Fundamental Analysis

With Berkshire Hathaway’s annual meeting taking place this weekend, some random thoughts come to mind.

I’ve never attended one of these, but I’m sure they’re a blast.

I wonder, though, if the truly long-time Berkshire shareholders feel sort of like the fans of a rock band who they used to see in small clubs and other venues. Then the band gets really, really big and seeing their favorite act means “sharing” the experience with massive crowds in huge arenas. Though I’m not denying Buffett’s and Munger’s investment wit and wisdom surely deserves as large an audience as possible.
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Yet I patiently remain a holder. I may be brave, crazy or stupid, but if I wasn’t prepared to see results like those announced today I would have sold last fall. When it was apparent we were headed for a downturn, if not full blown recession.General Motors (GM/NYSE) has a great non-US business. Clearly, more work — read cuts — needs to be done in North America….
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What I’m reading… with a quick blurb on eachIn our Food Crisis sectionWSJ: Grain Companies’ Profits Soar as Global Food Crisis MountsAt a time when parts of the world are facing food riots, Big Agriculture is dealing with a different sort of challenge: huge profits. (replace the word agriculture with oil and you’d have politicians yelling from the rafters about how this is evil)…
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Readers who have been trying to access the site over the last couple of days, I apologize. There’s no telling what you might have been able to access, if you were able to access anything at all. Blame it on a flubbed software “upgrade.”
 
It’s a shame, too, because it had to happen just when there was an exciting announcement to make that is probably driving more visitors to the site.
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I have no idea what has gotten into Brazil today as the iShares Brazil (EWZ) is up nearly 9%; that’s the large caps index.. but Gafisa (GFA) is up 14% and since I just added to this Monday in the $38s [Bookkeeping: Adding Gafisa] I am going to cut back a bit here in the $43s. If anyone knows why Brazil is so happy today let me know in comments area; I do have a p…
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Headwaters Inc. (HW: 11.66 -2.60 -18.23%) is a company in the midst of a turn around of their major business operations. The company has been hit by the double whammy of the housing construction slow down impacting the construction materials division (50% of sales) and the complete phase out of Section 45K alternative energy business (coal to syngas). The syngas business was propped up by the tax credits which are now gone, but a couple of years ago provided about 40% of the Headwater’s profits.
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That was our last catalyst to break through 1400. I’m going to be more negative and if we pop to 1410, 1420 etc on S&P 500 I will began layering in even more shorts.Since I don’t know what the flavor of the day will be (strong dollar? weak dollar? commodities are great? homebuilders are great?), I’m using the broadest short I have which avoids the Dow stocks (multinationals baby) and focuses on those needing the power of Americans, Russell 2000 (TWM)…
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Everything will be better in 6 months. Everything will be better in 6 months. Everything will be better in 6 months.GDP still positive - no recession. GDP still positive - no recession. GDP still positive - no recession.Unemployment rate low - Americans thriving. Unemployment rate low - Americans thriving. Unemployment rate low - Americans thriving.Inflation nearly non existent per government reports. Inflation nearly non-existent per government reports. Inflation nearly non-existent per government reports….
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Just in time for a sell off… the mainstream press finally wakes up to one of the best investing stories of the past few years… much of this is old news for blog readers but it continues to build on my World of Shortages theme… note how when new factories are created to generate more fertilizer, it leads to more energy consumption which leads to more water usage, and pollution and…….
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Let's keep this in context.. gloom and doom sells.  Period.  I'm not disputing the fact that scarce commodities are becoming increasingly valuable but I don't buy all the gloom and doom either.  That being said, I just read a good article on Peak Water from Wired. Here are the cliffs notes for those [...]
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Well my ‘dream’ scenario of this morning did work out - I wrote this when Cummins Engine (CMI) was in the $59sMy hope right now is the stock runs to mid $60s, where I’d lighten up and then refill the position as it eventually falls back to fill that gap in the chart - ambitious plan but it would be a dream scenario.Since I’m not watching every movement of the market (damn day job), I missed the move to $64, but I lightened my position here in the $63s, selling down my position by 40%. (200 of 500 shares) Again, I’d like to add this stake back on a pullback. So if I am wrong and there is no pullback then I still have 60% of my position to ride the wave. If there is a pullback, then I will buyback my shares let go here in the $63s with a target of $56.50 - this would be a 10% reduction… if it worked out that beautifully, well I’d be a happy camper. This selloff still keeps the name at 1.7% stake in case it continues to run….
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There are very few movies I ever get excited about anymore, since they are all so ho hum and/or repeats of various old themes; I probably go to 3-4 movies a year nowadays… but for anyone with a Y chromosome this one has to get your heart racing. Love the casting of Robert Downey Jr. - hope it is half as good as some of the trailers out there.
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Despite the incredulous valuation First Solar (FSLR) continues to do enough to make shareholders happy. Let me be the first to say, despite my early entry into solar (about 1.5 years ago) I’ve constantly underestimated this specific name, and missed the boat - we’ve held it in the fund briefly but since I’m not a “growth at all costs” guy, but a “growth at reasonable cost” guy, I’ve had a hard time holding this (similar to B…
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I restarted Cummins Engine (CMI) in the fund 2 weeks ago as a “weak dollar” play - one thing that attracted me to this name in the fall was it’s large (and very early) exposure to Chindia. Once I started seeing company after company make up all their US losses with major currency benefits from international sales (along with booming volume sales overseas) this seemed like a good time to re-enter this name. [A…
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I am closing out one of my infrastructure stocks; Chicago Bridge & Iron (CBI) after a less than stellar earnings report. This is 2 days in a row an infrastructure stock has missed; yesterday was McDermott [McDermott Issues Warning] but I’ve decided to hold the latter for now. Main difference is despite the name, Chicago Bridge & Iron is based in the Netherlands and thus does not have the tailwind of the US Peso at it’s back. Further, yesterday’s fall in M…
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We have analyzed BP’s financial statements for the quarter that ended on 31 March 2008. Since 2006, BP has prepared their statements in accordance with I…
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Ford (F) is getting things right and whilst it is still far away from a complete recovery, they are quickly moving in the right direction.
Most people tend to focus on their difficulties at home in the US and overlook how well they are doing abroad and how profitable the are. With this momentum and new strong products, we feel that Ford offers interesting prospects for the patient investor.
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