How one investor is playing the Supervalu trade ($SVU)

Jeff at Ragnar is a Pirate has written about how he is taking advantage of the opportunity in Supervalu (NYSE: SVU) – with LEAPs (long dated options).

I will say that when a company is trading for 3-4x the average yearly improvement in tangible book value (and, in a time period that includes the Great Recession) it should spark your interest. They are paying down debt like crazy, have someone who appears to be a great . . .

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Forbes: Michael Dell on reinventing his company ($DELL, $HPQ)

Dell Inc (NASDAQ: DELL)  is one of the many tech bellwethers that appear cheap relative to long term earnings power. I wrote about one of its key advantages, the negative cash conversion cycle stemming from a best-in-class supply chain, here. Forbes recently interviewed Michael Dell on the changes the company is undergoing as it transforms from a “shiny box seller” to a supplier of broad IT products and services, similar to Hewlett-Packard (NASDAQ: HPQ) or IBM . . .

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Vector Space: A fascinating way of visualizing competitor performance ($RIMM, $AAPL, $NOK)

Asymco recently published an interesting visualization of the smartphone industry’s competitive landscape. This “vector space” model shows how competitors are performing over different time periods along market share and profit share dimensions. The graphs show that Apple (NASDAQ: AAPL) and Research in Motion (NASDAQ: RIMM) are becoming the dominant players, at the expense of some of the older smartphone manufacturers, such as Nokia (NYSE: NOK), which indicates to me that the incredible decline we’ve seen in RIMM shares is overdone.

. . .

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John Reese touts Microsoft and other Blue Chips ($MSFT)

John Reese, founder of Validea, a provider of value-focused research and investment tools, recently wrote an article a Nasdaq.com discussing the opportunities presented by blue chip stocks. One in particular, Microsoft (NASDAQ: MSFT) is a regular on this site, and the full article contains several more that might be worth looking into.

Microsoft Corporation (MSFT): Sure, Microsoft isn’t growing as fast as it used to. But Bill Gates’ software giant ($206 billion market cap) is still putting up solid growth . . .

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Is Portfolio Theory Harming Your Portfolio?

Scott Vincent of Green River Asset Management recently published a study in which points out the negative consequences of modern portfolio theory (MPT) and the opportunities that are being created for intelligent investors. Here’s the abstract (emphasis added):

Modern Portfolio Theory (MPT) teaches us that active equity managers who use judgment to make investment decisions won’t be able to match the returns (after fees and expenses) of blindly-invested, passively-managed index funds. Data on returns supports the theory, so it’s . . .

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