Canadian Dollars Blog

2019 is officially in the books

cdndollars@gmail.com (torontoinvestor) — Wed, 1 Jan 2020 21:00:00 -0500

With 2019 in the books returning an astounding 28.9% for the S&P 500 and the Toronto Stock Exchange's S&P/TSX Composite index up 19%, there was a lot to cheer about for investors in North America.

This was a remarkable year considering a lot of the doom and gloom that fell on markets in Q4 of 2018. A lot of pundits were calling for 2019 to be the year that the 10-year bull run would take a massive correction, but that certainly didn't happen despite the year making a lot of news that would arguably have made markets shakier than they were.

I hope a lot of you readers were invested as it was a year to make a lot of easy money. Unless of course, you had invested in cannabis-related stocks.

All this said, a correction could happen. We never know when it could happen but for those with a long-term investment horizon should not be fearful of a recession or pull-back in stocks. Take only the risk you can afford to take and stay the course.

For something a bit on the lighter side, when the clock struck midnight, some of you may have had the urge to get a move on your taxes like our buddy Ned Flanders:

Happy new year everyone! Hoping you all have great health and prosperity!!

Back from a Hiatus

cdndollars@gmail.com (torontoinvestor) — Mon, 23 Dec 2019 20:55:00 -0500

Like a phoenix rising from the ashes, I intend to be back. The Personal Finance space in Canada has changed a lot in the last 5 years. There's been a rise of new robo-advisors and free trading from some places like Wealthsimple. It's an interesting time to be an investor.

Look for more content in the near future.

Toronto Star

cdndollars@gmail.com (torontoinvestor) — Mon, 12 May 2014 10:54:00 -0400

Is Torstar even cheaper now with the sale of Harelquin? Saj Karsan over at Barel Karsan certainly thinks so.

There are some remaining concerns we have even with the recently proposed sale:

Torstar debt levels are really high
Print/Newspaper revenues are in decline
What will management do with the newly acquired cash? They hinted at paying off the debt but what if they don't use the money wisely? Hopefully they don't invest more in print!

That said, Harlequin will sell for 455 million, Torstar debt is 178 million, some quick math will reveal that 277 million in net cash.

Here's some quick numbers:

At today's stock price of 7.53, the market cap is approximatey 600 million.

Pre-Harlequin announcement, the stock price was around 6.50 which valued the market cap at 517 million.

The sale of Harlequin (pending approval) will add 277 million in net cash, yet the market cap of TS has only risen by 85 million.

Does the market believe that Torstar will squander the net cash and just burn right through it?

Or is there not much faith in the underlying business?

Couple that with the fact that Torstar calls me once every 3 months for a free subscription to their print edition leads me to believe that they are very much desperate for readership.

Some food for thought.

What I'm Reading This Week (May 9, 2014)

cdndollars@gmail.com (torontoinvestor) — Fri, 9 May 2014 10:31:00 -0400

Here's what we're reading over at Canadian Dollars:

Albert Eintein's Timeless Advice for Investors:

“If I had an hour to solve a problem and my life depended on it, I would use the first 55 minutes determining the proper question to ask, for once I knew the proper question, I could solve the problem in less than five minutes.” - Albert Einstein

Safal Niveshak offers these 5 Things to Avoid in the Current Stock Market. Extremely humbling and a friendly reminder in a market that contains high valuations.

We still believe that Microsoft (MSFT) offers a great margin of safety and are very pleased with their push into the Cloud. Under the new leadership of the new CEO, we believe that a lot of the ground work is in place to revitalize the company.

We highly recommend reading Modern Graham's Microsoft Quarterly Valuation.

New stock additions to my TFSA (Tax Free Savings Account)

cdndollars@gmail.com (torontoinvestor) — Tue, 18 Jan 2011 09:00:00 -0500

Last year I was able to beat the TSX and DOW with my portfolio. The total return was about 25%. Not bad. I treated the portfolio very conservatively last year by purchasing a lot of solid dividend companies like Shaw Communications (SJR.B) and Utilities company Emera (EMA). I expect these companies to be held year over year and indefinitely as they can be easily DRIP'ed.

Now that another year has begun, I have another $5000 to play with. At the moment I am focusing on deep value net-net type of companies. With the Canadian dollar currently trading higher than the United States dollar, it makes purchasing stocks on the Nasdaq and NYSE that much more cheaper for me.

As there are no restrictions on what stocks can be placed inside a TFSA, I have added a few companies in the portfolio.

Without further ado, these are the stocks that I've added since the new year:

VVTV (ValueVision Media)
GRVY (Gravity Co Ltd)
CCME (China Media Express Holdings)
SOLR (GT Solar International)

In the coming weeks I will write the value argument for each of these stocks.

Reviewing a previous pick: Danier Leather (TSX:DL)

cdndollars@gmail.com (torontoinvestor) — Mon, 17 Jan 2011 09:00:00 -0500

Here's an interesting business. Last year in May the company offered shareholders the option to tender their shares for $6.25. The stock has since gone on a tear in finishing up around $13-14 a share. The good news is that the company has been actively purchasing shares through a normal course issuer bid. The current normal course issuer bid will expire in May but I suspect the company will probably issue another one in the current year.

If this happens, this will be a great catalyst for the stock, and ultimately for shareholders.

As of Q1, the company has $9.3 million in cash. The current market cap of the business is $65.9 million.

Some of the risks of this company are that the industry is highly cyclical. For example most of the revenue the company makes are in the winter months. Between the April and September months, the cojavascript:void(0)mpany usually operates at a loss.

With a P/E of 12.59 it is slightly below the industry ratio of 18.9.

I like the fact that the company is actively repurchasing and canceling shares with their extra cash. Admittedly I would like to see them return some fo the cash to shareholders in the form of a special dividend. However at least they are making smart use of the cash by repurchasing shares.

If you look at the last 2 normal course issuer bids, the purchases have been very beneficial.

In the last year the stock has appreciated over 100%. In the year prior to that, their average purchase price for the issuer bid was $4.25. Seeing as the stock is currently over $14, I would say that was a very wise move.

Management appears to be very shareholder friendly.

Disclosure: Still: Long Danier Leather.

Update on SINA Corporation

cdndollars@gmail.com (torontoinvestor) — Tue, 17 Aug 2010 07:45:00 -0400

On August 2nd, I sold SINA for a decent return. Since then it has been on a wild ride rising to over $45.00 and then with the recent fears of a double dip recession, it has taken a beating. I'm going to patiently wait this one out and have put in a stink bid under $40.00 should it dip. I still view this as a good play long term, but I sold out earlier this month to lock in some gains.

Patience is the key word here.

Under the Radar: Danier's Excellent Numbers

cdndollars@gmail.com (torontoinvestor) — Mon, 16 Aug 2010 08:45:00 -0400

For the fiscal year ended June 26, 2010, Danier Leather (TSX: DL) reported year earnings of $1.58 per share. As their business is seasonal, a quarterly loss of 0.14 per share was recorded. This was down significantly from the same quarter last year in which they lost 0.47 per share.

Although there has been quite a run up in the last several months, this one is still a very compelling buy.

Here are some reasons why we continue to believe this one to be a hold.

1. Increasing sales and earnings

From 2009 to 2010, EBITDA more than tripled to $15.2 million from $4.3 million last year. Despite the sluggishness of Canadian retail, this brand has still managed to increase sales by a decent 4%.

2. Share repurchase

Management continues to believe that the stock is undervalued, in the last fiscal year, the company has repurchase 28.9% of the prior year's outstanding subordinate voting shares. Specifically, 1,352,700 voting shares were repurchased. This is nothing to sneeze at.

3. Financial discipline

While sales dipped a bit in the 4th quarter, they were up overall for the year. Management has shown financial discipline by keeping costs down and reducing costs by 1.1 million year over year.

4. No debt and huge cash position

Danier finished the fiscal 2010 year end with 26.6 million in cash. This is an increase of about 2 million in cash over last year. If you crunch the numbers, assuming today's share price of 10.55, you will notice that cash accounts for more than half of the value of the stock.

With sales increasing, and management showing that they can keep the costs down, and no debt, this company is essentially trading less than 4x the share price if subtract the cash.

The only risks we see to this stock are that it is thinly traded. This shouldn't be an issue if you believe in the stock medium to long term. The other risk is that the retail industry may not be very resilient should the economy encounter a double dip recession. Despite these two risks, we believe that with Danier's large cash hoard and prudent financial management should prove invaluable. Regardless, should the stock drop from its current levels, we will continue to purchase more and we believe that so will Danier's management.

Micron Technology a buy?

cdndollars@gmail.com (torontoinvestor) — Wed, 11 Aug 2010 08:00:00 -0400

Been looking at this one. They are generating 1 billion in free cash and trading a fraction over 3x earnings. From this perspective the stock looks cheap. They also own the DRAM space.

Unfortunately end of June, the CEO sold a sizable amount of stock (4.2 million).

What do you think? Is this one a buy? Is there something we don't know about?

Why is saving out of fashion?

cdndollars@gmail.com (torontoinvestor) — Sat, 7 Aug 2010 08:47:00 -0400

You know that savers have an image problem when they're mocked on television. I'm not a regular watcher of Two and a Half Men, but while flipping channels I caught a bit of the show. One of the dorkier characters was giving the little kid some advice about saving money and watching his money grow - prudent advice. However, when he leaves, Charlie Sheen tells the kid how ridiculous that strategy that is - making the other guy out to be a loser.

Since when was it uncool to be a saver? If anything it's probably cool to be a saver now than any other time in history. Why? Because everyone is out there saving so little, you'd be a leader and not just following the status quo.

It's a shame that popular culture makes fun of those that save. I hope that people with some brains can see through this and realize the true importance of saving and not just to live life paycheque to paycheque if they don't have to.

Great Yield on BCE

cdndollars@gmail.com (torontoinvestor) — Thu, 5 Aug 2010 08:32:00 -0400

As per the Globe and Mail this morning:

Canada's largest telecommunications company, BCE posted strong profit growth of just over 70 per cent as it reported second quarter earnings on Thursday that were slightly ahead of analysts' forecasts...

...On the strength of the company's performance, Bell increased its common share dividend by 5 per cent to $1.83 a year and increased its financial guidance for the second half of the year.

At yesterday's closing price of $31.60, the dividend yield on BCE is now an impressive 5.8%. Not bad for what I view as a defensive play in this volatile market. Plenty of good upside and excellent yield. What's there not to like from a dividend investor?

More Upside in Apple?

cdndollars@gmail.com (torontoinvestor) — Thu, 5 Aug 2010 08:00:00 -0400

With Apple’s run in the last couple of years a lot of investors are probably wondering if there’s still fuel in the tank for additional growth. With the recent antennagate issue, there are some Apple loyalists that are noticing that their shiny Apple isn’t as bulletproof as it once was.

The way Apple dealt with the antenna problem was viewed as arrogant and disingenuous. By dragging other ‘smartphone’ makers into the fold and claiming that all ‘smartphones’ have the same antenna issue is very troublesome. Up until now, Apple has focused on one thing - innovating ahead of their competitors instead of slinging mud at them. It’s worked well for them up and until now, so I’m not sure why they’re doing it - other than to deflect attention from themselves. Being customer focused means making products that people love (which Apple succeeds in doing). It also means taking care of them when things go bad. Is the solution to give out free cases the ideal solution? Time will tell. These items are ridiculously cheap to make and probably won’t put a serious dent on Apple’s earnings.

On the more positive side, if you look at the number of people camped outside of Apple and mobile telecom stores on friday, it’s a clear indication that despite the flaws of the iPhone 4, there is still a loyal following that want the device no matter what. This is some seriously powerful stuff. When was the last time you had people line up for hours for a device with a serious flaw. That’s some serious brand loyalty right there.

So what is Apple doing right? They’re launching a lot of different products that have their own verticals. The iPad has proven that it can coexist with the Mac computer line without taking away any sales. The iPhone continues to be hot which will push more purchases on the iTunes/App stores.

Overall, I predict that Apple will continue to crush earnings - that is if they learn from the antennagate mistake and are genuinely taking steps to remedy the problem. i’m hoping that their stance is purely posturing and that they are making steps to truly handle issues like this in the future better.

Sold SINA

cdndollars@gmail.com (torontoinvestor) — Mon, 2 Aug 2010 12:06:00 -0400

My first sell within my TFSA:

bought: SINA at 37.56
sold: SINA at 43.17

I plan to deploy the cash into a high dividend stock. This stock wasn't intended for a long term hold either.

With the recent run up in Danier Leather shares, I am considering trimming my position as well. With the stock up 78% year to date, I may consider taking 1/3 off the table and deploying for another use. Will report further.

The first rule about RIM share price: You don't talk about RIM share price

cdndollars@gmail.com (torontoinvestor) — Mon, 2 Aug 2010 07:30:00 -0400

Did you know that at Research in Motion (RIM), they have a rule where if anyone talks about the company’s share price at work, they have to buy a doughnut for everyone in the company? Apparently this rule has been in place since the first day that the company went public. The last time the rule was violated was just under 10 years ago when the Chief Operating Officer was caught mentioning the share performance right before a call with analysts. This mistake cost him 800 doughnuts.

While some may view this as being insensitive to shareholders, I believe it’s a good strategy. There are a lot of fluctuations in the stock market and focusing and talking about the day to day ups and downs will distract the employees from the long term goals of the company. The company can’t prevent individuals from checking the stock prices on various finance websites, not encouraging people to discuss the stock price is a smart move. The street is definitely concerned about RIM’s future prospects with the sagging share price.

I hope that even though they’re not allowed to discuss it, they are making moves to address this and bring more shareholder value even with the tough new competition from Google and Apple.

Top Free Financial Applications on the iPhone/iPod Touch

cdndollars@gmail.com (torontoinvestor) — Thu, 22 Jul 2010 06:36:00 -0400

The Apple iOS platform is a brilliant one. It's fast and responsive nature make it an ideal operating system for researching information on the go. When connected to Wi-Fi or 3g, the device is even more powerful. The wealth of information that you can download in the apps is so useful that whenever I need to travel long distances, I no longer bring my netbook or notebook - I just carry around my iPod Touch. The following apps are my favorite financial apps that I find indispensable.

1. CB Mobile (Canadian Business)

My favorite thing about this app is the financial news and opinion sections. It is updated regularly and like the bi-weekly Canadian Business magazine, it contains well researched and timely articles.

2. MarketWatch

MarketWatch is an indispensable part of both my mornings, afternoons and evenings. When I need to know earnings results, I usually check here first. Also before the markets open up in the morning, MarketWatch has a good summary of what happened in Europe and Asia overnight. It helps me to put the day into perspective.

3. Wall Street Journal

The legendary Wall Street Journal. Although the application itself is free, not all of the articles are. I'm currently on a 45 day free trial and so far I love it. The articles contain a lot of depth and there is a wealth of information for the user to read.

4. Yahoo Finance

Perhaps the best stock quote application on the iPhone. It syncs with your yahoo finance portfolio, so you can make your portfolio edits online and they'll automatically appear on your iPhone app. There is simply no better portfolio application out there. I use this all the time when I need to take a quick glance at how the markets are doing during the day. The interface is simple and laid out very well.

5. XE Currency

For those of you that trade FOREX or those that like to keep track of currencies. This excellent tool will give you up to the minute currency exchange information around the clock. The application is always reliable and fast. I've used it many times right before changing money for my trips and can say that it's very useful when comparing the real world rate to the money lender's rate.

What are some of your favorite iPod/iPhone financial applications? Do you have a suggestion for better apps? I'd like to hear them.

Why smartphones are important but they aren't for me

cdndollars@gmail.com (torontoinvestor) — Wed, 21 Jul 2010 06:00:00 -0400

Those that follow this blog know that I'm a lover of technology. I'm quick to adopt the latest gadgets whether it's a new notebook, xbox, or camera when they're released. There's one area that I've been neglecting while I notice everyone else 'catching up' - the smartphone. Although I totally understand the utility and amazing features that come with owning a fancy smartphone, I haven't really bitten the bait. I can honestly say that I have been tempted though.

So why the hesitation you might ask? As with most of my purchasing decisions I make them based on two main factors: price, and utility.

Cost:

The truth of the matter is, in Canada our cell phone and data rates are atrocious. We pay the third highest rates in the world and the mobile competition is a giant oligopoly. The fact that our regular bills are higher means that those that opt for smart phones will end up paying close to $100 a month on the data and phone services alone. This is ridiculous when I consider that I can have high-speed Internet, landline, and cable television for a similar cost. It's silly isn't it?

Utility
Okay so the price may be a bit out of wack, but $100 a month isn't that big a of a deal. Heck I know people that lease cars for 400-500 a month that they only drive on weekends but that's for another blog post in the future. So suppose that I pay the $100 for a smart phone plan - do I need it? What sort of value does it bring?

We're living in an age where connectedness seems to be important - so important that being connected all the time to the Internet is now starting to trump other areas of our lives. But the question I have for you is - do you really need to be connected all the time?

Given the penetration of wifi throughout the downtown core, it's not unrealistic to have most of the functions of the iPhone at a fraction of the price with the iPod touch. You'll have access to all the games and data that you would otherwise have on the iPhone. The only caveat is that you can't make traditional phone calls with it and there's no GPS built-in. For the latter I've found that tools that use wifi triangulation to be pretty decent if you don't need a precise location.

This post is not to criticize the iPhone or the Blackberry or the Droid but rather to put perspective on things. It's only a matter of time that everyone in the developed world will be using a smartphone. Which features you deem essential are the key things. Even if you are connected all the time, make time to turn it off periodically and spend more time with your friends and family. They'll appreciate that and so will you

Betting on EMMS Merger Investing Arbitrage

cdndollars@gmail.com (torontoinvestor) — Mon, 19 Jul 2010 00:00:00 -0400

Jae Jun of Old School Value has an interesting take on the whole EMMS merger investing arbitrage situation.

While he makes some valid points I disagree with some of them. First off let me disclose that I am still retaining my position in EMMS and have voted to tender the shares.

Should the tender not work, I'm not seeing much further downside in this stock as the activists could very well be getting Mr. Smulyan to offer a higher bid. It's clear that Jeff Smulyan is very willing to take the company private - the question is are we reading his hand correctly?

I believe that he is willing to pay more than the 2.40 if there is dissent from the activists. Of course this is merely speculation as we don't have a view of Mr. Smulyan's hand.

Only time will tell but the tender deadline of August 2 is quickly approaching. I'm holding my shares and will ride this one out. The potential further upside is potentially huge.

Disclosure: Author has a position in EMMS acquired at 2.19

Why sell preferred shares?

cdndollars@gmail.com (torontoinvestor) — Sun, 18 Jul 2010 14:35:00 -0400

At what point do you get rid of your preferred shares? Suppose that in the depths of the financial armageddon, you were able to pick up some bank preferred stocks are ridiculously low levels. There was a period of time when preferreds were yielding 13-14%. While in many cases, this would be a warning sign, those that saw the blood in the streets and bought instead, were rewarded handsomely. Ironically enough, I bought these stocks for the sole purpose of being defensive.

Now these very same preferred stocks are yielding about 6-7%. So from the time of financial armageddon until now, if you are still holding bank preferred, the upside you've received alone in capital gains can be anywhere from 60-80% (or even more). With the bonus of high yield that you're receiving, the question is - when do you decide to sell the preferred shares? Or do you just keep it indefinitely or until the bank retracts?

What are some strategies in this regard? Do you hold or sell? I'm choosing to hold - it's hard to let go of the golden goose laying the golden eggs.

Half time TFSA report

cdndollars@gmail.com (torontoinvestor) — Sat, 17 Jul 2010 14:25:00 -0400

What a rough year it's been so far for stocks in general. I've been attempting to buy on the dips but have had an equal amount of successes and failures.

Intrinsically RIM looks cheap and I bought after the drop last quarter at around 55. It's since recovered but it may take some time for investors to see the true value in this one.

For my TFSA I started out the year fairly conservatively. I had kept last year's TFSA account half in cash and half in equities with ING. In hindsight this was not a great move as I only earned 4% last year.

This year, I've moved my TFSA over to iTrade with the hope of taking better control of my destiny.

In Jan 2010, I started the year off with 10,400 in my TFSA. I decided to spread that out evenly between 5 stocks:

GRVY - Gravity Co Ltd Sponsored
SINA - SINA Corporation
DL - Daniel Leather
EMA - Emera Inc
SJR.B - Shaw Communications

As EMA and SJR.B have DRIPs, I am reinvesting all dividends into their shares. These are long term holds that I believe will treat me well.

Based on my 5 choices, I'm heavily skewed towards value. I purchased Danier Leather at the beginning of 2010 at around 6.50. Since then I have achieved a 45% return with the stock trading at 9.50. As for the others I've had moderate success. SINA is up 8% while EMA and SJR.B are both up 6% and 3% respectively.

GRVY started off the year well and was one of the leaders but has in recently months taken a turn for the worst and is now the worst performer.

There's no doubt that GRVY requires a lot of patience. At one point it shot up to over $2.10 a share. In my greed, I failed to put in a stop loss and unfortunately I am now at a loss (on paper) for this position. I still have faith in this company as they are trading at low multiples. The question right now is execution and whether we will see them release the Raganarok 2 game which will no doubt be a big hit in Asia.

All in all, my TFSA is up 9% this year. Not bad considering that the TSX and DOW are -1.5% and -3.17% for the year.

Danier Leather is a compelling buy

cdndollars@gmail.com (torontoinvestor) — Sat, 1 May 2010 15:45:00 -0400

Let's look at some numbers shall we:

Shares outstanding at end of quarter: 4,794,269
Cash: $32,307,000 or $6.738 /share
Shareholder Equity: $57,379,000 or $11.968 /share

The stock is currently trading at 8.20. The business is profitable. Last quarter the EPS was 0.48 diluted.

Subtract the cash in the balance sheet and you have a stock that is ridiculously cheap. Surprised nobody else is noticing this one.

Disclosure: I initiated a position at 6.50 and am currently still holding.

This one has much more to climb. Glad to have this as a holding in my TFSA.

A review of 2009

cdndollars@gmail.com (torontoinvestor) — Fri, 1 Jan 2010 16:24:00 -0500

In the past year my non-registered investments have increased an astounding 76%. Note that this includes both dividends that are re-invested and an aggressive push in March and April to invest. At that point I was holding approximately 0% cash and fully invested in the market. I made the decision to invest for two reasons:

1. I'm invested for the long haul

2. I had a feeling that the market had bottomed.

You could say that I pretty much went all in. Since hitting the bottom in April, I haven't made a huge push. I'm currently holding about 25% in cash so that I am ready to pounce when I find anything worth buying.

Some of my recent purchases in December include:

BOLT, RCI.B, GRVY

I'm investing in stocks that are arguably deep value and stocks that pay a generous dividend. RCI.B as beat up really badly after the announcement of Globalive's WIND mobile.

I will talk more about my decisions to purchase GRVY and BOLT in a future post. For now I'll just say that these two stood out because of their low debt situations and deep (arguably) deep values.

How to save time and money at the grocery store

cdndollars@gmail.com (torontoinvestor) — Tue, 17 Nov 2009 03:00:00 -0500

In our area, grocery store sales begin on fridays and end on the following thursdays. A bag of flyers is sent out in the mail usually around thursday highlighting what is for sale. When the flyers come, we go through them very carefully to figure out what is for sale in the upcoming week.

What we used to do is just make a mental note of which store had the most sales and just get most of our groceries from that place. Unfortunately we found that this was a real time waster because having to remember grocery lists was never a good idea. We'd get most of the items we wanted to buy, but in doing so we also bought a lot of extra junk that we didn't need.

So we needed a better way. We know use an electronic list. I just open up my favorite text editor and input all the items that we want to buy. Once that is done, I just send the list to my phone and we're off shopping. By making a set list, I am able to visualize where I need to go and get in and out of a grocery store quickly and efficiently - buying only the things I set out to buy and not extra junk.

The extra time saved allows us to visit more than one grocery store in one session and get more deals.

We tend to shop in the early morning or evenings to avoid the crowds. The cashier lines are shorter and with fewer people in the aisles we are able to zip around quicker. The other advantage of shopping early in the morning and evenings is that we are less hungry - so the odds that we are buying more junk food are diminished.

We've been trying out this new method and it seems to work quite well for us. What are your grocery shopping tips? Or do you just visit the grocery store when you run out of food?

TSX and DOW trading near 52 week highs. What's next?

cdndollars@gmail.com (torontoinvestor) — Sat, 14 Nov 2009 18:12:00 -0500

With the TSX and DOW trading at near or above their 52 week highs, I've received a lot of emails asking me where I think the market is going and what should people do with a lot of the profits they've made up so far in the calendar year.

Here's my answer: I don't know. My guess is as good as yours.

For anyone that was brave enough to invest money back in the early part of the year, you will notice that your portfolio is up quite a bit.

My best move was TCK.B when I bought it around $10. There were times when I second guessed my purchase but I'm glad that I held on to it. As it's been up 300% I got out and sold around $30.

My worst performer so far has been MFC. It looked like it was starting to recover nicely until they decided to slash the dividend by half. Whether that is a beneficial thing for the company remains to be seen.

The market seems a bit expensive at the moment so I've been extremely selective (more so than before) about which equities to purchase. Aside from a few growth plays like Apple (AAPL), I'm focusing more on value plays at the moment. There are still a lot of hidden gems out there - specifically a lot of net-nets that have the potential to be home runs.

In the last couple of months, I've been adding Mastech (MHH) and Insmed (INSMD) to my portfolio. I love the idea of buying a company that is trading below net value for two reasons:

1. Margin of safety is higher
2. The chance for a double bagger or triple bagger is higher.

That said, when they reach their target levels, I intend to get out and look for other value plays.

As for now, most of my portfolio is focused on solid dividend plays (big Canadian banks, telecoms) that I intend to keep forever. With bank savings interest rates at about 1% and barely keeping up with inflation, I'll be deploying more money into value and dividend plays. The latter being mainly for long term investing.

Disclaimer: These are strictly my opinions and I encourage you to make your own decisions.

The Case for Research In Motion (RIMM)

cdndollars@gmail.com (torontoinvestor) — Mon, 28 Sep 2009 21:28:00 -0400

It's not very often that we get a 15% pullback when a stock meets expectations, but that happened to RIMM. The market had gotten ahead of itself and was expecting a blowout quarter. Instead what they got was what was expected.

Some say that the co-CEO should focus more on running the business rather than chase the Phoenix Coyotes.

Others say that RIMM is losing a lot of market share to AAPL.

Heck some others are saying that RIMM is going to go bankrupt like Nortel.

While there may be some truth to the first statement, I believe that multiple smartphones can be successful in the marketplace.

While AAPL has a wide moat with computers, ipods, iphones and software, not everyone wants an iPhone to do their emailing. Have you ever tried emailing with an iPhone? There's no contest when comparing it with a Blackberry.

Secondly, I don't know where these 'facts' that RIMM will go bankrupt are coming from. They are enjoying healthy margins and have robust sales. Next time you're sitting in the subway take a look around you. The business penetration of Blackberries is huge. The iPhone is cool too but it serves a different purpose.

RIMM is now trading at 18x forward earnings. With additional selling pressure in the short term it is likely that there will be some extreme volatility.

I for one see this as a golden opportunity to purchase RIMM at these levels and have initiated a position today. While I see AAPL and RIMM as competitors I believe there is adequate room for both of these companies to grow.

And no I don't believe RIMM will go bankrupt. All the talk about is just plain absurd.

Disclosure: I'm LONG Apple (AAPL) and LONG Research In Motion (RIMM)

Dividend cuts from Dividend Aristocrats

cdndollars@gmail.com (torontoinvestor) — Sun, 9 Aug 2009 19:00:00 -0400

What happens when one of your beloved stocks suddenly decides to cut it's dividend? Do you sell it or do you hang on to it in the hopes that one day it'll raise it's dividend again.

What if you, like a lot of Canadians own Manulife Financial. What do you do at this point?

Well the first thing you should do is evaluate your portfolio and risk allocation. The MFC dividend cut is a solid and stark reminder that anytime you invest in the stock market there are two things that are never guaranteed: 1) the rise in value of the stock and 2) a steady dividend. Those that though it was safe suddenly got spooked. The TSX as a whole sold off - especially the insurance and financial sectors. The next day the buying was back because people started to believe that the MFC dividend cuts only applied to them. Or do they? I guess only time will tell.

The important thing to learn from all this is that dividend cuts can and will happen so the dividend that one gets from their portfolio should never be thought of as a guarantee. If one needs more guaranteed investments in one's porftolio, one should turn to fixed income instruments.

The other thing that investors have learned from the past year is that stocks don't always go up and when they fall things can get really nasty fast.

As for what I'm doing with MFC? I'm intending to hold it as I have a 25-30 year investment horizon.