RTCrawford's Weblog

I don't make this stuff up. I'm not that smart.

Archive for July 2008

Healthcare Quality Thoughts from Recent Work

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(Painting of Magnolias in a Bowl referenced later)

It is during the summer that I take a break from teaching and focus on consulting projects that keep me current in the field of management and prevent me from feeling sequestered from the competitive healthcare market. This posting is devoted to some common healthcare management themes identified during recent consulting projects and conference presentations.

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Charleston and Economic Thoughts

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Just got back from a week spent in Charleston, which the NY Times profiled this week as an upper-scale destination at a reasonable price. More than 20 years ago, my wife and I took our honeymoon there because we were dirt poor — I was an undergrad in my senior year and she was a data entry person for an off-shoot of NASA, believe it or not, in Athens, Georgia — home of the University of Georgia Bull Dogs … Go Dogs, Sick ’em … Woof, Woof. But I digress.

Charleston was interesting because the NY Times got it right. We took bicycle “rick shaws” from the French Quarter back and forth to the Marion Francis Hotel (named for the “Swamp Fox” of Civil War fame, I believe). There were a number of interesting items worth mentioning.

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Written by rcrawford

July 26, 2008 at 11:48 pm

The Fine Art of Selling

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Selling equities is difficult for me. I become attached them, having rooted for their success, and, whether selling at a loss or at a gain, it is hard to part with that which has consumed so much time and thought. Today, I did just that, and there may be some merit in describing the decisions that led to them.

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Written by rcrawford

July 18, 2008 at 8:46 am

Posted in Investments

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AEO Board Screening Test Results

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In prior postings, I’ve mentioned the American Eagle message board on Yahoo! Finance — a rare collection of thinking and contributing investors (long, short, and agnostic on that stock). A recent discussion with Steve West on that board prompted an idea. If the depression of Bear Markets tend to represent buying opportunities and if we are now officially in a Bear Market, what stocks do other, knowledgeable investors recommend as possessing above average management and cheap valuations, and how would they fare when run through my initial analytical screen?

Because no screen is perfect and there are any number of methods for valuing stocks, why limit the exercise to just my screen, and, equally, important, isn’t it likely that the best selections of others would point out the short-comings in my screening approach? That was the initial idea, and, when it was put to the board, the response was gratifying. Nearly 80 stocks were recommended — 68 after eliminating duplicates –, and one poster offered a list of short stocks for consideration.

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Written by rcrawford

July 13, 2008 at 9:09 am

The Start of Something Small

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I don’t know what the outcome will be, but I’ve posted a request to my friends on the best of the Yahoo! Finance boards (AEO), with plans to deliver the results here.

Okay, okay, I know, this is off topic, but in recent months this board has been about ideas, content, and investors (long, short, and agnostic) helping (or, at least, contributing) to the knowledge of others — sounds more altruistic than the reality, but it is a better model for these boards than the normal pump and bash found elsewhere.

Under the heading of “FWIW,” I indicated that AEO may (emphasis on “may”) be seeking a bottom during a time of economic turmoil. Steve accurately responded that AEO is subject to the steering winds of the broader market (retail and beyond) and White Sandy Beaches has (correct me if wrong) indicated that the macro controls AEO, as well. Both are right (in my view) if holding a short-term perspective.

Value investors, however, tend to argue (a la Buffett), that, when the market becomes depressed, that is the time to be greedy. Well, clearly, the market is depressed … and may become further depressed before euphoria returns. Under that logic, this may be the time to buy excellent companies at reduced prices. The market is on sale, but identifying the ultimate winners is problematic (making decisions difficult under the best of circumstances, and nearly impossible when the baby is being thrown out with the bath water).

So, the question naturally arises, what would you buy at these prices? What companies strike you as under-valued, led by great management, possess the strength to survive the current economic challenges, and seem likely to out-perform whenever sanity returns?

If you provide the stock symbols, I’ll run them through my screener — which performs the discounted cash flow analysis and a number of other tests –, and I’ll post the results on my blog. Perhaps Bill Ellard will do the same (left a message on his phone), and, if so, I’ll post those results, as well. And, if others have a method for identifying value investments, where the criteria for assessment can be described for a broader audience to understand, the invitation holds for you, as well.

I’d like to get the results in fairly short order — sufficient to run the screen over the weekend and in time for the start of trading next week. So, that means just one day to post your picks.

So, what are your best investing ideas? Just post the stock symbols (sorry, no penny stocks — my screen won’t accept them). No need to explain the reasoning behind your recommendation, either. I’ll post the quantitative results without comment.

This board attracts an above average group of investors, and there ought to be a way to share our best ideas.

Thanks,

Robert

PS. The data source used for my analysis is Morningstar, which doesn’t provide complete financials for financial firms (banks, brokerages, insurance). So, Dave’s preference for AIG, for example, will render incomplete results. My preference is to avoid financial firms, but I’ll post the incomplete findings if you submit them. My preference, however, is to focus on the rest of the market.

For those who are interested, I’ll do something similar with this blog. For those who can not wait, feel free to post your recommendations there — the American Eagle (AEO) message board in Yahoo! Finance.

I have, as well, promised to post the results of others who have financial screening and analysis tools used to identify value stocks, and, in the future, I’ll run the same screen for the most popular choices in Motley Fool CAPS — a larger community of investors.

The results should be interesting, if a sufficient number of recommendations are submitted.

Written by rcrawford

July 11, 2008 at 6:36 am

Market Meltdown Response Suggestion

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I spoke with a Wall Street analyst yesterday, prior to the market’s meltdown today. We were talking about news reports out of Europe, indicating predictions by Barclays Capital, the Royal Bank of Scotland, and Fortis of a major market event in the US and withdrawal of investments and capital by them from the US — as reported in the Financial Times and elsewhere. Reading this prompted me to move a third of my investments into cash (in addition to my mad money cash, set aside for investments as they become known). Another third has been pulled from a number of mutual funds and placed in S&P 500 index accounts, and the remainder is in a portfolio of stocks purchased due to the disconnect between market value and intrinsic value — a small number of which have been identified here.

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Written by rcrawford

July 10, 2008 at 3:38 am

Quality Systems (NYSE: QSII)

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It has taken several weeks to rebuild my computer system and the automated Excel files that allow me to screen stocks and identify each as, either, a value prospect or those which fall within the broad range of “other.” Just before the two crashes that represented a perfect storm of computer trauma, I looked at the out-of-favor sector of temporary staffing. For this effort, I decided to do the same, focusing on the confluence of two unloved sectors — IT and healthcare. Specifically, our focus this week is healthcare IT.

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Written by rcrawford

July 8, 2008 at 4:31 am