The Tasgall Group

Yukos, the former Russian energy giant, is now dead. Vladimir Putin has added “company killer” to his resume as he and his KGB cronies successfully stole the company from Michael Khodorkovsky and private shareholders (Khodorkovsky initially stole the company from the Russian people, so he’s not an innocent babe).

Truth be told, the Yukos saga was really over 3 years ago when Khodorkovsky was imprisioned in a Siberian Labor Prison for providing political opposition to Putin and the Kremlin. (Yes, politicians in Russia still imprision political opponents in prisons in Siberia.)

This should be a reminder to any of us that governments can and will take anything they want at the barrel of a gun. In Russia specifically, few care about the protection of private property. The theft is quite bold in Russia, but we can see similar, smaller theft attempts everywhere (like the “windfall profits” taxes here in the US, Venezuela’s Chavez renegotiating the ownership of oil production, etc.).

I just looked over at Scottish Re’s fundamentals (SCT) and was surprised. The company is trading right now with a market cap of $817m in market cap and has $690m in cash (as of their last quarterly report). If you buy SCT today at $15, you’re getting $12 in cash. Many value investors will back out cash like that to calculate the P/E ratio — which becomes ridiculously low if you do that with SCT.

What’s the downside or the risk? Scottish Re is a re-insurer, which means they write insurance policies for insurance companies. If State Farm or Allstate gets hit hard by hurricane season, they actually have an upper limit to the losses they can take — because they buy insurance from SCT or other re-insurers (not so much with hurricanes, SCT focuses on life insurance, but it’s the same concept). Last year’s Hurricane Katrina cause a couple of insurers in the same business to face significant problems. Insurance companies have large cash positions so they can respond to claims as they occur.

SCT looks like it has a very solid balance sheet and might be worth buying when the price starts to trend up again.

Not to be confused with the 1957 film of a similar name, this post describes some of the analysis I’ve done?on the cash S&P 500 which I’ve been ignoring for no good reason other than it’s fun to say “Dow”.? Dow.? Dow Dow Dow.? HEHEHEHE.? But you might find the plot of that movie to be right on target.

Anyway, it became clear in a density analysis that the S&P 500 has really had 3 “real” prices or values since the recent 2003+ bull market started.? These prices are, approximately and in order of occurance, 1125, 1189 and 1261.? (more…)

I just noticed that Caribou Coffee (CBOU) is a public company.? It’s actually tiny compared to the behemout Starbucks (SBUX)…? The market cap for CBOU is under $120m right now (compared to $25 billion for SBUX), and it’s foundering at the lowest price since its IPO 10 months ago.? The fundamentals aren’t strong enough to get me to bite, and the chart pattern does nothing to bolster confidence…? but I’ll drink their coffee any day.? There’s a difference between a good product and a good investment (see TiVo or NetFlix for similar products I recommend but would find difficult to invest in — ouch, Netflix is down 20% today).

I named this post because of the Peter Principle, which essentially states what the link says it states.? I was reminded of the mention in Running Money of the fund managers who, when they reached a goal for rate of return,?took windfall profits and sat on them so as not to miss their targets for the month.? So my question is, should an investor call it quits during a given timeframe if they hit a good run and, if so, when and for how long? (more…)

It’s hard to be bearish with this kind of information hitting the wire.? If the market really is a minority game, then forget a bear market for now.? Looks like today’s action would agree.? But then again, bear markets?have the biggest up days.? I’m curious to know now what other sentiment indicators are saying.? One?lemon does not a fruit bowl make.? Also note that as of my writing this, the Dow futures haven’t exceeded the infamous 11087 level from my density chart.? This means that there isn’t yet a change in value to the upside but mearly a retreat TO value, for whatever that is worth.? This pretty much leads one to the conclusion that nothing that has happened in the past month has been anything other than pure volatility with value never really changing from 11087 or so.? So where are all the voices crying for “Neither” in the bullish/bearish debate?? Perhaps volatility should be redefined to mean?”a period of?strong opinions, weakly held”.? Until August rolls around, the best investment advice might just be sell above 11087 and buy below it, ‘cuz we ain’t movin’, Jack.? Or perhaps you could make an option play.? There is probably no better spot that these high value areas for initiating a market-neutral?option position since they are?essentially?epicenters?of activity.? But before you do anything rash, please read my disclaimer.

Oh, Vic, Vic, Vic…Damn, Son!? What the…!?? What are we gonna do with you?? The sawnbitch gone an done it agin.? Goes to show you can talk a good talk and have lots of great things to teach but that won’t necessarily translate into a good game.? Take what you can that’s valuable, make it your own and walk…no…run away.

I’ve always thought that?animation was sorely underutilized as an investment tool.

I have never made money in the markets.? If you follow my advice, that is akin to strapping on a a piece of fishing line to your ankles and trying to bungee jump off a 1,000 foot bridge…..? (more…)

Just read this great quote from Inside the House of Money (p. 205):

We are playing a variant of the Greater Fool theory which should be called the Slower Fool theory. According to the Greater Fool Theory, investors buy things [at inflated prices] on the hope that they can find a greater fool to sell to.

Following the Slower Fool Theory, …my plan …is to be faster than the other fools holding [similar positions] and liquidate before the oncoming Armageddon devastates them… To the extent that everyone believes the crisis is sometime in the future and somebody else’s crisis, the game is viable. (more…)