"I don't read economic forecasts. I don't read the funny papers."  - Warren Buffett


Stingy Links
http://www.stingyinvestor.com/SI/articles/articlearchive.shtml

Chou runs his fund the way he runs his life
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20080531/STBUYSIDE31
"At lunch Francis lamented that "I've become a bond trader." He
finds it is very time-consuming because "there is a lot of
haggling that goes on." His days are now filled with calls from bond
dealers who know that Francis is an interested buyer. He is on
everyone's speed dial. In the 2002 Chou Fund report, Francis said
"distressed securities involve companies that have one or more
serious deficiencies including weak economics, stretched balance
sheets, liquidity problems, incompetent management, accounting
frauds, potentially mutant cockroaches - you name it.""

Housing bubbles collapse inward
http://www2.standardandpoors.com/spf/pdf/index/052708_Housing_bubbles_collapse.pdf
"The trends that pushed housing demand toward distant suburbs and
rural areas were not sustainable. Although housing in outlying
areas was relatively less expensive, a few years of double-digit
appreciation quickly made these homes unaffordable for most
households, especially after the sub-prime mortgage crisis (which
started in August 2007) shut down non-conventional lending.
Speculators could only profit from flipping when prices were rapidly
increasing. When prices stalled and started to fall in 2006,
investor demand for residential properties evaporated, and many
speculators left holding unsold properties were forced into
foreclosure. There is also some evidence that household preferences for
larger homes may be shifting. In part, this is simply because
of sharp increases in commuting costs."

Through the floor
http://www.economist.com/displayStory.cfm?story_id=11465476
"As house prices in America continue their rapid descent,
market-watchers are having to cast back ever further for gloomy
comparisons. The latest S&P/Case-Shiller national house-price index,
published this week, showed a slump of 14.1% in the year to the
first quarter, the worst since the index began 20 years ago. Now
Robert Shiller, an economist at Yale University and co-inventor
of the index, has compiled a version that stretches back over a
century. This shows that the latest fall in nominal prices is
already much bigger than the 10.5% drop in 1932, the worst point of
the Depression."

Are your stocks protected by moats?
http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2008/05/29/are-your-stocks-protected-by-moats.aspx
"Thanks to The Rothery Report's Norman Rothery - with whom I had
the pleasure of dining this week - I came across a copy of a
book that is focused on the topic of economic moats. It's called
The Little Book That Builds Wealth (Wiley, 2008), by Pat Dorsey,
who is the director of equity research at Morningstar Inc.
Morningstar is famous for its mutual fund ratings, but also rates
individual stocks using an 'economic moat' rating system. The book
divulges most of its approach to this system and makes for a
fascinating read."

The folly of short term performance
http://morningstar.co.uk/UK/funds/article.aspx?lang=en-GB&articleID=56326&categoryID=13
"Investors often buy funds based on past performance, especially
of the short-term variety. This is in part human
nature--behavioural finance types might attribute it the tendency all of us
have to try to impose order on chaos, even if it means attributing
meaning to small patterns where there may be none. It may also
be a matter of convenience--getting reliable information about
fund holdings, management, and organisational factors such is
incentive pay can be difficult. In the face of that difficulty,
investors tend to place more weight than they should on easily
available factors, such as short-term past performance."

Postcrisis bank stocks
http://www.forbes.com/forbes/2008/0616/156.html
"It is time to ask: How could the managers of so many banks and
brokerage houses have thrown out the rule book on risk?"

Wealthy? Here's some good news
http://www.canadianbusiness.com/my_money/planning/retirement_rrsp/article.jsp?content=20080414_120526_8864
"When wealthy Canadians look at how much money they'll need to
save up for retirement, they can be in for a shock. The latest
report from the mutual fund industry recommends that you replace
80% of your working income when you retire. That means if you make
more than $100,000, you'll need to save up two or three million
bucks. Luckily, says actuary Malcolm Hamilton, if you're
wealthy, you don't need anything close to an 80% replacement ratio to
maintain your standard of living." [The table at the bottom of
the page is the interesting part of this mini-article.]

The next Buffetts
http://www.canadianbusiness.com/my_money/investing/article.jsp?content=20080527_114153_6772
"We hope that the greatest investor of all time has many, many
good quotes left. But we also have to acknowledge reality. Buffett
is 77 and even his steady diet of Cherry Coke and hamburgers
can.t keep a guy going forever. Investors who would like to put
their money into Berkshire Hathaway, Buffett.s flagship company,
have to deal with the unpleasant fact that Buffett may be on his
last lap or two as champion of the stock market marathon. That
raises a fascinating question: who is the next great Buffett-like
investor going to be? He or she must be a great stock picker,
of course. But that.s just the beginning. What distinguishes
Buffett is not only his stock market acumen. It.s also his
willingness to state his opinions in plain English, his independent turn
of mind, and his willingness to treat investors as if they were
his partners."

Joining the dark side
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2008/05/26/joining-the-dark-side-pirates-spies-and-short-sellers.aspx
"So we have covered three potential sources of short ideas. What
happens if we put them all together? The parameters I used to
define my shorts were a price-to-sales > 1, an F score of 3 or
less, and total asset growth in double digits. This proved to be a
powerful combination. Between 1985 and 2007 a portfolio of such
stocks rebalanced annually would have declined over 6% p.a.
compared to a market that was rising at the rate of 13% p.a. in
Europe"

Is Royal getting risky?
http://www.prefblog.com/?p=2186
"I was most interested to learn that Royal Bank had an
Assets-to-Capital ratio of 22.05 as of the 1Q08 filing. It is my
understanding that the general maximum allowed by OSFI for this ratio is
20.0, which may be increased to 23.0 upon prior application to
the Superintendant. Is this correct? If so, then: (a) When did
Royal Bank apply to have the maximum increased? (b) On what
grounds did the Superintendant allow the increase? (c) Were any terms,
conditions, or time limits attached to the approval?" [You'll
be rewarded if you take some time to more fully explore Mr.
Hymas' PrefBlog.]

Patient Capital Q1
http://www.patientcapital.com/newsletters/newsletter-2008-03.pdf
"In fact we strongly believe that there is more trouble to come.
Historically, there has never been a time when real estate
values have declined dramatically without serious economic fallout."

Buffett sees U.S. in recession
http://money.cnn.com/2008/05/25/news/economy/buffett_recession.ap/index.htm?postversion=2008052517
"Warren Buffett, whose business and investment acumen has made
him one of the world's wealthiest men, was quoted in an interview
published Sunday as saying the U.S. economy is already in a
recession. Asked by Germany's Der Spiegel weekly whether he thinks
the U.S. could still avoid a recession, he said that as far as
the average person is concerned, it is already here."


S&P/TSX60 Value Screens
http://www.stingyinvestor.com/SI/strategy.shtml 

High Dividend Yield Stocks                 P/E P/B P/S P/C P/D Yield*
========================================== === === === === === ======
Biovail (BVF)                               5   5   4   5   5    5
Bank of Montreal (BMO)                      4   4   5   1   5    5
CIBC (CM)                                   2   4   5   5   5    5
National Bank of Canada (NA)                3   4   5   5   5    5
BCE (BCE)                                   5   4   4   5   5    5
Bank of Nova Scotia (BNS)                   3   3   3   1   5    5
Royal Bank (RY)                             4   3   4   5   5    5
Telus (T)                                   4   4   4   5   5    5
TransCanada (TRP)                           3   4   3   4   5    5
Shaw Comm Cl.B (SJR.B)                      3   2   2   3   4    4
More Info: http://www.stingyinvestor.com/SI/strategy/dogs.shtml 

Value Ratio Stocks                         P/E P/B P/S P/C P/D  VR
========================================== === === === === === =====
Biovail (BVF)                               5   5   4   5   5   0.8
BCE (BCE)                                   5   4   4   5   5   1.8
Thomson (TOC)                               5   4   2   2   4   1.9
Bank of Montreal (BMO)                      4   4   5   1   5   2.1
Telus (T)                                   4   4   4   5   5   3.0
Royal Bank (RY)                             4   3   4   5   5   3.1
Bank of Nova Scotia (BNS)                   3   3   3   1   5   3.3
National Bank of Canada (NA)                3   4   5   5   5   3.5
Sun Life (SLF)                              4   5   4   1   4   3.7
Husky Energy (HSE)                          4   2   3   3   4   3.8
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                              P/E P/B P/D   G$   dG$(%)
========================================== === === === ====== ======
ACE Aviation (ACE.B)                        5   5   0   85.11 297.36
MDS Inc. (MDS)                              5   5   0   47.22 152.90
Thomson (TOC)                               5   4   4   55.77  48.79
Magna Cl.A (MG.A)                           4   5   3  100.24  43.14
Nova (NCX)                                  5   4   3   35.96  33.59
Biovail (BVF)                               5   5   5   14.10  21.97
BCE (BCE)                                   5   4   5   40.07  14.33
Canadian Tire (CTC.A)                       5   5   3   66.98  11.82
Inmet Mining (IMN)                          5   3   1   75.39  11.44
Sun Life (SLF)                              4   5   4   49.80   7.68
Petro Canada (PCA)                          5   3   2   60.41   5.37
Weston George (WN)                          4   5   4   52.91   3.31
Bank of Montreal (BMO)                      4   4   5   50.01   2.55
More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml 

*Notes: http://www.stingyinvestor.com/SI/strategy/notes.shtml 

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Books for Stingy Investors

Security Analysis
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Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0071448209/


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ISSN 1499-2795 Copyright Dan Hallett and Associates Inc., 2008.
All rights reserved. The securities mentioned in this report are not
appropriate for all investors. Consult your professional investment
advisor before making any investment decision.  While all reasonable
effort is made to ensure the accuracy of information and data
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not a good predictor of future performance.  Results are not
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information in this newsletter, and in its related website, is not
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