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July 2007

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Sigh.. Bank of America

July 31, 2007 – Comments (0)

I'm not sure if I'm reading this right: http://www.marketwatch.com/news/story/american-home-mortgage-falls-wall/story.aspx?guid=%7BBE51427C%2D5C18%2D44C3%2D811B%2D7CCC6BFFAC2A%7D

but it looks like BAC loaned American Home Mortgage $1.3 billion. AHM basically just went under. too bad I'm not clairvoyant - tomorrow could have been a pretty good day to buy BAC! or perhaps I'd know not to buy BAC instead, and plunk everything down in the far more conservative US Bancorp. 

besides that, I note that Tuesday Morning shares are now going for $11.66. I'd previously noted that I might be interested around $10. I would not buy the shares in real life. I think this is not a quality company anymore. In real life, I'm trying to narrow my portfolio choices, and I would not be interested in plunking cash down on a low-quality company. there are many high quality companies that pay hefty dividends, like USB and BAC (assuming its loans don't get it into trouble, which isn't that likely).

  [more]

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Avon selloff probably overblown

July 31, 2007 – Comments (0)

It is rather late in the turnaround for Avon to be spending this much on restructuring, hiring sales reps, etc. Nonetheless, their overall sales grew substantially. I think the Street's focus on their reduced earnings is short sighted. If Avon falls just a little bit more I'd consider buying.

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Comments on First American Financial, Moodys (FAF and MCO)

July 28, 2007 – Comments (2)

First American Financial and Moodys are held by Morningstar's Tortoise portfolio, indicating that these are wide-moat companies with relatively low risk, and slow but steady growth. nonetheless, both stocks have actually appreciated a whole lot, and have benefitted the Tortoise portfolio a whole lot (the Tortoise and Hare portfolios are in  M* Stock Investor, and an annual subscription costs $69 for M* subscribers, $39 through Fidelity's brokerage).


I personally picked FAF last year. the stock appreciated precipitously. it has since pulled back substantially, although it's still about 20% ahead of the S&P for ther period of my pick.


I had not picked Moody's. it's a wonderful business but I was late to the party...


... but, amidst the recent sell-off, I think that both may now be buys again.


First American is the largest title insurer in the US, and is leveraging their considerable IT expertise to move into real estate and other information services. it was a smart move. despite the fact that they're in the Tortoise, I think there's significant growth potential behind FAF. Management has significant ownership. There were some issues with options backdating but relatively speaking, they weren't egregious - the SEC closed its inquiry. I believe the shares have sold off because of mortgage and housing market-related concerns.


Moody's rates debt, and operates in a duopoly with Standard and Poors. Both have been criticized for being overly lax in rating debt now that the issues with subprime mortgage backed obligations are in the open. the criticisms are valid, but neither of them was any worse than the ones who were snapping the debt up. I'm not sure how much longer the article below is going to be free, but Moody's is now taking a hit and being hired less for debt ratings because it's requiring mortgage-backed security issuers to add another layer of credit enhancement. basicaly, the issuers are rating shopping.


http://online.wsj.com/article/SB118471274304469543.html?mod=googlenews_wsj 


I don't own either of these businesses. however, I soon may. I might not jump in right this second, but these are very attractive businesses selling at what I believe to be reasonably attractive prices now. I'm particularly tempted by Moody's, although I wish it would fall just a little bit more.  [more]

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now's as good a time as any to buy some Fuel-Tech

July 26, 2007 – Comments (0)

Fuel-Tech has fallen previpitously in the last few trading sessions, on no apparent news. Now's as good a time as any to buy more.

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re last post, I was just kidding!!!

July 25, 2007 – Comments (0)

I was just kidding! I did NOT intend to end it all.  [more]

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Wow, this is a really bad day for my portfolio, I'm committing suicide.

July 24, 2007 – Comments (1)

This is a very, very bad day for my portfolio, both real and virtual. I'm ending it here - I'm taking my own life. Goodbye, cruel world.

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Bridge loans

July 20, 2007 – Comments (0)

JP Morgan Chase and Citigroup may be on the hook for leveraged loans made to private equity groups conducting LBOs. They may be unable to sell the debt to investors in the current climate, and may be stuck holding those bridge loans on their balance sheets. These debts are risky, and the banks will either have to keep the debt, or sell it at a discount.  [more]

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It's so hard being Popular that I'm going to pick the stock to underperform

July 19, 2007 – Comments (0)

Nathan Parmalee, who like me has the misfortune to be long Popular, has this article out: http://www.fool.com/investing/general/2007/07/19/its-not-easy-being-popular.aspx  [more]

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Add to JPM? Hold on Intel

July 19, 2007 – Comments (4)

Intel's been suffering because of its price war with AMD. However, as much as I root for AMD, Intel is far better-positioned, with good cash flows, and very heave investment into R & D. For AMD's sake, I hope they carve out a niche where Intel can't get to them. In the long run, though, I'd bet on Intel. At today's price, though, I'm not eager to buy more.  [more]

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Stocks to add to: USB, NVS, JNJ

July 18, 2007 – Comments (0)

If I were so inclined, I would add some money to the following defensive stocks, which I consider to have been unfairly punished.  [more]

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Mackey does apologize

July 18, 2007 – Comments (1)

 Whole Foods Market (NASDAQ: WFMI) today released the following statement from Co-founder, Chairman and CEO, John Mackey: "I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards. I am very sorry and I ask our stakeholders to please forgive me."   [more]

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Getty Images

July 13, 2007 – Comments (0)

Check out the Morningstar news page for Getty Images: http://quicktake.morningstar.com/stocknet/AllNews.aspx?Country=USA&Symbol=GYI  [more]

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John Mackey does a Patrick Byrne

July 12, 2007 – Comments (4)

As an actual shareholder of Whole Foods, I wrote today to their investor relations department (ir.questions@wholefoods.com) to comment about the message board incident.  [more]

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Healthways (HWAY)

July 10, 2007 – Comments (0)

As I write this, Healthways is a 5-star stock in CAPS. If you check Gurufocus, Ron Baron bought recently, and has commented positively on the company. It does provide a needed service, and has contracts with numerous managed care organizations and large employers.  [more]

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Corporate Executive Board (EXBD)

July 07, 2007 – Comments (0)

One other writer asked, how cool would it be to say, I'm on the executive board of the Corporate Executive Board?  [more]

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possible contrarian plays

July 06, 2007 – Comments (0)

My picks in Group 1 Automotive (GPI) and Bankatlantic Bancorp (BBX) have been severely punished. I do now own the stocks personally. However, I might consider a contrarian play in one or the other.  [more]

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JP Morgan Chase

July 05, 2007 – Comments (0)

A while back, I posted about how Chase bank was trying to dethrone Western Union, but was unlikely to do so because of the fees it was charging for checking accounts. I hope Chase will offer free checking, however, they do take ACH 'pushes' by Paypal and ING Direct as direct deposits, so savvy users can DD their paychecks elsewhere. Additionally, I believe that Chase is now offering a $100 bonus to people who open accounts there. I'm going to sign up.  [more]

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DWS Global Thematic and Global Opportunities

July 03, 2007 – Comments (0)

Investors may want to consider DWS Global Thematic (SCOBX) and Opportunities (SGSCX). Both are world stock funds. True, neither are cheap, and DWS has had market timing issues. As such, I realize this may be a controversial recommendation.  [more]

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Cimarex Energy

July 03, 2007 – Comments (0)

Cimarex (XEC) is a mid-cap oil and gas producer (more gas than oil, I believe). they are focused on return on invested capital (ROIC) rather than growing reserves, focusing on US properties with sound economics. they have a good shot at adding economic value over time.  [more]

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Bear Stearns: time to jump in?

July 02, 2007 – Comments (1)

Contrarians might be looking to jump in to Bear Stearns. If the company's fundamentals remain solid and the stock is further pressured by negative sentiment, this could be a good time to buy.  [more]

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More good bond funds!

July 01, 2007 – Comments (0)

TCW Total Return Bond Institutional is a good fund. Morningstar Analyst Pick
, manager was voted Fixed Income Manager of the Year at M* in 06, charges .44% ER - that's practically free. Gundlach focuses solely on mortagage-backed securities. He's not buying Ginnie Maes, though, he also does mortgage bonds and collateralized mortgage obligations.
He's earned 5 stars on M*, which also rates him as below average risk.
Additionally, even though this and other TCW funds are called "institutional", the minimum entry point is now $2000. $500 in an IRA.  [more]

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Discover: don't bother?

July 01, 2007 – Comments (0)

I've picked Morgan Stanley (MS), and I wish I had actually gone and spent some real money on some shares. Discover is part of Morgan Stanley, and they are spinning that off. I'm bullish on credit card firms in general, and I personally own both Mastercard and Amex.   [more]

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