Most investors would like a "do over."

They look back on certain investments and wish they'd never heard of, much less put money in them. Sure things like your good friend's invention that would make beer in one day from water and weeds. Or your brother's idea of selling real estate on Saturn. Everyone has their own stories. Mine are usually related to private investments in the medical device field or biotech, though I did have one out of Florida that made a "pig" that ran through oil pipelines to check on their safety. After meeting the founder who looked more like a used car salesman that caught a great sale on polyester suits, I should have known better right then. But I didn't.

Continue reading Comfort Zone Investing: If I Could Start All Over Again ...

Comfort Zone Investing: If I Could Start All Over Again ... originally appeared on BloggingStocks on Sat, 02 Apr 2011 10:30:00 EST. Please see our terms for use of feeds.

Since the stock market is down so much I have been buying something in the fourth quarter almost every week. I have been patient and have been expanding my watch list. The difficulty for me is that I feel like almost everything is on sale -- but is everything a bargain?

Maybe not; maybe I'm delusional. Perhaps that is because I am tuned into another time and place when I would have been dancing in the streets if I were able to acquire Anglo American ADR (NASDAQ: AAUK) or General Electric (NYSE: GE) for pennies on the dollar. Maybe that is all these stocks are worth? That is what Wall Street currently thinks. That is what Main Street currently thinks. There is a lot more bad news than good.

Then why is Warren Buffett buying, and Carl Icahn and Ken Heebner? After all, I'm just following in their shadows.

The reason is that most investors are simply focused on all the bad news. That is what has most folks' attention and that is making the market -- bankruptcies, billions of dollars in losses, government out of control, Wall Street out of control and more. There is also serious fear things will get worse. If you lost money in the stock market (all of us), or lost your job or your house or any combination of the above, then things look bleak and for now they are. However, we should not be investing for now; we should be investing for the future.

Consider the following elements that support a recovery in the next year. I do not mean a boom, just a recovery -- just a more positive investing environment.

1) By spring it is estimated the government will have poured $2 trillion dollars into an economy of $13 trillion over a 12-month period. Not only is this a market stimulus, but it may prove to be highly inflationary, and if so equities are a better place to be then cash.

Continue reading Serious Money: Can everything be a bargain?

Serious Money: Can everything be a bargain? originally appeared on BloggingStocks on Fri, 26 Dec 2008 17:00:00 EST. Please see our terms for use of feeds.

To me, it was inevitable that PetroChina ADR (NYSE: PTR) would become one the largest companies in the world, so I am not surprised by news that it has surpassed General Electric (NYSE: GE) to become the world's second largest company. It now stands behind only Exxon Mobile (NYSE: XOM), and has a much faster growth rate.

I have been shouting about this stock to anyone who would listen since I started writing for BloggingStocks, and hopefully a few have taken notice and earned some money with me. While GE has made some modest gains this year moving almost in lockstep with the indices, PetroChina is up almost 70% and has been paying a generous dividend the entire time. PTR reached a value of $434 billion riding the news of $85-a-barrel oil while GE is hanging tough around $413 billion on a down day in the market.

My original thesis when PTR was at $44 a share, paying about a 5.5% dividend yield and carrying a trailing P/E of 9.5, was that this stock was having a fire sale. Since that time, the stock has simply been on fire. I liked this stock because I felt that few things come close to the certainty of the sun rising in the morning, but the Chinese consuming more oil tomorrow than they did yesterday was one of them. The last time I recommended the stock, it was trading at $142.12 last December when I suggested investors add it to their watch lists for an opportunity to acquire it. That opportunity came as it dipped as low as $108.18.

Continue reading Chasing Value: The sun, oil and PetroChina (PTR) all rise -- and pass GE

Chasing Value: The sun, oil and PetroChina (PTR) all rise -- and pass GE originally appeared on BloggingStocks on Mon, 15 Oct 2007 15:00:00 EST. Please see our terms for use of feeds.

For about 16 months I have been writing about business news, the over-all market, pet peeves and some stocks I like. At times I have responded to inquiries in the comments section or follow-up posts. Sometimes I have responded directly to some of our regular readers. Many of our readers are quite-well versed in the investment world and the stock market in particular; and I have learned some things from them too. On many occasions something a reader has commented on has stimulated another story, and I have done several sagas during my tenure.

BloggingStocks has improved every month and when I look at the company I am keeping lately I am flattered to be among them. Our editors have been extremely encouraging and supportive. One of the best features about this site that I think puts us head and shoulders above others is the almost instant feedback afforded by the comments section and the dialog that ensues. This is not possible in magazines or sites trying to compete online with large business journals.

Continue reading Calling all stock pickers - what stocks do you like now?

Calling all stock pickers - what stocks do you like now? originally appeared on BloggingStocks on Tue, 04 Sep 2007 22:30:00 EST. Please see our terms for use of feeds.

I had a chance today to take one of the online Implicit Association Tests (IAT) of Project Implicit, an ongoing study by Harvard-affiliated academics trying to uncover the associations, often subconscious, that guide our perceptions. The test I took was one of gender, and it told me that I am biased toward associating careers with men, family life with women. I admit, I am a product of 1950s television, so the results weren't surprising.

It did cause me, however, to wonder what assumptions we make in considering our portfolio. See if any of these hit the mark -

• Big companies = bad companies. For us children of the '60s, this message was drilled into us during the protests of companies engaged in weapons research during the Vietnam War. Later, movies such as The China Syndrome and Alien 2 mined the same vein.
• Female CEO = Chummy, non-confrontational office atmosphere. The ghost of Mary Richards, Laverne and Shirley, or Monica, Rachael and Phoebe haunt many of us.
• Chinese profits = American losses. We faced this in the 1980s with Japan, and Korea. Perhaps this is a holdover from the depression, when so many people believed in the zero sum game; the rich got richer, the poor got poorer. Even though this has been disproven over and over, it seems to be part of the American psyche. It could also be expressed as Mexican immigrants = loss of American jobs, although I don't see any of my friends lining up to mow lawns.
• The majority is always right. You would think such an irrational corollary to the democratic model would find no traction, but there most be a reason for the dot-com bubble.

Take a few minutes, if you wish, to take one of the Project Implicit tests. See if it doesn't cause you to wonder about the implicit assumptions that color your judgment. And what do you think are some other assumptions people hold about the stock market that I didn't mention?

The Implicit Association Test and stock selections originally appeared on BloggingStocks on Fri, 08 Jun 2007 17:13:00 EST. Please see our terms for use of feeds.

In Part 1 of this series, I found two possible candidates for my Dow value picks, Alcoa Aluminum (NYSE: AA) and American International Group (NYSE: AIG). Here we review the next five DJIA stocks, searching for further value in light of the frequent new Dow highs. Lately, the Dow seems to be benefiting from the number of companies with growing international business, its higher than S&P average yields (2.3 vs 1.8 as a whole), and the safe haven nature of large caps in a precocious market.

AT&T (NYSE: T) -- Like most of the Dow stocks, T pays a high yield, currently 3.5%, and like the others it pays it consistently. This company is the aggregation of SBC, Pacific Bell, Nevada Bell, Bell-South, AT&T long distance and Cingular Wireless. It is the only one of today's five stocks that I have owned (separately as AT&T and SBC), but I do not own any shares of AT&T now and I do not care to. After all of the expansion done by mergers and acquisitions and only limited internal growth, I am not sure what the upside is.

How much pricing power will the new AT&T have, given ongoing competition in each segment of its business from other wireless carriers, cable television, and VoIP? Considering all of the recent M&A activity, it seems to have relatively low debt and huge cash flow. It also has a P/S, P/B, and P/CF in the lower range of most stocks. But a P/E over 20 is too high given that I do not see where future growth will come from. It seems to me for every competitive battle AT&T might win on one front they may lose an equal amount on another. All things considered, this stock seem fairly priced with limited near-term upside.

Continue reading Serious Money: Whittling away at the Dow - T, BA, CAT, C, & KO: Part 2

Serious Money: Whittling away at the Dow - T, BA, CAT, C, & KO: Part 2 originally appeared on BloggingStocks on Wed, 30 May 2007 12:37:00 EST. Please see our terms for use of feeds.

A few days ago I received the following inquiry from a frequent reader of my blogs on Chasing Value.

Hi Sheldon, what do you think about: Gannett Company (NYSE: GCI)

P/S - 1.72, P/B - 1.65, P/cash - 9.9, dividend - 2.1%, P/E - 12.4

Publishing sector - quite hot at the moment? ...alex

Alex , you are developing a pretty good understanding of the numbers I look at. Now you should add something else to your calculations. The actual business it is in. When we look at American Home Mortgage Investment (NYSE: AHM) (see Someone asked about Amercian Home Mortgage) or IndyMac Bancorp (NYSE: IMB) (see Chasing Value: IndyMac Bancorp - once in a lifetime,) or many other fallen banks and mortgage companies, we can be confident they will bounce back if they survive the lows. There will always be banks.

Continue reading Chasing Value: Gannett as value play - not for me

Chasing Value: Gannett as value play - not for me originally appeared on BloggingStocks on Wed, 23 May 2007 16:28:00 EST. Please see our terms for use of feeds.

Warren Buffett, Chairman and CEO of Berkshire Hathaway (NYSE: BRK.A) has been doing some big time cogitating about the future. He plans to donate the lion's share of his wealth to the Gates Foundation. Recently, he said he was looking for an understudy with the right investing temperament and wisdom to lead Berkshire. There are reports that his office has been swamped with resumes. Some are reaching to the bottom of the barrel in suggesting that I seek an audience. Perhaps they were stimulated by another Serious Money: Freight Railroads - BNI, CSX, UNP & more story which I posted the day before Berkshire Hathaway announced it had become BNI's largest shareholder.

So with this and other prescient commentary I recently posted, I was asked to present some ideas on what acquisitions Berkshire might consider given Buffett's eagerness to find a good deal. It is likely that Buffett will bring several people on board to play the role of Chief Investment Officer for different segments of the company. Nobody in their right mind believes that Buffett is replaceable.

In any event here are some of my ideas on the subject. All of my ideas follow a pattern favored by Buffett including low P/E, P/S, P/B, and P/CF's, as well as a high return on equity and low debt.

Continue reading Serious Money: Buffett should buy these five companies

Serious Money: Buffett should buy these five companies originally appeared on BloggingStocks on Wed, 09 May 2007 16:30:00 EST. Please see our terms for use of feeds.

It is much better to pick stocks when the market is closed than when it is open. It is much better to pick stocks when you have some peace and quiet. Looking back at stocks I have bought over the last ten years and comparing the results, I would have to say that I have done much better making the decision on the weekend than I did during the trading day with too many distractions, news flashes, and my own rambunctiousness. [From the dictionary - marked by uncontrollable exuberance: Unruly]

I have found various factors that make a difference in the long-term success of investments. Adding WHEN to make the decision is not a factor I've encountered. Simply put, if I was to create a value fund based on my other tested factors, I can now say with almost absolute certainty that adding the 'When factor' would improve its results. So my short list of stock fund criteria includes the following:

• Strong sustainable cash flow
• Low Price-to-Book ratio
• Low Price-to-Sales ratio
• Return on Equity (ROE) higher than the P/E ratio (trailing)
  
• Positive return on Invested Capital (ROIC)
• AND NOW - do not make buy decisions when the market is open

I think it is always a good idea to make decisions when one is less stressful, but I never gave it as much thought as I have recently; especially when it comes to stock picking. Those of you who have read my Chasing Value or Serious Money stories have seen all of this before repeatedly. Now with the last factor, which is not visible to investors in any mutual fund, I add one more area of personal discipline. Of course, for the traders among you, making your decisions when the market is closed might be a tad difficult at times.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

New rule for picking stocks: Do it on the weekend originally appeared on BloggingStocks on Fri, 27 Apr 2007 14:56:00 EST. Please see our terms for use of feeds.

As a self-proclaimed Web 2.0 geek (those who know me will agree with that label) I am constantly reading about the next wannabe MySpace, Flickr, and YouTube. On Wednesday, TechCrunch profiled Stockpickr, "the stock idea network" targeting the financially inclined and boasting a new partnership with TheStreet.com (NASDAQ: TSCM). I have to say it was a breath of fresh air. A rarity for Web 2.0 (although certainly not the ONLY Web 2.0 finance company), Stockpickr is proving to be very helpful for those of us who have a hard time choosing stocks and funds. The site allows users to create a profile of the stocks that they normally track and then generates stock ideas based on publicly available investing information.

I haven't had the chance to fully demo it (I do, in fact, have a full-time job) but I did navigate through some of the community profiles on the left side of the page, such as Warren Buffett's holdings. It not only showed me who else bought the stocks Buffett owns, but Stockpickr also told me what else they might recommend for buyers of said stock. For example, if you were interested in Costco Wholesale (NASDAQ:COST), Stockpickr shares what other people who own this stock also bought -- such as, Microsoft (NASDAQ:MSFT), Starbucks (NASDAQ:SBUX), or Cisco (NASDAQ:CSCO).

Read more of TechCrunch's review of Stockpickr here.

Web 2.0 meets finance in Stockpickr originally appeared on BloggingStocks on Fri, 05 Jan 2007 11:45:00 EST. Please see our terms for use of feeds.

I only picked seven stocks because it is too hard to beat the market without a focused portfolio. The more stocks you have the more you resemble an index fund. When you consider how many stocks James Cramer recommends in a year you have to wonder how following that kind of advice could lead to success. Casting your net wide and hoping to catch something good is not a shrewd investment strategy. You have to pick and choose somehow.

I kept thinking about what the right price to acquire this stock should be and decided the time was now. After pondering all of the information I shared with our readers, it appeared that if this stock was going lower it would not be by much. However, if it took off to the upside I would be in a bigger quandary. So now I own it and expect to for many years. If it does go down I will probably buy more.

Opportunity: Lets discuss your picks for 2007 + 12 of mine to review if you have some stock ideas you would like me to review publicly.

Check out my other posts for BloggingStocks here.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.

Valero Energy - My last trade of 2006 originally appeared on BloggingStocks on Tue, 02 Jan 2007 15:54:00 EST. Please see our terms for use of feeds.

Where do investment ideas come from and what makes one idea carry more weight than another? Sometimes it is your knowledge or interest in a certain area of business that stimulates you to consider an investment. Sometimes it is the opposite and you feel a need to expand your horizons. It might be the excitement or buzz around a certain company that perks your interest to look further. But often it is the source of the information that does the trick. Maybe sometimes it is a trick, and it is all about presentation.

In Kramer vs. Kramer the movie, winner of five Academy Awards, Dustin Hoffman and Meryl Streep played a husband and wife too preoccupied with their careers to put much energy into their family. In the end they separate and Mrs. Kramer gives up on her custody battle for her son concluding he would be better off with Mr. Kramer, who has lost his job in trying to maintain his bond with his son.

The Kramer/Cramer's of the investment world are at odds with each other too, but not in a personal relationship, only in their delivery of advice.

Continue reading Cramer vs Kramer -- Two investing gurus' approaches

Cramer vs Kramer -- Two investing gurus' approaches originally appeared on BloggingStocks on Fri, 24 Nov 2006 15:15:00 EST. Please see our terms for use of feeds.