ISSUE 15
12 December 2008
BUY? SELL? HOLD?
ICLUB AIDS INVESTORS IN QUEST TO MAKE SENSE OF THE MELEE!
This reporter would be the first to admit that she is quite befuddled by the stock market's tumble - no, er, rally - or, do tell, was that a sell-off? Whatever on earth, she asks, is a long-term, fundamental investor to do when the market changes its mind by the minute? Buy? Sell? Hold?
Investment gurus proclaim that the stock market's rough ride -- something akin, this reporter notes, to a several-hundred-mile horse and buggy ride across the Great Plains in the middle of winter with nary a wool blanket for warmth -- is but minutia. Yes, indeedy, ICLUBcentral is offering what many proclaim is but an unprecedented boon in the midst of times perhaps more unbridled than the Wild West itself.
On to today's headlines...
'TIS THE SEASON!
INVESTOR ADVISORY SERVICE LIGHTS THE WAY
Investors looking for a lantern to guide the way need look no further! It is sure to be handed down as none other than ICLUBcentral lore that Harvard Square's very own Minute Men have been seen galloping horseback from village to village, brandishing these beacons of light, and proclaiming the news to all who would lend an ear: Hear ye, hear ye! A bargain like this we've n'er been seen before!
Now is the time for former Investor Advisory Service Members to return to the path of the straight and narrow. As a previous subscriber, you may re-subscribe to IAS for the special rate of just $175 for an online subscription. To receive each issue by Pony Express, and also receive access to the IAS archives and online edition, you'll pay just $249 -- a deal that is making headlines across the rugged prairie!
But you dare not tarry! When the bell tolls at the strike of Midnight on New Year's Eve, the riders will be silenced, their horses led quietly back to the stables in the dark of the night. Yay, the ICLUBcentral Minute Men may make one last, courageous attempt to call out the secret code -- X4PQ -- as they ride off into the chilly December night, the very password you must utter to receive the special rate when you place your order online today or by way of Alexander Bell's new-fangled invention at 877-33-ICLUB (617-661-2582). You can pay with your John Hancock on bank-issued parchment, or with your good faith and credit...card.
RETAIL RUSE OR REALITY?
STOCKCENTRAL MEMBERS PONDER WHETHER BEST BUY REALLY IS...
Despite reports to the contrary, consumers have proven once again that if they are nothing else, they are indeed one thing: sorely unpredictable. This leads this reporter to beg the question that is on everyone's mind: Is that stampede of holiday shoppers heading to...or fro?
Though analysts projected nothing short of impending retail sales doom amid holiday shoppers' gloom this season, when all was said and done, this reporter was forced to provide the silverware with which they would be forced to eat crow. Indeed, the National Retail Federation reported that Black Friday sales were up 7.2 percent from the same period last year, leaving long-term, fundamental investors to ponder this question: Might there be true treasure hiding among the iron pyrite of the retail sector?
Way back in May, when it seemed the earth was still rotating properly on its axis, Michael Schickler posted this comment, along with a Stock Study, on the StockCentral Best Buy forum: "I think Best Buy is a good and growing company and it is in the buy range." Six months and a what seems to many a lifetime later, as the holiday shopping season approached -- or as some would have it, encroached -- investors -- their curiosity piqued -- began to place bets on just how long our consumption-minded population could hold out.
"I notice you wrote in May so I wonder how you feel now," writes Lynn Brown. "Just checked out status of cash and debt in (the Best Buy) annual report which looks pretty good. They have had an increase in plant and equipment. Of course, they just announced they are reducing their annual estimates as the whole retail sector gets hammered.
"I notice in their August 08 balance sheet that current assets are lower than current liabilities. Not so good. Looks to me like their inventory isn't moving -- which I guess isn't surprising considering at least for the moment no one is buying. I can't believe people will cut back for a long time. We are such consumers!!!
Michael, I downloaded your SSG," Lynn continues. "Mine was a little more conservative (high PE only 17). I projected out 8 quarters on the front page using Value Line projections. So my growth projection was only 6.5 percent. I did this SSG quite a few months ago but did update some things. Growth projections might be lower if we consider that over 5 years the company is going to have to make up the extreme decrease of 2008 and 09. What do you think?"
What do investors think? Does Best Buy have the grit and determination it will take to ride out the recession? Is this company a good, long-term investment? Before you cast your vote, be sure to check out the stock studies posted by various StockCentral members, as well as the Excel spreadsheet.
TODAY'S ENTIRELY RELEVANT QUOTATION
"Frankly, Black Friday serves as much more of a media spectacle than a true barometer of the relative health of the consumer and retailers. The next two weeks, when pricing reaches somewhat more normal levels, should tell the true tale.""
-Eric Beder, Retail Analyst, Brean Murray Carret & Co.