In a post in late November last year, Testing the performance of price-to-book value, I set up a hypothetical equally-weighted portfolio of the cheapest price-to-book stocks with a positive P/E ratio discovered using the Google Screener, which I called the “Greenbackd Contrarian Value Portfolio”. The hypothetical portfolio is based on Josef Lakonishok, Andrei Shleifer, and Robert Vishny’s (“LSV”) Two-Dimensional [...]
Archive for September, 2010
Greenbackd Contrarian Value Portfolio Update
Posted in About, Behavioral economics, Stocks, Value Investment, tagged Contrarian investing on September 16, 2010 | 8 Comments »
The Activist Investor: Effective Activism, on the Cheap
Posted in About, Activist Investors, Catalysts, tagged Activist investing, Activist Investors, Shareholder activist on September 15, 2010 | Leave a Comment »
Michael R. Levin, who runs The Activist Investor website, has produced a white paper, Effective Activism, on the Cheap that identifies 36 undervalued companies that fit his profile for “effective activism, on the cheap.” Michael likens the list to the companies generated in an Endangered Species / Darwin’s Darlings strategy. Says Michael of the target [...]
Warren Buffett on the economy: “No double dip”
Posted in About, Austrian Economics, Value Investment, Warren Buffett, tagged Warren Buffett on September 14, 2010 | 2 Comments »
Warren Buffett has long eschewed any ability to foresee the path of the markets or the economy, but according to this BusinessWeek article, he’s resolute that the economy will not slide back into recession: Warren Buffett ruled out a second recession in the U.S. and said businesses owned by his Berkshire Hathaway Inc. are growing. [...]
Market Folly introduces “Hedge Fund Wisdom”
Posted in Stocks, tagged Seth Klarman on September 13, 2010 | 1 Comment »
Jay at Market Folly has introduced a quarterly newsletter “Hedge Fund Wisdom,” which Jay bills as a “complete guide to what hedge funds have been buying and selling.” The newsletter includes: Complete portfolio updates on 20 prominent hedge funds Commentary and analysis of each fund’s moves Consensus buys & sells among the hedge funds profiled In-depth [...]
What does a falling P/E ratio mean?
Posted in About, Stocks, Value Investment, tagged Graham P/E10 on September 10, 2010 | 9 Comments »
While the WSJ is prepared to consign the PE ratio to the dustbin (see The Decline of the P/E Ratio and Is It Time to Scrap the Fusty Old P/E Ratio?) Barry Ritholtz is one of the few actually asking the question, “What does a falling P/E ratio mean?“ Ritholz focuses on the expansion and contraction of [...]
The 10-year implied real total returns to equities is 1% per annum
Posted in Stocks, tagged John Hussman on September 9, 2010 | 1 Comment »
John Hussman’s excellent Weekly Market Comment for the week beginning September 6 has a superb chart showing the 10-year returns to the S&P500 implied by its present level. The news is sobering. John estimates returns for the coming decade of less than 6% per annum: Though we use a variety of methods, the consensus estimate [...]
Bloomberg on Burry’s bets on farmland and gold
Posted in About, Austrian Economics, Dr. Michael (Mike) Burry, Stocks, tagged Dr. Michael (Mike) Burry on September 8, 2010 | 1 Comment »
In Burry, Predictor of Mortgage Collapse, Bets on Farmland, Gold, Bloomberg has a great profile on Dr. Michael Burry and his recent investments. Says Bloomberg: Michael Burry, the former hedge-fund manager who predicted the housing market’s plunge, said he is investing in farmable land, small technology companies and gold as he hunts original ideas and braces for a [...]
Guest post update: Sham Gad on Paragon Technologies (OTCBB: PGNT)
Posted in Activist Investors, Value Investment, tagged Paragon Technologies (OTCBB: PGNT), Sham Gad on September 7, 2010 | Leave a Comment »
Sham Gad has provided an update on his earlier guest post on Paragon Technologies (OTCBB: PGNT), which Daniel Rudewicz of Furlong Samex also covered in January. Sham is the managing partner of Gad Capital Management, a value-focused investment firm modeled after the Buffett Partnerships based in Athens, Georgia. Gad is also the author of the recently released, ”The Business of Value Investing: [...]
Quick Idea: Cal Dive International Inc. (NYSE:DVR)
Posted in Stocks, Value Investment, tagged Cal Dive International Inc. (NYSE:DVR) on September 3, 2010 | 3 Comments »
Cal Dive International Inc. (NYSE:DVR) is an interesting play on the offshore oil and gas service industry. It was trading through a cyclical and seasonal low before the Macondo well blowout. The blowout has had a significant impact on the offshore oil and natural gas industry, and saw DVR suffer one of its worst quarters in several [...]
Alternative metrics to the Shiller PE10
Posted in About, Value Investment, tagged Shiller PE10 on September 2, 2010 | 1 Comment »
My post on the Shiller PE10 ratio calculated using Shadowstats’ alternate to the BLS CPI generated some great discussion about the various flaws in the market-level PE and PE10 – using BLS CPI or Shadowstats’ CPI – ratios. Brett Arends’s WSJ.com ROI blog has a timely post Why Stocks Still Aren’t Cheap examining other measures of [...]
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