The Stingy News Weekly (12/13/02)
The Markets This Week
DOW 30: 8,434 -2.45% with a median P/E of 24.0
S&P/TSX: 6,664 +1.32% with a median P/E of 24.1
The Value View
Dow at a P/E of 20: 7,028 (-16.7%) Poor Value
Dow at a P/E of 15: 5,271 (-37.5%) Fair Value
Dow at a P/E of 10: 3,514 (-58.3%) Good Value
S&P/TSX at a P/E of 20: 5,530 (-17.0%) Poor Value
S&P/TSX at a P/E of 15: 4,148 (-37.8%) Fair Value
S&P/TSX at a P/E of 10: 2,765 (-58.5%) Good Value
A Stingy Contest - Last Chance!
Try to outfox other investors for a chance to win a copy of the new
book "The Contrarian Investor's 13". Based on previous contests, the
odds of winning are quite good!
"It's Christmas again, time to celebrate the transformation of Ebenezer Scrooge. You know the ritual: boo the curmudgeon initially encountered in Charles Dickens's A Christmas Carol, then cheer the sweetie pie he becomes in the end. It's too bad no one notices that the curmudgeon had a point"
"The economist-pundit wanted to find a way to describe the workings of the Bank of Canada in terms that everyone could understand and enjoy talking about at Christmas parties, and which could possibly be the basis of a handsome book that would be bought by middle-aged people desperate for something to give their elderly uncles."
Dividend tax cut could shift the investing landscape
"At long last, there's serious talk in Washington of ending the double taxation of corporate dividends. Here's why investors should care."
Turning the page
"As founder, chairman and CEO of BC's Northland Properties Corp., Bob Gaglardi has had his ups and downs, no doubt about it. In fact, his bumpy career is one of the reasons you won't catch him spending much downtime relaxing in front of the boob tube these days. Instead, most nights anyway, he sits at his computer and hammers out a few more pages of a book he hopes will inspire his grandchildren to keep going when the going gets tough in their lives. Think of it as a modern version of The Little Engine That Could-one without the happy little train, the toy animals and all that "I think I can, I think I can" crap. Gaglardi's plot is darker, more realistic. It revolves around the trials and tribulations of a hard-working guy, a risk taker who becomes a hotel and real estate mogul, then almost loses everything-including his shirt-when interest rates soar and a nasty power struggle with bankers (OK, so maybe his story has the odd clown) puts a till-dipping crook in charge of his multimillion-dollar empire."
Look out! Insiders are bailing
"Want one more reason why this rally might not be for real? Insiders sold in droves in November."
The KREMEY warning for Krispy Kreme
"For this reason, many stock-pickers are proceeding with caution: "It probably would be a little bit safer to buy Krispy Kreme if the price declined and provided a decent entry point," says investment manager Robert Burgoyne, of Burgoyne Investment Services. Likewise, critics and shortsellers are again declaring the stock full of hot air. The skeptics quieted after seeing Krispy Kreme fall to a temporary low point of $27.40 this past summer. But short interest, a measure of how many traders are betting that the stock will decline, remains high."
The jewels in Berkshire Hathaway's crown
"Robert P. Miles, professional speaker and the author of The Warren Buffett CEO: Secrets From the Berkshire Hathaway Managers, and 101 Reasons to Own the World's Greatest Investment, shares his insights into Warren Buffett's investment strategy and his entry into the jewelry industry."
The future of the fed
"Is the glass half full or half empty? The last couple of years have been tough for the U.S. economy and for Federal Reserve Chairman Alan Greenspan. A shallow recession has been followed by a recovery that still shows few signs of taking off. Greenspan has sounded oddly uncertain about the economy's direction: "This is one of the most difficult periods of forecasting we have confronted," he told economists in London on Sept. 25."
Is Christmas inefficient?
"Yale University's Joel Waldfogel, writing in the American Economic Review, condemns what he calls "The Deadweight Loss of Christmas." Once you cut through the calculus and graphs, his conclusion is clear: though Christmas generates a $50 billion gift-giving industry, a tenth to a third of that is sheer loss. Why? Because the recipient doesn't always get what he wants. Given the chance, the recipient would have purchased something else."
This week's trivia questions are: Q1. Who said "Everyone has the brain power to make money in stocks - not everyone has the stomach."? Q2. Who said "The worse you feel, usually because the news is bad, the safer the market is. The better you feel, usually because the news is good, the closer you are to a top."? Q3. Who said "If the job has been correctly done when a common stock is purchased, the time to sell it is - almost never."? The answers to last week's trivia questions are: Q1. Who said "Bears don't live on Park Avenue."? A1. Bernard Baruch Q2. Who said "Your success in investing will depend in part on your character and guts, and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this, too, shall pass."? A2. John Bogle Q3. Who said "Investors repeatedly jump ship on a good strategy just because it hasn't worked so well lately, and, almost invariably, abandon it at precisely the wrong time."? A3. David Dreman Source: Wall St Wit & Wisdom 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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