There was an interesting article in the NY Times on the housing market. But what really struck me is Robert Toll’s (CEO of Toll Brothers (TOL)) denial of what is taking place in the housing industry until recently:

There was an on the housing market. But what really struck me is Robert Toll’s (CEO of Toll Brothers (TOL)) denial of what is taking place in the housing industry until recently:

Let’s say the scenario that I described in this article plays out, the Chinese economy slows down, its massive operational and financial leverages create deflationary pressure on the companies forcing them to lower prices in an attempt to stimulate sales growth, starting a price war which would in turn lead to even lower profitability, driving many companies into red. A sudden loss of profitability would lead the bad loans, which are estimated to be around $900 billion (40% of GDP), to become a real problem.Let’s say government decides to take a hands off approach and not take the Japanese route by creating a zombie economy and would let the market forces play out (I know I am stretching here). If (actually in my mind it is a question of when, not if) all that takes place, what would happen to:

I wrote these short comments on Minyanville.com between August 14-16.

As I began analyzing amusement-park operator Cedar Fair (NYSE: FUN), it reminded me of a computer game that I used to play called Rollercoaster Tycoon, because I felt like I was on a roller coaster when debating whether to open a position in this company.

Cedar Fair is known as a pure-play, profitable, well-managed company that has paid and raised dividends every year for the past 19 years. Though competitor Six Flags (NYSE: SIX) is a pure-play amusement-park operator as well, it lacks all of the other qualities that Cedar Fair brings to the table — it is buried in debt, and its cash flow reminds me of its wilder coaster rides.

Love was in the air, birds were singing, price/earnings ratios were growing and the stock prices of large-cap, bellwether companies such as Microsoft, Wal-Mart and Johnson & Johnson were rising as if dotcom had become their middle name. Investors could not get enough of these great companies that had created substantial wealth for shareholders in the preceding decades. But they were in for a surprise.

Late 1999 and early 2000 marked the end of the renaissance era for large-cap growth stocks. Most of them either have gone down or drifted sideways since. And this should not have been surprising. In the ecstasy of market excitement, investors had confused great companies with great stocks. And those great companies stopped being great stocks once their p/es reached unprecedented highs.

Jos. A. Bank (JOSB) is up close to 6% after reporting truly unbelievable sales numbers for July: same store sales were up 16% and total sales were up 28%. July’s performance has validated my view on the stock that you are about to read.

What does it really mean “being contrarian?” Doing the opposite of what everybody else is doing, all the time? What if you agree with what everybody else is doing? Should you disagree for the sake of being contrarian?

“Being contrarian” means being able to think and act independently of the crowd and not be swayed by the crowd thinking. It means to stay on your own autonomous thinking track, independently of the direction the crowd is taking, even if it requires going against the crowd. It means not accepting (though respecting) the market’s wisdom unconditionally, but attempting to develop an opinion of your own.