Be the bid!

[pchang]

Washington Mutual aka JPMorgan Chase

is paying 4% for on-line savings. I would not put more than $100,000 in it (the new $250,000 limit is only temporary).

[DanS]

China's looking pretty good right now. Shanghai's down over 70% from its highs. FXI, the Chinese blue chip exchange-traded fund that I invest in is off 73% from its highs.

Volatility in Asia is insane. The anglophone markets are relative seas of tranquility.

[Asher]

Re: Be the bid!

Originally posted by DanS
The prices in the general stock market in the US are still a little too rich for my taste, so I'm not buying index funds yet. But there are some reasonable deals on specific stocks out there. Today I picked up some shares of AMAT at $15.

AMAT makes semiconductor manufacturing tools, flat-screen TV manufacturing tools, and solar panel manufacturing tools. It is the worldwide leader in all three markets. The company's biggest market is semiconductor manufacturing tools. That semiconductor manufacturing tool market is tanking right now, so investors have been selling the stock. This quarter's results could be ugly -- we'll have to see. The solar panel manufacturing tools market, while exciting, is new and speculative, especially with commodities prices declining so much lately.

The stock is trading at a P/E of 18 and 10x free cash flow. The company has almost no debt and reasonable amounts of cash on hand. The dividend yield is about 1.6%. Its price to sales ratio is about 2.

Critiques and suggestions for other stocks are welcome.

AMAT when Dannyboy purchased: $15
Today: $9.95

And best of all:
http://www.marketwatch.com/news/stor...ory.aspx?guid={0DEDB95E-9525-4173-B058-9C8640EFF441}&dist=msr_12

Applied Materials to cut 1,800 jobs; profit falls 45%

SAN FRANCISCO (MarketWatch) -- Applied Materials Inc. on Wednesday reported a fourth-quarter profit that fell 45% as the semiconductor-and-solar panel equipment maker delivered weaker sales due to broad declines in corporate spending on technology products. The company also said it would slash 1,800 jobs in order to cut its costs over the next year.

Applied Materials said that it earned $231 million, or 17 cents a share, on sales of $2.04 billion. During the same period a year ago, the company earned $422 million, or 30 cents a share, on sales of $2.37 billion. New product orders totaled $2.21 billion, essentially flat with the year-ago quarter.
Applied Materials said that excluding one-time items, it would have earned $264 million, or 20 cents a share. Analysts surveyed by FactSet Research had forecast Applied Materials to earn 17 cents a share on $1.97 billion in revenue.
While Applied Materials topped Wall Street's forecasts, the reality of the overall economic slowdown was evident in comments from Chief Executive Mike Splinter. On a conference call to discuss the results, Splinter said that beginning in its current business quarter, Applied Materials would begin "implementing a restructuring program" in order to cut costs and focus its investments in strategic priorities.
And in order to do that, Applied Materials intends on cutting about 12% of its workforce, or about 1,800 jobs, as part of efforts to reduce its overall expenses by $400 million annually. The company said it would make the job cuts "through a combination of attrition, voluntary separation and other workforce reduction programs."
"The last six weeks of turmoil in the financial markets is unprecedented," Splinter said. "The weakening global economy will have significant impact on all of Applied's businesses. Our view [is] that this will be an extended downturn, lasting a year or longer. And that there will be significant changes in our semiconductor customer base as the industry emerges."
Applied Materials is expecting that customer base to contract as spending plans tighten in the enterprise market. The company expects its first-quarter revenue to fall between 25% and 35% from its fourth quarter, and that its earnings will be between breakeven and 4 cents a share.
Such a forecast results in a revenue range of $1.33 billion to $1.53 billion. Analysts had forecast Applied Materials to earn 17 cents a share on sales of $1.88 billion.
Following the results and restructuring announcement, Applied Materials' shares fell almost 3% to $9.69 in after-hours trading. The stock has taken a beating this year, and in Wednesday's regular market session, it gave up 70 cents a share, or 6.6%, to close at $9.95. It was the first time the company's stock had closed below $10 a share in nearly 10 years.

Ruh oh!

[KrazyHorse]

Stock picking is a sucker's game. But as to the original topic:

[KrazyHorse]

I believe the D/P ratio is expressed as a % on that chart while the following 7 year return is the cumulative return over 7 years (if it takes 7 years to double your money then the cumulative 7 year return would be 1)

[DanS]

Re: Re: Be the bid!

Originally posted by Asher
AMAT when Dannyboy purchased: $15
Today: $9.95

Ruh oh!

I'm happy with my purchase and will be buying more at the depressed price.

[Asher]

Depressed is the correct term.

[DanS]

Originally posted by KrazyHorse
Stock picking is a sucker's game.

Mostly, I invest using index funds. But if there some good deals to be had in individual stocks that I'm following, I also buy those.

[KrazyHorse]

It's your money, Dan. But I think that without either inside knowledge or special ability separating the wheat from the chaff is impossible.

Whereas large, market-wide swings in risk-aversion (as much of the movement downward movement of major indexes was) is often pretty easy to diagnose. By the way, this is also the reason behind the depressed gains fall to spring of equities. Bad weather = risk aversion.

[RGBVideo]

Originally posted by KrazyHorse
Stock picking is a sucker's game.

[KrazyHorse]

Explanation?

[DanS]

Originally posted by KrazyHorse
But I think that without either inside knowledge or special ability separating the wheat from the chaff is impossible

I think that from time-to-time special situations present themselves for investors (I can go through some of those that I'm looking at, if you're interested in critiquing). Also, there are some areas of the economy that are not well covered by the index funds that are interesting for investors who are looking at the long term and are willing to take on risk.

That said, the foundation of my portfolio is and probably always will be in index funds. Part of it is that good investing ideas don't fall from trees. The other part is that I'm exploring whether I have any special ability in separating the wheat from the chaff.

[KrazyHorse]

That's fine, Dan. It's just that there are people who have access to all the data you do (and more), who spend their days thinking about this stuff and who can pretty easily leverage their positions strongly if they have demonstrated prior ability.

[DanS]

No doubt they do. However, they tend to be armed with different philosophies.

All this said, if you aren't demonstrating that you are beating the indexes, then by all means go with the indexes. I will hold myself to that standard.

[RGBVideo]

Originally posted by KrazyHorse
Explanation?

Short answer: People are even stupider than you presume.

Long answer: You're overestimating intelligence of the market. There have always been sweet deals available. The reason most people should buy index funds instead of invididual stocks is that micromanagering diversified stock holdings and following data from all the corporations becomes too much of a hassle unless you're having something like >$100k total invested, not that you can only beat index averages by having insider advantage.

It's really surprising how irrationally stock prices can sometimes behave. Making a blanket statement like that proves only that you haven't been following price fluctuations of invididual stocks for long.