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Lollapalooza

 
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  • 20 Stock Ideas for QE2 [View article]
    Jeffrey Moore, that is some excellent work you did on SYMS. I have merely glossed over SYMS a few times in the past couple years due to it being a cigar butt, but your write-up has prompted me to do some homework. Thanks for the quality contribution.
    Mar 17, 2011. 11:32 AM | Likes Like |Link to Comment
  • Microsoft Is Cheap: Prove Me Wrong [View article]
    Ravi, thank you for your comment. I am familiar with some of your work, which is top-notch.

    To those of you who enjoy rational, value-oriented analysis, I highly recommend following Ravi (if you are not already doing so).
    Jan 19, 2011. 12:56 PM | 2 Likes Like |Link to Comment
  • Microsoft Is Cheap: Prove Me Wrong [View article]
    Connor, you make an excellent point. I have been bullish on many U.S. large caps over the past couple years and people keep asking how such widely followed stocks could possibly be mispriced. My answer is that U.S. large cap prices have flatlined over the past decade, causing price targets to be far too pessimistic on a risk-adjusted basis (especially when compared to some of the market darlings).
    Jan 19, 2011. 12:52 PM | 1 Like Like |Link to Comment
  • Microsoft Is Cheap: Prove Me Wrong [View article]
    I agree that the more widely covered a stock is, the less likely it is to be mispriced. But that's not the same as saying it can't be mispriced. There will always be people who think stocks are cheap through various prices, otherwise they wouldn't trade there in the first place. Some analysts are better than others at appraising businesses. I am excited to see how this one plays out.
    Jan 19, 2011. 12:42 PM | Likes Like |Link to Comment
  • Microsoft Is Cheap: Prove Me Wrong [View article]
    cfarm, I pay zero attention to technicals. In the long run, business returns and stock returns will converge. Apple (AAPL) went sideways from 1987 to 2004, and IBM (IBM) went sideways from 1973 to 1995. Investors concerned about such technicals would have missed out on some extraordinary subsequent returns.

    These long sideways moves usually coincide with compression of irrational multiples, even as business fundamentals remain strong. This happened to Nifty Fifty stocks in the late 60s and tech & large caps in the late 90s.
    Jan 18, 2011. 02:48 PM | 7 Likes Like |Link to Comment
  • Opportunities in Micro Cap Financials [View article]
    Bill,

    No, I haven't added to BFSB (or PLFE). As noted in a previous comment, these are token positions intended only to keep my attention. I am still doing work in this area, as financials, particularly banks, are outside my circle of competence. It will likely take me several more months of research before I feel more comfortable with these types of businesses.

    As a conservative investor, I struggle with the banking business model (10x-20x leverage and long-term assets funded by short-term liabilities). I feel slightly more comfortable with insurance companies, but am wary of estimates for liabilities related to certain equity-linked annuity products.

    My token positions in BFSB and PLFE were made because they appear to be well-capitalized relative to peers. I wish I could offer you more insight, but am not there yet.

    Thanks,
    Nathan
    Jan 6, 2011. 02:03 PM | Likes Like |Link to Comment
  • Opportunities in Micro Cap Financials [View article]
    My BFSB and PLFE positions are less than 1% of my portfolio. I normally don't take small token positions, but financials are outside my circle of competence. However, I am interested in doing some work in this area because it looks attractive. I find that even small token positions tend to focus my attention. BFSB and PLFE appear to be extremely well capitalized relative to peers and trade at huge discounts to tangible book value (assuming liabilities are accurately reflected on the balance sheet).

    Any insight you have would be greatly appreciated.
    Dec 2, 2010. 11:43 AM | Likes Like |Link to Comment
  • The Last Word on Buy-and-Hold [View article]
    gdehuff, thank you for your contribution and kind words. You bring up another added benefit of a long-term perspective: sleeping well at night. Plus, it is nice to be able to go on vacation and never once worry about my portfolio.

    And thank you also for making the point about selling to upgrade positions--another key one I omitted in an effort to keep the article short and sweet.
    Oct 17, 2010. 11:31 AM | Likes Like |Link to Comment
  • Don't Bet Against the U.S. [View article]
    telkontar: while I did mention the practical purpose behind using strong symbolism such as the all seeing eye, I did not previously disclose my personal reasons for using it (which I also use on my website). You nailed it exactly. Thank you for sharing that insight.
    Sep 28, 2010. 11:13 AM | Likes Like |Link to Comment
  • Don't Bet Against the U.S. [View article]
    Thank you all again for your comments. I do agree that Americans have grown soft over the years and that the spirit is somewhat dormant--but it's still there. The point of this article was to merely point out that there are enough positive factors in place that America's demise is not likely to happen as quickly as some are predicting.

    As for the all seeing eye... I assure you that I'm not part of the Illuminati or anything. Being fairly familiar with popular "conspiracy theories," I am quite aware of the potential to be misunderstood. With my website being "Ignore The Market," I am seeking a somewhat irreverent reader, who is most likely to recognize the all seeing eye and be curious about my content.

    Thank you all again for taking time to comment. Intelligent comments are welcome and appreciated.
    Sep 27, 2010. 06:28 PM | Likes Like |Link to Comment
  • Don't Bet Against the U.S. [View article]
    Thank you all for your comments. As with any article I write, it is just as much about getting bright people to exchange thoughts as it is about spreading my own.

    This is indeed an extremely complex issue. The tough choices need to be made, but I agree with Ben Gee in that the changes must take place gradually so that people have an opportunity to adjust.
    Sep 27, 2010. 10:55 AM | Likes Like |Link to Comment
  • When 60-Cent Dollars Are Good Investments [View article]
    Be prepared to do a lot of work for what may seem at first to be little or no reward. I estimate that I've done well over 30,000 hours of research over the past 10+ years, yet not until a couple years ago did I become truly confident in my abilities. Everyone learns at different speeds and I'm not exactly a Mensa candidate, but I'm no dummy either.
    Sep 9, 2010. 07:23 PM | Likes Like |Link to Comment
  • When 60-Cent Dollars Are Good Investments [View article]
    This approach is very simple, but it is not very easy. It is a lot of work--a lot of reading. These opportunities are everywhere and depend on the price. It requires researching and understanding what businesses are worth and then waiting (and waiting) for their prices to fall. Personally, my research is focused on equities, but most of the research done on the equities is the same as for bonds. My source is SEC documents. Visit company websites and go to investor relations and just start reading 10-K's, 10-Q's, annual reports and proxy statements.

    My favorite books are "The Intelligent Investor" by Benjamin Graham, "Poor Charlie's Almanac" by Charlie Munger and Peter Kaufman, and "The Essays of Warren Buffett" by Warren Buffett and Lawrence Cunningham. Also, I highly recommend reading Warren Buffett's "The Superinvestors of Graham-and-Doddsville."

    This is a good place to start and should keep you occupied for a long time. These and many, many other educational resources are available at IgnoreTheMarket.com under the "Investor Education" tab.

    Hope this helps!
    Sep 9, 2010. 12:02 PM | Likes Like |Link to Comment
  • High Conviction for 10 High Quality Stocks [View article]
    Stan Sutfin,

    I don't use any websites to find free cash flow info--for a couple of reasons. First, many services that do provide free cash flow info do so based on reported GAAP figures, which don't always accurately reflect economic reality. Second, I make my own adjustments for free cash flows that are not standard, but I consider to be conservative and fairly representative of economic reality.

    The best place to go for free cash flow is to the companies' financial statements and calculate it in a way that makes sense for the investor. Otherwise, I do screen for free cash flow ideas using ADVFN.com. It's a great screening tool and it's free with registration. Another great source for ideas is ValueLine, which is a pay subscription service. I don't agree with their use of "cash flow," but it's great for ideas.

    Let me know if this helps.
    Jul 5, 2010. 12:36 PM | Likes Like |Link to Comment
  • High Conviction for 10 High Quality Stocks [View article]
    For income investors, one could certainly argue there's a big difference between FCF yield and bond yield (although, what about zero coupon and deep discount bonds?). The value of any investment is in its ABILITY to generate cash. This is why companies are taken private--FCF yield becomes 100% tangible, like a traditional bond yield. Thanks for your comments.
    Jul 1, 2010. 03:34 PM | 1 Like Like |Link to Comment
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