What do you hope to gain by your investment? Are you looking for capital gain, income or a combination of both? I often buy companies for their increasing dividend payments. The capital gain is nice, but if I never sell the stock, then I do not get this.
When a company I buy for dividends lower their dividends, then I have a decision to make. Should I sell? Should I buy more? Or, should I hold on to what I have? I bought TransCanada Corp (TSX-TRP) in 2000 when they lowered their dividend. I had been looking at the company for some time, but I had not bought it. However, they got slammed so hard, and I thought unduly, for reducing their dividend, I felt it was a good time to buy. I also felt that management was making the right decision for long term viability of the company.
I have Manulife stock (TSX-MFC) when they lowered their dividend. I, of course, reviewed the stock at that point. What I decided to do was just to hold what I had. I did not think that it presented a good buying opportunity as I did not think that the stock price unduly suffered from this move. The stock price was lowered and the company was punished for the move, but it did not seem to have been punished much.
The one cardinal rule of investing is to never make an investment that will not let you sleep at night. Another rule is to not invest money into stocks if you need that money within the next 5 years. The 5 year rule also applies to buying bonds. The good thing about bonds is that they have a maturity date. If the bond you buy matures when you need your money, then it is appropriate to buy a bond.
On my Investment Talk blog I am today writing about CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF). Today, I am discussing if the stock is a good price and what analysts are saying. To read about this stock go here....
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Wednesday, November 28, 2012
Monday, November 26, 2012
Types of Dividend Stocks
Some companies vary their dividends depending on what they can pay like Goodfellow (TSX-GDL) and oil companies. A company like Leon's (TSX-LNF) has reasonable dividends (around 2.5%) with median growth around 9%, but will pay special dividends when they feel that they can, but do not feel confident enough to raise dividends.
You can buy companies with low, medium and high dividend yields that have low, medium and high dividend growth. A company like SNC-Lavalin has a low dividend, around 1.8%, but high growth in dividends, above 20%. A lot of REITs have high dividends, around 6.5%, but low dividend growth, around the rate of inflation. An example would be RioCan (TSX-REF).
Our banks tend to have median dividend yields (over 3%, but less than 5%) and median growth rates currently around 9 to 10%. However, in the past the yields would be around 3 to 4%, but growth around 10% to 17%. The past would be before the recent crisis of 2007 when all our banks stopped raising their dividends.
You might want to start with companies with low dividends and high growth and when you are to start living off you portfolio go for stocks with higher dividends. The biggest reason for this, especially if you have a trading account is taxes. If you do not need dividend income, you pay less tax on lower dividend income.
Lots of people talk about dividend growth stocks. I did an article on this subject in the past. See article on Dividend Growth Stocks.
On my Investment Talk blog I am today writing about Canada Bread Co. (TSX-CBY, OTC-CBDLF). Today, I am discussing if the stock is a good price and what analysts are saying. To read about this stock go here....
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
You can buy companies with low, medium and high dividend yields that have low, medium and high dividend growth. A company like SNC-Lavalin has a low dividend, around 1.8%, but high growth in dividends, above 20%. A lot of REITs have high dividends, around 6.5%, but low dividend growth, around the rate of inflation. An example would be RioCan (TSX-REF).
Our banks tend to have median dividend yields (over 3%, but less than 5%) and median growth rates currently around 9 to 10%. However, in the past the yields would be around 3 to 4%, but growth around 10% to 17%. The past would be before the recent crisis of 2007 when all our banks stopped raising their dividends.
You might want to start with companies with low dividends and high growth and when you are to start living off you portfolio go for stocks with higher dividends. The biggest reason for this, especially if you have a trading account is taxes. If you do not need dividend income, you pay less tax on lower dividend income.
Lots of people talk about dividend growth stocks. I did an article on this subject in the past. See article on Dividend Growth Stocks.
On my Investment Talk blog I am today writing about Canada Bread Co. (TSX-CBY, OTC-CBDLF). Today, I am discussing if the stock is a good price and what analysts are saying. To read about this stock go here....
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Wednesday, November 21, 2012
Pension Plans
Are Defined Benefit Pension Plans really better than Defined Contribution plans? Personally, I do not think so.
It has been suggested that the problems with DC plans start with the fact that employees are not educated investors? I would suggest that with DB plans, employers quite possibly are not educated investors also. (There were a lot of banks (like European banks) that got caught with mortgage-backed securities that were sold on sub-prime mortgages. You might have thought that banks being financial institutions would know what they were getting. Apparently this was not so.)
I think that one of the biggest mistakes made by most pension plans is that they took premium holidays or increased benefits or in some way used the "extra" money in pension plans when they were declared overfunded in the 1990's.
There was a big move up in the stock market between about 1982 and 1999 which is called a secular bull market. Since 2000 we have been in a secular bear market and the market has not done much for anyone. Most pension plans are underfunded or underwater, as it is generally called.
Secular markets last a long time. You will at least have one during the time you should be building up your pension plan. If you were in a DC plan, money would have continued into the plan as the secular bull market continued to play out in the 1990's. You need these markets to build up a decent pension.
The other thing I like about DC plans is that you do not need to worry about your company getting into financial trouble and having problems getting your pension money. With DC plans the money comes into your hands when your company makes a contribution.
When I had the chance to change from a DB to DC I did so. That was because I was not planning on working at the company until retirement. It is easier to move money from DC plans then DB plans. If you move money from a DB plan, you basically get little unless you are older. Everyone under DC plan gets the same amount of money each year.
DB plans are such that older employees get more money put towards their retirement than younger ones. There can be a big difference in what you get if you stop working for a company and ask for your pension to be transferred to a Locked-In RRSP. (That is someone asking for this that has worked for a company for 20 years and is 60 will get a lot more than someone who has worked for a company for 20 years and is 40.)
I think that DC plans are good for companies also. It is a pay as you go pension plan for them. They will not end up with a big pension liability. This is one of the things that brought down the auto companies.
I think that the solution is that we all need to have financial education. If you are not working for the same employer until retirement, you are better off with a DC plan. In today's employment market, how many people can count to work for one employer until retirement? I would guess very few, especially if you do not work for the government.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
It has been suggested that the problems with DC plans start with the fact that employees are not educated investors? I would suggest that with DB plans, employers quite possibly are not educated investors also. (There were a lot of banks (like European banks) that got caught with mortgage-backed securities that were sold on sub-prime mortgages. You might have thought that banks being financial institutions would know what they were getting. Apparently this was not so.)
I think that one of the biggest mistakes made by most pension plans is that they took premium holidays or increased benefits or in some way used the "extra" money in pension plans when they were declared overfunded in the 1990's.
There was a big move up in the stock market between about 1982 and 1999 which is called a secular bull market. Since 2000 we have been in a secular bear market and the market has not done much for anyone. Most pension plans are underfunded or underwater, as it is generally called.
Secular markets last a long time. You will at least have one during the time you should be building up your pension plan. If you were in a DC plan, money would have continued into the plan as the secular bull market continued to play out in the 1990's. You need these markets to build up a decent pension.
The other thing I like about DC plans is that you do not need to worry about your company getting into financial trouble and having problems getting your pension money. With DC plans the money comes into your hands when your company makes a contribution.
When I had the chance to change from a DB to DC I did so. That was because I was not planning on working at the company until retirement. It is easier to move money from DC plans then DB plans. If you move money from a DB plan, you basically get little unless you are older. Everyone under DC plan gets the same amount of money each year.
DB plans are such that older employees get more money put towards their retirement than younger ones. There can be a big difference in what you get if you stop working for a company and ask for your pension to be transferred to a Locked-In RRSP. (That is someone asking for this that has worked for a company for 20 years and is 60 will get a lot more than someone who has worked for a company for 20 years and is 40.)
I think that DC plans are good for companies also. It is a pay as you go pension plan for them. They will not end up with a big pension liability. This is one of the things that brought down the auto companies.
I think that the solution is that we all need to have financial education. If you are not working for the same employer until retirement, you are better off with a DC plan. In today's employment market, how many people can count to work for one employer until retirement? I would guess very few, especially if you do not work for the government.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Monday, November 19, 2012
Investors: Geniuses When Market Goes Up
Investors often think of themselves as smart or "Geniuses" when the market goes up and they gain money. However, the same investors are likely to blame others when the market goes down and they lose money.
The thing that happens a lot in dealing with the stock markets is that people never ask where the money comes from when they make money in the stock market, such as when the market goes up. However, everyone wants to know where their money has gone when the market goes down. Sometimes we are too inclined to accept anything we make as something we personally have done, but anything we lose as someone else's fault. However, no one has forced anyone into investing. People invest of their own free will.
Therefore, any loss is your problem and your responsibility, wholly. To become a better investor, you must accept responsibility for what you have lost. If you do not, you will not learn anything and will never become a better investor.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
The thing that happens a lot in dealing with the stock markets is that people never ask where the money comes from when they make money in the stock market, such as when the market goes up. However, everyone wants to know where their money has gone when the market goes down. Sometimes we are too inclined to accept anything we make as something we personally have done, but anything we lose as someone else's fault. However, no one has forced anyone into investing. People invest of their own free will.
Therefore, any loss is your problem and your responsibility, wholly. To become a better investor, you must accept responsibility for what you have lost. If you do not, you will not learn anything and will never become a better investor.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Wednesday, November 14, 2012
Beating the Market
As an individual investor do you really think that your goal should be to "Beat the Market"? I think that if individual investors are asking themselves that they are asking the wrong question. The real question is "Are you making any money"? Is your return higher than inflation?
By trying to "Beat the Market", investors might be applying short term thinking. I think that when individuals are out to do this that they will only be thinking short term. I think that to do well in buying stocks, especially the dividend paying kind, you should be thinking long term.
You do not want to get so tied up trying to beat the market, you do not do what you really want to do and that is make money.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
By trying to "Beat the Market", investors might be applying short term thinking. I think that when individuals are out to do this that they will only be thinking short term. I think that to do well in buying stocks, especially the dividend paying kind, you should be thinking long term.
You do not want to get so tied up trying to beat the market, you do not do what you really want to do and that is make money.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Monday, November 12, 2012
Dividend Growth
I have something like 54 dividend paying stocks in my portfolio. It is not as bad as it sounds, my top 5 stocks are 30% of my portfolio and my top 20 are 75%. I am putting any new money into new stocks and buying some dividend paying small caps and such.
Anyway, what I wanted to point out is that in July and August of this year, no stock I had raised their dividends. This is very unusual for my portfolio. I had two stocks raise their dividends in September (Calian Technologies Ltd (TSX-CTY) and Saputo Inc. (TSX-SAP). October was better with dividend raises from AltaGas Ltd. (TSX-ALA), BCE (TSX-BCE), TECSYS (TSX-0TCS), and Toronto Dominion Bank (TSX-TD).
The thing is, is that I think that my 5 year median dividend increase is coming down. It used to be 12% to 15% per year. Last year my 5 year median dividend increase was 11%. Currently it is running at 9%.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Anyway, what I wanted to point out is that in July and August of this year, no stock I had raised their dividends. This is very unusual for my portfolio. I had two stocks raise their dividends in September (Calian Technologies Ltd (TSX-CTY) and Saputo Inc. (TSX-SAP). October was better with dividend raises from AltaGas Ltd. (TSX-ALA), BCE (TSX-BCE), TECSYS (TSX-0TCS), and Toronto Dominion Bank (TSX-TD).
The thing is, is that I think that my 5 year median dividend increase is coming down. It used to be 12% to 15% per year. Last year my 5 year median dividend increase was 11%. Currently it is running at 9%.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Wednesday, November 7, 2012
Investors: Individuals and Mobs
If you invest in the stock market, you have to realize that investors sometimes act like individuals and sometimes act like a mob. When investors have been acting very mob like, I check my stocks to ensure that they are solid. You will lose if you stock goes bankrupt. You will also lose if your stock is materially damaged. If investors are acting mob-like, you want to have strong solid companies in your investment portfolio.
The current financial crisis was first brought to our notice in 2007. The investors, in their mob-like wisdom did some panicking in the fall of 2007, then they only, periodically, did some panicking until September 2008. In September 2008, there was a full blown panic. There is something about September (and October) that causes investors to panic. This happens a lot.
On my Investment Talk blog I am today writing about Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP), Today, I am discussing the stock. To read about this stock go here....
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
The current financial crisis was first brought to our notice in 2007. The investors, in their mob-like wisdom did some panicking in the fall of 2007, then they only, periodically, did some panicking until September 2008. In September 2008, there was a full blown panic. There is something about September (and October) that causes investors to panic. This happens a lot.
On my Investment Talk blog I am today writing about Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP), Today, I am discussing the stock. To read about this stock go here....
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Monday, November 5, 2012
Interview with Crystal
I follow Crystal on Twitter and thought my readers might enjoy and interview with her.
Introduction:
I am Crystal, a Canadian income focused investor. I work shift work. My hourly wage is high, yet I only work part-time hours that are in a gradual decline. I have been with my current employer for the past seven years; I enjoy my career and have no immediate plans to quit; however, I am in a position where I am less dependent on my employer, as the income generated through my investments is a sufficient amount to replace my current wages.
What prompted you to start investing? Did anything inspire you?
I began investing to compensate for a lack of job security. I continue to invest because I really enjoy it!!!
If someone was just starting out, what would you advise as a first move?
Prior to investing, I would advise a person to spend a large amount of time on research. Learn who you are as an investor and find companies that correspond with your investment style. If you are too busy or do not enjoy doing your own research, just buy the index, as there is a greater degree of risk in owning individual stocks. A hot stock tip may sound great in theory, but in practice it is very important to understand that wealth is accumulated slowly over time and there are no shortcuts.
Do have any favourite investing books?
Although I have done extensive reading on this subject matter, I cannot identify any particular book or author as my favorite. I learn something from everybody.
What sort of account are you using for stock trading? Are you using a trading account, RRSP, TFSA? Why?
I have a Canadian margin account, U.S. margin account, RRSP, and TFSA with TD Waterhouse. I contribute the maximum amounts to my TFSA and RRSP (I have a very low RRSP contribution limit available due to my employment RRSP and pension plan). I choose TD because it offers the Dividend Reinvestment Program (DRIP) for my Canadian and U.S. stocks, and my option writing limit is based on available margin rather than percentage of holdings.
How do you determine what to invest in? Does any particular site or business news program influence you?
I invest in well-established, profitable, relatively conservative Canadian or U.S. based companies. I prefer corporations having over 2 billion in market capitalization and with a history of paying regularly scheduled dividends that increase over time. Before investing I find out the dividend yield, history of dividend increases, dividend payout ratio, the amount of debt, earnings growth, and potential option premiums.
I listen to business news and search the internet for current information. I obtain a great deal of data from advisors, researchers, traders, analysts, etc. however, the information I acquire does not play an important role in my valuation of an individual stock nor do I make my investment decisions based on the views of professionals.
Where do you generally get your info on stocks you invest in? Do you use any investment tools or specific sites?
I research my stocks through perusing their websites; by listening to their conference calls and by reading their annual reports and other shareholder information
Do you use any system or program to track you stocks and options?
I set up a spreadsheet to enter the purchase and sale prices of my stocks to calculate cost. I also have an additional spreadsheet designed to estimate my projected annual dividends to keep me focused on income rather than stock appreciation. For instance, when I have X amount of dividends coming in, short-term volatility is irrelevant to achieving my objectives.
I follow my stocks through streaming quotes on my iPhone and desktop; however, I do not track my options as I am an option writer, not an option trader.
How did you get into option trading?
I began selling options to add an additional source of income to my account.
How would you categorize the type of stock you invest in? Do you invest in different stocks for stock trading compared to stock options?
I categorize the type of stocks I invest in as easy to understand, quality, conservative, dividend paying stocks. The share price of a company with strong earnings and a good balance sheet will increase over time; however I tend to focus on creating and assessing my wealth through income rather than stock appreciation.
When I invest in a company, I like to sell the put options, however, I sell options of companies that I have held in the past and have sold because they are overvalued or pay very little dividends.
Do you have any plans for the next 5, 10 years?
No, I'm not a goal setter. I don't even make plans for the next 5 or 10 minutes
Did the 2008/2009 crash affect you? Did you change anything about how you were investing because of it?
I began investing on my own in mid 2008; therefore, the crash had more of an impact on my attitude towards investing than it did to the balance of my accounts. I had experienced previous losses during good markets as the result of costly mistakes from financial planners.
Rather than changing how I invest, I decided to change my attitude towards investing. I began to focus more on patient long-term growth and short-term dividend income and ignore the volatility of the market.
Do you mind saying what stocks you are invested in? A lot I see on your tweets are dividend paying stock. Are all your stocks dividend payers?
I only invest in dividend paying companies.
My present holdings are:
Canadian Companies:
Baytex Energy (BTE); Canadian National Railway (CNR); Crescent Point Energy (CPG); Cenovus Energy (CVE); Enbridge (ENB); Keyera Corp (KEY); Pembina Pipeline (PPL); Toronto Dominion Bank (TD); and Tim Hortons (THI).
US Companies:
Colgate-Palmolive (CL); General Mills (GIS); Johnson & Johnson (JNJ); McDonald's (MCD); Pepsico (PEP); and Exxon Mobil (XOM).
Conclusion:
Thank you for taking the time to interview me as I enjoy exchanging ideas with other investors.
You may follow me on Twitter@nachoswithsalsa. I discuss my investments, post my trades, and disclose my income received from dividends and option premiums.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
Introduction:
I am Crystal, a Canadian income focused investor. I work shift work. My hourly wage is high, yet I only work part-time hours that are in a gradual decline. I have been with my current employer for the past seven years; I enjoy my career and have no immediate plans to quit; however, I am in a position where I am less dependent on my employer, as the income generated through my investments is a sufficient amount to replace my current wages.
What prompted you to start investing? Did anything inspire you?
I began investing to compensate for a lack of job security. I continue to invest because I really enjoy it!!!
If someone was just starting out, what would you advise as a first move?
Prior to investing, I would advise a person to spend a large amount of time on research. Learn who you are as an investor and find companies that correspond with your investment style. If you are too busy or do not enjoy doing your own research, just buy the index, as there is a greater degree of risk in owning individual stocks. A hot stock tip may sound great in theory, but in practice it is very important to understand that wealth is accumulated slowly over time and there are no shortcuts.
Do have any favourite investing books?
Although I have done extensive reading on this subject matter, I cannot identify any particular book or author as my favorite. I learn something from everybody.
What sort of account are you using for stock trading? Are you using a trading account, RRSP, TFSA? Why?
I have a Canadian margin account, U.S. margin account, RRSP, and TFSA with TD Waterhouse. I contribute the maximum amounts to my TFSA and RRSP (I have a very low RRSP contribution limit available due to my employment RRSP and pension plan). I choose TD because it offers the Dividend Reinvestment Program (DRIP) for my Canadian and U.S. stocks, and my option writing limit is based on available margin rather than percentage of holdings.
How do you determine what to invest in? Does any particular site or business news program influence you?
I invest in well-established, profitable, relatively conservative Canadian or U.S. based companies. I prefer corporations having over 2 billion in market capitalization and with a history of paying regularly scheduled dividends that increase over time. Before investing I find out the dividend yield, history of dividend increases, dividend payout ratio, the amount of debt, earnings growth, and potential option premiums.
I listen to business news and search the internet for current information. I obtain a great deal of data from advisors, researchers, traders, analysts, etc. however, the information I acquire does not play an important role in my valuation of an individual stock nor do I make my investment decisions based on the views of professionals.
Where do you generally get your info on stocks you invest in? Do you use any investment tools or specific sites?
I research my stocks through perusing their websites; by listening to their conference calls and by reading their annual reports and other shareholder information
Do you use any system or program to track you stocks and options?
I set up a spreadsheet to enter the purchase and sale prices of my stocks to calculate cost. I also have an additional spreadsheet designed to estimate my projected annual dividends to keep me focused on income rather than stock appreciation. For instance, when I have X amount of dividends coming in, short-term volatility is irrelevant to achieving my objectives.
I follow my stocks through streaming quotes on my iPhone and desktop; however, I do not track my options as I am an option writer, not an option trader.
How did you get into option trading?
I began selling options to add an additional source of income to my account.
How would you categorize the type of stock you invest in? Do you invest in different stocks for stock trading compared to stock options?
I categorize the type of stocks I invest in as easy to understand, quality, conservative, dividend paying stocks. The share price of a company with strong earnings and a good balance sheet will increase over time; however I tend to focus on creating and assessing my wealth through income rather than stock appreciation.
When I invest in a company, I like to sell the put options, however, I sell options of companies that I have held in the past and have sold because they are overvalued or pay very little dividends.
Do you have any plans for the next 5, 10 years?
No, I'm not a goal setter. I don't even make plans for the next 5 or 10 minutes
Did the 2008/2009 crash affect you? Did you change anything about how you were investing because of it?
I began investing on my own in mid 2008; therefore, the crash had more of an impact on my attitude towards investing than it did to the balance of my accounts. I had experienced previous losses during good markets as the result of costly mistakes from financial planners.
Rather than changing how I invest, I decided to change my attitude towards investing. I began to focus more on patient long-term growth and short-term dividend income and ignore the volatility of the market.
Do you mind saying what stocks you are invested in? A lot I see on your tweets are dividend paying stock. Are all your stocks dividend payers?
I only invest in dividend paying companies.
My present holdings are:
Canadian Companies:
Baytex Energy (BTE); Canadian National Railway (CNR); Crescent Point Energy (CPG); Cenovus Energy (CVE); Enbridge (ENB); Keyera Corp (KEY); Pembina Pipeline (PPL); Toronto Dominion Bank (TD); and Tim Hortons (THI).
US Companies:
Colgate-Palmolive (CL); General Mills (GIS); Johnson & Johnson (JNJ); McDonald's (MCD); Pepsico (PEP); and Exxon Mobil (XOM).
Conclusion:
Thank you for taking the time to interview me as I enjoy exchanging ideas with other investors.
You may follow me on Twitter@nachoswithsalsa. I discuss my investments, post my trades, and disclose my income received from dividends and option premiums.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.
Friday, November 2, 2012
Money Show - Peter Hodson
Peter Hodson is editor of Canadian Money Saver Magazine. For their site click here. Peter also writes for 5iresearch. To see this site click here. His talk is called "How to pick a Good Company: What we've Learned from a Quarter-Century of Stock Buying". His was the closing keynote speech.
He says that investment financial industry is great for the industry's companies, but not so much for individuals. Investing mistakes we make are:
He likes companies that can go up 3 to 4% per quarter. Diedrich Coffee (NASDAQ-DDRX) went up from $1 to $32.75, which was the full price at takeover. The best sources for investment ideas are the annual information forms. Read everything on a company you want to invest in.
Computer Modelling Group (TSX-CMG)'s dividends start out at $0.1 and are now $0.16. WaterFurnace Renewable Energy (TSX-WFI) started out with a dividend of $0.07 per share and its dividend today is $0.24 today.
Stantec Inc. (TSX-STN) has started to pay dividends. It is a good company and the initial dividend gives are very significant statement. Peter says that the management is good. The company has a history of problem solving. It motivates it staff with a balance of shares, salary and options.
(I follow all these stocks of Computer Modelling Group (TSX-CMG), WaterFurnace Renewable Energy (TSX-WFI) and Stantec Inc. (TSX-STN) on my website).
For signs of a good company you should look for
Look at Calian Technologies Ltd (TSX-CTY) where company is growing its dividend, the P/E is 10 and company has $4 in cash per share. (I follow this stock).
Lessons from the experts would be: Pull the weeds: water the flowers. In other words, sell the losers and keep the good companies. A good company is rewarded with rising price/market cap and gets more attention. Look for blue skies. Bay Street analysts are conservative. Don't dream, but know the upside. You should ignore target prices. This is the worst thing of all time.
A diamond is still a diamond, even if it is in the garbage. If others do not like a company, it doesn't mean it is not good. Buy companies with:
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
He says that investment financial industry is great for the industry's companies, but not so much for individuals. Investing mistakes we make are:
- We gamble, not invest,
- We do not buy a company because we say it is too expensive,
- We sell a stock too early,
- We do not buy because you are waiting for a pull back,
- We keep your losers for too long and
- We look for where a stock has been and this is irrelevant.
He likes companies that can go up 3 to 4% per quarter. Diedrich Coffee (NASDAQ-DDRX) went up from $1 to $32.75, which was the full price at takeover. The best sources for investment ideas are the annual information forms. Read everything on a company you want to invest in.
Computer Modelling Group (TSX-CMG)'s dividends start out at $0.1 and are now $0.16. WaterFurnace Renewable Energy (TSX-WFI) started out with a dividend of $0.07 per share and its dividend today is $0.24 today.
Stantec Inc. (TSX-STN) has started to pay dividends. It is a good company and the initial dividend gives are very significant statement. Peter says that the management is good. The company has a history of problem solving. It motivates it staff with a balance of shares, salary and options.
(I follow all these stocks of Computer Modelling Group (TSX-CMG), WaterFurnace Renewable Energy (TSX-WFI) and Stantec Inc. (TSX-STN) on my website).
For signs of a good company you should look for
- Management who have started and grown companies before
- Tech edge
- Patents
- Low cost producer
- Into new markets
- With a new services
- Big brother relationship (i.e. has a parent company to help them)
- Market share
- R&D expenses
- Drives costs lower
- Acquires competitors
- Access to capital
- Cash flow positive
- Has earnings
- Has partnerships
- Has expansion plans and have enough working capital for its needs
- When valuing a company, subtract its cash per share from the share price. If a stock is at $20 and the company has cash per share of $10, then you are really only paying $10 per share.
- Clean accounting
- Good auditors
- Companies that do not over promise
- Companies that deal with their problems
- Companies that communicate
- Annual report has goals, does the company mean them?
- Is company growing better than others in industry?
- Are they making money with that growth?
- Barriers to entry in company's market?
- What size is the company's market?
- Is their market cyclical or seasonal?
Look at Calian Technologies Ltd (TSX-CTY) where company is growing its dividend, the P/E is 10 and company has $4 in cash per share. (I follow this stock).
- Strong Industry and growing company
- Competitor edge
- Keeps its advantage
- Well financed
- Able to communicate to investors
- Good Management
- Attractive value
- This equals a worthwhile investment
Lessons from the experts would be: Pull the weeds: water the flowers. In other words, sell the losers and keep the good companies. A good company is rewarded with rising price/market cap and gets more attention. Look for blue skies. Bay Street analysts are conservative. Don't dream, but know the upside. You should ignore target prices. This is the worst thing of all time.
A diamond is still a diamond, even if it is in the garbage. If others do not like a company, it doesn't mean it is not good. Buy companies with:
- High growth
- Low multiple - can have massive margin expansion
- Rapid EPS acceleration
- Operation profit surge due to cost cutting
- High multiples
- Defensive growth
- Companies with excess cash
- May not get market/multiple expansion
- Market share growth/monopolies
- Merger candidates
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Thursday, November 1, 2012
Money Show - Donald Vialoux and Jon Vialoux
Don Vialoux is founder of Tech Talk and here is a link to TechTalk. He also has sites called Timing the Market and Equity Clock. Jon Vialoux is a research analyst for Horizons Investments Management Inc. Their talk today is called "Timing the Market Using a Combination of Technical, Fundamental and Seasonal Analysis".
Don starts off with one stock he recommends, which is AutoCanada Inc. (TSX-ACQ). He is bullish on gas long term, but not so much in the short term. He is bullish on tech stocks. He thinks gold stocks will be volatile. He thinks that US corporations have lots of cash and good margins. They have fired a lot of people and have refinanced at lower rates. He thinks we should buy dividend paying stocks for income.
In the US people realize they are in problems and that the markets will go down. Spain will have to leave the Euro to recover. Agriculture will be good over the long term because of growing population, but sector will be volatile.
You should buy Dividend ETFs or Dividend paying companies. If you have trouble picking 10 to 15 good dividend paying stocks, use Dividend ETFs.
You need to be good at fundamentals, seasonal investing and technical analysis. In seasonality you find periods of seasonal strength and weakness. You use technical analysis to fine tune your entry to and exit from the market.
With seasonality you need to look for annual recurring events. Seasonality has to do with the market or a sector of the market. Look for recurrent tendencies, economic indicators, corporate earnings, consumer or business patterns, and announcement events.
For example retail sales show strong spring, flat summer, strong fall, moderate winters then a strong spring. Retail is the strongest in the fall. In the first half of the year it is driven by industry and in the second half it is driven by consumers. The average ultimate seasonality for retail is to buy on October 28 and sell on May 5th. Based on 60 years of data, these dates can vary by 1 month either way.
Lumber has gone nowhere in the last 15 years. It is volatile, but it has its seasonality. It peaks in February each year and has its lowest point in October. You can do a seasonal trade on this sector. For CanFor (TSX-CFP) you can buy the 1st of November each year and sell it the 1st of April each year and over the past 15 years you would have made a 16% per year average return.
The TSX Financial Services sector has its top in December. You should hold this sector from October 10th to December 31st and from January 21st to April 13th.
The China Shanghai market has seasonality. In fact studies have shown that 35 of 36 tops markets had a similar pattern with the market rising on Halloween (October 31st) and toping at the end of April.
The Metal and Mining Sectors (gold, copper, and zinc) bottoms in October each year. You should hold this sector from November 19th to January 5th and then from January 31st to May 5th. This has worked 82% of the time over the past 20 years. However, it did not work for the S&P Metals and Mining Sector in 2011.
As for gold, this year the consumer demand in China exceeded the consumer demand in India. Hold gold from July 12th to October 9th each year. Hold gold stocks from July 27th to September 25th each year. If you did this over the past 25 years you would have made a 14% annual return. October tends to be the weakest month for gold.
For Platinum, hold this sector from January 1st to May 31st each year. This can be used in Canada. There is a spring buying season and Platinum is up in the spring of each year. This works about 80% of the time.
The US markets are strong just before an election and this generally continues to the end of the year.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Don starts off with one stock he recommends, which is AutoCanada Inc. (TSX-ACQ). He is bullish on gas long term, but not so much in the short term. He is bullish on tech stocks. He thinks gold stocks will be volatile. He thinks that US corporations have lots of cash and good margins. They have fired a lot of people and have refinanced at lower rates. He thinks we should buy dividend paying stocks for income.
In the US people realize they are in problems and that the markets will go down. Spain will have to leave the Euro to recover. Agriculture will be good over the long term because of growing population, but sector will be volatile.
You should buy Dividend ETFs or Dividend paying companies. If you have trouble picking 10 to 15 good dividend paying stocks, use Dividend ETFs.
You need to be good at fundamentals, seasonal investing and technical analysis. In seasonality you find periods of seasonal strength and weakness. You use technical analysis to fine tune your entry to and exit from the market.
With seasonality you need to look for annual recurring events. Seasonality has to do with the market or a sector of the market. Look for recurrent tendencies, economic indicators, corporate earnings, consumer or business patterns, and announcement events.
For example retail sales show strong spring, flat summer, strong fall, moderate winters then a strong spring. Retail is the strongest in the fall. In the first half of the year it is driven by industry and in the second half it is driven by consumers. The average ultimate seasonality for retail is to buy on October 28 and sell on May 5th. Based on 60 years of data, these dates can vary by 1 month either way.
Lumber has gone nowhere in the last 15 years. It is volatile, but it has its seasonality. It peaks in February each year and has its lowest point in October. You can do a seasonal trade on this sector. For CanFor (TSX-CFP) you can buy the 1st of November each year and sell it the 1st of April each year and over the past 15 years you would have made a 16% per year average return.
The TSX Financial Services sector has its top in December. You should hold this sector from October 10th to December 31st and from January 21st to April 13th.
The China Shanghai market has seasonality. In fact studies have shown that 35 of 36 tops markets had a similar pattern with the market rising on Halloween (October 31st) and toping at the end of April.
The Metal and Mining Sectors (gold, copper, and zinc) bottoms in October each year. You should hold this sector from November 19th to January 5th and then from January 31st to May 5th. This has worked 82% of the time over the past 20 years. However, it did not work for the S&P Metals and Mining Sector in 2011.
As for gold, this year the consumer demand in China exceeded the consumer demand in India. Hold gold from July 12th to October 9th each year. Hold gold stocks from July 27th to September 25th each year. If you did this over the past 25 years you would have made a 14% annual return. October tends to be the weakest month for gold.
For Platinum, hold this sector from January 1st to May 31st each year. This can be used in Canada. There is a spring buying season and Platinum is up in the spring of each year. This works about 80% of the time.
The US markets are strong just before an election and this generally continues to the end of the year.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
Money Show - Huzefa Hamid
Huzefa Hamid is senior analysts at DailyForex.com. His talk was called "Increasing your Risk/Reward with a High Win Rate".
In order to increase your win rate, you need to look at more than just one time frame. You should use engulfing reversals with short wicks. The bearish engulfing means that the market is going down and the Bullish engulfing means that the market is going up.
You should look at daily charts and then hourly charts to cover different time frames. You want your engulfing candlesticks to have short wicks. If wicks are long, it could mean indecision. Your wicks cannot be more than one third of the candles.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
In order to increase your win rate, you need to look at more than just one time frame. You should use engulfing reversals with short wicks. The bearish engulfing means that the market is going down and the Bullish engulfing means that the market is going up.
You should look at daily charts and then hourly charts to cover different time frames. You want your engulfing candlesticks to have short wicks. If wicks are long, it could mean indecision. Your wicks cannot be more than one third of the candles.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
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