Glen Bradford's  Instablog

First Off:
Why would you listen to me? I've done it before. Note that when I wrote that article I had titled it: "There is no risk with Conseco" but SeekingAlpha retitled it. What makes this a great opportunity is that no one will publish my thoughts on this company. Also note that I spent the last 2 hours arguing with my parents over why this company is worth owning and they think I'm insane for suggesting that this is a great value. No one wants to look at this company from the long side. PERFECT!
Set the stage:
I have taken a siesta since earlier this year when I turned an about face regarding Chinese equities listed on US Exchanges. I used to think that they were real. Boy, was that an awakening experience. Apparently investing in the fundamentals as they are stated in SEC filings is not fundamental investing. Fundamental investing is investing in what those fundamentals are supposed to represent, the future and present profitability combined with the present financial position of a company. I recently restarted my e-mail newsletter and a good friend of mine says that I should take a look at this company traded in Canada. Historically, I've never spent much time at all looking at Canadian companies. After looking at this one, however, I am baffled by the present price. Well, that's a lie. I'm not baffled. There are reasons that the company is cheap. But all of them combined do not warrant the present price being a sustainable price. My forecast is that higher prices are indeed in this company's future. The chart below explains their past.




I looked at the website and clicked the chart and then ignored it:
I feel like this is the theme song coming from anyone who I recommend this company to. Everyone hates phone books. Everyone hates falling prices. That is, everyone but me, apparently. The short list of reasons why everyone hates this company:

1. They cut their dividend.
2. They were removed from an index.
3. They are below $1.
4. They are traded outside the USA.
5. They are in a dying industry
6. They might have credit problems.
7. Their revenues are declining.
8. They just lost a lot of money this last quarter, probably going bankrupt.
9. The company has stopped giving guidance.

Even the analysts have given up:
I went out of my way to call the analysts. Optimistic? Not in the slightest. I had to practically beg them to give me information. They sounded completely dreadful. It was hilarious. Then, they admitted that they'd probably be fine at least through next year. Great success. Here are their reports: report 1, report 2.

Their last quarter's results are on tap here.

All things aside, here are the reasons that I am buying:

1. The company is hugely cash flow positive, especially on a price basis.
2. This could be a 10-bagger from here fairly easily.
3. The old owners wanted a dividend. When the dividend was cut, I expect all the grandmas sold.
4. Tax loss selling ends soon.
5. Sometimes people are forced to sell at low prices.
6. The analysts have given up.
7. The analysts projections are really really good! The price they justify is clearly not paying attention to their fundamentals!
8. I've never seen a company go under that is making money and can pay their debts as they come up.

ProTip:
If you own YLO, take a look at their preferreds. There's arbitrage opportunity if you short their common and go long their preferred A shares.


Disclosure: I am long YLWPF.PK.

Additional disclosure: I also own their series A preferred shares. I own both common and preferreds on behalf of myself and my investors.

I have come up with a game that all it takes is $200 in $1 bills to play to illustrate to children what is happening in the Eurozone. It illustrates how Germany and Italy act like they are making money but in reality, are simply buying their own goods and services via a vendor financing ponzi mechanism.

Round
		Germany	Italy	Greece
1	Begin Round with	50	35	15
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	End	55	36	12
2	Begin Round with	55	36	12
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	End	60	37	9
3	Begin Round with	60	37	9
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	End	65	38	6
4	Begin Round with	65	38	6
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	End	70	39	3
5	Begin Round with	70	39	3
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	End	75	40	0
					GREECE IS NOW WORKING ON DEBT
6	Begin Round with	75	40	0
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	Greece Owes to Germany	2
	Greece Owes to Italy	1
	End	80	41	-3
7	Begin Round with	80	41	-3
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	Greece Owes to Germany	4
	Greece Owes to Italy	2
	End	85	42	-6
8	Begin Round with	85	42	-6
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	Greece Owes to Germany	6
	Greece Owes to Italy	3
	End	90	43	-9
9	Begin Round with	90	43	-9
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	Greece Owes to Germany	8
	Greece Owes to Italy	4
	End	95	44	-12
					Greece Needs a Bailout, Germany gives $6 and Italy gives $2
10	Begin Round with	95	44	-6
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	Greece Owes to Germany	10
	Greece Owes to Italy	5
	End	100	45	-9
11	Begin Round with	100	45	-9
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	Greece Owes to Germany	12
	Greece Owes to Italy	6
	End	105	46	-12
					Bailout Solves the Problem? Nope.
12	Begin Round with	105	46	-12
	Domestic Wealth Creation (Bank Pays This $1 to everyone)	1	1	1
	Greece Spends on Germany	3		-3
	Greece Spends on Italy		1	-1
	Italy Spends on Germany	1	-1
	Greece Owes to Germany	14
	Greece Owes to Italy	7
	End	110	47	-15

 My policy on silver is that as long as it keeps setting new highs, I am not going to sell. I'm not sure what the downside risk is of holding 1 day. Do you think that demand is just going to dry up? That's usually not how bubbles work. Honestly, I'm not sure if Silver is even in a bubble. One thing is certain, it has gone parabolic. But, the fundamentals have gone parabolic as well.

As long as the politicians do not make changes to the unsustainable system that is summarized in a Saturday Night Live skit titled, "Don't buy things you can't afford," the fundamental story for buying and holding commodities like silver is intact.

So, while the government is out there spending wildly, decreasing the purchasing power of the dollar, why shouldn't I be spending my dollars as fast as i can to buy something that will likely hold its puchasing power better than a dollar bill?



Disclosure: I am long SLV, AGQ.