Dividend Paying Tech

I will be on holidays next week, so I will not be posting again until July 2nd, 2013.

I read The CanTech Letter. They recently had an article on Canadian Dividend Paying Tech stocks.

• Calian Technologies (TSX-CTY)
• Evertz Technologies (TSX-ET)
• Aastra Technologies (TSX-AAH)
• Wi-LAN (TSX-WIN)
• C-Com Satellite (TSXV-CMI)
• Computer Modelling Group (TSX-CMG)
• Constellation Software (TSX-CSU)
• Absolute Software (TSX-ABT)
• Macdonald Dettwiler (TSX-MDA)
• Mediagrif Interactive: (TSX-MDF)
• Open Text (TSX-OTC)
• Enghouse Systems (TSX-ESL)

I currently own Calian Technologies, Evertz Technologies and Computer Modelling Group stocks. I used to own and still follow Wi-LAN. I also follow Enghouse Systems.

I have done very well with these tech stocks, earnings some 18% per year on Calian Technologies and Evertz Technologies. I have earned some 40% per year on Computer Modelling Group.

Tech stocks are not for everyone as there are risks involved with the good returns. I personally like tech stocks, but maybe that is because I worked in IT.

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Investment Woes

At dinner the other night one lady gave me her tale of investment woes. In the late 1990's she contacted one of our major banks to get an investment advisor. This she did. She said that she asked that her money mainly go to fixed income.

What he invested her money in was mainly tech stocks. After the tech bubble burst and she lost most of her money she complained. There is an ombudsman for bank services and investment. After some 4 or 5 years she said that she got some of her money back.

I can see why this happened and why she was lucky to get some. She did not complain when she was making money, but only after the bubble burst. No matter who you are investing with, they must provide monthly statements. She should have complained right away that the advisor was not investment her money the way she wanted.

She has to take responsibility here. To wait until after she has made and lost money is far too late. Yes, the advisor should have invested the money the way she wanted. He probably thought he was doing her a favour in investing in tech stocks. Everyone in the late 1990's was gaga over tech stocks. Nevertheless, she should have complained immediately.

It has always amazed me that people will spend more time and effort over items that cause a few bucks than thousands of dollars in investing. It is fine to get an investment advisor. However, it is your money and you have to provide oversight. Investment often comes down to common sense. Does what your advisor want to do make sense to you?

Another lady at the table said that she had invested for a number of years with a financial advisor at the same bank and that she has done just fine.

Here is a link to a blog posting by My Own Advisor on "How to dump your big-bank financial advisor financial advisor".

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Secular Bear

We are in a Secular Bear market. I am not the only one to think this. See recent article by Vitaliy Katsenelson, the CEO of Investment Management Associates in Denver.

We have been there since 2000. I expect to make money in a Secular Bear market in dividends. I expect to make money in dividends until we hit the next Secular Bull market. In Secular Bear markets, the markets go, essentially nowhere. Yes, they go up and down and we have cyclical Bull and Bear markets with a secular market.

However, Secular Bear markets really go nowhere and I am certainly not expecting this one to be any different that the last one or any other Secular Bear market. The last Secular Bear was from 1966 to 1982. You can make capital gains in a Secular Bear. You can capture some rising stocks in a cyclical bull market. But capital gains will only occur in short term investments. I do this sometimes and it can be fun.

Secular Bear markets are also called sideway markets. The reason for this is that the entry point and exit point of such markets tend to be around the same place.

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Risk Free

Nothing is risk free. Someone told me the other day that the only thing to buy is government bonds because they are risk free. Why then would they pay interest on these bonds? They may be of low risk, but they are not risk free. You should not confuse low risk and no risk.

Government bonds maybe lower risk than other things you can invest in. A government openly defaulting on bonds is not the only thing governments can do to bond holders. Government can rewrite the rules governing concerning the paying back of the bond and bond interest. For example they can extend the date they will call in the bonds. Governments can also print more money, create inflation and pay back bonds loans with money that is worth less than the money they got for selling the bonds originally.

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Banks, Energy and Utilities

I currently have a back log of blog entries for this site. So, I will start to publish 3 times a week instead of just twice to try to use up this backlog. I will now publish Mondays, Wednesdays and Fridays.

I have lately started buying stocks that I usually do not buy. I have recently done some investing in energy companies. Specially, I have bought Canadian Natural Resources (TSX-CNQ). I first bought CNQ in September 2012 because the dividend yield was relatively high. The 5 and 10 year median dividend yields were 0.73% and 0.75%. The current one was at 1.31% and I got it with a yield of 1.32%.

Another stock I bought was Ensign Energy Services (TSX-ESI). Until recently the dividend yield was less than 2% and generally running under 1.5%. Currently the dividend yield on this stock is running at 2.7%.

There is a school of thought on buying dividend paying stocks which thinks that you should use the dividend yield to guide your purchases. I generally look at the 5 year dividend yield compared to the current dividend yield. However, I often have yields going back further and I look also at these.

Generally, I only want to buy a stock which has a current dividend yield higher than the 5 year median dividend. Also, the higher the current dividend yield is above the 5 year median dividend yield the better the stock price.

The thing is I have a lot of utility stocks and I have done well with them, but any I have looked at in the last few years have been overpriced. They have not such a high price that I would sell them, but what you pay for a stock greatly affects the long term return you get. You do not want to pay more than a reasonable price for a stock. I have found no good utility stock at a reasonable prices for a while. The price of utility stocks has come down recently, but they are still pricey.

The Banks are different as they are selling at historically relatively reasonable prices. I did an article about the dividend yield on original purchase price of stocks. I made a spreadsheet and I have put it on my site. The original article is here. The conclusion was that nothing beats the banks on good dividends and good increases over the long term.

My study, of course, looked at the past and the past does not always reflect the future. All our major banks kept dividend level for a time after 2008. They are back to increasing their dividends, but not at the same rate as in the past. However, I think that given a bit more time they will get back to what they were.

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Marvyne Jenoff - Words Water Light

My friend Marvyne will have a show at the Skylight Gallery, Northern District Library from July 3rd to July 30th, 2013. The address is 40 Orchard View Blvd. This library is located near the Yonge, Eglinton Subway station. Orchard View Blvd is one street north of Eglinton off Yonge. The Library is just west of Yonge Street.

The show is called "words - water - light". The show is text based watermedia paintings and abstract photographs. See more details at on Marvyne Jenoff's site.

Capitalism Haters'

To hate capitalism shows that you have no understanding of history. Also the quote I got because I dared to state the obvious about boomers debt of "capitalism is the extraordinary belief that the nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all" probably says more about the commenter's feelings towards their fellow humans than anything about capitalism.

And, just because someone makes a remark that is quotable, does not make it true. Also, just because others use a quote, still does not make it true. No matter how you slice and dice it, this quote is a very cynical view of mankind.

This was one of the replies I got about who will pay for the boomers' debts. Perhaps my readers were a little upset that we have allowed our politicians to run up huge debts that now have to be taken care of. Like a bit of anger at me for pointing this fact out or a bit of blaming others rather than ourselves for the debt we are in. It is easy to say some abstract economic theory like capitalism is the fault rather than pointing the finger at us, where the finger should be pointed.

History

Capitalism was used by the western world to move people out of poverty to the peace and prosperity of today. Compared to our historical past, we have never had it so good. We live in comparatively very safe and very prosperous times.

Before the western world had industrialization and capitalism, life was nasty, brutish and short. For all the suffering people endured in cities in early industrialization, people were better off than they had been before they immigrated to the cities. The people might have been uneducated and poor, but they were not stupid.

Capitalist policies in places like China are currently moving millions of people out of dire poverty.

Opinion on Fellow Humans

I personally have a very good opinion of my fellow humans. I think most people are just trying to do the best that they can. I generally do not expect to be cheated by others and I am generally not. Of course, there are people who would try to cheat me, but to me that is more their problem than it is mine.

I have worked in officers and I have found most people, including management, were trying to do a good job. People who hate capitalism also seem to feel that everyone in management of companies or all businessmen are crooks. This is simply not true.

Let's face it; people who hate capitalism do tend to have very negative opinions about their fellow humans. My experience has been that people generally believe that others would react in similar situations as they would. If you would act badly if you had the chance you would therefore expect that others would so too. If you are of the disposition that you would cheat other people if you could, you would certainly feel that others would cheat you if they could.

Capitalism did not cause man's inhumanity to man. It does not cause us to be good or bad. Google who treats its employees very well can operate under capitalism just as well as firms that do not.

Conclusion

So you do have choices. You can sit and moan about how awful the system is, or you can get off your duff and do something to make the world a better place. You can chose to help out your neighbor; you can chose to help out your community.

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Stock Market, Zero-Sum Mentality

A zero-sum mentality is one that believes that there is a winner for every loser and visa a versa. When I say the stock market is not zero-sum, I that mean the winners do not necessarily equal the losers. Basically everyone can win when the total value of the market goes up and everyone can lose when the total value does down. If you think of the market as a pie, it is a pie that can get bigger or smaller.

When the stock market expands not everyone is a winner, it is just easier to be a winner. There are always stocks that do not go up when the general market does. Just as when the market contracts, it is harder to be a winner, but some stocks do go against the trend.

In the western world, the stock markets have tended to expand over the long term. So, it is easier to be a winner in stocks over the long term. What kills stock markets is when a country goes bankrupt. Wars are also not good for a stock market, especially if the economy gets badly damaged.

When the markets go up, no one asks where the money was coming from to power the rise. However, when they come down, everyone wants to know where THEIR money went to. I see this happening all the time. People just have no understanding on how the stock market works. There are also relative winners and losers because people buy and sell stocks all the time.

When the markets go down, you really only lose when you sell or the company goes bankrupt. Whether you should sell or not can be tricky. If your stock goes down just because the market has gone down, there is usually no need to sell. If this is not the cause, look to see if it is just a temporary setback. The stock market has a tendency to over react.

If a stock has something negative happening, like the EPS is not what was expected, the market can react harshly. This might only be temporary. This can lead to a special buying situation where you can make good money. If revenue and EPS are down and the debt ratio is high, you might want to reconsider if you want to hold on to a stock. Some stocks never recover and some take a very long time.

The economy is not a zero-sum either. An economy can contract or expand. That is the economic pie can grow bigger or smaller. When it goes bigger everyone can be a winner and when it contracts, everyone can be a loser. Although, this is generally not what happens here either as there can be winners and losers on both the expansion and contractions of the economy.

However, option trading is zero-sum. Here you are buying and selling by contract. For every winner there is a loser. I understand option trading, but I do not do it. I do know people who have quite successfully made money trading options.

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Country Bankruptcies

The problem with our high debt is that too many people feel that countries cannot go bankrupt. This is not true. There are far too many people who do not know history. As I remember my history, it is far easier to mention who has not gone bankrupt. There is one Nordic country and basically the Anglo-Saxon countries that have not gone bankrupt (or defaulted on government bonds).

The Anglo-Saxon countries are Canada, US, Australia and New Zealand. New Zealand almost went bankrupt in 1979, but was saved by the incoming Labour party. England last defaulted on government bonds in the 12th century. All other countries have defaulted on government bonds.

If debt levels get too high, there will not be enough money to fund social programs. (For example, anything I have read on Greece and their government health coverage is that is there in theory, but not much in fact.) You cannot just hit the austerity button either if you are in trouble over debt. Greece is an example also of this as austerity has basically killed their economy.

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 site for an index to these blog entries and for stocks followed. Follow me on Twitter.