As I stated last week, I have taken the view of James Montier that a low price/sales ratio is an unreliable indicator of cheap stocks, since it ignores profit margins and capital structure. I have similarly adopted his view that an astronomically high price/sales ratio is a reliable indicator of overpriced stocks, because at a […]
Montier, in his Value Investing, made a spirited defense of value investing by demonstrating, not only that it works in a normal market, but also, based on the history of Japan, that it works effectively in a lost decade scenario. I find this significant because it strikes me that the United States faces a significant […]
Now that the BP well has been finally containmed, it is only natural that market participants have come to expect a great deal of the shrinkage in valuation of Gulf oil producers to reverse itself to some degree. Certainly there will be new regulations, and perhaps more onerous inspection standards, but on the whole it […]
Since my last foray into the taxation arena, where I examined the (most probably nonexistent) link between tax collections and growth, proved so interesting, even though it was a purely statistical analysis and nothing to do with tax policy as such, I thought I would make a modest proposal in some actual tax policy directions. […]
I am recommending stock in Entercom Communications Corp (ETM), on the grounds that they are considerably undervalued. Of course, I wish I had issued this recommendation last week when they closed at $5.29 per share, but even now that they are at $7.30 per share, the company is still compellingly undervalued. Entercom claims to be […]