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San Diego's beleaguered money manager, Brandes Investment Partners, is taking more hits this morning (Feb. 20). Eastman Kodak stock is trading at $3.39, down 5.04 percent on the day. As of Sept. 30, Brandes owned 9.61 percent of the stock, the second largest institutional holding. Kodak stock is down 94 percent in the last 12 years. Other Brandes disasters, based on Sept. 30 data, are General Motors, selling for $1.55, Brandes owning 6.03 percent, third largest institutional holder. Ford, $1.51, 4.88%, 4th largest; Gannett, $3.76, 10.81%, second largest; McClatchy, 48 cents, 6.58%, 3rd largest; Royal Bank of Scotland, $5.31, 2.69%, largest. This British bank, essentially nationalized, underwent a 20-1 reverse split, so its high for the last year is $163.12. It has lost almost all its value. Brandes also got hit hard in Freddie Mac, Washington Mutual, and Countrywide. In late 2007, Brandes had $125 billion under management; at yearend last year that was down to $53 billion.

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Comments

valueinvestingisdead March 5, 2009 @ 10:07 a.m.

Don, So many lives ruined for what? Greed? Corruption? Now we are going to help the ones that did wrong?

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katzkup March 11, 2009 @ 8:43 a.m.

hopefully some day this clown and his texan buddy w. james brown will finally be exposed and held accountable.

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SurfPuppy619 March 5, 2009 @ 11:37 a.m.

I agree with V-I-I-D 100%.

Why are we subsidizing the slime balls who made all the profits while wrecking the lives of the poor and middle class????

Let AIG fail-unwind the garbage dirivatives.

Let GM fail, the compnay will juss get a new owner and can redo their bottom line detsroying the bad money costing contracts (wow, I never thought I would see the day that I went against a private union).

It hurts, and it is going to be painful-but the poor and middle class should NOT have to pay for the mistakes of these fools.

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valueinvestingisdead March 5, 2009 @ 2:39 p.m.

BIP down another 10% atleast today. Staggering. A drunk, chimp on acid throwing darts could do better.

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Don Bauder March 12, 2009 @ 9 a.m.

Response to post #31: A lot of people have to be brought to justice. Best, Don Bauder

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Don Bauder March 6, 2009 @ 6:57 a.m.

Response to post #25: Yes, the greed and corruption of the post-Reagan years matched the greed and corruption of the 1920s. Will we end up the same way? Stay tuned. Best, Don Bauder

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Don Bauder March 6, 2009 @ 7:01 a.m.

Response to post #26: The government is worried about the counter-parties in derivatives of AIG and many other financial institutions. There has to be a way to get rid of those derivatives so AIG can go BK. The next argument is that an AIG BK would be disastrous, because the company handles such a huge percentage of 401(k)s. Come now. Do you think there aren't other insurers that can administrate these plans? Best, Don Bauder

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Don Bauder March 6, 2009 @ 7:04 a.m.

Response to post #25: I have never seen a drunk chimp on acid throwing darts at a list of stocks. But it is great imagery. Best, Don Bauder

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Visduh Feb. 20, 2009 @ 11:24 a.m.

Is it possible their luck with investment picks could turn around? Sheesh, what a bunch of losers.

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valueinvestingisdead Feb. 20, 2009 @ 11:27 a.m.

They have to be down to $40 Billion or less now. They also own stakes in BAC, C, WFC, MU, MOT, XRX etc etc etc...look at the new 10 year low list and they most likely not only own it but have a huge stake at prices 10X higher. I can pay no fees and lose this kind of money.

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Don Bauder Feb. 20, 2009 @ 12:42 p.m.

Response to post #1: Charles Brandes takes the Graham-Dodd value approach. Through the years, value investing has done better than other strategies, such as growth investing, but value has taken a bad beating in 2008-2009. Other value investors have been hit, too, but I don't know that they have been hit as hard as Brandes. Value investors look for beaten-down stocks -- often ones with good, underpriced assets. It doesn't seem to be working this time. Best, Don Bauder

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Don Bauder Feb. 20, 2009 @ 12:46 p.m.

Response to post #2: B of A, Chrysler, Motorola, Xerox, etc. have all been pounded. Again, they are beaten-down, old-style blue chips -- attractive to a value investor. But the ones Brandes chose have not done well: autos, financials, newspapers have been putrid. Best, Don Bauder

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valueinvestingisdead Feb. 20, 2009 @ 1:02 p.m.

Reply to #3 - The biggest downfall with their approach is failure to incorporate the macroeconomic picture. They are so convinced that what happens in the "market" does not matter that in an economy like this, they get crushed. Thing is that nobody has ever went through something like this unless you are in your 90s.

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Burwell Feb. 20, 2009 @ 1:25 p.m.

A Brandes and his investor's money are soon parted.

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Burwell Feb. 20, 2009 @ 1:28 p.m.

It is better to be thought a Brandes than to make lousy stock picks and remove all doubt.

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Don Bauder Feb. 20, 2009 @ 1:47 p.m.

Response to post #5: Yes, I think value investors often don't take new trends into account. They tend to think that if GM, Ford, Bank of America and various newspaper stocks were once good buys, and now appear cheap, that the market must have overreacted. But, as you point out, conditions change. On the other hand, growth investors tend to fall into their own traps, too. They fall in love with techs, worshipping technological progress, but forget that competition is ferocious in the tech area and a lot of companies fall by the wayside. Best, Don Bauder

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Don Bauder Feb. 20, 2009 @ 1:48 p.m.

Response to post #6: It has worked out that way in the last couple of years. Incidentally, one institution that uses Brandes to manage part of its money is SDCERS. Best, Don Bauder

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Don Bauder Feb. 20, 2009 @ 1:50 p.m.

Response to post #7: Another memorable aphorism. Best, Don Bauder

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valueinvestingisdead Feb. 20, 2009 @ 7:47 p.m.

Don, tell me how this place can stay in business? Wouldn;t pension fund managers be doing due diligence and fire them for someone with better numbers? If you saw a list of their portfolio, you would be shocked. It is littered with absolute junk. I think they should do a video online explaining themselves. To think they go show off the wealth at multi-million dollar halloween bashes makes someone who has lost 75% of their money feel like the biggest SUCKER in loli-pop history!

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Don Bauder Feb. 20, 2009 @ 11:14 p.m.

Response to post #11: Not all Brandes numbers are bad. True, they badly underperform the benchmarks in many areas, but there are some areas in which they overperform. Not many now, however. There is no doubt: they are on a losing streak. Best, Don Bauder

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valueinvestingisdead Feb. 21, 2009 @ 9:52 a.m.

Reply to #12 - Really? I am curious to which numbers you think are good? You can subtract another 30% on US VALUE and 20% on INTL since December.

Would you put any money there personally?

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Don Bauder Feb. 21, 2009 @ 10:33 a.m.

Response to post #13: I was relying on yearend 2008 numbers. Definitely, some of the categories outperformed the benchmarks. I posted this at the time. If, as you say, there have been higher-than-average losses since the first of the year, then Brandes may no longer be overperforming in those areas. We will have to wait for his first quarter report, I think. Best, Don Bauder

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valueinvestingisdead Feb. 22, 2009 @ 8:25 p.m.

Reply to #14 - A dart throwing chimp could have done better than this. Truly lousy managers here. An embarrassment to claim they "know" some method of investing that is worth their huge fees. Well, only a 100% return followed by a 100% return to get back to even. UGH!

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Don Bauder Feb. 22, 2009 @ 8:42 p.m.

Response to post #15: No doubt about it, value investing has not worked in this market. Brandes seems to have done worse than other value investors. No method has worked in this market: growth investing has failed, too. Value used to do better than growth over a long period. It doesn't seem to be happening in this market. Best, Don Bauder

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valueinvestingisdead Feb. 28, 2009 @ 9:49 p.m.

Reply to #16 - They should dissolve before any more lives are ruined. People have lost so much money here and they don't even know what they are doing. How else do you explain buying tons of banks and homebuilders LAST SUMMER? Just because you can build a $60 million home doesn't mean the RE market is booming or in for a turnaround.

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Don Bauder Feb. 28, 2009 @ 10:38 p.m.

Response to post #17: Charles Brandes concedes he got into financials too early. Boy, is that a mouthful. Best, Don Bauder

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valueinvestingisdead March 2, 2009 @ 1:22 p.m.

So much for Margin of Safety. If I hear that term again, I will scream. One thing is for sure...NOBODY knows how to invest. The whole thing is a big scam.

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SurfPuppy619 March 2, 2009 @ 5:11 p.m.

valueinvestingisdead, do you manage money for a living????

Give us the scoop on what you do. I liked the line about chimps making better stock picks throwing darts- and not charging a fee.

This thread reminds me of all the real estate agents who came into the market in the late 90's and early 2,000's who had never been through a recession and all they knew was an up market- they had no clue how the real estate market could turn.

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Don Bauder March 2, 2009 @ 8:27 p.m.

Response to post #19: I agree that no person has ever had a sure-fire method of investing in the stock market. It's like having a sure-fire way to win at the racetrack: there is no such thing, for the outsider at least. (Of course, a lot of races are fixed. And the stock market is often rigged. But even so, there is no way to get it right every time.) Best, Don Bauder

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Don Bauder March 2, 2009 @ 8:29 p.m.

Response to post #20: What got me about all those young real estate hotshots of the early 2000s is that only ten years earlier in San Diego there had been a big setback in real estate values. There had been many other downswoops through the years, too. Best, Don Bauder

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valueinvestingisdead March 3, 2009 @ 2:34 p.m.

Where is all this money going that is lost? Makes you wonder if the 3-4 families that control the World's money supply is gobbling it all up. The middle class is ruined and now enslaved to the super elite for way lower wages going forward. Evil World.

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Don Bauder March 3, 2009 @ 11:01 p.m.

Response to post #23: It's paper wealth that is evanescing -- stock and real estate markets. You sure have suffered from the phenomenon. Best, Don Bauder

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