Friday, June 29, 2007


Time is just flying by! With the markets now closed for the weekend, the first half of fiscal 2007 has come to an end. I hope to have time this long weekend to analyze my situation and come up with a way forward plan for the latter half of the year.

Nevertheless, from a quick look at one of my spreadsheets, I can see that year-to-date, I'm slightly ahead of last year's realized capital gains.

I suspect that the second half of year won't be as good for a number of reasons. One of which is thanks to my new job; I won't have the ability to follow the market throughout the day and take advantage of the large intraday swings that I suspect will occur in the months ahead. Hence, I'll have to come up with a 'new' strategy and possibly even come up with a new watch list over the weekend.

Thursday, June 28, 2007

Jibbed by our Strong Dollar

What a day for the great Canadian loonie?

On top of being just a few days away from celebrating its 20th birthday as a coin, the Canadian Dollar was up 0.95 of a cent today to close out at $0.9439 US. Not bad, eh?

But where are the savings for Canadians?

With the Canadian Dollar almost at par with the American greenback, shouldn't we see the benefits when we go out shopping?

Just go into your local bookstore or greeting card shop, and turn to the back cover; there's a Canadian price and a US price and guess what, in most case, you're talking about a difference of at least 25%. Somehow, I doubt the store will accept your $15.95 US for that $19.95 Cdn book you're buying.

Then have a look at the price difference when it comes to big ticket items like automobiles. There are many online discussions dedicated to the feasibility of saving thousands of dollars when purchasing a brand new vehicle in the States and bringing it across the border.

Someone's got to be pocketing the difference, and it's definitely not us, the consumers.

Monday, June 25, 2007

Solar Power Technologies

A G&M article states that "General Electric Co. and a dozen other companies are starting work under a U.S. federal program to make solar power cost-competitive by 2015".

The article reminded me of the work being conducted at the University of Toronto by Professor Ted Sargent and his research team. In 2005, they invented a plastic solar cell that can turn the sun's rays into electrical energy, even on a cloudy day. The spray-on material utilizes nanotechnology to harness the sun's invisible, infrared rays. Sargent is quoted as saying "If we could cover 0.1 percent of the Earth's surface with [very efficient] large-area solar cells, we could in principle replace all of our energy habits with a source of power which is clean and renewable."

While the technology hasn't been perfected yet, this potentially game-changing technology would definitely go along way in solving our energy needs. In the meantime, we should all do our part by conserving energy and save money in the process.

Sunday, June 24, 2007

Bad Customer Service

Have you ever had such a bad customer service experience that you made a vow to never conduct business with that company again?

Well, it has happened to me on two occasions now, both of which involved well-known, Canadian retail chains. It's quite a shame, considering that I try to support Canadian-based businesses whenever possible but the way they treated me in both cases definitely rubbed me the wrong way; they didn't even apologize!

They have now lost a customer for the course of my life and possibly a few more, as I have mentioned my experiences to several of my friends and relatives, and they were shocked to hear about my experiences that they too are reconsidering making future purchases from these stores.

What ever happened to the Customer always being right?
And in both cases, I was definitely right!
In the first case, the store had recalled the product and I learned about it apparently just over a year later. According to the store manager, I was too late; the recall was only effective for a year. Well, they lost me as a customer for not replacing a recalled item I purchased for less than 15 bucks! In the second case, the store lost me as a customer for not replacing or exchanging a broken item that I purchased for $80 and even more importantly, treating me with no respect.

This type of customer service behaviour may have worked a decade ago but I can now easily conduct business with a competitor down the street or online and get a similar product or service for the same or lower price.

Saturday, June 23, 2007

Migao (MGO-T)

I will continue yesterday's theme of investment opportunities in the Chinese agricultural sector, by bringing to your attention, Migao (MGO-T), which is another key holding in my portfolio.

Migao produces two specialty potash-based fertilizers (potassium nitrate and potassium sulphate) for the Chinese agricultural market. According to their web site, "There is very little naturally occurring potash in China. Of the three principal fertilizer nutrients (nitrogen, phosphate, and potash), potash is the least readily available in the country. Migao's patent-pending technology allows the Company to offer a consistent and reliable supply of high quality potash-based fertilizers which are ideal for high-value crops such as fruits and vegetables, tobacco, and cotton."

In the second quarter, the company achieved earnings of $3.3 million ($0.10 per basic share), and like Hanfeng, Migao is focused on increasing their production capabilities to meet the demand.

Friday, June 22, 2007

Hanfeng Evergreen (HF-T)

Let me introduce you to one of the main holdings in my portfolio: Hanfeng Evergreen (HF-T).

Hanfeng is a provider of value-added fertilizer in China’s fertilizer market for the urban greening and agricultural markets. Headquartered in Toronto and with operations in Shanghai, Jiangsu, and Heilongjiang China, Hanfeng has its own value-added fertilizer production facilities in China and also imports products sourced from leading North American and European suppliers of fertilizers and horticultural products.

There are a number of reasons why I invested in Hanfeng including:

> China is the world’s largest consumer and producer of conventional fertilizers.

> The 2008 Summer Olympics in China will require a special focus on urban landscaping.

> The Chinese government has increasingly stressed the importance of value-added fertilizers as a key component for improving crop yields, farm incomes, water pollution and raw material efficiency.

> The company intends to expand production capacity to meet product demand.

> Hanfeng entered into an agreement with Heilongjiang Agriculture Company Limited, the largest state-owned agricultural company in China, for the sale and distribution of its fertilizers.

> Hanfeng entered into separate agreements with Agrium and PetroChina Ningxia Petrochemical Company to further expand its slow and controlled release fertilizer business in the domestic market in China and into international markets, including North America.

I find the last point particularly full of potential going forward.
Agrium is the largest agricultural retailer in the U.S. and a leading global supplier of agricultural nutrients, industrial products and specialty products. Hanfeng now has a solid relationship with an industry leader with the marketing expertise to widen their distribution network. Meanwhile, the joint venture with PetroChina is also interesting as they can assist in providing the necessary materials, government relationships and access to additional customers to grow the company further.

Thursday, June 21, 2007

Investment Style

Some of you might be curious about my asset allocation and investment style.

I'll be highlighting some of my investments in the days and weeks to come but in the meantime, I'll just say that I currently have over 50 percent of my assets sitting in cash earning 4 to 4.25 percent interest (depending on the savings account) as I wait for some of the stocks on my watch list to reach my target buying prices. I know that interest income isn't very tax friendly but I like the assurance of having the cash readily available to fund my sometimes, itchy trigger finger.

As for my investment style, I really don't have one defined yet. At the moment, I'm more growth-oriented but would like to start developing a bigger basket of dividend-yielding stocks that I don't have to keep an eye on a daily basis. On the rare occasions when I have the opportunity to watch the stock market during the day, I might try to make a quick trade or two to take advantage of a volatile or news-worthy stock on an intraday basis. I mostly rely on basic pattern recognition to determine entry / exit points on stocks that I have a real desire to keep for the longer term. Due to the lacklustre performance of the US Dollar of late, I'm currently concentrating on Canadian stocks so I don't have to worry about the brokerage's exchange rate and extra commissions.

The majority of my investment ideas originally come from reading online forums, BNN interviews of a few analysts I respect, and a local call-in radio show called "The Friday Market Monitor."

For those of you outside of the Ottawa region, you can listen to "The Friday Market Monitor" via the 580 CFRA website between the hours of 1 and 3 Eastern on Friday afternoons. They usually run a quarterly stock pick contest in the last half hour where people call in with some great new stocks on a regular basis. I highly recommend listening and even participating in the show, especially for its contest portion.

Wednesday, June 20, 2007

Telus joins suitors wooing BCE

Canadian Press is reporting that Telus (T-T) has joined the list of companies courting BCE.

According to the report:
"BCE said late Wednesday that it and Telus have entered into discussions to “explore the possibility of a business combination.” The two companies have entered into a mutual non-disclosure and standstill agreement on a non-exclusive basis, BCE said in a release."

Hmm, could yesterday's activity be explained by this news?

The action yesterday grabbed my attention as I was following Telus for the last little while looking for an entry point. I was offline most of the day so I was caught off-guard by the $2.95 difference in the June 19th's low and high for the day. Although volume hit 1,522,760 shares yesterday, it wasn't way out of whack as there were several days in the last month that hit over a million shares traded but an almost $3 move on a blue-chip stock told me something must be up.

The question now is how will the market receive this news? After all, Telus was rumoured to be the next possible private equity takeover target but there were other people saying it would try taking over BCE... tomorrow should be an interesting day. And let's not forget how Rogers will be affected by this news with two of its major wireless competitors possibly concentrating their efforts on a merger instead of their main businesses.

Another MF Account Bites the Dust

Today, I closed my mutual fund account with one of the 'Big Five' banks by redeeming my units in an international equity fund. This fund was one of the first investments I ever made and just my luck, it took a beating soon thereafter with the rest of the market. It finally recovered to where I should be about to squeeze out about a small gain which goes to show that timing plays an important role when investing.

This particular fund may still have ways to go before peaking but the incovenience of holding only one fund at an institution that I no longer have any more dealings with and the lack of online funds transactions for people without a so-called 'regular' bank account outweighed these possibilities. Besides having one less thing to keep track off, it also means that I might save a tree or two from the quarterly mailings I would have otherwise received.

Speaking of trees, you can help preserve endangered rainforest habitat by visiting The Rainforest Site on a daily basis.

Happy Tax Freedom Day Canada!

According to The Fraser Institute, starting today, "Canadians have paid off the total tax bill imposed on them by government and can finally start working for themselves."

The total tax bill has increased this year. "In 2007, the average Canadian family (with two or more individuals) will earn $83,775 and pay a total of $38,992 in taxes, for a total tax bill amounting to 46.5 per cent of its income. The average Canadian family will see its income increase by 3.4 per cent ($2,760) between 2006 and 2007 while the total tax bill increases by 1.5 per cent ($580). The largest increase among the myriad of taxes comes in the form of property taxes, up $279 for the average Canadian family. Other notable increases come in profit taxes ($256) and social security taxes ($118). Liquor taxes and natural resource levies both decreased between 2006 and 2007."

You can use their Personal Tax Freedom Day calculator to determine the day you stopped working for government and started working for yourself.

Although Tax Freedom Day falls four days earlier than in 2006, it still falls almost two months later than in 1961 which makes one wonder if things are truly better now than they were back then...

Wouldn't we all feel better about paying our fair share of taxes if we knew our tax dollars weren't being wasted???

Tuesday, June 19, 2007

Osisko's Stock-Split Day

For the sake of record keeping, Osisko (OSK-X) had its two-for-one stock split today.
It's intraday chart can be found below:

Osisko ended the day at $6.20.

The S&P/TSX index closed 56.93 points lower at 14119.49 while the TSX Venture exchange was up +10.90 to 3237.08.
Kitco reported the New York Gold Spot Price to be 660.50 (bid) / 662.00 (ask), up $4.70 on the day.

While on the subject of liquidity, what do you think about investing in low-volume stocks?

I have my eye on a few companies that appear to have good fundamentals but experience a relatively low number of trades during an average day. I see this as a positive when times are good as people chase the share price upwards but once things get tough, I suspect these type of stocks will get hit hard due to the absence of interested buyers. I've witnessed some of these stocks double in price in short order from the sidelines. Recently though, these stocks have dipped somewhat and look tempting... what should I do?

Monday, June 18, 2007

Osisko Exploration (OSK-X)

I'll turn my attention today to Osisko Exploration (OSK-X). It holds a 100% interest in the Canadian Malartic gold deposit in Quebec. I've dabbled in this stock on several occasions in the past including twice in the last two trading days taking advance of its relative lack of liquidity.

As you can see in the 1 year chart below, it almost completed another 'saucer bottom' intraday today

before dropping to $12.76 at the end of the day:

On June 4th, Osisko announced a two-for-one forward split of its common shares in the form of a stock dividend. Based on that announcement, shares of Osisko as slated to commence trading on an ex-dividend basis as of June 19th which happens to be tomorrow.

I'm thinking that Osisko's share performance to date was linked directly to the lack of very active trading activity which resulted in relatively big gaps in its bid/ask prices so it should be interesting how tomorrow's stock split will affect the share price and trading activity.
Typically, stock splits are beneficial in the long run when the share price is near record highs but in this case, I'm a bit skeptical of its benefits in the short term so I decided to get out today and see what happens from the sidelines.

Sunday, June 17, 2007

Rogers Communications (RCI.B-T)

I guess I should start things off with my decision to invest in Rogers Communications (RCI.B-T) at ~$44.50 back on May 28th while it's still relatively fresh in mind.

My portfolio had a very large weighting in mining stocks and with all the talk that the TSX (particularly mining stocks) were due for a correction, I thought it would be prudent to start diversifying my portfolio.

As you can see by the 1 year chart below for RCI.B-T, it is obviously in a nice uptrend

Besides the uptrend, I found the following things interesting about Rogers:

Cable Television & HDTV:
Almost everyone nowadays is buying HDTV-ready televisions. Digital HDTV services will bring in more revenue for Rogers.

Wireless Communications:
Not only are they a key player in the wireless telecommunications industry in Canada, they will be the exclusive provider of Apple's new iPhone in the country! Once iPhone availability is officially announced, I am hoping there will be a nice spike in investor interest in Rogers.

Home Phone:
With Rogers' introduction of home phone service, many of my friends have made the switch from Bell. Apparently, their not the only ones. That's good news for Rogers; bad news for Bell.

BCE Takeover Talks:
If and when BCE gets taken over, BCE shareholders will be looking elsewhere; some might decide that Rogers is a good place to invest.

Although it's small, it's money in my pocket nonetheless.

I had been keeping my eye on the stock for a couple of weeks and was hoping for a pullback to $42 but thanks to the company's announcement to raise the annual dividend to 50 Canadian cents a share from 16 cents that never happened and the share price shot up on the May 28th news.

I recalled reading somewhere that the company had a good following in the United States where it just happened to be Memorial Day and their markets were closed for the holiday so I thought, "Surely, when the U.S. markets open the next day, the share will rise even further" so I placed my order. Well, I was right. The share priced opened higher the next day but unfortunately, it then quickly starting dropping again and tested the $43 mark a few times in the days afterwards.

Friday's closing price was $46.73.


Well, here it is... my first blog entry!

Once I have figured out this whole blogger thing out, I intend to record my thoughts on my investment decisions so I can come back to them at sometime in the future and hopefully learn from my mistakes. (Hopefully, they will be few and far between but as we all know, no one's perfect.)

I've read some other Canadian investment blogs that post new commentary on a daily basis. I doubt I'll be doing that so don't be surprised if there are weeks or even months in between posts depending on market conditions and my schedule.

So there it is.... my first blog entry.

Stay tuned for more.