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Last week: wild five days for the markets and still more action ahead
2008-01-27 09:50:00
It was quite a week. The market players could not believe their eyes when they saw the wild 75 bp rate cut, thrown in by the Fed on Tuesday. Well, people expected 25 bp or 50 bp at most, but 75... That was a bit too much. Any way, the short-term surprise-driven effect was good and worked as expected, with the stock markets rallying for three straight days, before profit taking brought them down a
More About: Action , Markets , Wild , Week , Days

Stop flushing your dollars down the toilet: The economics of a high-efficie
2008-01-27 05:07:00
There are so many ways to save money around your own house. One of such ways is cutting on water consumption and thus reducing your water and wastewater bill. One may argue that it is not much money, but let's look at some simple math before making such conclusions. I will use my family as an example. I own a house and have three persons in my household, the two of whom are (honestly) not true
More About: Economics , Toilet , Stop , High , Dollars

Down we go again...
2008-01-22 06:07:00
The last week was quite something. Although the statistical data reported during the last week were not that bad (of course, they would not - we have wizard economists and econometricians working for the U.S. government!) and although there were some good spots in reported earnings (like IBM and GE), the markets rushed down in a big-time selloff. A piece of poop news here, a panic-inducing

What will the Super Bowl Indicator tell us this year?
2008-01-22 05:32:00
As we have been watching the stock markets sinking deeper and deeper lately, many investors and traders are desperately looking for market indicators and other magic signs that will tell them about the future market performance. As I was going through the news, I found a pretty funny article about the so called Super Bowl Indicator . The idea behind it is simple enough: if the Super Bowl game
More About: Year

Markets: Quiet before the storm?
2008-01-15 04:37:00
Aside from a healthy opening jump on IBM's earnings beating analysts' estimates, the markets on Monday traded relatively flat and reminded me a nervous school of curious fish in anticipation of one of the two options. What shall it be, a hungry shark (completely disastrous bank earnings numbers and bad government stats) or some nice food (government stats and banks earnings which are not that bad
More About: Markets , Storm , Quiet

Questrade allows direct U.S. dollar trades in RRSP accounts
2008-01-14 02:37:00
My current brokerage, Questrade Inc., became the first Canadian discount brokerage which would allow U.S. dollar holdings and direct trades in RRSP accounts. You can read about it here or here. It means that from now on you do not have to convert your account funds from Canadian dollars to U.S. dollars and back when you buy and sell U.S. stocks. The traditional round-trip FX premium for
More About: Dollar , Direct , Allo , Rect

U.S. mortgage lenders are sued by cities: Is it the legitimate way?
2008-01-13 05:37:00
One of the things that I was quite surprised to see last week was lawsuits by cities of Baltimore and Cleveland brought about against WFC and other big mortgage lenders on the ground that these banks discriminated against low-income black borrowers by charging them with excessive mortgage premiums and incorporating prohibitively high penalties into mortgage contracts. While the underlying motives
More About: Cities , Mortgage , Lenders , Sued , Mort

The earnings season kicks off next week
2008-01-13 03:56:00
The U.S. markets closed on the sour note on Friday, weighted down by growing worries about the U.S. economy and uncertainty about the upcoming earnings season results. Meanwhile, the S&P/TSX index is kept afloat lately by gold mining and oil stocks. The next-week announcements that may have an impact on the markets include: Jan 15, Tuesday: Retail sales for December. The number should be
More About: Season , Earnings , Week , Kicks

Welcome to the Bear Market?
2008-01-10 05:12:00
The last 7 trading days were definitely interesting to observe. We saw a very healthy selloff sequence. Speculators are becoming increasingly nervious and sell massively at any hint of negative news. I bought shares of Wells Fargo & Co. (WFC) and D.R. Horton Inc. (DHI) on Friday and Monday, respectively. Anticipated a rebound this week because both stocks were oversold and their market sectors (
More About: Market , Bear Market , Bear

DJIA-to-Gold Ratio: Is Gold the King?
2008-01-06 06:17:00
Chart junkies love plotting and analyzing relationships between different variables over time. Since I keep track of some of the market indicators, I do plotting too sometimes and think the following diagram looks pretty interesting in the light of recent market trends: The diagram above depicts the historic time series of the year-closing Dow-to-Gold (DG) ratio, which is calculated as the
More About: The King , King

Trading notes: a short swing trade in TDG.UN.TO
2008-01-04 08:14:00
In my Wednesday post, I mentioned that I could not resist buying an occasional stock for a short-term swing trade. Yesterday, I sold it for a quick 28% profit. The traded stock was Trinidad Energy Services Income Trust (TDG.UN.TO), which has been lately hit pretty hard by several market-related and company-specific factors. Despite its name, the trust has nothing to do with Trinidad and Tobago, a
More About: Trading , Notes , Trade , Swing , Short

December blog stats
2008-01-04 07:30:00
Just to keep track of some numbers (otherwise, they will get lost), I am posting the blogging stats for December 2007, the first month of this brand-new blog: Total posts = 17; Total visitors = 320 (90% are new visitors); Top incoming traffic sites (visits): http://www.getrichslowly.org/ (120) and http://www.fatpitchfinancials.com/ (21) - many thanks to both for carnival links; Search-based
More About: Blog , Stats

Back from holidays
2008-01-03 05:38:00
It was a very nice break from work. Several vacation days from the last year that had to be taken + several public holiday days + a pair of working-from-home days = a relaxing getaway. We generally stayed within the budget with Christmas presents for friends and family - the prior negotiation with my wife on the per capita gift-spending limits really helped, and she did a great job shopping for
More About: Holidays , Back

My blogging challenge for the next year
2007-12-23 06:20:00
Since I am very new to the community of financial blogging (and blogging in general), I am still trying to learn the rules of the game. Hopefully, within the next year, I will know a thing or two about the relevant routine, networking specifics, blogging techniques, and technology. The key challenge for me will definitely be to stay an active blogger and to continue posting on a more or less
More About: Blogging , Challenge , Year , Halle

Participation in the Carnival of Personal Finance # 131
2007-12-23 05:54:00
This week's post, in which I summarized the reasons why ETFs and index funds may not be the first-best option in comparison with carefully selected high-quality individual stocks, participated in the Carnival of Personal Finance #131 hosted by Get Rich Slowly. Get Rich Slowly did a great job organizing and presenting a very large collection of diverse articles. Every week lately, especially
More About: Personal Finance , Participation

TSX-listed income trusts with credit rating of A and A+, as of October 2007
2007-12-23 03:04:00
In my previous post, I published the list of TSX-listed companies with recent A and A+ credit ratings. In this post, I am presenting a list of Canadian income trusts, which have the highest credit ratings given by the top international credit-rating agencies. The spreadsheet with these income trusts is posted here. Of course, just the fact of being on this list does NOT guarantee that an income
More About: Credit , Income , October 2007 , October , Trusts

TSX-listed companies with A and A+ credit ratings
2007-12-22 05:11:00
As I was going through my my records, I thought it would be helpful if I posted one of my lists (its short version). It includes all TSX listed companies (almost all of them are Canadian), which had A or A+ credit rating as of the end of October 2007. For value investors it is important to pick up companies with good financials. A top-quality credit rating assigned to a company by Moody's or
More About: Companies , Credit , Ratings , Listed

Business tax reductions by the Ontario government
2007-12-20 00:31:00
In its 2007 Economic Outlook and Fiscal Review released on December 13, 2007, the government of Ontario proposed $1.1 billion in corporate tax reductions over the next three years. The reductions are intended to support manufacturers and other sectors and include the following measures:Elimination of the Capital Tax on January 1, 2008, for corporations primarily engaged in manufacturing and resource activities; A 21% Capital Tax rate cut for all businesses retroactive to January 1, 2007, on the way to its elimination in 2010; and Increase in the small business deduction threshold from $400,000 to $500,000, retroactive to January 1, 2007. Looks like some positive news in here for the Ontario economy, which lately suffers from the strong loonie and lower U.S. demand for Ontario products. Although the selective-incentive approach is still used here, I think that these measures are much better than largely populist and spending-oriented PST reductions and sector-oriented subsidies. Ho...
More About: Business , Government , Sine

Customer review: Questrade discount brokerage
2007-12-19 10:06:00
It took me at least several months of web research, reading, and website visits before I finally decided on my choice of a discount brokerage for my equity RRSP account. As a starting point of reference for you to get a better picture of what companies serve Canadian customers in this market, you can look at the latest, summer 2007, market comparison of Canadian brokerages by Surviscor. In my own search for the overall good brokerage firm, I considered the following several factors: Availability of no-fee, low-cost RRSP and stock-trading account services;A broker’s membership in the Investment Dealers Association of Canada (IDA) and insurance of customer funds and accounts by the Canadian Investment Protection Fund (CIPF);Lowest transaction fees;No/low limits on minimum account balances;Trading in Canadian and US securities;Easiness of web access to an online trading platform for fast, secure, and dependable equity trading;Availability of technical support and customer service ove...
More About: Review , Customer , Brokerage , Discount

One source of wealth you may not be fully aware about: daily 1.4K deposits
2007-12-16 07:50:00
Once in a while each of us occasionally stumbles upon a very powerful idea or thought that has a very strong influence on our lives. It may come to you from another person, from a book, or even from a web post. One of such wisdoms is about one great asset that everybody has access to, but not everybody uses well, pretty much like everything else in Life.It seems that every person in this world is born unequal to the others. We have different parents, different racial and cultural origins, and different bodies. Some of us are born in safe economically developed countries, have rich parents, eat well, and are healthy. The others are born in poorest countries, do not have one or both parents, starve every day, and struggle with various disabilities.Some of us complain about this unfairness of Life, the others take it as given. Some are unhappy about their personal lives and their surroundings, while the others seem to enjoy Life?s event most insignificant events. One of the traditional...
More About: Daily , Wealth , Source , Time Management , Aware

Seven reasons why I am not buying ETFs and index funds
2007-12-14 10:13:00
I have been observing a very common and powerful trend lately ? everybody seems to be into ETFs and indexes. It is not just a trend. It is the latest fad among investors and traders, which is strongly promoted in the media. These funds have been hugely popular among different breeds of investors and traders. Experienced investors use them to diversify their portfolios and increase their exposure to different markets and sectors. Beginner investors buy them because it is an easy and affordable way to invest into the whole market or just one of its segments. Traders use them to relatively safely ride on strong market trends. Non-investors who just want to save a bit for their retirement buy them because they are told to buy them. Here is the media pressure at work here.I have to admit that there are quite a few positive things about ETFs and index funds. They can and probably should be used in certain situations. However, overall I remain pretty skeptical about them and personally pre...
More About: Buying , Investing , Reasons , Index , Funds

A kinky mind of a value investor
2007-12-13 07:21:00
I noticed one weird thing lately, now that I started building up my long-term equity portfolio. I feel very positive when the stock market goes down. It feels good when I see full-scale distribution days and panic-driven sell-offs. I like observing healthy 20-30+% sector corrections. I do not worry a bit when I observe stock prices plunge deep down and when speculators lose big chunks of their equity. I do not care about conspiracy theories which always try blaming somebody or something when the markets go down. All these events, which are like a knife in a bull?s heart, mean one thing for me: I may get some pretty stocks at pretty low sale prices. That?s one of the key principles of value (especially contrarian) investing at work here ? get shares of high-quality dividend-paying companies at low-low prices and enjoy the long-long ride along with their dividend hikes and accompanying capital gains.There is always a rule in the market ? whenever something does down, it will necessari...
More About: Investing , Mind , Investor , Kinky , Inky

Technical aspects of blogging
2007-12-10 08:31:00
I did not realize that blogging can be quite complicated from the technical side. Being pretty far enough from programming and blogging, I find myself a bit overhelmed by all the new terms and techniques that I can and should apply when setting up and running a blog. I am still struggling with the formatting and posts' appearances since for some reason the WYSIWYG approach does not always work in the Blogger and I have to reformat the posts after their published looks are diferent from the edited versions. I do not know why but the blank lines between paragraphs dissapear or reproduce themselves in multiples and the published text does not look pretty. My apologies if somebody received muptiple feed versions of the same posts. From now on, I will make sure that a final version of an edited post translates into a single published post. Well, luckily we learn something new every day. Blogging seems to be an excellent way to substantially enrich computer skills and, of course, to disc...
More About: Technical , Aspects , Technic

My investing strategy, Part 2
2007-12-06 04:55:00
In my previous post, I mentioned several constraints that I have to take into account when selecting my optimal investing strategy. To balance them out, I can use my strong sides:Background in accounting, finance, and economics, which works well for me when I analyze market and sectoral infomration and look at companies' financials and reports;Familiarity with both fundamental and technical analysis methods, which improves my chances of making good stock selections and avoiding costly mistakes;Free access to market and stock analysis data, including analytical reports, historical and statistical data, and articles, which helps me going through tons of ready-to-use information in no time;The long-term planning horizon, which allows me not to bother about shorter-term stock price fluctuations and selling decisions;The substantial accumulated balance on our combined household RRSP limit, which allows me to invest tax-free for the long time to come;The account with a discount brokerage...
More About: Strategy , Investing , Part

My investing strategy, Part 1
2007-12-06 04:14:00
It is true that I do not have much of real-life experience in investing and stock trading, but I have done a great deal of prep reading and paper trading while sitting on a tight budget with two spenders/shoppers on a feminine side of my small household. My plan is to make up for that past zero-savings period during the upcoming years, immediately after I aggresively eliminate the credit-line and student-loan debt. Should I choose long-term investing or short-term trading at this point? The answer is choosing stock investing right now, with a possible addition of small-scale trading in the future. Trading stocks with a small budget of just several thousand dollars is a very risky venture, especially in the recently volatile markets, which go sideways as bulls and bears have been staging a pretty serious fight. While it is very possible now to make quick profits on some good deeply oversold stocks, even 20-30% gains will be very moderate with small trade sizes and will be further red...
More About: Strategy , Investing , Part

On housing prices in the Greater Toronto Area
2007-12-05 03:55:00
As my mortgage payments were slowly but steadily growing along with interest-rate hikes during the last 2.5 years (see my previous post), the market value of our residential property in a quiet suburb north of Toronto was persistently climbing as well. Of course, it is personally very comforting to see a value of your house to go up by 30% over a couple of years. Periodically, a couple of real estate agents are calling to deliver us the exciting news about new records set by prices on similar houses in our neighborhood. I feel happy and express my sincere excitement every time I talk to them, but politely decline an offer to put our house on sale and find something bigger, better, and (of course) "just a bit" pricier ("A bit" is "only" S50-100K). No thanks no. I will pay off this one first and then we will see. Moreover, I see some clouds on the horizon of the Canadian housing market, which are about to bring a refreshing rain of falling housing prices (speaking metaphorically, the ...
More About: Housing , Area , The G , Prices

Reducing debt
2007-12-04 03:50:00
One of my key priorities in the coming year is the reduction of our total household debt. As I mentioned in the introductory post, we currently have about C$4,000 on a credit line, C$11,000 in my wife's student loans, and roughly C$291,000 in a residential variable-rate mortgage. I am sure it is still not the worst-case scenario, as some people apparently have $30,000-40,000 credit-card debt on top of the other, lower-interest sources of borrowing.It is simply ridiculous, mind-blowing to observe how much money goes to the bank in interest payments each month. The extra $1,500 or so each month that we can get once we pay off our C$306,000 credit will definitely make a huge difference on the growth rate in our retirement savings; therefore, in my current personal fiscal year that ends on August 31, 2008, debt reduction is made the first and foremost priority.Under this plan, the credit line balance should go first since it carries the highest interest rate that we pay (8.25%). The st...
More About: Debt

A note on sub-prime debt and derivatives
2007-12-02 04:18:00
As time goes by, you will notice that I will talk quite a bit about Canadian, U.S., and foreign economy and markets. I can't help it because I am an economist by education and (some say) mentality.Also, another feature of this blog will be reviews of and references to some of the other financial blogs that I regularly or occasionally read and/or am subscribed to. Some posts in these fellow blogs are very interesting and make me think about fresh aspects of a situation or issue that are non-standard and are not captured by the attention of general public.A lot of media attention recently is on the sub-prime crisis that is the key factor why the financial sector in the U.S. and Canada has gone down over the last several months in 2007. The primary focus right now is on the sub-prime debt issues and trading in so-called CMOs (collaterlized mortgage obligations), MBSs (mortgage-backed securities), SIVs (structured investment vehicles), and other asset-backed securities with sophisticat...
More About: Note , Debt , Derivatives , Prime

A humorous look on the sub-prime crisis
2007-12-02 03:57:00
I think it was a very funny way to talk about the not-so-funny situation in the financial markets related to the subprime crisis:Here is another one, with the same gentlemen performing:These British folks are so funny sometimes.
More About: Humorous , Crisis , Prime , Cris

Introduction
2007-12-02 02:11:00
Why am I starting this blog? Well, I think that blogs are an excellent way to achieve at least several objectives. They help:1. Develop and maintain decent writing skills;2. Meet interesting people with similar interests;3. Maintain everyday long-term focus on one's objectives and life interests;4. Share, exchange, and discuss valuable ideas;5. Provide one's small but yet (hopefully) valuable marginal contribution to the pool of information and ideas available to idividuals interesting in a particular topic; and6. Develop individual discipline-related skills (mine are not that great, by the way).Hey, it looks like this list provides enough motivation for me to do this blog. I have been meaning to start occasional blogging on financial, investing, and trading topics for some time, but there were always excuses. Besides, I was not doing any real investing or trading due to understandable financial reasons (debt, other expenses, family, etc.). Now, when I finally have an opportunity ...
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