GlobalSpeculation.com
Bargain hunting for the sport

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

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

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.

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.

Ticker Time last high low Price % Change
SOLF 4:00pm 8.24 6.10 4.68 +81.09%
YGE 4:02pm 6.26 5.27 4.21 +70.10%
LDK 4:01pm 22.41 18.19 15.86 +52.55%
STP 4:00pm 17.82 17.50 13.25 +49.12%
JASO 4:00pm 5.65 4.82 4.12 +47.90%
CSIQ 4:00pm 10.90 9.86 8.60 +38.85%
CSUN 4:00pm 4.57 3.77 3.45 +34.01%
TSL 4:02pm 13.18 10.50 10.20 +31.93%

Dario,

Yahoo is priced to grow at 11.5% by my calculations. I know they have had deals with Microsoft and Google and neither have worked as far as I know. It’s been growing revenues at 6% to 8% and earnings growth is also questionable. Everyone knows google’s a better search engine. I’d rather own the best in class. There is a PE ratio discrepancy of about 22 to 19. That’s no question. Unless you know about some deal that Yahoo’s got up it’s sleave. Owning it and not google at this point in time is in my opinion like paying the same price for a moped when you could get a BMW. But, hell, if gas mileage turns you on. Go for it.

I don’t know anything about banks. I figure, I’d rather not try and read financial statements that are produced by banks (the institutions that in my opinion can manipulate them the most). JPM has a PE of about 18. It’s priced to grow at 11%. I have no idea. Well, finally: “(JPM) has just announced it will be making changes to about $110 billion in mortgages to help its borrowers” That’s good news.

I have other companies that I’d rather own. 1 Year targets are stupid, but analysts set them. There’s all sorts of bad measurements out there. That said, I reference them each time before I buy.

All things considered, I don’t own either.

Glen

From: Dario Visnjic
Sent: Friday, October 31, 2008 2:39 PM
To: gbradfor
Subject: Stocks

Hey

I have some shares of JPM, and yahoo is showing that its 1-Year Target is like 46. Does that mean I should sell at $46 or what. Also when do you think I should sell JPM?

Thanks

Todd,

The 2nd Quarter is usually their strongest quarter, so I expected earnings to fall from 1.044

It fell to 0.80, analysts expected 0.81.

Then of course they lowered their full year outlook (cause of the $0.99 UK currency hedge 1-time cost ––no brainer)

They’re still up Year over Year, That’s good, but I think their crane backlog is likely to be down from the last quarter. They hid those details by mentioning that it’s up Year over year. Crafty.

“The sequential decline in Manitowoc’s crane backlog from the second quarter
of 2008 reflected slowing demand for tower cranes in Europe, and a delay in
opening the 2010 order book until material price forecasts and customer
pricing arrangements can be finalized.”

“Crane backlog at
September 30, 2008 was $3.3 billion, nearly 26 percent higher than the
third quarter of 2007 and down slightly from the second quarter of 2008.“

Of course they don’t tell you what the Q2 figure is. Make you look it up.

“For the nine-month period of 2008, net earnings were $210.4 million or $1.60 per share, down from $237.4 million or $1.87 per share in the previous year period.”

That even reflects the $1.00 per share currency hedge. Looks like they’re kicking butt to me.

Haha, This next quote’s funny

“People and Organizational Development: Research shows that engaged
employees care about the future of the company and have a direct, positive
impact on a company’s financial performance.“

Research shows that engaged employees care… priceless. So, there’s a lot of filler in their statements.

Alright, I’ve seen enough. This company is still a Buy on my list. It’s too damn cheap. And.. even though this quarter is lower than the last quarter, we are in “tough times” and… it’s up Year over Year. Incredible.

Glen

From: Todd.Johnson
Sent: Tuesday, October 28, 2008 10:57 AM
To: gbradfo
Subject: RE: MTW

Thanks Glen,

If you would, send me your thoughts when they post results after the bell today.

Thanks again,

Todd,

“The $2.7-billion acquisition will establish Manitowoc among the world’s top manufacturers of commercial foodservice equipment. Manitowoc said it is also is one of the world’s leading producers of cranes and innovative lifting solutions for the global construction industry.” (referring to Edonis).

————Side note: (the point is to illustrate that a lot of construction companies are going to break trends.. and are priced to do so, but some are strong — even still)

Breaking a long-running trend, Terex posted a decidedly disappointing third quarter. Net earnings slipped by 34% to $93.8 million, even as net sales increased almost 15% to more than $2.5 billion. The total backlog of pending equipment sales, a crucial forward indicator, fell 14% just since the second quarter. Backlogs for Terex’s aerial work platforms and construction equipment fell by more than 60% and 40%, respectively. In contrast, Terex reported an 8% increase in backlogged crane orders, and only a 9% drop in pending sales of mining equipment.
Bucyrus, meanwhile, enjoyed another knockout quarter with a 124% increase in net earnings, a 380-basis point expansion of EBITDA margin to 17.9%, and a whopping 74% increase in total sales backlog to $2.5 billion. The company’s entry into the underground mining equipment business with last year’s acquisition of DBT lends limited value to year-over-year comparisons, but nonetheless this was a rock-solid quarter for Bucyrus.

—————–End Side note:

My opinion is that Analysts still need to lower expectations for MTW, but I’m concluding that they’re waiting on earnings to come out before they do it. BUCY is another one of my favorites. TEX used to be, but I took it off the table when I compared TEX and MTW and figured MTW was better… not to mention a couple on campus interviews. You’d be surprised what company reps will tell you if they think you’re looking for a job with them and you ask them for the three things that they think their company can improve on and the most because you want to know if you can help.

My opinion on MTW could change if they come out with Q3 results and I see significant weakness. Remember that investors are dumb and 1-time costs generally hurt the stock price over the next year. That said, MTW could soar. Low risk situation if you ask me. I don’t see it getting whooped much more since it already took a beating when TEX came out weak.

Glen

From: Todd.Johns
Sent: Wednesday, October 22, 2008 3:56 PM
To: gbradfo
Subject: RE: MTW

Thanks Glen,

I believe that it is being punished without cause due to the overall market sell-off and especially in the small-cap segment. I like it for 3 reasons.

1. More tied to large government/energy infrastructure projects, not residential/commercial construction.
2. Diversified internationally, especially in some of the developing, high-growth, countries.
3. Good management and cost controls.
4. oh I forgot, they started in the crane business just short of the Great Depression…if they survived that, they can certainly make it through this economy

Hey Nate,

I’ve tabled this one, cause I have no idea about how the currency exchange rates will impact the company. Here’s the Q2 transcript: http://seekingalpha.com/article/89211-central-european-distribution-corporation-q2-2008-earnings-call-transcript

A few highlights I just found:

“we continue to see in Poland and in Russia, of course with the higher GDP growth of Russia, certainly trade-up opportunities are higher that also we are seeing coming through with the pricing of value over volume which we get to a little bit later, which certainly be the aspect of bode well for a strong currency.”

Alas, you’re question: “The zloty has continued to appreciate around 5% of the second quarter, and another 2% so far year quarter to-date this third quarter. The Rubles are relatively flat this quarter, third quarter, and maybe only about a 1% appreciation in the second quarter, but relatively up flat to the dollar and the euro.”

James Archbold is the man with the answer to this question.

http://people.forbes.com/profile/james-archbold/17140

Contact:
Jim Archbold,
Investor Relations Officer
Central European Distribution Corporation
610-660-7817

I haven’t called CEDC yet, it sounds like you know more about their currency situation than I do. I look for consistent companies with growth potential on the cheap. CEDC ridiculously fits my model right now. Buffett and Lynch love cold calling. My advice is you give it a try. Let me know what you find out.

Glen

From: Nate Tabak
Sent: Sunday, October 26, 2008 2:43 AM
To: gbradfo
Subject: CEDC

Hey Glen,

How much of an effect are the collapses of the zloty/forint/ruble going to have on CEDC’s fundamentals and future earnings? I’ve been buying into the stock’s weakness, partially with the hope that the currency situation could be a boon for company since it will be able to make Eastern European investments and acquisitions at a steep discount using its USD reserves. Furthermore, do you have any idea to what extent CEDC hedged against currency declines?

Thanks,
Nate Tabak

Greg,

That’s hard. I hate picking just one. For the sake of using macroeconomics, China’s my favorite country and they aren’t hurting fundamentally as bad as we are. My favorite “ultra-high” risk play is GHII. It’s a penny stock that is trading at 11 cents and in my opinion is worth about $2 or more. Please give it a PE of at least 10.

If you like options, buy 2010 January Calls on CEDC.

Those are my two favorite ideas right now. CEDC is way too cheap, I sold my stock and bought the options @ $30. I could be an idiot, who knows… but at least I’m basing it on the fundamentals and probabilities.

Glen

From: tubertini
Sent: Sunday, October 26, 2008 10:30 PM
To: gbradfo
Subject: one stock

Glen,

I have a discretionary account in which I have set aside for risky but potentially lucrative investments. If you had to pick one stock that has been beaten down but has the most potential to sky rocket once the bank failures and poor economy is behind us what would it be? By the way, great articles on Stockpkr.

Greg Tubertini