Saturday, May 31, 2008

Buying a New Car? You Absolutely Need This!

If you're shopping for a new car, you need to get Canada's most powerful negotiating tool.

Car Cost Canada provides Canadian dealership invoice prices to its members and can save you hundreds, if not thousands of dollars on your next new car purchase.

It's so simple too.

After registering at the Car Cost Canada web site, just select the car models you're interested to get the wholesale invoice price reports and instantly see the car dealer's true cost. Print out the report and take it to the dealership.

Since the dealer knows that you know their true cost, all their negotiation games and hassles are thrown out the window and you regain the power to get the deal you want.

"New Car Buyers stand a better chance of getting a great deal if they know the dealer invoice price" - The Globe and Mail

I know it did for me as I saved a lot of $$$ when I bought my car a few years ago with the report in my hands!

So if you're shopping for a new car, I'd definitely recommend using this handy web site to help you get a real deal.

Free US Real-Time ECN Quotes

Earlier this week, Yahoo! Finance announced the return of free unlimited US real-time ECN quotes on its web site. Kudos to them for bringing back this very useful feature!

MSN Money also offers real-time quotes but they limit it to 1,500 per month.

Meanwhile at Google, I haven't read anything about their real-time quote offerings recently but back in January 2007, they reported that they were trying to make it a reality.

Hopefully, this is just the beginning of a new real-time stock data era and we'll soon see freely available Level II quotes at your favourite online financial portal...

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June 2nd Update:
Well, that certainly didn't take long!
Barrons now has real-time prices for U.S. stocks on its site and Google Finance announced today that it's now offering real-time quotes on NASDAQ securities.

I can only wish my blog had such power to influence :D

Tuesday, May 27, 2008

Lucky ETF Investors

Here's an excerpt from Pett's article entitled 'Investors get lucky on Claymore pricing glitch' that I came across today:

"According to Claymore vice president Jeff Logan, market makers for Claymore ETFs, including Bank of Montreal, use Reuters as a pricing vendor. He said that Reuters, based out of the U.S., had a reset or pricing glitch right at the end of the day yesterday, causing Bank of Montreal's automated trader to make markets at a much lower price than the fund's actual net asst value.

"While BMO lost money on the trading, many retail investors were able to pick up the ETF at a big discount to the net asset value," said Mr. Logan. "Bank of Montreal could have canceled the trades but given the relatively small loss, they decided not to, making many investors very happy."

In total, about 7,300 units in the global mining ETF were bought during the last minute of trading as the price fell from $25.70, to a low of $19.55. The ETF closed at $20.05. Mr. Logan said the Claymore Global Agriculture ETF was also affected by Reuter's pricing glitch, although not as drastically.

Mr. Logan said the error has been corrected and secondary pricing sources and failsafes have been put in place to prevent this isolated occurence from happening again.

Units in the Global Mining ETF are back trading above $25 to $25.20 at 12:30 p.m. ET."

I'm just wondering who the lucky investors were?

Friday, May 23, 2008

Calling Oil's Top

As per my comments on the Million Dollar Journey, the quick rise in oil prices has created a very tempting reason to try shorting oil.

The HBP NYMEX Oil Bear+ (HOD-T) and HBP Energy Bear+ (HED-T) ETF's can help you accomplish your shorting strategy but since it offers ~2x the opposite move of the commodity / index, I still haven't figured how much, if any, I should invest / gamble in it. In any rate, if I were to short oil, it would be a short-term position in my portfolio and I definitely would have to keep a very close eye on it and place a stop loss.

Another way to bet on lower oil prices would be to invest in airline and other transportation-related stocks. As big consumers of oil, they can only only benefit from lower oil prices.

But before you place your bets on a correction in oil, please keep in mind that there's a limited supply of oil and prices will eventually be higher than they are today.

Tuesday, May 20, 2008

Medical Wait List Insurance

With waiting lists for medical procedures in our so-called "public" healthcare system at all-time highs, it comes as little surprise that the entrepreneurial spirit of the private sector is now offering a means of bypassing those long line-ups.

Acure Health Corp.
offers what they like to call "Medical Access Insurance (MAI)" which according to Acure Health, is Canada's first "Wait List Insurance." According to the CBC, the insurance is now offered in five provinces, most recently in Ontario.

So What is Wait List Insurance?

According to their web site, Acure's Medical Access Insurance

"provides Canadians with expedited access to specialist consultation (see MAI Plus+), diagnostics, and surgery for over 135 treatments and conditions. Medical treatment for covered conditions will be provided in weeks, not months or years. Our policyholders are serviced independently, resulting in shorter waiting times for others... If a physician recommends a covered diagnostic procedure or surgery and you are placed on a medical waiting list more than 45 days long, MAI will arrange to expedite your diagnosis and treatment in the United States or, in Canada when services are available."
Should You Buy It?

Just like life insurance, I consider wait list insurance a personal choice but unlike life insurance coverage, you might personally benefit from it.

With that in mind, is it worth the average 75+ bucks per month for coverage?

If you come from a strong gene pool, you might consider twice but if you've ever known someone waiting for months or years for an operation and witnessed their agony, then you'll most likely say yes.

The price may be steep but in the grand scheme of things, it might be well worth it in the time and money you save in not being in pain and suffering. Keep in mind that it was originally promoted as an addition to group insurance packages for companies so you might want to try convincing your employer to share in the costs as well.

I am not an insurance expert nor a doctor, so as always, you should not rely on any information found on this blog. I encourage you to conduct your own research and consult with your physician before signing any documents. Acure Health Corp. did not commission the writing of this article.

Which Canadian Bank Should You Buy?

David Parkinson asked this question in a recent Number Cruncher article and came up with the following result:

... which banks to buy? For that, we return to well-regarded equity quantitative-analysis firm CPMS Computerized Portfolio Management Services Inc., which has crunched the Canadian banking numbers and identified the key metrics that historically have pointed to superior stock performance.


CPMS has back-tested bank stock performance over the past 10 years against a variety of quantitative measures, and found that buying stocks with the lowest price-to-book-value (P/B) ratio would have netted investors the best bang for their buck, outperforming the group as a whole by almost 10 per cent annually.

Underperformance in the previous year – as indicated by both the worst 12-month price change and the highest dividend yield, both of which suggest a relatively low stock price – also tended to point to superior returns in the year that followed, with better than 4-per-cent outperformance of the group benchmark.

Conversely, bank stocks with the best price gains over the prior 12 months and the lowest dividend yields tended to be duds, underperforming the benchmark by the biggest margins.

You can view the complete result set on the RoB site.

Monday, May 19, 2008

TSX: On the Brink of 15K

Just a few months ago, there was a lot of talk about the global economic downturn and dire warnings of a major bear market. Well, if you're an investor of the TSX Composite Index, you might be wondering what all the recession talk's all about as the TSX is within a few points of reaching the 15,000 mark. Well, I didn't expect that to happen so soon!

Thanks in most part by the latest surge in oil prices (and natural gas too), the TSX is in record territory and the question is, will the party continue...

Well, I have no idea but considering I didn't really partake in this rally in any major fashion, I am currently establishing a list of stocks (including some energy-related bear ETF's) I'd like to get my hands on if a dip does occur anytime soon.

Wishful thinking?

Perhaps, but like we have seen in the last year, stranger things have happened.

Friday, May 9, 2008

ETNs vs. ETFs

Today's RoB article about the launch of U.S. Platinum Exchange Traded Notes (ETN's) mentioned an interesting point on a key difference between Exchange Traded Funds (ETF's) and ETN's:

Investment bank UBS launched two ETNs offering long and short trading strategies in platinum. ETNs, unlike exchange-traded funds, do not purchase physical platinum to back the number of shares sold.

Investopia defines an ETF as
A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold.

Because it trades like a stock whose price fluctuates daily, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.

By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order.

while it says that an ETN is
A type of unsecured, unsubordinated debt security that was first issued by Barclays Bank PLC. This type of debt security differs from other types of bonds and notes because ETN returns are based upon the performance of a market index minus applicable fees, no period coupon payments are distributed and no principal protections exists.

The purpose of ETNs is to create a type of security that combines both the aspects of bonds and exchange traded funds (ETF). Similar to ETFs, ETNs are traded on a major exchange (ie. NYSE) during normal trading hours. However, investors can also hold the debt security until maturity. At that time the issuer will give the investor a cash amount that would be equal to principal amount (subject to the day's index factor).

One factor that affects the ETN's value is the credit rating of the issuer. So, the value of the ETN may drop despite no change in the underlying index, instead due to a downgrade in the issuer's credit rating.

It should also be noted that structures like the Central Gold Trust and the Central Fund of Canada physically hold bullion.

Monday, May 5, 2008

Royal Bank of Canada

So I finally took the plunge and invested in a bank today. The Royal Bank of Canada (RBC-T) to be exact.

I must admit that I am not particularly confident about my entry point but as shown in the charts below, RBC's recent downtrend appears to have been broken.

Now, I could have only taken a partial position in RBC and see what happens before investing the rest but I decided against this. Since I plan on investing in at least two other Canadian dividend-paying bank stocks, I decided to invest the full amount in RBC and avoid paying a few additional dollars in commissions. If markets deteriorate again, I'll enter a position in another bank I have on my watch list. And if bank stocks have already completed their downtrend, I have picked up RBC at a yield of just over 4%.

Hopefully, ten years from now, none of this will matter with RBC hopefully reaching much higher highs and providing an ever-increasing dividend to boot.