Amvona

American Greetings Corp. and the Triple “W”

stock_certificatesOn December 22nd, 2011 we began purchasing shares of American Greetings Corp. at $12.91 per share for investors.  To our surprise we were able to get several more large blocks of the shares in extended hours trade yesterday evening (Jan. 4th, 2012) for the same accounts.
 
We’re thrilled that as of the writing of this article, the price has actually gone down even further (explained below).  
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Hard Drives, Floods, Monasteries and Investment Returns

Halki
 
The bones of an article
 
On November 16th, 2011 there just wasn’t enough time to do everything – something had to give.  We were packing our bags for our trip to Istanbul, we had to be at the airport by 6:30 p.m., we were making last minute preparations, scribbling out notes for an article on Western Digital and stuffing investors accounts with their shares as fast as we could.  After listening to their Q1 2012 CC call twice [and then STX’s] and having read all of their 10Q’sand annual reports for over a year we were more convinced now than ever that WDC had by far the superior management team, and with a confirmation of full insurance coverage including business continuity (that is to say lost income) after the floods in Thailand, there was no doubt left in what we were doing with investors money.
 
 
Although we only needed the typical hour to knock off the article, it just wasn’t in the cards.   By 2:30 p.m., amidst a flurry of phone calls and emails, we gave up on the idea that the article could be published that day, having scribbled out only the framework of an article.
 
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Why we’re still buying Skechers stock

gorun_3On December 22nd, 2010 we published our article “SKX and the markets strange reaction to Sterne Agee”.

In summary we indicated that readers should buy shares of SKX at $16.   At the close of market Friday November 25th, 2011, the shares could be acquired for a mere $12.18 – a decline of some 23.9%.

We were wrong on how the market would price the shares.  However, we do not believe we were wrong regarding the value of the company, despite the markets pricing – so we purchased more shares for investors between $11.86 - $12.77 per share.
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Update: General Dynamics Acquires Force Protection

arrogance_2We were going to title this article “We’re so smart”, but we thought that there was at least a small possibility that readers would fail to appreciate the depth of our humility if we did that, so we went with the second most obvious title we could think of.  Besides after SeekingAlpha’s editors picked up our article “Houston, we've got a problem - Bevilacqua” a few weeks ago and exposed it to their 50 million visitors a month by featuring it on “Market Currents”, then selecting it as an “editors pick” once we did finally submit it to on our own, we began to think that our humility may actually not be as secure as we once thought.  

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Update: Sanderson Farms and Pilgrim's Pride one year later

food-inflationExactly one year ago, on September 28th, 2010 we purchased shares of Sanderson Farms for investors. Two days later we published our opinion on Amvona in our article "Can you say 'Chicken Feet' in Russian? The case of SAFM and PPC". Three days later SeekingAlpha published the article Here.
 
On Oct. 8th, 2010 when the price moved down to $39.10 per share, we more than doubled those positions.

 

We thought we would take a look back at the thesis in that article, now that the period for short term capital gains tax has passed and examine how the issues performed against one another, but also against the benchmark S & P 500 (Alpha).

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Correspondence with a friend on Investing

cree_bulbThe following is provided as related material the article "Update: Sanderson Farms and Pilgrim's Pride one year later". It is a copy of email correspondence (with responses inserted into the text) with a friend who had asked for "actionable advice" on a stock. The date was Oct. 21st, 2010. We hope that the correspondence reveals more of the thought that went into the purchase of shares of SAFM for readers of the article above.
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Update: It turns out the answer is Yes!

ssd-hard-driveIn the spirit of updating past articles as we did on August 10th, 2011 we thought we would do another update, albeit this time only for a bit of levity.

 

On January 28th, 2010 we published one of our first articles. We're pretty sure we may have been one of the few, if not the only bloggers in the world (on that day) to pose the curious question “Would the Pope buy an iPad?”.  At the time Amvona had not yet become a dedicated blog (it was still a commerce site with a blog as an afterthought) and the categories were not yet focused on the topics they are today.

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Update: “640K ought to be enough for anybody…” WDC vs. STX

stock_marketOn August 11th, 2010 we acquired shares of Western Digital Corp. for others accounts at $24.15 a share in the midst of tremendous pessimism about the storage industry.  On September 17th, 2010 we outlined a few simple views that brought about this decision and published our article “640K ought to be enough for anybody…” WDC vs. STX (we used prices as of Sept. 10th, 2010 for the purposes of the article, although the shares were actually purchased on August 11th, as noted in the article itself in reference to “early August”).  On October 1st, 2010 Seekingalpha also published the article here.

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Lions and Tigers and Cisco Bears! Oh My!

lions_and_tigers_and_cisco_bears This article is a follow up on our February 12th, 2011 article: “How we lost investor’s money on Cisco”, a title which probably seems even more prescient about now. The article put forth the very unpopular idea that Cisco shares represent both a good value and safe investment, and that an emotional reaction likely played a key role in the recent volatile movements in the share price.
 
Our opinion hasn't changed. It is not our goal to purchase "at the bottom" nor sell "at the top", for we are not aware of any reliable way to go about doing this (although we are open to suggestions - preferably those that do not involve astrology). Instead, our interests lie in owning good companies, with long-term earning power, that can be purchased at a deep discount.
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FRPT: Moving from speculation to investment

cougar_ISS This article is a follow up on “If you must speculate: Force Protection Inc.”  published on April 15th, 2011 and is intended as a closer examination of the YTD 2011 FRPT order book, along with some additional speculation on the future growth prospects in 2011 and 2012.
 
In the above article we pointed out that the total worth of the company to a prospective acquirer was about 150 mln. as of April 15th (share price $4.54).  The stock has risen to $4.80 per share as of close of market on May 4th, 2011, a gain of some 5.7% in just under 3 weeks.
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If you must speculate: Force Protection Inc.

 
speculation Investment and Speculation are two very distinct activities.  Speculators believe they can see into the future, and more particularly, believe they have some sense of future security prices.  Investors accept that they do not have any special foresight, and instead focus on an entirely different set of criteria. 

It is best not to speculate, since the foundation upon which speculative decisions are likely to be based are invariably little more than “best guesses”.  If the urge to speculate cannot be resisted, consider giving 95% of your funds to a value-oriented investment manager who is well vetted and who you trust.  Keep the other 5% and go to Vegas (at least you’ll have fond memories to make up for the loses).
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How we lost investor's money on Cisco

image_1Losing other people’s money isn’t as much fun as it sounds.  We either bought, or gave directions to buy shares of CSCO on December 3rd, 2010 at $19.09 to folks who trust us enough to let us make some investing decisions for them; they’ve now lost 1.89% on their investment in just about two months.  We have no intentions of selling; on Monday we'll be buying for their accounts.

Up until last Wednesday, February 9th, 2011 these folks were making about 15% on the same investment, since it had only been about two months, as we just pointed out, we were feeling pretty smart, and getting ready to do some bragging about our track record, when Thursday rolled around. Let’s just say it was “a day that will live in infamy” (hopefully nobody has used that line already).

Since we do a great deal of explaining how we make money for others, we thought this would be a good chance, actually the first, to explain how we also lose it.

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SKX and the markets strange reaction to Sterne Agee

going_downSKX fell almost 8 percent on Tuesday after an analyst said it may have overestimated demand for its toning shoes. He downgraded the stock to "Sell."  From Bloomberg:


“Sterne Agee analyst Sam Poser said Skechers has more toning shoes inventory than it can sell as sales of the specialty shoes slow. Poser said he has seen the shoes at discounters Ross Stores Inc., TJX stores, which include T.J. Maxx and Marshall's, and Costco, selling for $39 to $52.99. That puts pressure on Skechers partners like Famous Footwear, where the shoes sell for $59.99, Poser said.”

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Two Great Brands - One on sale. SKX and NKE

 
 
Virtually all marketing promises more than a product can deliver.  This is particularly true in retail consumer marketing.    If Marketers didn’t seek this outcome, we would not be living in such an acute consumer driven society.  On some level, almost all products have the latent and subtle promise of somehow making our life easier, and better.  There is nothing new about this.  It is a promise that always goes unfulfilled in the long run, which is why we have to keep consuming.
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Three Card Monte and other efficient ways of parting with your money

It has been said that there are only two directions in life “the right way and the wrong way”.   This is a simple and true statement.   However, human nature being what it is, we perfect techniques of taking the simple and making it complicated.   If this statement is true, and there are really only two roads, or perhaps it could be said two different directions on the same road, and we discover that we have gone down the wrong one, and that indeed no “fork in the road” lies ahead that will ultimately bring us back to the path we desired, then we come to the realization that we must retrace our steps and begin (seemingly painfully) at the beginning of the journey – it is all the more difficult when we have invited followers.

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145 Pine Haven Shores Road
Suite 2293
Shelburne, VT 05482

Feel free to email us. We would be happy to answer any questions you might have.


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