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Joseph P. Porter
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I am a retired college faculty in Philosophy, with specializations in Ethics, Socio-political Theory and Rational Choice/Decision Theory. My teaching focus was on Business Ethics, Medical Ethics and Logic. After retirement I freelanced as a Grant Writer/Fund Raising Consultant. I have taught at... More
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  • Dogging The Market: Week 25 Is Just Plain Ugly 2 comments
    Jun 22, 2013 3:45 PM

    There's nothing to say after the debacle of the past two weeks. When the market decides to do damage, it doesn't mess around.

    The Dow:

    (click to enlarge)

    The S&P:

    (click to enlarge)

    Of course, it's not really the market that does this - it's the investor. People felt like the Fed popped their balloon and went home, taking their money with them.

    I, personally, view the past couple of announcements by Mr. Bernanke as very positive news, all things considered. He's not proposing that we go off quantitative easing cold turkey, and the gradual withdrawal won't start until September (if then).

    Most importantly, the talk of finally ending QEternity means that the Fed sees the fundamental economy as coming along - not as fast as some would like, but at some point you have to wean yourself from your mother's milk.

    See you next week.

    Disclosure: I am long PFE.

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Comments (2)
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  • Hello, I've been following, well actually, reading, your articles (because, I just figured out how to follow on this site) for a while. Rather than the standard "Should I buy or should I sell these companies?" question, I wanted to run some ideas by you to tap into that valuable insight/research you've exhibited @ seekingalpha. And then you could maybe comment ?
    SLP (your superlative article on this one already gives me the answer here), WU, INVN and NVDA are companies I'm bullish on. I'm thus so because I've been screening all the stocks I could muster data on on parameters gleaned from some classics (Klarman's Margin of Safety, Buffet's letters (and my interpretation of them), O'Glove's Quality of earnings and Graham's Intelligent Investor)
    WU scores a 15, SLP a 13, INVN a 12.5 and NVDA a 12 on these.
    (I'd be happy to share my excel sheet via email/google drive with data details on these with you of course).
    Basically, the score is just a reflection of whether the past financial stats (from 5 years) reflect values held high by those authors (eg: high gross profit margin, low sga to gross profit ratio, low interest exp to operating income, increasing retained earnings, existence of treasury and buy backs etc) plus some detractions based on whether any accounting shenanigans have been done.
    SO, what think ye of these companies Dear Professor ? Be they good investments at current prices ? (Actually other than SLP, I'm only invested in LEAPS for WU, NVDA and attempting INVN because of fund shortage)
    Thanks for your excellent writing. It's a pleasure to read your work.
    27 Jun 2013, 06:12 PM Reply Like
  • Author’s reply » Thanks for the compliments!

     

    Of the three companies, only WU does not pass my PIC test. WU has a debt/equity ratio of 4, which is way beyond the max I'd accept at 1 (this is mitigated somewhat by the fact that their cap is over $9 billion, but with a quick ratio of only 1.10, I have my doubts). NVDA and INVN are both financially strong by my criteria. I know a little about NVDA - it's a good company, but its current price/earnings of 15 is close to the top of what's generally considered reasonable. I'd almost say INVN is over-priced, but I don't know that much about the company.

     

    Check to see if Ashraf Eassa has written anything about NVDA lately. I respect his opinion about techs, especially chip companies. I'm not sure about WU - I wouldn't buy it for myself. NVDA is close to the max I'd consider buying at this point, but it might still be a good deal. INVN I would probably wait until they came down in price a bit.

     

    Understand that I can only speak for myself. I do not know what your tastes are. Keep in mind that WU is almost an anachronism - who doesn't transfer money over the internet? NVDA used to be something worth a lot of speculation, but now? I dunno.

     

    Financially, NVDA and INVN are solid enough for me. The numbers for WU aren't bad for a mid-cap, but I worry about the D/E.

     

    I probably haven't helped you all that much, but ...

     

    Be sure to do your due diligence
    jpp
    27 Jun 2013, 09:43 PM Reply Like
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