The Stingy News Weekly (01/26/03)
The Markets This Week
DOW 30: 8,131 -5.31% with a median P/E of 22.9
S&P/TSX: 6,665 -1.35% with a median P/E of 22.4
The Value View
Dow at a P/E of 20: 7,101 (-12.7%) Poor Value
Dow at a P/E of 15: 5,326 (-34.5%) Fair Value
Dow at a P/E of 10: 3,551 (-56.3%) Good Value
S&P/TSX at a P/E of 20: 5,951 (-10.7%) Poor Value
S&P/TSX at a P/E of 15: 4,463 (-33.0%) Fair Value
S&P/TSX at a P/E of 10: 2,975 (-55.4%) Good Value
Matty Moroun beat Buffett in bridge deal
"The battle, which began in 1977, had all the makings of a mismatch. On one side were two famed investors: Berkshire Hathaway Inc. Chairman Warren Buffett and his partner Charles Munger. Squaring off against them was Manuel Moroun, the Lebanese- American chief executive of a Michigan trucking company. At stake was control of the Ambassador Bridge, a privately owned span linking the Detroit metropolitan area with Windsor, Ontario, in Canada. "
Can electronics retailers reconnect?
"A wave of hot products should lure shoppers, but with prices falling fast, big payoffs -- and rising stocks -- depend on a hefty surge in demand."
TurboTax customers upset by DRM
"Product activation has now made its way into one of the most popular software programs ever created, TurboTax. And, as an extra bonus, the latest release of TurboTax comes with Macrovisions's obnoxious C-Dilla malware. C-Dilla prevents you from copying the CD by disabling your CD-RW drive. That means it's monitoring your CD writing activities all the time. As if you needed more processes running on your machine. Early reports from some users indicate that C-Dilla has caused interference with other software and that it is inordinately difficult to get rid of, perhaps requiring a low-level hard disk format. And to make things even dicier, Intuit apparently did not overtly inform purchasers of the new TurboTax that C-Dilla was included and would be installed on their systems."
We're buying 8 companies that buy themselves
"We asked David L. Ikenberry, who knows as much or more than anyone about the subject. As an assistant professor at Rice University, he co-authored a widely cited 1995 Journal of Financial Economics study with Joseph Lakonishok and Theo Vermaelen. The study showed that buyback companies outperformed the averages by 3 to 3.5 percentage points a year in the 1980s. An update for the 1990s showed even better results, with a difference of about 4.5 percentage points a year."
Is fat the next tobacco?
"For at least one industry, though, the new spotlight on fat may be a glimmer of unaccustomed good news. Anecdotally, we've heard that smoking has helped a lot of people lose weight."
Inflation fighter's Pimco champ
"In the coming years, Gross thinks the inflationary pressures will only intensify as Alan Greenspan and the Fed, and President Bush and his Treasury, make good on their promise to avoid a Japanese-style recession by whatever means necessary, including turning on the government printing presses and flooding the economy with money. Such a move could be devastating for savers, with foreigners scrambling to make sure they're not the last one out of the U.S. market. The upshot would be ugly, since a good chunk of the invested savings in the United States comes from foreigners."
This week's trivia questions are: Q1. What was the worst year for the DOW? Q2. What was the worst period for the DOW? Q3. How far has the DOW fallen since its peak in 2000? The answers to last week's trivia questions are: Q1. Which stock in the S&P 500 has the highest Price/Sales ratio? A1. eBay at 22.8. Q2. Which stock in the S&P/TSX Composite has the highest dividend yield? A2. TransAlta at 5.8% Q3. Which stock in the NASDAQ 100 has the highest dividend yield? A3. Paccar at 1.8% Source: globeinvestor.com & msn.com The Stingy StoreDownload a sample of the Rothery Report Download a sample of Frugal Funds Subscribe Today Bullishly Yours, Norman Rothery ISSN 1499-2795 To (un)subscribe please use our email centre at http://www.stingyinvestor.com/cgi-bin/email.cgi Refer to legal & conflict of interest disclaimers at http://www.stingyinvestor.com/SI/legal.shtml http://www.stingyinvestor.com/SI/legal/conflict.shtml
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