Sheldon Liber posts
Last November I wrote Chasing Value: Apple's Great, but This Stock Is Better!
with the audacity to state "...the potential to beat Apple's prospects by 33 to 1 -- now that is amazing!"
Yes you read that correctly.
I still believe a dollar invested in EZCorp (EZPW
) will earn 33 times that of a dollar invested in America's sweetheart Apple Inc (AAPL
Of course anyone can make any proclamations that they want.
Few dare as I have to post the results when they are not favorable as I have over the past five years.
Today however, I will not be swallowing my pride as EZCorp, a leading pawn shop and cash advance company, has indeed out performed the tremendously successful Apple since the original story. It is worth mentioning to those that would point to Apple's ten-year run that EZPW was the better stock over the long haul as well.
Continue reading Chasing Value: EZcorp Still Besting Apple
There have been many lessons to learn from the "Great Recession." But while the message is often clear, we can't always muster the courage, discipline or consensus to act on these lessons.
The National Basketball Association (NBA) is about to enter its second season -- the playoffs. And for a Laker fan in Los Angeles, there is much to look forward to. However, the current NBA collective bargaining agreement will end and we will have to witness another battle between the billionaires and the millionaires.
Why can't the NBA learn from other businesses that have successfully maneuvered through economic turmoil to achieve profitability?
Continue reading Chasing Value: The NBA Should Learn from Others
In the middle of the summer with the stock market smoldering from the economic aftershocks of the BP (BP) oil spill, I decided to post a contrarian story emphasizing a very common refrain among value investors, "my pal Warren" being head of the class: buy on fear (sell on greed). This notion is continuing to work for what I called the toxic stock portfolio.
This is the third update to my ranting five months ago that six of the most reviled and most highly traded stocks featured by daily bad press as a group would outperform the overall market. It has, with the big winner rising from being one of the biggest losers.
Continue reading Chasing Value: Toxic Stock Update #3 -- BAC, BP, C, GE, GS, RIG
I have always felt that for all the blabbing we do -- or blogging, in my case -- we should try as best we can to be accountable for our good and bad calls. This report is long overdue, but I will post it anyway since all of my past year's picks and results have been made public.
The market was very harsh in the early part of 2009, filling investors fear and trepidation, and sinking to a March 9, 2009 bottom. Perhaps some of the bleeding has stopped, but the economy has not healed as bears and bulls seem to carry the day, or every other day.
Continue reading Chasing Value™: 2009 Results Crushed the S&P 500
Yesterday I was shocked by the response to a poll I conducted in this very same column
where I suggested that six out-of-favor stocks were a buy and would out perform the over all market. The results left me puzzled for several reasons.
For one thing I have been blogging for Aol. for over four years and I cannot remember an occasion that there was so much unanimity on anything before. I expected approximately equal votes for each of four possible responses to my question, and an appreciable number that might think I was off my rocker. Instead, I was jolted to a new reality when 84% of the respondents agreed that the six toxic stocks would outperform.
The six stocks are Bank of America (BAC
), Citigroup (C
), General Electric (GE
), BP p.l.c. (BP
), Goldman Sachs (GS
) and Transocean (RIG
). I thought I was taking a contrarian position and based on recent market activity that would seem to be the case. This raises another question. If my readers are any reflection of the market, how could the market move in the opposite direction of such overwhelming sentiment?
Continue reading Chasing Value: Shocked By Toxic Stock and Still Finding Deals
Tomorrow is filled with the potential to boost the market upward, or trip it up going into the weekend. Three financial giants are reporting: Bank of America Corporation (BAC
), Citigroup, Inc. (C
) and General Electric Company (GE
). This could set the stage for a continued market rally next week as earnings season has been generally positive and a trend is developing.
Expectations are high, following solid quarters reported by State Street (STT
) last week that surprised
many, and JPMorgan Chase & Company (JPM
), who followed up with a big beat this morning.
Sentiment seems to be on the bullish side as tomorrow is also options expiration time and those betting on the banks should be pleased to book some gains.
Continue reading Fearless Friday: BAC, C, and GE Report Earnings
To continue the saga of what might be on Warren Buffett's foreign wish list, consider the current holdings of Berkshire Hathaway (BRK.A
), the largest of which is insurance. The insurance industry has been hard hit by the economy, but it also has the greatest potential to rebound of any industry. Insurance companies have huge cash flow and a large float (mandated by government regulation) that can be used for investments. This has been a major contributing factor in Buffett's success.
Unlike the construction, automobile or financial sectors that have been met with an economic tidal wave that destroyed demand, there is no lack of demand in the insurance industry. The insurance companies have been hurt by the shrinking of their investment portfolios more than loss of demand or even claims, accepting companies that wrote swaps, like American International Group (AIG
When next "my pal Warren"
invests abroad he may not have to go very far.
Continue reading Serious Money: Buffett Going Global -- Part 5
Let's go around one more time with American Eagle Outfitters (AEO
), the retailer with the pristine balance sheet that designs and manufactures its own clothing line targeted at the 15 to 25 year old age group.
It was one of my successful picks for 2009
, rising from $9.13 to a closing price of $16.98, with a 52 week high of $19.86. Today it is trading near its 52 week low of $11.35, opening at $11.61 and trading up at mid-day.
I think this eagle will soar again and surpass it's previous high.
Continue reading Chasing Value: American Eagle Will Soar Again
The long awaited Initial Public Offering (IPO) of Tesla Motors (TSLA) stock hit the market at $17.00 a share and it is up in a down market, trading between $18 and $19 throughout Tuesday morning.
I say stay away. First and foremost, investors should take note of the fact that most IPO's end up as losing propositions. In the case of Tesla, which lost over $55.7 million last year and will lose more this year, the bleeding has just begun.
The car manufacturing business is very capital intensive and Tesla only hopes to stem the tide in 2012 when it projects a production run of 20,000 Model S all electric sedans for $50,000 each.
Continue reading Tesla IPO: Hot Stock or Portfolio Shock?
Earlier today, I posted Whose Best Interests Are Served If BP Is Pushed into Bankruptcy?
where I disclosed having taken a position in BP p.l. c. (BP
), and for better or worse my first test will be the market close on July 16, 2010.
Over the past year, I have started reporting on various put options that I have been doing. In today's example, I sold to open BP at a July strike price of $22.50 (a naked put), receiving $0.50 per share.
My break even is $22.00, and the stock opened today at $27.65 with three weeks to go.
Continue reading Options -- A Foolish Bet on BP?
The daily cost of operations, clean-up and restitution to BP plc (BP) has reached $100 million per day (over the last three days), according to the company. Unless this is being broadcast to garner unlikely sympathy from a angry crowd, then the costs have reached a magnitude I would have thought unlikely, and my contrarian bet on BP may be at risk.
It's important for me to disclose from the beginning (not just in the footer) that I have wagered that BP is oversold through options and equity. How much so depends on a lot of factors. I made this calculated risk based on the assumption that forcing the company into bankruptcy is not in anyone's best interest. However, I am once again reminded of a great line from the The Maltese Falcon, in which Kasper Gutman cautions Sam Spade:
Continue reading Whose Best Interests Are Served If BP Is Pushed into Bankruptcy?
There are many places that Warren Buffett may choose to invest Berkshire Hathaway (BRK.A
) capital. At the same time you can be sure there are places he will not set foot. It is not likely he will invest anywhere that does not have a vibrant, well-established stock market with a stable government. So, Mr. Hugo Chavez in Venezuela will not likely see any capital deployed from the likes of "my pal Warren"
any time soon.
As a matter of fact, I would put the chances at slim of any South American country, besides Brazil, getting a look at all. Brazil is just too big and too vibrant to ignore. I would rule out Africa entirely except for indirect investments in oil and minerals through large conglomerates. The closest thing in the region would be Israel, at the furthest western reaches of Asia. He has already invested there and there is a high probability he would again. Investors from most of Europe and Asia have done the same, although many would rather not discuss it.
He has also invested in China, Great Britain, South Korea, and Switzerland. I would expect more money to be plowed into all of them again without reservation if the right deal materialized.
Continue reading Serious Money: Buffett Looking Beyond Our Borders -- Part 3
Stories are starting to appear that "my pal Warren"
is gearing up for a major foreign acquisition. One of my dear friends Randy S. is taking a post graduate business class at UCLA where this issue is a part of the course. He is supposed to figure out what non US companies Berkshire Hathaway (BRK.A
), led by Warren Buffett, might be considering for investment.
Ahh yes, the prediction business, quite tricky indeed. Starting with some basics, in most cases I would stick to the time tested philosophy that past performance is not an indicator of future success. That said, I think in the case of Buffett, it does. There are many clues along the trail based on his past performance.
Here are some basic consistencies from the existing portfolio that I would expect to hold true going forward.
Continue reading Serious Money: Buffett Looking Beyond Our Borders
Next Page >