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TranceAddict Investors Club @ Marketocracy (pg. 37)
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| Krypton |
| quote: | Originally posted by Shakka
Absolutely...and money to be lost. It's called every single day. Sorry, just a bit of an asinine comment if you ask me. Bear markets are certainly a great deal more difficult though.
/end of rant due to market frustration. |
Well of course there's money to be lost. But one can weather the market storms much better if they implement a risk management strategy with a proven track record of providing above average alphas. |
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| atbell |
| quote: | Originally posted by Capitalizt
Just ask yourself...What are the long term macro trends of the world?
My answer:
#1 Lots more computers
#2 Lots more internetz
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#3 Less power consumption
#4 More walking
A good solution to the strangle hold that oil, oil bearing countries, and car makers have over the US economy would be to make city centers more livable. This would mean more walking, which is also good from a physical health point of view. End result, buy Nike. ;)
Power is needed to fuel internetz and computers so it's generation and distribution need to be understood to figure out where to invest. I personally like nuclear, which means invest in Uranium, and some wind solutions. Solar still needs some work though.
There is also a technology where excess power generation is used to pump water up a hill only to have it be released at peak times. The technology is described in the book "Heat" which I read recently. It isn't a bad idea, I like the founding principle of storing generated electrical energy as gravitational potential energy for peak times, but I'm not sure using pumped water is the best way to do it. |
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| atbell |
| quote: | Originally posted by Capitalizt
We still haven't seen a bloody selloff in the stock market so I'm hesitant to buy anything here no matter how good it looks. I think we really some good old fashioned panic selling...capitulation...a sense of total hopelessness. That is what signals a bottom and we haven't seen it yet.
I don't think Wall St. has fully taken into account the economic policies we will get when the dems win the White House this year. I think a Hellary or Obama Presidency would chop 20% off the market fairly quickly. With dems in control of all three branches of government, it is a guarantee that capital gains taxes will go up, corporate taxes will go up, and the top tax rate for small businesses will go up...all very bearish for the market.
Keep some powder dry folks. |
I agree that this isn't the bottom and I'm looking at my prediction of stability in Feb with shame.
Bernake wants to keep cutting, keep "stimulating", but it's all a load of BS that's not going to "help" what's really happening. The standard of living is going down, either through market losses or inflation. There's just no getting around that.
I recently spoke with my friends in the investment industry, one was positive on Nickle and Molibdinum, the other felt the strength of the US economy had a lot to do with branding and estabished brands. By the second argument, the world recognised brand franchises are extremely valuble.
I tend to agree with this. The brands have the power to pick and choose which products to add to thier line that will maintain the reputation. This means that solid international brands like Coke, Nike, Holiday Inn (?), Hilton, etc. should hold stronger then other companies. |
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| Krypton |
My #1 stock DSX is in the third section of this post. This is the best stock I have ever found in my opinion. The fourth section is a summary of my view of DSX...
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Here it is. My February 2008 stock research report. Several of you requested I add your stocks to my list. Look on the list, and look for your stocks. If your stock did not make the list, it is because...
a. You gave me an ETF/mutual fund/index fund which are not stocks.
b. Financial statements reported in non-US dollar.
c. Missing data.
d. Your stock's fundamental strength was below a 70 .The reason for this is because it is not worth the time to do more in depth calculations if the stock is not good enough against the market or industry.
Below is are the screenshots......The stocks are listed in alphabetical order. The higher the intrinsic value of a stock, the better and cheaper the value was. The intrinsic strength values are on the very right side of the spreadsheet. The stocks with the highest intrinsic strengths on this list are the highest I have found so far researching thousands of stocks since Novermber 2006.
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Here is how to analyze the results...
The gold section is a set a of averages of more than a dozen metrics according to their respective purposes. All of these calculations are included in the 'intrinsic strength value'.
Fundamental Strength:::
0 - 20: Consider Short Sell
21 - 39: Strong Sell
40 - 59: Sell
60 - 69: Hold
70 - 84: Buy
85 <: Strong Buy
Gamma Ratio:::
0 - .949: Undervalued
.95 - 1.049 : Fairly Valued
1.05 <: Overvalued
Yield Price Ratio:
0 - .59: Dividends & Earnings Overvalued
.60 - .99: Dividends and Earnings Fairly Valued
1 <: Dividends and Earnings Undervalued
Intrinsic Strength Value*:
< 4: Fundamentals and Value Substantially Below Average
4.01 - 7.99: Fundamentals and Value Below Average
8.0 - 8.99: Fundamentals and Value Average
9.0 - 9.99: Fundamentals and Value Above Average
10.0 <: Fundamentals and Value Substantially Above Average
Keep in mind that the scale used in the intrinsic strength value is set at a very high level, because obviously, the higher the better. A 5.0 really is not that bad, but I'm not looking for "not that bad". I'm looking for the very best stocks I can possibly find. This strategy is designed specifically as investment (as opposed to trading) and placing value on fundamentals. The ultimate purpose is to find the highest possible quality stock for the lowest possible market price, with minimal use of technical analysis.
If there is anything you guys don't understand or have a question about, don't hesitate to ask.
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I have money sitting on the sidelines, plus my tax refund and stimulus check. So far, DSX is the best stock I've found so far, in my opinion, according to the numbers. I'de also like to know what you guys think about my list or DSX? I will probably take on a partial DSX position tomorrow. Below is the research I have come up with so far...
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DSX - Diana Shipping Inc.
The numbers are great!! The risk? What risk? China is hungry. India is hungry. Russia needs some too. Brazil is there too. Include the what the developed nations buy and sell, and we can see why shipping transports will be in HUGE demand. Steel from Brazil needs to get to China! The world needs dry-bulk shippers. Demand for raw materials cushions the dry-bulk shippers for long-term growth prospects. Add on the need for consumer descretionaries like food, toilet paper, etc.; demand is there even in a slowing economy. In other words, the demand is not driven by a temporary fad. The last 5 years have seen EXPLOSIVE growth for dryshippers including DSX. Just look at the growth rates. They average more than 100%. The great prospects for DSX is that it has long-term growth, increasing demand expected to continue rising, low valuation, and the best financial numbers I have seen so far in all my research.
DSX - Diana Shipping
Price Today @ 3.19PM: $30.31
52wk Range: 16.79 - 45.15
Industry: Dry-bulk Shipping
Description: Diana Shipping, Inc., through its subsidiaries, engages in the ocean transportation of dry bulk cargoes worldwide. Its fleet consists of dry bulk carriers that transport iron ore, coal, grain, and other dry cargoes along worldwide shipping routes.
PEG = .57 (Yahoo Finnace)
Sales (5-Year Annual Avg.) 74%
Net Income (profit) (5-Year Annual Avg.) 346%
Dividends (5-Year Annual Avg.) 105%
Dividend Yield: 7.8%
Earnings Yield: 6.6%
% of 52wk High: 33%
Debt/Equity Ratio: .12
Gross Margin: .0%
Pre-Tax Margin: .5%
Net Profit Margin: .5%
Return On Equity: 23.1%
Return On Assets: 18.4%
Return On Capital: 18.8%
My Rating and a target price
Fundamental Strengh: 85 - Strong Buy
Gamma Ratio: 1.31 - Undervalued
Yield Ratio: .83 - Dividends and Earnings Fairly Valued
Intrinsic Strength Value: 27.49 - Fundamentals and Value Substantially Above Average
Target price (as indicated by gamma ratio): $39 - 40
| quote: | The international dry shipping sector is a stable industry that is largely supported by China's raw material import needs and its manufacturing export needs. ... This is an industry that also seems to weather recessionary and inflationary periods well, because of the need for transporting both consumer staples and raw materials. ... It offers ... low risk because both [its] sector and services are in demand even in a slowing global economy.
The Shipping sector has contained some of the best performing stocks this year ... in part ... thanks to rising demand for raw materials. Once again much of this demand has come from and will continue to come from the Chinese economy ... and [its] rapid building projects to flaunt to the world in the coming 2008 Olympic Games. ... The average price of chartering a big freighter to carry raw materials from Brazil to China has nearly tripled [versus] a year ago. |
http://www.fool.com/investing/high-...ing-shares.aspx
| quote: | Keep An Eye On Diana Shipping
One of the less publicized success stories of 2007 was the shipping industry. In particular, the dry-bulk category has experienced sharp swings but on average, impressive gains.
The primary source of these gains revolves around the day rates for dry bulk shipping. The industry has become somewhat commoditized in that there is an active market for shipping days complete with a spot price (current price today) for a particular size of ship as well as forward contracts that companies enter for long-term agreements with clients. These contracts can range from a few weeks to several years and are typically paid based on some agreement of a price per day.
Due to the expansion of the global economy, there has been increasing demand for shipping. Countries like China have a strong need for iron ore to make steel for building projects. Grains such as corn and wheat are being shipped as industrialized nations ramp up ethanol production, and developing nations require more food stocks. As day rates for shipping rose sharply this summer, many of the stocks such as Dryships Inc. (DRYS), Genco Shipping (GNK), Diana Shipping (DSX), and TBS International (TBSI) saw incredible gains.
In typical fashion, Wall Street was extrapolating the present far out into the future, and modeling substantial growth indefinitely. Since rates began to level off, the stocks have given back much of their gains and now appear to have value at current prices.
In looking at the structures of different companies within this industry, I was intrigued with the variety of capital structures represented. Diana Shipping struck me as particularly unique because the company proposes to pay out the majority of its free cash flow in the form of quarterly dividends. This strategy is typically seen in mature companies, but Diana continues to expand at a moderate pace by buying new ships and increasing the capacity of shipping days available to customers.
In order to finance these new ships, the company issues new stock periodically when it finds an opportunity to purchase a new vessel. With a low debt ratio and a solid yield, the stock will likely turn out to be less volatile than its peers over the course of this expansion. In comparison, Genco pays a smaller dividend (lower yield) and finances many of its vessel purchases with debt.
Another differentiating strategy for these companies is the degree to which they enter long-term contracts with customers. There are benefits and detriments to either side of this argument. Companies who choose to lock in rates with long-term contracts are unable to capitalize on increases in the spot market for shipping, but at the same time enjoy the benefit of having stable cash flow and lower risk.
Diana shipping has chosen this method although there are several vessels that will come to the end of their contracts in the next 5 quarters. Genco on the other hand, has decided to leave about a quarter of their vessels off contract in order to capitalize on the increasing spot rates. The decision has paid off as rising rates transfer directly to the profitability of the company, but the risk of a slowdown will have more of a direct effect on the bottom line.
There has been some concern that a global slowdown will cause shipping rates to drop significantly and thus cause the transportation companies to suffer losses. While this is a legitimate concern, it appears that the possibility is already included in the price of many shippers.
When considering Diana, the company has long-term contracts that will allow it to be profitable in a rough environment because clients are legally obligated to continue to employ the vessels. There are four vessels coming due for contract renewal in the first quarter of 2008 but the event should be a major positive for Diana as the current rates are significantly higher than the current rates of the completed contracts. This will allow the company to continue increasing the dividend over the next year and provide some sort of floor under the stock price.
The overall market has started 2008 on a sour note. As such, I am limiting new purchases to very small amounts until the current downtrend is resolved. I would not recommend purchasing Diana outright at this time, but I think it is a quality name that should be on the radar.
Aggressive traders may wish to sell puts with a strike price under current levels in order to capture some premium - but only if one is willing to take delivery of the stock as a long-term investment. The good thing with this name is that investors will get paid a healthy dividend while waiting for the stock to rebound. I do not own the stock, but will be considering a purchase as the picture becomes clearer. |
http://seekingalpha.com/article/591...ng?source=yahoo |
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| atbell |
| quote: | Originally posted by Krypton
DSX - Diana Shipping Inc.
The numbers are great!! The risk? What risk? China is hungry. India is hungry. Russia needs some too. Brazil is there too. Include the what the developed nations buy and sell, and we can see why shipping transports will be in HUGE demand. Steel from Brazil needs to get to China! The world needs dry-bulk shippers. Demand for raw materials cushions the dry-bulk shippers for long-term growth prospects. Add on the need for consumer descretionaries like food, toilet paper, etc.; demand is there even in a slowing economy. In other words, the demand is not driven by a temporary fad. The last 5 years have seen EXPLOSIVE growth for dryshippers including DSX. Just look at the growth rates. They average more than 100%. The great prospects for DSX is that it has long-term growth, increasing demand expected to continue rising, low valuation, and the best financial numbers I have seen so far in all my research.
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The risk is the US falls flat and trade paterns shift. The past five years have seen explosive growth because the supply has been baddly out of wack with demand. The causes are not easy to understand. This is a business where a de-railment can cause a port to get clogged which will then make rates jump by 50-80% for a single week.
Not to mention you're talking big money here. Ships "rent" for between 40-200 k US ... PER DAY. So a delay where 20 ships are held up for 5 days each... well big money.
I'm also going bearish on growth until I read more. You need to look at the shipping fleet size, the age, the distribution of ship types, and the order book. Not to mention that steel, one of the biggest things needed to build new ships, keeps going up (see German steel workers getting huge raises and Iron Ore companies pulling in 65% price increases contract to contract.
| quote: |
The international dry shipping sector is a stable industry that is largely supported by China's raw material import needs and its manufacturing export needs. ... This is an industry that also seems to weather recessionary and inflationary periods well, because of the need for transporting both consumer staples and raw materials. ... It offers ... low risk because both [its] sector and services are in demand even in a slowing global economy.
The Shipping sector has contained some of the best performing stocks this year ... in part ... thanks to rising demand for raw materials. Once again much of this demand has come from and will continue to come from the Chinese economy ... and [its] rapid building projects to flaunt to the world in the coming 2008 Olympic Games. ... The average price of chartering a big freighter to carry raw materials from Brazil to China has nearly tripled [versus] a year ago.
http://www.fool.com/investing/high-...ing-shares.aspx
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The shipping industry is anything but stable. Price variations have been EXTREME (100% shifts in priceing in a week) in the past five years and they differ from ship type to ship type.
The sector also has trouble weathering resessions. Ship owners had a really horrible time in the '80s and '90s and only really started to roll in cash from Sept. / Oct. 2003 on.
Shipping is also anything but low risk. Shipping is one of the highest risk industries in the world. Each ship costs MILLIONS of dollars for a rate of return that fluxuates with the hour. Then there are about 7-10 piracies a week, sinking, geo-political risks, mutinies, and all kinds of other problems. Remember that as soon as a ship leaves the port things start getting riskier and international waters actually have NO LAWS at all.
Right now the two biggest threats to the BULK shipping sector are shifting trade paterns caused by US slow downs and an end to Chinese infrastructure building (which is sucking up the cement and steel).
Don't be fooled by this other internet site, shipping IS affected by recessions.
Over all, I'd be warry of shipping because the past 5 years have been so good. |
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| Krypton |
| quote: | Originally posted by atbell
The risk is the US falls flat and trade paterns shift. The past five years have seen explosive growth because the supply has been baddly out of wack with demand. The causes are not easy to understand. This is a business where a de-railment can cause a port to get clogged which will then make rates jump by 50-80% for a single week.
Not to mention you're talking big money here. Ships "rent" for between 40-200 k US ... PER DAY. So a delay where 20 ships are held up for 5 days each... well big money.
I'm also going bearish on growth until I read more. You need to look at the shipping fleet size, the age, the distribution of ship types, and the order book. Not to mention that steel, one of the biggest things needed to build new ships, keeps going up (see German steel workers getting huge raises and Iron Ore companies pulling in 65% price increases contract to contract.
The shipping industry is anything but stable. Price variations have been EXTREME (100% shifts in priceing in a week) in the past five years and they differ from ship type to ship type.
The sector also has trouble weathering resessions. Ship owners had a really horrible time in the '80s and '90s and only really started to roll in cash from Sept. / Oct. 2003 on.
Shipping is also anything but low risk. Shipping is one of the highest risk industries in the world. Each ship costs MILLIONS of dollars for a rate of return that fluxuates with the hour. Then there are about 7-10 piracies a week, sinking, geo-political risks, mutinies, and all kinds of other problems. Remember that as soon as a ship leaves the port things start getting riskier and international waters actually have NO LAWS at all.
Right now the two biggest threats to the BULK shipping sector are shifting trade paterns caused by US slow downs and an end to Chinese infrastructure building (which is sucking up the cement and steel).
Don't be fooled by this other internet site, shipping IS affected by recessions.
Over all, I'd be warry of shipping because the past 5 years have been so good. |
I'de have to disagree. I'm 100% bullish. The shortage of ships and carriers gives shippers the ability to charge very high rates. The sector's economic moat is the demand for consumer staples that people need in all economic periods. The stocks certainly are volatile, but I would not base analysis of the industry to stock volatility. I believe the volatility is just traders doing their thing. Despite the stock volatility, I consider drybulk-shippers an investor's gem right now. |
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| Capitalizt |
I was typing in some symbols and many of those companies do look good...but there's just too many damn choices, lol
I wish you could throw them all into an ETF for me krypton. ;)
I found this company creates ETF's using models similar to yours...weighting their holdings based on earnings power or dividend yield. If you feel like taking a break from all this crazy analysis and want to just buy a big basket of stocks with good fundamentals, check these out:
http://www.wisdomtree.com/etfs/inve...-philosophy.asp |
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| Shakka |
| I ing hate ETFs. They distort true fundamentals and create noise. I know they're cheap and a good way to invest in baskets of stocks, but still--they muddy the waters. |
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| Capitalizt |
| quote: | Originally posted by Shakka
I ing hate ETFs. They distort true fundamentals and create noise. I know they're cheap and a good way to invest in baskets of stocks, but still--they muddy the waters. |
disagree...ETF's rock. They make it incredibly easy to diversify into different sectors with low risk. If you want to bet on higher energy prices, buy some energy ETF's. No need to worry about a specific company being nationalized or going bankrupt...because you own hundreds of companies. If you take a macro view on things, they are a great way to invest.
Think prices are going down? Buy an inverse or double inverse ETF like these. If your bets are right, you can still get a high return with much less risk than indvidual stocks. |
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| Shakka |
| quote: | Originally posted by Capitalizt
disagree...ETF's rock. They make it incredibly easy to diversify into different sectors with low risk. If you want to bet on higher energy prices, buy some oil ETF's. No need to worry about a specific company being nationalized or going bankrupt...because you own hundreds of companies. If you take a macro view on things, they are a great way to invest. |
I don't dispute that, but again, they muddy the waters. A large reason some of the tiest retailers have rallied recently was due to massive buying of the RTH. A reason a lot of financials rallied (aside from Fed cuts and massive stimulus) was people piling into ETFs. They may be a good tool for the average retail investor, but for professionals (and I say that as humbly as possible) they simply add noise. I have owned ETFs in my PA for the very reason you like them and I have done fine by owning them. However, when it comes to doing real stock picking and researching to find good ideas, ETFs can really throw a wrench into the system. Fwiw, my funds are very macro focused. |
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| guerra-monstru |
| I was wondering what are your thoughts if Obama gets elected and socialized medicine happens. Will it be a good time to buy stocks for those corporations during Obama's time and then sell when socializim ends in the medical field? |
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| Shakka |
| quote: | Originally posted by guerra-monstru
I was wondering what are your thoughts if Obama gets elected and socialized medicine happens. Will it be a good time to buy stocks for those corporations during Obama's time and then sell when socializim ends in the medical field? |
Theoretically it would not be a good thing for HMOs. The question is how much of that gets discounted into the stocks before he would actually get elected? People have mixed views on which party is good for stocks and what not. I think traditionally the view is that the GOP is more pro-business/hands off and therefore theoretically provide a better backdrop for stock investing. However, I think there are studies that can show just the opposite. If a democrat gets elected it's probably not going to be positive for big oil, pharmaceutical companies and companies like that as those are generally 2 sectors that are in the Dems' crosshairs. And of course, all of this is just one man's humble opinion.;) |
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