Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Guy, thanks for the stats and tables on the worse 3 day starts in market history. I knew the first 3 days of this year were bad but now I see that it is also the worse start in history for all 3 major indexes. Hopefully, it will mirror 1991 which also saw a big drop in real estate prices, but a huge gain for the year in stock prices (up 29% on the SP500). Not that I will count on that happening.
Jimmy Rogers/ Chinese currency...Rogue, Rogers is very bullish on the Renmimbi and believes it is undervalued. The problem is that the Chinese govt does not allow it to freely float against the dollar. He thinks the day will come eventually but he recommends investing in chinese companies through stock purchases. As the govt allows the currency to appreciate and their profits are earned in Chinese renmimbi, those profits will become larger in terms of other currencies as will the stock price. He also points out that when the Chinese govt does allow their currency to appreciate, stock prices there have shot up even more, so he believes that as the Chinese continue to move towards a freely exchangable currency, stock prices of chinese companies will benefit.
Recently read a new book by Jim Rogers, "A Bull in China". It was just released last month. He makes a good case for why investors should put some funds into Chinese stocks. He doesn't make specific recommendations but he does provide good background on the factors behind the growth of numerous industries in China and also lists specific examples of stocks in them (although most of those are much larger than VMers go after). It did alleviate some of my concerns about investing in China stocks and I have been looking into numerous ones there. He alerts investors to be careful of a bubble there but also makes a strong argument as to why it is good to diversify beyond US stocks especially when the US economy is slowing down.
Btw, Rogers also wrote the book, "Hot Commodities" early last year in which he made a strong case to invest in natural resources including oil, agricultural, and mining companies. That advice turned out to very timely.
Healthinvest partners did have an incredibly bad year...down 42%. Out of curiosity, I searched on yahoo for worse performing small cap funds and the worse of the bunch dropped 19%.
http://screen.yahoo.com/a?cc=SV&proy=90%2F100&troy=50%2F140&z=troy&db=funds&vw=1&b=21
Healthinvest managed (or maybe mismanaged) to more than double that rate of loss. They do specialize in microcaps which are more volatile. Does anyone have a list of microcap funds and how they performed last year? It would be interesting to compare that to what our VMOC list did.
OISI-Ive been buying as well.
I'm also thinking the big seller is likely Healthinvest Partners. Probably they need to raise cash as they are likely being hit with a flood of redemptions. Their performance last year was awful...NAV/share was down 42% in 2007.
http://www.healthinvest.se/index_en.asp
My IRA was up 39% for the year. That includes cash in the account which probably averaged about 25% of the total funds although I closed the year with a 40% cash position. Metals were the big winners although for those that I did not sell, many turned to losers. 2008 should be a very interesting year ahead as we find out how much fallout there is from the housing and credit market meltdown plus this will be an election year.
Thanks to all for your contributions and best of luck in 2008.
AYSI, Just a thought, but I wouldn't be surprised to see some weakness at the beginning of the new year as some cash in some big profits to start the year out. After that, I think we'll see it ratchet up to more new highs.
Home prices vs rents
There was a good article in Fortune magazine last month that made a strong case that a further correction in home prices was required to match the rents in many areas. As I recall, over the longer term home values have averaged a certain multiple of gross rents. That relationship held true until a few years ago when home values took off leaving rental values far behind. They made a good argument that home prices in many areas still need to correct about 20% +/- before they return to their normal correlation to what the places would rent for. Either that or rents still need to increase substantially or most likely a combination of the two.
Bottom line: Likely we will see both higher rents and lower house values as the market corrects.
AYSI, Previous quarters' income statements in their 10Qs reported net income and then followed that with comprehensive income AFTER currency adjustments. So I would certainly expect them to continue to report it that way. Net income=income before foreign currency adjustments.
BRLC, Thanks for pointing out the huge drop in eps estimates. I would sure like to see the analysts updates on that and how they came up with their new numbers if anyone has access.
Also....
Insiders have been big buyers lately. A director bought 800,000 shares just recently and last month the CEO and CFO also bought 120,000 shares. I doubt they would be buying so many shares if bad news was coming.
http://www.secform4.com/insider-trading/1232229.htm
No doubt this one has been beat down by tax loss selling. That pressure will soon end and this one is now selling well under tangible BV.
BRLC has turned into my misery holding for 2007 but I am holding here and may add before year end...
>>>Lakota Indians renouncing their US citizenship:
The new country would issue its own passports and driving licences, and living there would be tax-free - provided residents renounce their U.S. citizenship, Mr Means said.
That's fine with me. Let the benefit checks from the US also end to the tribe and those individuals who renounce their citizenship. I also wonder if the tribe has thought about how they will fund their new independent government?
Huge sequential growth in revs from $1.88 mil in Q3 to $3.4 mil in Q4. Considering that, I'm surprised they didn't earn even more in Q4. Perhaps they are paying a lot more in overtime and training new hires in pushing all that product out. Higher material costs likely also figure into the equation. Looking forward to seeing the 10K whenever it comes out.
I picked up some more shares today. Great job on finding and DDing this one, littlefish!
Wade, I have never felt comfortable with the idea of shorting. I have seen plenty of overvalued stocks that continue on an upward trajectory far beyond anything that is reasonable. That being said, I also can't ignore all the problems that are out there now and yesterday morning I just shorted an individual stock for the first time. Perhaps there would be enough interest for someone to set up a separate "short" board on IHUB.
Btw, the stock I shorted was DSL. They are a mortgage lender based in California, where property values are tanking now. (A friend went to a new home development east of LA and was told that prices are 20% below a year ago.) 89% of DSL's loan portfolio is on California properties, 82% are ARMS with negative amortization, and 80% are based on borrowers non-verified income. The lion's share of their loans have originated in the last 3 years. This seems like a recipe that is ripe for continuing huge loan losses in the coming year, possibly even bankruptcy. I tried to short this one even earlier but my broker could not find shares to borrow.
Scottrade won't let me sign on this morning. Anyone else having problems?
Mike; re AEY...Thanks for the reminder about that article. On the one hand it further confirms that business is indeed booming for AEY and they have just built a new facility to help handle it. On the other hand, I wonder if we will see some one-time moving expenses in the coming results.
We will soon know...
(As I said before, I'm holding all my shares into earnings on Monday morning)
skillz RE: reporting deadlines: I thought that companies were given an extra 30 days to file annual reports vs quarterly reports. Is that wrong?
hweb, RE AEY. For at least the last 3 quarters, AEY has not preannounced earnings. They also exceeded the analyst earnings estimates by 55%, 25% and 27% respectively. Also in each of those quarters, earnings were always announced on the last monday morning before the SEC earnings report deadline on the fifteenth. Since the deadline for this quarter falls on the weekend, I would assume they are not considered to be late in announcing the following monday.
I forget who the lone analyst who follows this is, but I wish he had not increased his earnings estimate from 12c to 17c. I expect AEY will still meet or beat, but obviously not by a blowout that we would have compared to 12c.
Wade: re AEY....I'm sitting tight along with probably numerous others going into earnings. The biggest risk that I can see for a bad Q is if they wrote down some inventories. Based on conversations with exec management that you and others have shared with the board, I don't see that happening. I remember 10 months ago we were trying to figure out why the stock was stuck in the 3s. While down a lot from its highs, it is still way above that level. This is one I plan to hold well into next year.
Boone Pickens appeared on CNBC. Thinks we'll see $100 oil before we see $80 oil and expects that $100 oil will become commonplace. Also is bullish on nat gas because it is a cleaner burning fuel.
AEY- I believe that much of the recent weakness is attributed to the general weakness in cable stocks. Comcast, Cablevision, and Time Warner Cable are all at or near 52 week lows. In my mind some investors are throwing out the baby (AEY) with the bathwater. Following is a recent headline about Comcast. Note the second paragraph indicating how it is being forced to increase capex to compete with other services (phone and satellite) in spite of a slowdown. Also, cable cos are required to go 100% digital by early 2009, and continue to offer more High def and other advanced services to remain competitive and that means increasing purchases of AEY equipment:
-- In a bad year for cable stocks, Comcast's fall has been downright ugly.
Shares of the nation's largest cable operator tumbled to a 20-month low Wednesday after it disclosed that this year's cable revenue growth and cash flow will come in lower than expected. It said consumers were balking at increasing their spending in a slowing economy and phone companies had stepped up competition
Meanwhile, Comcast also raised its capital spending to push advanced digital set-top boxes and its digital services.
5 year freeze of ARMS with teaser rates: Since many of those loans have already been sold and probably resold by now, it seems to me that the current holders of the mortgages need to agree to this, not the original underwriter. Since many of those arms can jack up the interest rate by 2%/ year, that means that the current holders of those arms could easily see a 25% decrease in their value while they still wonder if the payments will be made. It seems to me that it sounds good but in reality it will create a new convoluted mess.
Cash crunch hits florida schools. They are scrambling to make payrolls as state freezes school district deposits to halt a run on the fund.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHR5KklFq4X0&refer=home
msgi...yes, I like the pass card that B of A uses for bb and pinkies. I have banked at bank of america for years but no one at the branch knew anything about the zero commish program. I think my second order was to buy Capstone mining, or actually the pink sheet version of it. My order was put "under review". The next day someone called me and asked if I had placed the order. Then warned me that it was very thinly traded and there wasn't even a bid and ask. I responded that it was the pink sheet equivalent of a toronto traded stock with good volume. Also they were profitable and trading at a low PE. He said he would mark my account and I shouldn't have any problems with trades in the future. I assume he was referring to trades off the beaten path which is what many VMCers are doing.
It took awhile to get it set up but paying no commission on trades and earning 4% on uninvested funds works great for me. I am keeping Scottrade and TDAm but have moved more funds to BofA.
cleverox, Re: BofA free trade brokerage account. I set mine up last summer and am happy with it. Zero commission on trades and one can also buy and sell pink and bb stocks after setting up a pass card. Good executions from what I have seen. Funds not in stocks go automatically into a money market account that pays over 4% interest.
AEY- Sales of used "legacy" boxes without cable cards are only a small portion of total new and used equipment sales. They only amounted to 5% of total sales last Q. Legacy sales will likely jump in the soon to be announced Q4 results but AEY also expects them to continue well beyond that in international markets. Also many smaller cable companies asked for and recieved extensions for domestic legacy sales beyond July 31.
Looking forward, with or without legacy sales, I expect that AEY will benefit from the govt mandated conversion to all digital by Feb 2009 as many cable companies are upgrading their equipment to comply with that and provide more options to better compete with the competing satellite companies.
QID- Wondering how this double-short of the Nasdaq 100 is able to pay a quarterly dividend = 5% yield?
http://finance.yahoo.com/q/hp?s=QID&a=06&b=13&c=2006&d=10&e=27&f=2007&g=v
BRLC... New insider buys-CEO bought 100,000 shares and CFO bought 16,000 shares last week. This morning BRLC announced that they will be providing 2008 earnings guidance on Wednesday and should clear up much uncertainty for this HD LCD TV maker. I doubt they would have bought if bad news was coming. Christmas season is here and retailers report that electronics sales are strong.
DYII, The $42 mil in revs and 24c eps income in the PR are from continuing operations and neither the Baton Rouge Hospital(pending sale) nor the West Houston facility (sold) are included. In the 10 K, they indicate that those two facilities provided an additional 2c in profits as discontinued operations, so losing them will not hurt as they can earn double that in interest from the $20 million sale proceeds.
The Baton Rouge hospital is carried on the books at $14 million so they will show a $6 million gain from that in Q2 08 when it closes. That is about 40c eps. Hope this helps.
DYII, Don't know about others, but my money was moving into it today. Looks cheap on today's sell-off.
What happened to BWLRF? I bailed out after earnings but when I've checked lately it shows zero volume. With the canadian BWR trading 6 million shares today, I can't believe there is no volume.
SOYO- This is what their 10Q says about the tax credit; there is no mention of stock options:
Deferred Income Tax Gain (Expense): The deferred income tax benefit (expense) was $744,789 for the three months ended September 30, 2007. This is a result of timing differences between GAAP income and taxable income, and is mainly attributable to the net operating loss carryforward. There was no deferred income tax gain or loss in the three months ended September 30, 2006.
SOYO- Hadn't seen the 10Q. So actually SOYO missed somewhat in revs, gross margins and eps if one excludes special items (marketing and tax credit). One could never tell that from the price action today.
SOYO- Good report although revs and gross margins were slightly below guidance. Earnings at 5c were way above guidance of 2c although there was a $700K tax credit and then the $316K credit in sales and marketing expense category which seems odd. Without those special items, earnings would have been about half of what was reported (still above guidance).
BRLC...I've heard no news since the earnings and CC last week. Positives..below book value, sales are growing exponentially, low debt, had positive earnings last Q from operations (writedown of LCOS caused a one-time loss) and as you indicated they are now in their strongest qrtr. Short term technicals are a mess but look at 3 year chart. Stock is sitting on the uptrend line. I smell frustation and capitulation by longs although this is definitely a tax loss sale candidate till year end. I added some more shares this morning.
HTE- Current price is $25.88, not $15.70....Whew, you scared me with that quote. HTE is one I own and like here. Divi was reduced to Can-30c monthly but yield is still great at 14% US.
Home prices- Interesting article in Nov 12 Fortune magazine that predicts housing prices will continue to drop over the next 5 years. Through the 1990's prices stayed constant at about 15x their rent value. They expect that relationship to return which means a combination of higher rents and lower prices. Breaks it down by markets, Florida is the most overheated market and they project a 30% drop in prices there. Areas that did not overheat such as the midwest will likely see price appreciation.
If that is the case, the pain for many homebuilders and the RE industry will continue for a long time.
I think the recent weakness in AEY is probably from some fund(s) lightening their holdings. Most major cable companies are at or near 52 week lows including Comcast, Cablevision, and TWC siting competitive pressures from satellite and phone services. As a supplier, someone is likely assuming that means AEY will also be weak. But in order to compete the cable companies need to continue to upgrade their equipment and attract more "triple play" customers (cable, phone and internet). Also all existing older TVs will need cable boxes to even work by Feb 09 which is only a little over a year away. I expect times to continue to be very good at AEY, at least for the next year. About the only possible negative I can see is that they might write off some of their inventory of legacy boxes at year end. I also am adding some AEY here.
Len...I almost forgot you don't believe in heating your house during those cold Kansas winters. Speaking of crude crud... forget high definition, here is an idea for a christmas present...a heated toilet seat.
>Speaking of toilet seats, there s reportedly a heated toilet seat craze sweeping the United States. Toilet maker Todo, a Canadian company with factories in Mexico, announced it will open up a new manufacturing facility to keep up with the burgeoning demand for the warmed-up seats, which are enormously popular in Japan. A heated toilet seat, you say? Don't knock it til you ve tried it. Some of your favorite Gizmodo writers use one every day, and that 98.6-degree seat sure makes a cold room seem a lot warmer early on a winter's morning.<
Toshiba HD-DVD player update. Stopped by my local walmart Friday morning figuring I would snag a $98 HD DVD player for a gift but they were already sold out. The guy said they sold all 30 within the first hour and there was a line when the store opened. Sale technically goes through the weekend but one will be lucky to find one now. I also doubt Walmart will get more of those, the player is second generation and is replaced by a third generation model (basically the same in a sleeker box). Saw a story that the 3rd generation model will go on sale at Walmart this friday for $198 which is still a great deal as it comes with 2 free HD dvds in the box and one still gets the 5 free deal from Toshiba. There is a battle going right now between bluray and HDDVD to win the battle for supremacy in high def dvds. The consumer is the only clear winner so far as the price wars rage on.
In fact here is an even better deal available over the internet right now for the 3rd generation HD DVD player at $189 with no tax and free shipping and comes with 2 free dvds plus 5 by toshiba rebate through a factory authorized Amazon dealer:
http://www.amazon.com/Toshiba-HD-A3-720p-1080i-Player/dp/B000U62N1S
Len, What is the prize here??? How about a barrel of Kansas crude..
My WAG on Crude: $97.25