Date updated:02-11-2008
"Many shall be restored that have now fallen and many shall fall that now are in honor." -- Horace's Ars Poetica from Benjamin Grahams, Security Analysis
"We will continue to ignore political and economic forecasts, which are expensive distractions for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points or treasury bill yields fluctuating between 2.8% to 17.4%.
But surprise--none of these blockbuster events ever made the slightest dent in Ben Graham's investment principles...Fear is the foe of the faddist, but the friend of the fundamentalist.
A different set of major shocks is sure to occur in the next 30 years. We will neither try to predict these nor profit from them". --Warren Buffett, From Buffett and Cuningham, "Essays"

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CFC
Cfc - $0.00
- N/A
- $N/A
Center of the immediate housing and mortgage market storm. Though shares may get cheaper as news around company and industry likely to get far worse before it gets better, I believe it will survive. Survivors will have great opportunities to profit and prosper as the storm has greatly reduced competition and allows for margin improvement. Stock believed to be worth between $30 to $40 a share in the next 3- to 5-years.

-
LOW
Lowes Companies - $25.77
- -3.52%
- $26.53
Another poster child of the current housing and mortgage market debacle. The company trades at a significant discount to the market on depressed earnings and depressed multiples. Company should benefit as earnings move back toward normalized levels as the housing and mortgage markets effects work themselves out over the next 24- to 36-months. Believe the company will outperform the market over the next, 3 to 5 years.

-
WMT
Wal Mart Stores - $59.78
- -0.02%
- $60.00
The company is politically correct to hate, however they are the king of low margin operating and efficiency. In a robust economic environment, consumers can be politically correct in even their shopping habits, however in rougher economic times people let their political correctness go to the way side in favor of getting the most out of the precious dollars they have available to them. It is easier to see shoppers moving towards discounters than towards the higher end.

-
KO
Coca Cola Co The - $51.71
- +0.10%
- $51.74
The perfect company for today's environment. Earnings clarity. diversified revenue streams (i.e. large international exposure), virtually no debt, and non-cyclical. Could finally support the lofty valuations placed on it in the late nineties.

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BRK.A
Brk.a - $0.00
- N/A
- $N/A
If there is anyone that can make the most of complicated structured investment vehicles not able to catch a bid and languishing in a market locked by fear, it has got to be Berkshire Hathaway with its cash hoard, pristine balance sheet, arsenal of securities and for the first time a lot of volatile trading sessions capable of giving the company enough volume to build meaningful positions.

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COP
Conocophillips - $76.48
- -3.30%
- $78.91
Major integrated oil company. Company has shadow cast over it by Wall Street based on their Burlington Resources acquisition at time believed to be to high a price based on Wall Street inability to fully understand and quantify the supply and demand imbalances in the energy complex and the over $50 a barrel oil result. Natural gas prices more likely to move higher toward oil than the opposite as it becomes one part of the solution to energy independence. Additionally, Wall Street does not fully appreciate the companies 20% plus stake in Lukoil. Obvious, Putin concern however opportunity to replace and add to reserves huge. Very hidden and under appreciated asset.

-
BNI
Burlingtn N Sante - $100.11
- -3.67%
- $103.59
Railroads and obviously Burlington northern have returned to their monopoly positions that they previously enjoyed before the creation of the our nations highway system. Traffic congestion and obviously high oil prices has returned the efficiency to railroads. Railroads have a decided advantage over trucking in long-haul shipping, and with it pricing power and after decades of investment that is now waning margin expansion.

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ACUS
Acusphere Inc - $0.39
- -2.50%
- $0.40
Management is a bit inept regarding operations and financing as well as self serving, however technology solid and company near bankruptcy will force company to finally seek a partnership to unlock value. Technology (Imagify, non-nuclear, faster, cheaper, more specific) clearly superior to currently used nuclear. Though extremely difficult (barrier to entry) believe company should receive FDA approval, and enter a $1 to $2Billion potential market.
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