Archives
Here, at your fingertips, are more than 35 years’ worth of issues and articles. Search by date, company or keyword.
Introducing the Grant’s Supermodel Credit Portfolio
Credit is what we are bullish on--cast-off residential mortgage-backed securities, senior bank loans, convertible bonds and corporate debentures, high-rated and middling. And it's credit that fills the new Grant's model portfolio. Expectantly, we call it our Supermodel Portfolio. May it deliver superior returns for 2009 and beyond.
Beating the band
A discussion of the Treasurys and gold... The 2008 Investor of the Year award goes to a man who, through December 8, earned 26.9% by investing in exactly those assets on which Grant's is most bearish. . .
‘Intelligent Investor’ redux
The bear market has coughed up the names of eight companies that meet the exacting criteria that Benjamin Graham laid out in 1973 for stocks that a defensive investor might buy with confidence. To scan the requirements--seven in all--you wouldn't suppose that a single company could measure up. They are (1) adequate size, (2) a good balance sheet--current assets greater than two times liabilities, (3) 10 consecutive years of net profits. . .
Never before seen
Unprecedented, according to an electronic search of the financial press, is the frequency of the use of the word "unprecedented" to describe the crisis on Wall Street. Living eyes have never seen the likes of it. And no observer, living or dead, has ever witnessed a greater scale of intervention by any government to refloat a sinking economy than the one being mounted in Washington. Now begins an attempt to see the crack-up of 2008 as our financial descendants might eventually see it. . .
Sell the renminbi
"Some investors are so keen on [Middle Eastern] economies that they think the currencies have nowhere to go but up." So speculated The Wall Street Journal back in May, a time so distant that the oil price was actually rising. As 2008 deflates to a close, the currencies of Saudi Arabia, the United Arab Emirates and Qatar (as expressed in quotations on their one-year forward swap rates) are tipped for slight depreciation rather than moderate appreciation. Let it be said, however, that one Middle East currency is still chugging higher against the dollar. The readers of Grant's will not gasp to learn that it's . . .
Ben Graham does Motown
House prices in Detroit had fallen by 12.5% from their 2005 peak when I visited in September 2007 in search of value-laden real estate. Prices have since dropped by another 18.6%. The declines are remarkable.
Global debasement play
All year, central bankers have been saving the world by inflating their assets, often in new and imaginative ways. The holidays can't come soon enough for them. In the past 12 unforgettable months (just try to forget them), the Federal Reserve's assets grew by 146%, the European Central Bank's by 58% and the Swiss National Bank's by 74%. But the Bank of England puts them all in the shade with year-over-year growth of 158%.
Bullish on credit, bearish on money
A discussion of opportunities and risks in the fixed income market.
Eat my bread, sing my song
Compares the government’s investment in nine major banks with depression interventions.
'Dry powder,' reconsidered
Revisiting a company too expensive six months ago that has been become substantially cheaper.
Uncle Sam's new fat suit
The initiatives to halt the credit crisis are sowing the seeds of future inflation.
'Toxic Treasurys, super-safe mortgages'
The safety of an investment is dependent upon the price paid.
A little wonderful advice for Mr. Paulson
A discussion in how to narrow GSE spreads and how to invest if it were to happen.
Time's up, Mrs. Watanabe
The carry trade is in full force despite economic stress in countries with high yielding currencies.
Merrill's mortgage blowout
A discussion of Merrill Lynch’s CDO sale and the distressed CDO opportunity.
Bearish on the biggest monoline
A review of the U.S. government’s finances and the implication for interest rates and the currency.
The trouble with Prosperity
A guide to investing in leveraged financial institutions in the eye of a credit storm.
Debt for dinner
A discussion of a restaurant that recently completed an acquisition that has resulted in a leveraged balance sheet.
Reserve currency at bay
A discussion of inflation in countries with currencies tied to the U.S. dollar.
This time--really--it’s different
A discussion of the macro and micro repercussions from the straining American consumer.
Window shades, stocks, etc.
A description of a window shade manufacturer with a large hedge fund portfolio priced at a discount.
Landslide report
A progress report on the housing bust. One company is beginning to find opportunities in raw land.
Hostages to house prices
A comparison of two large capitalization companies that have their immediate futures tied to house prices.
The close of the era of peace and quiet
The era of disinflation caused by globalization is nearing its end.
The old drawing board
The International Association of Financial Engineers announces a meeting on the need for a second generation structured products pricing model.
It floats, it sinks
The credit crisis has not yet produced compelling absolute value in the CLO market.
Sunset for the euro?
The euro has come under pressure on lower than expected inflation reading in Germany.
It was the storage business, after all
The credit excesses of the previous cycle are still unwinding.
350 million chimneys
An examination of three Chinese companies discussed by Richard Chilton and Murray Stahl.
Power play of tomorrow
A company in a position to benefit from increased capital spending in the utility industry.
Discounting defaults
Steve Miller describes that the leverage loan market is pricing in excessive losses.
A short treatise on good intentions
The Federal Reserve’s recent actions, dropping its target rate by 3% and accepting dubious assets onto its balance sheet, has unintended consequences around the world and on its currency.
Hair of the dog
The private sector is de-leveraging while government sponsored enterprises are being asked to re-lever with troubled assets.
Limits of leverage
Two California S&Ls are struggling with non-performing loans issued during the height of the recent real estate speculation.
Bonfire of the currencies
The world’s central bankers can all agree on one thing – the desire for a weaker currency.
Hoover without the Depression
Historical review of how America’s monetary and financial arrangements have led to Depression-like distress without a depression, and how one might profit from the inevitable attempts to set things right.
Not so preferred
Fannie Mae is ‘adequately capitalized’ according to OFHEO, but that is a result of preferred stock issuance not the performance of the underlying business.
Up with Banco cheapo
Bladex is a supranational trade-finance bank headquartered in Panama with a conservative balance sheet trading below its book value.
Name that central bank
The Federal Reserve Bank credit has been growing 2.2% annually. The ECB is growing its balance sheet at an annual rate of 22.3%.
Fill in the Suez Canal
Prior to the Federal Reserve, productivity growth led to lower prices. Today, lower prices resulting from productivity are confronted by monetary stimulus.
‘Essentially stale money’
Newmont Mining shares have not participated fully in the gold price rally and cheap compared to its peers.
Bullish on AIG
AIG announced further market valuation writedowns in its insured multi-sector CDOs creating another opportunity to invest in a great company at a reasonable price.
Trophy tranche
The CMBX triple-A 4 has been sold by banks to hedge other risks and by hedge funds to speculate on deterioration in the commercial property market. Selling of the index has carried beyond the underlying fundamentals.
Regime change
Gulf countries have declined to remove their pegs to the U.S. dollar despite rising inflation. Hungary removed the forint’s trading band against the Euro.
The people’s wrath-delayed
The lack of a backlash against Wall Street is surprising given the scope of the current credit crisis.
Material strength
AIG’s recent announcement of a material weakness in it’s accounting has created an opportunity to invest in a great company at a reasonable price.
Not so contained
description: Eastern European banks have continued to offer mortgages in low interest rate currencies adding currency risk for borrowers.
Whose preference?
Non-cumulative preferred stock issuance has risen, but interest payments are at the board’s discretion.
Junk-grade central bank
The most leveraged financial institution in New York is the Federal Reserve Bank of New York and it is accepting low-rated CDO tranches at 80 cents on the dollar as collateral.
Many countries, one interest rate
The FED and the ECB set one interest rate for multiple countries. The FED ignores the 'dollar bloc' countries at the risk of inflation.
'Free mortgage business'
This company. was set to be acquired for $31.50 a share. The deal fell through and now investors can buy one business and receive 2 other businesses for nothing.
Company to let
This company was set to be acquired for $34.50 a share. The deal fell through and now investors can buy the company at 6 times forward earnings.
Kravis was right before
This company was set to be acquired for $120 a share. The deal fell through and now investors can buy the company at two-thirds off.
Peak oil, peak dollars
Shad Rowe relates how Boone Pickens has used his belief in peak oil to compound returns in BP Capital.
Improbable sources of strength
The weak dollar ahs led exports to account for a large proportion of GDP.
Value restoration at a gallop
Market volatility may yet produce investment values as the ideas of the recent bull market – decoupling, the Great Moderation, and “inflation vigilantism” – retreat.
What grows on trees
Grant’s discusses a profitable timber company. The company is selling at a discount to its peers and has a more conservative balance sheet.
Invest--then investigate
A CDO squared recently sold at a large discount. As investors realize the complexity of the structures, expect the discounts to get larger.
Old Europe creaks and groans
description: Club Med countries have seen the sovereign CDS spreads widen and the sovereign debt widen versus German bunds.