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February 2007

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Vindicated?

February 14, 2007 – Comments (0)

Avon Products and Getty Images have increased nicely this year. A lot of people were down on Avon. I picked Getty just after it had a big dip, and it had been languishing for a while. Avon's showing signs of a turnaround, and Getty has always generated strong cash flow.

On the "oops" side, I've already written about New Century. Avid is another "oops." I think the stock will recover somewhat, though.

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"You moron!" pick of the month: New Century Financial

February 08, 2007 – Comments (0)

NEW dropped 30% on news of earning restatements and a reduced outlook. Based on the numbers that they had put up, yesterday they were within a consider-buying price. Not if the numbers change! This was probably exacerbated by HSBC's announcement that they had very substantially increased their bad debt reserve on their outlook for the US subprime market. HSBC is a huge bank that is diversified in terms of services offered and geography, and they dropped 2.6% on the news (and they're adding about $1.5 billion to their reserves). I think the subprime market is no place to be, and I will end my pick in NEW. This will be a permanent black mark on my record. The good news is, though, that I have plenty of other picks that have worked.  [more]

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