March, 2003: 7 13 29
Disclaimer - IMPORTANT - Read this first!
Investor's Journal is a diary focused strictly on investments and personal finance issues, primarily from a contrarian and retiree point of view. Follow along with an average guy's failures and successes as he learns, by trial and error, the fine art of value investing.

3/7/03-With the U.S. dollar having fallen about 20% in the last few months relative to foreign currencies, particularly the Euro, and reports of still somewhat overvalued major market averages in this country, it may be time to reconsider overseas investments that offer good prospects.

Five such candidates include, first, three closed-end funds, and then a pair of low-risk open-end mutual funds.

  • China Fund (CHN) (recent price $17) has a small discount to net asset value (-2%) and has had double-digit increases in 2003 as well as in each of the prior two years. Investment analysts as diverse as the famous John Templeton and Lisa Hess, money manager and "Forbes" columnist, have lately been touting this asset as likely to do well in the current global environment. Note, however, that there is a hefty 2.3% annual expense ratio.

  • Korea Fund (KF) (recent price $11.88) has a large discount to NAV (-16%) and a reasonable annual expense ratio (1.19%) for a single country closed-end fund. Templeton, per "Louis Rukeyser's Wall Street," March, 2003, issue, pp. 4-5, thinks the Korea Fund now has much greater potential than U.S. equities.

  • Morgan Stanley Asia Pacific Fund (APF) (recent price $7.14) has a significant (-14%) discount to value and a moderate (1.4%) annual expense ratio. Half its assets are invested in Japanese companies. Lisa Hess thinks that, finally, Japan's economy will be heading north again.

  • Matthews Asia Growth And Income Fund (MACSX) (recent price $10.25) has a "Value Line" overall rank and risk rank of 1 (highest) each and an annual expense ratio of 1.79%. The fund has a $2500 minimum initial investment. Its 5-year annualized return was 15.11%.

  • Tweedy Browne Global Value Fund (TBGVX) (recent price $14.29) has a "Value Line" overall 2 rank and a risk rank of 1. It's annual expense ratio is 1.37% and its 5-year annualized return was 3.94% which, however, puts it among the best performing global funds in this period and is far superior to the S.& P. 500's five-year performance. This fund also has a $2500 opening investment minimum.

3/13/03-For the first time in several weeks, we had a little good financial news today. A closing has been set (3/18) for the refinancing of our mortgage loan. It only took about ten calls, and going over one person's head to her supervisor, to get things finally moved along to this point.

In addition, the stock markets, and with them our portfolio, were sharply higher at the end of trading today. In paper profits at least, we gained over $8300 between roughly 8:00 AM and 3:00 PM.

We're hopeful too, and waiting to see from our accountant, of receiving a hefty refund from the U.S. Treasury this year.

3/29/03-The stock price gains so easily achieved in the prior ten days or so were substantially given up this past week, as it became more evident to even the most obtuse observer that the U.S.-led forces in Iraq were not going to have an easy or quick win over that small nation and that, even once military victory occurs, the odds are we'll not do well in the battle for "the hearts and minds" of those we've come to liberate. Arab/Islamic public opinion, against us from the outset, is becoming more intensely antagonistic, as we are not only attacking and occupying this cradle of civilization country but doing significant "collateral damage," killing scores or hundreds of civilians in the process. Big questions remain as Bush's expectations are proving to have been unrealistic. The Administration has accordingly been hustling to put a new, positive spin on things. Will humanitarian crises and the deaths of thousands be averted?

Meanwhile, the markets' drop reveals, like nuggets nestled in a clearing pan of sand sifted for gold, several assets that have good value and likely will perform well over the long-term, at lower risk than for the major averages:

  • Phoenix Gold (PGLD) (recent price $1.51)
  • Circuit City (CC) (recent price $5.34)
  • A. Schulman, Inc. (SHLM) (recent price $14.65)
  • Cato Corp. (CTR) (recent price $18.72)
  • Superior Ind. Int'l. (SUP) (recent price $36.61)

The employment agency I'd gone to Thursday has come up with a computer-generated list of openings for me to check out, available online. They range from positions hundreds of miles away, that pay only $8.50/hour and require me to speak Spanish (which I don't), to jobs paying little better, in the Austin/Travis County juvenile detention system, that require me to do "counseling" with delinquents and their families, keeping cases and other records I would be working up for "the man" to use in confining or otherwise regulating the lives of these "perps" for the next several years. Despite the obvious lack of job satisfaction (at least for me) in such work, I did apply for several such openings last year, soon after unanticipated expenses had gone way up. I was never even contacted for a single interview.

At this stage of my life, I do not feel impelled to take on either significant emotional or physical stress for extra spending money. If this means we must continue to put off nice vacations and carefully watch our other spending, so be it!

Our portfolio now provides added income of $12,000 a year (a 3% yield being maintained on $400,000 in liquid assets, besides our real estate and other non-liquid holdings). This plus a modest amount of average growth in the nest egg annually, Fran's part-time income, and my retirement annuity, should, if need be, get us through the recession and on into the time when Social Security benefits kick in. I'll also keep my eyes open for better work opportunities that may come along.

If I feel a compulsion to be doing something to feel productive, I can always buy and sell up to .5% (.005) of the liquid assets each week, purchasing only the best price to value asset I can find and selling only the worst such holding then among our stocks. If I am a half-way decent value investor, this should provide us an extra $10,000 or more, on average, after frictional costs.

Disclaimer and Disclosure Statement
Much as I'd love it to be otherwise, I receive no payment of any kind for disseminating investment information unless, by some fluke, millions of folks, on the strength of these entries, start buying shares of stock I own, a possibility only slightly less likely than our being destroyed by a large meteorite. Do not follow any suggestions made in Investor's Journal as if I were a professional.

Neither I nor Investor's Journal will be responsible for losses by anyone who obtained ideas from this site.

This diary is intended for personal interest and general information only. You are advised to do your own research (as well as to consult highly compensated professionals) before spending money on anything.

I know of no reason anyone should take my financial musings seriously. At best I am a dedicated amateur providing a bit of investment-related insight and entertainment, at worst an amusing diversion.

My wife, Fran, and I may at times own shares of some of the assets mentioned here. But neither of us receive any benefit from reference to them, unless you count the mutual misery when we get it wrong, or the opportunity to gloat when we get it right.

Back to Top

Home | Previous | Next