David Dreman "feels bad for investors."
Dreman is one of the world's greatest value investors. He's been analyzing stocks for more than 50 years. He literally wrote the book on contrarian investing. Contrarian Investment Strategy: The Psychology of Stock Market Success came out in 1980 – right at the end of a decade-long bear market.
If you followed Dreman's advice back then – and bought stocks when nobody else wanted them – you're likely a millionaire today.
I talked to Dreman this week on S&A Investor Radio. That's my free weekly podcast where I break down the markets and interview some of the smartest investors on Wall Street. And he explained why he feels so bad for today's investors…
During our 20-minute conversation, Dreman explained that investors continue to take money out of the market in droves. Numbers provided by research firm Investment Company Institute show investors are taking billions of dollars out of stock funds each passing week.
He thinks these investors are making the wrong move… But as a contrarian investor, Dreman sees this as a positive sign. That's why he's telling folks to buy stocks right now.
That was surprising to me. After all, Dreman is a value investor… And stocks are not cheap, trading near 15 times earnings. We have also had a great year – with the S&P 500 index up over 12% through September.
However, Dreman says there are plenty of industry-leading stocks trading below 10 times forward earnings that pay high yields. I didn't believe him – until I looked myself.
According to research engine Capital IQ, more than 15% of stocks within the S&P 500 trade below 10 times forward earnings. Of those, over 50 industry-leading stocks are paying a 2% or higher yield. I've listed a few names below. I'm sure you will recognize most of them…
| Company |
Industry
|
Forward P/E
|
Yield
|
| Microsoft (MSFT) |
Software
|
9.7
|
3.1%
|
| L-3 Communications (LLL) |
Defense
|
9.1
|
2.8%
|
| Caterpillar (CAT) |
Construction
|
8.8
|
2.5%
|
| Cummins (CMI) |
Engines
|
9.2
|
2.2%
|
| JP Morgan Chase (JPM) |
Banking
|
8.3
|
2.9%
|
| Chevron (CVX) |
Energy
|
9.4
|
3.1%
|
| AFLAC (AFL)* |
Insurance
|
7.2
|
2.8%
|
| Cisco (CSCO)* |
Networking
|
9.7
|
3.0%
|
| Corning (GLW)* |
Specialty Glass
|
9.8
|
2.7%
|
| Johnson Controls (JCI) |
Auto Parts
|
9.6
|
2.7%
|
* I concur.
There are a few things to take away from this…
First, even though the average stock in the S&P 500 is trading at 15 times earnings, there are still plenty of good stocks you can find trading at cheap valuations.
The second is learning how to be a contrarian investor. Right now, most investors are scared of stocks. Dreman talked the same sentiment about in 1980. Buying stocks nobody else wants usually leads to exceptional returns.
I suggest picking away at some of the names in the table above. Not only will you sleep well at night owning these industry leaders… But chances are good you'll have some huge winners on your hands a few years from now.
Good investing,
Frank Curzio
-----------------------------------------------------------------------------------------------------------------------------3)Benghazi: Osama's Revenge on Obama
By James Lewis
Talk about chickens coming home to roost. Talk about the Mother of All Fiascos. It's the revenge of Osama bin Laden from the bottom of the ocean, and the message is plain: al-Qaeda is very much alive, and America is a paper tiger.
The Middle East is beginning to fall apart -- Iran just sent a spy drone over Israel's sensitive defense installations, and the IDF waited hours to react; Turkey forced down a Syrian arms plane, and al-Qaeda's Al Zawahiri openly assaulted the U.S. Consulate in Benghazi in a six-hour attack, working through al-Qaeda in the Maghreb (AQIM), while the glorious Libyan friends did nothing as our ambassador was being raped and murdered. The guards called for help, and nobody responded. A police car fled the scene. The other ten cop cars requested by the consulate never showed up.
The Libyan regime knew. It had to know.
In Afghanistan, our soldiers are being murdered by the same Afghan troops we are training to take over after we leave. They can see the weak horse and the strong horse, and they are trying to tell the strong horse what side they are on. These folks used to be on our side, but they know which way the storm is blowing.
Remember: host governments are always responsible for the safety of accredited diplomats and soldiers. Always, always, always. Embassies have a U.S. Marine color guard -- not for protection, but for a symbolic presence. Host governments have overwhelming power: armies, cops, and a huge intelligence apparatus. In Afghanistan, believe it or not, we are the guests of the regime. If Afghan soldiers are killing us, it's because the regime is trying to save its butt, now that we have bowed down to the Taliban.
When Ayatollah Khomeini staged the takeover of the U.S. Embassy in Tehran in 1979, he denied any responsibility. Jimmy Carter was weak enough to do nothing for a whole year, when the answer is right in the textbooks: the host government is always responsible for the security of diplomats. As soon as Reagan beat Carter, the U.S. hostages were released pronto, because Khomeini was not ready to die. His point was made.
Interesting footnote: Khomeini's runner to the embassy terrorists was a kid named Mahmoud Ahmadinejad. It was a big career move for him.
America may not have a memory, but the Islamists do. They've got our number, and they knew how far to push. They are not interested in you and me -- not yet -- but in the 1.4 billion Muslims who are quietly loving the revenge of Allah. This is how al-Qaeda gets notorious, wealthy, and powerful. This is how Islamists make recruits all over the world, including the West. Now Islamist throwbacks own Iran, Turkey, Egypt, Tunisia, Yemen, Saudi Arabia, Lebanon, Gaza. America is asleep at the switch, and Islamic fascists are on the march. Women in the millions are putting on chadors, niqabs, and black tents, not because they want to, but because they are afraid not to. They are right to be afraid. Our raving feminists are silent as the grave.
Remember: both our Cairo Embassy and our Benghazi Consulate were attacked, with a black al-Qaeda flag waving over the ruins for the international cameras. Al-Qaeda's signature is simultaneous attacks in different places. This was the biggest victory for AQ since 9/11/01. We handed it to them. Obama bowed down to King Abdullah in public. Hillary has been videoed a thousand times walking with Huma, both wearing head scarves.
Signals. In the Muslim world, if you send an openly gay ambassador to Libya, you might as well paint a target on him. If you make Hillary -- the betrayed wife of President Bill -- your secstate, expect the outraged patriarchal pride of the throwbacks to take revenge. You think Hillary being secstate is wonderful and progressive, and they take it as a personal insult and demand bloody revenge. They are laughing at her now -- a weak woman with a weaker president.
In Egypt and Libya, our glorified "Arab Spring" buddies did nothing while our sovereign territory went up in flames, our diplomats were shot and abused, and our national security secrets were stolen. So-called "spontaneous protests" exploded in fourteen Muslim countries at the same time as the Cairo and Benghazi assaults. Our diplomats have now been pulled out of a reported 20 Muslim countries, including Tunisia, Mali, Algeria, Libya.
It was the eleventh anniversary of 9/11/01, and our State Department idiotically pulled the U.S. Marines and military contractors out of Libya -- in favor of radical Islamists hired at $13,000 per year. Instead of U.S. Marines to guard the embassies with machine guns those State Department moneys went to Green Chevy Volts.
To show them we mean no harm. How they must be laughing at us.
Hours before the Benghazi attack on Ambassador Chris Stevens, al-Qaeda released a web video from Ayman Al Zawahiri -- bin Laden's second in command. According to the Israeli intelligence-linked news site Debkafile.com:
Zawahiri called on the faithful to take revenge on the United States for liquidating one of the organization's top operatives, Abu Yahya al-Libi in June by a US drone in Northwestern Pakistan. Its release was a "go signal" for the hit team to attack the US diplomats in Benghazi.
Why Benghazi? Because al-Libi means "the Libyan." Obama's U.S. predator killed Yahya al-Libi in Pakistan, and al-Qaeda takes instant revenge on our top diplomat in Libya.
Why the timing? It was 9/11, hours after the United States held memorial ceremonies for the victims, broadcast around the world.
It may not make sense to us, but it makes all the sense in the world to radical Muslims, al-Qaeda, Taliban, Salafists, Wahhabis, suicidal Twelvers, martyrdom freaks of Hezb'allah, and neo-Ottomans. There are hundreds of these little sects around the world, all whipped up every Friday by the local imam, sheikh, or other revenge fantasist.
Signals. They understand them. We have a media and political class that throws sand in our eyes. They are screaming at us, and we are pretending not to hear.
We now know why the administration has been running like hell from the assaults in Benghazi and Cairo. Weeks of flimsy lies, day after day, starting with Obama's speech to the United Nations, where he blamed a shoddy web video made by a Christian Copt from Egypt ("a resident of Southern California") who was promptly put in jail, presumably to protect his life. The BBC instantly blamed the video on 100 Jews -- or was it 500? -- who paid for the cruddy video. Anything to deflect blame in those crucial hours. Then the BBC "corrected" its lie after it went around the globe.
Our U.N. Ambassador Susan Rice is still running the same lies Obama told weeks ago. Hillary and the State Department are telling different lies every day; Obama is blaming the intelligence agencies, who are leaking right back; and somebody is blaming the Pentagon today.
This would be a scream if it wasn't so dangerous.
Al-Sharq Al-Awsat is an Arab newspaper published in London, and it's found a Libyan guard who survived that night, named 'Ali. (Translation by MEMRI.org; formatting in original.)
... Ali was part of a Special Protection Unit, which comprises members of the February 17 Brigade, a Libyan militia comprising radical Islamists which was established following the Libyan revolution.
Back in March 2012, the U.S. Consulate had hired members of the Special Protection Unit to guard its compound.
'Ali and others in his team describe ... the embassy's poor cooperation when, following the June 2012 attack on the embassy, (when a bomb exploded outside the Benghazi consulate) they requested upgrades to their weapons and improvement of the security tools at their disposal.
'Ali said that during the attack, after the embassy was stormed by some 50 men, ... his team's calls for backup, in Arabic and English, went unanswered by both the Americans inside the embassy and by the February 17 Brigade headquarters less than two miles away.
... Police Vehicle Outside Consulate "Fled The Scene"; No Response To Libyan Guards' Call For Backup
'Ali ... was taken by surprise by the attack, which he said "seemed to come out of nowhere." He said that he first noticed that the police car outside the consulate - an additional layer of security provided by the Libyan government - "took off quickly, fleeing the scene."
He then saw some 50 men, mostly unarmed, approaching the consulate by foot on the dirt road leading up to it, headed by eight masked men, two of whom carried RPGs. ... Shortly thereafter, one of the attackers fired three (RPG) rounds at the main gate, while others stormed the consulate wall.
...the great majority of the attackers were Libyans from Benghazi, and some of them were masked. ... four of the attackers, all apparently masked, were the leaders of the group, because ... all the others seemed to listen to them and to follow their orders.
... one of the four leaders had worn a Pakistani-type garment, and carried a golden pistol. A second, whom he described as a "short, fat, irritable" man about 5'4" with a beard visible under his mask carrying an AK-47, asked him about where the Americans were inside the consulate. A third man, he said, who was about 5'7", wore a long robe."
This is the age of the web, and the U.S. State Department must have been following every moment of the six-hour attack. They knew about September 11. They knew about Zawahiri's video. They knew Al-Libi was assassinated on President Obama's direct orders in Pakistan. They had received distress calls from the U.S. ambassador in Libya.
They knew. If they didn't know, they should resign en masse.
If the State Department knew, Hillary must have known. If Hillary knew, Obama must have been told. This is the age of instant communication. Didn't somebody have a cell phone?
They knew and did nothing.
It was 3 am, and nobody picked up the phone.
If Americans can't figure this out, the bad guys will. They already know. Only the ignorant and foolish don't get it.
----------------------------------------------------------------------------------------------------------------------------------------------------------------
4) Quelling panic in the ranks
By Wesley Pruden
There's not a dry mattress, pair of skivvies or delicate lace panty anywhere out there. The president is chasing an imaginary bird, the pollsters are choking back panic ("has our methodology been wrong?") and the media glitteries are even more hysterical than usual ("how can anyone as wonderful as us be so wrong?").
Democratic disarray lies all about. Change and decay all around they see.
Quelling panic in the ranks is currently Job 1 for the Obama campaign. David Plouffe, a senior adviser to Barack Obama, professes not to fret about "the fundamentals," and says the panic in the ranks is nothing more than an outbreak of "bed-wetters."
From the cries and squeals in certain precincts it's clear to just about everybody that President Obama's slam dunk in the debate was only the modest clatter of a rim shot. It's dawning on Democrats and their faithful media sages, so gleeful only yesterday, that it's possible their man might soon have plenty of time to work on his putts and hoops.
Mitt Romney's surge, fueled by that slam dunk that didn't go awry, has pushed ahead of the president in the public-opinion polls for the first time. The latest polls show him closing the gender gap and running far ahead among the independents who the wise men say are the key to victory. It's a remarkable turnabout. It might not last but the quick and the nearly dead have traded places, with a little over three weeks to go.
The new polls which take fully into account the dribble and bounce from the first debate is what has so rattled the professionals who are paid not to rattle. Gallup's first snapshot of "likely voters," separated from the merely registered voters and those who might or might not take the trouble to get to vote, put Mr. Romney ahead by 2 points, 49 percent to 47 percent. That's well within the margin of error and any pollster will tell you that such a result is "statistically insignificant." ButGallup says it illustrates "the competitive nature of the election." That's Ph.D talk for "Romney's got the momentum." (It's what George Bush the Elder calls "the big mo'.")
A wise Republican knows to curb his enthusiasm. What the fickle finger of fate can give, the fickle finger of fate can take away. "When we were being questioned [a fortnight ago] about the state of the race," Eric Fehrnstrom, a Romney spokesman, told reporters this week, "our advice was to simply caution everybody to be patient; there's going to be a lot of ups and downs in this campaign, but it's going to be tight right until the end. We believe that to be the case, and I believe the president and his campaign share that view."
Nevertheless, the market for stories about disarray in the Romney camp has dried up. The media glitteries are getting a lesson in the risks and dangers of forgetting who they're supposed to be. Many of them have become aspiring spokesmen for the messiah, eager to read dissenting glitteries out of the cult.
After Andrew Sullivan, one of the most widely read Internet bloggers, wrote that Mitt Romney "is kicking the president's [hind quarters]," a day or so later he felt the need to explain that on second thought his first thought is inoperative. Everyone on the left is still howling at Chris Matthews, who went berserk on the air after the first debate. The president still hasn't replied to Chris' offer to teach him how to debate. Who knows what clubhouse ignominy awaits Gail Collins of the New York Times, who wrote this week that "when Democrats run into each other in elevators they exchange glances and sigh. Or make little whimpering sounds." (She's counting on Joe Biden to make it all better.)
The media glitteries, no longer satisfied to be mere journalists, reckon themselves a mighty army marching as to war, with the banner of the messiah of Chicago going on before. They feel no shame for abandoning duty. There's no one any longer available to enforce the discipline of a serious newsroom.
When Abe Rosenthal, the late executive editor of the New York Times, once decreed that reporters, columnists and editors could not march in partisan causes no matter how worthy. One of his reporters demanded to know why. Didn't she have First Amendment rights, too?
"Of course you do," Abe replied. "You can [have sex with] an elephant, if that's your taste. But if you do, you can't cover the circus."
---------------------------------------------------------------------------------------------------------------------------------------------5)
Confusing Strength With Aggression
A draw on substance, but the vice president loses on style
By Peggy Noonan
The vice presidential debate was uniquely important because if Paul Ryan won it or did well, the Romney-Ryan ticket's momentum would be continued or speed up. If he did not, that momentum would slow or stop. So the night carried implications.
The debate, obviously, was the Republican versus the Democrat, a particular kind of conservative versus a particular kind of liberal, one philosophical approach versus another. Beyond that there was some iconic weight to it. It was age versus youth; full, white-haired man versus lean, black-haired man. Youth is energy—new ideas and new ways. But age can stand for experience, wisdom. Youth can seem callow, confident only because it is uninformed. But age can seem reactionary, resistant to change in part because change carries a rebuke: You and your friends have been doing things wrong, we need a new approach.
Joe Biden had to do what the president failed to do—seem alive, bring it, show that he respects America so much he'd bother to fight for it. Mr. Biden is voluble, sentimental, scrappy. Could he focus his scrappiness enough to deliver targeted blows?
History is human; both men had things to prove. Mr. Biden had to show the White House, the Democratic base and himself that he still has it, that he's not the doddering uncle in the attic. Whatever happens, at almost 70 this is his last grand political moment. Would his career end with a whiff or a hit? And the debate was his opportunity to save Barack Obama. Might that be personally satisfying? Obama staffers are often quietly condescending about Ol' Joe. What sweet revenge to publicly save the leader of those who privately patronized you. If I read Mr. Biden correctly, this would have crossed his mind.Mr. Ryan had to introduce himself to the American people in a new way—at length, in a contentious environment. He had to communicate: "I haven't been a national figure long, but I know what I'm doing. I'm not radical or extreme and I'm not here to destabilize, I'm here to help make things safer by putting them on firmer ground."
AFP/Getty Images
Joe Biden (left) squares off against Paul Ryan in Thursday's vice-presidential debate.
Mr. Ryan had to show the voters, the GOP and the political class that Mitt Romney did not make a mistake in choosing him. There were other candidates, some impressive. He had to demonstrate that Mr. Romney's faith was well and shrewdly placed.
So: a pat on the back and a gold watch for the old man? Or a "Thanks for coming in, we're going in another direction but let's stay in touch" for the young one?
***
So, to the debate:
There were fireworks all the way, and plenty of drama. Each candidate could claim a win in one area or another, but by the end it looked to me like this: For the second time in two weeks, the Democrat came out and defeated himself. In both cases the Republican was strong and the Democrat somewhat disturbing.
Another way to say it is the old man tried to patronize the kid and the kid stood his ground. The old man pushed, and the kid pushed back.
Related Debate News
Here's a look at the highlights of the Vice Presidential debate. Photo: Associated Press
Last week Mr. Obama was weirdly passive. Last night Mr. Biden was weirdly aggressive, if that is the right word for someone who grimaces, laughs derisively, interrupts, hectors, rolls his eyes, browbeats and attempts to bully. He meant to dominate, to seem strong and no-nonsense. Sometimes he did—he had his moments. But he was also disrespectful and full of bluster. "Oh, now you're Jack Kennedy!" he snapped at one point. It was an echo of Lloyd Bentsen to Dan Quayle, in 1988. But Mr. Quayle, who had compared himself to Kennedy, had invited the insult. Mr. Ryan had not. It came from nowhere. Did Mr. Biden look good? No, he looked mean and second-rate. He meant to undercut Mr. Ryan, but he undercut himself. His grimaces and laughter were reminiscent of Al Gore's sighs in 2000—theatrical, off-putting and in the end self-indicting.
Mr. Ryan was generally earnest, fluid, somewhat wonky, confident. He occasionally teetered on the edge of glibness and sometimes fell off. If I understood him correctly during the exchange on Iran, he seemed to suggest to moderator Martha Raddatz that a nuclear war in the Mideast would be preferable to a nuclearized Iran. Really? That easy, is it? Mr. Biden had one of his first good moments when he said, essentially, "Whoa." Actually he said war should always be a very last resort, which is always a good thing to say, and to mean.
Because the debate was so rich in charge and countercharge, and because it covered so much ground, both parties will be able to mine the videotape for their purposes. On the attack in Benghazi, the question that opened the debate, Mr. Biden was on the defensive and full of spin. He pivoted quickly to talking points, a move that was at once too smooth and too clumsy. He was weak on requests for added security before the consulate was overrun and the ambassador killed. "We will get to the bottom of this." Oh. Good.
Mr. Ryan was strong on spending and taxes. On foreign affairs and defense spending, he was on weaker ground. Medicare and Social Security were probably a draw. Mr. Ryan coolly laid out the numbers and the need for change, but Mr. Biden emoted in a way that seemed sincere and was perhaps compelling. He scored when he knocked Mr. Romney for his 47% remarks, saying those who pay only payroll taxes pay a higher rate than many of the rich, including Mr. Romney. Mr. Ryan in turn scored on the unemployment rate in Scranton, Pa., Mr. Biden's hometown. It is 10%. It was 8.5% when the recession began. "This is not what a real recovery looks like." Mr. Ryan on abortion was personal and believable. Mr. Biden seemed to be going through the pro-choice motions.
***
I have just realized the problem with the debate: it was the weird distance between style and content, and the degree to which Mr. Biden's style poisoned his content..
In terms of content—the seriousness and strength of one's positions and the ability to argue for them—the debate was probably a draw, with both candidates having strong moments. But in terms of style, Mr. Biden was so childishly manipulative that it will be surprising if independents and undecideds liked what they saw.
National Democrats keep confusing strength with aggression and command with sarcasm. Even the latter didn't work for Mr. Biden. The things he said had the rhythm and smirk of sarcasm without the cutting substance.
And so the Romney-Ryan ticket emerged ahead. Its momentum was neither stopped nor slowed and likely was pushed forward.
Meaning that things will continue to get hotter. The campaign trail, commercials, all sorts of mischief—everything will get jacked up, cranked up. Meaning the next debate is even more important. Which means, since the next debate is a town hall and won't be mano-a-mano at the podium, that the third debate, on foreign policy, will be the most important of all.
Ms. Raddatz acquitted herself admirably, keeping things moving, allowing the candidates to engage, probing. There was a real humanity to her presence. We just saw Jim Lehrer beat up for what was also good work. May her excellence go unpunished.
------------------------------------------------------------------------------------------------------
| 
No comments:
Post a Comment