Category: Stock Pick of the Day


Canadian Stocks

Filed Under: Stock Pick of the Day by Bill — Comments Off
October 16, 2009

Since the federal government isn’t going to stop printing money anytime soon I’m fairly certain that the US dollar is going to keep falling.  One way to offset the falling dollar is to invest in companies in foreign countries.  That way you don’t only well from the companies doing well, but you get the currency exchange bonus.  If you pick companies that buy a lot from the US then you’ll see another bonus there since they will be saving money on the purchases.  I know many people don’t feel very comfortable purchasing in the far off lands of China and Europe.  Let’s not forget the Canadian stocks of the great white north though.  You could still visit these companies on a weekend trip, a passport (or specialty license), and some heckling from the border patrol. 

The Canadian Stock Exchange

The biggest Canadian stock exchange is the Toronto stock exchange or TSX.   The hours of this exchange are roughly the same as the NYSE (9:30AM to 4:00PM EST) with some different holidays:

  • New Year’s Day – January 1, 2010
  • Family Day – February 15, 2010
  • Good Friday – April 2, 2010
  • Victoria Day – May 24, 2010
  • Canada Day – July 1, 2010
  • Civic Day – August 2, 2010
  • Labour Day – September 6, 2010
  • Thanksgiving Day – October 11, 2010
  • Christmas Day – December 27, 2010 (in lieu of December 25)
  • Boxing Day – December 28, 2010 (in lieu of December 26)

U.S. Holidays*

  • Martin Luther King, Jr. Day – January 18, 2010
  • Memorial Day – May 31, 2010
  • Independence Day – July 5, 2010 (in lieu of July 4)
  • Thanksgiving – November 25, 2010

The Canadian economy is strongly based in exports of commodities and they have some famous large banks.  My Canadian stock picks will definitely fall in these two industries.  One Canadian oil stock I particularly like is Canadian Oil Sands Trust.  I believe the US will look to purchasing oil from non Middle East sources.  While drilling in the US is ideal, we’ll look to our local neighbors first, and Canada has no political inflammatory implications with it.  The oil sands have been known about for a long time it just wasn’t worth going after until oil prices shot up over the last few years.

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I’m Interested in Oil Stock

Filed Under: Stock Pick of the Day by Bill — Comments Off
September 23, 2009

As long as the majority of oil comes from outside of the country I believe oil stock is going to rise. One factor is we are definitely monetizing the debt in the US right now (don’t even deny it) and this will reduce the US dollar against other world currencies. If our money is worth less then the price of oil will go up. Also, regardless if our use of oil rises or drops OPEC is going to fix the price of oil, maybe even fix the profit per year from oil. If they do get the economy churning again (which I think we will) then our oil use will rise with a still falling dollar making much higher oil prices.

One oil stock I like is Valero Energy Stock Ticker: VLO

Even at today’s low prices the stock has gained an average of 20% per year for the last 20 years. That is pretty freaking amazing I don’t think most people’s mutual funds have done that well through the boom and bust cycle.  My only real concern is the growth rate.  If it’s not sustainable the stock could sit idle a bit longer especially with its variable positive/negative cash flow and earnings per share.

Logarithmic Chart VLO

I think the best oil stock out there right now is Stock Ticker: SII or Smith International Inc.  I particularly like this stock because they make their money in drilling equipment, waste management, and supply chain logistics for the oil drilling industry.  So regardless of oil stock prices this company has the potential of doing well.   If oil prices are high then the oil companies will have more money in invest in drilling equipment, if it’s low then demand will go up and more drilling equipment will be needed.  It’s a win win with their consistent increase in dividend payouts and improved earnings per share.  If you look at the chart SII has consistently bounced back from steep drops, just a nice repeating pattern.

Logarithmic Chart Sii.jpg

I know these are some crude oil stock picks.  (Ha Ha get it?)  I just wanted to show a stock pick still using my usually CAGR screening, but with some more ties to current affairs.  We’ll see how my current event analysis works out.

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History of Stock Market Performance

Filed Under: Investment Strategy, Stock Pick of the Day by Bill — Comments Off
July 24, 2009

Often you’ll hear numbers thrown around by stock market advisors saying things like “the stock market performance has been 8% a year…” however, this hasn’t always been true, this is only been true for a given slice of stock market history.  It’s interesting to look at stock market performances over different periods of time.

Stock Market Performance Pre WWI (1871-1911): The stock market (S&P) went from 4.44 to 9.27 for a CAGR of only 1.8%

Stock Market Performance WWI to WWII (1912-1944): During this period the stock market only returned 0.7% per year raising to 11.85.  The Great Depression followed by a New Deal government spending it was hard for poor and rich to gain any traction.

Stock Market Performance WWII to Vietnam (1945 – 1965) Here was the first era of serious prosperity with the stock market climbing nearly 10% (9.9%) per year each year.  Imagine the wealth gained by those savers who learned to earn in a time of 1 – 2% returns.  I believe part of it was the beginning of woman moving into the workforce (though most returned after the war until the 1960s and a serious improvement in manufacturing productivity.

Stock Market Performance Vietnam to Desert Storm (1966 – 1991) 5.2% returned a year during this period.  I think it’s interesting to note that this period and after Desert Storm to present are about the same rate of return.  It almost appears the economy is becoming so large, or the face of war has changed so much that the war doesn’t have as much impact on the financial markets.

Stock Market Performance Desert Storm to Present (1992 – 2009) 5.7% returned – again about the same as Vietnam to Desert Storm, though the number would have been a bit better if I would have stopped it at the return to Iraq.

Why did I choose wars as a point to break down eras?  Why not?  You just never know what will pop out at you when you take the time to look at the details and not just muck it all up in one round number.  Why not try the numbers in some way that makes sense to you and tell us all about it?

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Stock Market Info – Varying Levels Of Awesomeness

Filed Under: Stock Pick of the Day by Bill — 1 Comment
July 14, 2009

Everyone gets their inside information or hot tips from varying sources.  However, when it comes to finding the best stock market info your source definitely matters.  Here are 3 sources of stock market information with their pros, cons, and my general thoughts.  Hey if you didn’t want my general thoughts why are you reading my blog?

Stock Market Info Tips:

  1. The Water Cooler Guy – When Fred from accounting tells you about his big score in stock xyz and wants everyone to follow what he’s going to do next in his stock market ventures you better listen, or should you?
    • Pros – The advice is free, if you’re both right you’ll be office heroes and you’ll get quality time with your boss giving his stock tips, and you don’t feel too obligated to follow one way or the other since it’s just Fred.
    • Cons – Office politics may make you feel pressured to follow along, Fred will likely only talk about his stock market wins, not his losses you get a skewed view of his choices.
    • Random Thoughts – If you want to invest in an office setting start a stock market investing club.  That way there is open discussion and time for facts not just boasting, with all the other benefits of the water cooler time.
  2. Investment Newsletter/Publications – From the Wall Street Journal to 1000 a month newsletters which ones are worth it?
    • Pros - Investment newsletters can give you insight that is unique and timely, critical to a good investment plan.  Also, you can learn just by following the thought patterns of the authors.
    • Cons – Too cheap of ones everyone gets the same info, too expensive and the stock market info drains too much of your trading account for you to make any money off of the information.
    • Random Thoughts – Don’t spend more than 1% of your trading portfolio on stock market information of any kind.  I know this is limiting in the beginning, but it will stop you from becoming a stock market tool junkie.
  3. The Internet – Forums, Blogs, and Search Engines – What else do you need?
    • Pros – Generally the price is right, even the exclusive forums aren’t usually more than $20 a month.  Often they have more expensive newsletters or other services tied to them, but you get to check those out on the sites before you buy. 
    • Cons – There is no good way to validate stock market info on the net since it’s not generally peer reviewed.  So you have to take any ideas with a grain of salt.
    • Random Thoughts – Use the Internet for learning how to think like a investor or trader.   Learn to make a trading plan, or how to calculated risk, but don’t just buy what others are buying, learn how to come to the conclusion on your own.
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