Middle Class Millionaire

RSS Feed Homepage

Articles: 1, 2, 3, 4, 5, 6, 7

If Only You Had the Inside Scoop
2008-04-09 13:43:00
Bought too early? Sold too soon? Should have seen it coming? Well don?t feel too bad, here?s a list compiled by Micheal Brush of MSN Money of some of the biggest insider mistakes of 2007. *The losses above were as of Jan 18, 2008. As we know the market hasn?t performed well this year so many of the above losses are potentially much higher.
More About: Scoop , Inside

Toyota - Soon to be the Worlds Biggest Car Maker?
2008-04-07 13:41:00
Toyota?s strategy of shifting their focus to emerging markets seems to be paying off as they are now expected to surpass GM in annual sales by the end of 2008 making them the world?s largest automaker. According to an article by Martin Foster in the New York times. "While sales declined in North America, they increased in Asia, especially in Indonesia and Thailand, and in other regions including South and Central America, Africa and Oceania.In the nine months through December, less than half of Toyota sales came from its showrooms in North America. Sales to North America slid to 44 percent from 57 percent a year earlier, while Asian sales rose to 25 percent from 15 percent."As a consumer it?s no surprise that GM is about to be bumped from the #1 spot. I am by no means a picky shopper but for me it?s basically at the point that when I?m car shopping I don?t even bother looking at North American cars anymore. My reason for this is simple?I want to own a car that isn?t going to break ...
More About: Toyota , Worlds , Maker

200 Hundredth Post
2008-04-04 14:03:00
I just realized that yesterday marked the 200th post here at Middle Class Millionaire so I just wanted to take today?s post to thank the readers of this blog for their continued support and readership. I would also like to thank the regular commenters who not only keep me honest but also provide some added depth and perspective to many of the posts. Cheers,MCM
More About: Post

Portfolio Update as of April 1, 2008
2008-04-02 14:22:00
-no change from last month-up 0% in 2008 -CDN 65.8%-U.S. 31.6%-International 2.6%TRP - 4.14%CSH.UN - 4.02%GWO - 4.36%PFE - 4.78%POW - 3.79%WAG - 3.66%L - 2.66%UNS - 2.25%GZ - 2.65%TD - 12.30%EIT.UN - 2.61%JNJ - 5.89%MMM - 3.67%C - 3.41%ATD.B - 2.91%BCE - 5.14%IIC - 2.63%O'Shaughnessy?s Global Fund - 2.57%American Growth Fund - 0.90%CDN Value Fund - 2.95%Small Cap Growth Fund - 3.73%Chou Associates Fund - 9.30%Money Market Fund - 9.68%There were no changes to my portfolio over the last month ? no buys, no sells.
More About: Portfolio , April , Update

Yellow Pages - YLO.UN
2008-03-31 13:57:00
When I invest in companies I invest for the long haul. Ideally, I would like to hold a company indefinitely so one of the first criteria I look at before adding something to my portfolio is the sustainability of the business model, and I just don?t see YLO.UN existing long term using their current model. That being said, I certainly don?t consider them a dead company and they are making steps in the right direction by transitioning online. However, unless they can completely transform themselves into a dominant online advertiser it?s my opinion that they will not exist at some point in the future. I do like and use some of their online services such as canada411 and autotrader and I am positive on their recent agreement with Google to become the first Canadian based reseller of Google AdWords adverts. However, the bulk of their revenue still comes from print and I don?t think print will be around longer term.Personally, I?m skeptical that even if they did transform themselves into ...
More About: Yellow , Pages

Canadian Tire Scraps its Print Catalog ? A Foreshadowing of Yellow Pages Fa
2008-03-28 12:37:00
Canadian Tire announced yesterday that they will be phasing out the print edition of their catalogue and replacing it with an online edition. ?all of our research was indicating that readership levels were decreasing and more and more people are on line,? Canadian Tire spokeswoman Lisa Gibson said in a telephone interview Thursday. ?So that's why we decided to let people know on line and not make a big production.? -Quoted from an article by John Partridge of the Globe and Mail In my mind the above quote could easily apply to the print edition of Yellow Pages . Shares of YLO.UN have slid 30% over the last 3 months and as the yield creeps higher I?m increasingly being asked if I think now is a good time to buy YLO.UN. My short answer is that if you?re a long term investor I don?t think there is a good time to buy. In my next post I?ll explain my rational behind my don?t buy recommendation.
More About: Canadian , Print , Catalog

Some Recent Dividend Increases
2008-03-27 13:17:00
With all the negative press over the last month I thought it might be a little refreshing to hear a little good news. So here?s a little summary of some of the recent Canadian dividend increases over the last month.-T.D. Bank (TD) Annual div increased 3.5% to $2.36 -TECSYS Inc (TCS) Declared first dividend of $0.02-Canadian Tire (CTC.A) Annual dividend increased by 13.5% to $0.84 -Constellation Software (CSU) Annual dividend increased by 20% to $0.18 -Stella-Jones Inc (SJ) Annual dividend increased by 14.3% to $0.32-Transcontinental (TCL.A) Annual dividend increased by 14% to $0.32-Aecon Group Inc (ARE) Annual dividend increased by 42.9% to $0.20 -Bonterra Energy Income Fnd (BNE.UN) Annual distribution increased by 4.5% to $2.76 -CCL Industries Inc (CCL.B) Annual dividend increased by 16.7% to $0.56 -Guardian Capital Group (GCG.A) Annual dividend increased by 11.1% to $0.15 -SNC-Lavalin Group (SNC) Annual dividend increased by 33.3% to $0.48 -Superior Plus Income Fund (SPF.UN) An...
More About: Recent , Dividend

Facebook Worth 15 Billion?
2008-03-25 12:42:00
For those of you who haven?t heard of Facebook here is an extract from the ?about? section of Facebooks website.About FacebookFacebook is a social utility that connects people with friends and others who work, study and live around them. People use Facebook to keep up with friends, upload an unlimited number of photos, share links and videos, and learn more about the people they meet.Anyone can join FacebookAll that's needed to join Facebook is a valid email address. To connect with coworkers or classmates, use your school or work email address to register. Once you register, join a regional network to connect with the people in your area. Discover the people around youFacebook is made up of many networks, each based around a company, region, or school. Join the networks that reflect your real-life communities to learn more about the people who work, live, or study around you.?Microsoft recently invested $240 million for a 1.6% stake in facebook while Hong Kong billionaire Li Ka-sh...
More About: Worth , Billion

Core Portfolio Holdings
2008-03-19 12:46:00
You often hear analysts talk about ?core holdings? but what exactly is a core holding? Well according to investorwords.com:?A core holding is bought with the express purpose of being held for a very long time, and is often a high-quality security with a history of fairly steady performance.? I thought that in this time of market turbulence it would be refreshing to go over a model portfolio of companies that I would consider core holdings.CANADIAN:TRP, ENB (pick 1)RY, TD, CM (pick 1)BNSGWO, SLF, MFC (pick 1)POW, PWF (pick 1)BCE, T, RCI.B (pick 1)REI.UN, XRE (pick 1)CNR, CP (pick 1)FTS, EMA, EP.UN (pick 1)TLM, PCA, ECA, CNQ (pick 1)COS.UN, SU (pick 1)L, WN, EMP.A (pick 1)BAM.AU.S:JNJC, BAC, JPM (pick 1)GE, UTX (pick 1)PG, CL (pick 1)FDX, UPS (pick 1)WMTLarge International Drug Company (PFE, TEVA etc?)What do you consider your core holdings?
More About: Portfolio , Core , Holdings

How Much Does It Cost To Beat the Market?
2008-03-17 12:47:00
I was recently reading the New York Times and came across a very interesting article by Mark Hulbert. In his article he outlines the results of a recent study that attempted to quantity the collective cost of Americans trying to beat the market. The study entitled ?The Cost of Active Investing? found that collectively it is costing Americans roughly $100 billion annually to try and beat the market. The study ?took into account the fees and expenses of domestic equity mutual funds (both open- and closed-end, including exchange-traded funds), the investment management costs paid by institutions (both public and private), the fees paid to hedge funds, and the transactions costs paid by all traders (including commissions and bid-asked spreads). If a fund or institution was only partly allocated to the domestic equity market, he counted only that portion in computing its investment costs. Professor French then deducted what domestic equity investors collectively would have paid if they i...
More About: Market , Beat

Global Credit Crunch
2008-03-13 12:34:00
The credit crunch caused by the mortgage fiasco in the United States is now truly a global phenomenon. The Bank of Canada announced yesterday that they will be injecting $4 billion in an attempt to ease some of the liquidity issues caused by the mess south of the border. During the same period a credit infusion will also be offered by the Federal Reserve, the Bank of England, the European Central Bank and the Swiss National Bank. It may be too little too late however at this stage in the game what other reasonable options are there? The bottom line is more liquidity is required to allow financial institutions to continue doing business. At this point the only other alternative would be to force the financial sector to liquidate its rotten assets and wipe out the leverage which would cause many of them to go bankrupt. That would be a lose-lose for everyone.
More About: Credit , Global , Crunch

Stock Selection Process
2008-03-11 12:55:00
Here is the general process I use to evaluate a stock.1. Are their products/services in a growing or stable industry?-for me this would exclude companies such as newspapers, tobacco etc. Basically, I look for companies that I think will still be around in 50 years.2. Do they have a competitive advantage or are there large barriers to entry?-for example companies like TRP and CNR have huge barriers to entry. Other than the billions of dollars that would be required to build the infrastructure it would takes year and years to get the proper approvals.3. Do they have a history of returning value to shareholders?-for example, JNJ has raised their dividend for the last 44 years. MMM has paid a dividend since 1916. A history of share buy backs would also be a plus.4. Are they trading at a reasonable price? - I use my fair value calculation when appropriate.To calculate fair value I use a modified discounted cash flow model. Basically, I calculate the present value of the future dividend i...
More About: Stock , Process , Selection

New Billionaire on Top
2008-03-07 13:23:00
There?s been a little shuffling at the top of the billionaire list this year. Warren Buffet is now officially the world?s richest man. His net worth is now an estimated $62 billion up from $52 billion last year. His 10 billion dollar ride has ended the 13 year reign of his longtime friend Bill Gates who was been bumped down two notches to the world 3rd richest man. But come on...once you hit a few hundred million does it really matter anymore? Regardless here is a list of the top 20 richest people in the world. 1. Warren Buffett 2. Carlos Slim Helu 3. William Gates III 4. Lakshmi Mittal 5. Mukesh Ambani 6. Anil Ambani 7. Ingvar Kamprad 8. KP Singh 9. Oleg Deripaska 10. Karl Albrecht 11. Li Ka-shing 12. Sheldon Adelson 13. Bernard Arnault 14. Lawrence Ellison 15. Roman Abramovich 16. Theo Albrecht 17. Liliane Bettencourt 18. Alexei Mordashov 19. Prince Alwaleed 20. Mikhail Fridman
More About: Billionaire

U.S. Recession?
2008-03-05 13:00:00
The talking head on business networks like BNN and CNBC have been debating the issue now for months, ?is the U.S going into recession??. Some economists are saying yes, while others are saying no. Well Warren Buffet has an answer for us?yes the U.S is in a recession. Based on the technical definition of a recession (two consecutive quarters of negative GDP growth) we haven?t yet entered a recession. However, Mr.Buffet was recently quoted as saying ?I would say, by any commonsense definition, we are in a recession?. That?s good enough for me. If the world most successful investor says we?re in a recession I believe him.
More About: Recession

Portfolio Update as of Feb 28, 2008
2008-03-03 13:38:00
-no change from last month-up 0% in 2008 -CDN 66.2%-U.S. 30.4%-International 3.4%TRP - 4.46%CSH.UN - 4.19%GWO - 4.31%PFE - 4.72%POW - 3.76%WAG - 3.30%L - 2.39%UNS - 2.27%GZ - 2.50%TD - 12.74%EIT.UN - 2.65%JNJ - 5.31%MMM - 3.41%C - 3.39%ATD.B - 3.05%BCE - 5.31%IIC - 2.80%O'Shaughnessy’s Global Fund - 3.38%American Growth Fund - 0.84%CDN Value Fund - 2.96%Small Cap Growth Fund - 4.02%Chou Associates Fund - 9.48%Money Market Fund - 8.78%The only change in my portfolio over the last month was that I added a quarter position to my Citibank holding.
More About: Portfolio , Update

TFSA ? Tax Free Savings Account
2008-02-29 16:47:00
As I?m sure you have probably heard the recently released budget contains a proposed ?Tax Free Savings Account ?. This proposed account will allow individuals to contribute up to $5000 annually into an account that can accumulate interest, capital gains and dividend tax free. As there is already a lot of information circulating regarding these new accounts I won?t try to rehash it all but instead provide you some links to sites that you may be interested in:-How to Profit from a Tax Free Savings Account (click here)-TFSA Bonanza (click here)-The Tax-Free Savings Account (TFSA) ? A Creative Financial Approach (click here)-Federal Budget 2008: Tax Free Savings Account (click here)-Benefits of Tax Free Savings Account (click here)-Tax Free Savings Account (click here)-Juggling the Mortgage, RRSP?s and TFSA?s (click here)-Tax-Free Savings Account (click here)

Citigroup - C
2008-02-27 14:17:00
"Citi group is organized into four major business groups: Global Consumer; Markets and Banking (M&B); GlobalWealth Management; and Alternative Investments. The Citigroup Global Consumer business includes banking services, credit cards, loans and insurance. The M&B business is in about 100 countries and advises companies, governments, and institutional investors on the best way to realize their strategic objectives. The GlobalWealth Management division at Citigroup is comprised of The Citigroup Private Bank, Smith Barney (private wealth management), and Citigroup Investment Research,and serves both private and institutional clients.?Here are my reasons for averaging down:-As a general rule I?ve found that the best time to buy large multinational blue chips is when everyone else hates them.-Currently 45% of their revenue is generated outside of the United States and their current focus is to increase this number to 60%.-They have the world?s largest credit card operation.-In my opinion...

Citigroup ? C
2008-02-26 18:59:00
I'm currently travelling so this post will be short.Last Friday I added about a quarter position to my Citigroup holding. I continue to like Citi for the same reasons as I did when I originally initiated a position in November. Tomorrow I?ll provide a full analysis of C as well as the new fair price that I?ve calculated.

Johnson & Johnson - (JNJ)
2008-02-22 13:45:00
?Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional.?Dividend Yield: 2.64%Dividend Yield 5yr Avg: 1.9 %ROE levels of above 21% for the past 10 yearsCurrent P/E? 17.3Projected 2008 P/E ?14.3Projected 2009 P/E ? 13.64 Star rating from S&P - $74 one year targetArgus rates it a buy with a $75 one year targetOther information:-44 years of consistent dividend growth.-3 year average dividend growth rate: 14%-5 year average dividend growth rate: 15.5%-5 year average dividend payout ratio: 40%-Dividends issued to shareowners every quarter since 1944. -Dividend raised each year for 44 consecutive years. -Sales have increased each year for 73 consecutive years.-Double digit Earnings increases for 21 consecutive years.-44% of sales outside of North AmericaCalculated Fair Value:The fair price I cal...

Sub Prime Explained
2008-02-20 13:55:00
Here's a funny little cartoon series that actually does a good job explaining the subprime mess. It?s definitely worth the read.http://docs.google.com/TeamPresent?d ocid=ddp4zq7n_0cdjsr4fn&skipauth=true&pli =1
More About: Prime

3M - MMM
2008-02-19 17:32:00
Today I?d like to take a look at this member of the ?Broad Dividend Achievers?. ?3M Company is a diversified technology company with leading positions in consumer and office; display and graphics; electronics and telecommunications; health care; industrial; safety, security and protection services; transportation and other businesses. They are an integrated enterprise characterized by substantial intercompany cooperation in research, manufacturing and marketing of products.? They trade under the symbol MMM on the New York Stock Exchange and are included in the following indexes Dow Jones Composite, Dow Jones Industrial, S&P 100, S&P 500 and S&P 1500 Super Comp.-Current P/E ? 14.5X-2008 Estimated PE ? 14.7X-2009 Estimated PE ? 13.3X-ROE ? 37.74%-Current Yield ? 2.36% -5 Year Average Yield ? 2%-Current Payout Ratio ? 33.5%-5 Year Historical Payout Ratio ? 39%-3 year dividend growth rate ? 10.02%-5 year dividend growth rate ? 10%Other Facts:-Dividend History: Paid quarterly since 1916...

3M ? Increases Dividend
2008-02-14 17:30:00
On Feb 11th, 3M announced a 4.2% increase in their quarterly dividend, making 2008 the 50th consecutive year that the company has increased their dividend. Although, the dividend increase is only marginally above the rate of inflation their payout ratio has slowly been coming down. The 5 year average payout ratio is approximately 39% while their current payout ratio is about 33.5%. The Moneygardener has suggested on his blog that perhaps the paltry dividend increases are a result of 3M bulking up for future acquisitions and I certainly agree that?s a probable option. However, another reason for the small dividend increase could simply be that management is taking a cautious approach. I?m speculating that the management at 3M is like most of the large and small players in the market, just waiting to see what happens to U.S economy. Will there be a recession? If so how bad will it be? Although, 60% of 3M?s revenue now comes from outside the U.S they are still very closely tied to the ...
More About: Dividend

Subprime ? Do We Have a Problem Managing Risk ?
2008-02-12 22:00:00
Due to the ongoing subprime fiasco many banks and financial institutions are in the process of redefining how they assess risk. As an investor I find it hard to believe that these major financial players could have miscalculated risk to the degree that it now has some of them teetering on bankruptcy while potentially throwing the U.S into a recession. Personally, I?m hoping that they knew the risk and were just greedy. As an investor the greed argument is much more reassuring than the notion that almost all of the major financial players in the U.S do not have the ability to accurately assess risk, and therefore were investing in products that they didn?t understand.Recently Citigroup Chairman Win Bischoff was quoted as saying ?managing risk within a bank is not just a matter of relying on internal processes but also requires taking the right decisions at the top of the company?. Is this new? Is he proposing a new standard for risk management? His quote leaves me asking ?what were t...
More About: Risk , Problem , Subprime

Thinking about Taking a Vacation?
2008-02-11 17:13:00
If you love adventure and go on vacation for an adrenaline rush then you might want to check out the below hot spots. Reuters has compiled a list of great travel destinations for the really depressed/insane. The article entitled ?Travel Picks: The world's top 10 dangerous destinations? provides a brief description of each destination as well as the possible risks ie- warlords, kidnapping, land mines etc?Here they are in order of danger:1. Somalia2. Iraq3. Afghanistan4. Haiti5. Pakistan6. Sudan7. Democratic Republic of the Congo8. Lebanon9. Zimbabwe10. Palestinian TerritoriesTo view the entire article please click here.
More About: Vacation , Thinking , Taking

A Correction vs. a Bear
2008-02-08 14:42:00
When does a market correction become a bear market? Well according to InvestorWords.com the definition of a bear market is: ?A prolonged period in which investment prices fall, accompanied by widespread pessimism. If the period of falling stock prices is short and immediately follows a period of rising stock prices, it is instead called a correction. Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.?Another general guideline that is used to distinguish a correction from a bear is that a correction can be defined as a 10% decline, while a bear market is a 20% drop. So what do you think correction or bear?
More About: Rect

Portfolio Update as of Feb 2, 2008
2008-02-05 13:43:00
-up 1% from last month-up 9% in 2007-CDN 67%-U.S. 30%-International 3%TRP - 4.31%CSH.UN - 4.27%GWO - 4.49%PFE - 4.99%POW - 3.97%WAG - 3.27%L - 2.62%UNS - 2.47%GZ - 2.17%TD - 13.02%EIT.UN - 2.45%JNJ - 5.43%MMM - 3.52%C - 2.68%ATD.B - 3.09%BCE - 5.22%IIC - 2.36%O'Shaughnessy’s Global Fund - 3.39%American Growth Fund - 0.87%CDN Value Fund - 3.11%Small Cap Growth Fund - 3.87%Chou Associates Fund - 9.34%Money Market Fund - 9.08%The only change in my portfolio over the last month was the purchase of IIC. I also contributed some cash to the portfolio which increased my cash position to 9% from 6%. The cash injection was also responsible for the 1% portfolio increase. Excluding the cash injection the portfolio would have been down approximately 2%. The reason for the decrease was the general malaise that the markets have experienced over the last month, no individual name was down in any significant way. As always I’ll continue to monitor the markets and make acquisitions when I percei...
More About: Portfolio , Update , 2008

ING Canada – IIC
2008-02-04 13:44:00
I recently purchased a small amount of ING Canada (IIC - TSX). I am going to continue to follow it and possibly double down in the future. I plan on holding this name for approximately 2 to 5 years (due to the cyclicality of the P&C industry). However, I don’t expect much movement in the stock for the next 6-12 months.ABOUT “ING Canada Inc. is the largest provider of property and casualty (P&C) insurance in Canada, operating through ING Insurance, ING Novex, Nordic, belairdirect and Trafalgar. Our principal products are automobile, property and liability insurance, which we provide to individuals and small to medium-sized businesses across Canada. Consumers can purchase insurance products from ING Insurance through a network of 2800 brokers across the country, from belairdirect through its web site and call centres as well as from Trafalgar Insurance through Grey Power brokers and call centres”Current P/E – 8.5X-2008 Estimated PE – 9.1X-2009 Estimated PE – 8.1X-ROE – 2...

TransCanada Corp ? TRP
2008-01-30 13:43:00
"TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure. Our network of more than 59,000 kilometres (36,500 miles) of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent?s largest providers of gas storage and related services with approximately 360 billion cubic feet of storage capacity. A growing independent power producer, TransCanada also owns, or has interests in, approximately 7,700 megawatts of power generation."Investors in TranCanada Corp. all received a pay raise yesterday (albeit a small one). TRP raised their quarterly dividend by 6% and reported fourth quarter net income of $0.70/share (up 27% from last year). While fourth quarter earnings were up 8% from 2006. Year over year net income was 5% to $2.31/share, while earning were up 10% to $2.09/share.In my opinion TRP is a solid Canadian company that should part of the foundation of any diversified di...

Dividend Reinvestment Plans - DRIPs
2008-01-28 13:36:00
If you are unfamiliar with Dividend Reinvestment Plans please read the following posts from November, 2007 ?DRIPS? and ?To DRIP or not to DRIP?.I have recently chosen to enroll my entire account in a synthetic DRIP program. In a previous post I had mentioned that I chosen to DRIP some of my holdings however all holdings are now DRIPed and all new holdings will automatically be enrolled in a synthetic DRIP program without me having to notify a broker. Setting up an automatic DRIPing program is extremely easy and can be done with one five minute phone call to your discount broker. You simply call your discount broker, and tell them which account you?d like to enroll. I?ve chosen to DRIP my entire account to take advantage of recent declines in the market. Additionally, my portfolio is now at the point where I won?t be adding a lot of new names and as a result won?t require the cash flow from my current holdings to finance the purchase of new names. Additionally, with approximately 20...
More About: Drips

The Facts about Wal-Mart
2008-01-25 15:06:00
I discovered a great article by Charles Fishman, ?The Wal-Mart You Don?t Know?while doing my daily read over at Million Dollar Journey. The article explores Wal-Mart from the suppliers? point of view and illustrates the enormous power that Wal-Mart can exert not only on their suppliers but also on the entire global economy. The author argues that: ?The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line??Here are some aspects of the article that I found interesting. -? Wal-Mart is not just the world's largest retailer. It's the world's largest company--bigger than ExxonMobil, General Motors, and General Electric.?-Last year they sold $255.5 billion worth of goods.-In 3 months they sells more than number-two retailer Home Depot sells in a year.-They do ?more business than Target, Sears, Kmart, J.C. Penne...
More About: Facts , Wal Mart