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Investing Based on Demographics
2007-08-22 15:17:00
It?s a fact North America is getting older. The baby boomers have made their mark in every stage of their life and their retirement and old age will be no different. I?ve compiled a little list of some of my favorite companies that will be directly benefiting from the aging North American population. Please feel free to add your companies to the comments section and then I?ll compile a comprehensive list later in the week.CSH.UNSCCLC.UNJNJTEVA
More About: Investing , Demographics , Graph , Base , Demographic

Dividend Growth Stock VI
2007-08-20 14:20:00
Bank of Montreal BMO?Founded in 1817 as Bank of Montreal, today BMO Financial Group is a highly diversified financial services provider. We offer clients a broad range of personal, commercial, corporate and institutional financial services across Canada and in the United States through BMO Bank of Montreal, BMO Nesbitt Burns, BMO Capital Markets and our Chicago-based subsidiary, Harris Bank.?-founded in 1817-policy to payout 45% to 55%-paid dividends for over a century-dividend increased 80% from 2002 to 2006-current yield of 4.2%-trailing P/E 13.4-2007 estimated P/E 11.5 -2008 estimated P/E 10.8-ROE 19%
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Major Purchase and Depressed Markets
2007-08-17 14:19:00
Although the markets have fallen a lot recently I haven?t made any purchases. The main reason I haven?t pulled the trigger yet is simple...I have very little available cash. I recently purchased a cottage and as such will need all of my available funds for the down payment. However, I have a small amount of money available to invest in my RRSP and I?m currently looking to add one of the following companies IPL.UN, BMO, BNS. Longer term I believe all of the above three names are a good buy and I currently have an order in for IPL.UN at $8.50 (I?m doubtful that it will reach that level but if it does I?ll be an owner). I may have more available cash after the financing for the cottage is worked out. However, until the details of the cottage financing are worked out I only have enough money for one position.The timing of the cottage purchase was certainly not perfect however, we have been looking in the area that we bought in for about 4 years and this was the first opportunity to buy...
More About: Markets , Major , Purchase , Depressed , Hase

Time to Buy Financials?
2007-08-14 13:39:00
Is there actually a global credit crunch? Is there a major economic crisis in the making as a result of the US sub-prime mortgage market? I don?t think anyone really knows but if I was a betting man I?d bet YES to the above two questions. Ok, so now that we?ve established that there might be a legitimate credit crunch what do we do? Panic? Sell all our holdings? Never buy another stock? That might work for some people but what I?d suggest is scan the market, identify which sectors and companies are taking the biggest hits and evaluate whether or not these out of favour stocks might be a good fit for your portfolio. The recent market declines are eminiscent of 2002 when I picked up TD. With many of the Canadian banks hitting 52 week lows I think that the time might be near for Canadian investors to get their fingers back on the buy button. Remember...BUY ON FEAR, SELL ON GREED.
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How I Select Securities
2007-08-10 13:38:00
I am for the most part a value investor and as such invest primarily based on fundamentals. Some of the main metrics that I use are: -P/E-Forward P/E-Price/Book-Dividend growth rate-ROI-ROE-Average EPS growth-debt levels -revenue growthI am not going to provide specific numbers for each of the above metrics as it varies from industry to industry. However, one number that I generally view as being important is the forward P/E and I will rarely invest in a company with 1yr forward P/E of over 18 and a 2 year forward P/E of over 15. Due to that fact I generally do not invest in the technology sector (regardless of how great a company?s technology is I?m not going to pay over 18X next years earnings for it). From my experience, growth companies and those with a high P/E will often get caught with ?multiple compression? when either the economy stalls or they fail to meet expectations. I also look at qualitative factors such as:-barriers to entry-competitive advantage-long term prospects...
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Retirement Nest Egg at the close of August 3, 2007
2007-08-08 14:03:00
-Down 2% from last month-Up 6.8% in 2007TRP ? 4.16%ABX ? 4.25%CSH.UN ? 3.24%GWO ? 4.82%PFE ? 3.78%POW ? 4.21%BA.UN ? 0.41%L ? 4.06%UNS ? 2.83%GZ ? 2.82%TD ? 13.35%EIT.UN ? 2.95%JNJ ? 5.80%MMM -4.13%ZED - 0.52%GO.A ? 2.97%ATD.B ? 3.77%O'Shaughnessy?s Global Fund ?3.93%American Growth Fund ?1.0%Canadian Value Fund ? 3.73%Small Cap Growth Fund ? 4.27%Chou Associates Fund ? 10.42%Health Science Fund ? 0.87%Money Market Fund ? 7.68%My portfolio is down 2% from last month. Most of the lost was a result of the general decline in the market. However, both CSH.UN and EIT.UN declined approx. 8% over the month. I am going to continue to hold all my positions and will begin to look at accumulating more shares if the market declines further. I am currently taking a hard look at BNS.
More About: Retirement , Close , Nest , August , Retire

Why I Chose a Dividend Growth Strategy
2007-08-07 14:09:00
In this post I?m going to explain why a dividend growth strategy works for me. 1.In my opinion a growing dividend is usually a good indicator that a company is healthy (although certainly not the only indicator). Annual dividend increases indicate that the executive and director insiders are sufficiently confident in the long term prospects of the business to payout their earnings as dividends.2.Dividend s from Canadian sources are taxed at a preferential rate (see this post for details on the tax treatment of dividends)3.Commission costs are dramatically lower as positions are usually held for the long term.4.Annual dividend growth can protect your income stream against inflation. Additionally, companies with a history of increasing their dividend can usually pass much of the price inflation on to their customers.5.The share price of the company usually increases with the dividend (ie-you don?t see many high quality blue chips yielding more than 4% because the share price increases...
More About: Strategy , Growth , Grow , Rate

Vacation
2007-07-27 13:30:00
I will be on vacation from now until August 7th. Since I?ll be fishing and camping for almost the entire week you might as well cancel your internet and disconnect your computer as there will be no posts until my return. Cheers,MCM
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US Banks
2007-07-26 13:48:00
The US banks haven?t been a pleasant place to be invested recently. Here is a snapshot of the price history of some of the big US banks over the last month (remember these loses exclude any losses resulting from the rising CDN dollar)CJune 25: $51.69 Now: $49.21Change: DOWN 4.8%BACJune 25: $48.85Now: $47.93Change: DOWN 1.8%JPMJune 25: $48.36Now: $45.27Change: DOWN 6.4%USBJune 25: $33.39Now: $31.14Change: DOWN 6.7%WBJune 25: $51.91Now: $48.83Change: DOWN 5.9%WFCJune 25: $35.08Now: $34.57Change: DOWN 1.5%As you can see there where some fairly impressive declines over the last month. So?does this mean it might be time to pickup some big US banks? Personally, I think there might be another round of declines. What?s your opinion?
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Bicycle Trusts
2007-07-24 13:44:00
I was recently reading about setting up trust funds and thought I?d highlight this interesting trust structure. A bicycle trust is similar to traditional trusts except there are certain milestone and requirements that must be met by the beneficiaries. These milestones can be virtually anything ie-graduating university, turning 35, etc...So much like riding a bicycle you have to ?pedal? to make it work. This is a great structure to ensure that your hard earned inheritance is being used in an appropriate and responsible manner. A properly thought out bicycle trust would ensure that if something did happen your 18 year old son couldn?t drop out of school and use the $300,000 trust fund to tour himself and his band around the country for a few years. Instead, the trust could be setup so that he?d receive $20,000 upon your death however, after that milestones would have to be met to receive more money, $15,000 after the first year of university, $15,000 after the second etc...If your in...
More About: Rust , Trusts , Bicycle

Alimentation Couche-Tard
2007-07-23 13:43:00
I initiated a position in ATD.B on Friday. I revisited this name shortly after my last Wednesday?s posting ?Where is the Value??. I?ve provided a brief description of ATD.B as well as my reasons for buying:?Couche-Tard is the largest convenience store operator in Canada with a network of over 2,000 stores in Canada as well as a considerable presence in the U.S., with more than 3,000 additional stores. Over 3,600 of the total number are Company-operated stores and nearly 1,400 stores are operated under our affiliate program. The Company sells fuel in 65% of its Company-operated stores. The Canadian stores are located in Quebec, Ontario, Alberta, British Columbia, Manitoba, Saskatchewan and the Northwest Territories. The U.S. stores are located in 28 states. The stores are primarily operated under the Couche-Tard® and Mac?s® trademarks in Canada and the Circle K® trademark in the U.S.""In addition to the North American Couche-Tard network, there are approximately 3,500 Circle K licens...
More About: Lime , Alimenta

Inflation
2007-07-19 13:49:00
The latest inflation numbers are in and to the surprise of many economists inflation declined 0.3% from the previous month (2.2% versus the predicted 2.5%...but still above the central banks target of 2%). Although inflation checked in at a national annualized rate of 2.2% I think it?s meaningful to examine where this average is coming from. Listed below are the inflation rates per province and territory:?Newfoundland and Labrador 1.4 ?Prince Edward Island 1.6 ?Nova Scotia 1.8 ?New Brunswick 1.9 ?Quebec 1.5?Ontario 1.6 ?Manitoba 2.2 ?Saskatchewan 3.2?Alberta 6.3?British Columbia 1.5?Whitehorse, Yukon 1.7 ?Yellowknife, N.W.T. 3.6 ?Iqaluit, Nunavut 2.8 Anything stand out? Of course it does...all the provinces/territories participating in the oil boom are also experiencing rapid inflation (mainly as a result of the high cost of housing).
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Where is the Value?
2007-07-18 13:54:00
With the exception of resource companies I invest for the long term based on a number of factors (mainly fundamentals). However, lately I?ve been having a hard time finding any attractively priced equities that I?d want to hold for the long term (if you?ve found any let me know). I have a personal philosophy that once money enters my investing account it can?t be taken out until retirement. As a result, I?ve been accumulating cash in my regular bank account (which isn?t included in my monthly nest egg statements). Instead of depositing this money into my nest egg investing account I am going to be using this money on real estate in 1 of 2 ways:1. Going to pay down my existing mortgage (which would be equivalent to generating a guaranteed after tax return of 5%)2. I?m in talks to purchase a house privately and would use this money as a down payment/deposit (would be over a year closing time).
More About: The V , Where

Golden Blog Awards
2007-07-17 13:35:00
Well I just thought I?d tout my own horn today as I?ve recently won a very very very prestigious ?Golden Blog s? award in the ?Best Blog Name? category. The awards were held at the lavish and informative online palace of The Money Gardener over at http://themoneygardener.blogspot.com. If you want to check out the event or any other of the prestigious award winners you can check them out here.
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Renovations Update ? II
2007-07-16 14:42:00
I made some significant progress in my house renovations over the last 4 days. I primed and painted almost the entire interior of the house. Here are the approximate costs of the work: ?paint and primer (cost $210)-beer for helpers ($175)-food for helpers ($20)-brushes and trays ($45)-plaster for areas damaged by wallpaper/trim removal ($5)-misc ($10)TOTAL: $465 (leaves me $1120 in my renovations budget)In my opinion the painting is by far the best "bang for my buck" and will have the greatest return once I sell the house.Items Remaining:-Aesthetic work to 2nd bathroom-Painting front door-Painting trim-Replacing kitchen counter tops(?)-Replace receptacle, switches + plates-Clean/scrub garage-Paint Kitchen cabinets
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Lack of Posts Recently
2007-07-12 14:01:00
I apologize for the lack of posts recently. I have been overwhelmingly busy with a few things: mainly house renovations and working 5 to 7 hours of overtime everyday. However, I do plan on returning to my regular 3 to 5 posts a week shortly.
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Dividend Growing Stocks - V
2007-07-09 13:47:00
TransCanada Corp - TRP"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."-Has paid a dividend for the last 42 years-Long history of increasing dividends (with the exception of 1999 where they cut it from $1.12 to $0.8)-The purpose of the dividend cut was "to strengthen its financial flexibility and capture North American energy growth opportunities."-Current P/E 17X-Estimated 2007 P/E 18X-Estimated 2008 P/E 16.7X-Current yield 3.7%-TD target price of $4415 year Dividend HistoryYear Annualized Divide...
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Inter Pipeline Fund - IPL.UN
2007-07-06 15:17:00
I?ve put in a limit buy for IPL.UN at $9 per unit. For those of you unfamiliar with the company here is a little blurb about them: ?Created in 1997, Inter Pipe line Fund is a major petroleum transportation, storage and natural gas liquids extraction business based in Calgary, Alberta, Canada. Inter Pipeline is a publicly traded limited partnership that owns and operates a diversified combination of energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. This asset portfolio generates long-term and predictable cash flows, thereby providing unitholders with a growing and stable source of monthly cash distributions.?I?ve decided to put a limit price in for IPL.UN for many of the same reasons outlined by Moneygardener in his May 18th post. If my order is filled I will be buying these units with a portion of the proceeds from a bond that matured in June. I am not expecting a large increase in either the share price or distributions from IPL.UN however, wha...

Home Renovation Update
2007-07-05 14:00:00
Last week I wrote about some home renovations that I plan on doing prior to selling, here?s the update:?Stained the deck (approx cost $15)?Removed kitchen cabinet doors and filled in holes (approx cost $0)?Replaced bathroom vanity, sink, faucet and moved plumbing (approx cost $400)This week I plan on:?Filling some holes in the bathroom drywall that were created as a result of removing porcelain inlayed toilet paper rolls and towel holders. ?Painting the removed kitchen cabinetsTotal spent on the renovation so far:$415. This leaves me with $1585 remaining in my budget.
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Questrade - Promotion
2007-07-04 14:28:00
Hi All,I just got some more news from Emil over at Questrade. "I came across some news recently that I'm not sure if you know about, and thought you and your readers might be interested in. As of June 26th, Scotiabank has bought out TradeFreedom Securities. This makes Questrade the last independent brokerage in Canada, and with Canada Day just around the corner, we decided to celebrate. Please feel free to check out our site for the independence celebration promotion. It?s quite humorous. I hope it will spark a new conversation in your website."Here's a link to their July promotion here.
More About: Promotion , Romo

Retirement Nest Egg at the close of June 30, 2007.
2007-07-03 15:54:00
-Down 2.5% from last month.-Up 9.1% in 2007.TRP ? 3.96%ABX ? 3.72%CSH.UN ? 3.41%GWO ? 4.72%PFE ? 3.97%POW ? 3.41%BA.UN ? 0.4%L ? 4.27%UNS ? 2.8%GZ ? 2.82%TD ? 13.77%EIT.UN ? 3.05%JNJ ? 5.66%MMM -4.16%ZED - 0.74%GO.A ? 3.21%O'Shaughnessy?s Global Fund ? 4.01%American Growth Fund ? 1.02%Canadian Value Fund ? 3.88%Small Cap Growth Fund ? 4.28%Chou Associates Fund ? 10.68%Health Science Fund ? 0.88%Money Market Fund ? 10.29%Well this has been one of my worst months so far as my portfolio is down 2.5% from last month. This is mainly due to currency appreciation and a general decline in the market. I am going to continue to hold all my positions and will begin to look at accumulating more shares if the market declines further.
More About: Retirement , June , Close , Nest , Retire

Lottery Tickets, Risk vs Reward ? A Middle Class Rant VI
2007-06-28 13:51:00
Human psychology is both tremendously fascinating, and mind numbingly scary. Although, there are probably a million different examples that would illustrate the fascinating delusions of the human psyche there is one in particular that I?d like to talk about?the risk vs. reward calculation that goes on (consciously or unconsciously) in the human mind when they purchase a lottery ticket. Ok? let me set the scene; the average lotto 6/49 payout is about 3 million dollars, a single ticket costs $2 and the odds of winning are 1 in 14 million. Just to put this into perspective your chances of being hit by lightening in Canada are 1 in 2.5 million. So, if you believe you?re going to win the lottery than you must also be darn sure that you?re going to be struck by lightening at least five times in your life. However, the human psyche doesn?t work like that and despite the overwhelming odds 3 million dollars is a lot of money to most people, and because the tickets are only $2 people are wil...
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Home Renovations
2007-06-26 13:42:00
I?ve recently been doing some renovations to my home in an attempt to increase its value before I sell later this year. I?ve budgeted $2000 to complete my ?home makeover? and I?ll be doing all the work myself. I?ve done some reading on which areas of the house provide the most bang for your buck and as the literature suggests I?ll be concentrating most of my efforts on the kitchen and bathrooms but will be spending some time and money on the rest of the house as well. Here is a list of what I plan on doing:1. Paint dated cabinets in the kitchen2. Move and replace handles in kitchen3. Remove wallpaper in kitchen4. Replace kitchen counter tops5. Tile a kitchen backsplash6. Replace damaged trim around door in 3 rooms(dog scratched up) 7. Replace bathroom vanity, sink, faucet, mirror and 8. Stain back deck9. Clean garage10. Re-insulate garage door11. Paint from deck12. Paint entire interior of the house
More About: Home , Renovation , Reno , Renovations

What Do You Want to Read About?
2007-06-25 13:33:00
I thought I would take today?s post to ask you, the readers, what you want to read about? If you have anything you?re interested in or anything you?d like to see me post about please leave me a comment and I?ll add them to my idea pile.Cheers,MCM
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Payback for Hybrid Cars
2007-06-22 13:26:00
This is a follow up post to my May 29th post, ?Hybrid Vehicle Rebates?.I was recently reading an article at MoneyCentral entitled ?The Costly Secrets of Hybrid Cars ?. This article questions the cost effectiveness of buying a hybrid vehicle and provides the cost difference between the hybrid and gas versions of a few different vehicles. More detail is provided in the article however, a basic summary is that although hybrid vehicles do save you money on gas they are not yet cost effective in the long run due to the higher initial sticker price. To read the entire article please click here.
More About: Hybrid Cars , Payback

Big US Banks
2007-06-20 13:22:00
For those of you considering taking a position in a large US bank here are the yields, payout ratios, current PE and forward PE of some of America?s biggest banks.CYield: 4%Payout Ratio:48%PE: 13Projected 2007 PE: 12BACYield: 4.47%Payout Ratio:46%PE: 10.65Projected 2007 PE:10.38JPMYield: 3%Payout Ratio:31.5%PE: 11.7Projected 2007 PE: 11.3USBYield: 4.7%Payout Ratio:55%PE: 13.1Projected 2007 PE: 12.76WBYield: 4.14%Payout Ratio:46%PE: 11.5Projected 2007 PE: 10.9WFCYield: 3.1%Payout Ratio:43%PE: 14.1Projected 2007 PE: 13.3
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Big Canadian Banks
2007-06-19 13:34:00
As promised here are the yields, payout ratios, current PE and forward PE for the big Canadian banks. Tomorrow I?ll do the same for the big US banks.TD Yield: 2.9%Payout Ratio: 46%PE: 15.7Projected 2007 PE: 13.1RY Yield: 3.2%Payout Ratio: 45%PE: 14.1Projected 2007 PE: 13.5BNSYield: 3.4%Payout Ratio: 46%PE: 13.6Projected 2007 PE: 13.2CMYield: 3.1%Payout Ratio: 36%PE: 11.4Projected 2007 PE: 12.3BMOYield: 4%Payout Ratio: 57%PE: 14.4Projected 2007 PE: 12.3NAYield: 3.9%Payout Ratio:43%PE: 11.3Projected 2007 PE:11.1
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Banks Dividend Yields & Payout Ratios
2007-06-18 13:29:00
I have seen a number of posts recently comparing the yields of various banks to one another in an attempt to determine the ?best buy?. Although, I think that the yield is important I don?t think that the yield by itself is a useful number even for those looking exclusively for dividend income. In my opinion you also need to compare the payout ratio of the banks in order to ascertain if:1. The dividend is sustainable2. The dividend has room to grow3. The business has sufficient excess capital to growThe payout ratio is a simple ratio that investors can easily calculate.DIVIDEND PAYOUT RATIO = DIVIDENDS PER SHARE/EARNINGS PER SHAREIn tomorrows post I?ll compile both the yields, payout ratios, current PE and forward PE for the big Canadian banks and on Wednesday I?ll do the same for the big US banks.
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Chou Funds
2007-06-15 15:25:00
I just thought I?d point readers to a recent article in globeinvestor about my favorite Canadian mutual fund manager Francis Chou. I like his disciplined, methodical and deep-value approach to investing and although I?m personally not a big fan of mutual funds I own, and like the Chou Associates Fund for the following reasons:?I think Francis Chou is a seasoned pro at finding deep value before the market?He invests in markets that I do not have the time to follow?15yr return 15.5%?He invests for the long term and is not concerned with quarter to quarter fluctuations?Very methodical investing style?MER of 1.74% (in my opinion it is worth every penny)(Disclaimer: I?m not your boss or your spouse so do you own research and make your opinions on when to buy or sell. Nothing I say should be bastardized or construed in any way to be advice)
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Dividend Growing Stocks ? IV
2007-06-14 15:08:00
Enbridge (ENB) is an energy distribution, transportation and services company. Core businesses include distribution of natural gas and transportation of liquid hydrocarbons.-paid a dividend for over 50 years-dividend has grown an average of 10% yearly-currently yielding 3.40%-65% payout ratio-95% of their business is regulated-PE 19X-Stable credit rating (A-, Baa1, A) -click here for a complete dividend history 1953 ? 2006 I don't currently own ENB however it is one I would eventually like to add to my portfolio.
More About: Stocks , Growing , Rowing , Grow , Dividend