Festival of Stocks #28
Welcome to the twenty-eighth Festival of Stocks. The Festival of Stocks is a weekly blog carnival dedicated to highlighting the best recent posts on stock market related topics.
I am proud to present this week’s best entries to the Festival of Stocks. The articles are listed by category. The stock tickers are linked to Yahoo Finance. I have included my post “Against the Topps Deal” among the links below.
This week I decided to do things a little differently. Several of the best blog posts of the last week happened to be on the same topics. Rather than attempting to fight the tide and admit inferior posts in their place, I decided to embrace the idea of multiple posts on the same topics. As a result, you will find an occasional panorama of punditry among this week’s selection. Of the festival’s seventeen posts, three are on Jack Bogle’s new book, two are on the Topps deal, and two are on stock buybacks. Of course, there is also the usual handful of posts on specific stocks you’ve come to expect from each week’s festival.
On the right side of your screen, you’ll see a survey asking what total annual return you expect from the S&P; 500 over the next ten years (if you don’t see it, please go here). The survey isn’t an ad. It’s part of a project I’m working on for the blog. Please take the time to vote, as I’ll incorporate the results of this survey into some of my future posts.
If you have an investing blog of your own, you can copy the poll and present it on your own site. The more diverse the places the poll is presented, the better the results will be.
Thanks for humoring me.
Enjoy the festival.
Market Commentary
Falling Out the First Storey Window By Value Discipline
In his first post back after a month long absence from the blogosphere, Rick discusses the February 27th fall in Shanghai and the U.S. market tumult that followed – a one day drop he likens to a fall out of a first storey window.
Bogle’s Book
Book Review: John Bogle’s Little Book of Common Sense Investing By Value Blog Review
Steven sets the record straight regarding exactly what Bogle does and doesn’t say in his new book. Everything on Value Blog Review is written with new investors in mind – and this review is no different. Steven explains why Bogle’s latest title is the first book a new investor should read.
The Little Book of Common Sense Investing – Book Review By The Confused Capitalist
Jay finds himself in the unusual position of describing how a book can be like Chinese water torture – but in a good way. His point is simple: Bogle’s constant, logical beating of the indexing drum, accompanied by simple arithmetic and quotes from famous value investors and B school professors, makes it “all but impossible to dismiss” the case for index funds.
More on Bogle’s New Book By Controlled Greed
In response to Bogle’s new book, John Bethel looks at a contradiction in Warren Buffett’s thinking on index funds. Buffett says an index fund is “the most sensible equity investment for the great majority of investors”. However, while winding down his own investment partnership, Buffett advised those partners who didn’t want to take Berkshire shares to give their money to (the late) Bill Ruane of the Sequoia Fund. More than 35 years later, the partners who followed Buffett’s advice have a 15.68% to 11.85% annual return lead over the S&P; 500 – but, time will tell.
Topps
Disappointing Offer for Topps: Why this Deal is $7.55, Not $9.75 By Cheap Stocks
The recently announced Topps deal is met with some tough words and common sense in this post from Cheap Stocks. Those words mean even more coming from a former shareholder who specializes in stocks with a lot of excess cash on the balance sheet.
Stocks: TOPP
Against the Topps Deal By Gannon On Investing
For those who just can’t get enough of the Topps deal or who simply enjoy falling asleep in front of their computer screens, here are 5,000+ words of vitriolic analysis often approaching pure philippic – written by yours truly.
Stocks: TOPP
Buybacks
Stock Buybacks and Dividend Payments Remain Strong By Disciplined Approach to Investing
David Templeton takes a look at stock buybacks and dividend payments. According to a press release from Standard & Poor’s, S&P; 500 companies spent $105 billion buying back their own shares during the fourth quarter of 2006.
The Buyback Indicator Still Going Strong? By CXOAG Investing Notes
In a related post, the CXOAG blog cites a recent paper discussing the stock repurchase anomaly in recent years. Based on that paper’s findings, it appears investor awareness of the anomaly’s existence has not served to eliminate it.
Stock Analysis
This Panther is Ready to Pounce By Value Plays
A detailed post reviewing Owens Corning’s latest conference call. The author clearly likes the stock. Much of the post is devoted to discussing the (conservative) assumptions present in the company’s earnings estimate.
Stocks: OC
Handleman is Still a Bargain By The Picky Investor
In this follow-up to an earlier post, the author explains why Handleman is still a bargain, despite suspending its quarterly dividend. The post discusses qualitative as well as quantitative aspects of the business and its merits as an investment.
Stocks: HDL
Manitowoc Company “Revisiting a Stock Pick” By Stock Picks Bob’s Advice
Following his usual format, Bob Freedland revisits Manitowoc Company for the second time. He first wrote about the company in November of 2004; then, revisited it in January of 2006. This is his latest update on Manitowoc.
Stocks: MTW
Conviction Buy List By One Guy’s Investments
Travis Johnson rips a page from Goldman Sachs’ playbook and presents a “conviction buy” list of his own. It consists of four very different companies: Gol Linhas Aereas Inteligentes, American Science and Engineering, Cemex, and Exelixis.
Stocks: GOL, ASEI, CX, EXEL
Investing
Profit With Split-Offs By Fat Pitch Financials
George is at his best in posts like these. Here, he leads investors through the split-off process, step by step. He explains what split-offs are (and how they differ from their better known brethren, spin-offs), why they can be profitable for individual investors, and where you can start looking for future opportunities in this area. He also provides two examples of recent split-offs.
Stocks: MCD, CMG.B, WY, UFS
Great Companies Don’t Always Make Great Stocks By The Peridot Capitalist
A short post on an important topic. Why do the portfolios of even the best value investors always look so ugly? Why can’t sell-side analysts distinguish between a business and a stock? Why do America’s least admired companies outperform America’s most admired companies? Simple, because great companies don’t always make great stocks.
Stocks: BBY, RSH
Other Goodies
Handouts Live On In Corporate Board Rooms By 10Q Detective
A guided tour of the goodies given out to corporate board members with your host, David Phillips. Sights to see include: Whirlpool appliances, fancy gym memberships, family outings to theme parks, and free tires.
Stocks: WHR, LTM, BUD, GT, HPQ, SNS, HOT, DIS, CUK
Quickie By MFI Diary
Certainly not a misnomer; this is a quick post. It’s a list of “Blue Light Special” stocks selected through the use of Joel Greenblatt’s Magic Formula. These are sixteen “Magic Formula” stocks that have fallen 15% or more.
Top 1,000 Finance Blogs, P/E Revisited, Investor Bashing By Interactive Investor
A good way to end the Festival. This post is something of a hodgepodge. The best part is the discussion of Jack Bogle’s book, the reaction to that book from Bloomberg’s James Pressley, and the reaction to Pressley’s reaction from the folks over at Value Investing News (I am one of those folks). The Interactive Investor post is itself a sort of reaction – so, at this point we’re about four steps removed from Bogle’s book and it seems as good a time as any to call it quits.
That’s all for this week’s Festival of Stocks.
Thank you to everyone who contributed to this week’s festival – you did all the real work.