The Stingy News Weekly (02/08/02)
The Markets This Week
DOW 30: 9,744.24 -1.65% to a P/E of 27.7
TSE 300: 7,535.36 -2.02% with a negative P/E
The Value View
Dow at a P/E of 20: 7,036 (-27.8%) Poor Value
Dow at a P/E of 15: 5,277 (-45.9%) Fair Value
Dow at a P/E of 10: 3,518 (-63.9%) Good Value
A Stingy Contest
Test your investment knowledge for a chance to win a copy of "The New Investment Frontier" by Howard Atkinson and Donna Green.
Enron was, in layman's terms, a nest of dirtballs
"If you're an average layperson, your grasp of high finance consists of knowing your ATM code. So you're probably bewildered by this scandal surrounding the collapse of Enron, which had been the seventh-largest corporation in America. (The sixth largest is the guys who go ``WHASSSSSSUP!'')"
How Enron works
"Here's how Enron works. It's really quite simple. Ismail is a successful mule trader in Peshawar. Every year Ismail delivers 30 mules to the Kabul Mule Market and gets $40 per mule."
Our military ready to join hunt for Enron boss
"DEBATE continues to rage in Ottawa over what role our military should play in helping the United States find, capture, and bring to justice the notorious Kenneth Lay."
Don't get burned
"As investigators untangle the complicated accounting at Enron, your own financial health depends on asking a simple question: What are earnings? Ignore the accountants, the analysts, and the brokers who snigger at your stupidity."
Dirty rotten numbers
"Enron has made us shine a light on the books of America's public companies. Now, if your company carries even a hint of bad accounting, the stock will be savaged."
In tough times, fees matter more
"But then along comes a year like last year, when a fund loses 20 or 30 per cent -- as some did in 2001 -- and suddenly, some may more closely question the 2 or 3 per cent they are paying a professional to manage their money for them." -- Have fun spotting the 'sell side analysts'
Betting the house on a better life
"A recent cautionary story in the Detroit Free Press (www.freep.com) warns reverse mortgages can become an expensive trap. It describes the experience of a couple who weren't prepared for large up-front fees that are higher than with a conventional loan, years of high interest charges applied against their home and the fact the spendable income received from a reverse mortgage is less than the home equity eaten up by the reverse mortgage."
Past the glory days
"Among the many banks stung by recent bankruptcies in America, one name stands out: J.P. Morgan Chase was a big lender to three of the biggest corporate failures - Enron, Kmart and Global Crossing - and has had to write off hundreds of millions of dollars."
Going for broke
"Banks are cracking down on cash-starved firms, companies are struggling to pay debt issued three years ago, and wary investors have a bad case of Enronitis. That puts teetering sectors like telecom, retail, and steel in peril. And the trend is building: Last year 257 publicly traded companies filed for Chapter 11, up from 176 companies in 2000."
The friction economy
"American business just got the bill for the terrorist attacks: $151 billion--a year"
On heart attacks
"Taking an aspirin right after a heart attack can reduce the risk of death about 25%."
The trivia questions this week are:
Q1. Who said "The only way to be loved is to be loveable, which really irritates me."?
Q2. Who said "When you mix raisins with turds, they are still turds."?
Q3. Who said "Based on my own personal experience - both as an investor in recent years and an expert witness in years past - rarely do more than three or four variables really count. Everything else is noise."?
The answers for last week's trivia questions are:
Q1. Who said "I feel like an oversexed man in a harem. This is the time to start investing."?
A1. Warren Buffett
Q2. Who said "I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty."?
A2. Warren Buffett
Q3. Who said "It is amazing to see how many capable businessmen try to operate in Wall Street with complete disregard of all the sound principles through which they have gained success in their own undertakings."?
A3. Ben Graham
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