valuecfa

Thank you, Uccmal.

I hope the Citi series AA pfds conversion rate holds. I'm still in this one. Amazing how long the spreads are lasting on all these Citi preferreds.

hahha ;D My first reaction was, WHAT?! You got me.

Learning how to read financial statements is imperative. All the value investing books in the world won't help you if you don't understand accounting. Once you understand accounting, value investing books are a fantastic source of advice. Textbooks are boring, but they really are the key. You can read a book like Intelligent Investor, Dhando Investor, or a Peter Lynch book to get u pumped up a bit, before you tackle the textbooks. But textbooks are necessary for a solid foundation, if u want to be able to truly understand every line of all financial statements, and what they mean. There's a lot of fake value investors out there b/c they skip the accounting textbooks for the more "fun" (but also very valuable) advice-driven value books. Learning GAAP accounting and its shortcomings is a must. Here some books that will get you well acquainted with accounting: How to read a financial report, John Tracy Analysis and Use of Financial Statements ---(this was the original CFA textbook for financial statement analysis) Any accounting book by Leapold Bernstein --some listed here: http://www.bookfinder.com/author/leopold-a-bernstein/ ============================================================================= Once you get a decent grip on financial statement analysis, you may want to learn how managers play tricks with their accounting to report better results. Here is a list for fine tuning some of your accounting skills within financial statements. Financial Shenanigans Financial Numbers Game Financial Fine Print: Uncover a Company's True Value Creative Cash Flow Reporting Quality of Earnings ============================================================================== From there on you can move on to other classics like: Berkshire's letters to Shareholders Security Analysis Margin of Safety The Warren Buffett Way Common Stocks and Uncommon Profits Intelligent Investor Quest for Value Joel Greenblatt's two books Peter Lynch's Books etc...(many classics) =============================================================================== Then you can move on to more advanced books like: Distressed Debt Analysis Loan Workouts and Debt for Equity Swaps Corporate Financial Distress & Bankruptcy Fundamentals Corporate Credit Analysis Creating Value Through Corporate Restructurings etc... =============================================================================== Then you can look into textbooks on international investing, fixed income, arbitrage, economics, derivatives, corporate finance, quantitative method, advanced financial reporting analysis, currency & FX, alternative asset valuation, ethics & professional standards, corporate governance, portfolio mgmt., etc.... The CFA program is an excellent and rigorous source for all of the above mentioned subjects in italics.

Equity research? Yes, equity. It's not bad. Very, very little micromanagement at my firm (which is very nice, kinda work at your own pace), and has been repeatedly been voted as one of the top companies to work for. I definitely don't want to go into IB, but have considered moving to the corporate credit side if openings become available, under the right conditions. My goal has always, been to switch to the buy side or even PM someday, but it is hard to break into without the connects. How weird would it be if we were at the same firm? Nah...

I work for a boutique investment bank... Which one? Or, less revealing. in what state? trader/associate/analyst/research/IB?? -- I'm research associate for well-known middle bracket firm in midwest. I'd rather not say which one or in what universe coverage on a message board.

How about this for an exercise - if Warren Buffett wanted to be paid more - how much could he be paid before you would sell the stock and no longer own? Now I'm talking TOTAL comp (to your point with Welch), including perks. $10 million? $50 million? I think he could be paid $500 million or more per year and it would still be a good deal for most shareholders. Since i don't follow GE's compensation plans closely, as i am not a shareholder... EDIT: OOPS! I thought you were talking about Welch and GE here I will answer your question with a question. Do you think Welch would have preformed any less well, had his annual pay been $20 million vs. the $500 million you propose? Or what if Welch's salary was $1 Billion per year? When is enough enough? Don't get me wrong, I am all for incentive compensation and rewarding great managers well. However, I would prefer Buffett's approach of giving them a big bonus each year they preform great. I would even be fine with restricted stock awards too. There have just been so many compensation "issues" in the past and present, that i think the issues are not being handled anywhere near properly by the compensation committees and BODs. Whether it be repricing of options, backdating of options, outrageously low strike prices, golden coffins, golden parachutes, windfall if they are fired!, extaordinarily long warrant periods of decades in some cases, or excessive perks like this ridiculous one: (flying to the doctor for a physical.) --(I wonder if he also flies to Dairy Queen for a midnight snack) http://dealbook.blogs.nytimes.com/2009/03/27/a-trip-to-the-doctors-on-the-company-jet/ This listing of waste of shareholder capital is endless with all these executive compensation issues. the same goes for Schmidt/Page/Brin (GOOG) I disagree. Google's mgmt already was very, very will compensated in earlier years with their previous stock options. They've gotten into a bit of rough patch recently, and do they cut back or even stablize perks? No, they reprice underwater options. As can be seen here: http://www.footnoted.org/gold-stars/google-rolls-out-its-option-exchange-program/ ---That created a lot of shareholder value!!--- :P {{I just made a fart noise with my mouth}} How about this for an exercise - if Warren Buffett wanted to be paid more - how much could he be paid before you would sell the stock and no longer own? As far as warren buffett's salary. I don't know at what point i would not be a shareholder. Certainly a very high one. I don't have to worry about that with him as he is not a self-serving CEO. Once again, I am all for rewarding great managers with great rewards during good years. But repricing stock options when companies share price has fallen 70%!? I'd like to reprice my options too. How is that great for shareholders, awarding dismal performance. Or giving bonus perks, and bonus salaries during crappy periods. I could go on and on. Once again, i''l put this in caps just to emphasize my point, -MANAGERS SHOULD BE REWARDED VERY WELL FOR GREAT PERFORMANCE- but this is not what is happening in corporate america. They get overly rewarded regardless of performance, even during poor performance: through repricing of options, change of controls, etc, etc, etc, etc, etc, etc, etc, etc, etc, etc, ............. As Jack Bogle says, "ENOUGH!" This is a simple way to put it: It's like raising your dog. You reward him with treats when he pees outside. You don't reprice his stock options when he poops on the floor.

Broxburnboy: One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. Broxburnboy, I could not agree more. However, i'm trying to tackle more realistic goals right now. What u speak of is probably one of the biggest problems in my mind as well, yet there are so many fish in that privileged pond, that i don't know if that will ever change. I'll leave that one to Patrick Byrne, Prem Watsa, and Michael Moore (i hear he is making a video on this subject). I'm just picking my battles.

By the way, this one: GE - Shareholder votes on both Executive Comp & golden parachutes With the Golden parachute vote... this only recently became eligible to a shareholder vote (it was not previously the case, and it still isn't in nearly every company), when it was ONLY recently discovered about Jack Welch's parachute during the divorce proceedings. Shareholder had no idea as it was not disclosed or put to a vote. If GE wasn't scandalized by this bad press, they still wouldn't authorize a shareholder vote for it. This is just one case in point, in which the bill will help solve. http://money.cnn.com/2002/09/06/news/companies/welch_ge/

Interesting, but as of right now at most companies, you can not revise a compensation package on an annual basis. Also, most companies don't allow a shareholder vote on some "hidden" compensation forms such as some perks, golden coffins, and golden parachutes, change of control packages. There are some firms out there that do allow votes on ALL of the above, however, they are few and far between. In my opinion, this is the main issue i think this bill may at least help to solve: Also, most companies don't allow a shareholder vote on some "hidden" compensation forms such as some perks, golden coffins, and golden parachutes, change of control packages.

Want to know where some of your capital goes as a corporate shareholder? Now that we’ve moved beyond 10K season and into proxy season, I thought some would like this new column. The idea was to have a site that focused intensely on perks during proxy season. Perks Watch which will run as part of Dealbook in the NY Times. http://dealbook.blogs.nytimes.com/category/perks-watch/ This one would make me cringe, were I a shareholder of Stryker: What does it say about the local medical community when the chief executive of a large medical technology company has to hop on the corporate jet and fly to another city to get an annual physical? That’s the situation at Stryker, based in Kalamazoo, Mich., which disclosed in its proxy that Stephen P. MacMillan, its chief executive and president, “traveled to a physical exam on the company aircraft.” While the company didn’t disclose where Mr. MacMillan flew to for the exam or give a breakdown of either the cost of the flight or the exam, this was the second consecutive year that the executive flew out of town for a physical. That’s got to lead to some awkward moments at the Kalamazoo Country Club, another company-provided perk that Mr. MacMillan receives, when he runs into local doctors in the clubhouse. Indeed, while the proxy statement notes that Stryker “believes that its perquisites practices are conservative,” the filing shows that top executives at the company got a wide range of perks last year. Among them was an off-site planning meeting that spouses of several executives were allowed to attend. The cost of attendance for one Stryker executive, Andrew Fox-Smith, the president of the company’s international group, and his wife was $36,985, which seems like a pretty plush trip. Granted, Mr. Fox-Smith is based in Hong Kong, so they had a long way to travel. As it happens, Stryker also pays for his housing and utilities, which cost $185,165 last year.

BTW...I am not canadian - I just saw that now. lol, Too bad. There are too many loudmouth Americans on this board like me. j/k Still buds. If its a large enough issue, shareholders should put it up to vote to change corporate charters so that compensation is voted on. This has already happened at a few companies You and i know how difficult it is to get a board to listen to you if you are a major shareholder with clout, let alone a small one without clout. Look at Ackman having to threaten the Target Corp. board with arbitration just to get an extra director on the board, even though Target's corporate charter already clearly allows another director through shareholder vote. Can you imagine what he would have to threaten them with to get them to lower their pay. Good luck on Level 3.

Randian wrote: Sure, there is an agent-principal conflict. But if you are concerned, than invest in companies with better corporate governance, or require a great required rate of return. There are more than just FFH & BRK. I can prove it. Every year, BRK manages to a half dozen companies, all with great corporate governance. How come warren has no problem investing his money? Warren invested in Goldman and GE, both with extremely highly paid employees and executives. Randian, I really could keep picking apart all of your comments, but i have other things to do. Why allow companies continue poor corporate governance? Why provide the argument, to look to invest elsewhere? Why not just fix the problem? Of course there are some companies out there with good corporate governance. That is not the point. As far as Warren Buffets thoughts on the issue: This is what Warren has to say: http://articles.wallstraits.net/articles/1372 Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay. The upshot is that a mediocre-or-worse CEO-- aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo-- all too often receives gobs of money from an ill-designed compensation arrangement. It doesn't have to be this way: It's child's play for a board to design options that give effect to the automatic build-up in value that occurs when earnings are retained. But-- surprise, surprise-- options of that kind are almost never issued. Indeed, the very thought of options with strike prices that are adjusted for retained earnings seems foreign to compensation "experts," who are nevertheless encyclopedic about every management-friendly plan that exists. ("Whose bread I eat, his song I sing.") Getting fired can produce a particularly bountiful payday for a CEO. Indeed, he can "earn" more in that single day, while cleaning out his desk, than an American worker earns in a lifetime of cleaning toilets. Forget the old maxim about nothing succeeding like success: Today, in the executive suite, the all-too-prevalent rule is that nothing succeeds like failure. Huge severance payments, lavish perks and outsized payments for ho-hum performance often occur because comp committees have become slaves to comparative data. The drill is simple: Three or so directors-- not chosen by chance-- are bombarded for a few hours before a board meeting with pay statistics that perpetually ratchet upwards. Additionally, the committee is told about new perks that other managers are receiving. In this manner, outlandish "goodies" are showered upon CEOs simply because of a corporate version of the argument we all used when children: "But, Mom, all the other kids have one." When comp committees follow this "logic," yesterday's most egregious excess becomes today's baseline Okay, if i haven't made my point with u after all this back and forth, then i never will. But thanks, for bringing the issue to discussion. P.S.~ Don't forget to fill out the form, in the link at the top of this thread, if you agree with the bill and want to send a computer generated letter to your senators. It only takes a few seconds. -Wait a minute. (Randian hero)Aren't you Canadian? You can't participate anyway, lol.

Jeez, I know for sure that the CFA program tells you that you should vote your proxies. Apparently you aren't aware of the CFA program's stance on the 'Say on Pay' Bill Here is what they have to say: Kurt Schacht, Managing Director of the CFA Institute Centre, said, “knowing such a vote will be taken sharpens directors’ attention to and explanation of executive compensation practices. Investors are tired of learning after the fact about ‘golden parachutes’ and executives whose pay isn’t tied to performance.” http://www.thecro.com/node/462 AND “Shareholders are recognizing that, when chairmen of compensation committees understand that their decisions will be subject to a vote of confidence, they try harder to get it right,” said Stephen M. Davis, project director at the Millstein Center for Corporate Governance and Performance at Yale. A result, said Scott A. Fenn, managing director of policy for the proxy advisory firm Proxy Governance, is that “say on pay is the issue that’s resonating most with shareholders this year.” http://www.nytimes.com/2008/04/06/business/06say.html?_r=1

I am saying it ALREADY IS IN THE HANDS OF THE SHAREHOLDERS You are the one advocating for government intervention with respect to compensation. You obviously haven't studied this issue much. This is not the case, on an annual revision basis, and through all companies, and with respect to golden parachutes and golden coffins. They ran a special on CNBC this morning that explains it a bit for you. I suggest taking a look at the replay. Or u can just read the house bill and ammendment thrown in by for Barrack Obamma. And how u relate this to communist russisa, is retarded. I'm advocating shareholder rights, not government rights. This bill doesn't relate to AIG bonus tax (which i'm against or pay caps, or any other crazy stuff like that). It is simply advocating increased shareholder voice, as opposed to the way the proxy system is currently organized. You ARE advocating for communist russia. Its the same as when people say Lebron James is paid too much. If you don't like it, don't buy the tickets or watch the games on tv. If you don't like executive comp, then don't buy the stock. You obviously can't grasp what this bill is in reference to. If you don't like Crack don't buy it, but don't try to stop people from selling crack.- This is the type of arguement you are trying to make. Or better yet, Before they passed the Securities and Exchange Act and manipulation was rampant, would you say, -Just don't invest in the Stock Market, there is no reason to fix it, just don't invest in it if u don't like it.-

This isn't communist Russia. Giving the owners of a company more say in who they hire. Communist? , lol.

I know you mean know offense, but i figured i would get a response like the following: --"Nobody holds a gun to you head to make you buy a stock." This is like saying don't go to Central Park at night, because lots of thefts have taken place there. Instead of saying lets take care of the theft problem. Many companies don't even have a "say on pay" policy, while some have adopted it early. The U.K. already has comprehensive and mandatory say-on-pay laws, but in the U.S., corporate governance traditions are different. Scott Fenn, managing director of policy at Proxy Governance, says blanket legislation is misguided. "We take a more nuanced approach," he says. Responsibility lies with the board of directors, rather than the shareholders, to make the right choice. U.S. shareholders now only have a voice on the compensation of chief executives if the board of directors choose to put it to a ballot during proxy season. Such a vote is a shareholder advisory vote. It's non-binding and does no more, beyond potential public embarrassment, than give a board the option to reconsider a pay package already approved. Directors aren't obliged to change a cent, regardless of the outcome of the shareholder vote. RiskMetrics Group, a research and management consulting firm, found 74 companies, including GE, Valero, and Apple that had a say-on-pay vote this year, though in most cases, shareholders had to have held at least $2,000 worth of stock in their company for at least a year to be eligible to vote. Source of quotes, for clarity: http://www.forbes.com/2008/11/11/say-on-pay-lead-compensation-cx_mk_1110corpgovernance.html

send this form (pre-filled for you) to your senators for this session. It will automatically generate the letter and find the senator in your area. Just fill out your name, email, and address if you agree with the letter. http://www.unionvoice.org/campaign/paywatch_say_on_pay I get sick to my stomach when a compensation committee awards outrageous compensation plans (including insanely dillutive options plans) especially during periods of mediocre or poor performance sometimes in the 30-80 million range per year. I think it should be up to the owners (shareholders) to decide on how much and in what form to pay their executives. There are so many great companies out there that i would love to own, yet they have anywhere from 10-25% of future shares outstanding in the form of options. This practice is beginning to become the norm, not the exception. Please write your senators. It will take no more than 30 seconds of your time. Please fill out the from linked above if interested in taking a stance. Thanks.

A Bloomberg article explaining the proxy problem. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4OuCsU8r2Yg Kind of makes you wonder how much better off investors are protected since the Securities and Exchange Acts of 1933/34, after the Great Depression. It almost seems as though the goal of the SEC is to create trust in the markets through perception (going after little fish like AIG bonuses & Martha Stewart), then create trust through proper regulation of the most important rules. I have no idea why problems like the ones mentioned in this thread are not discussed more.

This too is a great documentary on Naked Short Selling, from Bloomberg . http://video.google.com/videoplay?docid=4490541725797746038

With ETNs you have credit risk. I would recommend an ETF instead. DBA is one agriculture ETF

Look at a chart graph of the fails to deliver relative to the share price. I think you will see more conclusive evidence. I don't have the time to find it for you, but i believe this chart is also available within the deepcapture site. You may find this very recent article interesting too. http://www.bloomberg.com/apps/news?pid=20601109&sid=aB1jlqmFOTCA&refer=home

You can vote for him to be on the Daily Show here: http://guests.dailyshownews.com/akira/dtd/16867-2313

Wow, that is cool. Check out this new cool thing too: http://online.wsj.com/article/SB123689025626111191.html

Patrick Byrne, CEO of Overstock, is beginning to send an interesting attachment to his overstock customers via email: http://www.thecontrarianmedia.com/2009/03/overstock-ceo-calls-jim-cramer-a-criminal/