The Stingy News Weekly (12/29/02)
The Markets This Week
DOW 30: 8,304 -2.43% with a median P/E of 23.9
S&P/TSX: 6,596 +0.53% with a median P/E of 22.5
The Value View
Dow at a P/E of 20: 6,949 (-16.3%) Poor Value
Dow at a P/E of 15: 5,212 (-37.2%) Fair Value
Dow at a P/E of 10: 3,474 (-58.2%) Good Value
S&P/TSX at a P/E of 20: 5,863 (-11.1%) Poor Value
S&P/TSX at a P/E of 15: 4,397 (-33.3%) Fair Value
S&P/TSX at a P/E of 10: 2,932 (-55.6%) Good Value
New @ StingyInvestor
Dividends are making a big comeback with investors and it's not hard to see why. Many blue-chip stocks are now paying more than GICs, government bonds or high-interest savings accounts. The tax advantages of Canadian dividends makes them even more attractive.
Stingy Selections & Dartboard Dynamos
Last year I attempted to achieve success by hand picking twelve value stocks from the S&P500. Well, I managed to avoid the success part. My twelve picks lost an average of 1.92% from December 5, 2001 to December 5, 2002. Mind you, this was much better than the S&P500 which fell by 22.12% over the same period. Normally outperforming the index by 20.20% would be cause for celebration but a loss is still a loss.
The new vocabulary
"Here are 33 handy excuses for saving too little or making foolish investments, plus translations for what each excuse really means."
Portfolio risk in dollar cost averaging
"In fact, volatility - or risk - is the enemy of any wealth accumulation program. And investors who take excessive risks, in pursuit of illusory gains, may only wind up broke in the long run. Forget that comfortable retirement."
Santa Claus vs. The Marketers
"When Santa Claus finds his popularity waning, the directors of Claus Inc. vote to bring in a group of marketers on board to refine his 'brand' and improve his business processes. But the cure can be worse than the problem, and when problems with CRM, privacy issues, and copyright infringement may make Claus Inc. miss the Christmas shipping deadline, Santa launches an undercover project to get the gifts out on time."
Going against the crowd really paid in 2002
"The best SuperModels ideas were those that discounted so-called expert opinions like those from Standard & Poor's. The worst: an early-year play on a rally and a misfire on defence."
Joe Galli's army
"This army of high-achieving, super-motivated greenhorns has generated, on average, double-digit, year-over-year product sales increases in whatever store they take on. Their war stories recall such feats as ramping up paper-towel-holder sales by 1,000% in just seven days. That's good news for stores, as well as for Newell, and Phoenix efforts have improved the company's once-fraught relationships with its retail customers."
This week's trivia questions are: Q1. How many stocks in the S&P/TSX Composite pay a dividend? Q2. How many S&P/TSX Composite stocks have a yield of more than 5%? Q3. How many S&P 500 stocks have a yield of more than 5%? The answers to last week's trivia questions are: Q1. Who said "Don't try to buy at the bottom and sell at the top. This can't be done - except by liars."? A1. Bernard Baruch Q2. Who said "The serious investor knows that among the many signposts that point to corporate and investment growth, a rising dividend trend is perhaps the most significant."? A2. Geraldine Weiss Q3. Who said "October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February."? A3. Mark Twain 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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