Stock | Global Investors

Posts Tagged ‘stock’

Best Stock Picks 2012 Contest Q1 Update

April 3rd, 2012 | Posted by Global Investors

2012 Best Stock Pick: Last Place is All Mine!

Each year, a few bloggers including myself participate in a friendly stock picking competition. The goal is to pick 4 stocks for the year and hope that our little portfolio will do better than everyone else’s. We can pick stocks from both the Canadian and US markets and ETFs are accepted as well. On the other hand, during the year no trades are allowed.

I have a weird feeling that history is repeating itself again this year: I’m last because of a single bad pick… Should I say “bad”? not yet. But I can’t say that it was a good move for Q1! Let’s take a look at what went well and what sucked in Q1 for my 2012 best stock picking contest:

National Bank – NA (TSE) +11.05%

The National stock has been good to me for the past 3 years. In fact, since December 2008 (when the stock was at $25), it has never stopped surging. We are now over $80 and the dividend keeps on increasing. The best part is that I think the best is yet to come for this small bank from Quebec. They have made several important moves over the last 2 years while investing massively in technology improvements. Disclaimer: I am long NA.

5N Plus – VNP (TSE) –29.04%

During my stock picking session, I mentioned that VNP could be one of the best 2012 Canadian Stocks. The company is solid and evolves as a leader in its niche. The problem is that they might have taken a bite into something they can’t swallow. For the first time this Quarter, they have reported losses. Very poor timing is behind these losses: important acquisitions last year, economic problems in Europe and a slowdown in the solar industry due to the potential threat of a recession. I hope that the next quarter will be better, if not, I will most likely drop this stock upon their 2^nd financial report. Disclaimer: I’m long VNP too.

Intel – INTC (NASDAQ) + 16.85%

INTC has been a rising star in my portfolio since I bought it back in August 2011. They show great innovative power and dominate their market like no other. Their Achilles Heel is related to their difficulties in entering the smart phone and tablet markets with their chips. The good news is that they recently gained market share in this niche as well. I’m expecting INTC to continue to soar until the end of 2012. Disclaimer: I’m long INTC as well.

Chevron – CVX (NYSE) +1.54%

CVX was my “defensive play” for this year’s contest. I’m not expecting CVX to grow like crazy but I think that a strong dividend combined with a hiking price of oil is never a bad idea in a portfolio! You can’t expect much from a big boat like CVX if not to expect a steady growth. This is exactly what I expect CVX to do. So far, if I include CVX dividend yield, the stock is doing okay but it’s lagging as compared to the stock market. Let’s hope they will post strong profits throughout the year! Disclaimer: I’m long CVX.

2012 Best Stock Pick Ranking:

I know… I’m in last place… but still, I’m in positive territory. Look at the return of the other bloggers, it’s quite impressive (click on their name to read their article):

Where Does All My Money Go?: 35.91%

Intelligent Speculator: 16.37%

Dividend Mantra: 13.71%

Wild Investor: 11.78%

My Traders Journal: 11.17%

Beating the Index: 10.87%

Million Dollar Journey: 7.84%

The Passive Income Earner: 4.77%

Dividend Growth Investor: 4.43%

The Financial Blogger: 0.10%

View full post on The Financial Blogger

Read More » No Comments »

Correlation Between Age Demographics and Stock Market Prices?

February 6th, 2012 | Posted by Global Investors

While perusing this early retirement reading list for more books to read, I ran across an interesting fellow named Harry S. Dent, Jr. His primary theory is that age demographics are strongly correlated with the economy and thus stock market prices.

In particular, the number of households headed by 46-50 year-olds are the best indicator because they are shown to have the highest spending. This makes sense, as around age 50 is also when peak income occurs while you also have spending pressure from grown-up kids and college tuition. After that, the kids move out, things slow down, and average income drops. Here are some charts from the HS Dent Foundation website:

Source:HS Dent Foundation

By looking at birth rates and adjusting for immigration, you can basically predict how many 46-50 year-olds there will be well into the future. Here’s how the shifted birthrate data corresponds to the Dow Jones stock index adjusted for inflation:

Source:HS Dent Foundation

According to the birthrate data, we are looking at depressed prices for another 10-15 years or so, but things will pick back up after that. While I think there may be something to this concept on a long timescale, I would be careful with trying to profit with it in the short-term.

I’m actually look at Mr. Dent himself here – a quick look around shows that he is trying everything under the sun to make money from this simple theory – writing a new book every few years with mostly the same content (2011, 2009, 2006), selling $1,500 seminars to “Demographics School”, and even starting his own Dent Tactical ETF (ticker symbol: DENT) with poor performance since inception and a bloated 1.65% expense ratio. Potential investors should know that he already started a mutual fund previously that failed:

In 1999, the AIM Dent Demographics Trends Fund was launched, based on the demographic economic and lifestyle trends identified by Dent. Unfortunately, the fund’s results were miserable. From 2000 through 2004, the fund lost more than 11 percent per year and underperformed the S&P 500 Index by almost 9 percent per year. In 2005, its sponsor put investors out of their misery by merging it into the AIM Weingarten Fund.

Over the years, he has made many predictions. Some of them came true, more or less. For example, he predicted that the slowdown in Japan economy would coincide with the end of the end of their peak number of 46-50 year-olds in 1990-1994. Some of them did not, like in 2006 when he predicted the Dow Jones would reach 32,000-40,000 in the year 2010 (the highest ever close was 14,164 in 2007).

The last prediction I could find was Dow 4,000 to 6,800 somewhere around 2012. That’s over a 50% drop from today’s prices. I think I’ll add this demographics theory to my investing consciousness, but I’ll leave the bold predictions behind.

Chase Freedom® Visa – $200 Bonus Cash Back” border=”0″></a> 
 
<a href= Correlation Between Age Demographics and Stock Market Prices? from My Money Blog.

View full post on My Money Blog

Read More » No Comments »

Larry Swedroe Personal Portfolio: Small Value Stock Premium Revisited

December 27th, 2011 | Posted by Global Investors

I’ve written a little bit in the past about including small-value stocks to your investment portfolio. “Small” means companies with a relatively smaller market cap (total market value) – definitions vary from being the bottom 10% by capitalization or being worth less than $1 billion. “Value” stocks are those that tend to trade at a lower price relative to others when measured against markers like earnings, dividend yield, sales, or book value.

This NYTimes article on the portfolio of investment advisor and author Larry Swedroe included some concise examples of how significant this small-value premium has been in the past. For one, small-value stocks outperformed the S&P 500 by about 4% annually from 1927-2010.

Put another way, by making a portfolio using small-value stocks and US Treasury bonds, you could have gotten similar performance to the S&P 500 with much lower risk. Specifically, you could have held 1/3rd small-value and 2/3rd Treasury bonds and had close to the same return as the S&P 500 over a 40-year period from 1970-2010. This chart summarizes:

Source: Buckingham Asset Management, New York Times

Will this “small-value premium” continue to persist? There are a few theories out there. One is behavioral, where small-value companies tend to be the more ignored and unpopular companies and thus are consistently underpriced. Another is based on the fact that small-value companies are simply riskier, and thus investors demand a higher return for holding them.

I happen to believe that there is something enduring about small-value stocks, but the size of my bet on that belief is relatively small – only about 5% of my target stock allocation. But I also know that you need to hold a very strong belief in whatever internal explanation you have for the outperformance. Otherwise, when small-value is the dumps for a while relative to the Current Hot Thing – and it will be, one day – you’ll sell and lose any potential edge.

View full post on My Money Blog

Read More » No Comments »

LMIA (New Video), CLNO, EW, ITC, ENR – Stock Update From PennyOmega.com!

October 30th, 2011 | Posted by Global Investors

LMI Aerospace, Inc. (Nasdaq:LMIA), a leading provider of engineering services, structural assemblies, kits and components to the aerospace, defense and technology industries, announced that it has received a contract award from Embraer for the design and build of wing slat assemblies for the KC-390 aircraft.
View full post on Live News from PR-USA.net

Read More » No Comments »

2011 Best Stock Picking Contest Q3 Results

October 4th, 2011 | Posted by Global Investors

The Market is down seriously and so are my picks . Nonetheless, it’s time for another update on everybody’s performance. Believe it or not, there are 2 bloggers that are positive! Crazy isn’t?

RIM

If you ask me, I think it’s over for RIM. I took a serious beating in my own portfolio, sold it at $44. I thought they were able to compete with their Blackberry but it seems that the customers have decided otherwise. While I am still a Blackberry fan (nothing can type faster!), I must admit that it might be my last phone with them too… sometimes, you take guesses and are wrong. RIM is one of the bets I lost! I just hope that it won’t go down further by the end of the year. I promise I won’t pick it next year .

HUZ

Silver was doing well until the recent September debacle when it followed gold in the dive. Then again, I would not hold silver in my portfolio but this is the kind of stock that can help you win a 1 year contest. I think we have room for a jump before the end of the year. Let’s keep our fingers cross!

POT

I’m pretty happy with Potash to be honest. While it is off slightly, it is still in a pretty good position to finish the year strong. If the plan to save European countries is strong enough and news from emerging markets are encouraging, we can easily see Potash going back up and showing a positive gain in 2012.

CVX

Aaahhh… a good old dividend paying stock! Honestly, I’m not surprised to see CVX being my best stock this year. I would not have bet on this stock at the beginning of the year as I was expecting to be my defensive pick in a bull market. But things evolved differently and Chevron played exactly its role! The dividend payout makes it a pick that is positive as of today. No wonder I switched my portfolio towards a dividend investing strategy this year ;-D.

Now on to the big guys… Kuddos to Intellingent Speculator and Dividend Growth Investor for being positive! Here are all the results:

Dividend Growth Investor 3.39%

Intelligent Speculator 3.19%

Million Dollar Journey -5.98%

Money Smarts Blog -13.14%

Where Does All My Money Go -18.12%

The Financial Blogger -20.31%

My Traders Journal -35.82%

Wild Investor -37.26%

Beating The Index -45.07%

And all the picks:

IS	KMB US EQUITY	16.3%
IS	PEP US EQUITY	-3.1%
IS	CTRP US EQUITY	-20.5%
IS	AMZN US EQUITY	20.1%
TFB	HUZ CT EQUITY	-3.7%
TFB	RIM CT EQUITY	-63.2%
TFB	CVX US EQUITY	3.8%
TFB	POT US EQUITY	-16.0%
WI	WHR US EQUITY	-42.7%
WI	JPM US EQUITY	-28.1%
WI	PZE US EQUITY	-46.9%
WI	SLB US EQUITY	-27.8%
MDJ	V US EQUITY	22.5%
MDJ	RY CT EQUITY	-5.6%
MDJ	HSE CT EQUITY	-11.7%
MDJ	ECA CT EQUITY	-29.2%
WDA	F US EQUITY	-42.4%
WDA	SVR-U CN EQUITY	0.9%
WDA	CM CN EQUITY	-3.1%
WDA	VWO US EQUITY	-25.6%
MSB	CGL CN EQUITY	-13.2%
MSB	CGL CN EQUITY	-13.2%
MSB	CGL CN EQUITY	-13.2%
MSB	CGL CN EQUITY	-13.2%
BTI	SKW CN Equity	-59.4%
BTI	ARN CN Equity	-21.8%
BTI	BWD CN Equity	-55.0%
BTI	REL CN Equity	-39.7%
MTJ	SSO US EQUITY	-20.6%
MTJ	UWM US EQUITY	-36.2%
MTJ	MVV US EQUITY	-29.5%
MTJ	EET US EQUITY	-48.7%
DGI	JNJ US EQUITY	5.7%
DGI	PG US EQUITY	0.6%
DGI	PM US EQUITY	10.0%
DGI	PEP US EQUITY	-3.1%

View full post on The Financial Blogger

Read More » No Comments »

Build A Complete Stock Portfolio With Just Two ETFs: Vanguard Total US (VTI) and Total International (VXUS)

September 28th, 2011 | Posted by Global Investors

If you are constructing your own portfolio and like the idea of low-cost, passively-managed index funds, you should definitely be aware that just two ETFs that can provide you diversified exposure to stocks worldwide and all at rock-bottom fees. Given how many choices there are out there today, I can’t assume that everyone knows about these already.

The Vanguard Total US Stock index fund invests in over 3,000 stocks that represent the entire U.S. stock market, from small-cap to large-cap companies. The smallest company on their holding list is 100 shares of Qualstar Corp, worth a mere $200. The entire company is worth about $20 million. Compare that to the largest holding of Apple, worth $380 billion (that’s 19,000 times larger). The ETF and Admiral shares have a mere 0.07% expense ratio ($7 annually per $10,000 invested), which is taken out in tiny amounts daily out of the fund’s net asset value. That’s just 6% of what the average mutual fund charges. There are three versions:

Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)

The Vanguard Total International Stock index fund invests in over 6,000 stocks that covers 98% of the world’s investable markets excluding the US (“ex-US”). This includes 44 countries from the “European, Pacific, and emerging market regions, as well as Canada.” The fund also includes both small-cap and large-cap companies from these countries. The ETF and Admiral shares charge a 0.20% expense ratio. Three versions as well:

Vanguard Total International Stock ETF (VXUS)
Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)

This graphic shows you how these two funds relate to other Vanguard ETFs you may already be aware of:

(Source, brighter red text is added by me)

(I should also mention that there is the Vanguard Total World Stock ETF (VT), which covers the entire world in one tidy fund. However, it only holds 2,904 stocks total, which is nearly 2/3rds less than a VTI/VXUS combo. On top of that, it charges a 0.25% expense ratio, which is nearly double how much a VTI/VXUS combo would cost when weighted appropriately. I personally think the added diversification and lower cost is worth the hassle of owning two separate funds.)

Implementation

As of August 31, 2011, the world market value breaks down to about 42% US and 58% Ex-US. For simplicity, I chose to own VTI and VXUS in a simple 50/50 ratio as part of my target asset allocation. I rebalance back to 50/50 regularly using new cashflows, and also at least once annually. Bonds are a separate discussion.

Side note: The reason I thought of writing this is that I previously held Vanguard FTSE All-World ex-US ETF (VEU) as my primary international holding, which as you can see above is a subset of VXUS, but realize that VXUS only arrived earlier this year. I’ve shifted most things over already, but I have been hesitant to sell some of my taxable holdings because I’d owe capital gains taxes. I noticed yesterday that I am actually at slight loss now (yay?), so I am able to do some tax-loss harvesting by selling my VEU and swapping it for VXUS. Since they are not “substantially identical” funds, I am not subject to wash sale rules.