Miscellaneous articles for this snowy day... at least in Toronto

Some articles...

• Bond yield spreads high but not raw bond yields (Accrued Interest): This is a point I have made in the past and is worth keeping in mind if you are looking at bonds. Many analysts claim that corporate bond yields are trading more attractively than during the Great Depression. This is only true if you look at spreads. In contrast, if you look at raw yields, they are not necessarily that high. I think the junk bonds are worth considering but the rest of the corporate bonds do not look attractive.
  
• ConocoPhilips posts massive $31.8 billion non-cash loss (The Globe & Mail): This was supposedly announced before and most of it arises from writing down goodwill related to its Burlington Resources acquisition a few years ago. Talk about a terrible deal for shareholders (unless oil&gas prices rally or something.) Book value was around $93 billion (tangible was $63 billion) and it is going to get cut in third.
  
• Rio Tinto considering big stock sale to pay down debt (MarketWatch): They say that bubbles are often marked by huge takeovers near the top (incidentally profitting investment bankers and short-term traders, including arbitrageurs, while potentially hurting everyone else, including long-term shareholders, employees, and creditors.) Well, a good sign of the commodities bubble was the takeover of Canadian giant Alcan by the commodities giant Rio Tinto. Rio Tinto is now considering issues shares to pay off the debt. Needless to say, as is almost always the case when management makes mistakes, the shares will be issued at multi-year low prices.
  
• Marc Faber actually recommends some technology stocks (Seeking Alpha): I mentioned a few weeks ago how Marc Faber actually recommended some technology stocks--possibly the first time in many years. In the Barron's 2009 roundtable, he maintains his view and recommends some large-cap tech stocks. This is quite an interesting bet and one that I'm leaning towards. Tech has been out of favour for almost 8 years--ignoring some high flyers like Apple or Google--and is a good contrarian area to look... As for Marc Faber's main strategy, it seems that he favours betting on the re-flation trade. He is going heavily into all sorts of cyclicals. Faber's view is essentially the consensus view, with even the FedRes expecting growth in the later part of the year (although the FedRes is not predicting asset prices ;) ). I don't share the same view and would avoid them. But do keep in mind that some of Faber's investing is short-term trading based on technical analysis. In contrast, I do not use technical analysis at all and am more longer-term oriented (except special situations and the like.)