Email question about:
Toll Brothers (TOL)

Q:        I'm interested in TOL as both an investor and a homebuyer. TOL's unwillingness to lower home prices flies in the face of local market conditions and has been very frustrating for me in what is supposed to be a buyer's market. I can see they're looking long-term but, at some point, they've got to sell houses. How should I view TOL's position as an investor?

Jim:     I've looked month after month, and year after year, and TOL's homes have come down a great deal... Maybe they haven't come down enough to intrigue you, but there has actually been a decline, and that's in the conference call. TOL, at $20, does not intrigue me. TOL, at $18, is good. I'm price sensitive on these. Why? Because they tend to trade in kind of jerky moments, and when there's a real just kind of seller pounding them, that's when you buy... not just when it's hanging around $20.

Price target to buy TOL: $18.00

Email question about:
CGM Focus (CGMFX)

Q:        In Stay Mad For Life, you recommend CGMFX. After this season's turmoil, do you still back Ken Heebner as one of the best fund managers around?

Jim:     The formula that used in Stay Mad For Life was to look at multiple years, and it does include periodically guys having a bad year, as we like... I am not changing my view on Heebner one bit. Remember, I'm not friends with any of these money managers. I just like the way he has done over the long term... and I don't get any money from them to steer... I don't get anything... I'm just recommending people because I think they're good.

Email question about:
Nordic American Tanker (NAT)

Q:        You recently recommended NAT with its high yield and low P/E. Over the past year, it has earned $3.12 per share, while paying out $4.89 per share in dividends. A similar situation exists in Diana Shipping (DSX), which has earned $2.74 per share and paid out $3.31 per share in the past year. How can these companies stay in business while paying out more than they earn each year?

Jim:     Okay, remember, when you have these situations, you have to look at cash flow, not what they earn... and NAT has never borrowed... does not have an ounce of debt. The reason that I didn't like DSX, and I like NAT, is that they are not borrowing to pay that dividend, which is the difference why I think NAT should be bought and bought aggressively right here. I want to reiterate that NAT is one of my absolute favorite names for 2009.