And then there was one...

Markets just closed for this, the penultimate trading day of 2010. After reaching a new twenty-eight month high yesterday the TSX sagged a tad today. No surprise given that both gold and oil fell away from their recent highs. All-in-all, not to worry about a tenth of a percent drop.

South of the border things are about the same and the second the markets closed, the US futures came to life and immediately pointed to a lower opening for tomorrow. Looks like we're going to close an excellent year with a bit of a downer.

Me, I'm going to close the books for the year and count the money. After all, this is the year TPCI made it all back. Barring a market meltdown tomorrow...I'll be smiling.

Dead Money Comes To Life

Back in May of last year, I wrote about Orphan Fund(s).  These are the the small investments in our RSPs that don't seem to belong.  On occasion, hopefully not often, our trading accounts hold an orphan stock or two which we tend to ignore as they're dead in the water.  I held such a stock until December 3.

Four years ago this month I heard of a small company that was destined for great things. National Challenge Systems has operations in Ontario and BC. The principle business is collection and disposal of restaurant grease and other organic wastes.  Had I done my usual research I would have passed. Firstly, it was a penny stock which I avoid. Secondly, nobody had anything good to say about the company. Posters on Stockhouse.ca expressed great disappointment with senior management of the company. Be that as it may, I had some money in my trading account and proceeded to buy thousands of shares at an average price of .095. Yup, nine and a half cents.

Over time a few things happened. The share price gradually fell off to the .05 - .075 range. The shares were delisted from the TSX and listed on the Venture Exchange. The company did a one for twenty reverse split turning my thousands of shares to hundreds of shares. Investopedia.com has this to say about reverse splits; "firms do it to make their stock look more valuable when, in fact, nothing has changed. A company may also do a reverse split to avoid being delisted."  Based on the share consolidation my acquisition cost was now $1.95 per share.  The day of the consolidation they traded at $1.30.  Not good!

Somewhere along the way, the company changed its name to Organic Resource Management. Changes were implemented, which on the surface at least, appeared positive.  The range this year has been from a low of .95 to a high of $1.80.  Any time it traded for $1.80 a couple of hundred shares would change hands and then it would drop back with the next trade.  The volume was always low and many days there were no trades at all.  Dead money.

Holding Organic Resource (ORI) wasn't fun.  So, how does one resurrect dead money?  Me, I calculated that I needed $2.04 to get all my money back including all fees.  Each week I placed a sell order, good through the following Friday, at $2.04.  Each week it expired without being filled.  As I don't sell at a loss, it appeared that I was destined to hold ORI shares for the foreseeable future.

On December 3, after selling the coal miners I placed a buy order for more BMO and RBC shares.  I refreshed my 'Order Status' page every few minutes to see if either of my buy orders had been executed.  The bank shares were recovering from earlier lows so I wasn't hopeful.

Suddenly with just a few minutes left in the trading day my sell order for ORI was filled at $2.04, a new all time high!  My guess is that someone placed a buy order at 'market price' assuming the order would be filled at around $1.75, which was the last quoted price and the only shares available on the sell side were mine at $2.04.  Bang!  I had my money back.  Goes to show, you can't ignore things in your account no matter how stagnant they appear.

Not a bad day...

Actually, a heck of a lot better than expected given the Chinese interest rate hike over the weekend.  Bearing in in mind that a slow down in China means a global slow down, I expected the US market would tank today.  The DOW dropped a tick, while the S&P 500 and the NASDAQ both ticked up.  All-in-all, not bad.

My newly acquired Cisco Systems (CSCO) shares finally moved up, 2.39%, after been flat to down since I bought them a few weeks ago.  With the TSX closed I checked out some of my Canadian stuff on the NYSE.  RBC was down while both BMO and TD were up after starting the day on the downside. Not bad given the Chinese thing.

If our financials gain some strength and oil holds at it present level of $91.00, we may have a nice pop to close out the year.

'Twas the week before Christmas

Caught me by surprise...and no, not because I forgot to do my shopping, which was made easy this year.  Most of the adults in our life agreed to make donations to charity rather than exchange gift cards which seems to have become the norm over the past few years.  No, what surprised me this week was the TSX's huge spike up on Tuesday.  I was surprised again on Wednesday when it didn't sell off, which often happens after a decent gain.  Even today's tiny downward tick of 9.5 points was surprising given that tomorrow is the last day for year tax loss selling.  That being the case, I'd normally expect tomorrow to be flat or down...but, with oil over $91 I'm not so sure.  This week may have one more surprise in store for us.

At any rate, after tomorrow the TSX is closed until next Wednesday.  If oil holds at or near the present level for the next six days we may very well close out the year with an upward move.

For my part I'm standing pat.  I like most of my stuff.  I doubt that I've got any short term rockets but I think I'm well positioned for gains in the 10-15 % range for 2011.  With a bit of selective trading I hope to get this to the 15-20% range.

Merry Christmas and best wishes for a safe, healthy and prosperous New Year!

What a difference a day makes...

Early this morning I was going to write about the way BMO was being punished for Friday's announcement of their acquisition of Marshall & Ilsley for $4.1 Billion.  BMO shares were $62.05 on Thursday and $56.60 on Monday...a drop of 8.8%.  Apply that to the BMO market cap and do the math.  It's a really big number.

I held off writing about BMO because TD Bank, not to be outdone, announced that they were buying the old Chrysler Credit, now known as Chrysler Financial for $6.3 Billion.  I figured I'd wait and put it all in one long, sad story as I prefer not to rehash bad news.  My guess was that the market would similarly dislike the TD deal.

Not so fast!  Apparently TD walks on water and the markets responded by bidding TD up $2.64 to $73.16 in one day.  If that wasn't enough the market spread the love to the all the big banks.  My BMO shares jumped $1.18 and even my long suffering shares of RBC came up $1.04.  All-in-all, I made some real money on my bank shares on Tuesday, December 21.

The TSX reached a new twenty-eight month high of 13,365.  US, Europe and Asia were all up and my stuff reached a level I haven't seen since the summer of '07.

Yes, what a difference a day makes!

Stuff I'm Reading This Morning

TSX may open higher on rising commodities Reuters.  Will we have one more Happy Monday?

BMO may have last laugh (after getting beaten up on Friday) Globe Investor.

Twenty minutes into the new trading week.  TSX and US markets all up...for the moment at least.

Happy Monday and have a great week!

Will Santa Sizzle or Fizzle?

At the beginning of December it looked like the TSX was going to add a fourth month to the year end rally.  Now we've had three days of slippage and dropped 114 points from Monday's high of 13,295.  We're still up for the month but both gold and oil have backed off their earlier highs so it's not looking great for today.

On a positive note, RIM blew the doors off with their Q2 earnings report after the market closed yesterday.  Other news, just out this morning, is BMO's acquisition of Marshall & Ilsley, a US regional bank, for $4.1 Billion.  

I started this half an hour ago but decided to hold off posting to watch the opening.  TSX has been both up and down a tick.  RIM up 4.24%, BMO down 6.48%.  Guess the market doesn't like BMO's all stock purchase which will water down the shares although, this may change as the day goes on and the numbers are further digested.  Happy Friday!

Research

A reader, Chad, posted a comment to Monday's post and asked a number of questions. Welcome Chad.

Regular readers of TPCI will be aware that my investing style is anything but well organized or scientific.  I expect that most finance guys would scoff at my asset mix and methodology.  In my defense I point out that I have recovered from the abyss of 2008 after watching the value of my life savings fall off the cliff while invested in finance guy's picks.

In my May 5 post, Who Should(n't) Be In Funds? I mentioned that I've only read one book on investing.  The overall message of The Wealthy Barber by Michale Chilton is covered in the May post, including, most importantly, the answer to the question asked by the post's title.

I've mentioned that I use both Globe Investor and Morningstar for fund research.  Recently, my preference leans toward Morningstar as Globe Investor made changes to their site and blew away my saved portfolios.  Prior to the change I had a pretend portfolio on Globe Investor wherein I was tracking all of the seg funds, about sixty, offered by one of those goofy guaranteed income plus programs.  The process of adding numerous funds to a portfolio, so they can be quickly compared, is fairly painful so I was disappointed with the change.

In my post of June 1, 2009, My Home Run! (Part 2 of 2), I told of my early success with ETFs. ETFs are all about a sector so you have to listen and learn as much about the sector of interest to understand where the sector is at any given time, and maybe, just maybe be able to predict which direction it may head.  My investments in the energy ETF (XEG) and gold ETF (XGD) involved fairly basic research as these ETFs track pretty closely to the commodities.  Still, at the end of the day it's about gut instinct.  With oil presently near $90 and gold near $1,400 would I be a buyer or seller?

Individual stocks are another kettle of fish.  It begins with a name.  The name of a stock that is.  Sometimes a friend or family member comes up with an idea.  Other times a story in a newspaper or blog creates interest in a certain company.  Except for my HudBay Minerals story, I've done fairly well with top picks of BNN guest analysts.  No matter how you come up with the name you've got to do your research before placing that buy order.

I know I've mentioned using Stock Chase and Stock House as research tools. Stock Chase summarizes all the comments about each company made by BNN guest analysts.  Additionally, the date and price of the stock on that date are recorded.  This can sure reduce the endless hours watching the tube.  The Bullboards on Stock House are always an interesting read as these are the views of other retail investors.  For historical charting I love the interactive charts of Yahoo! Finance.  You can add Technical Indicators such as moving averages and see the dates of events such as stock splits and dividend payments.

For a nice easy, entertaining read, I enjoy Josh Brown's The Reformed Broker.  Josh's blog roll includes links to a multitude of other financial blogs.  

To be fair, I should add that we can always discuss fund choices with finance guy.  After all, he's the one who receives commission when we buy a fund.  Those dealing with full service brokers also have access to their research and recommendations for stock research.  Online discount brokers don't provide these services.

At the end of the day, there are thousands of investment opportunities out there.  The first thing to decide is your tolerance for risk.  In my opinion, exposure to risk should decrease with age.  A market meltdown late on the game could have you looking for work in an unfamiliar environment.  Case in point....me.

Mondays Are Happy Days!

This December at least.  Last Monday the TSX reached a new high for the year...in fact, it was a new high for well over two years.  Until December 6, we hadn't seen the TSX over 13,200 since September 2, 2008.

Well, here we are.  Another Monday rolls around and another record close for the TSX.  Today's close, 13,295.

BNN analysts and various bloggers are now talking Santa Claus rally.  If the optimists are correct, it looks like we may enjoy this run up 'til year end.

Defying Gravity

I'm happy to say that I've got enough going on in my life that I don't watch BNN 24/7. Yesterday I came in on the right side of a curling match and  was away from the house and BNN so I don't know exactly what happened.  I was surprised to see that the TSX gained ground throughout the day while the big Canadian commodities, gold and oil, were losing ground.  Usually the TSX tracks pretty close to these two.  At the end of the day the TSX carved out a 72 point gain and my stuff advanced for the ninth consecutive day.

Right now I'm holding eight stocks and watching twenty-two others.  Yesterday only two of the thirty went down.

I took a small plunge into US waters this week and made my first purchase on the Nasdaq Exchange.  Bought Cisco Systems as the outlook for them is very good for the coming year.  An anticipated explosion in the smart phone and tablet market will flow through to Cisco as the massive amounts of data which these items utilize is processed by Cisco equipment.

IMPORTANT REMINDER:
Nothing on this site should ever be considered to be advice, research or a suggestion or invitation to buy or sell any securities. Every investor should do their own research and consult their own finance guy. See full DISCLAIMER.

It's beginning to look a lot like Christmas...

Here in the 'Peg at least.  The late November snow is piled up everywhere and we're looking at a deep freeze this weekend with January type lows in the -20 range.

The markets have been flat but still slowly trending upward.  The TSX hit a new high for the year on Monday.  Despite a couple of downward ticks in the TSX, down 25 points on Tuesday and another 98 on Wednesday, my stuff has gone up every trading day this month.  That's pretty surprising given that my portfolio is almost all Canadian.  So far at least, it looks like the rally which started at the beginning of September continues.  Maybe there really is a Santa.

With a couple of hours to North America market opening, it's anybody's guess today.  No real definitive overnight news, but US futures are up a tick.

Happy Friday and good luck to all!

Sometimes things just work out

I've been honest about fessing up when I make mistakes.

In my March post Canadian Banks - Buy 'em and Hold 'em I told about leaving a sell order on the table and leaving town for the day.  The result was that I was taken out of RBC (RY) on the way up at the very beginning of a rally for RBC shares.  Had I been paying attention I would have seen the share price approaching my sell order and either increased my ask or pulled the order allowing me to reassess the situation.  A month later, not having learned my lesson, I admitted that I'm not the sharpest knife in the drawer... with my story about a sell order for Cenovus Energy (CVE).  In this case, I failed to pay attention to the fact that Cenovus shares bounced one day and oil spiked overnight.  I left a sell order in place and once again was taken out on the way up and missed a nice gain later that same day.

So, when I finally do something right I'm going to brag a bit.  As mentioned yesterday, I doubled my positions with both BMO and RBC on Monday.  Wham!  BMO reported real good Q4 numbers before the markets opened on Tuesday and the shares took off.  I would have been happy if BMO shares rose to my new lower average acquisition price but they hit that and kept going. In one day I went from being under water to a real nice gain.

Sometimes things just work out.

Big Beat By BMO

Happy Tuesday!

Yesterday, I put Friday's money back to work by doubling my October positions in both BMO and RBC. Ironically, I was able to buy shares for less than I had offered on Friday on yet another dip. Afterward, both went up throughout the day so it felt like a win, win. Averaged down on my October purchases and actually made money on my Monday morning buys.

BMO just out with Q4 numbers and it's a big beat of expectations. The banks, BMO for sure, should get back on track today.

Asia, Europe and US futures all up overnight. DOW futures way up! Oil over $90. TSX should keep on rockin' today.

I'm glad to see a couple of readers weighing in with comments. Welcome! Bloggers do wonder if anyone is reading.

TSX On A Roll!

Despite Friday's sell off of the banks the TSX carved out a new two year high,  The run that began on September 1 has been quite spectacular.  With gold at $1,415 and oil over $89 we may keep 'er going today.

One last chance to put some legs under the banks with BMO closing out the reporting period tomorrow.

Markets just opened.  First tick for TSX to the upside.

BNN live from new studio in Toronto.  Freshened up their look.  Lookin' a lot like CNBC.  Too bad they told Michael Kane where to find the new digs.

Coal Miners, Love 'em and Leave 'em

Usually when I sell something it's because the markets are strong and the stock I want to sell is along for the ride.  Today is different.  It's been a flat day but Western Coal (WTN) has been up all day.  Not to the level that I suggested earlier today.  Rather, the market still wants to stay within the range of the cash offer which is $11.50.  After watching it all morning I finally placed a sell order and let them go at $11.48.  A nice 42.6% gain since my purchase on November 9 at $8.05.

My other coal miner, Grande Cache (GCE), also purchased on November 9 got caught in the updraft and it too was on a roll today.  Figuring I might cash in on this I placed a sell order at $10.15 when is was trading around $10.00.  It took about an hour but the buy orders finally reached up to my price and took out my shares at $10.15, a 20.8% gain over my $8.40 purchase price.

When I bought the coal miners last month I was thinking about a twelve to eighteen month hold.  Little did I know that a takeover offer would fire up the whole sector in a few days. Sometimes things just work out.

Now here's what is so different today.  Since RBC's big earnings miss, reported before the markets opened this morning, the banks have tanked.  As a holder of bank shares, BMO, Royal and TD, I'm disappointed.  On the other hand, I see this as a buying opportunity.  I've taken my new found wealth, from today's selling activity and placed buy orders for additional shares of both RBC and BMO figuring it's a chance to average down on my October purchase prices. I'm well under the market on both offers so I may or may not get them but it's worth a try.

Have a great weekend, and as always, Happy Investing!

Good News - Bad News

GOOD NEWS

• Great Canadian employment numbers.  Unemployment rate down to 7.6%
• Oil over was over $88, now dipping on the bad news
• Gold over $1,390, now rising on the bad news
• Walter Energy (WLT) finalizes deal for all the shares of Western Coal (WTN)

BAD NEWS

• Huge disappointment in US employment numbers just out seconds ago.  Unemployment rate up to 9.8%
• Big earnings miss by RBC.  Estimate was 1.00 per share, actual .86

Of the above, the market mover will be the US employment figures.  Europe which had been in positive territory tuned down instantly on the news.

Me, I'm real happy with the Walter/Western Coal Deal.  It's been finalized at the previously reported $11.50 per share cash.  The new news is that the alternative to cash is .114 of a Walter share for each Western share.  Walter shares closed in New York yesterday at $105.60. This values the Western Coal shares at $12.03US. 

Is it too soon to say Merry Christmas?

Christmas isn't for a while but it already feels like we got a present.  After coming off the best three months in recent memory the markets continued to climb yesterday.  The TSX began the new month with a  pop of 1.5%.  The DOW jumped 2.2%.  What surprises me the most is that Asia, Europe and US futures are all up overnight.  It actually looks like the rally will continue today.  It's too soon to talk Santa Claus Rally but who knows?

Mixed results from our banks this morning.  CIBC (CM) beats while TD (TD) misses estimates...but still turned in a "weaker" profit of  $994 Million for the quarter.  Not too shabby.  RBC (RY) results tomorrow.

My new coal miner, Western Coal (WTN) rose 6% yesterday but at $10.60, it's still trading below the offered takeover price of $11.50.  It seems the market doesn't believe the deal with Walter Energy (WLT) will close.  Me, I'm on the fence but trying to cover my butt with sell order at $11.05.  I paid $8.05 on November 9.  I'd be happy to take the three bucks and move on rather than wait for takeover thing to play out over the next several months.  I place this order each morning only after checking to see where WTN opens.  I don't want to leave a multi-day order sitting there only to be taken out first thing in the morning on the day when it pops.

Chrysler Bragging?

Saw the prez of Chrysler Canada on BNN this morning.  He was bragging that November sales were up 34% over last year.  Let's see now...34% of nothing is...hmmmm?

Fact is, it looks like the whole auto industry is rocking once again.  Maybe this recovery is for real.

Best Three Months Since???

But for a major downward dip in in November it's been a nice steady climb.  The first peak was on November 8 which was the same date the TSX reached a twenty-six month high.  I reached a new high on the 22nd even though the TSX sagged a bit that day.

I'm up 11.7% YTD.  Of this, 10.1% came in the last three months.  Doing a smig better than the TSX on both counts.

And Now For December...
Out of the blocks like a sprinter this morning.  The TSX is up to new two year high...up 137 to 13,090 forty-five minutes into the trading day.  The DOW is up 194.  WOW!