Glen Doth Know

opportunity of a lifetime?

"Analysts and others speculating that we'll violate our covenants"

"Most of this is the result of incorrect calculations"

"Historically speaking, recessions are favorable for us"

Looking at this, the earnings grow at about 12% and earnings have been growing at 40% year over year. It's priced to shrink. This Last quarter BLEW! will the company go bankrupt? Let's see.

This last quarter they had to write off a lot of their goodwill and this came directly out of their retained earnings taking them negative.

Now I'll be honest --- pricing this company with the dividend discount model = $0 since the retained earnings are -$101M and the company makes an average quarterly profit of $3M and all that unburying it has to do.

Whatever, logisticare should benefit from cheaper gas prices.
http://www.randomuseless.info/gasprice/gasprice.html
= REVERSAL of ::::
As a result, the Company expects to report a substantial loss when it reports results for its third quarter of 2008. Due to the utilization trends and payer rate negotiation uncertainties in the transportation segment, mediation in Canada related to previously announced revenue cap enforcement, interest rate uncertainties, remaining procurement activity and the uncertain start date for the new South Carolina transportation contract,
end reversal

I think that medicare or medicaid or something will be around paying for this. Besides, police were cutting down on routes since gas prices were so high. This all turned around since the barrel of oil dive bombed out of speculation back into reality.

http://www.nytimes.com/2008/11/08/washington/08regs.html?_r=2&hp&oref=slogin&oref=slogin

“More and more people are coming onto Medicaid,” she said. “People are losing their jobs and running out of unemployment benefits. Some employers can no longer afford to provide health insurance to their workers.”




Details:

Effective December 7, 2007, we acquired all of the outstanding equity of Charter LCI Corporation, or
Charter LCI, the parent company of LogistiCare, Inc., or LogistiCare. LogistiCare, based in College
Park, Georgia, is the nation’s largest case management provider coordinating non-emergency
transportation services primarily to Medicaid recipients. The purchase price in the amount of $220
million consisted primarily of cash and 418,952 shares of our common stock valued at approximately
$13.2 million in accordance with the provisions of the purchase agreement ($12.3 million for
accounting purposes). These shares were issued in exchange for the cancellation of LogistiCare
employee stock options. In addition, we may be obligated to pay additional amounts up to $40 million
under an earnout provision contained in the merger agreement. The purchase price was paid with funds
drawn down on a new credit facility and proceeds received from a private placement of our 6.5%
Convertible Senior Subordinated Notes due 2014, or the Notes. The Notes will be convertible into
shares of our common stock at an initial conversion rate of 23.982 shares of common stock per $1,000
principal amount of Notes, which is equivalent to an initial conversion rate of $41.698 per share of
common stock. The initial conversion rate is subject to adjustment in certain events. The new credit
agreement with CIT Capital Securities LLC provides us with a senior secured first lien credit facility in
aggregate principal amount of $213.0 million comprised of a $173.0 million, six year term loan and a
$40.0 million, five year revolving credit facility. We borrowed the entire amount available under the
term loan facility and used the proceeds of the term loan to (i) fund a portion of the purchase price of
this acquisition; (ii) refinance certain existing indebtedness; and (iii) pay fees and expenses related to
this acquisition and the financing thereof. By adding non-emergency transportation services to our
service offering, we are able to focus on better managing the front end of the Medicaid service delivery
system ultimately saving government payers money through combined transportation case management
services and home based social services.

Labels: prsc

Data Triumphs Education
by
Glen Bradford

I thought it would be difficult to find overpriced companies. I was wrong. Even in an environment like this --- I was able to find people paying more than they should for stability. It’s like buying ice cream in the middle of winter and expecting the demand to increase in the short term. It just isn’t going to happen. I covered why it didn’t make sense to pay face value for companies like Johnson and Johnson(JNJ) in times like this about a month ago --- but here’s a company that’s just downright overpriced. Don’t believe me? Check back in a month.

The Stock to Drop:
STRA (Strayer Education) is priced way too high! At $237 it’s got a PE of 45. This implies a future growth rate of 32%. Take your gains! No analyst has a growth rate this high! As I learned in business school the best companies operate out of closets and tool sheds to avoid unnecessary expenses. Ask Glen Campbell, founder of HatWorld. He lived in his store while Lids executives was out eating fancy dinners on their investors time. Lids went under. HatWorld bought Lids out and made it profitable. Back to Strayer --- they just moved HQ:
“This building offers dramatic architectural features that include floor-to-ceiling glass, maximum efficiency, upscale common area finishes, and unparalleled signage opportunities on the Dulles Toll Road,” said Chris Chambers, partner of Herndon-based Crimson Partners, which developed the building.
Sounds ridiculous to me --- why would I pay this much for growth. It’s got a 10-year track record. It’s been growing at a rate of 20% for the past 5 years.


The Stock to Rock:
FDS – Factset research’s 5 year quarterly revenues can be matched with a logarithmic growth of 23% with a regression coefficient of 0.999. It’s priced to grow at 7.3%. Analysts expect somewhere between 14% and 18%. Basically, they provide their services to financial institutions and hedge funds. I figure the best time to get down and dirty in the research numbers is when the markets aren’t reflecting accurate prices. Let’s see if I can think of a time when the market’s are behaving irrationally… hmm… How about now? This is kind of like my Nasdaq OMX (NDAQ) play on volatility expectations. As more trades happen, I expect the exchanges to make more money is very similar to the concept that as more irrationality is priced into the market, I expect more financial institutions to start crunching real numbers. You can lay-off your employees, but you still need the data.


I’ll close with a quick break down of stock price for beginners: There’s three things that determine a stock’s price.
1. Intrinsic Value
2. Growth Expectations
3. Market Volatility

Intrinsic value can be pulled from the Balance Sheet. Growth Expectations can be pulled from future projections of the income statements and is impacted by all news. Market Volatility can be seen as the difference between the price and the Intrinsic Value and Growth expectations. If you can find companies that are predictable --- you’re ability to pick ones that are suffering from negative market volatility as opposed to the two others is greatly enhanced.

I currently don’t own either FDS or STRA.

Labels: FDS, STRA

Wall Street is known for taking the brightest of minds and curb stomping their faces on the patio out back. In the past 3 months I’ve learned a lot about the dynamics of the stock market amidst one of the largest crashes we’ve ever seen. Especially, how accelerations in price evaluations can be expected in certain classes of stock (value vs. growth, small vs. mid. vs. large cap, dividend vs. non-dividend, developed vs. emerging, active vs. passive, credit vs. equity, time-based vs. time unlimited, high volume vs. low volume). I use comparative analytics and Monte Carlo simulation to determine the stocks I hold in my portfolio and the portfolios of my investors.
We’ve been in a bear market for a year now. I’ve been selectively bullish since Dow 11,000 --- and that turned to market bullish at Dow 8,000. That said, it could still go lower. I’m out there buying the falling knives and getting slaughtered doing it. What I didn’t take into account was that when the entire market falls, it takes great companies with it. And, it takes those great companies to price levels that offer huge rewards for those patient enough to buy in at the right time.

Bear Market Considerations

Value vs. Growth
In a bear market, the growth stocks drop to value stock prices --- as if they are done growing. You see uncertainties like stocks trading below book value, sometimes cash – total liabilities valuations. The trick is realizing that this is coming and just waiting to snatch them up at these ridiculous levels.

Small, Mid, and Large Cap
The first stocks to slide are the small caps, followed like a pack of mountain trailblazers that are strapped together at the waist by Mid and Large caps. As long as you’re keeping an eye out for the slide starting, you can try and unhook yourself from the pack to save yourself from peril.

Dividend vs. Non-Dividend
Cramer’s been emphasizing stocks that offer secure high dividends that haven’t offered yields like this in a long time, if ever. These kind of stocks do have bottom prices because there is a certain point where bond-holders sell their bonds and grab these stocks up with their historically gigantic yields. This gives Dividend stocks a bottom price. There are growth stocks out there that don’t have this luxury and easily drop below book values, PE ratios of 1, even if they’ve been growing year over year at 100%+ rates.

Developed vs. Emerging
The first to dive are the emerging market stocks. The BRIC countries have been hammered the worst. Then, you have the mountain climber effect start dropping off the developed economies. This time is historically different from any other time in history, however. Globally, leaders are stepping up efforts to curb their economies back onto the growth track within in the next year.

Active vs. Passive
Active funds are getting sacked; they’re out there strong-headedly catching the raining knives. Passive funds show less of the pain. My approach to this was to get into this mess fairly diversified across industries and countries and slowly bulk up on the ones that were getting hammered the worst but still looked to have a strong future.

Credit vs. Equity
The credit market’s are the market’s that got us into this big mess. That said, you’d be ahead if you were in reasonable credit a year ago instead of equity. What now? If you’re smart, you can catch easy safe bond yields at 8%. I would point out that I think if you’re smarter, you can buy stocks and sell covered calls and pull 10% off the top. In my opinion, the smartest are buying stocks and expecting a reversion to the mean, since historically when the volatility indexes reach abnormal highs --- that’s what is expected.

Time Based vs. Time Unlimited
Basically, this is the difference between stocks and options. As the market plummets, the options get comparatively more expensive. But, they still enable you to catch serious upside or downside.

High Volume vs. Low Volume
The low volume stocks get hammered the worst in times like this. There are just not as many buyers because nobody knows about them.

The Bottom Bear Market Line
In bear markets, the best strategy is to own inverse market leveraged ETFs or long puts that you bought a year ago. The hedge funds that bet that the market is manic-depressive and that the market doesn’t do a good job of pricing this in have been lining their pockets with heroic gains for their investors.

What to do now?
We’ve already been chopped down from 14,000 to 8,000. I’m still buying predictable companies that have more upside than is priced into their stock. I’m always comparing new companies to the ones I hold in my portfolio --- maybe there are better opportunities out there? There are a lot of commentators that just comment on what the market has done and bat ideas around. There are a lot of people out there that run electronic screens to sort out stocks and then comment on the screens. There are a lot of people that achieve market returns and are happy. I believe that like in school, those that do their homework and understand how to value companies can do better.

Happy Thanksgiving!

Right now might not be the greatest time to buy since the market's been leaping off it's bottom. I think there's still room for downside --- but I'm fully leveraged up, as I have leveraged up at 9000, 8500, and 8000 --- leaving one more opportunity to leverage up at 7000 (which is still likely because "investors" are actually gamblers these days).

http://money.cnn.com/2008/11/26/news/economy/where_bailout_stands/index.htm?postversion=2008112615

Maybe you should read that, $7 trillion will turn this economy around. And the stock market is set to pull us out --- as it always pulls the economy out of gloomy times.

Boiler up!

Half Down! Let's make 100% to break-even!

Just For the record, In case you can't read my main holdings changes by looking at my Validation pictures, here's my open positions. I figure --- I'll list them and discuss them afterwords.

Quantity/Ticker/Strike Price

I could only get BEAV for April 2008
April 2009
2 BEAV 25,
2 BEAV 15,

January 2010
2 NDAQ 35,
2 SIGM 20,
5 AOB 10,
3 CEDC 30,
3 YGE 10,
3 MTW 12.5,

January 2011
3 AOB 7.5

Out of them all, I'm bearish the most on SIGM --- it was a long shot and I knew it. I wouldn't buy it right now --- I blew it. Also, the YGE is a Obama play. It's one of the cheaper solar stocks that's actually killing profitability figures. That's one to watch for.

As the market has been punching me in the stomach and taking half of my starting value away from me, I feel that I've been positioning myself in order to take full advantage of the "Hulk" effect. I've been placing lay-away orders on companies in similar positions as me, and slowly losing purchasing power doing it. I think that even if my option positions crumble to nothing, the rest of the portfolio's I manage will surely rebound with returns greater than you'll see from the Dow 30. Will my option positions crumble to nothing? Doubt it. I make highly calculated bets. Most reports predict the end to this by the end of 2009. I'm just trying to take advantage of that by riding my companies through the roof that I've been yelling about all along.

I've been reading reports lately, I'm incredibly bullish. Hedge fund investor (cash flow and holdings) consensus reports indicate a capitulation point --- so do Insider transaction reports, as well as mutual fund cash flow and cash holdings reports.

Obama's going to throw $500B at the US consumer. If I had a bet right now, bet oil has bottomed. I called the top. Now's the bottom. It's at $55 I think today. It's back in the realm of normal trading --- as indicated by the fact OPEC is cutting production.

Labels: AOB, CEDC, MTW, YGE

I was asked this weekend to look into POT, Potash Corporation. I ran my analysis incredibly conservatively and simply assumed that the entire last year's incomes were unjustified. Based on incomes last year, the company is priced to grow at 14.8%. Over the last 9 years (excluding the last year), you've got a growth rate of about 18%, most of which is in the latter part. I think this was a cyclical boom. I think the company is still overpriced. Using my lazy calculations, $40 is where I'd become a buyer. But, maybe there is something to this last year of absolutely ridiculously overpriced everything. I'm waiting till the 4Q's come out before I guide any higher.

Labels: POT

I don't know where the time stamps come from, but that last post was around 1 PM,

The dow was actually around 8025. And, it was still "on it's way down" according to my friends and family.

Also, i tried to write about STRA and how it's too expensive about 2 days ago.

it is too expensive.

Labels: STRA

Huge Buy!

AOB, BUCY, CEDC, EBIX, SOHU, BEAV, NIHD

BUY!

Alright, here's how I see it. In the past, China has been using it's Yuan to buy dollars to artificially deflate it's currency to promote us buying their finished goods cause they could produce them a lot cheaper with this artificial inflation and lower wages. Now, this $685 Billion invested within itself is not good for the USA and it signals that instead of buying dollars to stimulate economic demand in china --- they're going to spend it building up their infrastructure.

For all you people that own USA companies --- this is generally bad news.

But feel free to drive the stock market bullishly to the sky! I'll stick with my china stocks. AOB, XIN, GHII, EJ, SOHU, YGE. XIN, GHII, YGE are the most speculative of the bunch. If you're looking for the easy money --- AOB, SOHU, and EJ will do it for you.

China to launch $586B stimulus plan

My companies that should sky-rocket:

GHII
XIN
EJ

Labels: EJ, GHII, XIN

XIN announced a $10 Million share repurchase. Investors get to vote December 4th

The first proxy enables the buyback
the second proxy ammends their statements to include the buyback
and the third proxy does their auditing stuff.

If this passes, this buyback is currently equivalent to 18x the daily share volume and about 1/10 of all shares outstanding.

Their cash position is strong and this buyback makes sense. I expect doubling. That said, Russian and Chinese and Brazil securities are all over the place. Get ready.

Labels: XIN

Alright, i just spent 2 hours scouring annual and quarterly reports and statements. I am selling CBI in my accounts and buying BUCY.

CBI has had some cost issues and overruns. I thought this was a one time thing! I'm done.

BUCY has fallen more than CBI but BUCY's backlog has increased, CBIs has not.

So --- basically how I make decisions is when I determine that I would rather own one company over another --- I make the switch. BUCY is down SOOO MUCH.. I guaranteed CEDC a week or two ago. Consider this almost the BUCY guarantee... it's really really close

CBI could get better and it should --- but right now... BUCY is the cheap one... with the better track record.

Labels: BUCY, cbi

Dean,

LFC
I had issues pulling data for LFC. I did find an article: http://biz.yahoo.com/zacks/081027/15517.html?.v=1

I couldn’t read their website either. I am not sure that I trust any of the numbers on this company. So, I really can’t form an opinion. But, based on the Zacks article and based on the reasons I can find in blogs as to why people are bullish. It looks like there is a lot of room to grow and they probably have a competitive advantage. I’m just not into it. I think compared to the rest of Chinese Stocks, it’s PE looks to be too high.

PTR
Revenues show a good rate of growth. Earnings per share have been falling. But --- they made good in December 2006. Their last quarter was up 30% because of higher oil prices. I know that the Chinese government has been subsidizing oil prices for the past year cause they were so high. I think that at $80 a barrel, the government was covering the rest or something --- unsure.

According to yahoo, both have little to no debt and are trading just above book value. I’ve been trying to stay out of areas in the economy that are getting a lot of publicity—the financials, auto, oil, banks, insurance.

Actually wait --- I came across this website about 3 months ago.. and then I spent an hour going through my history to find it again.

http://chinabizfocus.com/modules/InvestChina/

http://chinabizfocus.com/modules/InvestChina/stockratios.php?sel=tradingideas&subsel=pe

To price Chinese companies, I take what I would pay for them in America and slash their price in half. Also, people aren’t paying for growth right now --- so you can get it on the cheap. One of these days, companies that are priced at PE ratios of 0.50 and Price to book values of 0.50 will come back if they survive --- and they’re growing. I’ve been looking for a few deals in Russia. If you can find a site that’s like this for Russian ADRs --- send it my way.

Glen

From: Dean Davis
Sent: Thursday, November 06, 2008 1:42 PM
To: gbradfo
Subject: CDEC

Glen,

I appreciate the CDEC recommendation. Made a quick 32% gain in less than 4 days, but got out a little too early. Will get back in if it pulls back. I live by the idea that pigs get fat and hogs get slaughtered.

I looked at one of your recommendations and really, really like YGE. What are your short term and long term thoughts on this one? I would really like to just buy and hold for 5-8 years.

I have been looking to put some huge blocks of money into both LFC and PTR. I like the markets in China also because of the huge growth potential, cheap labor and international exposure. These two companies are market leaders that have been beaten down. They have huge stockpiles of cash, huge YOY growth numbers, low PE's, high EPS numbers, and pay good dividends to boot. Do you see any reason I should be leary in buying these two stocks?

BTW, you have provided better stock picks than any so called "professionals" I have used in the past. When you decide to start an investment service, I will be one of your first customers. I like the criteria you look for in determining a stocks potential.

Thanks!
Dean Davis
________________________________________
Color coding for safety: Windows Live Hotmail alerts you to suspicious email. Sign up today.

Labels: CEDC, LFC, PTR

Russia is down about 75% over the last 6 months.
Europe is down about 40% by rough guestimates over the same period.
Asia is down about 50% over the last year.
The Bovespa is down about 50% too.
The US market looks to be down about 40%. in the same period.

The supply and demand characteristics don't apply to the stock market.
As the supply of stock stays pretty much constant --- the prices are falling and the demand is falling.

I'm buying everything that I can. When's the next time you'll see a time like this?

It's like seeing that really amazing girl for that first time --- and knowing you're going to marry her. This one's mine.

Labels: Global Stocks --- Readjust my mind

CEDC is my favorite. i guaranteed it (i never do this.. this was a first) about a week ago. So far, so good., went from 20 to 30.. i sold all my CEDC stock and bought call options.

Anyway, Russia is down about 75% in the last 6 months. Lets get some ideas on the table. i'll figure out more this weekend.

CEDC, RSX,

Russian Stocks Traded on the NYSE
Company
Symbol

Industry
Golden Telecom
GLDN
Telecommunications and Internet Services
Mobile Telesystems OJSC
MBT
Mobile Communications
Mechel Steel Group OAO
MTL
Steel Producer and Mining
Rostelecom OAO
ROS
Long Distance Telecommunication Services
Vimpel-Communications
VIP
Wireless Communication Services
Wimm-Bill-Dann Foods OJSC
WBD
Food Products

I am buying YGE, MTW and AOB calls tomorrow morning.

Labels: AOB, MTW, YGE

Greg

I bought the calls at an average price of $6, they’re at about $9-11 now.

Anyway, tomorrow I’m buying calls on MTW and AOB. CEDC is still the way to go if you’re going to choose one I think. If you’re playing GHII put a limit buy order in at $0.11 or less and pray you catch it soon, cause their CFO is going to go promote them at some banquet where a bunch of small companies go.

Making rules you refuse to deviate from eliminates opportunities that come once a lifetime. That said, I broke rules these last three months that cost me a lot of money --- oh well.

Historically, the market goes up in oct/nov/dec of election year. I have no idea what will happen. I just play odds and buy stocks that are cheap relative to the market. Also, I think that by January 2010 --- I hope to be out of the woods as far as the ‘recession’ goes.

Glen

From: tubertini
Sent: Tuesday, November 04, 2008 7:38 PM
To: Bradford, Glen Richard
Subject: Re: one stock

Unfortunately, options is not an area where I have a lot of knowledge. However, I plan on purchasing shares of GHII sometime this week. I wanted to do a little more research and also wait and see the reaction after the election although I may risk a significant move up.

I see that you bought the Jan 2010 calls of CEDC at $30. What price are they at now? Also, the market has moved up significantly over the past few days. What are your thoughts on what may happen through the rest of the year. I was actually hoping for a pull back so that I can pick up some of the stocks I have been looking at for a lower price.

In addition, the one thing I struggle with is adhering to a set of metrics to make my investment decisions. Do you have a specific set of metrics that you rely on and do not deviate from? Do you use some type of spread sheet to perform your analysis on.

Sorry for all the questions seeing that you are the one that was emailing me the question to begin with.


Thanks.

Greg T

Labels: AOB, MTW

From: Bradford, Glen Richard
Sent: Sunday, November 02, 2008 2:35 PM
To: Rebecca
Subject: RE: Stockpickr article

Just got your message. They’ve been sorted into my junk mail until now. It’s hard to find companies that are so bad that they’re not worth owning in this kind of environment with everything down as much as it is. The trick though, is sorting out the absolutely crazy bargains with enough people watching the company to show signs of a rebound and ride the rebound. These are definitely 5 companies that I wouldn’t own. The only reason that I can think of owning them is because you believe that the worst is over and there’s a lot of growth potential. My initial focus is to not lose money. Buying companies that are losing money and owe a lot of their assets to creditors is irrational to me unless there’s a thunderous upside.


Warren Buffett's advice in this market is to buy American stocks. Sometimes when I'm researching potential investments I come across such duds that I have to ask: "How are you even in business?" [Examples? We could use some more tickers in this story, so if you have any other stocks in mind, we could just mention them briefly--their names and maybe a quick reason why you don't like them.] CKEC, CPY, HTC, THC, SVVS
In this market -- and one could argue that this is always true -- every investment you make runs the risk of losing you money. Some, though, almost guarantee it. Some people believe that to reap the greatest rewards in life, you have to take the highest risks. But does that mean jumping off the highest cliff or trying to make it across the tracks in front of the fastest train? To me, risk is uncertainty. The higher the cliff and the closer the train --- the lower the risk because you’re certainly dead.
Here are two excessively leveraged companies (which happen to have similar tickers) that I think you should stay far away from. When a company is leveraged in debt as much as these two going into a global recessionary environment --- I say, bon voyage. Leveraging up is best done in times like this, where interest rates are dropping to historic lows and these companies are at a disadvantage to say the least.
[I think this intro needs more. It sets up that "American" is going to be the key ingredient to the article--which it is not. Why did you really decide to put these two stocks in an article together? Did it have anything to do with Buffett? What is similar about them? Why are they linked in your mind?
Also, why only two companies? It doesn't make much of an article--suggests that the thesis isn't strong enough to support more than two companies. Are these just two random companies that you don't like, so we're creating an article around that? Or are there more-compelling reasons for it?] A: To find these companies, I come across balance sheets and income statements that look pretty terrible. There’s no real link except that when Buffett says it’s time to buy, what he means is that it’s time to buy companies that are proven and consistent and reliable and priced to perform far below what they are likely to perform.
Tenet Health Care (THC) is an investor-owned health-care-services company. The last time that it announced it was closing a hospital, its stock price went up. [I'm not exactly sure what this means about the company. Is this a bad thing or good, and why? A: This is just something worth mentioning. It’s not positive.] The question I ask when I look at THC is: If Americans are struggling to pay their mortgage payments, will they be able to pay their hospital bills?
I suppose you could play this one the way people were playing some African-related stocks awhile back: Things can't get any worse, so they have to go up from here. But I think THC's going to close up shop. [This means shut down, right? A:Yes] The best part [is this sarcastic? A: Yes] is the earnings upside. Even if earnings come through at 12 cents this next year, that's still a P/E of more than 30. [Are you interpreting this as good or not? A: This is terrible] Also, analysts have it underperforming its industry. [This is bad, right? A: Yes, terrible] Sounds like Doogie Howser is still in business. [That's good? I'm not sure I understand. A: The idea was to relate that Doogie Howser’s TV show doesn’t’ exist anymore --- and THC is on the same chopping block]
Hungarian Telephone and Cable (HTC) is a telecommunications provider operating in Hungary.
OK! You caught me red handed. It's not a U.S. stock. [So why did you choose to include it in this particular article? This goes back to the fact that I think the intro could be stronger.] But even Buffett's drawn some stocks into his portfolio from outside the U.S. [I'd love some examples here and maybe even what you think of them--just briefly! A: Buffett bought a stake in BYD --- a Chinese company that plans to sell electric cars in America by 2010. In my opinion, he overlooked HOGS “Zhongpin Inc.” and several other Chinese companies. Buffett bought BYD because he sees a company with good management and huge growth opportunity on the cheap.] This isn't one of them.
HTC is panicking. [Why? Anything news-related? A: They’re updating investors on their strategy. TDC tried to sell HTC but backed out.] Revenue is up, but the company is operating at a -25% profit margin. A current ratio of less than 1 indicates that THC is likely paying its bills strictly by taking out longer-term loans. I can't read its Web site (it's in Hungarian), but its business summary sounds mostly landline. [Where did you find this if not on the Web site? How have you done your research? A: company profiles/investment blogs/just sifting through lots of company statements and investor opinions --- sometimes I find great companies at bargain prices --- sometimes I find companies that should be closed.] HTC's offerings include voicemail, fax, dial-up, ISDN and DSL.Where's the high-speed Internet and cell phone service?
No, I think I'll stick with companies that have proven track records and that know how to make money. [Again, partly because we need more tickers, some examples would be great.] Benjamin Graham [a little strange to start with Buffett and end with Graham--maybe we should just start with Graham? Again, where is the focus? A: Graham was Buffett’s teacher. I think they’re pretty much the same minus the fact that Buffett believes in finding good predictable companies, and only buying them when their Graham valuations become reasonable. Graham felt it was best to own a variety of the “cheap companies”] calls it the difference between investing and speculating. And I'm an investor. [I wasn't quit sure where "You decide" came from--the article really hasn't been about a choice you're encouraging people to make. If we pulled the Graham thing into the beginning, maybe we could make that work? A: There’s all sorts of investment heroes to choose from --- Lynch, Buffett, Graham, Piotroski, Zweig, Livermore, O’Neil … Maybe I should do an article that features a stock from each strategy?].


From: Rebecca
Sent: Wednesday, October 22, 2008 5:20 PM
To: gbradfor
Subject: Stockpickr article

Hi Glen:

My name is Rebecca, and I’m the one who edits your articles for TSC and Stockpickr and puts them up on the sites. Dan has sent me something you’ve written about THC and HTC, and I have a few questions about it. I’ve tweaked it a bit and then put my queries in brackets throughout the text. Could you look it over and see what you can do? The sooner the better, because Dan would like to put this up tomorrow morning, but I understand if you need more time. Just let me know.

In general, I’m not really sure what the premise for this article is. I talk about that a little in my queries, but if it’s not clear what I mean, let me know.

Excuse, me, too, if any of my queries seem strange or like I’m missing the point. I actually read this through the first time thinking you were recommending these companies (I didn’t catch the sarcasm in “doing a great job of it”), so that caused a little confusion. There are some questions, though, about whether points you make are meant to be positives or negatives. I think in these cases some extra explanation would be helpful. Rather than just mentioned a number or fact, explain what it means (particularly what it means to you). How are you interpreting a P/E of 30, for example?

Thanks so much!

Rebecca


Warren Buffett's advice in this market is to buy American stocks. But obviously, just because a company is based in the U.S. doesn’t make it a sound investment. Sometimes when I'm researching potential investments I come across such duds that I have to ask: "How are you even in business?" [Examples? We could use some more tickers in this story, so if you have any other stocks in mind, we could just mention them briefly--their names and maybe a quick reason why you don't like them.]
In this market -- and one could argue that this is always true -- every investment you make runs the risk of losing you money. Some, though, almost guarantee it. Some people believe that to reap the greatest rewards in life, you have to take the highest risks. But does that mean jumping off the highest cliff or trying to make it across the tracks in front of the fastest train?
Here are two excessively leveraged companies (which happen to have similar tickers) that I think you should stay far away from.
[I think this intro needs more. It sets up that "American" is going to be the key ingredient to the article--which it is not. Why did you really decide to put these two stocks in an article together? Did it have anything to do with Buffett? What is similar about them? Why are they linked in your mind?
Also, why only two companies? It doesn't make much of an article--suggests that the thesis isn't strong enough to support more than two companies. Are these just two random companies that you don't like, so we're creating an article around that? Or are there more-compelling reasons for it?]
Tenet Health Care (THC) is an investor-owned health-care-services company. The last time that it announced it was closing a hospital, its stock price went up. [I'm not exactly sure what this means about the company. Is this a bad thing or good, and why?] The question I ask when I look at THC is: If Americans are struggling to pay their mortgage payments, will they be able to pay their hospital bills?
I suppose you could play this one the way people were playing some African-related stocks awhile back: Things can't get any worse, so they have to go up from here. But I think THC's going to close up shop. [This means shut down, right?] The best part [is this sarcastic?] is the earnings upside. Even if earnings come through at 12 cents this next year, that's still a P/E of more than 30. [Are you interpreting this as good or not?] Also, analysts have it underperforming its industry. [This is bad, right?] Sounds like Doogie Howser is still in business. [That's good? I'm not sure I understand.]
Hungarian Telephone and Cable (HTC) is a telecommunications provider operating in Hungary.
OK! You caught me red handed. It's not a U.S. stock. [So why did you choose to include it in this particular article? This goes back to the fact that I think the intro could be stronger.] But even Buffett's drawn some stocks into his portfolio from outside the U.S. [I'd love some examples here and maybe even what you think of them--just briefly!] This isn't one of them.
HTC is panicking. [Why? Anything news-related?] Revenue is up, but the company is operating at a -25% profit margin. A current ratio of less than 1 indicates that THC is likely paying its bills strictly by taking out longer-term loans. I can't read its Web site (it's in Hungarian), but its business summary sounds mostly landline. [Where did you find this if not on the Web site? How have you done your research?] HTC's offerings include voicemail, fax, dial-up, ISDN and DSL.Where's the high-speed Internet and cell phone service?
No, I think I'll stick with companies that have proven track records and that know how to make money. [Again, partly because we need more tickers, some examples would be great.] Benjamin Graham [a little strange to start with Buffett and end with Graham--maybe we should just start with Graham? Again, where is the focus?] calls it the difference between investing and speculating. And I'm an investor. [I wasn't quit sure where "You decide" came from--the article really hasn't been about a choice you're encouraging people to make. If we pulled the Graham thing into the beginning, maybe we could make that work?]


Rebecca

Labels: CKEC, CPY, HTC, SVVS, THC

Looking at the numbers, I started with a net input of about $89K I rode that up about 20% --- and then recieved knock out blows into and through "Black October." I cut out my Trailing stops and rode my portfolio down to $55K (down 40% from the start and probably down about 50% from the peak). Throughout the whole thing, I shifted assets into my positions that were plummeting the fastest --- and I began buying January 2010 Calls in the accounts that I could when my dad and friends were telling me I was an idiot. That's what I've been doing. If I wasn't playing with college money and my investors accounts were set up to margin and buy calls, I'd have leveraged up more --- for better or worse.

"Shoulda-Coulda-Woulda" --- That's the call of wussies. At least I actually did it.

Now that I have experienced this kind of drop first hand... I plan on actually selling stocks when there's lots of negative outlook and monster selloffs early on... and waiting for better prices --- even for ridiculously undervalued priced stocks like mine.

Labels: AOB, BEAV, CEDC, NDAQ

china solar looks really hot right now. i don't have the time to look through and analyze them all right now --- unfortunately. i'm definately interested.

barak obama won the election. (this is the night before) - sorry mccain.

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