tag:blogger.com,1999:blog-366466562012-01-17T09:27:21.399-06:00This blog will chronicle my experiments with Zecco online brokerage, with a focus on dividends, value, and absolute return whether the market is up, down, or sideways.Tomnoreply@blogger.comBlogger391100tag:blogger.com,1999:blog-36646656.post-41215098947178813022009-06-24T12:21:00.002-05:002009-06-24T12:27:36.739-05:00

Axel Merk does a good job of explaining how our belief that the Fed will inflate leads to inflation. The Fed must do more than talk before I will believe otherwise. Since its creation, it has done nothing but destroy the value of the dollar, rewarding borrowers and hurting savers. http://www.merkfund.com/merk-perspective/insights/2009-06-24.htmlSent from my Verizon Wireless BlackBerry

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-12859105008063165672009-06-22T18:56:00.001-05:002009-06-22T18:56:49.748-05:00

One interesting tidbit from the article is that Harvard now has a net cash position instead of margin. They are also shying away from investments that aren't as liquid, such as hedge funds and private equity, and keeping more under their own control, as opposed to placing it with outside managers. . I consider these prudent moves for anyone. You don't want to be in a position where you are

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-75958726630327584202009-06-18T08:05:00.001-05:002009-06-18T08:05:36.233-05:00

I wonder what impact people dropping off the rolls due to reaching the maximum time on unemployment is? June 18 (Bloomberg) -- The number of Americans receiving claims for unemployment benefits dropped for the first time since January, adding to evidence the job market is starting to thaw. The number of people collecting unemployment insurance plunged by 148,000 in the week to June 6, the most

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-88899490142727783592009-06-18T03:35:00.001-05:002009-06-18T03:35:34.743-05:00

I think the chance of very high inflation is higher now than at any time in the past 30 years. The economy can be stagnant and we can have simultaneous inflation. Just look at Zimbabwe. In stocks I recommend companies that will have pricing power in such an environment, and will pass their profits along to shareholders. Some commodity exposure seems prudent, maybe 5-10% of a portfolio. http://

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-35853415518221901222008-01-07T03:11:00.000-06:002008-01-07T03:55:56.503-06:00

Ambassadors Group, Inc. (EPAX) profits by partnering with a non-profit, People to People, to send Americans on educational foreign trips. It pays a 2.75% dividend, and is currently under-valued due to the depreciating dollar and conerns over terrorism. It has a $328 million market cap at $16.74/share, 16% Pre-Tax Earnings Yield, and over 100% Pre-Tax Return on Capital. Thomas Group, Inc. (TGIS)

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-75676162433835169312007-12-18T08:16:00.000-06:002007-12-19T08:02:59.547-06:00

Biovail (BVF), CCA Industries (CAW), and EPIQ Systems (EPIQ) have all lost money since being picked last December. I personally believe Biovail is still a good investment and hold it in my real-money portfolio, but it has been a loser. On the Magic Formula site, it's still listed as one of the top 25 picks, so it can be held for another year. It looks like Icarra is still down (it's been down for

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-44884436238022185042007-12-02T04:26:00.000-06:002007-12-02T05:07:57.097-06:00

The recent sales in my Magic Formula portfolio, tracked at Icarra.com, have resulted in a cash position of $5126. Money market rates are dropping with Federal Reserve rate cuts. Zecco's CSAXX money market fund is now yielding just over 4%. However, the Magic Formula website is currently recommending 3 stocks that have yields higher than that, plus the potential for capital appreciation.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-14695537470635466132007-11-20T22:58:00.000-06:002007-11-21T02:17:17.368-06:00

My first Magic Formula transactions were November of 2006. So now, one year later, let's see how those initial picks have performed (average return for these is 3%):OVTI +20%FCX +50%ASPV +40%ADDL -28% (Icarra has no data for ADDL after Jan 2007, so it's treated as sold)PNCL +60%FTO +50%WNR +18%PWEI -9% (Bought out)NATH +29%NOOF -38%OPMR -55%MRGE -77%EGY -41%UNTD +24%ASPV is still on the

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-5866372037538015852007-09-04T05:47:00.000-05:002007-09-04T06:56:52.834-05:00

Four Options for SeptemberHere are four buy recommendations from the Magic Formula list of the top twenty-five companies. The first two do not pay a dividend, but the last two do.Korn/Ferry International (KFY)An executive search company, with over 5% net profit margin and growing, and best of all, no debt. The current credit crunch shouldn't impact them. I don't think the threat of a recession on

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-38911442786874923542007-07-09T05:34:00.000-05:002007-07-09T06:10:01.827-05:00

FreightCar America (RAIL) has a market cap just over $600 million, a pre-tax Earnings Yield of 46%, and a pre-tax Return on Capital over 100%.The company makes railroad cars, primarily for carrying coal. Coal production, and therefore, orders for new railcars, is down recently. However, new coal-burning plants are coming online soon and aging railcars will need to be replaced with FreightCar's

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-81278016944378861812007-07-01T08:17:00.000-05:002007-07-01T09:15:53.055-05:00

Cherokee (CHKE) has a Pre-Tax Earnings Yield of 9%, a Pre-Tax Return on Capital of over 100%, and a Market Cap of $325 million. It licenses clothing brands to retailers such as Target (TGT) and has high gross margins. It dropped significantly from $48 to just over $36 last month and is now at $36.54 per share. It pays an annualized dividend of $3, or 8.2%, at the current price. The recent drop

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-22113422464018837952007-06-25T20:11:00.000-05:002007-06-25T20:14:53.656-05:00

PWEI, purchased in November, completed its merger on 6/22. Shareholders will receive $33.50 per share, a 7% loss from the original purchase price of $35.95. This has been reflected in my Icarra portfolio.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-67846371012185051932007-06-25T07:42:00.000-05:002007-06-25T20:15:20.960-05:00

I've set up a tracking portfolio at Icarra.com. It's more advanced than just a spreadsheet like I've been using, including charts and comparisons to different benchmarks.Magic Zecco Portfolio at IcarraFor simplicity's sake, I'm just using transactions of $500 for each stock, even though this results in fractional shares. The portfolio has no transaction costs, but this is the case with Zecco

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-17673800275446704402007-06-07T04:37:00.000-05:002007-06-07T04:54:04.394-05:00

Intevac (IVAC) has dropped into bargain territory lately, at $19/share. The company makes sputtering equipment for manufacturing hard drives and low-light imaging technology for night-vision goggles, sensors and cameras. It has a $400 million market cap, with Earnings Yield of 17% and Pre-Tax Return on Capital over 100%.ViroPharma (VPHM) has a $1 billion market cap, (at $14.60/share) and an EY of

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-17011524448032870222007-05-06T05:22:00.000-05:002007-06-25T20:16:07.967-05:00

Once a useful idea like "Sell in May and go away" has become a commonplace, penetrating the mind of the masses, it becomes useless. It has lost its power. Value investors, and especially Magic Formula investors, must be willing to move when they see a bargain. We can't be contrary just to be different. We don't run into a burning building because people are fleeing in terror. We do, however, want

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-69837837093193617812007-03-12T05:13:00.000-05:002007-07-01T09:06:22.877-05:00

The recent market swoon has resulted in a few new names on the Magic Formula list, large and small. These two seem the best bargains.Axcan Pharmaceuticals (AXCA) specializes in gastroenterology. Each member of its sales force generates an average of $2.5 million in revenue. It has a $740 million market cap, with an 11% Pre-Tax Earnings Yield and over 100% Pre-Tax ROC. It's currently $16.11 a

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1171888687416738382007-02-19T06:36:00.000-06:002007-02-19T06:38:11.370-06:00

Avici Systems (AVCI) just appeared on the Magic Formula list after posting a net profit for the 4th Quarter last week. It has a 25% Earnings Yield and greater than 100% Return on Capital.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1171444269938977162007-02-14T03:08:00.000-06:002007-02-14T03:11:10.850-06:00

Barrett Business Services Inc (BBSI) is the latest company to make the Magic Formula list, with a pre-tax Earnings Yield of 11% and pre-tax Return on Capital of greater than 100%. It's currently $24.02/share with a market cap of $270 million.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1170827804297844022007-02-06T23:49:00.000-06:002007-02-06T23:56:44.523-06:00

This semiconductor stock has dropped 15% since the middle of January and appeared on the list of the top 25 stocks just this week.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1170070008454940862007-01-29T05:17:00.000-06:002007-01-29T05:26:50.196-06:00

A writer describes his lessons learned after one year of Magic Formula Investing. He advises not deviating from the formula.Another writer examines what happens to Magic Formula stocks that have dropped 20%. I've seen this with several of the Magic Formula stocks I bought (like Freeport-McMoran), but it has already recovered and paid a dividend, as well. FDG, EGY and OVTI are still down 12-26%,

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1168515839455110172007-01-11T05:34:00.000-06:002007-01-11T05:45:57.093-06:00

Deb Shops (DEB) has recently appeared on the list of the top 25 Magic Formula stocks with market capitalizations over $50 million. Not much has changed on that list, what with big drops from EGY, FCX, FDG, FTO, and OVTI.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1166371847342102192006-12-17T09:46:00.000-06:002007-01-01T11:32:43.016-06:00

Here are 3 Magic Formula picks that might be worth investigating. I probably won't be making any more transactions this year, since I've got 7 Magic Formula positions (FCX, FDG, PALM, PLAY, OVTI, PWEI, EGY). I'm glad I avoided Addudell (looking at the company's history, they seem to completely change their focus to match whatever the hot sector is at the time). I wish I had bought some PNCL (up

Tomnoreply@blogger.com1tag:blogger.com,1999:blog-36646656.post-1165796062440421382006-12-10T18:09:00.000-06:002006-12-10T18:57:38.486-06:00

Here is a Google spreadsheet that lists the stocks recommended by the Magic Formula, and each one's performance since it was mentioned here.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1165073304609512932006-12-02T08:35:00.000-06:002006-12-10T13:33:03.413-06:00

I didn't get a screenshot of my Zecco portfolio from the end of November, but I must admit that I have been so pleased with Zecco and its 0$ commissions so far, that I've started using it for my non-Magic Formula investments, as well.November was a bad month for Fording Canadian Coal Trust (FDG), with the proposal for changes in Canadian tax law causing a significant drop.I've created a Google

Tomnoreply@blogger.com1tag:blogger.com,1999:blog-36646656.post-1164629906213969572006-11-27T06:05:00.000-06:002006-11-27T06:18:26.220-06:00

United Online (UNTD) is the company that now includes NetZero and Juno, and is currently $13.70/share. It has an 11% pre-tax earnings yield and has recently announced that DSL internet service will now be available. It pays a dividend, with a yield of almost 6% currently. It may be worth a look.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1164030512416903272006-11-20T07:00:00.000-06:002006-11-20T07:49:53.396-06:00

Vaalco Energy (EGY) is an oil and natural gas company that has been on an amazing run the past few years. The stock could be worth two times its current price if it keeps growing like this, and looks to be the best prospect on the list.Expect Freeport-McMoran to take a hit today on news that it is taking on debt to acquire Phelps-Dodge at a significant premium.Two Troubled CompaniesMerge

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1163614240390142402006-11-15T12:00:00.000-06:002006-11-15T13:09:53.180-06:00

Joel Greenblatt, author of The The Little Book That Beats the Market, teaches a class on Value and Special Situation Investing at Columbia University. A video from November 3rd is available on the class website. This video is just over 2 hours long. The first half is about Moody's, but the second half is about The The Little Book and the studies and principles behind it. He explains why a fund

Tomnoreply@blogger.com2tag:blogger.com,1999:blog-36646656.post-1163330162828541562006-11-12T04:31:00.000-06:002007-01-01T08:45:51.406-06:00

Two new companies have entered the Magic Formula top 25 this week, but they both seem to be weak contenders to me:Nathan's Famous (NATH) - Famous for the hotdog-eating contest held every year on Long Island, this doesn't look like the most compelling investment on the magic formula list, with its 12% earnings yield. If you take out one-time items from selling property last year, earnings are up,

Tomnoreply@blogger.com1tag:blogger.com,1999:blog-36646656.post-1163092521812060802006-11-09T10:59:00.000-06:002006-11-09T12:13:06.156-06:00

These three companies showed up on my latest check at the Magic Formula website:PW Eagle Industries (PWEI) - This company makes PVC pipe and PE tubing, used in irrigation, plumbing, natural gas pipelines, and telecommunications, throughout North America. It is significantly undervalued at $36.16/share (with an earnings yield of 37%). I'm adding this company to replace PLAY, which is being bought

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1162874094620856332006-11-06T22:33:00.000-06:002006-11-09T10:39:33.336-06:00

It's a good news, bad news day. PortalPlayer (PLAY) is being bought out for $13.50/share by NVidia, a 23% gain in less than two weeks. Meanwhile, Palm is now getting the same treatment from NTP as Research in Motion, who paid out over $600 million in ransom to the patent holding company. The stock dropped, but that's no reason to bail. It's possible that Palm will settle the

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1162736039986002792006-11-05T08:13:00.000-06:002006-11-05T08:13:59.996-06:00

Here are 5 companies that fit the magic formula of high earnings yield and return on capital. Being undervalued, relative to earnings, good news has a greater effect than it would with a company that is already priced for perfection.PNCL (Pinnacle Airlines)At $8.29/share and with over $2/share of earnings predicted for the year, this regional airline, a subsidiary of Northwest Airlines, has a

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1162528744875216422006-11-02T22:18:00.000-06:002006-11-02T22:41:04.246-06:00

The Terrible Truth About Investing: How to Be a Savvy Investor, by Bruce J. Temkin, published in 1999, during the tech bubble, should be in every investor's collection. I turn to it often for insight. It's a short book, and very accessible, full of useful charts and examples.One thing it covers is inflation ("the silent killer"). Temkin says the only good thing about inflation is that "a kid

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1162338197796324662006-10-31T17:16:00.000-06:002007-01-10T15:25:50.640-06:00

Here's what my portfolio looks like at the end of October (stocks were purchased on the morning of 10/26, during a substantial dip):At this time, there's a 3.67% return.A few relevant indices for comparison:Index Symbol 10/26 10/31 % ChangeDJIA ^DJI 12,100 12,080 -0.17%S&P 500 ^GSPC 1,380 1,378 -0.15%Nadaq ^IXIC 2,350

Tomnoreply@blogger.com1tag:blogger.com,1999:blog-36646656.post-1162284165219638662006-10-31T02:29:00.000-06:002007-01-10T14:50:39.700-06:00

Morningstar.com has an article about that other "little book", Christopher Browne's 'Little Book of Value Investing'.Chrisopher Browne is a managing director of Tweedy Browne Company, LLC, a company associated with Ben Graham and Warren Buffett.He recommends avoiding companies saddled with debt, and buying companies with a high earnings yield (should sound familiar to anyone following the Magic

Tomnoreply@blogger.com2tag:blogger.com,1999:blog-36646656.post-1162225273828798502006-10-30T10:13:00.000-06:002006-10-30T10:21:13.836-06:00

Where Is The Yield? is another blog here at blogspot about investing. This article is entitled, Highest-Yielding Magic Formula Stocks. The author has tweaked the magic formula to go for dividend-paying companies that also fit the magic formula (high return on assets, at a bargain price). I prefer dividend-payers, myself, because it means they are profitable. His method makes sense to me.

Tomnoreply@blogger.com0tag:blogger.com,1999:blog-36646656.post-1161953749855676082006-10-27T07:28:00.000-05:002007-01-21T10:12:20.703-06:00

Thursday, 10/26, I made my first 5 trades as part of the Magic Formula. Here are the steps I took:Went to MagicFormulaInvesting.com and requested a list of 25 companies with market capitalizations above 50 million.Picked 9 companies, looking for either recent filings or good return numbers, or a name I recognized. The formula calls for choosing 5-7 of these companies at random, and I strayed a

Tomnoreply@blogger.com1tag:blogger.com,1999:blog-36646656.post-1161943377204340522006-10-27T04:37:00.000-05:002006-10-29T19:32:20.483-06:00

It's not some kind of candy, it's a website offering commission-free trades, relying on interest on deposits and ad revenue to cover the $2/trade cost, and relying on news stories and word of mouth to gain customers. There are some limitations, however, like only 10 trades in one day, or 40 in a month ($3.50 for each trade above that).Why choose Zecco for magic formula investing? First, let's

Tomnoreply@blogger.com2tag:blogger.com,1999:blog-36646656.post-1161880975717935242006-10-26T11:33:00.000-05:002007-01-21T06:39:45.076-06:00

Magic Formula Investing is a value investing method that is pretty simple, and outperforms most anything else. It looks at companies that generate a good return on investment, and buys them when they're on sale. If you go to MagicFormulaInvesting.com, you can even get the list of companies to buy stock in, for free! Sounds pretty simple, right? We'll see...The Magic Formula is explained in Joel

Tomnoreply@blogger.com3tag:blogger.com,1999:blog-36646656.post-1161879999004352142006-10-26T11:13:00.000-05:002006-10-26T11:26:39.016-05:00

To set up my Zecco.com account, I needed the usual account setup type things, like bank account information, social security number, etc. I also had to send the signed paperwork with a photocopy of my driver's license, but could expedite the process by scanning and emailing this. To verify my ING Direct account, they made 2 small deposits. One warning: once I confirmed the account, they

Tomnoreply@blogger.com0