- Written by Marc Courtenay
- Friday, 27 October 2006
Chris Mayer, the editor of Capital & Crisis, is one smart stock picker. You can read about Capital & Crisis at www. agorafinancial.com. We first discovered Chris when he became the editor of the Fleet Street Letter, and we were impressed at how thorough and careful he was with the analysis of a publicly- traded company. Chris looks for VALUE, deep, under-appreciated, intrinsic value. He patiently peruses the reports and the internal sources of information to find a company who has outstanding leadership and is on the verge of significant growth in earnings and revenue.
Following Chris' advice has made us some serious investment profits. A few were companies that were eventually taken over by other companies because the price of the stock was so reasonable. One example, fertilizer company Agrium (symbol AGU) was not being recognized by the markets as a terrific commodity company selling at a ridiculous price. Those who bought AGU when Chris recommended it are up around 80%.
We remember the day that we received the latest edition of Capital & Crisis recommending that we buy Ameriprise Financial (symbol AMP). Reading the reasoning behind Chris' enthusiasm for this financial services company stock, we couldn't help but clearly see why it was a compelling value. We bought it, kept it less than a year and sold it for a 30% profit. Those smart enough to keep holding are up about 38% so far. Then there was AVX Corp (symbol AVX) the one that "got away". Chris said to buy it below a certain price. We got greedy and hoped it would fall more before we were buyers. Instead, the shares took off. This maker of the "hidden infrastructure" in cell phones and all sorts of electronic gadgets was and is a great way to play the increasing demand for electronic components. The company's profits have more than doubled from the same quarter a year ago. It recently had the best quarterly earnings report in 5 years. Yet the stock price has been very volatilite. Chris wrote to us on 10/27/2006 and said, "Part of the price volatility here is the same sort of thing that dogs Agrium. In the past these capacitor companies go through violent booms and busts. Everyone is scared, thinking this nice earnings report could be the last. But in AVX, we have a player that still produced free cash flow at the bottom of this cycle". Chris almost laments that AVX is only up about 35%, which is a sweet return in about a year's time.
These are just a few of the examples why Chris Mayer is one of our honorary members of our "board of investor-mentors". Our board is willing to think outside the box, look for bargains where few others are paying attention, and hold onto their investment recommendations for as long as the reasons still make good, financial sense. They are good writers and carefully consider what they should include in their newsletters. Recently Chris said we should buy an Argentine real estate company and a shrewd holding company that buys all sorts of under-priced assets and makes them grow. Bet you never heard of Leucadia National (symbol LUK)? You would have if you subscribed to Capital & Crisis. Hats off to Chris and Agora Financial for their continuing success. Those of us following their suggestions have been amply rewarded.