The PFI Group Investment club

[jeriko]

Out of VUOC

[jeriko]

Kenneth Fisher's 'Super Stocks' Approach Still Leaving Market in the Dust -
**
For decades, the price-to-earnings ratio has been the most widely used valuation measure for stock investors, and a key tool in the arsenals of many of the gurus I follow. While legendary investors like Benjamin Graham, Peter Lynch, and John Neff all used the ratio differently, they and many others agreed that the ratio itself was a key to finding bargain-priced stocks. The investing public and media seem to share their view, with the P/E ratio having long been the only valuation metric that most newspapers include in their daily stock listings.

But in 1984, Kenneth Fisher sent a shockwave through the P/E-conscious investment world. Fisher -- the son of Phillip Fisher, who is known as the "Father of Growth Stock Investing" -- thought there was a major hole in the P/E ratio's usefulness. Part of the problem, he explained in his book Super Stocks, is that earnings -- even earnings of good companies -- can fluctuate greatly from year to year, as companies replace equipment or facilities in one year rather than in another; use money for new research that will help reap profits later on; or change accounting methods.

While earnings can fluctuate, Fisher found that sales were far more stable. In fact, he found that the sales of what he termed "Super Companies" -- those that were capable of growing their stock price three to 10 times in value in a period of three to five years -- rarely decline significantly. Because of that, he pioneered the use of a new way to value stocks: The price-to-sales ratio (PSR), which compared the total price of a company's stock (its market capitalization) to the sales the company generated.

Fisher's findings helped make the PSR a common part of investment parlance, and helped make him one of the most well-known investors in the world. Over the years, Fisher has changed his approach significantly. But the Guru Strategy I base on Super Stocks continues to beat the market by a wide margin. Since its July 2003 inception, a 10-stock, monthly rebalanced portfolio picked using my Fisher strategy has gained 163.3%, or 13.9% per year. The S&P 500 over the same period has gained just 25.8%, or 3.1% per year.

Currently, access to this market-beating strategy (and several of my other Guru Strategies) is available through Seeking Alpha's Investing App Store. Let's take a look at just how the approach works.

Price-to-Sales and "The Glitch"

Fisher's observations about investor behavior are what led to his PSR discovery. Often, he found, companies will have a period of strong early growth and become the darlings of Wall Street, raising expectations to unrealistic levels. Then they have a setback: Their earnings drop, or continue to grow but simply don't keep pace with Wall Street's lofty expectations. Their stocks can then plummet as investors overreact and sell, thinking they've been led astray.

But while investors overreact, Fisher believed that these "glitches" are often simply a part of a firm's maturation. By buying shares in a good company when its stock is temporarily down due to a "glitch," you can make a bundle. The key, of course, is finding a way to evaluate a firm when its earnings are down (or when it is losing money). The answer: By looking at sales, and the PSR.

According to the model I base on Fisher's writings, stocks with PSRs below 1.5 are good values. And the real winners are those with PSR values under 0.75 -- that's the sign of a "Super Stock." To find the PSR, Fisher says to take the total value of a company's stock, i.e. its market cap (the per-share price multiplied by the number of shares outstanding). We then divide that number by the firm's trailing 12-month sales. For what Fisher called "smokestack" industries -- that is, industrial or manufacturing-type firms that make the everyday products we use -- lower PSRs are sought. They should have PSRs between 0.4 and 0.8, since their un-glamorous industries and businesses generally don’t command as high a price as other stocks.

Beyond the PSR

While the PSR was key to Fisher's Super Stocks strategy, he warned not to rely exclusively on it. Terrible companies can have low PSRs simply because the investment world knows they are headed for financial ruin.

Other quantitative measures Fisher used include profit margins (my Fisher-based model looks for three-year average net margins to be at least 5%); the debt/equity ratio (this should be no greater than 40%, and is not applied to financial firms); free cash per share (this should be positive); and earnings growth (the inflation-adjusted long-term earnings per share growth rate should be at least 15% per year).

What stocks currently meet these targets? Here's a look at a handful that my Fisher-inspired portfolio is keen on. Keep in mind that I always invest in baskets of at least 10 stocks, to diversify away some of the stock-specific risk that comes with using quantitative strategies.

Raytheon Company (RTN): This Massachusetts-based aerospace & defense giant is one of the few stocks that currently gets a perfect 100% score from my Fisher-inspired model. A few reasons: The $17-billion-market-cap firm has a PSR of 0.67, a reasonable 23% debt/equity ratio, $4.81 in free cash per share, and three-year average net profit margins of 9.0%.

Clearwater Paper Corp. (CLW): This Spokane, Wash.-based firm makes a variety of tissue and paperboard products, as well as lumber products. It's a small-cap ($900 million), and it also gets a 100% score from the Fisher approach, which considers it a "smokestack" company. The stock sports a PSR of 0.67, a whopping $17.45 in free cash per share, and three-year average net profit margins of 5.8%. It's also reasonably financed, with a debt/equity ratio of 36%.

GameStop Corp. (GME): Texas-based GameStop is the world's largest videogame retailer. The $3.4 billion market cap company gets a 90% from my Fisher-inspired model, thanks to its PSR of 0.37, debt/equity ratio of less than 9%, and long-term inflation-adjusted EPS growth rate of 28.8%. The lone blemish: Its three-year average net profit margins are 4.3%, falling just short of the model's 5% target.

Aeropostale, Inc. (ARO): Headquartered in New York City, this mall-based teen clothing retailer ($2.2 billion market cap) gets a 90% score from the Fisher-based approach. Its PSR isn't low enough to make it a Super Stock, but at 0.91 it still indicates that the stock is a good value. The firm passes all of the other Fisher-based tests, sporting no long-term debt, a 31.3% long-term inflation-adjusted EPS growth rate, $2.78 in free cash per share, and three-year average net profit margins of 8.8%.

Ross Stores (ROST): California-based Ross is the U.S.'s second-largest off-price retailer. The $7.5-billion-market-cap firm gets a 90% score form my Fisher-based model. Like Aeropostale, it has a solid but not-quite-Super-Stock-worthy PSR, which comes in at 0.98. Its other fundamentals are very strong, and include an 11.7% debt/equity ratio, $5.40 in free cash per share, and 24.4% long-term inflation-adjusted EPS growth rate.

Disclosure: I am long RTN, CLW, GME, ARO, ROST.

About the author: John Reese

[jeriko]

Using FINVIZ stock screener.
Using fundamental analysis you attempt to predict future pps, use technical analysis (TA) or charting in an attempt to project it.
Use TA & charting for entry, once an investment is decided on.

Start buy finding the best sector.
http://www.finviz.com/groups.ashx?g=sector&v=110&o=name

Next you want to find the best performance within that sector.
http://www.finviz.com/screener.ashx?v=141&f=sec_basicmaterials&o=-perf52w
Look for consistent growth over time. Look at the weekly, monthly, half, and year % of growth.
Check the chart by placing pointer over symbol, look for long term tight upward channels.

Once you've found a stock or have a list, move on to check what the Insiders & Institutional investors are doing. Type your symbol list into the tickers area, using ownership.
http://www.finviz.com/screener.ashx?v=131&f=sec_basicmaterials&o=-perf52w&t=TGA
Find the largest institutional ownership, with increasing purchases and the smallest amounts of shorts.
You have just found the best of breed, with the largest big guy interest.
You're Welcome

[jeriko]

CLFD - Order complete - 250 @ 4.00

[jeriko]

BANR - 12/16/10 Insider buy.
Steven Rust Executive VP
625 shares at 1.62 - 6824 shares tot.

[jeriko]

Update -
Year end meeting at Fazzaris 12/8/10.
One decision - CLFD - $1K buy set.

[jeriko]

For those members nervous about Cytosorb, read this;

http://etd.library.pitt.edu/ETD/available/etd-07222010-191334/unrestricted/Valenti_MS_2010.pdf

It proves the technology works. It will not be long.

[jeriko]

Update
sold cnh - 39.54 - re-buy on dip
buy casb - .43 - financial sector
buy vuoc - .59 - manufacturing sector
buy banr - 1.64 -
buy axl - 8.98
1K on the sidelines

All moves voted upon @ last meeting

[jeriko]

CytoSorb helped stabilize a 71 year old man in septic shock from
gangrenous bowel in the US being treated under an
Emergency Use protocol. In four days, patient was off
the ventilator, off vasopressors and stable enough to
do additional surgery

[jeriko]

GRMN - in @ 28.00
CNH - in @ 29.20

[jeriko]

Buys for the two stocks agreed upon last meeting are set.

[t-roy]

Might look at SOPW.....as the solar pick. I have looked at quite a few stocks and this looks to me to be the best that I have been able to come up with. Most are very low floaters w/ little volume. Please look it over and I'll do some DD as best I can before next meeting.

[jeriko]

Meeting 7/6
Approved stocks
CAB @ 13.69 - 72
BANR @ 2.22 - 450
AXL @ 7.63 - 131
Also approved CNH & GRMN - 500 each
Waiting for funds to clear to execute
************************************
Watch list
VUOC - Vu1 - currently @ .43
SNDK - Sandisk - currently @ 42.90
CADE - @ 1.37 coming back up
SPMI -
CPST
MPG
************************************
Research -
T-Roy to research solar/Green stocks
for next meeting.
************************************
Agreed to sell the Eigh & PDGE

[jeriko]

Obama Announces $2 Billion For Solar Energy Projects

Read more: http://www.triplepundit.com/2010/07/obama-announces-2-billion-for-solar-energy-projects/#ixzz0tJCWFUPm

[jeriko]

CTSO - All members should look at the presentation below in order to know what it is you own.

http://02c390e.netsolhost.com/pdf/CytoSorbents_Corporation_June_2010_Investor_Presentation.pdf

[jeepmaster]

WOULD LIKE TO LOOK AT GETTING INTO SOME FINANCIAL STOCKS, LENDING IS GOING TO HAPPEN AGAIN. REAL ESTATE (MPG) ETC ETC ETC. NEED TO BE IN THE MARKET NOW. THANKS FOR NOT HOGGIN THE BLOGGIN JERIKO.

[jeriko]

T-Roy - Thanks for posting.
Yes, much money remains on the sidelines

[t-roy]

We need to get on board w/ VUOC soon fellas. Jeriko did all the homework and I think this will be a good one in a few months, and possibly a real monster in a couple years if this technology is what they say it is!!! Lets GET ER DONE..............

[jeriko]

pfi group watch list

bp
mons
cpst
cade
eigh
mpg
c
s
att

[jeriko]

list of loved swingers for dummies

qasp
eigh
zlus
geta
cctc
cbai

[jeriko]

Vu1 Corporation Announces Plans for 2010
Company Demonstrates Progress Towards Product Introduction in 2010
SEATTLE, WA--(Marketwire - May 20, 2010) - Vu1 Corporation (OTCBB: VUOC), a provider of non-toxic, energy efficient general illumination light technology, today reported its product status and plans for the remainder of 2010.
"Driven by the hard work and commitment of everyone at Vu1, the company has overcome a number of challenging technical difficulties which delayed our anticipated initial product introduction in 2009. In spite of limited available funding, we have continued to refine our technology and have made significant progress in improving efficacy, reliability, performance and size-reduction while reducing our material costs," said R. Gale Sellers, Vu1 Chief Executive Officer. Vu1 has continued to be featured as a "breakthrough new technology to watch" in such publications and blogs as The New York Times, LEDs Magazine, Residential Lighting, Huffington Post, Popular Science, CNET, Xconomy, Gizmodo and others.
Vu1 is pleased to announce the following accomplishments -
Product Development -
Arrangements have been made with Underwriters Laboratories™ for the Vu1 ESL R-30 bulb to begin UL certification testing in June 2010.
Key components of our Electron Stimulated Luminescence (ESL™) technology have been refined including the electron source, integrated electronics and luminescent materials.
Electronics have been miniaturized to support the Vu1 R-30 bulb being a direct replacement for all existing R-30 fixtures and trim kits.
The company has increased its bulb's "Power Factor" (efficiency on the grid) to .99 which we believe exceeds all other energy efficient lighting technologies.
Vu1 has improved the bulb's efficacy and believes that with sufficient funding it is on target to deliver a 19W, 600 lumen, dimmable R-30 reflector bulb later this year.
The company anticipates significant improvements in energy-efficiency and bulb life through ongoing research and development.
Sales and Marketing -
Over 200 independent lighting distributors have expressed interest through our web site to distribute ESL bulbs into a variety of channels including hospitality, municipal buildings, museums, and cruise ships.
Keen interest in ESL lighting has been expressed by major U.S. utility consortiums on the East and West coasts culminating in several meetings and ongoing progress discussions.
Meetings have been held with several of the largest retailers, electrical distributors and eCommerce lighting resellers in the US and EU.
ESL Competitive Advantage -
ESL technology will provide the best combination of safety, non-toxicity, incandescent light quality, performance and affordability of any energy efficient lighting technology.
Vu1 ESL bulbs will be a screw-in retrofit solution for the incandescent bulbs they replace.
The characteristics of ESL technology will allow Vu1 products to most closely match incandescent light quality when compared spectrally to other energy efficient technologies.
ESL will swiftly reach the affordability factor CFL's now offer without having to compromise light quality, instant brightness, dimming or consumer safety.
In the recessed can market, LEDs suffer constraints due to the high heat environment. ESL will be a superior, cost effective solution for addressing the 800 million recessed can fixtures in the US.
Vu1 anticipates ESL bulbs will always be significantly less expensive than LED's while offering superior light quality.
Vu1 has begun testing ESL technology in other bulb shapes and sizes. The most interesting is in a linear tube configuration that may provide a fully dimmable, energy efficient replacement for the common fluorescent tube.
Key Milestones for 2010 -
With sufficient funding, the company anticipates further progress through the remainder of the year to the point of reaching commercialization of ESL technology in Q4 2010 in the following steps:
Product - Completion and Certification (June - August 2010)
Product - Channel Evaluation (August - October 2010)
Product - Introduction (October - December 2010)
Vu1 recently attended Light Fair 2010 and held meetings with distributors. We were very encouraged to find continuing support for our bulb. The distributors we spoke to reaffirm the need for a non-toxic, affordable, fully dimmable, incandescent light quality replacement for the soon to be banned incandescent light bulb is still needed and the current energy-efficient lighting solutions fall short of consumer desires.

[jeriko]

Stocks to look at -
MON - need more research
vuon - check this out - see earlier posts
s
c
mpg
cpst - buy signals now
cade - watch list

[jeriko]

Good article comparing light technologies - including
Electron-Stimulated Luminescence

http://www.gaiadiscovery.com/latest-planet/analysis-energy-efficiency-of-domestic-lighting-halogen-cfl.html

Key Company info:

Vu1 is pleased to announce the following accomplishments -

Product Development -
· Arrangements have been made with Underwriters Laboratories™ for the Vu1 ESL R-30 bulb to begin UL certification testing in June 2010.
· Key components of our Electron Stimulated Luminescence (ESL™) technology have been refined including the electron source, integrated electronics and luminescent materials.
· Electronics have been miniaturized to support the Vu1 R-30 bulb being a direct replacement for all existing R-30 fixtures and trim kits.
· The company has increased its bulb’s “Power Factor” (efficiency on the grid) to .99 which we believe exceeds all other energy efficient lighting technologies.
· Vu1 has improved the bulb’s efficacy and believes that with sufficient funding it is on target to deliver a 19W, 600 lumen, dimmable R-30 reflector bulb later this year.
· The company anticipates significant improvements in energy-efficiency and bulb life through ongoing research and development.






Sales and Marketing –


· Over 200 independent lighting distributors have expressed interest through our web site to distribute ESL bulbs into a variety of channels including hospitality, municipal buildings, museums, and cruise ships.
· Keen interest in ESL lighting has been expressed by major U.S. utility consortiums on the East and West coasts culminating in several meetings and ongoing progress discussions.
· Meetings have been held with several of the largest retailers, electrical distributors and eCommerce lighting resellers in the US and EU.


ESL Competitive Advantage –
· ESL technology will provide the best combination of safety, non-toxicity, incandescent light quality, performance and affordability of any energy efficient lighting technology.
· Vu1 ESL bulbs will be a screw-in retrofit solution for the incandescent bulbs they replace.
· The characteristics of ESL technology will allow Vu1 products to most closely match incandescent light quality when compared spectrally to other energy efficient technologies.
· ESL will swiftly reach the affordability factor CFL’s now offer without having to compromise light quality, instant brightness, dimming or consumer safety.
· In the recessed can market, LEDs suffer constraints due to the high heat environment. ESL will be a superior, cost effective solution for addressing the 800 million recessed can fixtures in the US.
· Vu1 anticipates ESL bulbs will always be significantly less expensive than LED’s while offering superior light quality.
· Vu1 has begun testing ESL technology in other bulb shapes and sizes. The most interesting is in a linear tube configuration that may provide a fully dimmable, energy efficient replacement for the common fluorescent tube.
Key Milestones for 2010 –
With sufficient funding, the company anticipates further progress through the remainder of the year to the point of reaching commercialization of ESL technology in Q4 2010 in the following steps:
· Product - Completion and Certification (June – August 2010)
· Product - Channel Evaluation (August – October 2010)
· Product – Introduction (October – December 2010)

[jeriko]

VUOC - Vu1 Corporation
My shiny new pick for the club. Below is some quick DD from their website & some 10K/10Q excerpts:

Vu1 Technology

Introducing: Electron Stimulated Luminescence™ Lighting Technology

Electron Stimulated Luminescence (ESL™) Lighting Technology is an entirely new, energy efficient lighting technology. It is neither incandescent, fluorescent nor LED.

To contrast:

Incandescent bulbs heat a filament to generate light.
Compact Fluorescent Lights (CFL) send a current through a mercury vapor that emits UV light to excite a phosphor.
Light Emitting Diodes (LED) create light by electrically stimulating a semiconductor material
ESL Lighting Technology uses accelerated electrons to stimulate phosphor to create light, making the surface of the bulb “glow”. ESL Technology creates the same light quality as an incandescent but is more energy conserving. There is no use of the neurotoxin Mercury (Hg) in the lighting process.

Proven & Safe

In creating ESL Technology, Vu1 merged several existing and proven technologies then uniquely adapted them for “lighting”. Vu1 uses commonly sourced, non-hazardous, commercial materials that are customized to our specifications. Our ESL Technology is encased in light bulb glass which is sourced from existing light bulb glass manufacturers.

We are currently developing a highly energy efficient, perfect light quality (identical to incandescent), mercury-free light bulb.

Safe as a lighting source, the ESL Technology fits neatly into classic light bulb shapes similar to those familiar to consumers everywhere. This eliminates the need to bend the technology into an unusual, twisted spiral shape (CFL) or have costly and heavy heat dissipation designed into the bulb housing (LED).

Key gate-keeping elements of the technology and associated manufacturing processes are patent pending.

The arrival of Vu1's ESL Technology adds an important new path for residential lighting options.

For energy efficiency,Vu1 is targeting to be two-thirds more efficient than the incandesent bulb

However, unlike either the CFL or the LED, Vu1 carries forward desirable incandescent lighting features loved by consumers today:

• perfect light quality
• instant-on
• ability to fully dim

In a world where consumers and governments are growing increasingly sensitive to Climate Change impacts, the carbon footprint size of a product throughout its lifecycle really matters. ESL Technology has a favorably small footprint beside the huge manufacturing and disposal costs footprints being generated by LED and CFL light bulb technology.

Initially, we plan to produce various sizes of Vu1-branded, ESL-powered Reflector Bulbs – the downlights commonly used in residential kitchens, dining rooms and living areas.

ESL Technology can be further adapted to many different types of bulbs. We will consider expanding into other bulb forms such as A-Bulb, Fluorescent Tube, PAR and others based on demand and available resources.
************************************************

Excerpts from the latest 10Q & 10K:

"we anticipate we will incur substantial costs related to the planned production in third quarter of 2010 related to purchases of raw materials and supplies, marketing, sales and distribution related costs, and increased administrative costs."
This is because of the production run of the R30 within the next few months.

"Our cash was approximately $93,000 as of March 31, 2010 and is not sufficient to support our reduced levels of operations. In April and May, 2010 Full Spectrum and SAM advanced an additional $555,500 under their respective Notes."

Since they are in transition from R&D to production this is how they have been financing their business every quarter. While tenuous they are very near to production.

Technically speaking they are very near a 2 year low of .30 - the two year high is 1.50.
It appears that a turn-around is imminent.

86.2mil shares outstanding - 31.9mil market cap
49mil float! That means when this baby moves it's gonna move.

"Wow Jeriko, all this DD? You must have a lot of time to search stocks." - Not really, this took about 20 minutes

Oh yeah, your welcome

[jeriko]

Monsanto - One beat down Big Board Stock -
MON is as low as it's been for three years.
At 54.11/share it has been as high as 142.24 last June/July.
This is meat & potatoes here.
This one will come back.

[jeriko]

Company Name Change to CytoSorbents Corporation

MedaSorb Technologies Announces Company Name Change to CytoSorbents Corporation

Date : 05/06/2010 @ 6:18PM
Source : MarketWire
Stock : MedaSorb Technologies Corporation (MSBT)

http://ih.advfn.com/p.php?pid=nmona&article=42701834&symbol=MSBT

MONMOUTH JUNCTION, NJ -- (Marketwire)
05/06/10
MedaSorb Technologies Corporation, formerly trading under the symbol (OTCBB: MSBT), has formally changed its company name to CytoSorbents Corporation. Pursuant to the name change, effective at the open of business on May 7, 2010, the new ticker symbol for the Company will be (OTCBB: CTSO).

For additional information on the Company, please see our Form 10-K filed with the SEC on April 9, 2010 under our former name MedaSorb Technologies Corporation, which is available at www.sec.gov.

[jeriko]

Reasons to own SpeedEmissions -

SPMI currently has over $9 million in assets.

SPMI has good POSITIVE cash flow.

SPMI has $671,604 CASH on their balance sheet.

SPMI reduced accounts payabale from $498,554 to $227,850 - over a 50% reduction from last year's balance owed.

SPMI only holds good debt.

SPMI reduced their total liabilities last year by roughly $250,000.

SPMI operates 53 testing centers in 4 of the 32 states required by law to perform emissions testing. Soon all 50 states will require vehicle emissions testing and SPMI is well positioned to capture substantial market share in a $2+ billion annual industry.

SPMI is currently generating approximately $10,000,000 in annual revenue. Revenue has been consistently increasing at a rate of around 3% to 4% per quarter.

SPMI only has roughly 7.4 million shares issued and outstanding. At the current price of $.05, that leaves the company with a market capitalization of only $370K!

SPMI is grossy undervalued. If the company were to liquidate all of its assets at say 50% book value...that would still generate around $4.5 million after the sale
. The company also has over half a million in cash on hand which would leave around $5 million total. A $5 million dollar market cap would give this company a price per share of around $1.

SPMI is poised to become a national name as they continue to grow and expand into other states

[jeriko]

Sure smells like dilution to me:

HELIX WIND EXECUTES 'SECOND NOTE' OF FINANCING
Posted by marin2008
Friday, 30 April 2010
Helix Wind, Corp. (OTC Bulletin Board: HLXW), a global renewable energy company, announced today the receipt of the second tranche, totaling $100,000, in the continuation of financing from St. George Investments, LLC.
As previously announced on April 6, 2010, the company secured financing from St. George Investments, LLC amounting to a total of $599,500 in funding with the potential to execute four additional Convertible Secured Promissory Notes. The receipt of the second tranche was accelerated for delivery to the Company on April 26, 2010 by executing the "Second Note." The remaining three additional notes with St. George are now anticipated to be executed over the next 75 days. Additional information can be found in Helix's Form 8-K, filed with the U.S. Securities and Exchange Commission on April 6, 2010.
Scott Weinbrandt, Helix Wind's Chairman, CEO & President said, "We are pleased to have executed the Second Note which was part of the financing transaction with St. George Investments and to have received funding earlier then scheduled. This funding, plus the remaining three notes in this round of financing will allow the Company to continue its efforts in completing Phase I of its operational plan. This includes completing the audit, filing its Form 10K, its first quarter Form 10Q, and completing the S-1 registration statement, while taking care of our customer base. We will continue to focus on securing the next tranche of capital with our financial partner, St. George Investments to get closure to enabling Helix to execute our next phase which is intended to allow Helix to pursue the numerous growth opportunities which have been identified."

[jeepmaster]

I love it when you get a guy on these boards that is passionate about a stock we have. I'll drink the Kool-Aid. MSBT is tested in Germany, forward thinking countries.

[jeriko]

MSBT - Efficacy Study of CytoSorb Hemoperfusion Device on IL-6 Removal in ARDS/ALI Patients With Sepsis
This study is currently recruiting participants
http://clinicaltrials.gov/ct2/show/NCT00559130

All shareholders of MSBT should view this presentation to know what it is you own:

http://webcastingplayer.corporate-ir.net/player/PlayerHost.aspx?EventId=2674413&StreamId=1420772&TIK=

[jeriko]

Investing like Warren Buffett
What’s behind his investment success?
This perennial topic was the subject of a recent article from Morningstar©, the Chicago firm that
evaluates mutual funds, stocks and other investment vehicles. What follows is based on that article.
Investing like Buffett implies:
· Looking for economic moats.
· Always having a margin of safety.
· Being patient.
· Never deviating from your strategy,
despite what others around you are doing.
It also implies acting boldly once you’ve made a decision; and taking a substantial position in the
investment you’re making. (Buffett has been quoted as saying that “…diversification is a hedge
against ignorance…”)
It no doubt helps that Buffett is brilliant and that he studied under famed value investor Benjamin
Graham. But his investing style is deceptively simple – so simple that almost everyone misses it.
Economic moats
Buffett requires a company to have a sustainable competitive advantage, or what he calls an
“economic moat.” That means he looks for companies that are virtually certain to have higher
earnings in five to ten years than today. Few companies meet this “virtually certain” criterion.
So, you don’t find stocks like Amazon.com or Yahoo in Buffett’s portfolio. Those companies may
have moats around them today. But no one – not even Buffett – can predict if they’ll still have that
moat in five to ten years.
What he tries to do is think about the company’s business as a whole, not just its financial aspects,
to determine whether it will survive indefinitely. He asks questions such as, “Am I fairly certain that
this company’s existing products will be around in ten or twenty years” and “Does this firm have a
unique advantage over others in its industry?” and “Will the health of this industry remain strong in
coming decades?”
If the answer to those questions is yes, Buffett will consider the stock. If the answer to any of those
questions is no, he moves on to another company.
So there are two components to an economic moat: The competitive position of an individual
company within an industry, and the long-term viability of the industry itself. For this reason,
it’s very difficult for an airline or chemical or automobile company to develop a wide moat –
these industries are probably going to get weaker over time, not stronger.
Margin of safety
Finding great companies is just the first step. Buffett realizes that the difference between a great
company and a great investment is the price you pay for it. He also realizes that he’s human and is
prone to making valuation mistakes. To account for this, Buffett uses a technique he calls “margin
of safety” which he defines (following his mentor Benjamin Graham) as buying a stock well below
his calculation of its “fair value.” He does this so that even if he makes a mistake in analyzing a
company, he can sell the stock at a higher price than he paid for it.
Buffett says he calculates fair value by estimating the future cash flows of a business and then
discounting them back to today. Using discounted cash-flow models, there are companies (like
Morningstar) that calculate and publish estimates of fair values for various stocks.
Investing is like gambling, in that both rely on playing the odds. But there’s one big difference
between gambling and investing Buffett-style. Gambling requires you to make bets in which the
odds of winning are less than fifty percent. When Buffett makes an investment, the odds of winning
are always greater than fifty percent or he won’t invest. He won’t always be right, but the odds will
always be on his side.
However, just because a stock’s cheap doesn’t mean Buffett will buy it. He typically avoids “cigarbutt
stocks” that are cheap for a good reason: They only have one or two puffs left in them. Lately,
he has purchased the debt and equity of companies in bankruptcy, but for most of his career that
was not the case.
Patience is a virtue
Buffett figures that as long as he buys companies that meet the first two criteria, their stock prices
are almost certain to be higher five or ten years later. And he doesn’t mind waiting that long for one
of his picks to pan out, provided the company still meets his investment criteria. This has to do with
his nontraditional definition of risk.
Most investors, especially professional investors, define risk as volatility (of price). As Buffett sees
it, if you’re willing to hold a stock for many years, volatility doesn’t matter. The only risk is that the
stock price will underperform a “hurdle rate” over the next five or ten years. Buffett defines this
hurdle rate as a ten percent pretax return, and defines risk as the probability of earning less than this
on an investment. Permanent underperformance can occur in two ways: by paying too much for a
2
stock, or by buying a company that suffers a long-term decline in its economic moat and earnings.
Because Buffett is very picky about which companies he assigns wide moats, and buys them only
at prices below fair value, he comes close to eliminating the risk of permanent underperformance.
If it’s so easy…
So why can’t just anyone copy Buffett and beat the S&P 500 Index year in and year out? While
many people have the ability to understand Buffett’s investment philosophy, very few have the
discipline to execute it. Buffett shows an almost superhuman ability to stick with his investment
strategy no matter what’s going on around him. This ability to think independently and keep
emotion out of the investment process is the variable that Buffett copycats have a hard time
mastering. The ability to think and act independently may be something that can’t be taught,
and thus can’t be duplicated by many people.
In a nutshell, these four principles are what separate Warren Buffett from anyone else: Investing
in companies with wide economic moats, insisting on a margin of safety, holding on to them for
long periods of time, and thinking independently of what other investors are doing.

[jeriko]

Investing Buffett style
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49565508

[jeriko]

"Beware of breakthrough technology??? Thats what we always talk about dummy."

I know this, apparently you know this, but I'm posting this for the education of ALL,

[jeriko]

Why the decrease in share price with news such as this?
NexMed Receives FDA Clearance for PrevOnco Phase 2 Study as First-Line Therapy for HCC
-FDA Also Provides Opportunity to Move Directly Into Phase 3 Study to Test PrevOnco™ as Second-Line Therapy for NEXAVAR®-

Press Release Source: NexMed, Inc. On Monday April 26, 2010, 4:45 pm EDT

SAN DIEGO--(BUSINESS WIRE)--NexMed, Inc. (NASDAQ: NEXM - News), a specialty CRO with a pipeline of products based on the NexACT® technology, today announced that the U.S. Food & Drug Administration (FDA) has cleared the Company to proceed with the proposed Phase 2 trial of PrevOnco™, its proprietary cancer treatment for patients with advanced, unresectable hepatocellular carcinoma (HCC), or liver cancer. The FDA granted PrevOnco™ orphan drug status in August 2008, and in March 2010, NexMed filed its Investigational New Drug (IND) application for the product candidate.

The Company also noted that in IND review communication, the FDA has given NexMed the opportunity to move PrevOnco™ directly into a Phase 3 trial that would support marketing approval, subject to positive study results. In order to pursue this regulatory path, NexMed would need to expand the proposed Phase 2 study design to use PrevOnco™ in combination with Doxorubicin as a second-line therapy for patients who have failed NEXAVAR®, the currently marketed first-line anticancer treatment for patients with either HCC or advanced renal cell carcinoma (cancer of the kidney).

PrevOnco™ incorporates lansoprazole, which is the generic anti-ulcer compound approved under the name Prevacid® and marketed in the U.S. by Takeda Pharmaceuticals North America, Inc. In vitro and in vivo data generated to date has demonstrated the ability of lansoprazole to inhibit tumor cell growth and enhance survival in mouse models of cancer alone, and in combination with Doxorubicin.

Commenting on today’s news, Dr. Bassam Damaj, President and Chief Executive Officer of NexMed, stated, “We are very pleased that the FDA agreed with our protocol for the HCC Phase 2 trial for PrevOnco™ as a first-line therapy for HCC. Additionally, we are actively assessing the suggestion made by the FDA to move directly into a Phase 3 trial, by studying PrevOnco™ in combination with Doxorubicin as a second-line therapy for patients who have failed NEXAVAR® therapy. Following this path could be very advantageous for NexMed since advancing the drug directly into a Phase 3 study would save us at least 12-24 months in development time.”

[jeepmaster]

Beware of breakthrough technology??? Thats what we always talk about dummy. Meeting at Farmers tuesday 5pm.

[jeriko]

10 Ways To Spot A Pump-And-Dump Scam
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49396421

[jeepmaster]

Tuesday the 27th next double meeting. CADE is at a bagger, good job Mailbox killer. Eigh is low and doubling down and still, I repeat still in HLXW at an auesome time.

[jeriko]

Into MDOR

[jeriko]

Out of HLXW

[jeepmaster]

OWVI...IHGP...WNWG what do you think Jerico. Do the strangers think these are ok. WNWG to release 10k tommorow. IHGP is the chart that I like the most. ZENG pinching like a muthaf--ker. ZLUS is green today so anything can happen. " THE BALLS THAT I LIKE BEST ARE THE BALLS THAT ARE HEALD EVERY NIGHT"

[jeepmaster]

WTCT swinger potential? PFMS climbing maybe hop on??

[jeepmaster]

Whare are the other eight??? Need partis-a-pa-tion......

[jeepmaster]

IPWG-IFON-TONE pinchers. Look at the pinch that happened to us on EXBX. Good job Jerico.

[jeepmaster]

CBAI, CCTR, CSKH, DGRI, DNRR, DPBE, EIGH, EVRM, MDHI, NUBL, SSEV, WDRP these are from MR. B.

ACTC CSKH MDHI NUBL are the fav's. EIGH is good to go at .08 and we are going to swing in the group.

[jeriko]

Kinda looks like I'm just posting messages to myself.

[jeriko]

CBIS - Cannabis Science
Pharmaceutical company commercializing a variety of cannabinoid based pharmaceutical products.
Company highlights:
* Dr. Robert Melamede, President & CEO Cannabis Science Inc., stated, “We have made great progress and this is just the beginning. We are in the final stages before Cannabis Science files with the FDA for clinical trials.
* Reuters and ABCNews report that the UK and Spain are expected to approve GW Pharmaceuticals' whole-cannabis extract. Big Pharma "gets it", and is leading the way for Cannabis Science to develop several non-smoked cannabis pharmaceutical products it will bring to the FDA for clinical trials.
Technicals:
Currently in a decending triangle, the closer it gets to the apex, the more likely it is to breakout.
The 52 week high is 1.44 - the low is .05.
I currently own Cannabis. (just wanted to say that)

[jeriko]

Pincher watch
HLXW tanking but still looks like a good green energy stock - a steal at these prices

PDGE - not yet ready to go

[jeriko]

CADE - setting up for a new push to 2.00.
This has been a resistance area for cade.
Sell on resistance - buy at support.

[jeriko]

NexMed, Inc. to Co-Sponsor Biotalk of Dr. Diego Miralles of Johnson & Johnson at the San Diego Biotechnology Discussion Group
Thursday, March 25, 2010

SAN DIEGO (Business Wire) -- NexMed, Inc. (NASDAQ: NEXM), a specialty CRO with a pipeline of products based on the NexACT® technology, announced today that it will co-sponsor the Biotalk of G. Diego Miralles, M.D., Head of the Johnson & Johnson Pharmaceutical Research and Development (PRD) Discovery Unit, at the meeting of the San Diego Biotechnology Discussion Group (“SDBDG”) on Wednesday, March 31, 2010, from 5:30 p.m. to 8:00 p.m., at the Sorrento Summit in San Diego.

Dr. Bassam Damaj, President and Chief Executive Officer of NexMed, stated, “We have long supported the mandate of the SDBDG, and are very pleased to be a co-sponsor of the upcoming Biotalk featuring Dr. Miralles. During the meeting, we will also debut the NexMed Biotech Partnering Initiative, which is intended to foster the development programs of emerging biotechnology companies utilizing the NexACT® delivery technology. We understand that early-stage companies may not have the necessary resources to advance their development programs. Under the NexMed Initiative, we will select partners who may opt to pay with equity and a revenue-sharing arrangement, for pre-clinical discovery work to be conducted by Bio-Quant which pairs their drug compounds with the NexACT® technology. We believe that this strategy has the potential to accelerate the use of NexACT as a leading drug delivery platform.”

[jeriko]

CTIC - New conference call today to update investers - Hilations below:

1. bianco said they are discussing swaps with the $40 million debt holders. this means dilution.
2. he said they would try to ask the fda to use other arms as proof of efficacy and safety, without this they may try to partner
with another pharma for a trial for pix, this will not happen.
novartis alredy walked from an option on pix.
3. he spoke of the interest of other institutional investors but said the company did not want to take on more debt, this equates to more dillution. concerning the meeting on april 9, they are asking for 1,200,000,000 shares to be authorized.
look at the stock and the companys past. $1.4 billion and no drugs.
the question that needs to be answered is this-if the fda says all new phase 3 trial and no big pharma comes to the rescue what then??? 3 years and a very expensive phase 3 trial will be too much to overcome.
dilution is already set for april 9 and $51,000,000 will not take them all the way through a new phase 3 trial.