Category: Investing

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Investing

Huntsman Corp

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Huntsman corp (NYSE:HUN) is a specialty chemical maker in the US, with operations all over the world. It was founded by Jon M. Huntsman in 1970.

Huntsman settles lawsuit with Apollo and banks
June 25 2009, SEC filing 8-K regarding settlement with banks.

Dec 15 2008, SEC filing 8-K regarding settlement with Apollo Group.

Matlin Paterson, who owns a big chunk of Huntsman stocks, sold his stake in 2007 (in hindsight, that’s a good price. Source: Yahoo Finance; Forbes). It seems he still has a significant stake though (source: MSN MoneyCentral, HMP Equity Trust).

Jon Huntsman (father, founder and chairman) and Peter Huntsman (son, CEO) on Fox Business News (link here)

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WealthTrack

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I found this program when doing research for Huntsman (NYSE:HUN). I found value investor Jean Marie Eveillard has a little of Huntsman stocks at gurufocus. Noticed there are some video clips for Jean Eveillard in this gurufocus web page, including one from YouTube.

So I looked around and found this program.

WealthTrack Podcast
Here is the web site: www.wealthtrack.com

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Investing

NRG Energy: a better way to play Buffett?

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When I say “play Buffett” I meant people who follows Buffett investing strategy, more specifically people who buy and hold his company Berkshire Hathaway (NYSE: BRK.A, BRK.B) stock. This is not easy as Buffett’s strategy is not clear cut, and his company stock is mostly overpriced in recent years (because of his fame), not to mention doing homework on Berkshire is almost mission impossible (at least I felt I cannot understand his corner stone business: insurance). So here is a better way:

Buying the stocks Buffett bought

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Eaton Corporation

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Eaton Corporation (Wiki entry; NYSE: ETN)

Secondary offering April 2008 (24x7wallst). They offered 17.5 millions of shares at $84, and the proceedings is about $1.43 billion.

Business Overview (diversified manufacturing)
Electricity power equipment; truck powertrain & fuel systems; aerospace fuel and hydraulics systems

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Stock misconception: listen to experts (II)

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It is reported that Pequot Capital will go out of business in next few months (from CNBC). Pequot was headed by Art Samberg (one of the Barrons Rountable 2008 expert), who would have dismal performance if he followed his Barrons Roundtable pick. Quote his best and worst picks (loss > 80%):

Company Ticker 1/4/08 12/31/08 Change

MEMC Electronic Materials WFR 81.40 14.28 -82.5
Qualcomm QCOM 37.03 35.83 -3.2
Focus Media FMCN 55.71 9.09 -83.7
Dogan Yayin DYHOL.Turkey 4.44 TRL 0.66 TRL -85.1

Interestingly, the latest WSJ article still brags about his success. (If he is really that successful, why not stay in the business?) Quote WSJ:

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US Bancorp share looks cheap

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(Update) According to Dow Jones News, USB sold 139 million shares at $18 per share. See the news at WSJ.

(Original) When I say cheap, I meant in relative terms.

US Bank logo

My benchmark: Buffett endorsed 2 banks in Berkshire annual shareholder meeting: US Bank (NYSE: USB) and Wells Fargo (NYSE: WFC). Many people did not know current Wells Fargo is not the good old Wells Fargo in the west coast, a little more than 10 years ago Norwest and Wells Fargo merged, and adopted the Wells name. Ok, back to the topic. Both USB and WFC stocks had a fun ride in the last 12 months. But more interestingly, as of today, WFC is down 5% YoY, while USB is down 42%. In the past 12 months a lot things have happened to Wells, the biggest one being the Wachovia acqusition. Both took TARP money. Both issued common stocks: twice for Wells (last Fall and last week), once fot USB (today). But the purpose of issing stocks is slightly different: Wells needed the money for captial, USB needs the money to pay back TARP.

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Stock misconception: listen to experts

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A guranteed way to lose money: listen to so-called experts. Barrons is a pretty reputable magazine in investment community. I read them, but I don’t listen to them. Here is an example: the reporting card of Barrons Roundtable 2008. Every year (Jan) Barrons will assembly a group of experts, from famous money managers to analysts such as Bill Gross (Pimco) to Abey Cohen (Goldman Sachs), discussing the outlook of the year, and each expert will share some picks.

Here is an example how things go terribly wrong (I hope no one copied his strategy).

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Stock misconception: volatility is not always bad

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We often from financial experts that volatility in our portfolio is bad. Or in other words, not only do we want good return, but we also want the path to that is smooth. I think most people would agree with that. My CFA preparation book also talked about this idea in “Portfolio Management” section. So basically this “less volatility” is preached and accepted in investment community.

But in Poor Charlie’s Almanac, Charlie challenged that less volatility notion and I think I agreed with him. Bascially he was arguing that this is very similar to (in old days) the Chinese women tied their feet, obviously that would not help them walking.

In another instance, volatility is good for the investment banks in this past Q1, as they made a lot of money selling the bonds (wider spead yield). I think they made money from selling stock options too (more volatility, more expensive the options).

For me personally, I am still learning about this volatility thing. Like “buy and hold”, I need to get out of this old habbit of “less volatility bias”. In late March I bought some Patroit Coal (NYSE: PCX), but I sold it after 2 days after it went up then down. Today the stock traded about 80% above what I bought 🙁

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CIT group

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(Update 24Apr09 afternoon) Sold my position. Moody just downgraded its debt rating: reminds me of the WaMu debt rating downgrade shortly before its fall.

(Original) Warning: this is a very speculative play. Also don’t confuse this with CitiGroup (NYSE: C). The ticker of CIT group at NYSE is CIT.

CIT group at NYSE pic

(Source: NYSE)

4 Analysts downgraded this stock this morning (source: theflyonwallstreet, also Yahoo Finance).

Wiki entry for CIT group, noticed it was a part of Tyco (a smaller GE if you will) at one time. Chinese news on CIT (about one year old). The company recently coverted to a bank holding company so that it could get fund access to TARP, FDIC, and more importantly bank deposits.

Q1 2009 earning release. Conference call.

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Predictably Irrational author Dan Ariely talk at VA book fair

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Dan Ariely (bio) is an expert in behavioral economics, and his recent book Predictably Irrational is well received. It is also quite relevant amid this financial market (and institutions) meltdown.

10 min audio (with slide show)

Full talk (c-span, about 38 minutes including Q&A)

Book at Amazon