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!

1035 Days Ago

January 18, 2008.  Three things happened that day;

1. I broke my long standing rule to never sell anything at a loss and bailed on HudBay (HBM) as documented in my post HudBay Minerals - My BIG Mistake.  
2. I promised myself that I'd learn as much as possible about the markets and get the loss back...and not just get it back but get it back into my trading account which is a small portion of my overall portfolio.
3. I made up my mind to never again recommend a stock to family or friends as I had with HudBay.  Fortunately none of them followed up on my recommendation, because, as a group, they are very passive investors who don't have trading accounts.

I bought HudBay on July 11, 2007 at $27.35 and sold on January 18, 2008 at $15.69.  A huge loss at the time.  Not chicken feed today.  Since then, HudBay has been down as low as $2.90. Had I held, this would have wiped out my trading account.

Fast forward to yesterday, 1035 days later.  It's all back!  Yup, as of yesterday's close, my entire HudBay loss has been recovered.

So, how did it happen?  Since selling HudBay I've bought and sold 43 times in my trading account.  Not all different stocks as I've been in and out of a few more than once.  For example, I bought and sold the Gold ETF (XGD) and the Energy ETF (XED) several times. Buying on dips and selling on gains of the underlying commodities.

I got real lucky a couple of times with takeovers.  I bought Fording Coal Trust (FDG.UN) just days before a hostile takeover offer from Teck Cominco (TCK-A).  Same thing with Canadian Hydro Developers (KHD).  Bought them a week or so before the TransAlta (TA) offer. In both cases I sold as the stock ran up rather than wait for the final takeover in order to take the profit and move on.

Very recently I lucked out again with Western Coal (WTN). Bought it on November 9 at $8.05 and along came Walter Energy (WLT:NY) with an offer of $11.50. Not too shabby for nine days.

Of course, my biggest single gain was my recent double with Scorpio Mining (SPM) as reported in my post Thank You Mr. Brieger!!!

All-in-all, I've beat the TSX by a wide margin over the past 34 months and most of my picks began with BNN and then followed up with research which been mentioned on these pages.  It's been a ride.  Along the way I learned a lot, practiced more patience than I'm used to and had fun doing it.

Good Luck & Happy Investing!

So, you're selling, what are you buying?

That's what friends have been asking since my recent posts about selling Encana (ECA) on September 30 and Research In Motion (RIM) on October 13.

Well, the little birdies have been predicting an upturn for Canadian banks for the past couple of months.  There is a near unanimous consensus that the banks have their troubles behind them and will report strong results for the next several quarters.  Most analysts predict that the banks will begin raising dividends as early as year end.

So, decision made…going to buy the banks.  Which one(s) to buy?  That’s the question.  For the answer I turned to the Interactive Charts of Yahoo! Finance.  I had a look at one year charts for BMO, BNS, CIBC, National and RBC.  Why not TD?  Because I already hold TD and have for some time as mentioned in my post Canadian Banks - Buy 'em and Hold 'em. Why National when it’s not one of the big five? Because it’s often a top pick by BNN analysts and many expect it to outperform the others and be the first to increase dividends.

To the charts I added Technical Indicators for 50, 100 and 200 day simple moving averages. By doing this I discovered that that BMO and RBC were trading at or below their moving averages. On the other hand, BNS, CIBC and National were trading well above which possibly indicates they have already begun the assent to new levels so there may be less upside over the next few months.

Based on this simplistic research, I divided my Encana and RIM money in two and placed buy orders for both BMO and RBC.  On October 13 I bought these two banks.

This week I sold Scorpio Mining (SPM) on Monday and Lundin Mining (LUN) on Tuesday.  As mentioned, Scorpio was my first ever double and I picked up a very nice 37% gain on Lundin. Anxious to keep the money in play I quickly bought Grande Cache Coal (GCE) and Western Coal (WTN).  Why the coal miners?  Again, the little birdies are predicting that the demand for coal will outstrip supply in the next 12 to 18 months as China builds another coal fired something or other every couple of weeks.

I have great hopes for my four new stocks over the next six to twelve months.

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.