Vitaliy's Contrarian Edge

Bail Out Capitalism, Not The Big Three

Vitaliy — Wed, 19 Nov 2008 17:55:36 +0000

Vitaliy N. Katsenelson - Forbes Government intervention in the financial system via the Troubled Asset Relief Program made me sick to my stomach, but without it, there is a real possibility that our economy would have come to a screeching halt as trust in the financial system was strained to the point of breaking. Confidence among [...]

Audio Interview with Chuck Jaffe at MarketWatch

Vitaliy — Wed, 19 Nov 2008 17:47:57 +0000

I had a fun radio/podcast interview today with Chuck Jaffe at MarketWatch (here is a link, my portion of the interview starts on the 10:40 mark), we “played” hold it or fold it with some of the stocks we own: American Express, eBAY, Nokia; stocks I would NOT want to own: GE, Goldman Sachs, Bank [...]

Quoted in Barron’s on AmEx

Vitaliy — Sun, 16 Nov 2008 04:48:42 +0000

I was quoted in this week’s Barron’s on AmEx (AXP): “This company can weather a huge hurricane and come out fine,” says Vitaliy Katsenelson, head of research at Investment Management Associates in Denver. “American Express is one the simplest financial companies to analyze. It’s much more transparent than Citigroup or JPMorgan or Goldman Sachs. He argues that [...]

China is slowing down

Vitaliy — Sun, 16 Nov 2008 04:40:52 +0000

I’ve said for a long time that one should not trust economic statistics data coming from the Chinese Government as it has the incentives (and power) to interrogate the data until it confesses to what it wants to see. Today we learned that industrial production in China rose 8.2% in October, a slowdown from 11.4% [...]

AmEx as a Bank Holding Company

Vitaliy — Wed, 12 Nov 2008 23:18:22 +0000

AmEx becoming a bank holding company (BHC) is not just net positive for the company it is simply positive. When a highly leveraged investment bank like Goldman Sachs turns into a BHC, its future profitability suffers as its leverage drops to commensurate level of the bank. Lower leverage leads to lower profitability. AmEx on another [...]

Stuff Stocks Still Too Expensive

Vitaliy — Mon, 10 Nov 2008 22:12:56 +0000

Vitaliy N. Katsenelson 11.05.08, 7:00 PM ET - Forbes Whenever I write or speak in front of a group of people and feel the need to apologize for my message, I am usually right. This usually happens for two reasons. First, I am likely saying what people don’t want to hear; and second, because the message goes [...]

Interview with Advisor Perspectives

Vitaliy — Tue, 04 Nov 2008 04:17:33 +0000

I was interviewed by terrific Robert Huebscher at Advisor Perspectives. We’ve revisited my range-bound markets thesis, possible economic scenarios for our economy, and discussed global economy including Europe, Russia, Middle East, and of course China. Here is a link to the interview. Robert also interviewed me awhile back, we discussed range-bound thesis in great detail. Here is a [...]

You are not as dumb as you think - or - Psychotherapy for Bear Markets

Vitaliy — Thu, 23 Oct 2008 17:14:09 +0000

I wrote an article in February 2007 in the Rocky Mountain News called - “You are not as smart as you think” (see second article) that article was written to address overconfidence that we get in bull markets. Today I’ve slightly rewritten the same article to address underconfidence of bear markets. You are not as [...]

Forbes Video Interview: Dotcom portfolio

Vitaliy — Mon, 13 Oct 2008 22:48:35 +0000

I was interviewed by Forbes in early October. I discussed my favorite “dotcom” portfolio of stocks, here is a link to the video.

Thoughts about the market

Vitaliy — Mon, 13 Oct 2008 05:12:26 +0000

Some thoughts about the market. In today’s market you see some unbelievable opportunities. For the first time, in a long, long time, we can actually put a full portfolio together where we don’t have to compromise on Quality, Valuation or Growth (QVG) when we pick stocks (please, please, please NOT! a solicitation). Until recently we [...]

The Wall Street Transcript Interview Excerpts

Vitaliy — Sun, 05 Oct 2008 13:50:48 +0000

I was interviewed by The Wall Street Transcript, here are some excerpts from the interview: Investing vs. speculating Let’s talk about financial stocks for a second, because I’m sure they are on investors’ minds right now. You want to be an investor rather than a speculator; at least I am talking about investing. If you own financial [...]

Signs of Global Growth Slowdown?

Vitaliy — Mon, 29 Sep 2008 16:49:29 +0000

This weekend’s papers provided new signs of global economic slowdown. The first came from Japan. For the first time in 26 years – a long time – Japan became a net importer (imports exceeded exports). FT article sums it up: The contraction was led by plunging sales of Japanese cars and trucks in a weak US [...]

Gold, Doomsday Currency?

Vitaliy — Fri, 26 Sep 2008 22:02:04 +0000

I am sorry, I could not contain myself. I got a call today from a financial journalist asking me if gold is “the” asset for the doomsday portfolio. I took this question very seriously after all if you are reading the news we are on the brink of one. I weighted my words very carefully. [...]

Five things that will be different after the ‘bailout’

Vitaliy — Fri, 26 Sep 2008 18:47:35 +0000

MarketWatch - September 25, 2008 By Vitaliy N. Katsenelson, CFA “Don’t worry they’ll bail them out.” Those words are jumping off my tongue couple times a day now when my clients call and ask if I think their auto insurance policy with AIG or their money market fund will be around tomorrow or their CDs will be [...]

Nokia is So Cheap!

Vitaliy — Fri, 26 Sep 2008 18:31:56 +0000

Forbes.com - September 6, 2008 By Vitaliy N. Katsenelson, CFA “Don’t gamble. Take all your savings and buy some good stock and hold it till it goes up, then sell it. If it doesn’t go up, don’t buy it.” What if you failed to follow that sage advice from Will Rogers? You bought a stock and it did [...]

Jos. A. Bank’s Margins

Vitaliy — Fri, 05 Sep 2008 20:48:16 +0000

Reader asked me a question about Joseph A. Bank’s profit margins, as a follow up to my early JOSB analysis. Vitaliy,Thanks for your thoughts on Jos. A. Banks (JOSB). In you book, Active Value Investing, you speak about the reversion to the mean in net profit margins. JOSB’s net profit margins have grown from under [...]

The Most Misunderstood Stock On Wall Street - Joseph A. Bank

Vitaliy — Fri, 05 Sep 2008 17:36:51 +0000

September 4, 2008 - Forbes.com I tell you, every time I talk to someone who has shopped at Jos. A. Bank (and had a great experience by the way), has seen company’s commercial on TV, or simply read the company’s quarterly earnings report (key word here is earnings, not losses), I have to pinch myself [...]

Welling@Weeden Interview

Vitaliy — Fri, 05 Sep 2008 17:20:33 +0000

I was interviewed by a super-smart and funny Kate Welling at Weeden & Co I am attaching the interview (link opens PDF). In the interview I am touching on several topics I’ve discussed in the past and some new ones (mentioning two new/old stocks too). If you would like to receive my articles by email (usually [...]

Chinese and Starbucks Late Stage Growth Obesity

Vitaliy — Thu, 21 Aug 2008 20:08:36 +0000

I had my TV service disconnected at home for awhile now, don’t want my kids to become TV-addicts. We reconnected it on Friday so we could watch Olympics – I am glad we did. The opening ceremony was incredible. It was a demonstration of Chinese might, but not through a communist-by-the-book parade of nuclear weapons and marching (expressionless) soldiers – this doesn’t impress anyone, not anymore. No, the elegant, wonderfully choreographed performance by fifteen thousand people, the marvels of modern technology (500 feet LCD screen comes to mind here), virtually unlimited resources of the Chinese government and seven years of preparation created a spectacular event that will be hard for any nation to follow. I am sure Russia, the host of 2014 Olympic games, whose nationalistic ambitions have grown together with its oil revenues is going back to the drawing board on its opening ceremony.

In the spirit of keeping up with current events and providing a contrarian take on popular consensus I wrote the following piece about China.

Subscribtion to Articles

Vitaliy — Thu, 21 Aug 2008 17:33:12 +0000

If you would like to receive my articles by email (usually couple days before I post them to this website), drop me a line.

You Don’t Have to Be Sick To Own HMOs

Vitaliy — Tue, 05 Aug 2008 23:00:06 +0000

You want to buy straw hats in the winter. This sums up an important kernel of successful value investing: making decisions (buying and selling) that are unpopular at the time. (Of course, one has to make sure that, due to global climate change, winter is not swiftly followed by an ice age. In the case [...]

Kimberly Clark, an Opportunity?

Vitaliy — Tue, 15 Jul 2008 20:39:11 +0000

If you believe at some point oil prices will follow the fate of the global economy and decline, Kimberly Clark (KMB) is one of the better ways to play it. Yes, I know you can buy airlines (Delta (DAL), AMR Corp. (AMR), Continental (CAL), etc.) but an airline may still go belly up as economy cools [...]

Two Interviews: BetterInvesting and Vinny Catalano

Vitaliy — Wed, 18 Jun 2008 17:37:49 +0000

I have not written anything for awhile. It seems that I am researching ten stocks at once which often pushes me into indecision paralysis. High conviction ideas are hard to come by, though we recently found a few which I’ll write about soon. We are stress testing our portfolios for two additional risks which makes stock [...]

American Express Analysis

Vitaliy — Fri, 30 May 2008 17:38:05 +0000

Here is a link (opens PDF) to a 9 page analysis I did of American Express (AXP). Warning: it is a bit dry. I was going to present American Express at Value Investing Congress in Pasadena, but the stock ran up and exhausted a good portion of margin of safety. Amex is one of the [...]

Forbes Praises Active Value Investing

Vitaliy — Sat, 24 May 2008 15:11:08 +0000

Rich Karlgaard, the publisher of Forbes magazine, mentioned my book in his article: The new Benjamin Graham is Vitaliy N. Katsenelson. I highly recommend Katsenelson’s book, Active Value Investing: Making Money in Range-Bound Markets (Wiley, 2007). I like to think the old Ben Graham would have recommended it, too.

Kiplinger Interview on Jos. A. Banks

Vitaliy — Sat, 24 May 2008 15:08:02 +0000

I was interviewed by Kiplinger about Jos. A. Bank (JOSB), my favorite retail stock I presented (download PDF of my presentation) at Value Investing Congress in Pasadena. This is probably the most contrarian stock I ever owned – 93% of the float is short.

Income Pie Implications

Vitaliy — Tue, 13 May 2008 17:33:24 +0000

By Vitaliy Katsenelson, CFA The NY Times came up with a very interesting way to look at consumer spending. In the long run, consumer spending is a function of consumer income. Though since early 2000 it did not appear to be the case as consumers financed their spending by borrowing against their future income. If you [...]