Getting lots of emails lately about value investing. A common theme is “investing vs trading” or “how can I be a value investor”, along those lines. Seems people are interested but not sure which is best for them. Here is a suggestion. There are three books you should read. I chose these because they are short (can be read in a few hours) but also do a great job of getting their points across.

The first is “The Little Book of Value Investing” from Christopher Browne. This is a good general overview of value investing that touches the main points of it without delving into minute detail.

I have been discussing ATP Oil & Gas (ATPG) with a reader for a while. I post his thoughts here for a few reasons. Knowing him to be a thoughtful person, his opinion carries value and we also have a presentation from 2008’s VIC on it here when the stock was at $7. It now sits at $16.69.

Note: I am neither recommending buying or avoiding this, I post simply for readers to make their own judgement. This is particularly interesting as we have a years worth of data to review.

The drop in General Growth Properties (GGWPQ.PK) over the past few days, while scary, does not even register as the most since this saga began in March. Can’t believe I am going to break out a chart, but we need some perspective.

Click to enlarge:

We have referenced this chart in the past and it bear looking at again. It is from Dow Chemical’s (DOW) earnings presentation today.

Why does what Dow does matter? As we have said many times, Dow is at the ground floor of what happens globally. From their Ag division, to the basic and specialty chemicals divisions and the rest of them, what is happening globally (roughly 80% of profits are from international operations), is depicted by their results. Dow’s basic chemicals division produces the building blocks for thousands (millions?) of products globally. Increased global demand will show up here first.

As a shareholder, I am incensed that the company will have to spend money to defend garbage like this. Let’s look at this poster child of abuse of the US civil litigation system. The definition of frivolous…You can download a copy of the suit here (.pdf):

Essentially it charges that the following statement in their IPO filing was intentionally misleading:

Somebody decided to call me out on my General Growth Properties (GGP) thesis and did so by putting me in the same sentence as Goldman Sachs (GS) and Bill Ackman. Can’t decide whether to argue with or thank them….I’ll do both.

Now full disclosure: The accuser is the same site that earlier had one of their “experts” copy verbatim one of my AutoNation (AN) posts and claim it as their own (they eventually removed the post). So no assumptions of their “expert status” ought to be assumed per their claims…

This is what happens when gov’t meddles in the market. Now, I am torn because C4C did help our AutoNation (AN) holding. But I fear its effect will be short term and leave potential buyers of new cars sitting, waiting for the next gov’t program before they go buy. Basically a short term gain and detrimental longer term effects. Anyway, the ugly result…

From the WSJ:

Every time I read something on this, it just keeps getting better…we may actually have a solar product people will really buy…. on a large scale

From ICIS:

You know the saying. Those who buy the “hot trend” do so eventually hoping to sell to the greater fool. In the case of the dollar trade, the greater fool would be the last guy to short it before the rebound.

If you remember “Davidson” has submitted a few posts on the dollar. Read them here and here. For those who wish not to read them, he essentially was saying that the dollar had most likely bottomed and was due for a rebound.

Not liking the request for yet another layer of bureaucracy in this speech. “More” isn’t the answer. Would more regulators have caught Madoff? No. They had everything they needed to catch him.

A bit of a rant……

Goldman Sachs did a REIT presentation the other day and the slides are all over the place. There was one in particular that matters to those of us holding General Growth (GGWPQ.PK) shares.

Now that it looks like debt maturity extensions are just about all but a given, we need to turn our heads to what the judge in the GGP Chapter 11 case decides to value the properties at. He will most likely do that using a Cap Rate. The lower the cap rate, the higher the value of the assets and the more recovery left for shareholders.

Dow Chemical (DOW) said at the time the Rohm & Haas (ROH) deal was completed they intended to pay off the bridge loan used to finance it before the end of the year. They have done that

The Dow Chemical Company (NYSE: DOW) and K+S Aktiengesellschaft announced jointly today that the United States Federal Trade Commission (FTC) has voted to accept a consent decree agreed to by K+S Aktiengesellschaft.

A couple of interesting conversations….

The problem is debt, not commercial real estate, says Wells Real Estate Funds CEO Leo Wells.