The Stingy News Weekly (10/23/2011)
| "In the short run, the market is a voting machine but in the long
run it is a weighing machine." | |
| - Benjamin Graham | |
Stingy Links
BMO set Monthly Income distribution bar too high
"With nearly 1/3 of distributions having been taken in cash since
2008, sustainability is a legitimate concern generally and a
big concern for any investor relying on this fund’s fat payout to
pay living expenses. BMO insists the payout is sustainable, an
assertion they base on the fund’s net inflows. Indeed, while the
fund has spent its last two full fiscal years in net
redemptions, reinvested distributions have generally kept more money
flowing into the fund than leaving. The only exception so far was
2008, when the fund saw net redemptions of $436 million including
reinvested distributions. But this speaks only to the mechanics of
where the money comes from. When I mention “sustainability” in
this context, I’m speaking to the fund’s potential to support
the payout with a sufficiently high total return. And on that
basis, there are good reasons to continue questioning its
sustainability."
Economics has met the enemy it's economics
"What is today known as economics arose out of two larger
intellectual traditions that have since been largely abandoned. One is
political economy, which is based on the simple idea that
economic outcomes are often determined largely by political factors
(as well as vice versa). But when political-economy courses first
started appearing in Canadian universities in the 1870s, it was
still viewed as a small offshoot of a far more important topic:
moral philosophy. In The Wealth of Nations (1776), Adam Smith
famously argued that the pursuit of enlightened self-interest by
individuals and companies could benefit society as a whole. His
notion of the market's “invisible hand” laid the groundwork for
much of modern neoclassical and neo-liberal, laissez-faire
economics. But unlike today's free marketers, Smith didn't believe
that the morality of the market was appropriate for society at
large. Honesty, discipline, thrift and co-operation, not consumption
and unbridled self-interest, were the keys to happiness and
social cohesion. Smith's vision was a capitalist economy in a
society governed by non-capitalist morality."
Tax math
"Let’s consider two key areas of the tax code, where “first-stage
thinking” allows Buffett to conclude that he’s paying a lower
tax rate than his secretary. Once we view the picture from the
proper perspective and engage in “second-stage thinking,” you’ll
see that Buffett’s effective tax rate is much higher than it
seems."
The science of irrationality
"Here's a simple arithmetic question: 'A bat and ball cost $1.10.
The bat costs $1 more than the ball. How much does the ball
cost?' The vast majority of people respond quickly and confidently,
insisting the ball costs 10 cents. This answer is both
incredibly obvious and utterly wrong. (The correct answer is five cents
for the ball and $1.05 for the bat.) What's most impressive is
that education doesn't really help more than 50% of students at
Harvard, Princeton and the Massachusetts Institute of Technology
routinely give the incorrect answer."
DOW 30 Value Screens
| High Dividend Yield Stocks | P/E | P/B | P/S | Yield | | AT&T (T) | 5 | 4 | 3 | 5 |
| Verizon (VZ) | 2 | 3 | 4 | 5 |
| Merck (MRK) | 1 | 4 | 2 | 5 |
| Pfizer (PFE) | 1 | 4 | 2 | 5 |
| General Electric (GE) | 3 | 5 | 3 | 5 |
| EI DuPont (DD) | 4 | 2 | 3 | 5 |
| Johnson & Johnson (JNJ) | 2 | 3 | 1 | 4 |
| Intel (INTC) | 4 | 3 | 1 | 4 |
| Kraft (KFT) | 1 | 4 | 3 | 4 |
| Procter & Gamble (PG) | 1 | 3 | 1 | 4 |
| Notes | More Info... |
| Low Price/Earnings Stocks | P/E | P/B | P/S | Yield | | Hewlett-Packard (HPQ) | 5 | 5 | 5 | 2 |
| JP Morgan Chase (JPM) | 5 | 5 | 3 | 4 |
| AT&T (T) | 5 | 4 | 3 | 5 |
| Chevron (CVX) | 5 | 4 | 4 | 4 |
| Microsoft (MSFT) | 5 | 1 | 1 | 2 |
| Exxon Mobil (XOM) | 4 | 3 | 4 | 2 |
| Travelers (TRV) | 4 | 5 | 4 | 3 |
| Intel (INTC) | 4 | 3 | 1 | 4 |
| Alcoa (AA) | 4 | 5 | 5 | 1 |
| Wal-Mart (WMT) | 4 | 2 | 5 | 2 |
| Notes | More Info... |
| Value Ratio Stocks | P/E | P/B | P/S | Yield | V.R. | | AT&T (T) | 5 | 4 | 3 | 5 | 1.44 |
| JP Morgan Chase (JPM) | 5 | 5 | 3 | 4 | 2.39 |
| Chevron (CVX) | 5 | 4 | 4 | 4 | 3.11 |
| Intel (INTC) | 4 | 3 | 1 | 4 | 3.15 |
| Verizon (VZ) | 2 | 3 | 4 | 5 | 3.22 |
| Hewlett-Packard (HPQ) | 5 | 5 | 5 | 2 | 3.30 |
| EI DuPont (DD) | 4 | 2 | 3 | 5 | 3.45 |
| General Electric (GE) | 3 | 5 | 3 | 5 | 3.49 |
| Travelers (TRV) | 4 | 5 | 4 | 3 | 3.79 |
| Pfizer (PFE) | 1 | 4 | 2 | 5 | 4.24 |
| Notes | More Info... |
| US Stock Summary | Yield | P/E | V.R. | | AT&T (T) | Y | Y | Y |
| Intel (INTC) | Y | Y | Y |
| Chevron (CVX) | | Y | Y |
| EI DuPont (DD) | Y | | Y |
| General Electric (GE) | Y | | Y |
| Hewlett-Packard (HPQ) | | Y | Y |
| JP Morgan Chase (JPM) | | Y | Y |
| Pfizer (PFE) | Y | | Y |
| Travelers (TRV) | | Y | Y |
| Verizon (VZ) | Y | | Y |
| Alcoa (AA) | | Y | |
| Exxon Mobil (XOM) | | Y | |
| Johnson & Johnson (JNJ) | Y | | |
| Kraft (KFT) | Y | | |
| Merck (MRK) | Y | | |
| Microsoft (MSFT) | | Y | |
| Procter & Gamble (PG) | Y | | |
| Wal-Mart (WMT) | | Y | |
| Notes... |
S&P/TSX60 Value Screens
| High Dividend Yield Stocks | P/E | P/B | P/S | Yield | | Enerplus (ERF) | 1 | 4 | 1 | 5 |
| Penn West Petroleum (PWT) | 3 | 5 | 2 | 5 |
| Sun Life Financial (SLF) | 5 | 5 | 5 | 5 |
| BCE Inc. (BCE) | 2 | 2 | 4 | 5 |
| Canadian Oil Sands (COS) | 5 | 2 | 2 | 5 |
| TransAlta (TA) | 3 | 3 | 4 | 5 |
| Husky Energy (HSE) | 3 | 4 | 4 | 5 |
| Bank of Montreal (BMO) | 4 | 4 | 3 | 5 |
| ARC Resources (ARX) | 1 | 2 | 1 | 5 |
| Power Corp of Canada (POW) | 4 | 4 | 5 | 5 |
| Notes | More Info... |
| Low Price/Earnings Stocks | P/E | P/B | P/S | Yield | | Research In Motion (RIM) | 5 | 5 | 5 | 0 |
| Nexen (NXY) | 5 | 5 | 4 | 2 |
| Inmet Mining (IMN) | 5 | 5 | 2 | 1 |
| Brookfield (BAM.A) | 5 | 5 | 4 | 2 |
| Sun Life Financial (SLF) | 5 | 5 | 5 | 5 |
| Bombardier (BBD.B) | 5 | 1 | 5 | 3 |
| Magna (MG) | 5 | 5 | 5 | 3 |
| Iamgold (IMG) | 5 | 2 | 1 | 1 |
| Canadian Oil Sands (COS) | 5 | 2 | 2 | 5 |
| National Bank (NA) | 5 | 3 | 3 | 4 |
| Notes | More Info... |
| Value Ratio Stocks | P/E | P/B | P/S | Yield | V.R. | | Sun Life Financial (SLF) | 5 | 5 | 5 | 5 | 1.29 |
| Canadian Oil Sands (COS) | 5 | 2 | 2 | 5 | 1.78 |
| Bank of Montreal (BMO) | 4 | 4 | 3 | 5 | 2.40 |
| Penn West Petroleum (PWT) | 3 | 5 | 2 | 5 | 2.41 |
| CIBC (CM) | 4 | 2 | 3 | 5 | 2.42 |
| Power Corp of Canada (POW) | 4 | 4 | 5 | 5 | 2.44 |
| TransAlta (TA) | 3 | 3 | 4 | 5 | 2.55 |
| National Bank (NA) | 5 | 3 | 3 | 4 | 2.64 |
| Husky Energy (HSE) | 3 | 4 | 4 | 5 | 2.65 |
| Bank of Nova Scotia (BNS) | 4 | 3 | 2 | 4 | 2.83 |
| Notes | More Info... |
| Canadian Stock Summary | Yield | P/E | V.R. | | Canadian Oil Sands (COS) | Y | Y | Y |
| Sun Life Financial (SLF) | Y | Y | Y |
| Bank of Montreal (BMO) | Y | | Y |
| Husky Energy (HSE) | Y | | Y |
| National Bank (NA) | | Y | Y |
| Penn West Petroleum (PWT) | Y | | Y |
| Power Corp of Canada (POW) | Y | | Y |
| TransAlta (TA) | Y | | Y |
| ARC Resources (ARX) | Y | | |
| BCE Inc. (BCE) | Y | | |
| Bank of Nova Scotia (BNS) | | | Y |
| Bombardier (BBD.B) | | Y | |
| Brookfield (BAM.A) | | Y | |
| CIBC (CM) | | | Y |
| Enerplus (ERF) | Y | | |
| Iamgold (IMG) | | Y | |
| Inmet Mining (IMN) | | Y | |
| Magna (MG) | | Y | |
| Nexen (NXY) | | Y | |
| Research In Motion (RIM) | | Y | |
| Notes... |
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