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John Dorfman's Last Bloomberg Article

John Dorfman has written his last article for Bloomberg.  After 10 years (started the column in 1997), Mr. Dorfman has decided to devote full attention to his investment firm Thunderstorm Capital.

I would like to wish Mr. Dorfman best of luck in all his endeavors.  His column will be greatly missed.  When I first started learning about the market, I was an avid reader of his column.  His articles were an excellent source of learning about fundamentals like P/E, and also learning about different ways to screen for stocks.


-theo

By Theo at 2007-02-15 17:48 | Stocks | Theo's blog


Theo,Here's #6 on Dorfman's

Theo,

Here's #6 on Dorfman's List:

"Six: Predicting the economy is probably even harder.

For seven years I ran an economic prediction contest, in which participants were asked to forecast variables such as growth in U.S. gross domestic product, oil prices, and unemployment.

Few people did well, and among those who did, there were few repeats from one year to the next."

Consider just a little COF, GE, HD, KO, or WMT to get off that commodity binge....hehehe  ;0

- Vooch

By Vooch at Thu, 2007-02-15 23:53 | login or register to post comments

RE: Predicting economy

Actually, I have to agree here.  My prediction skills are sub-par too.  In fact, I was thinking about writing an article about how bad I am at it.


-theo
By Theo at Fri, 2007-02-16 01:01 | login or register to post comments

Speaking of predictions, the

Speaking of predictions, tonight the S&P is nearing it's May 5th S&P500 High (which had a P/E of 16.64 at the time) by hitting a 16.60 today.

It hit in a P/E ~16.85 area a few days before, and after, that peak in May.

On Tuesday, HD and WMT report earnings, and the markets are closed on Monday for the holiday.

On another note, I've noticed some interesting things with my portfolio (it's gotten more conservative lately):

Parameter Vooch S&P500
====== ===== =====
Price/Earnings 10.72 16.6
Price/Sales 1.02 1.6
Price/Book 1.28 3.04
Market Cap (millions) 57,060 101,587
Volatility 8.71 7.53
Beta 0.93 1
Daily Volume 4,660,572 11,415,732
Dividend Yield 1.02 1.79

My "guess" is we may be nearing a peak next week or two.

- Vooch


By Vooch at Fri, 2007-02-16 01:12 | login or register to post comments

RE: Peak

I agree with a peak coming pretty soon.


-theo
By Theo at Fri, 2007-02-16 02:44 | login or register to post comments

Here's my comments on

Here's my comments on Dorfman's Final Points based upon my personal research:

> One: Out-of-favor stocks are the best road to capital gains.
AGREE

> Two: Don't be swayed by what Wall Street analysts say.
AGREE

> Three: High portfolio turnover is not necessary for good results.
AGREE from a couple fronts:
(1) My research indicates daytrading is effective, but when you add scalability (~$10-50,000/trade) into the equation, there's drastic diminishing returns.
(2) When I've closed-out really high annualized returns and kept compounding them, I ended up with 2x optimal returns going against 1x suboptimal returns, which kept me beating the S&P500, but it was dependent on the time range.  Mauboussin says you should go for magnitude instead of frequency.  Had I kept my GS and TM, I would have done quite well by holding them.  My conundrum is figuring out if I should only pick my best 6 bets "only", or continue what I'm doing.  At this point, I don't know.

> Four: The investment value of a stock is independent of whether it has been moving up or down.
AGREE
Pyramiding Profits or Averaging Down has yielded virtually the same winning ratio for me.

> Five: Predicting the market with consistency is extremely difficult.
AGREE

> Six: Predicting the economy is probably even harder.
AGREE

> Seven: High valuations alone aren't a good reason to sell a stock short.
AGREE

> Eight: High profits alone are no reason to invest in a stock.
AGREE

> Nine: Dialog with readers was one of the best parts of my experience as a columnist.
NOT APPLICABLE

As you can see, I think Dorfman knows what he's talking about.

- Vooch


By Vooch at Fri, 2007-02-16 02:10 | login or register to post comments

Dialog with readers

#9:  That's my favorite part of StokBlogs!
By Theo at Fri, 2007-02-16 02:47 | login or register to post comments

>  #9:  That's my favorite

>  #9:  That's my favorite part of StokBlogs

Yep!

My "Not Applicable" answer meant that I wasn't "him" - I wasn't privy to his Bloomberg Inbox, so it was not applicable to me.

- Vooch
By Vooch at Fri, 2007-02-16 02:53 | login or register to post comments