The Stingy News Weekly (06/09/02)
The Markets This Week
DOW 30: 9,590 -1.24% with a median P/E of 31.4
S&P/TSX: 7,479 -1.59% with a median P/E of 33.7
The Value View
Dow at a P/E of 20: 6,108 (-36.3%) Poor Value
Dow at a P/E of 15: 4,581 (-52.2%) Fair Value
Dow at a P/E of 10: 3,054 (-68.2%) Good Value
S&P/TSX at a P/E of 20: 4,439 (-40.7%) Poor Value
S&P/TSX at a P/E of 15: 3,329 (-55.5%) Fair Value
S&P/TSX at a P/E of 10: 2,219 (-70.3%) Good Value
The Coffee Can Portfolio
Robert Kirby thought that investors would be well served by purchasing small amounts of many stocks and then forgetting about them for ten years. While discussing his investment counsel business he related an interesting anecdote...
Farewell to a giant of value investing
"Al Frank, who died of cancer April 25 at age 72 in Carmel, Calif., was one of the very best stock pickers in America. He never sought the spotlight and few investors recognize his name, but he deserves a place in the investing pantheon with gods like Warren Buffett, Peter Lynch and John Templeton."
Revisiting Graham and Dodd
"Originally published in 1934, Security Analysis by Benjamin Graham and David Dodd could have been written yesterday. The players have changed but the conceptual framework is as fresh as ever. The introduction and the first chapter of this opus are especially chilling. Intended as an indictment of the excesses of the roaring Twenties, these first 15 pages of a more than 700-page book are equally applicable to our bubble -- and, by inference, to much that is now unfolding in its aftermath."
Putting "dis" in full disclosure
"'Most public companies go out of their way to please Wall Street analysts. Then there's Expeditors International of Washington Inc.', writes Robert McGough in today's Wall Street Journal."
Third Avenue's semi-annual report
"Those who think of options as an expense have it wrong, at least from the Company and Creditor points of view. Warren Buffett is quoted as saying, 'If options are not a form of compensation what are they? If compensation isn't an expense, what is it? And if expenses shouldn't go into the calculation of earnings, where in the world should they go?' Frankly, the Buffett statement is an overgeneralization, even though most finance academics, and among others, Alan Greenspan, seem to be wholly in concurrence."
The misery index
"The percentage of the Canadian economy, in terms of its gross domestic product, that is taken by the government in taxation at all levels for all taxes, increased one percentage point from 1999 to 2000 (the latest information available) and has been steadily rising from just 26% in 1965 and 33% in 1980. When will the increasing appetite for more taxes end?"
The trivia questions this week are:
Q1. How many companies in the NASDAQ 100 pay a dividend?
Q2. What is the largest and smallest company in the S&P500 by market cap?
Q3. What is the largest and smallest company in the S&P/TSX Composite by revenue?
The answers for last week's trivia questions are:
Q1. How many companies in the S&P/TSX Composite are losing money?
A1. 107 out of 297 (36%)
Q2. How many companies in the S&P500 are losing money?
A2. 98 out of 500 (20%)
Q3. How many companies in the NASDAQ100 are losing money?
A3. 45 out of 100 (45%)
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