Middle Class Millionaire

RSS Feed Homepage

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

Macquarie Power & Infrastructure Income Fund - (MPT.UN)
2008-05-14 04:46:00
Macquarie Power & Infrastructure Income Fund invests in essential infrastructure assets, with an emphasis on power infrastructure.MPT's POWER PORTFOLIO INCLUDES:-Gas Cogeneration ? Cardinal, a 156 MW gas cogeneration plant, is located in Cardinal, Ontario. -Wind ? MPT owns the 99 MW Erie Shores Wind Farm in Port Burwell, Ontario, which currently represents about 6% of Canada's installed wind capacity. -Hydro ? MPT owns four hydroelectric facilities, located in Dryden and Marathon, Ontario, and Sechelt and Dease Lake, British Columbia, totalling 36 MW. -Biomass ? MPT owns a 28 MW biomass facility in Whitecourt, Alberta, and holds investments in a 31 MW facility located in Chapais, Quebec. MPT's SOCIAL INFRASTRUCTURE INCLUDES:An indirect 45% investment in Leisureworld, which is currently the fourth largest provider of long-term care (LTC) homes in Ontario.FINANCIAL HIGHLIGHTS:-I have listened to the last conference call and management seemed to be very conservative and selective in...

Best of the Blogs Winners
2008-05-13 02:48:00
Well the results of the ?Best of the Blogs ? contest are in and Middle Class Millionaire was voted the ?Best Blog on the Internet??well not quite? Middle Class Millionaire came in tied for 14th place. The real winners deserve their crowns and are listed below:1. iBankCoin (formerly known as Fly on Wall Street)2. Wall Street Fighter3. Dealbreaker4. Paul Kedrosky5. Canadian CapitalistThanks to everyone who voted.

How Many Securities Should You Have?
2008-05-09 03:30:00
I?ve been asked this question before and my general rule of thumb is 20. I touched on this in a January, 2007 post about diversification however I?ll just rehash it a little bit. I think that if you own over 20 stocks you run the risk of becoming too diversified. If you?re too diversified you basically become the market and if that?s the case why waste the time and commission fees buying individual stocks? Simply buy some low MER index funds and get it over with, because if you diversify too much you?re going to mimic the index anyways.There are of course exceptions, for example if you?re pursuing a high risk strategy such as penny gold stocks it would probably be wise to create a basket of these high risk stocks and hope for a few big winners. Additionally, if your portfolio is under $70,000 I don?t think that you should be aiming to hold 20 stocks. I believe that if you can?t commit a minimum of 2.5% to 3% of your portfolio to a stock you probably shouldn?t buy it. I will often bu...

Best of The Blogs
2008-05-07 03:36:00
I thought that I?d use this post for some shameless self promotion as Middle Class Millionaire has recently been nominated as one of the "Best of the Blogs " by The Globe and Mail. I am definitely in good company as fellow bloggers Canadian Capitalist, Four Pillars, Dividend Guy, and Million Dollar Journey were also on the list.

Does 1% Really Matter?
2008-05-06 03:17:00
When it comes to investing and your portfolio does 1% really matter? If you are paying an MER of 2.5% instead of 1.5% is it a big deal? What about if your portfolio returns 7% instead of 9%?If your investment horizon is between 1 and 2 years than a couple percent really doesn?t matter. Your portfolio won?t be affected in any meaningfully way. However, if you are a long term investor 1 or 2% certainly does matter and will have a huge impact on your total portfolio return. I created the below chart to illustrates just how much difference 1 or 2 percent can make. The chart makes the following assumptions:1. Initial investment of $10,000 in year 1.2. No additional contributions.3. Interest compounded annually.4. All interest is reinvested.So although it may seem petty to be wasting time and squabbling over a one or two percent difference it could mean a difference of hundreds of thousands of dollars in retirement.
More About: Matter

Portfolio Update as of May 1, 2008
2008-05-02 06:26:00
-up 3.1% from last month-up 3.5% in 2008 -CDN 66%-U.S. 30.5%-International 3.5%TRP - 3.99%CSH.UN - 4.03%GWO - 4.25%PFE - 4.39%POW - 3.80%WAG - 3.22%L - 2.64%UNS - 1.95%GZ - 2.82%TD - 12.61%EIT.UN - 2.68%JNJ - 5.82%MMM - 3.38%C - 3.57%ATD.B - 2.59%BCE - 5.26%IIC - 2.65%O'Shaughnessy?s Global Fund - 3.43%American Growth Fund - 0.89%CDN Value Fund - 3.00%Small Cap Growth Fund - 3.71%Chou Associates Fund - 9.14%Money Market Fund - 10.20%There were no changes to the composition of my portfolio last month and I don?t anticipate any major changes this month either. However, I am taking a close look at BPT.UN and CU and may initiate a position in one of those names this month.
More About: Portfolio , Update

Moving to the Country?The Finances
2008-04-29 02:18:00
As promised here is a little update on the finances of our move to the country. As you?ll see below this move is being done solely for lifestyle reasons and is certainly not financial motivated in any way.My wife is on maternity leave for the next 2 months so the move will have no impact on what she brings in (in the short term). However, she works in a field that is in demand everywhere and she doesn?t anticipate having any trouble finding work once her maternity leave is up. However, it?s a different story for me as I currently work in a specific area of technology that doesn?t exist up north. Luckily for me I do have some other skills to bring to the table and was able to get a part-job in Information Systems for a government organization. My new hourly wage will be considerably below what I currently make and accounting for the lower wage and reduced hours I will probably be taking around a 65 to 70% pay cut. However, for what it?s worth my actual take home pay will probably be ...
More About: Country , Finances , Moving

Thinking about Investing? Start Now
2008-04-25 16:47:00
The below chart illustrates the importance of investing early and the power of compounding interest. When it comes to investing time really is on your side.Case 1:? $2,000 invested annually in years 1 to 5? No contributions after year 5? Assumed rate of return of 10%? Interest compounded annually.? All interest is reinvested.? Total invested $10,000Case 2:? No money invested in years 1 to 10? $2,000 invested annually in years 11 to 40? Assumed rate of return of 10%? Interest compounded annually.? All interest is reinvested.? Total invested $60,000You have probably seen similar charts on the front of mutual advertisements and although I?m not a huge proponent of mutual funds I think the underlying message is valid---The earlier you start investing the better.
More About: Investing , Start , Thinking

Boralex Power ? BPT.UN
2008-04-23 13:28:00
ABOUT BORALEXCreated in February 2002, Boralex Power Income Fund (the ?Fund?) is an unincorporated open-ended trust that indirectly owns ten power generating stations with a total installed capacity of 190.0 MW. Eight of these power stations are located in Quebec (Canada) and two are in the State of New York (United States).?The Fund owns seven hydroelectric power stations ? five in Quebec and two in the United States ? with a total installed capacity of 96.4 MW.?In Quebec, the Fund owns two wood residue-fired facilities ? a thermal power station and a cogeneration plant ? with a total installed capacity of 62.6 MW. The cogeneration plant also produces 1,780,000 thousand pounds of steam annually.?The Fund also owns the only natural gas-fired cogeneration plant in Quebec, which has an installed capacity of 31.0 MW and approximately 862,000 thousand pounds of steam annually.FINANCIAL HIGHLIGHTS-14% Yield-expected 2008 payout ratio of 95%-trading at approximately 30% below it?s book va...

Adjusted Cost Base
2008-04-21 17:57:00
With the end of the tax season approaching I?ve been asked a few times about how to account for capital gains as a result of the sale of income trusts. Well, the process is basically the same as with common shares except with income trusts the cumulative ?return of capital? (ROC) received from distributions must be accounted for in the adjusted cost base (ACB).What is Return of Capital?Basically return of capital is the tax deferred portion of income trust distributions. Return of capital can also be described as money the trust gives back to you from your original investment. The exact amount of ROC is provided to you annually by the trust.What Do You Do With The ROC?Once you?ve calculated the cumulative ROC you use it to re-calculate your ACB, which will be used to calculate your taxable capital gain when you sell. For example, suppose you paid $10 a unit and received a $1 per unit return of capital. Your adjusted cost base would be $9 ($10 - $1 = $9). Now if you sold that income...
More About: Cost , Base

The Secret to Financial Success
2008-04-17 15:14:00
Many people have the view that finances and investing is some kind of mystical puzzle that once solved will instantly eliminate all their financial troubles. The code will be broken and the chest of gold will fly open (just watch any late night infomercial). In my opinion the notion of a financial quick fix is the most dangerous and damaging perspective that anyone can have. Having this view effectively removes individuals from their current financial problems. It rationalizes the belief that you don?t have to diligently and effectively manage your money because once you figure the secret out everything will be OK. In my opinion the real secret to financial success is the realization that there is no secret, and that for 99.99% of the population (myself included) there is no formula or secret that is instantly going to solve all your financial problems. The real secret to financial success can be found by following these 3 easy steps: 1. Spend less money than you make.2. Invest you...
More About: Financial , Success , The Secret , Secret

Johnson & Johnson ? JNJ
2008-04-16 13:34:00
In typical fashion Johnson & Johnson announced that they have once again beat analyst consensus earnings estimates. Their quarterly earnings came in at $1.26/share, 6 cents above analyst estimates of $1.20/share. However, their two major businesses, pharmaceuticals and medical devices, would have experienced declines had it not been for the weak American dollar. The recent increase in earnings due to currency is viewed as a negative by many analysts however, as an investor it helps to reaffirm one aspect of my investing strategy. One of the criteria that I used to select the U.S names in my portfolio is their international exposure. Over a year ago when I first initiated a position in JNJ I stated that one of the reason that I bought was that 44% of their sales were from outside of North America which would act as a built-in currency hedge. It works like this: JNJ reports their earnings in U.S dollars so the 44% of their revenue that was generated outside of the U.S. has to be conve...

Moving to the Country...Permanently
2008-04-14 14:42:00
For the last five years Mrs. Middle Class Millionaire and myself have been talking about selling our house in the city and moving back to our very very rural home town. Well...the talking is over and over the course of this month we?ll be packing up all our stuff and making the 350km trip straight north. Long time readers of this blog will remember that last year I purchased a recreation property up north well we?ve decided that we?re going to be moving there permanently. Here are some of the details below:WHY THE MOVE-lifestyle-lifestyle-lifesyleABOUT THE HOUSE-located at the end of a dirt road.-no cell phone or high speed internet service (looking into satellite internet)-30 minute drive to ?town? which is where we would have to work.-our backyard is now 60acres which is surrounded by 1000?s of acres of crown land.-land has 2 stream fed trout ponds.-house is smaller than our current home (we plan to put an addition on sometime in the future).-house is only 20 years old and very st...
More About: Country , Moving

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...