Intelligent Investments: OIL Finally Rebounds

Tuesday, January 23, 2007

OIL Finally Rebounds

The portfolio finished up 0.52% today thanks in large part to my energy fund and Fidelity Leveraged Company which has a 28% sector weighting in oil. My individual stocks did not far as well. ARTX continued to move and I added to BRNC with another 150 shares at $15.85 bringing my total to 450 shares, one of my largest holdings. EGR was also added to doubling my share total to 2000 at a cost basis of 1.44.

TOA finished down 6% today after announcing they were updating a joint venture in which they basically created an SPE with Deutche Bank. EMVL, formally EWEB, dropped 6% also on no news.

Coach announced earnings today that beat estimates and it also raised its forecast. However, the street didnt like the small decrease in its margins due to the fact that factory store sales outpaced regular store sales for the first time. Seems to me that Wall St. always focuses on the worst news of any earnings report. The stocks was down almost 3% at one point before rebounding to finish up slightly.

1 comment:

QUALITY STOCKS UNDER FOUR DOLLARS said...: Oil will continue its long term bull move.; January 3, 2013 at 12:40:00 PM PST

Buffett's Value Formula (?)

Warren Buffett hasn't exactly published his formula for what he calls the intrinsic value of a company, but he has dropped a number of hints. He apparently multiplies estimated future earnings by a confidence margin between zero and a hundred percent (a bird in the bush being worth 0.5 birds in the hand, and all that; bush birds are the earnings you hope for, and hand birds are the earnings you're confident will materialize). He then compares these probable earnings with something he has total confidence in, by using a U.S. treasury yield as his discount rate. In calculator form it looks like this:

This calculator doesn't use fancier math than the original one did. Its advantage is that it forces you to be explicit about your earnings expectations. It also automatically provides you with a hard-headed investment strategy: always invest in government bonds, unless you can find something else you are confident will yield more cash.

One other hint that Buffett has dropped over the years is that he can estimate value in his head in about five seconds; so whatever he does he keeps it simple, slugger.