Our oldest subscriber has just died aged 109.
I first met Irving Kahn when I opened my first brokerage account at Abraham & Co., where my great-uncle Jack Oppenheim, stock market mentor to the German Jews, worked. (Jack had fled Germany with enough money to buy a seat on the New York Stock Exchange and by then had become a US citizen and was allowed to sit in it.)
I was 13 and in what was then called Junior High (now Middle School) and we were being taught about stock investing in our math class. Back then it was legal to open your own stock market account even if you were a kid and didn't have a social security number.
Mr. Kahn asked me if I wanted to buy a stock with a high or a low price-earnings ratio. Since I had no idea what that might mean, I chirped back “high.” I then get a lesson in financial analysis from a master of Ben Graham's value system who had helped him teach and write his Financial Analysis book.
I went back to my class at JHS 52 with a better idea of how to select shares.
Many decades later, after Abraham and Co. was acquired and uncle Jack had died, Mr. Kahn became an early subscriber to my newsletter, for which I was grateful. Since I have a new name by marriage, I didn't tell him that I was the 13-year-old kid who thought you wanted a high p/e ratio, but he figured it out.
He invested a portion of the funds managed by Kahn Brothers, his company, into American Depositary Receipts for at least as long as I have been putting out this newsletter, but of course with extreme care, analysis, and selectivity.
Mr. Kahn was remembered for having shorted high-flying shares in the runup to the 1929 crash, because he could spot the bubble. He liked keeping cash around so he could buy after bubbles burst.
He was also remarkable for being one of 4 Kahn siblings all of whom lived to be over 100 years old, and were studied by the Albert Einstein Medical School of Yeshiva University to try to find out why.
More for paid subscribers follows from Hong Kong, Switzerland, South Africa, Australia, Argentina, Canada, Portugal, India, Britain, Singapore, the US, Finland, China, Vietnam, and Japan including two annual reports and some investing advice for Argentinians.
When Knighthood Was In Flower
What knight will defeat the dragon winter?
It is wonderfully warm out, about 25° Fahrenheit, quite a boost from the Cleveland zero bound, and moreover we can walk around and not be driven. Somebody besides my kids and grandkids shovels the snow. The subway works.
The argument for city life would be stronger but for the collapse of public transport at the city where my other child and grandchildren live, Boston.
I imagine that the horrible February of 2015 will be recalled when my grandchildren are aged 173 after taking the latest anti-aging nostrum (the target age for what Bloomberg Businessweek calls “The Forever Pill”). That will be in 2181 AD or so. If you want to learn more, you can subscribe to the magazine or www.Global-investing to read our special report on X on our website. It has not been posted yet for non-subscribers because our webmaster in Newfoundland also has weather issues.You will be getting in after our readers have loaded up on the stock. Our copyrighted report has been bought by at least on major brokerage analyst.
More for paid subscribers from Britain, Germany, Israel, Brazil, India, and Canada.
Today I fly back. Planes are resistant to cold.
Today’s note is short and about industrial espionage. In the US and Britain organizations like the National Security Agency and the Govt Communications Headquarters work their way into the Sim card system to be able to tap the cellphones of people who may be up to no good—without a warrant.
In India the reverse occurs. Government officials are bribed to reveal what is supposed to be secret.
In India by now everyone already knows the size of the government budget deficit to be announced on Saturday: it will have a target level of 3.6%. You may wonder how this key figure which also will help people figure out in advance what the tax rate and growth for the country will be has become known.
India’s major multinational corporate sector and the richest families paid quite small bribes to government workers with access to the budget to get advance information.
More news from India, Mexico, Switzerland, Britain, Belgium,and the Netherlands today.
Stocks and Rock 'n Roll
Yesterday I managed to spill a cup of tea on the notebook so I am writing my blog on the children’s computer, while they play video games or sleep, as school has finally been cancelled. The big issue now is getting everyone and their instruments to Severance Hall for the performance by the Middle School children tonight. It is zero degrees Fahrenheit outside, which apparently even in Ohio counts as a snow day.
This was after I had a real treat going to the Rock ‘n Roll Hall of Fame by frozen Lake Erie. While we are old rebels, it was my generation which first swung its hips to the cross-race music of Elvis Presley and became Anglophile over the Beatles. Just as with the Gothic exhibit we saw in London, the Rock museum has incorporated lots of thing which those who lived through the musical revolution thought of as something else: Pete Seeger, and Satchmo apparently count as rockers.
My high school’s rock star Bobby Darin (much older than me but a real Bronx Science grad) did not warrant a mention that I could find but the German-Jewish 4th Reich rock star Billy Joel (first generation like me) was properly included.
History is bunk, as Henry Ford famously said, but I don’t want my teen-aged grandchildren who are busily studying Medgar Evers and other figures in black US history to know what their granny thinks.
More for paid subscribers follows from Spain, Ireland, Israel, Hong Kong, Canada, Britain, and Australia, including two annual reports.
The fact that it went below zero (Fahrenheit) last night and that there are about 4 ft of snow on the ground is not enough to close the schools in Cleveland for hardy Ohioans like my Middle School grandkids. I lost my bet and owe them money.
Today's blog will be short because while trekking to school is considered important in the household I am visiting, newspapers are not. Despite bringing my warmest coat and warmest boots I am not going to walk to the shopping area to get the papers and am confining my news and contacts to the internet.
Greece is back in the doghouse and gold is back up as an alternative to currencies today. I think we should just stop looking at the incredible fluctuations of the euros and the yellow metals and talk about other subjects. So there is more from Belgium, Israel, Switzerland, Ireland, Japan, Australia, Canada, The Netherlands, Hong Kong, and Colombia today.
Being in Cleveland under about 4 ft of snow I am not wanderimg out to get Barron's so as to produce tables for this week. The notebook is still in its case and I am working of a restricted-access computer used by the two household teenagers here.
Last night we went to a one-man show by Hal Holbrook which I have escaped from watching for most of my life, called Mark Twain. The kids were bored although they are learning about the Consitution (one of his subjects) in Middle School. I am pretty sure Holbrook cheats and selects different passages from Clemens' work in response to the news. But it was very funny.
A correction. My grandkids are not performing with the Cleveland Symphony on Tuesday night. They are performing in Severance Hall, the home of the Symphony, along with other Cleveland Heights musicians, on the tuba and the cello. The tuba is temporary as my No. 1 grandson got roped into switching instruments to fill a gap. There is a huge battered tuba here where he practices his Brahms and as a solo instrument it sounds completely ridiculous. Read more »
After robot dogs and robot vacuum cleaners, how about a robot fund manager?
The latest exchange traded fund investing (ETF) lure is the “Robo”, an automated wealth management system running algorithms. You fill out a form to show your personality traits (like ones used at dating sites.) Then the robo(t) figures out which ETFs “complement” you.
Robo will buy you a portfolio (which also can be an individual retirement account). Robo will automatically track it, and also rebalance if one of your holdings goes up or down too far. Rebalancing will cost you after year one.
To learn more, contact the (human) promotors of New Kapitall Holdings LLC which collects a commission for every signup delivered to brokerage Apex Clearing Corp. Apex will start collecting fees from its human customers only in 2016. Only humans may open an account and they have to be US residents.
Today's news is from Japan, The Netherlands, Britain, Canada, Israel, India, Denmark, and Texas, and is mostly bad. I am travelling and will not be updating the tables this weekend. Two grandchildren are performing with the Cleveland Symphony Orchestra (youth division.)
Saying Yes or No To Ideas
The board of Naibu Global International Co. plc, a Chinese maker of children's clothing listed on the London Alternative Investment Market (and recommended not only by Vivian Ng, but also by Investors Chronicle writer Simon Thompson) yesterday released a note reading:
“it was disappointed to report that they have been unable to obtain any information on operations in China, and therefore they are currently unable to provide shareholders with any update on the Company. Neither Mr Lin Huoyan, the Chairman, nor Mr. Lin Congdeng, exedutive director, have responded to requires from the non-executive directors to provide such information [and an audit for the year 2014.]. The non-executive directors [in Britain] have appointed KPMG to prepare a report on the Group's financial position...and will decide what steps to take regarding the continuing business of the Group...” And trading has been suspended.
I bought early last year shares of the maker of children's clothing because I was attracted by the idea of 4 grandparents buying outfits for their sole grandson or granddaughter from NBU, listed on the London Alternative Investment Market, or AIM. I bought using my US discount brokerage account with e-trade.
In August, the AIM suspended normal trading for NBU and a host of other mini-caps and it became impossible to track the shares from the USA. So I sold. Mr. Thompson put a sell on NBU in The Investors Chronicle on Sept. 15, 2014 after we were already out of the share, because despite claiming to be profitable, it did not pay its dividend.
However, neither the Investors Chronicle nor the Financial Times (FT) which owns it and its daily blog, reported on the change in the AIM trading.
Today the FT in its index signaled that there was an article about Naibu on page 13. But there was nothing in the newspaper I could find.
I contacted the editor of the Investors Chronicle about these matters. Mr John Hughman stressed that the editorial line of his publication and the main FT are independent. He also wrote that the focus of the publication is “London's largest listed companies” and that firms with capital of under £10 million are “too small and illiquid to warrant coverage.” After Simon Thompson issued his sell, “we have no plans to cover the company further.
Another AIM Chinese clothing and footware firm, Camkids, CAMK, also sold when its trading moved to auction last year, fell 14% today in London trading, to 18.5 UK pence. Ms. Ng, who no longer writes for us, also tipped that one plus Anton Oilfields.
Groupe Balloré was bought by the famous short-seller Carson Block (who runs Muddy Waters, an investigator into Chinese fraudulent companies listed in Hong Kong, the USA, and Canada. Mr. Block so far has not written up British-listed Chinese fraudulent companies. But he is turngin his attention to Europe. Balloré is French.
Mr Block argues that it is grossly undervalued because so much of its share capital is owned by other companies in the Balloré stable. He says nearly half, but using the organigram on the company website I figure it is more like 71%. However, unlike Mr Block and one of my reporters, I am not buying or tipping Balloré, for several reasons.
First, holding companies always trade at a discount. And the more closely held they are, and the more active the owner (here Vincent Balloré), the greater the discount. My recommendations do include some holding companies with good visibility and corporate governance, for example in Sweden (because there no longer is a closed-end Scandinavian Fund.)
But I am chary of holding company vehicles for aggressive investing strategies. I do not like hidden capitalization in listed companies because it can disappear when the manager changes tack. I prefer clear accounts to occult ownership. I think an organigram looking like a plate of spaghetti is dangerous.
Be sure to read our report on Novartis send out late yesterday. It will be posted for pre-subscribers over the weekend at $25. Current subscribers get all our reports free. A new boom in biotech down under has helped our Benitec Biopharma, developer of ddRNAi treatments for, among other scourges, hepatisis C. We have a special report on this one also available to paid subscribers on our webpage.
More for paid subscribers follows from Israel, Canada, Brazil, India, a note on gold, and another on Novartis today.