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  • Headed for a Silver Correction: Take Profits or Go Short [View article]
    Shorting SLV naked at this point feels a bit like standing in front of the train.

    A (better) hedged play to profit from the coming silver correction is to go long GLD and short SLV. The price ratio between the two metals is approaching all-time lows.

    Take a look at the following article.
    Apr 26, 2011. 10:36 AM | 3 Likes Like |Link to Comment
  • What We're Buying Now: Big Lots, Abbott Labs, BP, (And Why We Still Own JNJ) [View article]
    Nice article and I enjoyed reading the Little Book of Sideways Markets.

    I am long BP and ABT and agree with your analysis. In the energy space, TOT is compelling with reasonable valuation and dividend yield north of 5%.
    Apr 24, 2011. 04:03 PM | 4 Likes Like |Link to Comment
  • A Primer on Valuation: Testing the Wisdom of Ben Graham's Formula [View article]
    Another important concept introduced by Graham and later on adopted by Buffett is the "margin of safety". Value investors like to buy companies for 50 cents on the dollar.

    Using the margin of safety with the proposed formula for intrinsic value gives investors nice entry points and answers the question when to buy stocks.
    Apr 12, 2011. 05:08 PM | 2 Likes Like |Link to Comment
  • Cadence Pharmaceuticals: A Rising Star [View article]
    I knew about the stock from an earlier piece on small pharma stocks published in Barron's earlier this year but your analysis is much more thorough. I am long CADX.

    Any color on why BMY out-licensed the drug? When did that happen?
    Apr 6, 2011. 10:36 PM | Likes Like |Link to Comment
  • Search Is Google's Castle, Everything Else Is a Moat [View article]
    This is a very nice piece indeed!

    Although Warren Buffett never buys tech stocks for Berkshire (he claims that he and his partner Charlie Munger are not smart enough to understand tech stocks), I always thought that GOOG has many attributes that Buffett likes in a company:

    1. It has a dominant position and large market share in its industry.
    2. It derives value from a strong brand name (in this case unique proprietary technology).
    3. It generates lots of free cash flow and has a strong balance sheet.

    Another point that Buffett usually emphasizes is the quality of management. As he writes in his letters, he admires the managers of the companies owned by Berkshire so much that he would like his daughters to marry them. I have never heard the Chairman speak about Jerry Page or Eric Schmidt. None of it matters however since Berkshire will never invest in or buy GOOG.
    Mar 27, 2011. 10:47 AM | Likes Like |Link to Comment
  • Altria: A Cash Cow With a Generous Dividend Policy [View article]
    MO an asset play, a dividend play, and a growth play. Quite a catch!!

    To add to your analysis, MO trades at a low P/E given its earnings growth. Last year earnings grew at a rapid 20 percent and the stock is only trading at a forward-looking P/E of 12. Multiple expansion could easily push the stock higher north of $30 even though management warned that the first quarter will be difficult.

    Did you take a look at PM's value as well? Or other staples/beverage companies? Nice work.
    Mar 23, 2011. 11:49 PM | 1 Like Like |Link to Comment