How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.
If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)
If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.
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TORSTAR CORP. $8.54 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $680.7 million; TSINetwork Rating: Above Average; Dividend yield: 6.2%; www.torstar.com) continues to add to its growing number of Internet businesses.
The company recently paid an undisclosed sum for TargetVacations.ca, a website that lets users buy vacation packages and book flights, cruises and hotel rooms.
This purchase looks like a nice fit with Jaunt.ca, Torstar’s other travel-related website.
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The company recently paid an undisclosed sum for TargetVacations.ca, a website that lets users buy vacation packages and book flights, cruises and hotel rooms.
This purchase looks like a nice fit with Jaunt.ca, Torstar’s other travel-related website.
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VANGUARD GROWTH ETF $71.07 (New York symbol VUG; buy or sell through brokers) aims to track the MSCI U.S. Prime Market Growth Index, a broadly diversified index that mainly consists of shares of large U.S. companies. Its MER is just 0.10%.
The $25.2-billion fund’s top holdings are Apple, IBM, Google, Coca-Cola, Microsoft, Philip Morris International, Oracle, Wal-Mart, Schlumberger and Qualcomm.
Vanguard Growth ETF’s breakdown by industry is as follows: Information Technology (32.2%), Consumer Discretionary (18.1%), Industrials (11.8%), Consumer Staples (11.6%), Health Care (10.2%), Energy (6.5%), Financials (5.3%), Materials (3.8%), Telecommunication Services (0.4%) and Utilities (0.1%).
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The $25.2-billion fund’s top holdings are Apple, IBM, Google, Coca-Cola, Microsoft, Philip Morris International, Oracle, Wal-Mart, Schlumberger and Qualcomm.
Vanguard Growth ETF’s breakdown by industry is as follows: Information Technology (32.2%), Consumer Discretionary (18.1%), Industrials (11.8%), Consumer Staples (11.6%), Health Care (10.2%), Energy (6.5%), Financials (5.3%), Materials (3.8%), Telecommunication Services (0.4%) and Utilities (0.1%).
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VANGUARD EMERGING MARKETS ETF $39.71 (New York symbol VWO; buy or sell through brokers) aims to track the MSCI Emerging Markets Index, which is made up of common stocks of companies located in developing countries around the world. The fund has an MER of just 0.20%.
Vanguard Emerging Markets ETF’s top holdings include Samsung Electronics Co. (South Korea), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Taiwan Semiconductor (Taiwan: computer chips), Vale SA (Brazil: mining), America Movil SAB de CV (Latin America: wireless), Gazprom (Russia: gas utility), China Construction Bank, Itau Unibanco Holding SA (Brazil: banking), Industrial & Commercial Bank of China, CNOOC Ltd. (China: oil and gas) and China Life Insurance.
The $65.7-billion fund’s breakdown by country is as follows: China (17.4%), South Korea (15.2%), Brazil (15.1%), Taiwan (10.9%), South Africa (7.4%), India (7.3%), Russia (7.1%), Mexico (4.4%), Malaysia (3.2%), Indonesia (2.8%), Thailand (1.9%), Poland (1.7%), Chile (1.6%), Turkey (1.3%) and Other (2.7%).
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Vanguard Emerging Markets ETF’s top holdings include Samsung Electronics Co. (South Korea), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Taiwan Semiconductor (Taiwan: computer chips), Vale SA (Brazil: mining), America Movil SAB de CV (Latin America: wireless), Gazprom (Russia: gas utility), China Construction Bank, Itau Unibanco Holding SA (Brazil: banking), Industrial & Commercial Bank of China, CNOOC Ltd. (China: oil and gas) and China Life Insurance.
The $65.7-billion fund’s breakdown by country is as follows: China (17.4%), South Korea (15.2%), Brazil (15.1%), Taiwan (10.9%), South Africa (7.4%), India (7.3%), Russia (7.1%), Mexico (4.4%), Malaysia (3.2%), Indonesia (2.8%), Thailand (1.9%), Poland (1.7%), Chile (1.6%), Turkey (1.3%) and Other (2.7%).
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TRANSCANADA CORP. $44.88 (Toronto symbol TRP; Shares outstanding: 704.5 million; Market cap: $31.6 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.transcanada.com) has won a contract to build and operate a 90-kilometre pipeline that will pump bitumen from the Fort Hills oil sands project to an upgrading facility near Fort McMurray, Alberta.
This new line, called the Northern Courier Pipeline, will cost $660 million.
Regulators still need to approve the project. TransCanada will submit an initial application in late 2012; it hasn’t said when it would begin construction.
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This new line, called the Northern Courier Pipeline, will cost $660 million.
Regulators still need to approve the project. TransCanada will submit an initial application in late 2012; it hasn’t said when it would begin construction.
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VERESEN $12.77 (Toronto symbol VSN; Shares outstanding: 196.3 million; Market cap: $2.5 billion; TSINetwork Rating: Average; Yield: 7.8%) owns pipelines, power plants and natural gas processing facilities across North America. One of its major holdings is 50% of the Alliance gas pipeline, which runs 3,000 kilometres between Chicago and Fort St. John, B.C. Enbridge owns the other 50%.
The company also owns the Alberta Ethane Gathering System, and Veresen and Enbridge together hold 85.4% of the Aux Sable natural gas liquids plant.
In December 2011, Veresen paid Encana Corp. $920 million for the Hythe/Steeprock natural gas gathering and processing complex in the Montney region of B.C. and Alberta. Encana has agreed to purchase most of the facility’s gas under a long-term contract.
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The company also owns the Alberta Ethane Gathering System, and Veresen and Enbridge together hold 85.4% of the Aux Sable natural gas liquids plant.
In December 2011, Veresen paid Encana Corp. $920 million for the Hythe/Steeprock natural gas gathering and processing complex in the Montney region of B.C. and Alberta. Encana has agreed to purchase most of the facility’s gas under a long-term contract.
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PEMBINA PIPELINE $26.86 (Toronto symbol PPL; Shares outstanding: 288.7 million; Market cap: $7.8 billion; TSI Network Rating: Average; Dividend yield: 6.0%; www.pembina.com) owns pipeline systems that transport half of Alberta’s conventional oil production, 30% of the natural gas liquids (NGLs) produced in Western Canada and virtually all of B.C.’s conventional oil output.
In the three months ended June 30, 2012, revenue rose 70.0%, to $870.9 million from $512.4 million a year earlier. In January 2012, it bought rival Provident Energy, which extracts, transports and stores NGLs, for $3.2 billion. Provident’s contribution was the main reason for the higher revenue.
Cash flow rose 9.4%, to $89.5 million from $81.8 million. However, cash flow per share fell 36.7%, to $0.31 from $0.49, because the company issued more shares to pay for Provident. Lower NGL prices held back Provident’s cash flow in the latest quarter. But over the longer term, the company should be a good fit with Pembina because it diversifies its business and provides additional growth prospects.
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In the three months ended June 30, 2012, revenue rose 70.0%, to $870.9 million from $512.4 million a year earlier. In January 2012, it bought rival Provident Energy, which extracts, transports and stores NGLs, for $3.2 billion. Provident’s contribution was the main reason for the higher revenue.
Cash flow rose 9.4%, to $89.5 million from $81.8 million. However, cash flow per share fell 36.7%, to $0.31 from $0.49, because the company issued more shares to pay for Provident. Lower NGL prices held back Provident’s cash flow in the latest quarter. But over the longer term, the company should be a good fit with Pembina because it diversifies its business and provides additional growth prospects.
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BANK OF NOVA SCOTIA $52.46 (Toronto symbol BNS: Shares outstanding: 1.1 billion; Market cap: $57.7 billion; TSINetwork Rating: Above Average; Div. yield: 4.4%, www.scotiabank.com) has agreed to buy ING Bank of Canada, which operates as ING Direct, from Netherlands-based ING Group.
ING Direct offers a wide variety of no-fee banking services, mainly over the Internet. It has 1.8 million customers and $30 billion in deposits. Bank of Nova Scotia will keep ING Direct as a separate business.
The bank will pay $3.1 billion for ING Direct when the deal closes in December 2012. However, ING Direct holds cash of $1.2 billion, so the real cost is around $1.9 billion.
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ING Direct offers a wide variety of no-fee banking services, mainly over the Internet. It has 1.8 million customers and $30 billion in deposits. Bank of Nova Scotia will keep ING Direct as a separate business.
The bank will pay $3.1 billion for ING Direct when the deal closes in December 2012. However, ING Direct holds cash of $1.2 billion, so the real cost is around $1.9 billion.
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IMPERIAL OIL $46.36 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $39.3 billion; TSINetwork Rating: Average; Dividend yield: 1.0%; www.imperialoil.ca) is a major integrated oil company with oil sands projects in Alberta, and conventional oil and gas operations in Western Canada. It also owns four refineries and operates 1,850 Esso gas stations.
In the three months ended June 30, 2012, Imperial’s earnings fell 12.5%, to $635 million, or $0.75 a share, on lower oil and gas prices. A year earlier, it earned $726 million, or $0.85 a share. Revenue fell 3.3%, to $7.5 billion from $7.8 billion. However, cash flow per share rose 0.9%, to $1.09 from $1.08.
Imperial’s production is set to keep rising thanks to its new oil sands operations, including the $10.9-billion Kearl project, which is more than 94% complete. Imperial owns 71% of Kearl. ExxonMobil (New York symbol XOM) owns the remaining 29%. Exxon also holds a 69.6% interest in Imperial.
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In the three months ended June 30, 2012, Imperial’s earnings fell 12.5%, to $635 million, or $0.75 a share, on lower oil and gas prices. A year earlier, it earned $726 million, or $0.85 a share. Revenue fell 3.3%, to $7.5 billion from $7.8 billion. However, cash flow per share rose 0.9%, to $1.09 from $1.08.
Imperial’s production is set to keep rising thanks to its new oil sands operations, including the $10.9-billion Kearl project, which is more than 94% complete. Imperial owns 71% of Kearl. ExxonMobil (New York symbol XOM) owns the remaining 29%. Exxon also holds a 69.6% interest in Imperial.
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Investment research has changed a great deal since I first got involved in it in 1964, at age 16, when I got a part-time job as an assistant to an investment writer. Back then, and for many years after, you had to call or write companies to get them to mail annual and quarterly reports. You had to dig through stacks of dusty newspapers to get stock prices and market index history. To compare statistics on companies, you used a clunky adding machine and went through lots of pencils and paper....
Reductio ad absurdum (Latin: “reduction to the absurd”) is a form of argument that goes back thousands of years, to Aristotle and before. It works like this: to prove a proposition is false, you simply show that its logical implications lead to absurd conclusions. This can be a great timesaver for investors. Take, for example, foreign-exchange trading courses, for which you can pay hundreds or thousands of dollars for a day or two of instruction. The marketing materials for these courses suggest that you can make a living in as little as a few minutes a day by trading foreign exchange (or “forex,” as course promoters refer to it in the ads). Better yet, you can do it in your living room....
