investment

Many young people begin investing with the mistaken notion that a single big idea can make them rich. For some, the big idea is stumbling upon an investment that provides a 1,000-to-1 return. For others, it’s a technique that provides sure-fire investment decisions, or an investing course or guru that promises instant riches. If you ask investors who have a few decades of successful investing behind them, however, few if any will credit their success to any one investment or investing technique. Instead, most will talk about the value of everyday qualities like patience, consistency and a healthy sense of skepticism—in short, the kind of qualities that bring success in all aspects of life, not just investing....

PROCTER & GAMBLE CO. $64 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $172.8 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.pg.com) rose 5% after activist investment firm Pershing Square Capital Management announced that it now owns around 1% of Procter’s shares.

Pershing Square has a long history of making undervalued companies more profitable. It often does this by encouraging management to sell real estate or underperforming divisions.

Rising fuel and raw-material costs have hurt Procter’s profit margins. In response, the company recently announced a major restructuring plan, including cutting jobs and spending less on advertising. Pershing Square’s involvement should continue to spur the stock.

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ENCANA CORP. (Toronto symbol ECA; www.encana.com) is one of North America’s largest natural gas producers. Its reserves should last over 11 years. The company took its present form on December 1, 2009, after the old EnCana Corp. split itself into two new companies: the new Encana, which focuses on natural gas, and Cenovus Energy (Toronto symbol CVE), which specializes in oil sands projects, oil refineries and conventional natural gas....

Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. 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. Our Inner Circle Q&A frequently features questions on tech stocks. This past week, one Inner Circle member asked about a tech stock that has recently had a surge in its share price. Its unique software for submarine networks has helped this stock rise and Pat assesses whether it can sustain its momentum. ...

This is the latest in a series of video interviews in which Pat McKeough will give his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies, and still others will be comments on events that are affecting the markets and the economy. This time, Pat discusses the fact that in his role as investment counsellor, he learns a good deal from his portfolio management clients, Inner Circle members and readers. Successful investors spend a lot of time learning about investments, he adds, and you never know how much you might learn when you start commenting and replying to other investors’ comments.
Investment Counsellor: The Value of Your Comments...

Next year, U.S. retailing giant Target Corp. (New York symbol TGT) will open around 130 stores in Canada. That could put pressure on Canadian supermarket operators like Metro. However, Target stores will mainly focus on clothing and household goods, not food. Moreover, Metro has a long history of successfully competing with other big American chains, such as Wal-Mart and Costco. METRO INC. $53 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 98.9 million; Market cap: $5.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.metro.ca) is Canada’s third-largest supermarket operator, after Loblaw and Sobeys. The company has about 600 supermarkets in Quebec and Ontario. It also operates 260 drugstores under the Brunet, The Pharmacy and Drug Basics banners....

Today’s market volatility and economic uncertainty around the globe is making some investors wonder how much cash they should hold. My investment advice is to look at the longer term and not just at current conditions, or at today’s headlines. Remember, much of what we read today remains speculation....

Our first item raises an interesting question: How does LinkedIn compare to Facebook? Neither one has immediate appeal as an investment. After all, both are good examples of in-the-limelight stocks. That is, both trade at high prices that reflect excessive investor expectations. Prices of in-the-limelight stocks can rise substantially if they remain in the broker/media limelight and continue to generate news that maintains investor enthusiasm. But when the news turns negative, these stocks can drop like stones. Stocks can drop out of the limelight and experience steep stock-price declines yet still go on to great business success. Some wind up like Microsoft. It has more than tripled its per-share profit in the past dozen years, but its stock price is within the same trading range as it was 12 years ago. At both times it was well below the peak it hit in the Internet boom of the late 1990s....

We think conservative investors could hold up to, say, 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus. ISHARES MSCI SOUTH KOREA INDEX FUND (New York Exchange symbol EWY; buy or sell through brokers), is an exchange traded fund that aims to track the MSCI Korea Index....

Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. 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. As the population ages, many consider medical and biotech firms to be a promising stock market investment. This past week, an Inner Circle member asked Pat about one of the giants in the field, the world’s biggest maker of implantable biomedical devices....