasdaq, and Abbott (ABT) (see chart below).

    If I want to remain in the market, I would sell Meridian and buy Abbott (yielding 3.6%) as a replacement.

    Disclosure: None
    Find more at www.artiinvest.blogspot.com
     
    Tags: VIVO, ABT, Medical Devices
    Aug 06 06:41 pm | Link | Comment!
  • Google Acquisition of On2

    Google (GOOG) announced today that it will acquire On2 Technologies (ONT) for $106.5 million in an all stock deal. This is probably a great acquisition but the transaction type tells me something investors don't want to hear: I believe that Google stock may be over priced. Let me explain.

    Google has a great balance sheet. The company has no debt with enough cash to fund cash-for-clunkers! Holding $19.34 billion in cash, it puzzled me to see Google use stocks to purchase On2. The acquiring price ($106.5 million) is only 0.55% of its total cash ($1,935 million).

    If I own an asset which I believe is worth more than what the market tells me, I would be looking to trade that "paper" asset into "real" asset.

    There are two ways of looking at it.

    1. Google is really smart and their stock should go up.

    2. Google stock may be over valued and it should go down.

    You, as an investor, should pick which thesis fits you best.

    Art

    Tags: GOOG, Technology
    Aug 05 02:52 pm | Link | Comment!
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