This page is merely a collection of “stuff” I have collected from my office white boards. Primarily these notes are for the use of our Investment management firm. Many if not most of these notes will make no sense to the outside reader of these notes. Many of the companies mentioned are short candidates, and should not be looked at as potential investments.
June 19, 2012
1. Consider JNJ – 5/9/12 $64.51 – Nothing to sell right now, otherwise a contender.
2. Companies to Consider: 2/2/12
| Markel | MKL | 405.00 |
| Fairfax Financial Holdings Limited | FRFHF | 411.11 |
| Leucadia National Corp. | LUK | 28.53 |
| The Bank of New York Mellon | BK | 22.36 |
| Alliant Energy Corporation | LNT | 42.32 |
| Consolidated Edison Inc. | ED | 57.68 |
| Portland General Electric Company | POR | 24.87 |
| Southern Company | SO | 43.81 |
| FirstEnergy Corp | FE | 42.89 |
| Vectren Corporation | VVC | 28.12 |
| Xcel Energy Inc. | XEL | 26.89 |
| Kraft | KFT | 31.02 |
| Waste Management | WM | 37.89 |
| National Grid | NGG | 47.79 |
| Amgen | AMGN | 51.64 |
| Madison Square Garden | MSG | 28.30 |
| US Bancorp | USB | 28.38 |
December 14, 2010
1. Utilities – Ran some spreadsheets. Identified several companies that might be purchased on pullbacks.
2. Ensco – (ESV) – 9/15/10 Provides oil and gas drilling. Was $44.57 on 9/15 and $51.58 today.
3. WalMart competitors (number 2 and 3 world retailers) – Tesco PLC (TSCDY.PK) ($20.35) and CARRE FOUR SUPERMARC (CRERF.PK) ($43.50).
4. Companies to consider:
| Waste Management | WM | $36.32 |
| Monsanto | MON | $60.53 |
| ITT Corp | ITT | $50.24 |
| China Mobile | CHL | $49.79 |
| Johnson & Johnson | JNJ | $62.79 |
| The TJX Companies | TJX | $44.46 |
| Suncor Energy | SU | $36.23 |
| Canadian Oil Sands Trust | COS-UN.TO | $24.82 |
| PetroChina LTD | PTR | $128.10 |
| Weyerhaeuser Co. | WY | $17.92 |
| Cisco Systems | CSCO | $19.54 |
March 23, 2010
1. How can we profit from inflation?
2. Companies we might consider, and date they hit the White board
| 9/14/09 | NUE |
|---|---|
| PEG | |
| CV | |
| WPO | |
| PSO | |
| Hormel | |
| Kraft | |
| IBKR | |
| TRC | |
| LUK | |
| 1/20/10 | |
| Exelon | |
| Converge | |
| PFOAX | |
| PFVAX | |
| TPINX | |
| FPNIX | |
| AEE | |
| McGraw Hill | |
| MICC |
3. Watch Lumber Prices.
4. Watch Capacity Utilization Rates.
August 27, 2009
1. Consider Utilities.
2. Companies to watch, consider and thumb suck to: (This list was compiled 3/9/09. I messed up terribly on BAC
| LUK |
| ITT |
| JEF |
| BAC |
| CV |
| FFH |
| WFC |
| USB |
| AXP |
| BAC |
| OLN |
| Swiss Re |
| ICE |
| CME |
| ZINC |
| SHLD |
| RIO |
| BHP |
| DV |
| ACE |
| RIG |
| NKE |
| FIG |
| NUE |
| JOE |
| CBG |
| VNO |
| F |
3. Education theme 8/27/09
| DV |
| WPO |
| PSO |
4. Warren Buffett mentioned years back that newspapers should be valued at 2X revenues.
5. Drillers and oil services potential them 3/30/09
| BV | DEBT /EQUITY | |||
| DO | 63.64 | 24.07 | 0 | |
| NE | 23.86 | 20.16 | 5% | |
| RIG | 59.03 | 51.75 | 74% |
June 2, 2009
1. Notes from NYSSA Energy Conference May 19, 2009
A. Arbitrage in Natural Gas? Typically price ratio has been 1:6 Gas to oil. Yet because of transport costs make that 1:8. It is now priced 1:14. Maybe find a gas company?
B. Mentioned a $0.10 differential in European price and USA would be a tie with shipping, using Egypt to USA as an example of the costs.
C. Switching to gas is already occurring. There is more to it than a price arbitrage.
D. Oil Sands less economical if Natural Gas is up in price.
E. Phil Dodge, Tuohy Brothers Investment Research mentioned the following companies as candidates for purchase.
| Halliburton Co. | HAL (22.02) |
| National Oil Well Varco | NOV (34.65) |
| Range Resources Corp. | RRC (41.46) |
F. Ron enjoyed the presentation by CE Franklin LTD (CFK 4.90)2. John’s White Board (April 9, 2009)
| ADM | 28.53 |
| MON | 75.73 |
| BK | 28.59 |
| GLW x | 9.14 |
| RIG | 55.73 |
| VZ | 34.47 |
| COP | 54.28 |
| Barron’s loved the exchanges (see below) | |
|---|---|
| CME | 226.42 (Barron’s loved them) |
| ICE | 81.40 (Barron’s loved them) |
| NYX | 29.09 (Barron’s loved them) |
| NDAQ | 25.86 (Barron’s loved them) |
| AXP | 20.05 |
| GE | 17.05 |
| AMZN (12/7/08 P/E 37?????) | 53.36 |
| KFT | 21.07 (recession play? food required) |
| CAG | price unknown at time |
| JAH | ron mentioned via play on k2. |
| FIG | ron mentioned, owns ski resorts, depressed prices <$2. |
| USO (oil at 4 1/2 year low, dollar will get weaker, near 0% interest rates.) | 34.81 |
March 16, 2009 Companies to look at
| LUK |
| ZINC |
| RIG |
| NKE |
| TDF |
| AES-PC |
| PEG |
| JAH |
| ACE |
| AXP |
| ITT |
| UTILITIES |
February 23, 2009 Forward thesis?
1. Utilities
2. China
3. Inflation – How to prosper. Look at past inflation surges and what prospered and when in the cycle they prospered. Extrapolate to common shares.
February 1, 2009 Companies to Watch
| RIG | Drilling |
|---|---|
| NKE | skate shoes and snowboarding shoes rave reviews, yet might not have penetration |
| China Petro | |
| Credit Suisse | |
| SHLD | |
| ADM | |
| WPO | |
| MON | |
| NUE | |
| JOE | |
| Chevron | |
| COCO | |
| BHP | |
| WMT | |
| APOL | |
| PSO |
December 12, 2008
1. Will Exchanges tell us anything about the economy. Watch the following:
ICE
NDAQ
CME
NYX
2. LUK – What is tangible Book Value?
3. Copper and Iron Ore
October 27, 2008 Make it Stop!
Companies to Watch
WPO
MA
COP
V
TJX
TGT
AXP
GE
SHLD
FNF
Utilities
remember to read Christian Science Monitor
October 2008 Bank Bailout Effects
| Lower Price Earnings Ratios |
| Lower Earnings |
| Lower Price to Book Ratios |
| This all leads to eventual |
| INFLATION |
|---|
February 8, 2008
1. What companies will make money and be good investments if inflation comes back? It might take time, but it will come back.
2. Companies to watch
| FNM | 31.25 |
| FRE | 29.63 |
| SLM | 20.82 |
| WMT | 49.09 |
| GE | 33.79 |
| JOE | 38.30 |
| C | 25.99 |
| BAC | 42.39 |
| JPM | 43.85 |
| USB | 32.26 |
| WFC | 29.27 |
| FCE-A | 36.67 |
3. Explanation in table form as to why a small decrease in asset values can make a leveraged company insolvent.
Example A shows each company has same Net Worth
| Company A – Liabilities to Equity 9X | Company B – Liabilities to Equity .1X | |
|---|---|---|
| Assets | 1000 | 110 |
| Liabilities | 900 | 10 |
| Equity | 100 | 100 |
Example B shows each company if Assets Values drop 11%, Company A becomes Insolvent
| Company A – Liabilities to Equity 9X | Company B – Liabilities to Equity .1X | |
|---|---|---|
| Assets | 890 | 98 |
| Liabilities | 900 | 10 |
| Equity | 1o Insolvent | 88 |
The above example shows us that excess leverage can be dangerous.
October 16, 2007
1. Companies I should watch (longs and shorts)
GE – green co?
CEGE – Mentioned in Grants some time back
US Bank
WMT
APOL
CODI
SEB
TK
AMGN
JOE
WFMI
MIC – Infrastructure
CLAY – Bond infrastructure and review?
Guinness Atkinson Funds
2. To see some activity in remodeling sector, kitchens and Baths. This is from my good friend Steven Weinberg.
KBB Kitchen News
Kitchen and Bath Design News
3. Keep reading and re-reading about 1929.
4. Number of people born each year.
5. Dow Theory said on 9/4, watch the lows of 8/16. If both DJIA and DJT pierce those lows, bearish signal. DJIA 12,845.78 and DJT 4672.35.
6. Warren purchased in 1981? Rates were 14%. What made him invest when alternative rates were so high? I could be incorrect on the date, and he may have discussed this in 1974.
7. Compare Payout ratios.
8. Screen for small caps?
9. Charles Mulford likes the “Total Asset Ratio.” He feels it helps you determine quality of earnings, assets, etc. Measure the velocity of change in ratio.
Total Asset Ratio = Total Assets / (Revenues/365)
10. Some Ramblings:
A. Investment Thesis:
Company’s will lose growth naturally via slowdown (recession, maybe not all sectors). This will be magnified via loss of securitization gains, and maybe even losses. On top of that, securitizations will cause liquidity issues. Look for covenant breakages. Look to see if Beazer was loved by VL and Morningstar (John already pulled this).
B. If there is a slow-down, and it doesn’t occur in all sectors, what sectors might be okay?
a. Insurance?
b. Pharmas?
c. ? (maybe revisit 1973 -1974 stock performances.) I have book on last 100 years on Wall Street.
d. Bridge builders – it looks like bridge infrastructure and repair will get popular
So much fun.
11. What happened to investment companies in 1929? How about 1973 -1974. Specifically looking for the closed ends, Berkshires and Brookfields.
April 18, 2007
1. Companies to consider watching on a rainy day
GE – market barometer
ASTI – Supposedly buys defaulted mortgages cheaply at $0.03 to $0.04. Hi ROE.
UGTH – Percoco Spec
CLAY – loan investigator?
FORM – GTI
GS
BMY
Novartis
TDG
Hitachi
2. Hickey said he liked EMC about 3 months ago
3. Don’t forget dividend companies, Vince mentioned FDG, BTU and ACI.
4. What is Baupost doing?
5. Don’t forget the 2 minute drill
6. Read Ben Franklin and consider Christian Science Monitor.
7. Consider subscribing to TWST
8. Percoco mentioned Alternative energy on 3/19/07 such as DESC, Suntek, Energy Conversion, STP, Hydronix, Praxair and Airgas Products
9. Search the small caps
10. I wrote CECO and SIGI on 2/7/07
11. Spoke with BCA research, asked about 1973/74 scenarios. They see ample liquidity. “Watch Interest rates compared to GDP growth. They mentioned that Global GDP should be looked at in comparison to interest rates. Are rates rising during GDP slowdown? If so, then liquidity gets drained.” “Watch inflation rates, TIPS and means of central banks.”
12. Consider Pairing COP, XOM and CVX.
13. Read Wall Street Journal from 1929 – 1934
January 3, 2007
Watch Closely
1. Inflation / Stagflation / Deflation
2. Interest Rates
3. Growth Rates
4. Frustration levels
5. Reversion always wins!!!!!
6. Study the past to win in the future.
7. Recession???
8. World Credit. ( what happens if flowing water of equity stops?)
9. Watch The Bonds!!!!
10. Mortgage default rates, accruals and pay-option mortgages
Themes
1. Consumer slowdown – watch employment levels, inflation, inventory levels, consumer retrenchment, increased savings
2. Look for possible patterns of beginnings of previous severe bear markets.
3. Look for how long it took in prior cycles for employment rates to change. Was it quick or slow progression.
4. Lenders have expressed that employment levels are the best indicator to watch.
5. Manufactured Housing (MH) produced over 378,000 units in 1998. Projected totals for 2006 are under 120,000 units. To get an idea of what housing can do, one might want to look to see how long it took for inventory levels to adjust. It is my understanding that towards 4Q06 was the first time that MH inventory was finally “worked off.” Speaking of MH, every so often , I might want to search “Barry Vogel Associates.”
6. “Exiting early could be costly, but exiting late could be disastrous.”
7. Inventories – look for bloat…might be a lagging indicator…companies can produce inventory, expecting to sell, this creates eps, yet if they build, charges will occur (be it non-cash). That scenario would of course affect margins, budgets, etc. Look at related metrics.
8. Watch interest rates…remember Zweig
9. Watch liquidity of World
10. Watch Industrial Production.
11. Watch Copper prices – Richard Russell reminds us of Dr. Copper. In 12/06 he was concerned if Copper went under $300. As I write this copper is at approximately $260.
12. Jamaica (JSE)
a. Infrastructure
b. Beer – Diago PLC ( I think they own 20% of Red Stripe)
c. Water, roads, builders, capital, agriculture, Savings rate and Government
13. Preservation of Capital
14. Stay focused and unemotional in investing. (fear, euphoria)
Investments I might want to look at:
1. Amazon
2. Washington Mutual – I read that Nygren likes them. I should compare their fundamentals to CountryWide.
3. Home Depot
4. Nabors – Grant’s mentioned them favorably in mid to late 2006.
5. Currency Funds – ICPHX and MERKX
6. Alternative Energies – Hydrogen
7. Dataram (DRAM) – I heard a decent to high dividend
8. Ski Mountains – Final consolidator, years from now, could be cool. American Skiing Company (AESK)
9. NLY and TMA – look for near Book Value
10. Assorted companies
SNE
ALTR
ADPT
PKH – Steve P likes
DNA
WTM
LYG
Appolo
IMCL
Blackrock Energy
MH – CAV
GMCR
SSG
Morgan Stanley
All Exchanges ala Dreman
Company Themes
1. Google – might be a cyclical
2. HOG – consumer retrenchment
3. BBBY- consumer retrenchment
4. CFC/FED/DSL – Quality of earnings and accounting accruals.
5. Merck – watch the bonds
Economic Profit
1. ROIC – Return on Invested Capital
2. Economic Profit = Accounting Profit – Cost of Equity (COE).
a. COE being “what can you expect elsewhere?”
b. COE% X Shareholder Equity
3. EVA = NOPAT – WACC% X Total Capital
To Do List
1. Study and understand stock option rules. Very confusing since 123R. Difficult to interpret, manipulate, etc. Especially Statement of Cash Flows.
January 6, 2006
Theme for 2006 (just a possibility, not bankrolling this theme)
Housing Bust
speculators
consumer spending retrenchment
sub-prime lenders
Watch the 30 year rates (interesting, although short term rates have risen since 6/04, I have been tracking one lender and their mortgage rates. here is a table of some comparisons.
Type (no points) Jan 3, 06 June 30, 04
15 year Fixed 5.625% 5.25%
25 Year Fixed 6.125% not listed
20 Year Fixed 6.000% 5.75%
30 Year Fixed 6.125% 6.25%
1 Year Arm 4.625% 4.00%
3/1 year Arm 5.000% 4.25%
5/1 Year Arm 5.250% 4.875%
7/1 Year Arm 5.625% 5.250%
10/1 Year Arm 6.000% 5.875%
loan max for above $1.5M $750K
2. People I admire
Buffett
Springsteen
Others , just not listing em
3. Housing Inventory Ratio
Housing Inventory Ratio = Supply for Sale (or inventory)/Monthly Sales
4. Review all lesser looked at positions closely.
5. “It takes 20 years to build a reputation and 5 minutes to ruin it.” Warren Buffett
6. Things to look at
GRMN
NOVL
ADPT
Borland
Imclone
ADM (sugar and fuel)
Monsanto (feed the world, reduce needs of fertilizers)
7. OID said, and i think it was munger who quoted it
something like this, “recognize mistakes, and act on that recognition, and you will turn lemons into lemonade”
8. Friend of mine said seat on NYSE is worth $5.1M I don’t know if that was a sale price in Dec 05, or if it was his interpretation of value. This is good to know if you own a position in a specialist or owner of seats.
Richard Russell says, watch the djia and make sure it doesn’t close below 10,717.50
another oid on buffett and gold – I eliminated my 13 year precious metals position during 2005. It bothered me, that I couldn’t figure out the reason it was a “safe haven” or “money substitute”. I then reread OID year end 2000 and I think buffett said he grew up with gold, his dad loved gold, but he never understood it.
just some ramblings, doing lots of work on various positions. came off a real good year, hope to improve upon that. Returns last year for accounts that allowed shorting were beyond my expectations. Most accounts exceeded djia, spx and ixic. yet, i am only a long term investor and dont give a hoot about short term results.
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