Chroma Investing

Value Investing for beginning & small time investors and the value investing strategies of Graham & Klarman

Vaxgen A Net Net Update from Greenbackd

Greenbackd has an update on Vaxgen (VXGN) that is worth reading. Vaxgen is a net net stock that I suggested was worth a look on my August 4th post.

The Greenbackd post discusses new potential directors and an HIV drug that Vaxgen has some theoreticaly rights to if it exercises them. These are why the stock jumped a lot last week.

I am still moving. But since Greenbackd has done such a great job of posting an update I thought I would pass it on to you.

Not for Beginning Investors – Bought Put Options of GE

I have been ranting for a while about how overvalued the stock market seems to me right now, based on actual earnings. It seems pointless to normalize earnings if we are not headed for a period of trendline growth. Virtually no one is predicting that for the forseeable future. Too many headwinds.

Last Wednesday I initated a new position. It is definitely not for new investors but it is a classic hedge position. Today I bought 4 contracts for put options on General Electric at $16.00 expiring in October. There is nothing about this that is a value investment play. It is unusual for me, but supports my bearish call on the market. If I am wrong, I won’t lose that much.

Sunday Beginning Investor Links

I am a little behind on my posts. We are moving and between my paying job and the move, I haven’t been able to post as much as usual. These are general investing sites and not specifically value blogs. But definitely all beginning investors should check them out at least once. Motley Fool- Tom and David Gardner used to have a radio show on national public radio that I listened to before I was investing. Mostly they sell investment newsletters. Google Finance – It is a good place to put stocks into a watch list or portfolio list to easily track all in one place.

Reevaluting Facet Biotech (FACT)

Earlier in the month I discussed a non chroma portfolio sale of Facet Biotech (FACT) because I thought it explefied some of the non traditional techniques I apply to my value investing ideas. But this stock is one that keeps on giving. There are more lessons for the beginning investor.

Perplexing Stock Market

If you look at the current Price Earnings Ratio, the overall stock market is seriously overvalued. But the market keeps going up, closing today at an 11 month high. I am not complaining, really. I am long on some stocks, but I am gettting close to what I consider a fair value on my General Electric stock. But the common wisdom is that the market is pricing in an economic recovery. Really? With 10% unemployment. The consumer is 2/3 of the economy, so if we ain’t spending then there is no recovery on the topline growth. It seems to me that economists take a hit of marijuana and then issue their statements. There is no relationship to reality.

Beginning Investor Links

If you are just starting your investing these are good websites to check out for different reasons. They are also good for a small time investor.

American Association of Individual Investors – This is the website of the organization that is devoted to helping individual investors like you and I become better informed, and to make better investment decisions.For a small fee ($29) you can join. They have some interesting screeners that they have set up based on different investment strategies. Probably worth it just for that one feature. They also have lots of seminars and speakers if you become a member.

F Wall Street – I have commented on Joe Ponzio’s website before. He has an easy to navigate and elegant site that is full of information on valuations from a mostly Warren Buffett style investing approach.

What do Beginning Investors Need?

If you are a beginning investor what do you need to succeed? The short answer is perspective and patience. But the devil is in the details.

Perspective comes with time. But if you are starting out how can you possibly gain the perspective. Borrow someone else’s. There are gobs of great investors that will tell you how great they are on their websites. A few great investors have written books that are worth reading. Joel Greenblatt and Seth Klarmann come to mind. Spend some time reading and digesting the methodology. Pick it a part and decide what works for you and what doesn’t.

When the Pros screw up Students Suffer

There is an interesting article in Valuehuntr today. It talks about how Harvard and Yale, traditional rivals in the sports arena, have become rivals of a dubious sort: whose investment portfolio is suffering more. I am not sure that this was the intention of the original article, but what I took away from this was the following. The professional money managers or the Yale and Harvard endowments failed at their jobs of preserving capital.

Wells Fargo Online Brokerage – not good for small time investors

Because I happen to have an account with a large balance, I was invited to get Wells Fargo’s online brokerage with the lure of 100 free trades. Sounds great right. Here’s the catch. You have to have a minimum deposit of $25,000. And they charge an IRA fee. And they charged a penny stock penalty. I learned much of the downside later. What deterred me was ultimately their incredibly poor customer service and the extreme difficulty of establishing the account.

Chroma Investing Sunday Investment Links #4

This is the fourth Sunday Investment Links installment. Like the majority of my posts this is geared toward beginning investors, or investors with limited capital.

My value Idea – is a classic value investing blog. They are trying to sort through some ideas that may not fit into traditional value investing such as investing in commodities related stocks, like natural gas. Recently it has also discussed some spin off ideas.

ShadowStock: Deep Value Micro Cap Stocks – This blog used to be one of my stand by daily checks. But lately the posts have been inconsistent, not publishing more than posting. But if subscribe pay attention to the post when they come up. Interesting because he concentrates on Micro Caps, an interesting place for small time investors.

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