investment

As you probably know, several U.S. states have de-criminalized or legalized marijuana use and have begun authorizing legal production and sale of the plant. Other U.S. and Canadian jurisdictions are likely to follow. This change in the law is bound to lead to a shift in current and future marijuana production, from the underground economy to the legal economy, where it can be regulated, taxed and invested in. Tax revenues are already starting to roll in, but we haven’t found any worthwhile investments in this area. So far, all we’ve seen are stock promotions. We advise staying out of stock promotions, of marijuana businesses or anything else. They attract the wrong kind of people. Stock promotion is a take-the-money-and-run type of business. Most successful entrepreneurs value their reputations, and want to build a profitable, sustainable business that can pay off for investors. So they generally go into some other line of work, and stay out of stock promotion....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you advice on specific investment topics. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Selling half of hot stocks that surge helps you guard your profits. But apply this rule only to more aggressive stocks, and not to the well-established stocks that may surprise you by going a lot higher in the long run.” As you probably know, our Successful Investor business model has two parts. We publish investment advice through The Successful Investor Inc., and we manage investor portfolios through Successful Investor Wealth Management Inc. (These two companies are affiliated by common ownership; I own both but set them up as separate companies for regulatory purposes.)...

Every industry and group has its own special jargon. This specialized language always has the same purpose. It simplifies communications within the industry, and helps make insiders feel they are part of a tightly knit community. It also helps the group pursue its goals. It shapes concepts that will establish lines of thought and discussions that match the industry’s view of the world. But it can be confusing for those who are not insiders in the group. This natural human tendency has probably been going on ever since language began. Many will recall George Orwell’s classic novel written at the dawn of the Cold War, 1984. In the book, the totalitarian government that rules the English-speaking world has decided to replace English with an invented language called Newspeak. This new language uses lots of English words, but it defines concepts in such a way that forbidden ideas are difficult, if not impossible, to express....

FIRSTSERVICE CORP. (Toronto symbol FSV; www.firstservice.com) serves the following areas of the real estate market: commercial real estate, residential property management and property improvement. The company has more than 24,000 employees worldwide. In the quarter ended March 31, 2014, FirstService’s revenue rose 15.1%, to $548.4 million from $476.4 million a year earlier (all figures except share prices in U.S. dollars). Excluding one-time items, earnings per share were $0.09, compared to a loss of $0.20. The first quarter is typically a slower time for the company. Revenue rose at all three of FirstService’s divisions: Colliers International (commercial real estate), up 28%; FirstService Residential (residential property management), up 7%; and FirstService Brands (property services), up 11%. FirstService Brands operates Paul Davis Restoration, California Closets and CertaPro Painters....

Pat McKeough responds to many requests from members of his Inner Circle for specific advice on specific stocks as well as questions on investment strategy and the economy. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle. This week we had a question from an Inner Circle member on two Canadian energy stocks. In spite of its name, Tourmaline Oil has 85% of its output in natural gas. Whitecap Resources has the greater part of its production in oil. Both companies enjoy rising production—in Whitecap’s case, spurred in part by acquisitions. Pat examines both companies’ prospects for continued production increases and whether their share prices—and Whitecap’s dividend—can keep on rising. Q: Hi Pat: Can I have your view on Tourmaline Oil and Whitecap Resources? Thanks....

Pembina Pipeline and Veresen both trade at high multiples to their per-share cash flow. But both of these dividend stocks also currently maintain high yields. PEMBINA PIPELINE (Toronto symbol PPL; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil, 30% of Western Canada’s natural gas liquids (NGLs) and almost all of B.C.’s conventional oil. Pembina bought rival Provident Energy for $3.2 billion in 2012. Provident extracts, transports and stores natural gas liquids (NGLs)....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you advice on stock market trading and other investment topics. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “Worrying about things like the direction of the economy—rather than about the long-term strengths and weaknesses of the stocks you own—can lead investors into disastrous buy-sell decisions.” Many investors spend a lot of time worrying about the wrong things, while paying little attention to anything that has a direct impact on the value of their investments. For instance, at times they may mull over every tidbit of economic information that comes out, and how it differs from its predecessor of a week or a month earlier. They hope to detect a pattern—a sign that the economy is mending and headed for a return to steady growth, or deteriorating and doomed to plunge into a renewed recession....

There’s a revolution brewing in Canada’s brokerage industry. Canada’s provincial securities commissions are looking at three longstanding practices that help the brokerage industry and securities salespeople, but represent a steady drain on the finances of many investors. Trailer fees and other “embedded” fees. Mutual fund buyers now pay a yearly fee or Management Expense Ratio (MER) of perhaps 2.5% of the value of most mutual funds they invest in. One and a half percentage points generally stays with the fund company, to pay for management of the funds, record-keeping, administration and so on; one percentage point goes to the securities firm where the investor bought the fund, to be shared between the firm and the salesperson. The idea is that this fee goes to pay for continuing advice to the investor. The fund company continues to charge the 1% to the investor, and pay it to the brokerage firm, every year for as long as the investor owns the fund....

CHEMTRADE LOGISTICS INCOME FUND (Toronto symbol CHE.UN; www.chemtradelogistics.com) is one of North America’s largest providers of removal services for resource firms, such as oil refineries and base-metal processors. These companies’ activities create sulphur, acid and other by-products that Chemtrade converts into useful chemicals, like sulphuric acid. The trust also offers a range of environmental services through its Marsulex subsidiary, such as improving air quality and handling and treating industrial waste. Chemtrade’s revenue rose 30.4% in the three months ended March 31, 2014, to $273.9 million from $210.0 million a year earlier....

ISHARES CDN REIT SECTOR INDEX FUND $16.48 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index. The weight of each REIT is limited to 25% of the ETF’s value.

iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 4.9%.

The ETF’s largest holding is RioCan REIT at 19.9%, followed by H&R REIT (15.1%), Canadian REIT (7.5%), Dream Office REIT (7.2%), Calloway REIT (6.6%), Canadian Apartment REIT (6.0%), Boardwalk REIT (6.0%), Allied Properties REIT (5.8%), Cominar REIT (5.3%), Artis REIT (4.8%), Chartwell REIT (4.5%), Granite REIT (4.5%), Crombie REIT (2.3%), Dream Global REIT (2.2%) and Northern Property REIT (2.1%).

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