"There are two times in a man's life when he should not speculate
- when he can't afford it and when he can."  - Mark Twain


New @ StingyInvestor


Unbundling Canadian ETFs 2008
http://www.ndir.com/SI/articles/0508-Unbundling-Canadian-ETFs-2008.shtml
"It is easy to get a simple, low fee, and broadly diversified
portfolio with ETFs. Most investors can safely stop here. But
perhaps I can entice you to read on about a few specialized
situations. When it comes to ETFs I like to consider two options for
long-term investors. The first option is to purchase the ETF and
hold on. The second option is to bypass the ETF and buy the stocks
that it owns. At first glance, the choice between buying a
low-cost exchange-traded fund that holds many stocks or buying each
individual stock appears to be obvious. The exchange-traded fund
is likely to be the better bargain. However, buying stocks
directly may be a good choice for some investors because the Canadian
stock market is very small and it is dominated by a few big
names. By holding only a few stocks you can reasonably approximate,
or even fully replicate, some ETFs."


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

Rising from the stock market rubble
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20080621/STMAIN21
"The lock that commodities have on the Canadian market has made
mutual funds with a value strategy a singularly awful investment
in the past few years. But the Celestica story is a reminder
that well-chosen value stocks do offer potentially fantastic
rebound potential. What beaten-down Canadian stocks might be ready to
pop? Let's nose around the portfolios of some of the country's
top value fund managers and see what they're holding."

Study finds pension-plan returns top 401(k)s
http://www.bloomberg.com/apps/news?pid=20601213&sid=a6NZYLUmGxfk
"Pension-plan returns outperformed 401(k) retirement accounts
from 2003 to 2006, the most recent bull market, according to a
study. Pension plans beat 401(k) plans by 1.7 percent in 2003, 2
percent in 2004, 1.1 percent in 2005 and 1.6 percent in 2006, said
the survey released today by Watson Wyatt Worldwide, a global
consulting company based in Arlington, Virginia. Looking at a
broader period, 1995 to 2006, pensions outperformed 401(k)s by 14
percent, the study said."

Defined benefit vs. 401(k) plans
http://www.watsonwyatt.com/us/pubs/insider/showarticle.asp?ArticleID=19148
"This most recent comparison finds that between 1995 and 2006, DB
plans outperformed DC plans by an average of 1 percent per
year. Earlier studies also found that, over time, DB plans attained
higher returns than did 401(k) plans."

London 'cityboy' unmasks world of analysts
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=awBzfZs5tbN0
"As a utilities analyst at Dresdner Kleinwort, Geraint Anderson
was advising clients how to invest. At the same time, through an
anonymous London newspaper column, he was telling readers how
analysts wrote 'utter gibberish.'"

Corporate democracy is a myth
http://www.icahnreport.com/report/2008/06/corporate-democ.html
"We are in this situation because there is no leadership in the
executive suite. Why did we get here? Because in corporate
America there are no true elections. It is tyranny parading as
democracy. It.s a poison running through the blood of corporate
America. Perhaps, with enough public support, the lawmakers and
regulators will take note."

It's mine, I tell you
http://www.economist.com/science/displaystory.cfm?story_id=11579107
"The endowment effect was controversial for years. The idea that
a squishy, irrational bit of human behaviour could affect the
cold, clean and rational world of markets was a challenge to
neoclassical economists. Their assumption had always been that
individuals act to maximise their welfare (the defining characteristic
of economic man, or Homo economicus). The value someone puts on
something should not, therefore, depend on whether he actually
owns it. But the endowment effect has been seen in hundreds of
experiments, the most famous of which found that students were
surprisingly reluctant to trade a coffee mug they had been given
for a bar of chocolate, even though they did not prefer coffee
mugs to chocolate when given a straight choice between the two."

Your lifestyle may hurt your credit
http://www.businessweek.com/magazine/content/08_26/b4090030423218.htm
"Most borrowers know a late payment or high outstanding balance
can hurt their credit. But what about frequenting a massage
parlor, retreading a tire, or visiting a marriage counselor? Such
activities count, too, according to a suit filed by the Federal
Trade Commission in federal court in Atlanta on June 10 against
card issuer CompuCredit"

Why we're gloomier than the economy
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/17/AR2008061702463.html
"Ask Americans how the economy is doing, and their answer is
stark: It is not just bad, it is run-for-the-hills terrible.
Consumer confidence is at its lowest level in almost 30 years. Only 12
percent of Americans think the economy is in good shape. On the
Internet, comparisons to the Great Depression are widespread.
But the reality is different. According to most broad measures of
how the economy is doing, it's not all that grim."

'Brainwashing 101 for dummies' (and investors!)
http://www.marketwatch.com/news/story/11-reasons-passive-investors-let/story.aspx?guid=%7B62AB4A8E-65F4-4D29-8807-8A152450738B%7D&print=true&dist=printMidSection
"Yes, Wall Street's got a great con game going, but it only works
because America's 95 million investors are willing victims,
love playing along, actually letting Wall Street get away with it!
I call it "Brainwashing 101 for Dummies." Insiders use fancier
terms like neuroeconomics, behavioral finance and the new
"science of irrationality." But labels aside, you're being brainwashed.
And Wall Street's laughing all the way to the bank at how easy
it is to dupe gullible investors by using the 11 rules of
"Brainwashing 101 for Dummies." We got them for you: Everything you'll
ever need to know about the big con."

Remember, Cassandra was right
http://sgresearch.socgen.com/publication/strategy_periodical(20080313)_408.pdf
"Some are trying to argue that the mess in the US economy/housing
market/credit market is an example of Taleb's black swan.
Nothing could be further from the truth. Black swan events are
inherently unpredictable. However, the events unfolding now are sadly
all too predictable. They are following the standard pattern for
a debubbling process. Numerous psychological barriers prevent
us from listening to Cassandra, but it may pay to remember that
her predictions were all too accurate."

The road to revulsion
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2008/06/16/the-road-to-revulsion.aspx
"Indeed, one of the lessons that should be learnt from the
Japanese experience is that the banks were second round losers, a
point made by Albert Edwards recently. They didn't really begin to
underperform the rest of the market until the second Japanese
recession of its debubbling process. They really started to suffer
when their consumers (Japan Inc) started to struggle."

Long-term performance following rights issues
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=912406
"This study finds evidence of significant long-term
underperformance following rights issues made during 1986-95 in the UK. The
findings are resilient to a number of methodological controls. In
contrast, our results for a smaller sample of open offers made
during 1991-95 show strong positive performance over a 5-year
post-issue period, implying that firms making open offers had
better growth prospects than firms making rights issues. During
1986-90, a period when open offers were rarely used, firms appeared
to be making rights issues to exploit overvaluation. However,
this was not evident for rights issues made during 1991-95, a
period when open offers were more commonly used."

Third Avenue Q2 2008 letter
http://www.thirdavenuefunds.com/taf/documents/shareholderletters/aboutus-letters-08Q2.pdf
"One of the important lessons from the Bear Stearns debacle for
TAVF is to avoid owning common stocks where the businesses need
to have relatively continuous access to capital markets in order
to survive as going concerns."

Pass the buck
http://www.canadianbusiness.com/columnists/al_rosen/article.jsp?content=20080611_72311_72311
"Statements such as .IFRS is already being used in most of the
world.s major capital markets,. are clearly deceptions. Other
claims, like that IFRS is .capable of consistent interpretation and
application. around the world, contrast sharply with what the
audit firms tell their clients in private. One large firm summed
up IFRS as follows for its clients: More choice, less detail.
Clearly, the private advice to clients is at odds with the public
marketing efforts to investors."

We ain't got to show you no stinking credibility
http://www.hussmanfunds.com/wmc/wmc080616.htm
"In short, mortgage foreclosures and defaults are just now
hitting their stride, and we are likely to observe a second round of
credit fears as those losses mount. The U.S. dollar has enjoyed a
brief rebound on tightening talk from the Fed, which is likely
to quickly dissipate as soon as those credit concerns revive.
Meanwhile, commodity price pressure is likely to diminish by the
end of summer as the result of a continuing economic downturn
coupled with a flight-to-safety which will reduce monetary
velocity."


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   5   5   1   5    5
CIBC (CM)                                   0   4   5   5   5    5
National Bank of Canada (NA)                3   4   4   4   5    5
BCE (BCE)                                   5   4   4   5   5    5
Royal Bank (RY)                             4   3   4   5   5    5
Bank of Nova Scotia (BNS)                   3   3   3   1   5    5
Telus (T)                                   4   4   3   5   5    5
Shaw Comm Cl.B (SJR.B)                      3   2   2   4   5    5
Toronto Dominion Bank (TD)                  4   4   3   2   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   0.7
Bank of Montreal (BMO)                      4   5   5   1   5   1.7
BCE (BCE)                                   5   4   4   5   5   1.7
Thomson (TOC)                               5   4   2   2   4   1.9
Telus (T)                                   4   4   3   5   5   2.8
Royal Bank (RY)                             4   3   4   5   5   3.0
Toronto Dominion Bank (TD)                  4   4   3   2   4   3.2
Bank of Nova Scotia (BNS)                   3   3   3   1   5   3.3
Sun Life (SLF)                              4   5   5   1   4   3.3
Husky Energy (HSE)                          4   2   3   3   4   3.4
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   84.66 334.15
Magna Cl.A (MG.A)                           5   5   3  100.09  51.38
Thomson (TOC)                               5   4   4   55.77  48.79
Nova (NCX)                                  5   4   3   36.04  38.90
Biovail (BVF)                               5   5   5   14.12  32.58
Canadian Tire (CTC.A)                       5   5   3   67.00  20.17
BCE (BCE)                                   5   4   5   40.00  15.60
Bank of Montreal (BMO)                      4   5   5   49.97  13.85
Sun Life (SLF)                              4   5   4   49.88  13.63
Inmet Mining (IMN)                          5   3   1   75.47   9.81
Weston George (WN)                          4   4   4   52.96   9.01
Petro Canada (PCA)                          5   3   2   60.49   7.58
Canadian Pacific Rail (CP)                  4   4   2   68.71   1.12
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

Relative Dividend Yield
by Anthony E. Spare

Anthony Spare searches for value stocks using relative dividend
yield which is the ratio of a stock's dividend yield to the
average yield of the market. Spare's approach is to buy dividend
stocks near a peak in relative dividend yield and to sell them near
the lows. Although dividend-oriented investors will enjoy the
book, its cover price of $92.95 makes it a little dear. So, buy
the book at a sharp discount or borrow it from your local library.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0471327050/


Stock Research From Dan Hallett & Associates

The Rothery Report
http://www.rotheryreport.com/ 

The Rothery Report provides research on select deep-value stocks in
North America. Discover overlooked and undervalued stocks in quarterly
investment reports which provide detailed analysis of Canadian and
U.S. stocks.  Weekly email news and additional updates keep
subscribers informed about new opportunities and developments.

Rothery Report Performance (03/31/2001 to 03/31/2008)
  Average Capital Gain    Average Holding Period
          40.9%                   2.4 Years

Learn More
http://www.rotheryreport.com/store/store.shtml

Subscribe Today
http://www.rotheryreport.com/store/order.shtml 



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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
contained herein, accuracy can not be guaranteed. Past performance is
not a good predictor of future performance.  Results are not
guaranteed and we assume no liability whatsoever for any material
losses that may occur.  No compensation for suggesting particular
securities or financial advisors is solicited or accepted.  The
information in this newsletter, and in its related website, is not
intended to be, nor does it constitute, financial advice or
recommendations.  Investing in stocks can be risky and may result in
substantial losses.  A Dan Hallett and Associates Inc.(DH&A)
publication.  DH&A is registered as Investment Counsel in the province
of Ontario. DH&A, or related-parties may have an interest in the
securities mentioned.