Budget Items

I know that the Canadian government is saying that inflation is low, however I do wonder about this. For some items it is not true. What the Bank of Canada says for inflation per year is as show in the table below.

Years	Total Inflation	Core Inflation
3	1.71%	2.18%
5	1.44%	1.78%
10	1.67%	1.76%

I live in Ontario where the cost of Electricity has been a problem of awful government policies for years. My Electricity has gone up for me by 22.2% between 2015 and 2016. My increases over the past 3, 5 and 10 years are at 6.23% per year, at 3.60% per year and 4.77% per year.

I find that food is also raising much higher than what is said to be the inflation rate. In 2016 I spent 17.5% more on food than in 2015. My increases over the past 3, 5 and 10 years are at 11.7% per year, at 7.1% per year and 4.7% per year. Since I generally buy fresh rather than pre-packaged food, the changing CDN$ to US$ could be a big factor. Our dollar is declining against the US$ and we do get fresh food in non-summer months from the US.

Cable, Internet and Phone also seem to be an area where prices are rising quickly. These bills were up by 9.4% in 2016 compared to 2015. My increases over the past 3, 5 and 10 years are at 9.2% per year, at 2.2% per year and 5.7% per year.

I would think that these items would be core items in anyone's budget. The food inflation will affect my budget much more than the other items. I spend just over 10% of my budget on food, just over 1% of my budget on electricity and for the Cable, Internet and Phone combo I spend just under 3% of my budget.

On my other blog I wrote yesterday about Methanex Corp. (TSX-MX, NASDAQ-MEOH)... learn more. Tomorrow, I will write about Magna International Inc. (TSX-MG, NYSE-MGA)... learn more on Friday, December 30, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Portfolio Size

I started this entry because of a question from a reader.

In connection with portfolio size the quick answer is to go with what you are comfortable with. Also, you need to be able to track your stock. You need to review all your stocks at least once a year. Some stocks you might want to review more often if they are cyclical or volatile. I have 50 that I own, but I track 150 stocks. I can do this quite comfortably at the present time.

Most analysts and people who talk about portfolio size feel that around 20 stocks that are diversified is the right size portfolio.

You are going to have losers. These are the ones you will lose money on. You may not lose all your money, but could lose 50% to 90% of a stock's value. A recent stock going off the rails that comes to mind is TransAlta Corp. (TSX-TA). The initial drop was around 50%. It is now down some 84% since its top in August 2008.

Part of the reason I have 50 stocks is that I opened Trading Accounts at different times. I got my trading account first, then an RRSP account, then a US account, then a Locked-In RRSP account and finally my TFSA. There is some overlap, but I could not have complete overlap because stocks I liked were not at reasonable prices when I need to do some buying. I feel that it is more important to pay a reasonable price for your stocks. If you overpay for a stock at the start you could do poorly with it over the long term even with a great stock.

One question to ask yourself about your portfolio is, can I go off and leave it and not worry? Can I leave my portfolio alone for a month or 6 months and not worry? I can. I feel that nothing much will happen to it in the long term.

However, problems in the short term are a different matter. You should not be worried about your investment in the short term or you got the wrong things in your portfolio. It is not that I do not indulge in short term investments. I do because it is fun and I do not do it with enough money to damage my portfolio.

I remember talking to an acquaintance I know when the market was crashing at the end of 2008. She said that she had taken 2 days off of work to sell stuff from her portfolio. She lost a lot of money. To me the crash was just been there done that time to focus on something else.

You may want to focus on dividend payments, not value of your portfolio. The last two bear markets I lost just over 30% of the value of my portfolio. However, my dividend income did not decline. Since I have mostly great stocks the value of my portfolio recovered quite nicely.

I sold nothing because of the crash. I wrote about this a number of times. The first entry compared my portfolio to the TSX in Recovery from Bears where I looked to see how well my portfolio recovered from bear markets. I wrote about Me and CDZ on how my portfolio compared to the Dividend Aristocrat Index ETF of CDZ. I also wrote I about my Bear Market Income.

On my other blog I wrote yesterday about FirstService Corp (TSX-FSV, NASDAQ-FSV)... report learn more. Tomorrow, I will write about Colliers International Group Inc. (TSX-CIGI, NASDAQ-CIGI)... learn more on Friday, December 23, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Borrowing to Invest

In this Daily Buy and Sell Advisor article, the author comes out against borrowing to invest. However, he is talking about taking out a loan and only ever paying the interest on the loan.

Personally, I see nothing wrong with borrowing to invest in good stock. I do see a problem with only paying the interest and never the principal. In my budget is a monthly payment to my Line of Credit that I am using to invest in stocks.

The reason investors fail is because they panic when we hit a bear market. We will always hit a bear market at some time. If you are going to invest in dividend stock with a loan, you should focus on changes in dividend payments, not the change in the value of your portfolio.

What can be disastrous is if you borrow to invest and then panic at a bear market decline and sell. You still have to pay back the loan and you may sell stocks at a loss.

Also, if you borrow to invest, you should have a diversified portfolio, with at least 20 stocks and covering most stock categories. I say most because personally I do not invest in resource stock and I tend to not do Tech stocks for the long term as tech stocks often flame out after a while.

The bottom line is that you should not borrow to invest if you are going to be bothered by bear markets.

On my other blog I wrote yesterday about The Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF)... learn more. Tomorrow, I will write about FirstService Corp (TSX-FSV, NASDAQ-FSV)... report learn more on Wednesday, December 21, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Walking and Wining

My friend Nancy Ferragine has some interesting walk and wine tours in Europe for next summer. She has three of them, but one involves Chianti and southern Tuscany. I must say that Chianti is one of my favourite wines. She describes this tip on her website.

With its Renaissance cities, mediaeval villages and cypress lined avenues snaking through vineyards, southern Tuscany is the perfect place for a relaxed walking tour. Based at the tranquil Villa Casalta, we visit beautiful San Gimignano, the market town of Greve in Chianti, the UNESCO World Heritage Site of Siena and the magnificent city of Florence. During the week we sample several varieties of the world-renowned local Chianti and have the opportunity to learn more about Italian wines at the Wine School of Siena.

If you like wine and walking perhaps you should check it out.

On my other blog I wrote yesterday about DHX Media Ltd. (TSX-DHX.B, OTC- DHXMF)... learn more. Tomorrow, I will write about First Capital Realty (TSX-FCR, OTC-FCRGF)... learn more on Wednesday, December 14, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Something to Buy December 2016

There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.

The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.

For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.

Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See Something to Buy December 2016 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).

I follow 21 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Nine (or 43%) are showing cheap by historical median dividend yield. They are Canadian Tire Corporation (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), Goodfellow Inc. (TSX-GDL, OTC-GFELF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A). Reitmans (Canada) Ltd. (TSX-RET.A) is added back to this list. Thomson Reuters Corp (TSX-TRI) has been taken off the list.

I follow 12 Consumer Staples stocks. There is one company showing as cheap by the historically high dividend yield and that is Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF). Three stocks (or 25%) are showing cheap by historical median dividend yield. These are Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L, OTC-LBLCF). There is no change from last month.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month. There is no change.

I follow 12 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. There is no change.

I follow 7 Bank stocks. There is no company showing as cheap by the historically high dividend yield. Five stocks (or 71%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); and Toronto Dominion Bank (TSX-TD). Royal Bank (TSX-RY) has been taken off this list.

I follow 14 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 57%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW), DirectCash Payments Inc. (TSX-DCI) is no longer on this list. DH Corporation (TSX-DH, OTC-DHIFF) has been taken off this list.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change.

I follow 34 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are Bird Construction Inc. (TSX-BDT, OTC-BIRDF), and SNC-Lavalin (TSX-SNC, OTC-SNCAF). Stantec Inc. (TSX-STN, NYSE-STN) has been deleted from this list.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change.

I have 9 Manufacturing stocks. There is one company showing as cheap by the historically high dividend yield. Five stocks or 56% are showing as cheap by historical median dividend yield. They are Canam Group Inc. (TSX-CAM, OTC-CNMGA), Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF). Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF) is no longer showing as cheap by the historically high dividend yield

I have 16 Services stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 19% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). Pason Systems Inc. (TSX-PSI, OTC-PSYTF) is no longer showing as cheap by the historically high dividend yield.

I follow 7 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 16% are showing as cheap by historical median dividend yield. That stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). There is no change.

I follow 9 Energy stocks. One Stock or (11%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF) There are three stocks (or 33%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF); and Suncor Energy (TSX-SU, NYSE-SU). There is no change.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF), Calian Technologies Ltd (TSX-CTY, OTC-CLNFF), Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF) and MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF I have started a spreadsheet on Sylogist Ltd (TSXV-SYZ, OTC-SYZLF), but I have not finished it yet. There is no change from last month.

I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 38%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF), Enbridge Inc. (TSX-ENB, NYSE-ENB) and Veresen Inc. (TSX-VSN, OTC-FCGYF). There is no change from last month.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Two stock (or 17%) is showing cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF) and Fortis Inc. (TSX-FTS, OTC-FRTSF). Fortis Inc. (TSX-FTS, OTC-FRTSF) is new to this list.

I follow 5 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN). There is no change.

On my other blog I wrote yesterday about Chesswood Group Ltd. (TSX-CHW, OTC-CHWWF)... learn more. Tomorrow, I will write about Northland Power Inc. (TSX-NPI, OTC-NPIFF)... learn more on Friday, December 9, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Dividend Stocks December 2016

First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for December 2016.

• I have 2 stocks with a dividend yield higher than the historical high dividend yield,
• I have 33 stocks with a dividend yield higher than the historical average dividend yield
• I have 64 stocks with a dividend yield higher than the historical median dividend yield and
• 60 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list last list in November,

• I have 5 stocks with a dividend yield higher than the historical high dividend yield,
• I have 39 stocks with a dividend yield higher than the historical average dividend yield
• I have 64 stocks with a dividend yield higher than the historical median dividend yield and
• 66 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list in January 2014,

• I had 9 stocks with a dividend yield higher than the historical high dividend yield,
• I had 45 stocks with a dividend yield higher than the historical average dividend yield and
• 39 stocks with a dividend yield higher than the 5 year average dividend yield.

If you had one share of each stock, total dividends last month would be $151.64. This month dividends would be $153.06. Of the stock that I follow 12 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below.

Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF)
Canadian Natural Resources (TSX-CNQ, NYSE-CNQ) (This is an Oil Stock!)
Canadian Tire Corporation (TSX-CTC.A, OTC-CDNAF)
Chesswood Group (TSX-CHW, OTC-CHWWF)
Equitable Group Inc. (TSX-EQB, OTC-EQGPF)

H & R Real Estate Investment Trust (TSX-HR.UN, OTC-HRUFF)
High Liner Foods (TSX-HLF, OTC-HLNFF)
Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF)
Sun Life Financial (TSX-SLF, NYSE-SLF)
Telus Corp. (TSX-T, NYSE-TU)

TMX Group Ltd. (TSX-X, OTC-TMXXF)Sun Life Financial (TSX-SLF, NYSE-SLF)
Valener Inc. (TSX-VNR, OTC-VNRCF)

Of the stocks that I follow no company has decreased their dividends and of the stocks that I follow no company has suspended their dividends.

The TSX has changed the rules so companies can have a four letter symbol effective November 1, 2016. These companies have changed their TSX Symbols.

Enghouse Systems Limited (TSX-ENGH, OTC-EGHSF) (from TSX-ESL)

I have added a stock to this list and it is below. I had been meaning to do a spreadsheet on this stock, but I had not got around to it. I belong now to an investment club and I did one for this club.

Dollarama Inc. (TSX-DOL, OTC-DLMAF)

Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 10.14% of the stocks that I follow. Three of these stocks never had dividends, so 8.11% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Kombat Copper Inc. (TSX-KBT, OTC-PNTZF).

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.

On my other blog I wrote yesterday about WiLan Inc. (TSX-WIN, OTC-WILN)... learn more. Tomorrow, I will write about Chesswood Group Ltd. (TSX-CHW, OTC-CHWWF)... learn more on December 7, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

Debt Ratios

Debt does matter. I check it in a number of ways. I check the Long Term Debt of a company against the market cap. Since I am doing a ratio, I am looking for Debt/Market Cap Ratio approaching 1.00. Look for any large change in debt especially a debt increase. It is a warning sign if in a normal market your stock has this ratio approaching or higher than 1.00. If this occurs because of a severe bear market when all stocks have their market cap cut, I would not be so worried.

This is the thing that was pointed out with Valeant Pharmaceuticals and Debt. Of analysts seem to point it out after the fact. It is also the reason I would be cautious about Innergex Renewable Energy (TSX-INE, OTC-INGXF) which had a ratio of Long Term Debt/Market Cap Ratio of 1.63. Analysts have pointed out that the company owns good assets, but the high Debt/Market Cap Ratio seems to point to the fact that the market does not agree.

Another type of ratio I look at is the Intangible/Market Cap Ratio. This covers both Goodwill and Intangible assets. If this ratio is approaching 1.00 or is above 1.00 I think that the company has a problem. It is obvious that the market does not consider the value attached to Goodwill and/or Intangibles by the company to be valid. Often when this happens you are looking at possible write-downs of these items.

I also look at Leverage (Asset/Book Value Ratio) and Debt/Equity Ratios. These can vary depending on the sector your stock is in. Here it is important to know the normal ratios for the sector your stock is in. Consumer stocks tend to be with Leverage Ratios at around 2 and below and Debt/Equity ratios around 1 and below. On the other hand banks have high ratios with Leverage Ratios at around 16.00 to 18.00 and Debt/Equity ratios around 14.00 to 17.00.

I look at Liquidity Ratios. It is best that this ratio be 1.50 and above. If this ratio is lower than 1.00, it means that current assets cannot cover current liabilities. This is not a great situation. However, some companies, especially utilities, partially cover current liabilities with current cash flow. This is fine when the company's cash flow is dependable. The problem with low Liquidity Ratios is that it leaves the company vulnerable in bad times.

I also look at Debt Ratios. That is Assets compared to Liabilities. Here you do want the ratio to be 1.50 or better. This gives room for safety. If the ratio is below 1.00, it means that assets cannot cover current liabilities. When the ratio is below 1.00 you will have a negative book value. The book value is seen as the breakup value of the company. So if you have a negative book value, it means that the company is not worth anything. This may not be strictly true as a company may have assets that are worth more than the assets book value.

For addition readings on debt start at Investopedia with an overview of debt.

On my other blog I wrote yesterday about Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG)... learn more. Tomorrow, I will write about Finning International Inc. (TSX-FTT, OTC-FINGF)... learn more on Friday, December 2, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Valeant Pharmaceuticals and Debt

I remember when this company of Valeant Pharmaceuticals International, Inc. (VRX) plunged and people said, after the fact that they recognized the problem of too much debt, especially in relationship to the market cap. Peter Tchir talks about Valeant's debt in this Forbes article.

However, when this stock was soaring ever higher, I do not remember anyone ever bringing up this problem. Everyone seemed to just get on the bank wagon of every higher stock price for this company. After the stock price started to fall it seemed that a number of people where pointing out the fact of the high debt compared to the market cap and that people should have seen that and acted accordingly.

On Thursday of this week, I will talk about what debt ratios that I look at for the companies I review. I always keep an eye on long term debt compared to a stock's market cap.

On my other blog I wrote yesterday about Innergex Renewable Energy (TSX-INE, OTC-INGXF)... learn more. Tomorrow, I will write about Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG)... learn more on Wednesday, November 30, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Five Year Rule

The five year rule says that you do not invest in the stock market money you will need within the next 5 years. Also, if you need to take money out of the market give yourself 5 years. Take out money when the market is relatively high. You never know when the top is, but you can tell if it is relatively high.

Another point is to never invest in anything that will not let you sleep at night. It is not worth it. If you are very cautious, then perhaps the best investment might be GICs. I know that they do not pay much, but if it is for 5 years or less it is guaranteed by the government. You will not lose money.

If you are young and are building an investment portfolio you can take a greater risk and it is probably silly not to be in the stock market. By all means buy ETFs or Mutual Funds if you are not willing to do any sort of research yourself. However, research does not necessary involve much. You can buy banks (if you are Canadian) or utilities (that produce power or are pipelines) or buy shares in the stores or business you deal with.

If you are retired you would think differently. If you cannot afford to lose the bit of money you have, go to GICs. Also, do not buy the fancy GICs like the ones with possibilities of higher rates because they are attached somehow to the stock market. Get absolutely plain vanilla ones that you will get some interest on that is guaranteed. If you cannot afford to lose your money, you probably cannot afford to lose any income your money can produce. It may be small, but it will be positive income.

Also, it is not only banks that sell GICs. The credit unions sell them also and they have the same guaranteed. Often the credit union GICs will give you a better interest rate. It may be worth your while to check them out.

Do not let any salesperson talk you into an investment. Sometimes it is hard to get what you want; especially if you have a savings account in a bank they will try to sell you a mutual fund. You can resist. Determine ahead of time what it is that you want. If it is a GIC just keep saying what it is that you want and ignore what the salesperson is saying. Remember they are salespeople. They are trained to sell.

You will get what you want if you just ignore the pitch and keep requesting what it is you want. You can also tell them that you want to think about it. Just take the information and leave.

On my other blog I wrote yesterday about IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more. Tomorrow, I will write about PFB Corp. (TSX-PFB, OTC-PFBOF)... learn more on Friday, November 25, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Failed Stocks

My son has a portfolio of 20 stocks. Among his stocks he had both Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF) and TransAlta Corp (TSX-TA, NYSE-TAC). Reitmans cut their dividend around 75% in 2014 and TransAlta also cut their dividends around 86% between 2014 and 2016.

My son is in the process of building a portfolio of dividend growth stocks. What the above did to his portfolio was to make it pause in terms of dividend growth a couple of times in 2014 and 2016. Why I point this out is that making a mistake or having a stock cut its dividends is not a disaster.

The thing is that if you invest in stocks, no matter how well you do your homework, some are at least going to go through hard times. Some will cut their dividends. Then you have to decide if the stock is worthwhile holding on to.

For example, TransCanada Corp (TSX-TRP, NYSE-TRP) which is currently thought of as a great stock cut their dividends in 1999 by almost 38%. Bottom of the dividend were reached in 2000 and dividends started to increase again in 2001. It took almost 7 years for the dividends to get back to their old level.

On my other blog I wrote yesterday about Johnson and Johnson (NYSE-JNJ)... learn more. Tomorrow, I will write about IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more on Wednesday, November 23, 2016 around 5 pm.

Also, on my book blog I have put a review of the book The Memory Illusion by Dr. Julia Shaw learn more...

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Money Show 2016 - Tom Sosnoff

Tom Sosnoff's talk was entitled "Money and Entrepreneurship: How to go get both with Tom Sosnoff" Tom Sosnoff is a cofounder of thinkorswim, CEO of. Tastytrade Inc. This is my last entry for the 2013 Money Show.

There is a close relationship between entrepreneurship and trading money. We are a product of our environment. Market experience changes how we deal with buying. It enables us to know the value of things. This is basic economics. Trading gives you the ability to put a value on goods and services.

Tastytrade is a proponent of active trading model rather than a passive model. No one runs a business passively. In the business of life, being passive does not work. Have confidence in your convictions. Active trading is one of the best accelerates for learning how to make quick decision.

Little is learned from passive investing. Most passive participants in any business venture either fold or set their expectations around mediocrity. Trading helps you to be able to make decisions.

You should build the know-how to do the active trader way. You need to understand probabilities, strategies, risk-adjusted opportunity and domain mechanics. Active trading reduces the emotional connection to various business transactions. This helps us stay mechanical. You must understand liquidity. Apply know-how. An example is showing how our appreciation of market randomness allows us to focus on logic and strategy rather than market direction. Markets by definition are random.

Do risk analysis. Active trading increases your ability to put context around risk (probabilities, statistics and correlations). In trading, learn how to make decisions and understand risk. If you reduce risk, you improve outcomes. If you apply a simple active strategy you might be able to see how it performs against a traditional passive approach.

You need to understand leverage. Leverage can maximize capital usage. This is why leverage is good.

Use probabilities. Create expectations of a reasonable outcome. This is important in setting yourself up for success. There is the genius of opportunity. You need to understand how volatility is generated from overpriced fear. It is the highest level of public capitulation that generates the greatest amount of profit.

For the mechanics of success, use trade size, theory of large numbers, managing winners and managing losers. Trade the profit from winners and get rid of losers. There is no reward for compliancy. Continuous engagement pays off over time. Probabilities naturally work themselves out when you trade small and trade often. The Law of Large Numbers say the actually probabilities get closer to expected with the more occurrences.

On my other blog I wrote yesterday about Keyera Corp. (TSX-KEY, OTC-KEYUF)... learn more. Tomorrow, I will write about Cenovus Energy Inc. (TSX-CVE, NYSE-CVE)... learn more on Friday, November 18, 2016 around 5 pm.

Today on my other blog I will write about Alimentation Couche-Tard Inc. Redone (TSX-ATD.B, OTC-ANCUF)... learn more.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Inequality

It is not Inequality that people protest about. As in the US currently people where not protesting inequity because that has been around forever. What they are protesting is that the system does not work for them. This is the real problem.

We have this problem in Canada, but we do not have such a large minority of people for whom the system does not work. Look at people living on the street. Our country is not working for them at the moment. We need to fix this.

The left's solution of giving everyone in country money will not work. It sounds like the elite Roman's solution to their poor of bread and circuses. It did not work then and it will not work now.

It is interesting that in Canada we elected a traditional Politian in Trudeau. But then our middle class has not been under the pressure that it has been in the US. In the US just under half the taxpayers do not pay any Federal Tax. Lots collect money through the tax system. Like benefits given to those in low paying jobs.

For the people with difficulties living in our society, they do not want to be fobbed-off like this, they instead want in. They want a society that works for them. This is what we have to fix.

On my other blog I wrote yesterday about Encana Corp. (TSX-ECA, NYSE-ECA)... learn more. Tomorrow, I will write about Keyera Corp. (TSX-KEY, OTC-KEYUF)... learn more on Wednesday, November 16, 2016 around 5 pm.

Today on my other blog I am writing about Dollarama Inc. (TSX-DOL, OTC-DLMAF)... learn more on Tuesday, November 15, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Something to Buy November 2016

There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.

The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.

For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.

Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See Something to Buy November 2016 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).

I follow 20 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Seven (or 35%) are showing cheap by historical median dividend yield. They are Canadian Tire Corporation (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A), and Thomson Reuters Corp (TSX-TRI). DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF) are added to this list and Goeasy Ltd. (TSX-GSY, OTC-EHMEF) and Reitmans (Canada) Ltd. (TSX-RET.A) has been deleted.

I follow 12 Consumer Staples stocks. There is one company showing as cheap by the historically high dividend yield and that is Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF). Three stocks (or 25%) are showing cheap by historical median dividend yield. These are Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L, OTC-LBLCF). Empire Company Ltd. TSX-EMP.A, OTC-EMLAF) is again showing as cheap by the historically high dividend yield.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month. There is no change.

I follow 12 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. There is no change.

I follow 7 Bank stocks. There is one company showing as cheap by the historically high dividend yield and that is Home Capital Group (TSX-HCG, OTC-HMCBF). Six stocks (or 86%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD). There is no change.

I follow 14 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Nine (or 64%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), DH Corporation (TSX-DH, OTC-DHIFF), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW), DirectCash Payments Inc. (TSX-DCI) is no longer on this list. Accord Financial Corp (TSX-ACD, OTC-ACCFF), DH Corporation (TSX-DH, OTC-DHIFF) and Equitable Group Inc. (TSX-EQB, OTC-EQGPF) have been added to this list.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change.

I follow 34 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are Bird Construction Inc. (TSX-BDT, OTC-BIRDF), SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change.

I have 9 Manufacturing stocks. There is one company showing as cheap by the historically high dividend yield and that is Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF). Five stocks or 56% are showing as cheap by historical median dividend yield. They are Canam Group Inc. (TSX-CAM, OTC-CNMGA), Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF).

I have 16 Services stocks. Pason Systems Inc. (TSX-PSI, OTC-PSYTF) is showing as cheap by the historically high dividend yield. Three stocks or 19% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). There is no change.

I follow 7 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 16% are showing as cheap by historical median dividend yield. That stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). There is no change.

I follow 9 Energy stocks. One Stock or (11%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF) There are three stocks (or 33%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF); and Suncor Energy (TSX-SU, NYSE-SU). There is no change.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF), Calian Technologies Ltd (TSX-CTY, OTC-CLNFF), Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF) and MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF). MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF) has been added to this list. I have started a spreadsheet on Sylogist Ltd (TSXV-SYZ, OTC-SYZLF), but I have not finished it yet.

I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 38%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF), Enbridge Inc. (TSX-ENB, NYSE-ENB) and Veresen Inc. (TSX-VSN, OTC-FCGYF). Veresen Inc. (TSX-VSN, OTC-FCGYF) has been added to this list.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. One stock (or 8%) is showing cheap by historical median dividend yield. That stock is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). There is no change.

I follow 5 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN). There is no change.

On my other blog I wrote yesterday about Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more. Tomorrow, I will write about CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more on Friday, November 11, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Dividend Stocks November 2016

First sorry, I forgot to update the stocks I follow in October 2016. Not a lot has happened. Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF) stock price has been travelling south because people are worried about the Founders suit for some $185M. DH Corporation (TSX-DH, OTC-DHIFF) also fell a lot. People seemed to be getting worried about the high P/E Ratios after the company has been on a buying spree with little to show for it.

First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for November 2016.

• I have 5 stocks with a dividend yield higher than the historical high dividend yield,
• I have 39 stocks with a dividend yield higher than the historical average dividend yield
• I have 64 stocks with a dividend yield higher than the historical median dividend yield and
• 66 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list last list in September,

• I have 1 stocks with a dividend yield higher than the historical high dividend yield,
• I have 35 stocks with a dividend yield higher than the historical average dividend yield
• I have 61 stocks with a dividend yield higher than the historical median dividend yield and
• 54 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list in January 2014,

• I had 9 stocks with a dividend yield higher than the historical high dividend yield,
• I had 45 stocks with a dividend yield higher than the historical average dividend yield and
• 39 stocks with a dividend yield higher than the 5 year average dividend yield.

If you had one share of each stock, total dividends last month would be $150.45. This month dividends would be $151.64. Of the stock that I follow 6 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below.

Fortis Inc. (TSX-FTS, OTC-FRTSF)
DHX Media Ltd (TSX-DHX.A, OTC-DHXMF)
Home Capital Group (TSX-HCG, OTC-HMCBF)
Savaria Corporation (TSX-SIS, OTC-SISXF)
Waste Connections Inc. (TSX-WCN, NYSE-WCN)

Smart REIT (TSX-SRU.UN, OTC-CWYUF)

Of the stocks that I follow no company has decreased their dividends and of the stocks that I follow no company has suspended their dividends.

Of the stocks that I follow 1 company has split its shares. The split for Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF) was a 3 to 1 split.

Progressive Waste Solutions (TSX-WCN, NYSE-WCN) has a name change to Waste Connections Inc. Also, the TSX has changed the rules so companies can have a four letter symbol effective November 1, 2016. These companies have changed their TSX Symbols.

Colliers International Group Inc. (TSX-CIGI, NASDAQ-CIGI), From TSX-CIG
Onex Corp (TSX-ONEX, OTC-ONEXF), From TSX-OCX

Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 10.14% of the stocks that I follow. Three of these stocks never had dividends, so 8.11% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Kombat Copper Inc. (TSX-KBT, OTC-PNTZF).

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.

On my other blog I wrote yesterday about TransForce Inc. (TSX-TIF, OTC-TFIFF)... learn more. Tomorrow, I will write about Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more on Wednesday, November 9, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.

Money Show 2016 - Derek Foster

Derek Foster's talk was entitled "How Any Idiot (or non-idiot) Can Become a Millionaire: Your 10 Step Guide." Derek Foster is an author and wrote The Idiot Millionaire.

You can decide to be wealthy. What you need to decide is what is important to you. Read the book the Millionaire Next Door Thomas J. Stanley. You can see reviews of this book here.

Basically you need to decide if you want time or stuff. Money can give you time. Budgeting does not work if you do not want to do it. If you do a budget you hate, you will not follow it. When you go to buy stuff ask yourself if this item is going to enhance your life.

What you need to do is spend less than you earn. Studies show that happiness equals less TV and people are less happy that watch TV. Do no buy crap.

There is a difference between being frugal and cheap. If you are frugal you are careful how you spent your money. If you are cheap you will deny yourself what you really want and you save in a bank because money does not grow on trees. Your biggest expense is taxes. This is non-life enhancing spending. The worse thing to do is to take a job because a lot of your pay goes to taxes. Other money goes into commuting to a job and more for clothes for a job. Do not invest in a Mutual Fund with 2.5% in Fees. Instead look at their top ten investments and invest in these items.

Do not worry about starting our small, say with $100.00. Start early and start DRIPs with your stocks. Some investors try to make a quick gain. If you plant a tree you harvest the fruit, you do not cut the tree and sell for firewood. Dividends are like that. DRIPs allow you to buy more shares without paying fees. Grace is a woman who bought Abbot Laboratories and years later it was worth $7M. You can read her story at Wikipedia.

Focus on idiot proof stocks. Do not be attracted to complicated ideas. Ink pens would not work in outer space. The American spent millions of dollars to produce a pen that worked in outer space. The Russian used pencils.

People thought that the internet was the future and so bought things like Nortel and lost. You are further ahead buying idiot proof stocks, like a beer stock. Nortel was too complicated. Another type of stock is Colgate which makes toothpaste that everyone uses. What the Fed does, does not affect this sort of stock. Colgate has increased their dividends every year for 50 years. With idiot proof business, no matter what happens they will be ok. Another stock is Visa. 90% of all people have this card. Banks pay a fee to Visa to use their cards. Retailers pay a fee to Visa to use their cards. Visa gets a very small piece of each transaction fee.

Look for other similar opportunities. Remember to keep it simple. Usually the Canadian Dollar is lower than the US$. He remembers only twice when the CDN$ was higher than the US$ which was a few years ago and once in the 1970's.

Be patient with the market. Markets are kind of expensive at the moment. Put options are good at the moment. A put is a promise to buy at a certain price over, say the next 6 months. You pay a premium for the put option. He tends to buy and hold stock because it is tax efficient. You only pay tax when a stock is sold.

You should have a destination plan. It is boring investing that works. You need to have realistic plan. You need to put a certain amount of money in your plan each year. Look at things like the Saskatchewan Pension Plan. Anyone can join this plan. Stick to your plan and do not do anything stupid. Stick to simple things when investing. You can invest in companies you hate, like Bell or Rogers because everyone has to have their products.

On my other blog I wrote yesterday about Pason Systems Inc. (TSX-PSI, OTC-PSYTF)... learn more. Tomorrow, I will write about Molson Coors Canada (TSX-TPX.B, NYSE-TAP)... learn more on Friday, November 4, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Money Show 2016 - Zaid Jasani

Zaid Jasani's talk was entitled "Portfolio Management Strategies for Active Investors". Zaid Jasani is a Managing Director and Partner with The Independent Investment Institute .

He got money in September 2008 and put it all into the market. This market is all about risk exposure. Nobody knows the future. It is all probabilities, a game of probabilities. The market could go bull or bear. Analysts of crowd fundamental drive the market in the long term. Tech will drive the market in the short term.

Human behavior is predictable. We do not like feeling uncomfortable. What is normal? Things not on the bell curve. What things are unlikely are things at both ends of the bell curve. In the middle is the normal distribution. Over reaction creates swings from expensive to cheap. Knowing this could help you buy better and sell better. This swing behavior happens all the time. He thinks that short term is less than 3 months and long term is greater than 3 months.

In the short term you can have a price ceiling where a stock is technically expensive. The faster a stock moves the more likely it is to go above this. The slower a stock is moving the more likely the price will drop. A high swing in price gives you a short term price ceiling and the stock is technically expensive. A low swing in price gives you a short term price floor and the stock is technically cheap. Who leads the swings? They are traders who make up 4% of the trades a day.

The S&P500 represents 35% of the worldwide market. Europe and the rest of the developed world represent 35% of the worldwide market and Emerging Markets represent 11.5% of the worldwide market. Canada accounts for 3.5% of the worldwide market.

Is the market swinging high now? Currently we are above the norm, but below expensive. Most recently we have backed off a bit, so our market is neutral. Is the Global Equity Market pull back over? Global markets have broken the trend and peaked in 2015. The largest explanation is the action of central banks. The US dollar is up and this put pressure on oil prices.

What will make the market go back up? The US is in trying to normalize interest rates. They want to have the ability to lower rates in a recession. Yellen started to talk down the US$ in February 2016. The lower US dollar has allowed oil prices to inflate. Global markets have inflated.

Can the US take the next rate hike? Did aggregate demand grow? Not really. We are also now seeing oil demand slow. Mr. Market did not like the last rate hike. This does not have to happen again, but since global demand is down, it probably will. If the rate is not hiked it will be a disappointment for Mr. Market. The market is not really pricing in a rate hike. If there is no hike the TSX will go up. If there is one it will go down by 10 to 12%. The market is not really sure what will happen.

How to manage emerging equities? They are close to normal. If there is not US interest rate hike then oil and other resources should go up. Gold is cheap. If no interest rate hike it will likely pop. If there is no interest rate hike then the US$ will go down. If there is an interest rate hike it will be bad for the US$.

What about REITs. If Yellen could take a hike and convince the market everything is good, this would be the best outcome for REITs. If she does not convince the market everything is fine, this will be a problem for REITS.

A current good buy is RBC (TSX-RY) or the iShares S&P/TSX Capped Financials Index ETF (TSX-XFN). Between 2008 and 2016, the banks were just below normal. We are at neutral now. Last year the financials outperformed and they are close to neutral now. Another ETF would be BMO S&P/TSX Equal Weight Banks Index ETF (TSX-SEB). If there is no interest rate hike, that you be good for RBC. An interest rate hike would be bad for RBC.

Independent Investment Institute is a community that helps each other and freely trades ideas. It costs $49.95. The community and coaching are all done online. They also meet once a year somewhere in Canada.

On my other blog I wrote yesterday about North West Company (TSX-NWC, OTC-NWTUF)... learn more. Tomorrow, I will write about Pason Systems Inc. (TSX-PSI, OTC-PSYTF)... learn more on Wednesday, November 02, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Money Show 2016 - Warren MacKenzie

Warren MacKenzie's talk was entitled "Practical Advice for Long Term Investing". Warren MacKenzie is a Stewardship Counsellor with Highview Financial.

To Warren MacKenzie, long term is more than 10 years. If you need money in 5 years you should not be investing it. Long Term investing should be boring.

There is lots of doom and gloom at the money show. We will have a bear market at some point in the future. However, if you need more money what you should do is 1) work longer, 2) spend less or 3) take on more volatility. You get higher returns with higher volatility.

Your investing should be goal based. Take as much risk as you need to but no more. You should not manager returns, but you should manage risk. Investing has not only stock market risk, but emotional risk. There is also a government risk. An example of government risk is the income trust rules change by the government.

It is best to be diversified. You should invest in different asset classes. You need the correct asset risk for you goals.

If investing is a hobby, put some money aside to play with. You cannot expect to be better at all investment categories, so sometimes you would be better off with ETFs. Always do quarterly reviews of your investments.

Some advisors come under the suitability standard. An example is the banks. If you ask for Canadian Stocks and they give you a Mutual Fund with Canadian Stocks and it is the worse one with high trailer fees, this is legal. What you want is an advisor that is held to a fiduciary standard. Get it in writing that they follow this standard.

You need to auto rebalance your portfolio. This will force you to do what is right. Do not have a complicated portfolio when you are 90. Now is the time to simplify your portfolio. You do not want to wait and be too late.

The most important things about fees should be that you are getting value for your fees. A tiny fee is not ok if you are not getting value. Do not focus too much on fees. It is important to benchmark your portfolio. His benchmark is ETF portfolios.

On my other blog I wrote yesterday about Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF)... learn more. Tomorrow, I will write about Equitable Group Inc. (TSX-EQB, OTC-EQGPF)... learn more on Friday, October 26, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Money Show 2016 - Scott Hanson

Scott Hanson 's talk was entitled "Investing Long-Term Dividend and GARP in Canada and US" Scott Hanson is an Investment Advisor with CIBC Wood Gundy.

Scott Hanson talks about growth at a reasonable price that is GARP. The difference between successful and unsuccessful investing is buy and hold. From 1928 to 2015 DJIA had an 11.4% return per year. Bonds had a 5.2% return and MM Funds had a 3.5% return. So a $10,000 investment with DJIA grows to 120M, with bonds to $823,000 to MMF to $200,000.

Between 1995 and 2015, stocks had a 10% a year return. The average investor had a 2.5% return. Problem is noise. The media is your worst enemy, so is short term thinking. We have a wealth of information, but a poverty of attention. We are euphoric at the top of the market and depressed at the bottom. The best time to invest is at the bottom of the market and the worse time is with euphoria.

When the P/E is high or going up, the rate of return is going down. If the current P/E is high, the rate of return over the next 10 years will be low. If the current P/E is low, the rate of return over the next 10 years will be good. However, if interest rates stay low, then P/E ratios will probably stay high.

For example, Microsoft in 1999 at $60 had a peak P/E Ratio of 55. With growth of 8% for the company, the stock stayed flat for a very long time. Stocks do tend to track growth. However, do not buy good companies at a high price.

Investment sentiment is currently conservative. When stocks are on sale, no one wants to buy. The performance after a stock market fall is a 20% return. The true investor likes volatility. They want to buy great investments at the right price.

Greed can push people to buy high and fear can push people to sell low. This is why the typical investor losses. The Dividend Aristocrats are the stocks to buy. You want companies with consistent growth in earnings and dividends. Stocks with high yields and low payouts do the best. Low yields and high payouts do the worse.

You should go for growth at a reasonable price. What is good is superior earnings growth at a reasonable price. Look at ETFs that track the S&P 5900 dividend aristocrats. For Canada there is a smaller pool of dividend aristocrat stock. According to Morningstar from 1985 to 2016 buying dividend aristocrats had a 13.8% return against the S&P return of 8.1%.

One test to use is a stock should growth $1 of market values for every $1 of earnings. Buy dividend aristocrats at a reasonable price and add to your portfolio when stocks show weakness.

Company #1 is a label and packaging company. From 2009 to Q2 of 2016 the company accumulated $34.54 in earnings and the market value grew by $206.43. The Market Value grew by $6.00 for every $1.00 of earnings. This stock passes this test absolutely.

Company #2 is a convenience store. From 2009 to Q2 of 2016 it had $17.85 of earnings and market value grew by $50.67 or by $2.93 for every $1.00 of earnings. This company passes the test.

Company #3 is a leading IT company has $15.58 in earnings and the market value grew by $40.85. It has $2.93 for every $1.00 for earnings and so passes the test.

Company #4 is a Fertilizer company had $15.95 in earnings and market value went down by $18.20, so it had a decline in market value of $1.14 for every $1.00 of earnings. This does not pass the test.

Consider doing a "dollar cost" averaging with your dividend aristocrat quarterly dividends. The compounding is magical. You have the company reinvesting earnings plus dividend reinvesting. Compound interest is the most powerful force in the universe. Consider volatility as a bonus when investing in Dividend Aristocrat stocks. Buy companies that create $1.00 of market value for each $1.00 of earnings.

Today, the P/E is not cheap, but it is not expensive either. Earnings yields are a lot higher than the 10 year treasury bonds. Stocks appear to be cheaper relative to bonds.

One way of investing is to buy preferred shares, if you really do not want to be in the market. Fixed reset preferred shares have a built in rate hedge.

Often you do not get $1.00 of market value for $1.00 of earnings because of debt. You do not want companies that have a high debt load. A good way to judge the P/E of a company is to look at the historical P/E Ratios for a company.

On my other blog I wrote yesterday about Medtronic Inc. (NYSE-MDT)... learn more. Tomorrow, I will write about Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF)... learn more on Wednesday, October 26, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Money Show 2016 - Stefanie Kammerman

Stefanie Kammerman's talk was entitled "Q & A with Stefanie Kammerman" Stefanie Kammerman is the founder of the Stock Whisperer Trading Company.

She says she does old fashion trading in a high tech world.

There is the Dark Pool and 40% of the volume of trading is done in the Dark Pool on Alternative Markets. Here companies can move large number of shares without moving the market. Trades are only reported when all shares of the trade are done or the next day if say Goldman Sacs trade from one office to another office. That is a trade from the US to the London market.

On my other blog I wrote yesterday about Medtronic Inc. (NYSE-MDT)... learn more. Tomorrow, I will write about Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF)... learn more on Wednesday, October 26, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Money Show 2016 - Mike Larson

The Mike Larson's talk was entitled "The Everything Bubble: Causes, Consequences and the Case for Gold" Mike Larson is Editor of the Safe Money Report.

Druckenmiller got out of the market in May 2016. In June 2016 Bill Gross said that global yields were the lowest in 500 years. Jeff Gundlach in July 2016 said exactly how Mike Larson he feels and he says sell everything. Paul Singer on September 13, 2016 says it us a very dangerous time in the global economy and the global financial markets. This is the Everything Bubble. It is why managers with tens of billions of dollars at stake are so gloomy. They know what we face.

The problem is cheap and plentiful credit. The source is the Central Banks. Cheap dollars help assets. We are at the end game. IPOs in the US in the first half of 2015 had 15 corporations raising $13Billion; M&A's in the US was at $2.6Trillion. Buybacks was at $569Billing in 2015. This was all fueled by debt.

The Junk Bond market has exploded as money is cheap. For the Auto Industry in 2015 17.5 million vehicles were sold and Auto debt hit $9Tillion in the third quarter of 2015. A record 23% of the loans have been going to subprime. Average car loan is 68 months. A record 31% of Auto loans are underwater. Leasing market shares some 31.4% of new sales.

Real Estate commercial property prices have soared 95% eclipsing the 81% surge in the last bubble. REIT's has 34 M&A deals in 2015 doubling the 2014 tally. We have a higher peak in Real Estate that when the bubble burst in 2008.

One by one the bubbles are beginning to deflate. Signs are emerging of a turn in the credit market. For Autos in August 2016 incentives rose 8%, Sales dropped 5% and inventories are high.

There were no IPO's in January 2016 (and also none in December 2008). There were only 63 IPO's through to August 2016 and this is down 50% year over year. Private equity firms are choking on sinking investments. The easy credit systems are breaking down.

Venture capital funding dropped 19% from Q2 2015. Some companies are lying off workers and some are going broke. M&A has some transactions but in Q2 the values are down 33% year over year. Earnings fell 3.7% in Q2 and have been dropping for 6 straight quarters. This is the longest stretch from the Great Recession. There is negative profit guidance for Q3 of 2016. Buy backs are down 3.77M this year. You cannot buy back shares if you do not have the money. We have the widest debt to EBITDA gap in 20 years.

Commercial Real Estate investment is down 13% year over year. Industrial Real Estate is down 47%, Hotel Real Estate down 57% and retail down 21%. Banks are lightening Commercial Real Estate loan standards. Construction employment is down 4 of the last 5 months. This is the first time since the end of the housing bust. Apartment market is now the loosest since January 2014. The last time this happened was in January 2010.

Stock margin debt on the NYSE peaked at $507B in April 2015. It fell to $435B in February 2016. This was the third major top since 2006. Value is extreme in the S&P500 with a P/E Ratio of 18.6. Investors want out of US Stock funds.

How will the Everything Bust impact growth? August job gains of 151,000 missed the forecast of 180,000 of the Fed. Broader labor market indicators dropped 6 of the last 7 months. Service Sector growth falls to lowest in 6 plus years. The investment implications are higher cash and lower stock exposure. We should stay cautious. We should emphasize low volatility, higher recession resistant stocks and sectors.

The best long term acquisition is Snyder's-Lance Inc. (NASDAQ:LNCE), AT&T Inc. (NYSE:T) and Logitech International SA (NASDAQ:LOGI). Logitech's EPS and Revenues beat estimates. Shorting ideas would be Ford Motor Company (NYSE:F), Delphi Automotive PLC (NYSE:DLPH) a parts supplier and iShares U.S. Real Estate ETF (NYSE:IYR). REITs are vulnerable to rising interest rates, Recession and overvaluation.

What about Gold? It is great as chaos insurance. Buy in a bust. It is also a yield play because in a ZIRP/NIRP world there is $13Trillion in bonds with negative rates. Total demand for gold rose 15% year over year in Q2 2016. Investor demand soared to 448 tones up 141% year over year. Buy miners on pull back. If gold clears $1400 the potential exists for runs to 2011 highs near $2000.

Expect stock market volatility in 2016 and 2017. Buy the physical metal over negative rate sovereign and corporate bonds. He is bullish on gold.

The Bank of Japan just does not know what to do any more.

Go to his website for a free weekly newsletter.

On my other blog I wrote yesterday about Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)... learn more. Tomorrow, I will write about Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more on Friday, October 21, 2016 around 5 pm.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.