Market Participant -- High Concept Value Investing

Harsh Punishment and Bank Stocks KBE

2007-08-09T16:55:00.000-05:00

Too much hard work getting this small business off the ground has kept me away from blogging, but I hope to return to a more normal schedule soon. If you really want to punish someone force them to keep a diary.All in I think this is an interesting time for investors as recent market dislocations have created some impressive buying opportunities, especially for stocks tainted with subprime

The Sub-prime of Life.

2007-03-05T19:21:00.000-05:00

The subprime meltdown has been in full swing ever since February 7th 2007, when HSBC (HBS) raised subprime loan loss reserves by 20% and New Century (NEW) announced a net loss for 4Q06 and accounting probe to determine how big that loss was.On New Century filed a form 12b-25 with the SEC explaining why it could not file form 10-K on time. The grimmest part of this filing was:In the event the

Value Line 100 Fund to be reorganized into ETF

2007-02-07T07:20:00.000-05:00

First Trust has filed with the SEC a plan to reorganize the First Trust Value Line 100 Fund (FVL) into a new ETF (FTA). This is the second direct closed end to ETF conversion done by first trust. The new ETF will track an index of the 100 stocks ranked #1 by Value Line for timeliness, reconstituted monthly.The old FVL fund tracked the VL100 stocks in real time as they were updated every week.

Blumberg on REITs.

2007-01-24T07:26:00.000-05:00

GlobeSt.com: REITs will also figure in your strategy. What structures are you looking for?Blumberg: We're not going to buy a $10-billion REIT. We'll be looking for specialty office REITs that are regionally focused--anywhere where we have market interest. For many years, I've been talking about REITs and takeovers. REITs are sitting ducks. They can't store cash, they can't buy back their shares.

TD Ameritrade gets in the target date lifecycle game.

2007-01-14T19:56:00.000-05:00

Behold, TD Ameritrade's investment advisory group "Amerivest" has filed with the SEC for the introduction of a series of Target Date ETF's.Independence 2010 ETFIndependence 2020 ETFIndependence 2030 ETFIndependence 2040 ETFIndependence In-Target ETFThese funds will track custom indexes from Zack's, designed to outperform corresponding Lipper target benchmarks.Once each Underlying Index is

iShares FTSE NAREIT: REIT indexes you can use

2007-01-05T16:03:00.000-05:00

The iShares trust has filed with the SEC for the creation of ETF's that will track FTSE/NAREIT indexesiShares FTSE NAREIT Residential Index FundiShares FTSE NAREIT Industrial/Office Index FundiShares FTSE NAREIT Retail Index FundiShares FTSE NAREIT Mortgage REITs Index FundiShares FTSE NAREIT Real Estate 50 Index FundThe current set of REIT ETFs (ICF), (RWR), (VNQ) all own on Real estate

Wishing everyone a happy new year.

2007-01-01T11:43:00.000-05:00

Just wanted to post a thank you to my loyal readers and wish everyone a happy new year. We are thankful all the good things that happened to us, and all the bad things that did not.Looking forwards, Market Participant, should return to a more frequent publishing schedule sometime in late January. I'm currently in the process of starting a new business, which takes up a good bit of time, but the

Duplicate Shares

2006-12-24T09:40:00.000-05:00

Roger Nussbaum has a post up on ETF Duplication, questioning who powershares seems to have duplicated funds. A number of "basic 10" sector funds are available in both RAFI and Intellidex formats. My take is that powershares is letting people choose their alpha. You can get it from the Intellidex black box, or from the fundamental weighting hypothesis.Some investors are going to want a strictly

Thoughts on fearless predictions. It's too soon to tell.

2006-12-17T09:13:00.000-05:00

On September 26th 2006, I posted a set of predictions about the housing market, US Macroeconomy, and Investment themes. Lets run through them how see how they panned out so far. US Housing MarketIt's clear that the general direction of US housing is down, and it is taking the US economy with it. The main questions at this point relate to "how much" and not "if". First prediction: "Mild national

Ocean Tomo 300 Patent Index

2006-12-08T08:15:00.000-05:00

One interesting development in the past month is the promulgation of the Ocean Tomo 300 Patent Index and an ETF (tentatively (OTP) ) from Claymore that will track this index.Ocean Tomo's index aims to quantify the value of intellectual property owned by companies and then create an index of companies with large intellectual property assets. The index is then further stratified by investment style

Aegean Marine Petroleum (ANW) Risk Factors

2006-12-03T19:37:00.000-05:00

Proceedings concerning our founder and largest shareholder, Dimitris Melisanidis, could generate negative publicity for us, harm our reputation and adversely affect our business and our stock price.Our founder and largest shareholder, Dimitris Melisanidis, has played a key role in the development and success of our business. Mr. Melisanidis is a prominent figure in Greece and has been the subject

Will the CDO Machine Destroy Public Equity? Part I

2006-11-29T13:15:00.000-05:00

Christopher Whalen wonders Will the CDO Machine Destroy Public Equity?". The first half of his article is about Credit Default Swaps and if they are symptomatic of something.Briefly, an introduction to the Credit Default Swap CDX market. CDX are contracts for insurance on bonds. In exchange for a fixed premium you can purchase protection against default on a notional $10 million of bonds. A CDX

His plan proves successful

2006-11-25T22:00:00.000-05:00

His plan proves successful and Judy agrees to tolerate him as "her new man," securing Victor's place high atop the neighborhood's social pecking order. At the same time, Obi-Wan's investigations lead him to a water planet where he discovers the creation of an army unlike anything he has ever seen before. The result is the only thing it can be, given its market and the Dobbs character; a lame

An investment opportunity with sleepover possibilities

2006-11-25T09:48:00.000-05:00

"There’s an overriding sense of impermanence. This is a fashion choice. No one will buy one of these gloomy spaces and say, ‘I want to have kids here. I want to grow old and die here.’ This is simply an investment opportunity with sleepover possibilities."Condos of the Living Dead by A.A. Gill, October 2006I'm reminded of a quote from Warren Buffet that you should only buy something that you'd be

Theft in the Afternoon: the Reckson Associates Realty (RA) story.

2006-11-20T08:23:00.000-05:00

Shares of Reckson Associates Realty (RA) have lifted on news that a syndicate of Carl Icahn and Macklowe Properties plan to offer $49 in cash for RA shares compared to SL Green's (SLG) current offer of $31.68 in cash and 0.10387 of an SLG share. SLG's offer was worth $43.31 a share at the time, being a slight discount to Reckson's closing price of $43.95 at the time the deal was announced.SL

PID and Tiparillos

2006-11-09T16:50:00.000-05:00

A reader asks: Hi MP. I found you when I was searching for info on [PowerShares International Dividend Achievers] (PID). I am intrigued with it, but I've never bought anything outside my ROTH or 401k before. Do you think it's a bad idea for a taxable account? Investment returns stem from capital gains and dividends. Under the current tax structure long term capital gains and qualified dividends

Douglas Emmett and the 1.4 Billion Dollars.

2006-11-04T09:56:00.000-05:00

Douglas Emmett (DEI) is attracting the attention that biggest REIT IPO of 2006 does deserve. DEI's portfolio of trophy office property in Los Angeles and Honolulu is unmatched. The company is profitable from the get-go with prospects for internal growth. DEI is going to become a core holding for investors in BIGREITs: the large actively traded real estate investment trusts that make up the Cohen

Plan for next week

2006-10-30T09:40:00.000-05:00

It has been a terribly busy week, so I apologize for the lack of posts. Depending on my schedule over the next few days expect to see some new posts on new topics. As always readers are invited to comment, and I'll do my best to respond. Continuing my series on fixed income investments, by talking about TIPS and then moving on to more exotic fixed income securities. I see TIPS as one of the best

Like an old pair of jeans that you won't give up

2006-10-28T14:51:00.000-05:00

Richard DeKaser, senior vice president and chief economist for National City Corp (NCC), predicts 40 percent of the nation's housing is at risk of losing value, but the areas are definitely in low employment, over-built regions. He said consumers who are in the market for a home should forget about stretching as far as they can for a bigger and better home and be more realistic about what they

On SLX the Market Vectors Steel ETF

2006-10-21T10:54:00.000-05:00

On October 16th 2006, Van Eck Global launched the Market Vectors Steel ETF (SLX) based on the AMEX Steel Index. This follows the IPO of the Market Vectors Gold Miners ETF (GDX) on June 22 2006. Since then the gold miners ETF has gathered $282.4 million in assets. As I predicated, Van Eck would catch the ETF bug and start more hard asset ETFs.The core motivation for investing in steel is capturing

The Case for Bonds: Part II In the Aggregate

2006-10-18T08:35:00.000-05:00

The current bond ETFs can be split into two groups. The treasury yield curve group and the asset class groups. iShares Lehman 1-3 Year (SHY), iShares Lehman 7-10 Year (IEF), and iShares Lehman 20+ Year (TLT) cover the short, intermediate and long portions of the treasury yield curve. Unlike bonds themselves, ETFs are perpetual instruments, and so you can't ignore market price risk. Because of the

The Case for Bonds: Part I - Only the boring survive

2006-10-11T08:52:00.000-05:00

2006 has seen the introduction of many toys for the "Global Macro Hedge Fund in my E*Trade Account" crowd. ETF sponsors have wrapped all sorts of exotic assets such as foreign currency, precious metals, emerging markets, commodities, and short positions into ETFs. The previous obscurity of these asset classes kept them safely out of the hands of retail investors.The main asset class that the fast

Look at XME !!

2006-10-05T19:58:00.000-05:00

A mere one day after I mention that XME at 39.96 could be cheap on October 4th. Today, October 5th, the entire metals sector goes wild and rockets up 5.23% in a single day.Big drivers for the sudden jump metal stocks include bullish comments about US Steel (X) and talk of a takeover of British Steel (CGA) by Tata Steel. Excitement about steel spread to Nucor (NUE), AK Steel (AKS) which may

The Second wind of SPDR Metals and Mining XME

2006-10-04T21:22:00.000-05:00

Recently I have been looking at the SPDR Metals and Mining (XME). This ETF represents an equal weighted index of stocks involved in metals and mining. The fund is mostly base metals miners, together with a few steel makers, coal miners and gold miners.This nifty chart, shows the performance of XME over the past three months. XME has followed the path of iShares Goldman Sachs Natural Resources ETF

Douglas Emmett DEI and the 1.1 Billion Dollars

2006-10-03T16:07:00.000-05:00

All systems go at Douglas Emmett (DEI), as the REIT plans an IPO of 55 million shares at between $19.00 and $21.00 per share. This pricing implies an IPO takedown of $1.1 Billion dollars for a portfolio of trophy office/residential properties located in Los Angeles and Honolulu. See more background about DEI here.DEI plans to pay a dividend of $0.70/share, equivalent to 3.5% yield on a $20