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August, 2012


Many still good companies periodically lose a substantial percentage of their market values, dips which may be highly lucrative purchasing opportunities. Shares' market prices often fall below their companies' per share intrinsic value. This discrepancy provides the lower cost shares with a kind of market buoyancy. Eventually, like balloons held at the bottom of a pool and then released, they tend to zoom upward again in price, often in their new momentum even popping above their proper value levels. With a portfolio of such discounted companies' stocks, a patient investor may do quite well. The gains may be enhanced, in fact, if one will buy still more shares after initial purchases have gone down further in price due to either normal market volatility or company news of adverse yet temporary circumstances.

In the table are ten potential turnaround plays for such a strategy. The individual companies are not without risk, yet taken together an equal weighting of their shares is in my opinion likely to provide above average total returns. As usual, though, it is recommended the reader do his or her own due diligence and/or to follow the guidance of a trusted financial advisor.

Company NamePrice
as of 8/9/12
Price to
BODYBody Central Corp.$9.178.12N.A.
CAJCanon, Inc.$34.4312.78N.A. International, Ltd.$13.3414.79N.A.
GSThe Goldman Sachs Group, Inc.$103.6015.491.80%
LUKLeucadia National Corp.$22.2244.531.20%
LXKLexmark International, Inc.$19.566.126.50%
PAASPan American Silver Corp.$15.835.411.00%
QSIIQuality Systems, Inc.$18.0814.824.10%
SLWSilver Wheaton Corp.$30.5318.851.30%
VALEVale, S.E.$18.947.016.20%

I would keep these assets till each stock has provided a total return of 100% or till it has been held four years, whichever first, replacing those sold with the best of new candidates that have had negative recent performance but are now offering good prospects.


Larry is not a professional. Don't take him seriously!

Actually, the investment article provided here is for general information only and should not be considered as professional advice, a solicitation to buy or sell any security, or the Word of God. Investors are encouraged to do their own research while considering their personal goals and circumstances, or consult their own professional financial advisors, before making investment decisions. Neither Larry nor LARVALBUG will be liable for any losses sustained by any visitor to this site.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)

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