Weird Stanford Touches on Value Investing


Let’ see if we can derive some insights on value investing  from a weird Stanford touch.

Wednesday’s message What Can You Do About Pensions looked at how many pensions were screwed when the Sequoia Fund was flattened by its 30% holding in the price gouging pharma company, Valeant.  That firm’s share price dropped almost 90% in the last year.  One lesson on how to avoid this type of rip off was  to avoid the Golden Boy Syndrome.  I wrote:

Look out for hotshots and the Golden Boy Syndrome.  Having been in the business almost 50 years now, I  have seen so many kings knocked off their throne.  Anytime anyone acts as if they are doing you a favor taking your money… BEWARE!

So the New York Times article “College Admissions Shocker”(1) about Stanford University caught my attention.  Stanford University cemented its standing as the most selective institution of higher education by having a zero acceptance rate for the 2020 class from record-setting number of applications.

For example, they turned down a young lady who, at age 17, had already performed surgery, because “it wasn’t open-heart or a transplant or anything like that”.

One 15 year old applicant blamed his parents because they had earlier sued to let him begin kindergarten ahead of schedule.  “If I’d been held back a year, I would have been applying to the Stanford Class of 2021”, was his comment.

Why would a school do this?   The article says: Over recent years, Stanford administrators noticed that as the school rejected more and more comers, it received bigger and bigger donations, its endowment rising in tandem with its exclusivity, its luster, a magnet for Silicon Valley lucre.

This sounds much like the Golden Boy Syndrome to me.  Wanting something because you can’t have it is not a foundation for finding value.

But Stanford’ aloofness is not the point.  The lesson we can derive comes from the reaction of other universities.

The article goes on to outline how university administrators at other institutions were upset because their acceptance rate was too high.  One school’s reaction to create demand is:  “to send every high school senior in America who scored in the top 4 percent nationally on the SAT a complimentary spray bottle of Wharton: The Fragrance, which has a top note of sandalwood and a bottom note of crisp, freshly minted $100 bills”.

I am not sure how fragrance will enhance a school’s reputation but I am all for it because of one word… get ready for this… Sandalwood.

Those who have been reading this site for the past few years know that I am a fan of sandalwood.  A couple of year’s ago I invested in (and still hold share in) TFS Corporation, an Australian Sandalwood grower and manufacturer.

I was so enthused about TFS Corp. (Australian stock exchange symbol TFC:AU) that I co-authored with Candace Newman, the essential oil expert,  The Sandalwood Investing Report which was published and is still available at Amazon.com.  My first recommendation for this share was in a February 2014  message “A  Most Valuable Investment”.  I wrote:

A Most Valuable Investment

Click on title “A Most Valuable Investment” to read entire 2014 message.

The shares at that time  (marked with arrow) were $1.12.  Despite a bumpy ride (more on this in a moment) they were $1.69 yesterday.

TFC Corp

TFC Corporation share chart at au.finance. yahoo.com (2)

That report by the way is still available at Amazon.com. No fundamentals have changed except we have two years of extra price history on the shares.

Screen shot 2014-01-28 at 5.28.13 PM

You can get details or order the Sandalwood Investing Report at Amazon.com Sandalwood Investing Report details at Amazon.com

Yet the lesson we can gain is not really about sandalwood either.

The bigger lesson and point of this message is to remember that Golden Rule of Investing #1; “There is always something we do not know”.

I have no idea if all the top students in America being exposed to a fragrance with a hint of sandalwood will increase the demand for this rare essential oil.  That’s the point.  Everyday, there are almost infinite numbers of extremely tiny events that we will never notice or think about.  Any one of them could have huge profound impact on our lives.

Since we cannot know what the future brings, we need some other way to gain information about where we should invest.  One approach is to gain information about investing ideas with value analysis.

For example we don’t know all the forces that will impact the value of sandalwood long term, but we can look at what analysts say about the short value of TFS shares.

The analysts at capitalcube.com recently issued a report “TFS Corp. Ltd.: Gathering momentum, can it sustain its performance?” (3).

Here are some points to consider about the value of  TFS Corp. shares.

  • Australia is a good value market according to Keppler Asset Management.
  • The Australian dollar has been artificially depressed versus the US dollar so it should provide a forex profit boost.
  • The long term supply demand for sandalwood is very strong.
  • TFC-AU‘s share price performance was a -9.84% over the last 12 months. This is below its peer median but its 30-day trend in share price performance of 27.41% is better than the peer median.  This recent rising stock price may herald a change in relative share price performance.
  • TFS Corporation Ltd’s current Price/Book is at a discount of 0.89, a  good value.
  • TFC-AU‘s relatively high profit margins are burdened by relative asset inefficiency.  This means there is even more profit potential.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues. (reflects potential for growth).

The company’s return on assets over the past five years suggest that its relatively high operating returns are sustainable.

All of these factors suggests that shares in TFS Corp offer a good value now, but this is still a long term speculation.

TFC Corp

This relative value assessment from the capitalcube.com analysis linked below shows how the TFS Corp. share price performance is leading its sector.

Each of us should ask how much we can afford to allocate to a speculation of this nature?  This is a personal decision because we each have a unique risk tolerance.  When our risk tolerance is out of line with the risk profile of our investments, we’ll make more poor emotional decisions than wise investments.  See how to balance risks at “Risk Balance Thoughts“.

Stanford University’s “Golden Boy Syndrome” means that most people won’t get to school there, but this does not mean the school can’t provide us with some lessons.  One lesson is that even weird action, like Stanford’s zero applicant acceptance creates a ripple effect that creates a future where there is always something we cannot see and do not know.  This is why we use financial information rather than economic news to find investing value.

Gary

(1) www.nytimes.com  College Admissions Shocker

(2) https://au.finance.yahoo.com/echarts?s=TFC.AX

(3) http://www.capitalcube.com TFS corp gathering momentum can it sustain its performance

Why Leverage Silver ETFs

Turn $250 into $51,888… in Four Years or Less?

I first spotted an opportunity in 1986.   Two short term distortions (in the price of silver and the strength of the British pound) created potential for huge profits.  I wrote in a report (called the “Silver Dip”) that told how to borrow British pounds to speculate in silver and earn over $50,000 profit.  That’s the headline I used then in 1986, “Turn $250 into $51,888… in Four Years or Less”.

The report showed how to take borrow overpriced British pounds and invest the loan in under priced silver.   $250 was required to set up the loan.  No other cash was needed to borrow the pounds.

Readers who followed the report made $46,299 on the no cash investment in only one year

Then in 2015 I spotted the same distortion again.  The British pound was overvalued.  Silver was undervalued. 

I quickly issued a report… the “Silver Dip 2015” that looked at how similar conditions to 1986 had fallen into place.  The price of silver had reached a six year low.  The British pound strength was rising.  The dollar per pound rate was $1.55 per pound, exactly the same as in 1986 and the silver/gold ratio rose over 80 just as in 1986.

That report revealed the iShares Silver Trust, a silver ETF  and during the year after issuing this report, the share price rose from $13.57 per share to $19.60 in 2015.

The rise in the silver price created a nice profit.   The currency and leverage tactics within the strategy turned the nice profit into a very nice profit.

A $10,000 (6,451 British pounds) loan purchased 736 shares at $13.57.  In 2015 the shares rose to $19.60 and were worth $14,425 (up 44.25%).

Those profits were spectacular by any stretch of the imagination but turned out even better because the profits above excluded the forex profit.

In 2015-2016 , the British pound dropped almost exactly as it did 30 years ago!  The British pound fell from $1.55 per pound to $1.33 per pound.

At $1.33 per pound, the 6,451 pound loan only required $8,575 to pay back the loan.  This created an extra $1,425 forex profit.

When the opportunity appeared again last year, I updated the report to  “Silver Dip 2018”.

The 2018 report showed how the opportunity for this speculation was even better than it was in 2015.

Yet the profits have not yet arrived.  This allows me to make an amazing no-risk guaranteed offer to you.

Silver Dip 2019 includes profit calculations for 2019 and I offer you the report “Silver Dip 2019” with a year long guarantee.

“If the profits recommended in the report don’t arrive by the end of the year, I’ll give you a complete and full refund”.

That’s right if the tactic described in Silver Dip 2019 do not hit their target, you don’t have to pay a thing for the report.

Investing in silver ETFs leveraged with margin loans may create extraordinary profits in 2019.

The “Silver Dip 2019”  shows how to easily make an ideal speculation for almost any amount.   The report shows when and how to get margin loans in dollars, British pound, Japanese yen or euro.

In fact you learn how to borrow in 23 different currencies, even Russian rubles, so you can choose the weakest currency with the lowest interest rates.

Low Interest Loans

Interest on the loan won’t eat up profits.  The “Silver Dip 2019” shows how to borrow many currencies right now for less than 2%.

The Silver Dip is only exercised when conditions are absolutely ideal.  Value investors never push this rule.  Investment and speculative markets are full of rumor, conjecture (a lot of it false) and hidden agendas.  The Silver Dip relies instead on a really simple theory… that the price of gold should rise about the same rate as other basic goods and the rise and fall of silver’s price should maintain a parity with gold.  When that parity is out of balance (as it has been since August 2018) silver’s price is ready to explode.

The “Silver Dip 2019” explains how to speculate in silver ETFs plus outlines the following:

  • How to use the Silver Dip strategy without adding a penny of cash if you already have investments.
  • How to invest as little as a thousand dollars in silver if you do not have a current investment portfolio.
  • Why this is a speculation, not an investment:  who should and should not speculate and how to limit losses and take profits.
  • Three reasons why conditions are excellent for better for a Silver Dip now.
  • Three different ways to invest in the US or abroad.
  • How to buy gold and silver or platinum with or without dollar leverage margin accounts.

The “Silver Dip 2019” also contains four matrices that calculate profits and losses so investors can determine cut off positions in advance to protect profits and/or losses.  The report also looks at how to switch time horizons for greater safety.

Rising interest rates make the stock market highly dangerous in the short term. “The Silver Dip 2019” shows how to create a safe, diversified good value stock portfolio and use it to generate much higher returns with a little controlled speculation in silver.

Learn how to beware of certain brokers and trading platforms, how to choose a good bank or broker and how silver profits are taxed.

The report includes a complex comparison of silver’s price with other costs of living from 1942 to today to help determine its real value.

Finally, learn why and how to use advisers to manage profits from silver dips.

Current circumstances could cause the price of silver to rise rapidly at any time.  Do not delay reading this report.

The Silver Dip sold for $79 in 1986.  Due to savings created by online publishing (we have eliminated the cost f paper and postage), we are able to offer this report for $39.95.

Order now by clicking here.  Silver Dip 2019  $39.95

The benefit of 50 years experience in watching markets, metals, bonds, interest rates and currencies, I have learned many special pricing situations to watch for.

These special opportunities do not appear every day.  That’s why they are special.

Unless you have seen them come and go, it’s hard to see them coming again.

That is why I was willing to wait for years for silver to be in a special pricing position.

Our courses and reports are about finding good value and they have been helping astute readers find value investments, again and again for 50 years.

The “Silver Dip 2019” report shows a current huge opportunity.  I continuously watch for aberrations in currency and precious metal markets.   Sometimes a rare quirk, such as the currency distortions, low cost loans and low silver price  offer potential for profit, with very little risk of long term loss.

Investors who speculate on these aberrations at the correct time can make fortunes.

The time is now.

Success is almost guaranteed.  In fact an 89 year study showed a 99% change of success when sequence distortions are worked in a certain way.

We are stalking precious metal opportunity now.

The trap is set. We are waiting…

This opportunity is explained in the report “Silver Dip 2019”.

You can order the Silver Dip 2019 here for $39.95

Here is why there is no risk for you.  The report is 100% guaranteed.

I do not sell book, reports and courses.  I offer benefits.  If  the Silver Dip 2019 does not bring you the benefits you expect, just let me know any time in 2019 and I’ll send you a quick, no questions asked, full refund.

I can’t promise that silver’s price will rise in 2019 but  I can guarantee you’ll be fully satisfied with the report or… you can have your money back in full.

You can order the Silver Dip 2019 here for $39.95

Gary