Tag Archives: pcordway

The Great Disconnect; Free Value Newsletter



I have been speaking to several friends who run small businesses, and they are universally depressed. They see ever-increasing regulations, taxes, government dis-function and poor prospects. They are battening down the hatches. Perhaps, that is good advice. Note the interview with an entrepreneur #3 below

  1. http://www.thereformedbroker.com/2013/03/29/factset-negative-earnings-guidance-at-seven-year-highs/
  2. http://www.hussmanfunds.com/wmc/wmc130408.htm
  3. http://classicvalueinvestors.com/i/2013/04/fabulous-interview-with-entrepreneur-alan-butler-about-the-economy/
  4. http://greenbackd.com/2013/04/05/robert-shiller-interviewed-on-cape-and-the-stock-market/

Free Value Newsletter

Get on his email list for Value Investing News.   I think he might even send out Baupost’s last 2012 annual letter if you ask. Ask to be on his list: pcordway@gmail.comBelow is a sample from his last emailed letter:

Subject: good reading

As usual, if anyone is going to Omaha for the Berkshire Hathaway annual meeting and wants to get together just drop me (Phillip) an email. 

Facts and Figures

  • Real, per capita disposable income in the U.S. has declined at 0.4% per year over the past five years (Source: Commerce Dept.)
    • More, if you’re a glutton for punishment: America still has two million fewer jobs than it did in January ’08 (Brookings Inst.); food stamp enrollment is up 70%       since ’08 to a record 47.8 million in Dec. ’12 (SSA); 43% of active workers reported no active saving for retirement (ERBI)
  • In happier news:
    • There are 1.7 million fewer underwater home owners (sic) in 4Q12, taking the total down to 21.5% from the peak of 25.2% in 4Q11 (Corelogix); U.S. R&D spending     of 2.9% of GDP is back to its space-race peak economist); household net worth rose $1.17 trillion in 4Q12 to $66.07 trillion, the highest since 4Q07




  • Baupost 2012 Annual Letter — This has been out for a month or two and I won’t clog your inboxes any further, but if you haven’t read this yet you should. This was by far the winner of any otherwise lackluster shareholder letter season.
  • Household formation A chart from BAML showing the      5-year rolling change in numbers of households, which obviously fell off a cliff in ’08 and hasn’t really rebounded much.
  • Buffett Stock Gauge Sends U.S. Caution Signal — Buffett has said that  “probably the best single measure of where valuations stand at any given moment” is the market capitalization of all stocks (the Wilshire 5000) against gross national product. He added, importantly, that the ratio has “certain limitations in telling you what you need to know.” He believed it would be hard to go too wrong with the ratio in the 70-80% range, with anything approaching 200% deemed to be “playing with fire.” So there is nothing from his direct commentary to suggest that he viewed 100% as anything more than a round number, but it’s worth looking at where the ratio has been and where it is currently (as well as the margins supporting currently valuations).
  • Cyclically Adjusted PE Ratios — Similar to the market cap / NG is the ratio of price to 10-year-average profits shows. This chart, compiled by Goldman, shows CAPE ratios worldwide.