Santa Came Early

As mentioned in my most recent post I was looking forward to the year end dividend for my Canadian Bond Fund. Given that the earlier dividends arrived on the final days of June and September I naturally expected the year end distribution to arrive tomorrow, on December 30.

I was checking my account today and surprise, surprise, the year end distribution was paid on December 23. The value of my Canadian Bond Fund units is now up 6.02% since making the switch on June 22. The actual unit value is up 4.23%...the rest is the result of the quarterly dividends. Sweet! In the mean time, the TSX has dropped from 13,060 to today's 11,841...of 9.33%. What a difference!

Yes, The Day That Fear Trumped Greed was an excellent day for TPCI. In the new year I'll be looking back at 2011 and providing some stats about finance guy's continual advice about the ever increasing value of the long term markets.

Until then, happy investing and Happy New Year to all!   

The Day That Fear Trumped Greed

I've documented in fair detail my decision to take the majority of my money off the table in the past year or so.  It began last fall with my move out of the Canadian Resource Fund to a Canadian Bond Fund.  This year I bailed on my long held Canadian Endeavor Fund and that money also went to the bond fund.

After the move to Carman we decided we'd like to have some of our stuff with a local finance guy so we approached a good friend who works with one of the big five and she put us in touch with the branch finance guy.  We sat down with finance guy and to discuss the transfer.  Sure they have a Canadian Bond Fund just like the one we were in with the competitor.

Pending the arrival of our money from the former fund company finance guy offered some reading material and suggested that we have a look at it and make a final decision when the funds arrive in a week or two.  He gave us info on their Bond Fund, as well as their Conservative Fund and their Very Conservative fund.  In addition he gave us a well written article out of his head office entitled "It's only a flesh wound".  I commented on this article in my post of August 9.

A week or so later our money arrived and it was time to sit down and decide if we wanted to stay with bonds or get back into the markets, just a wee bit, with either the Conservative fund or the Very conservative fund.   Finance guy had made a pretty good case for going along with one of these funds in favor of the Bond fund but I was not to be swayed.  I sat across from finance guy, looked him in the eye and said "no, we're going to stick with the bond fund for now".  I went on to explain that the new job coupled with our desire to spend as much time as possible at the lake limited the amount of time I would have over the summer to watch the markets and make changes as required.  I said that we'd revisit this decision later in the year if there was any sign of stability in the markets.

That day the TSX was 13,060.  Three days ago, 11,171...a decline of nearly 15%  Now, the TSX bounced 609 points in the past couple of days but it's done that, or close to that, several times since that day in June.

Oh, by the way, the YTD return on the Bond fund is 5.52%.  On the Very Conservative fund it's .81% and the Conservative fund is -1.37%.  Yup, down 1.37%.

Unlike the title of this post, I'd like to think that my decision that day had more to do with a reasonably intelligent take on current world and market conditions than fear.  Whatever.  It's been a great summer to be sitting on the sidelines!

Have a great weekend and as always, Happy Investing!     

The Lost Decade

Sounds kind of ominous.  I was watching the tube yesterday and the one of the hosts asked the guest analyst if we are heading into another "Lost Decade".  My ears perked up.  Lost decade???  He went on to refer to the first decade of the new millennium as The Lost  Decade when returns for the entire ten years were sub-par.

I wasn't calling it The Lost Decade a few months later when, on July 16, 2010 I wrote A Little More About The Last (Next) Ten Years.  In this one I included a chart showing the returns of the TSX for the 12 month period ending July 8 for each of the past ten years.  Up and down, to be sure.  Some good ones?  You bet!  Some ugly ones?  Yup!  Because none of us were smart enough to time the market, we hung in there for the whole ten years.  Final return?  10% for ten years and I'm not talking 10% annual, I'm talking 10% in total for ten years.  The Lost Decade!

Canada's Top Ten Companies

This from the Globe & Mail today.  Canada's Top Ten Companies In Pictures

I'm feeling pretty good about this list as I'm holding four of the ten in my trading account...BMO, RBC, TD & Suncor.  Now if their damn share prices would just get back to where they were just a couple of months ago all would be good!

20 Things I Don't Understand About Personal Finance

A friend sent me this article from today's Globe & Mail.  I think TPCI and Rob Carrick would hit it off real well!

Rob Carrick's Globe & Mail Article

I Don't Like To Gloat...but

Things are pretty sweet here on the sidelines. Since triggering the most recent portion of my exit strategy back in early May the TSX is off 10.17% and DOW is down a whopping 13.04%!  In the meantime, my Canadian Bond Fund units just keep on tickin' up.  Oh sure, they take a downward tick on a day when the markets rally a tad but overall, I'm up huge compared to where I'd be had I held my earlier positions in the Canadian Resource and Canadian Endeavor Funds.

I wish I'd implemented something similar with that crazy basket of seg funds I'm holding in another account. Needless to say they're as far down as the markets are now. The blessing is that they are a small portion of my total holdings...getting smaller every day!

Same goes for my trading account but I don't worry about it as my largest holdings in that account are the three Canadian Banks, BMO, RBC & TD. I expect them begin to rally in the next quarter or two. I think that my trading account will be at the very least all the way back by year end...maybe even up a few points.

A few friends have asked why TPCI has been so quiet.  Pretty sporadic posting through June and July.  No, I didn't go on a vacation.  The fact is, I accepted a job offer.  The great thing about Carman is that there's no Walmart or Tim's so I wasn't tempted to seek out the urban boomer's type of job.  I lucked out with a very nice position doing the accounting for one of the larger firms in town.  Working a great group and enjoying the new challenge after being unemployed for a few months after the move.  Must say, I'm much happier at work than at home watching the markets fall off day after day.

Had a couple of visitors yesterday.  They dropped in to have a look at the Carman condo as they're getting ready to make a large investment in a condo complex in a nearby town. Boomer's housing...one of the few growth industries in small town Manitoba.

As Always, Happy Investing!

Sometimes it's nice to be wrong...

Like last Wednesday when I suggested that the DOW may dip for the sixth consecutive day. I was wrong, it ticked up. More recently, on Tuesday, I suggested that the TSX would not follow the US markets up as the price of oil was in the tank. I missed that one by a mile! Sure, the DOW went up as the futures indicated in the early morn...but the TSX kicked butt and soared 458 points. WOW!

Yesterday, there was a complete disconnect between the US and Canadian markets. The DOW fell off the cliff for a dive of 519 points giving back all of Tuesday's gain, and then some, while here at home the TSX hung on and gained 89 points following a commodity bounce.

Even with my terrible track record at predictions, the one that I've been bang on with is that I've continually said that this year will see tremendous volatility. In fact, I predict volatility for the remainder of the decade. Those who hang in there will go from wrist slashing depression to times when they actually believe that they and finance guy are the brightest stars in the sky.

A bit over a year ago I wrote A Little More About The Last (Next) Ten Years. Me, I'm very much in the camp that believe that the next ten years will look a lot like the last ten. We may never return to the heady days of the eighties or nineties when we thought the sun shown out of finance guy's butt.

It's only a flesh wound...I Wish!!!

"It's Only A Flesh Wound". That was the title of an article that my new finance guy gave me back in June. The writer made a fairly decent case for likening the market decline to a light flesh wound...in the big scheme of things that is. I wonder what that analyst is thinking today. If he compared the markets in mid June to a flesh wound, I expect that he'd now agree it's akin to a full blown gun shot wound to the head.

The TSX fell 6.15% last week followed with another 4.04% decline yesterday. Yup, a 10.19% haircut in six trading days. Down south, the DOW followed last week's 6.57% plunge with a 5.55% drop yesterday, making Monday, August 8, 2011 the all time sixth worst day for the index. Will it be coined as the third Black Monday?

Overnight, Europe and Asia are down again.  US futures are holding steady and even showing a slight uptick at the moment.  Don't look for any gains here at home.  Last Monday's $98 oil is now down below $80.  So goes oil, so goes the TSX.  This undoubtedly has something to do with the drop of the Canadian dollar from $1.05 US a week ago to pretty much par this morning.

I Was Wrong But It Seemed More Like Right

On Wednesday morning I suggested that the DOW may drop for the ninth consecutive day. At the end of the day, I was wrong as it ticked up 30 points. When looking at the one day chart for Wednesday I see that that the DOW was under water for most of day...about 5 hours by my take.

Well, if I missed with Wednesday's prediction, Thursday made up for it, in spades! A 500+ point drop in one day! Yikes! Naturally, the TSX joined in on the sell off and tanked about the same. The difference came on Friday when the US markets gained a tad when it was recognized that it had over sold, while the TSX dove another 217...mainly I suppose in reaction to the continued sell off of oil. Oil $98 on Monday, $87 on Friday.

Now, despite all attempts to salvage the US credit rating, Standard  & Poors downgraded it anyway. Doesn't look good for the week ahead.

Me, I stayed home last evening to watch the Bombers kick Edmonton, now I'm headin' to the lake to drown my sorrows.

Deal Or No Deal

It doesn't seem to matter.  The lack of a deal on the US government debt limit sent the markets down over the past week or so.  Yesterday, on the last possible day, a deal was struck, bills were passed and signed into law and the markets took a nosedive.  Worldwide the markets are down overnight and things aren't looking great.  At the moment, US futures are up a tick but down from a couple of hours ago.  My guess is that this could be the ninth consecutive down day for the DOW.

Those who hung in there and were enjoying the ride up earlier in the year are once again asking what the heck is going on.  Once again finance guy has stopped returning calls...after all, it is time for summer vacation.  Isn't it?

When I made my recent switch from bond fund to bond fund it was suggested that I keep a bit in play with a conservative balanced fund or even an ultra-conservative balanced fund.  "Mostly bonds but with some blue chip market exposure", I was told.  I stood my ground and said that no, I'd prefer to leave it all in a bond fund until I see some stability in the market and far less worldwide doom and gloom.  As regular readers know, I'm not the sharpest knife in any drawer, but on occasion I do make the right call.  More gut instinct than brains, but hey, whatever works.

Question, is anyone else watching CNBC's early morning show Squawk Box?  When did it change from a business news reporting show to a daily $#!^ fight with two scary righties beating on the lone lefty.

As always, good luck and happy investing!  

Bond, James Bond

The title should be Bond To Bond but I thought the 007 reference was kind of catchy.  My exit strategy began last fall when I transferred out of the Canadian Resource Fund to a Canadian Bond Fund.  I took the next step in May when I switched out of the Canadian Endeavour Fund to the same bond fund.

As of May 4 the largest chuck of my stuff was sitting on the sidelines in the bond fund with a finance guy who I feel rather ambivalent about.  It's not that I dislike finance guy, it's just that I don't really know him as he inherited my account when my previous finance guy, a close personal friend, passed away very suddenly a couple of years ago.

We figured we'd like to have a local finance guy here in Carman.  Hey, if you live in small town Manitoba you should make an effort to deal locally.  That's what keeps small prairie towns alive and we sure want Carman to remain healthy given our investment in the bungalow by The Boyne.  It just happens that one of our close friends at the lake is an account manager with the local branch of one of the big five.  We asked, and she introduced us to the branch finance guy.  So, after many, many years with our previous fund company we switched to the bank and parked it all in their bond fund.

Given that the TSX is off nearly 9% from the high of April 5 I've been sleeping really, really well and enjoying clipping the coupons!  I expect to jump back in sometime this fall but not until I see some stability in the markets.

The Boomerang Effect. It Ain't Over 'Til It's Over!

If a blogger looks back into the history of his own blog, digs up something he likes and uses it again, is it plagiarism or is he simply repeating himself?  I'll go along with the latter as that's what I'm about to do. I reached back to my post of January 25, 2010 for the following paragraph. The title of the post was Old Guys Getting $cewed - and it's not about Viagra! If you're new to TPCI you should have a look at that one as it's likely better than what I'm about to write. It must have been good as Feed Burner stats tell me that it's the most popular post ever to TPCI. Seems all you have to do is mention Viagra and the Google freaks hunt you down. Here goes...

"Large US banks nearly destroyed the World economy when sub-prime mortgages, asset backed commercial paper, credit default swaps and other imaginary investment vehicles proved unsustainable. Sub-prime mortgages were a bad idea in and of themselves, then the BIG guys added insult to injury by bundling them into $100 Million packages and selling them to each other and off shore banks. Have they no conscience?"

So, why am I bringing this up again? Well, it seems to be taking forever but we're slowly digging out
of the mess, or at least some think we are. There is a fairly large contingent, me included, who believe that the US is in for a double dip recession within the next year or so. Heck, I heard a guy on CNBC yesterday saying that there's a 99% chance of this. Short of starting WW III to juice up their manufacturing sector the deficit and debt levels are unsustainable. As I arrived well after the end of WW II I don't remember Rosie the Riveter but as a history buff I've heard the song and seen the "We Can Do It!" posters.

"All the day long, whether rain or shine she’s part of the assembly line.
She’s making history, working for victory, Rosie the Riveter"

So, what's my point. Well, I don't believe the US will start WW III to bail out their economy. Some of them are crazy but hopefully they'll keep her out of office.  "I can see Russia from my front door". Jeez, give me a break!

You can't turn on the news these days without hearing about and seeing video of the riots in Greece. The Greeks don't get it. They're screwed! Think about it, as most of the world clawed it's way out the recession it stands to reason that the weakest links simply won't recover. Regrettably Greece is destined to return to the Third World and once again become a nation of sheep herders and olive farmers. As Greece goes down, others will follow. Other countries... maybe. European banks...maybe. US banks with huge positions in European countries and banks. Yikes! The Boomerang Effect! All these months later and it will potentially go full circle and bite the large US banks in the butt. It ain't over 'til it's over!

Strategy, Gut Instinct...Whatever

Back on May 2 the total value of my stuff hit a new all time high. Yup, after recovering from the market meltdowns of 2008 and 2009 I had it all back and then some. What a ride!

In the past, at times like this, I've been sucked in to believing that we're on a roll and there's nowhere to go but up. I did things like cash out GICs to get more money into the market. That's called GREED! On May 2 I made the decision to take money out of the market and watch from the sidelines.  That's called FEAR!

As documented in earlier posts, my switch out didn't actually happen for two more days but switch out I did. On May 4 my Endeavour Fund units sold for $11.012...yesterday $10.22. That same day I bought Bond Fund units for $6.102...yesterday $6.139. I avoided a substantial downside on the Endeavour Fund and enjoyed a small uptick with the Bond Fund. Additionally, the Bond Fund has paid two nice monthly distributions since my May 4 transaction. I just did the math. The Bond Fund units are worth 8.822% more as of yesterday than the Endeavour Fund would be worth if I'd held them. Yup, 8.822% to the upside in what? 41 days! I'll take it every time!

Stuff I'm Readin' This Morning

Dollarama Beats Again... This was the 2009 IPO that I didn't like.  IPO at $17.50 in October, 2009...Yesterday $31.00!  Today ???

Greece At The Brink and then, just to show that the Greeks still don't get it Greek Workers Strike.

The Economy Is Worse Than You Think  Not much good news today.  With the TSX off over 1,000 points from the April 5 high it's lookin' like a good summer to stay away from the markets.

A View From The Sideline

So here we are, a year and a half into the second decade of the new millennium. So far it's looking a lot like the first. The TSX is up 13.39% since January 1, 2010...that all happened last year as it's actually down .93% this year-to-date. If you're a die hard and plan to hang in no matter what I suggest you read TPCI post of July 16, 2010; A Little More About The Last (Next) Ten Years.  Sorry, I simply don't see any reason for this decade to be any better than the last. The world changed somewhere around September 11, 2001 and I don't see it changing back. The eighties and nineties were good to us boomers. We paid off the damn mortgage, the kids moved out and we finally managed to put a bit away for our anticipated golden years.  Not exactly freedom fifty-five but at least we saved something.

Then came the new millennium... 911.  Huge volatility for commodities and stocks. A couple of market meltdowns. The worldwide banking crisis. Bankrupt automakers. Whole countries teetering on verge of bankruptcy. The boomerang kids came back as they struggled to sort things out in the strange new world. Our aging parents moved on to assisted living or nursing homes where they spend their days complaining about the food. We postponed planned retirements and many of us who had retired went back to work.

I don't think we've seen it all yet. Watch for the US to default within the next few years.  In the end, it'll be okay because China will come along and bail them out. Yikes! In response, US schools will add Mandarin to the curriculum. What tail's gonna be waggin' what dog then?

For my part, I triggered my exit strategy last fall when I switched out of the Canadian Resource Fund. With the recent transfer of my largest holding to the Canadian Bond Fund I'm pretty much just a spectator now. Oh, I still have my trading account to play with, although that hasn't been a whole lot of fun recently.  Oh ya, I still have that crazy basket of seg funds but by-and-large I'm out of the market.  Speaking of which, that 5% guarantee on the seg funds is looking better and better.  On the trading account side, the things I like; BMO, RBC, TD and Suncor are still doing okay albeit they've dropped off substantially in the past while. The others...I don't want to talk about.

So, what's your plan? Did you bail during one of the meltdowns? Are you hanging in for the time being? Are you hanging in no matter what because finance guy keeps reminding you about the long term returns of the market?  A little reminder may be in order; Who Should(n't) Be In Funds?  Most importantly, do you have a plan at all?

So, I Sold In May and Went Away...and how did that turn out?

Last month I documented switching out of my largest single holding, the Canadian Endeavour Fund, to the Canadian Bond Fund where the plan is to park the money for a while just to see if I can avoid the downward trend of the summer months. I was PO'ed with finance guy for not completing the transaction when requested...and even more PO'ed when he put it through two days later while I was waiting for "the right time" to arrive again.

The two day delay cost me several thousand dollars as, in that two days, the Endeavour Fund units went down and the Bond Fund units went up. The question, where do I stand today? On May 2, when I requested the switch, the Endeavour Fund was at $11.194 and the Bond Fund $6.079. On May 4, when Dopey woke up and got the job done they were $11.012 and $6.102 respectively. That two days cost! On the plus side, the unit prices continued to move as expected. As of yesterday were $10.528 and $6.151.

Yup, I avoided a huge drop in the Endeavour Fund unit price with the decision to bail. Furthermore, I've gained as the Bond Fund units continued to climb and I received the May distribution on my newly acquired units. The monthly distribution for May annualized to a tick over 3% which was very nice for something that I'd held for only 11 days prior to the May 15 distribution date.

No, I don't have a crystal ball.  The decision to Sell In May was based pretty much on gut instinct and the fact that I was growing tired of  the seemingly never ending cycle of volatility. It just seemed like a good time to take a breather, go to the lake and relax without worrying about the @#$%&*! markets!

Canadian Banks - We Love 'Em and Hate 'Em...for the same reason

They make tons of cash!

As investors we love it that our banks are so profitable. Quarter after quarter they churn out mind boggling numbers. Oh sure now and then they disappoint a tad by missing expectations and we sell off the shares for a while. For the past few years they held off increasing dividends while reorganizing after the world wide banking crisis which affected them very little. With that behind us the smart money is betting that we'll see dividend increases in 2011. In fact, National Bank (NA) kicked it off with a dividend increase announced last November, the first Canadian bank to do so since 2007. RBC (RY) joined the party last week with an announcement of a 8% dividend hike.

As retail bank customers it's more of a love/hate relationship. While we appreciate the banks' for the services they provide we often get more than a bit PO'ed with their #$%*! charges. If you're like me, you've shopped around for a package with the lowest possible monthly service charges, transaction fees, ATM fees etc. I'm happy to report that I pay no service charges for my day-to-day banking services. I think they call it a "seniors' package"...don't like the term but what the heck, I'll take...whatever. For the record, I NEVER order from the seniors' menu at restaurants.

So, you ask, what's my beef with bank charges? I didn't have one until a couple of weeks ago. We took a short four night trip to Vegas in mid April. In keeping with our practice, we took cash out of our US funds account. No exchange, no problem. Right? I did have fair warning before we left that my better half intended to shop. The shopping in Vegas is just too much fun. Jimmy Choo anyone? It was no surprise that we burned through the cash and were soon into the plastic and therein lies my beef with bank charges.

For the entire period we were away the Canadian dollar was trading well above the US, in a range between 1.0225 and 1.0275 US. Guess how we made out with our credit card charges. The best we did was 1.00368 on a day when the C$ was over $1.025 US. A day or two later when the C$ dropped below $1.025 US the rate was .99558. Yup, while our Canadian dollar was worth well over the US$ we lost out on any possible savings by virtue of a 2.5% fee for all foreign currency transactions.

Yup, our banks make tons of money...trouble is, all too often these great returns are at our expense.  For my part, I'll keep shopping for the best deal and I'll stick with my BMO, RBC & TD shares.  After all, like I've mentioned before, the Canadian banks have outperformed the markets every years since 1967.

FEAR and GREED, my personal struggle

Regular readers know that I've been holding the Canadian Endeavour Fund for some time. It had been my largest single holding. Since the last big dip in March, 2009 this Canadian large cap fund has made significant gains and contributed greatly to my overall recovery.

One day last fall I realized that the unit price had risen to the highest level since I initially bought in. Whenever something reaches a new high (for me) there's always a temptation to take the money off the table for fear that it will soon drop and may take forever to come back. Such a decision can't be taken lightly with your largest single holding. Questions. Will I miss further upside if I cash out? Might I lock in the gains and avoid a huge loss if the bottom falls out?

The day it caught my attention the units were at a new high and I figured I'd be real happy to cash out at this level and put the money into a bond or money market fund to avoid further volatility. Remember, my exit strategy calls for me to be out of the markets in advance of my next retirement date as mentioned in Who Should(n't) Be In Funds?

Well, you know what happened to the Endeavour Fund units. They pretty much followed along with the TSX. Up, up and away! Each week the unit price reached a new high. After each new high the price would fall back a tick or two. Each week I'd tell myself that I should have bailed (FEAR). Each week I'd remind myself how much money I gained since that day last fall when I realized that this fund was smokin' (GREED).

As reported on May 5, I tried to cash in some chips...but when I finally made the decision I missed the boat as finance guy was away and didn't think to put an out-of-office notifier on his email account. I know full well that a mutual fund dealer is not like a stock broker in terms of always being able to make contact but I don't think it's too much to ask that finance guy make provision to let clients know when he's not available.

Over the next couple of days finance guy and I were in a bit of a p!$$!ng contest as I noted that I was out several thousand dollars because the fund switch was not completed on Monday, May 2 as requested. Little did I know that finance guy processed the switch on Wednesday, May 4 even though I think I'd made it clear that my window of opportunity had passed on Monday and I planned to wait until the Endeavour Fund units recovered to that same level. I only discovered this when I logged into my account with the fund company a few days later.

So, my fund switch was completed albeit a couple of days late and at great cost as the Endeavour Fund units had gone down and the Bond Fund units had gone up. So, even though it didn't go exactly as planned, I did indeed Sell in May and Go Away. I'll continue to monitor the markets as I'm keeping my trading account and watching for opportunities to make a few changes like getting out of Cisco (CSCO:NY) which is my worst dog at the moment.

We're settling into our new life in Carman, Manitoba and I'm enjoying Bloggin' By The Boyne.

Good Luck and Happy Investing!

TPCI turns two

Yup, the first post to TPCI was two years ago yesterday.

My Blogger profile says that I've been on Blogger since October, 2005. I don't recall blogging back then. Neither Blogger.com nor I have any memory of my activity prior to May 8, 2009. I have a vague memory of ranting on a certain subject way back when. Long before Facebook or Twitter I did consider starting a "Get Michael Kane Off ROBTV (now BNN)" group. That may have been the subject of my early blogging.

TPCI was triggered, I suppose, out of anger. Not the best emotion to harness when attempting to record rational thoughts on a given subject but it did get things going. Along the way, I've come to realize that I was as angry with myself as I was with finance guy. Hey, I'm an adult. I have to take responsibility for my decisions. Sure, it's okay to be PO'ed with the guy doling out the $#!tty advice but, at the end of the day we all went along without taking the trouble to learn what we were getting into.

By May of 2009, my stuff had hit an all time low on November 20, 2008 and nearly got there again on March 2, 2009. So, things were actually on the road to recovery when I first posted to TPCI. Since then it's been quite a ride as regular readers will know.

Last week, the Bin Laden effect gave us a bump up on Monday. The markets apparently responded to the suggestion that the world would be a safer place without Osama. By Tuesday, suggestions that Bin Laden's demise would result in retaliatory violence took the wind out of those sails. This, coupled with an across the board sale off of commodities, sent the markets into a tail spin. Even with a gain of 111 points on Friday, the TSX was off nearly 400 for the week.

For probably just as good a reason as commodities dropped off last week, they're recovering a tad today. Naturally, the TSX is responding in kind although not in a big way.

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

I tried to cash in some chips...but

As mentioned last Monday, I was giving serious consideration to taking some money off the table.  The markets were up on the Bin Laden effect and it was looking like a good day.  My plan was to pull out of my largest single holding, the Canadian Endeavour Fund.

Shortly after 1:00 PM 'Toba time I pulled the trigger and dashed off an email to finance guy in The 'Peg.  "Switch ALL of my Endeavour Fund # 1234 to the Bond Fund #2345" (fictional fund numbers).  I sent the email High Priority and requested a Read Receipt and confirmation by return email.  Naturally, I expected an email saying that he'd do it but would need a signed form for this size of transaction.  He'd never remember that he sent the required form at my request some months ago.  All that was left was me to sign it and date it.

I did not hear back.  Why?  Well, on Tuesday I learned that finance guy was out west, with his computer, but not checking email.  For his failure to put a simple out-of-office notifier on his email account, which would have caused me to contact someone up the ladder, my ship sailed without me aboard.

Monday was the perfect day to make the requested switch.  By Tuesday I was down thousands of dollars because of the market decline.  It was a double hit.  I lost on the units that I tried to get out of when they dropped and lost some more when the units I wanted to buy went up. Wednesday added insult to injury as the same thing happened again.  Ouch!  That hurts!

As for finance guy, he takes no blame and has offered to do not a thing.  I contacted what I thought was his head office in Toronto only to learn that finance guy is an independent broker licensed through them but not employed by them.  A similar call to the fund company in Toronto was to no avail...and no, had I contacted them directly on Monday, they would not have been able to make the switch.  They only act upon orders from licensed dealers.  So, there you have it.  If you're watching your portfolio and think that you may wish to make the occasional timely change, deal with an independent at your own risk.  Me, I'm seriously considering taking my business to the financial services department of one of the major banks.  From past experience I believe that banks tend to support their staff and make amends when someone drops the ball.   

Is This The May To Go Away?

"Sell in May and go away".  This old adage is based on the theory that markets generally perform better from November 1 to April 30 than in the May 1 to October 31 period.  I've written about this before.  Last June to be precise, after taking a licking in May.

I've given up on trying to predict market trends.  Just too many variables which have little or nothing to do with corporate performance.  To name a few, earthquakes, hurricanes, floods, riots, civil unrest and civil war dramatically affect world markets and with electronic access to worldwide news, the effect can be instantaneous.  How many times have you turned on the TV first thing in the morning or checked overnight news on the Internet to discover that Asia, Europe and US futures are up along with the price of oil and gold?  Looking like a great day for the TSX....and then, one of these natural or man made events happens in mid-morning and by noon you've lost any gains that may have been accrued in the past few weeks.

2011 started out slowly.  January saw the TSX rise from 13,443 to 13,551 for a gain of less than 1%.  Things got going in February.  The TSX gained 4% for the month and closed at 14,136.  That, unfortunately is about as good as it gets.  Since the end of February the TSX dipped to 13,524 on March 16 and peaked at 14,270 on April 5.  The close Friday?  13,799.

So, what's causing this lack of direction?  On the plus side, earnings season was mostly positive.  Lead by the banks and energy companies, Canadian corporations reported some excellent numbers.  On the down side, civil unrest in the mid east contributes to holding the price of oil well above $100.00.  Good for energy companies, not so good for the struggling US economy.  If the world's largest economy doesn't gain some traction it's going to be a long time before we see markets back to normal...whatever the heck normal is?  If that wasn't enough, Japan's March earthquake threw the world's third largest economy into turmoil.  Not good!

As of Friday, my stuff is up 5% for the year, well ahead of the TSX which is up only 2%.  I'm interested by the fact that my Canadian Endeavour Fund units are at an all time high.  As I've mentioned many times, this is my largest single holding.  I'll be watching with interest today. If the TSX and the major holdings of the Endeavour Fund hold their own, this may be the day I take that money off the table. 

Hand Held Bloggin'

So, here I am sitting in a diner on Sherbrook Street in The 'Peg and I just had to try a post on the new Blackberry.  It wasn't easy getting here and if I didn't have Plus 2s there's no way I'd be able to see the screen.

Just read in the Globe & Mail that the Canadian dollar is up 27% in the past twenty-four months.  Shoot, I shoulda bought the Canadian dollar.  Wait a minute, I did.  All my stuff is in Canadian dollars.  Where's my 27% ??

Bloggin' By The Boyne

We've been passing through Carman, Manitoba, each summer weekend for the past seven years, on the way to our weekend place at the lake.  "The Lake", that's what Manitobans call any weekend get-away spot.  It can be a cottage, an RV or campground and it's always called the lake...whether or not there's actually a lake or any other body of water.

It was last August when we made the decision that the time had come get out of The 'Peg and make the move to small town Manitoba.  Over the winter our new bungalow in Carman was built and now, after moving on April 4, I'm sitting in the new den looking out at the Boyne River rushing by.  Even with the water's edge a mere fifty feet from our back door, we're assured that we won't be flooded out as the town is protected by a dike and diversion which were built after three floods in the '70s.  Many others in Southern Manitoba won't be so lucky in the next few weeks as flood forecasters are predicting near record water levels for the Red and Assiniboine rivers and their many tributaries.

With the move, I haven't been paying much attention to the markets.  Many days I had no idea what happened until I settled down to watch the evening news.  Just looking at a chart of the TSX and see that it reached 14,252 on March 4 only to sag to 13,524 on March 16.  After that, it was a fairly steady climb back to the 14,000 level by month end.  On April 5 the TSX reached a multi year high of 14,270 after which it sagged a tad but Friday's close of 14,208 was pretty nice.

My stuff actually peaked the day before the TSX and reached a new high on April 4.  The CHARTS are looking sweet.  Hopefully I'm going to be able to pay a bit more attention to the markets, analyze things and make a few changes.  Right now I'm loving my banks.  What's not to love?  I'm really loving Suncor (SU) which is up over 19% since my January 20 purchase.  I'm thinking it's time to say goodbye to COW, the agricultural ETF, which I've been holding for well over two years.  We'll see what happens in the next while.

As always, Good Luck and Happy Investing! 

It's A Puzzle???

The TSX closed out February at 14,136.  Here we are thirty days later and it's not quite back to that level.  The close today was 14,083.  What puzzles me is the fact that my stuff hit a new multi-year high today.  It's a beautiful world!  Guess I'm holding the good stuff at the moment. I won't brag too much because we all know how quickly the markets can turn.

One thing I know for sure is that I'm loving my Canadian banks.  My longest hold is TD.  I bought TD in February 2008 at $69.50.  They closed today at $86.40.  Plus, I've received some great dividends along the way.  Sweet!  My much more recent acquisitions of BMO and RBC are doing remarkably well in the short time I held them. When tempted to sell and take the profit I must remember what that guy said on BNN a while ago.  "Canadian banks have outperformed the markets every year since 1967".  Ya, I gotta remember that.

Tomorrow we close out the month of March and the the first quarter of 2011.  I'm not saying a thing that could be construed as a prediction.  Seems every time I do that the market swings in the opposite direction as though to prove once again that I'm not the sharpest knife in the drawer.

Good Luck and Happy Investing!

It's been a good week when...

Your stuff is worth more after the closing bell on Friday than it was the Friday before.  On that basis, this was a good week.  As the week bumped along it wasn't very exciting but in the end my stuff was up about 1%.  I'll take it.

The big news today was Apple's (AAPL) launch of iPad2 at 5:00 PM 'Peg time.  The local news showed the crowds at the Apple store.  Some had been there since 6:00 AM.  No other company hypes a product, in advance of the launch, like Apple.  The big story next week will be all about how many million units they sold this weekend.

As a proud Canadian I have to feel sorry for Research in Motion (RIM).  RIM introduced their first touch screen smart phone sixteen months after Apple came out with the iPhone.  Then, as though to lay permanent claim to this lag time, they revealed plans to bring out the PlayBook sixteen months after Apple launched the iPad.  Then they said the PlayBook wouldn't be out for another four or five months.  Jeez!  In the meantime Apple brings out iPad2 before RIM sells the first PlayBook which is now slated for launch on April 19.  I wonder how many millions of iPad2s Apple will have sold by then.

As I said a couple of weeks ago, I love my new Blackberry Style but I don't see RIM catching up to Apple in either the consumer smart phone field or the tablet computer market.  They're just too far behind.  As much as I missed some upside by bailing on my RIM shares last fall, I'm still way ahead with the trades I've made since then.  

A gold mine is a hole in the ground with a liar on top.

Mark Twain said that about 160 years ago.  That was a long time ago, before rules, regulations and security commissions were in place to protect investors.  Tell that to Bre-X investors. Back in 1997 Bre-X, a Canadian company, claimed to have a 200 Million once gold resource in Borneo.  Fortunes were made on the way up and wiped out when it was discovered that gold had been blasted onto the walls of the mine with a shotgun.  It was a big story in the late nineties.

I wasn't involved in Bre-X.  HudBay Minerals - My BIG Mistake tells the story of my first mining investment.  This wasn't a story involving fraud or deceit, rather it was about a very successful miner and an overheated commodities market.  When I bought into HudBay the company was debt free, had half a $Billion in the bank and was churning out free cash flow at the rate of a $Million a day.  When the bottom fell out of zinc prices I sold, took the lose and moved on.

Since HudBay I've enjoyed some success with mining stocks most of which I've written about on these pages.  A couple times it was all about timing.  I bought Fording Coal (FDG.UN) just days before a takeover offer from Teck Cominco, now Teck Resources (TCK-A).  I had similar dumb luck with my coal miners late last year.  I bought Western Coal (WTN) and Gande Cashe (GCE) just a few weeks before a takeover offer for Western dragged the whole sector up.  Of course, my biggest success with miners was Scorpio Mining which was my first ever and one and only double.

I've gotta fess up, they're not all winners.  Right now I'm holding a mining stock that's under water.  One day, while listening with one ear, the analyst du jour on BNN recommended Evolving Gold (EVG).  Without doing any research I logged onto my trading account and placed a buy order simply because I had a bit of money left after couple of recent trades.  What I later learned is that Evolving doesn't have a mine...just exploration sites in Wyoming and Nevada. I paid $1.28 that day and they've never there since.  I now have a rule, I don't buy a miner unless it actually has a mine.  I'm going to leave the junior exploration companies to the young guys who are prepared to take the chance that one in ten will actually turn into something.

Take off the Beer Goggles!

Apparently the only way to determine where the TSX is headed on any given day is to keep quiet and wait for market close at 3:00 PM 'Peg time.  Nothing else matters.  I was looking through my Beer Goggles yesterday morning when I suggested that the bleeding may have stopped.

No matter how positive the signs were in the first hour of the trading day nothing mattered when US housing numbers came out in the afternoon.  New housing starts...biggest drop in 27 years.  This news put the whole US recovery story in question.  If the US recovery falters, we don't stand a chance.

After the US housing news hit, the TSX turned south and managed an eighth straight day of decline.

As I write this, there is some overnight news which might tempt me to make a predictive suggestion about the day ahead.  I'm not saying a thing! 

The Bleeding Has Stopped...maybe???

After peaking on March 4 at 14,252 the TSX tumbled for seven consecutive days down to yesterday's close of 13,546.  A fall off just shy of 5%.

Maybe, just maybe the market has come to it's senses today.  Forty-five minutes into the trading day and the TSX is up 80 points.  Heres hopin'.

My stuff is doing okay today...except for the banks.  Seems the financials are down because Manulife has a very large presence in Asia.  Obviously Manulife will suffer considerable losses with all the deaths and injuries in Japan.  Not sure why that's dragging down the BIG 5 after just turning in record breaking Q1 results.

Us oil inventories just out.  Oil up a bit more than expected, big draw down in gasoline inventories.  Oil just jumped a couple of bucks and the TSX is now up 108 points. (9:35 AM 'Peg time)

Watch List
I'm still keeping an eye on Teck Resources (TCK-B).  I'd love to get some at the present level but have no liquidity in my trading account and nothing that I care to sell at the present levels.  I've been watching Dollarama (DOL) since the IPO.  Interesting story but I have trouble understanding the P/E ratio of 18.4 when the much more mature Shoppers Drug Mart has a P/E ratio of 14.5.  I'll watch it for another quarter or two.

Slip, Slidin' Away

We can never assume that the markets are going to stay on track. February marked the eighth consecutive month of gains for the TSX. We were basking in the long term gains since March of 2009 and joyfully celebrating the shorter term gains racked up since last September. March began like most months...a kick up for the first few days, peaking on the 4th. And then...

Along came political upheaval in the middle east, beginning in Egypt then rolling to country after country. Seems you can only oppress the people for so long. Apparently about 30 years is the breaking point. The end result may very be that several new democracies will rise in the middle east and the people may, at long last, enjoy a level of freedom and equality that we take for granted. Unfortunately, the path to democracy, freedom and equality will likely be long and painful. And then...

Along came the earthquake in Japan. 8.9 Upgraded today to 9.0 Yikes! Unbelievable devastation. Within hours the Japanese economy ground to a halt. All available resources were shifted to rescue those still living and treat the injured. If the quake and tsunami weren't enough, a couple of nuclear power plants were damaged and may very well be an even larger threat to the Japanese people and economy.

From March 1 to yesterday the Nikkei was off over 10%. Today, another 10% haircut. Here at home, the TSX peaked at 14,252 on March 4. Down to 13,546 today. Tomorrow's not looking great with US futures already in the tank.

Seems like a good time for a re-read of A Little More About The Last (Next) Ten Years. Like I've said before, I don't have a crystal ball but it doesn't take a genius to predict that this stuff will happen from time-to-time. With instant worldwide publication of all events, both good and bad, the markets react immediately.

I plan to take a whole bunch off the table with the next recovery...whenever that is.

Smarter Than Smart

I took a huge (for me) technological step forward last week with my purchase of a Blackberry Style 9670 Smartphone.  Spent most of the weekend playing with it and trying to figure out how to take advantage of its features.  At this point, all I can say is that it is unbelievable!

I don't even want to think about all it can do or how it does it.  It's just crazy smart!  Makes me kinda sorry that I took my profit on my RIM shares last fall, but, you do what you do with the info available on any given day.

I don't have a crystal ball...but

I've made a number or comments and predictions about Canadian bank shares over the past year or so.  Have a look here, here, here, here, here, here, and finally, the post just below of March 1 where I actually predicted that yesterday's RBC and TD Q1 earnings would blow the doors off expectations.

Well, didn't that just play out.  Yesterday RBC shares jumped $2.98 for a gain of 5.23% and TD gained $3.10 or 3.85%.  Dollar wise, yesterday was my largest single day gain in my trading account.  I'm reminded again what the guy said on BNN on February 16.  "Canadian banks have outperformed the markets every year since 1967."  Real tempting to just put it all in the banks and sit back watching them grow while cashing those nice dividend cheques.  Hey, I could write a new blog...The Lazy Canadian Investor.

Happy Friday and Happy Investing.  Have a great weekend!

Happy March!

Well, the day began like most 1st days of the month.  As I've said before, we Canadians seem to greet each new month with new enthusiasm and optimism.  Yup, the day began that way with the TSX touching a new 32 month high of 14,213 before falling off...after which it headed steadily down for the rest of the day.

The day started off with slightly better than expected earnings from BMO.  Largest Q1 profit ever!  Then came BOC with the interest rate announcement.  Ho, Ho, Holding the line at 1%.  No surprise there.  Old Guys have to wait a while longer.  No surprise there.

Other than that, I wasn't glued to the tube all day so I'm not certain what happened.  What I'm seeing now at the close of the day is oil jumpin' three bucks to $100.  Gold is up $25 to $1,435. Not sure why the TSX is down 13 points but I'll take it.  At these levels, any day it goes up or sideways is an okay day in my books.

Hey, the C$ is up to 1.0259 US.  Just for fun, take a C$100.00 bill into your bank and ask to buy $100 US. I'm bettin' you need another few cents.  Par in the markets isn't par at the retail banking level.  Ergo, BMO's record breaking quarter.

Royal and TD results on Thursday.  Again, because I wasn't paying attention today, I have no idea why TD shares are off nearly 2%.  I'm betting they're back on Friday as I'm betting Thursday's earings reports for both RBC and TD will blow the doors off expectations.    

A Little Reminder

It sure is easy to become complacent.  Here we are cruising along enjoying steady growth. On a long term basis the upward move began after the last big dip in March of 2009.  On a much shorter term, we've been on a heck of ride that began last September 1.  As mentioned on these pages, 2010 was flatter than the proverbial pancake to the end of August. On September 1 the TSX took off and we've had pretty much the best six months in recent memory.

On the August 31 the TSX closed at 11,913.  January 31, 13,551 for a gain of 13.7%.  By February 17 it had spiked to 14,136.  An 18.6% gain since the end of August.  Spectacular!

Once again, finance guy is back in the good books of many boomers who stayed the course during the turmoil of the past few years.  Many began to think that he isn't such a dolt after all.  His constant reminders about the long term returns of the overall market hit home.  Stick with finance guy and we'll be okay many once again believe.

For my thoughts on this, have a look at my post of July 16 last year.  A Little More About The Last (Next) Ten Years.  To stick with finance guy and his marvelous mutual funds for the next ten years means you really have to believe that world has not dramatically changed and the markets will settle into the old norm of slow and steady growth...a pattern which we haven't seen since the nineties.  The nineties people, ten freakin' years ago!  Like I said last July, the ten year return for the period ended July 8, 2010 was 10%...in total!  A GIC at 3% compounding annually grows by 34.39% in ten years.  Think about it.

So, will you stick with the funds?  Do you believe that the markets will return to patterns last seen in the eighties and nineties?  Are you thinking that we're enjoying new highs and now may very well be the time to take your money off the table?  Depending on your age and your planned retirement date this may be the case.  It's all about timing as I described in my post last May.  Who Should(n't) Be In Funds?  Most importantly, are you thinking about it at all? Finance guy thinks about your funds each month....when his trailer fee commission cheque arrives.

Blew Past 14,000!!!

When I began drafting this a few hours ago the title was "Flirting With 14,000".  Since then the TSX blew past 14,000 and, right now at least, it sure looks like it's going to finish above that level.

The first time the TSX closed over 14,000 was May 16, 2007.  The last time was July 4, 2008. In the interim it's been on a huge roller coaster ride.  As high as 15,073 on June 18, 2008 and as low as 7,566 on March 9, 2009.

Oil Disconnects
For years the spread between the price of Brent Crude oil which supplies much of Europe and West Texas Crude which supplies the US has been very tight.  Usually they're within a dollar of each other,  Recently Brent Crude has taken off.  It's over $104 this morning.  On the other hand, West Texas Crude, while up a tad today is still in the $85 range.  Why the sudden disconnect?  My guess.  TransCanada's new 30 inch Keystone Line from Alberta to Oklahoma has the US swimming in the stuff.  It's all about supply and demand.

What we need is a pipeline from Alberta to the West Coast so that we can send our stuff to CHINA!  Interesting that CN is making noise about a "pipeline on rails" to do just that.

Canadian Banks
Heard a guy on BNN this morning saying that the Canadian Banks have outperformed the markets every year since 1967.  Duh.  Does that give anyone an idea for a fool proof strategy? Me, just in the past month I was feeling that I was overweighted in the banks which now make up two thirds of my trading account.  I was going to make some changes...but, I think I'll leave well enough alone for a bit.

I think I jinxed it

I was up early on Wednesday and wrote my post about the TSX rollin' along and reaching new multi year highs. Sure enough, the markets open and the TSX sells off for a 107 point drop. At the end of the day I didn't do too badly. My stuff was just off a tick from Tuesday's new multi year high.

I fared far worse yesterday as the TSX regained more than half of Wednesday's loss. The problem was my new Cisco (CSCO:NQ) shares. After gaining nicely since I bought them in January. My entry price was $19.55 and they closed at $22.04 on Wednesday. After hours on Wednesday Cisco released dismal Q2 earnings and the market didn't like it. Cisco shares were the biggest loser yesterday with a drop of $3.12 to close at $18.92. I had great hopes for this stock as I understood that the world would be beating a path to Cisco for all the routers to handle all the data being produced by the smart phone explosion. Apparently lack of government spending overshadowed smart phone growth. The plan now is to unload them as soon as I can my money back. You win some, you lose some.

Today doesn't look great. Oil has recovered a tad to $87.20 but Europe and US futures are all down.

Oh well, happy Friday to all. Enjoy the weekend.

Rollin', Rollin', Rollin'

The TSX just keeps on rollin'...or should I say rockin'?

Added another 80 points yesterday.  Now stands at 13,892. I was surprised by the gain with oil falling off from $90+ a few days ago to the $86-87 range. On the other hand, the other big commodity, gold, seems to be gaining strength...that too surprises me, after what I posted about gold just last Thursday.

TSX On A Roll!

It wasn't that long ago when the TSX reached 12,000 and held for a few days that I asked what we will see next, 12,500 or a drop back to 11,500. Twice last year, in March and again in October I asked this on the old Daily Squawk page. In March it dropped back to 11,500 while in October it continued the upward climb which began in early September.

Fast forward to yesterday and we have the TSX at 13,811...a level we haven't seen since early July, 2007. No small coincidence that my stuff hit its all time high that same month.  Getting real close once again.  The CHARTS are looking sweet!

My new Cisco (CSCO:NQ) investment will be put to the test tomorrow when the Q2 earnings numbers come out.  Today's big earnings reports are Teck Resources (TCK.B) here at home and Disney (DIS:NY) south of the border.   

Gold, losing its luster?

Gold. $1,400 a month ago, now in the $1,330 range. Some may think of this as a buying opportunity. Me, not so much.

Historically 80% of gold production goes to produce things...jewelery for example. Apparently at the present time as little as only 40% of production is going to product production with the remainder going to investors and speculators such as the bullion funds which actually hold bullion instead of gold mining stocks. Seems as though supply is getting ahead of demand. One has to wonder what will happen to the price if speculators continue to accumulate while the market continues to fall off. Who are they going to sell to? Not me. On the other hand, an economic meltdown could cause a rush to gold for safety.

For the time being, I'll stick to my stocks and look for an opportunity in copper. Big fundamental difference between gold and copper. While gold is being stockpiled, the price of copper is at an all time high as China's insatiable need is outstripping demand.

Timing, sometimes it's everything

While I was writing this morning's post about January and bragging about my Suncor (SU) purchase, some guy at the Globe & Mail was writing about Suncor.  My post was published at 5:41 AM 'Peg time.  The Globe & Mail article hit the web eight minutes later.  Have a look; Suncor profit nearly triples. 

Holy crap!  Talk about timing.  I just bought Suncor on January 20 and was real pleased as of close of business yesterday.  Today's news should give it more legs.  Onward and upward!

So goes January, so goes the rest of the year...

At least that's what some believe.  If that's the case we're in for yet another year of crazy volatility with lower growth than we've enjoyed for the past couple of years.

The TSX closed 2010 at 13,443 and peaked on January 18 at 13,559 but not before falling off to 13,245 on the 10th.  After the 18th it fell off again but managed a recovery to 13,551 by month end.  Increase for the month 108 points or .08%  Yup, a full month on the roller coaster for a final gain of less than 1%.

I've said before on these pages that we Canadians seem to greet each month with new found enthusiasm and optimism.  It happened once again yesterday when the TSX jumped 161 points or 1.18%.  Gotta love it.  I'm writing this at 5:00 AM 'Peg time and things are looking good for this, day two of month two.  Asia and Europe are both up along with US futures and oil.

Watch List
Still keeping an eye on Potash Corporation (POT).  Just how sick do you think the guys at BHP Billiton (BHP:NY) are?  Their failed takeover attempt at $130 is sure looking lame now.  POT keeps churning out record numbers and the shares have rocketed to $181.20 as of yesterday. Remarkable!

Real Happy... 
With my recent purchases of Cisco (CSCO:NQ) and Suncor (SU).  Cisco is up 9.8% since my purchase on December 7 and Suncor is up 10.6% since I bought it on January 20.  Sometimes things just work out.

I may quit drinking but I refuse to go to those damn meetings!

This actually has nothing to do with my drinking habits.  Rather, it's about meetings. Specifically, it's about those meetings that friends invite you to so you can join them in cashing in on the next giant opportunity.

Years ago such invitations involved soap.  You had to sit through the first hour and were never given a clue that you were at an Amway meeting.  The first hour was all about building a network of friends and relatives so that they too would have the opportunity to get rich. Eventually, well into the second hour you finally got a peek at the product which was about to change your life and the lives of all the lucky people that you bring aboard.  Welcome to the world of multi-level-marketing.

I'm no expert, but my understanding is that MLM operations are legal while similar Pyramid schemes are not. The difference? An MLM involves selling legitimate products and payment of commissions which trickle down through several levels according to who recruited who into the network. Pyramid schemes on the other hand, involve payment of commissions simply for bringing people into the network, usually because there's a huge entry fee. Sometimes this entry fee is simply for the privilege of admission and sometimes it's the price of a over valued start up kit...like $4,000 for $1,000 worth of cheap jewelery.

In recent times these 'Opportunity Knocks' meetings have evolved and often relate to investments.  You might be given the opportunity to get in on the ground floor of the next big idea through an investment in a private company. On occasion these are well meaning people who sincerely believe that they hold propriety rights to the next fuel cell. Other times it involves scammers who claim to have developed a system to extract sugar from wood chips. Yup, we had one of these in Manitoba. Remember, there's no way to value an investment in a private company.  If it ain't trading on the market, who's can say what it's worth?  Have one and don't believe me?  Try to sell it, and get back to me.

Another example involves joining a lending pool for the smartest guys in the real estate business who promise monthly returns of anywhere from 5 - 20%. Where do I sign up for that? For info about these schemes have a look at this site. I've had this in my LINKS panel for some time under the title Ponzi Schemes.

The bottom line is that if it sounds to good to be true it usually is. Legitimate investments are offered by licensed dealers after preparation and filing of a proper prospectus. Always remember...

Meetings are for Amway and Mexican Times Shares.

Young Guys Checking In At TPCI

I've said before that I'm not trying the write the Great Canadian Novel here but on occasion it's nice to know that someone is reading. Feed-back is a gauge of readership. I receive emails from readers as there is a link to my email address on my profile. Some readers provide feed-back for all to see by adding a comment to a post. These are always welcome.

Recently a couple of young guys posted comments to specific posts. Now, you ask, how would I know an anonymous comment comes from a young guy? Have a look at the comments of December 28 under the post Old Guys Getting $crewed... More recently, on January 21, a reader suggested I may be fibbing about historical deposit rates of 8 - 9% with his comment to the Orphan Fund(s) post. So, what's the clue that these comments came from young guys? Simple, all of us old guys remember the interest rates of the eighties and nineties as mentioned in my responses to these two comments.

Yes, most of us remember mortgages with interest rates in the low to mid teens, or even higher for a brief period in 1981. Those who were actually able to save bit, do remember investing in 60 month GICs that paid 8, 9 and even 10%. A common annual RSP contribution was to simply buy an new GIC at the going 60 month rate. Yup, back then, we all knew the rule of 72. The rate of interest received divided into 72 reveals when your money will double. A deposit invested at 10% would double in 7.2 years...and double it did...throughout the eighties and early nineties.

It goes without saying these extremely high interest rates did as much harm as good. Borrowers got clobbered while dept free savers happily doubled their money with absolutely no risk. Different times to be sure. 

Hey Buddy, I'll trade you a Crescent Point for a Suncor

I changed oil companies yesterday.  I'd held Crescent Point Energy (CPG) for some time and had done well with it.  On a bit of whim I decided to switch to Suncor (SU).  Both are often top picks by BNN analyst du jour.

So why the change?  Recent sentiment seems to be tipping away from Crescent Point in favor of Suncor.  There's pretty much a unanimous consensus that Crescent Point has one of the top management teams in the business.  They're building a great company and running it well.  On the other hand, some are beginning to question their expansion plans which regularly involve issuance of new shares.  In 2010 they issued $375 Million of new shares in both June and October.  There comes a point when it would be nice if they would settle down and run the company for a while without these regular dilutions.  Alternately, many believe that Suncor's time has finally arrived.  2011 may be the year when its Petro-Can investment will finally pay off for this totally integrated giant.

I'm not saying that big is better but it's interesting to note that Crescent Point's market cap is $11.6 Billion while Suncor's is $58.9.

For a nice change I was on the right side of stocks moving in different directions with my two trades yesterday.  I sold Crescent Point on a bit of a pop up, on a positive day, at $43.50.  It finished the day up .13 at $43.37.  I bought Suncor on a bit of a dip, on a down day, at $37.60. It finished the day down .20 at $37.67.  On the day, I sold CPG at a high point and bought SU at a low point.  Maybe I should consider becoming a day trader?  NOT!

Opportunity Lost

The overnight news on Monday morning was all about Steve Jobs taking medical leave from Apple (APPL).  This is a company with 46,600 employees and the news was all about how the temporary loss of one guy may adversely impact the company.  In its usual fashion BNN covered the story ad nauseam.  Each shift change brought more comments and analysis from BNN hosts and guest analysts.  I wasn't glued to the tube, but it seemed to me that it was about two to one on the negative side.  The more optimistic talking heads pointed out that COO Tim Cook, who would back stop Jobs in his absence, has twice before successfully run the company while Jobs recovered from cancer and a liver transplant.

While the US markets were closed on Monday Apple shares were selling off overseas.  Down 7% in Germany.  I wondered how Apple shares would open on Tuesday in the US.  I wondered if this may be an opportunity.  I didn't give it much thought as I have no liquidity in my trading account and I'm pretty happy with the stuff I'm holding.  

So, what happened?  Apple shares which closed Friday at $348.48 opened on Tuesday at $327.05 and traded as low as $326.00.  The shares gained most of it back as the day progressed.  In the early afternoon they reached $344.76 before settling back and closing the day at $340.65

So, then what happened?  After the markets closed Apple released Q1 earnings numbers which blew the doors off all expectations.  Sales for the quarter $26.6 Billion, up 71% from a year ago.  Profit, $6 Billion.  EPS $6.43 up 23%.  iPhone sales 16.2 Million units, up 86% year over year.  7.3 Million iPads sold.  This is a device, and a market, that didn't exist a year ago.  Holy crap!

Apple shares traded up to $346.10 in after hours on the Nasdaq.

Yes, Monday would have been a good day to put on a day trader hat, liquidate some assets and get ready for Tuesday's opening.  Day traders who pounced first thing yesterday morning made some serious money.  Yes, an opportunity lost.

It's going to be all about earnings...

With US markets closed yesterday the TSX spent most of the day under water looking for direction.  It peaked around 2:00 PM 'Peg time before dropping off to finish the day with a small loss.  Overnight Asia is mixed, but Europe is all up about 1%.  Oil is holding above $91 and lots of talk about $100 oil in the near future.

BoC interest rate announcement at 8:00 AM 'Peg time this morning.  Expectations are that they'll do nothing and leave the rate at 1%.  Old Guys are just going to have to wait a while yet.

The story this week will be all about earnings reports.  From the US IBM, Citigroup and Apple are reporting today.  Later in the week it's Wells Fargo, Goldman, Google, GE and BoA.  Here at home, Viterra reports tomorrow.

As I'm typing this at 7:00 AM 'Peg time Citigroup just reported and it's a miss...but, fourth consecutive quarterly profit.  We'll have to see what that does to the financial sector today.

Have a look at the CHARTS.  After a slow start to the year, week two picked up nicely.

You win some, you lose some

A friend did some research after reading my post; Dead Money Comes To Life.  He pointed out that shares of Organic Resource Management (ORI) have traded well above my selling price of $2.04 since the day I bailed.  Well, he's right.  After holding for four years I took the very first opportunity to get out with my shirt, and all of my money.  I sold on December 3.

Since then Organic Resource shares have traded as high as $2.70.  That was a single transaction on December 13.  Otherwise  they've been in the $2.01 to $2.25 range on very low volume.  Many days only 200 shares change hands and it's not uncommon for there to be zero volume with this stock.  Liquidity?  Not so much!

No, I don't feel even a little bad about picking up my marbles on this one.  The proceeds from the sale of my Organic Resource shares was re-invested four days later in Cisco Systems (CSCO).  I took money out of stock in a tiny company with a market cap of $9.9 Million and put it into a huge tech company with a market cap of $116.4 Billion.

By the way, I bought Cisco at $19.55.  It's $21.00 this morning.  Organic Resource shares haven't traded since early Tuesday morning.  Over twenty-four hours and zero volume.

Looking for direction

Five trading days into the new year and the TSX has dipped each day. Commodities which had been sold off appear to have stabilized but have failed to reach back to year end levels. I'm surprised at oil. With the fire at Canadian Natural Resources (CNQ) and the leak which closed the Alaska pipeline I expected oil to bounce right back but it's not happening.

Alcoa (AA) kicked off the US earnings season with a beat after the markets closed last night. Many analysts are expecting upbeat earnings reports for the current quarter. Positive earnings may provide some direction for markets which otherwise are down to flat on weak economic news.

Later this week Intel (INTC) and JP Morgan (JPM) report. Here at home we'll be hearing from media and cable companies Corus (CJR.B), Astral (ACM.A), Shaw (SJR.B) and Cogeco Cable (CCA).

Limping into the new year

On Monday when the TSX was closed the rest of the world markets came out smokin' and jumped 1 - 2%. Wouldn't you know it, when the TSX opened on Tuesday, commodities collapsed with gold seeing the largest single day drop in months and oil tanking by a couple of bucks. Three downward days to start the year for the TSX. The gold sell off slowed but the downward trend continues this morning. Oil, on the hand, has has been down and up like a hooker's drawers. An oil day trader's dream environment. Not my cup of tea.

Watch List
I've been watching Potash Corp. (POT) since the failed takeover attempt of the fall. The offer of $130.00 looks pretty lame now as Potash closed at $168.70 yesterday. I first mentioned Apple (AAPL:NY) on these pages back on March 10, 2010. The price that day...$223.00. The price yesterday...$333.73.

Things that make you scratch your head
I wonder about General Motors (GM:NY)...closed yesterday at $38.90 up $5.90 from the $33.00 IPO price of November...this is based on ???

Today...
is anybody's guess. Great Canadian employment data early this morning followed by disappointing US data ninety minutes later. Who knows?

2010...In The Rear View Mirror

Well, that was more like a "normal" year. Not the huge gains of 2009 and not the disastrous losses of 2008. No, 2010 was much more like 2007 which I've previously referred to as the last "normal" year.

The TSX began the year at 11,746 and finished at 13,443 for a gain of 14.44%. My stuff was up 15.13%. That's always the goal, to come out ahead of the TSX. Of 251 trading days, there were 143 to the upside and 109 downers.  

Even better, my trading account gained 26.55%. I made a total of 18 trades during the year, the same as 2009. In the fall it seemed like a trading frenzy as I bought and sold RIM, got out of Encana, bought BMO and RBC, captured my first ever double with the sell of Scorpio Mining, sold Lundin, bought and sold the two coal miners, ended four years of dead money by getting out of Organic Resource Management, doubled my BMO and RBC positions and finally added Cisco Systems, my first ever purchase on the Nasdaq Exchange.  Whew! Seems like a lot when I put it all in the same sentence.

On the fund side, I reduced my possible downside as I took money off the table by transferring from my long held Canadian Resource Fund to a Canadian Bond Fund.  I've missed some upside with that move but as I've said on these pages, there comes a time when it's you've gotta know when fold 'em.  As I approach my next retirement my risk tolerance reduces.  As we've learned, a drop of 25% can occur in an instant and the 33% gain required to get it back can take a very long time.  I can't afford to play that game again! 

I'm still holding the large cap Canadian Endeavor Fund but will similarly convert it on the first sign of weakness.  The most pleasant surprise was that those lame Seg Funds recovered with a gain of 14.87%.  After dropping 38% within months of buying them at the mid 2008 high, I figured the only way I'd ever recover would be to hold for 15 year guarantee period.  Now, I can see a way out by the time I'm clear of those damn Deferred Sales Charges...about six or seven years.

2010 was my second year with TPCI.  I'm always interested in reader feedback.  I heard from a number readers after the May post Who Should(n't) Be In Funds?  As I suggested in the post, nobody I heard from had ever had finance guy contact them about an exit strategy based on their age or approaching retirement.  Pretty much everyone I heard from recognized themselves in the July post Why we fell in love with funds. Do we still love finance guy today?  A week later I wrote A Little More About The Last (Next) Ten Years as I wondered if we will ever again return of the heady days of the eighties and nineties.

All in all, I enjoyed a decent year with my investments and had some fun along the way blogging on TPCI.

Happy New Year and Good Luck To All!