Picking a Stock for 2006

Article Excerpt

Many investors think of a ‘stock of the year’ as a sure-fire pick that supposedly is bound to be among the year’s biggest winners. Some of our past selections have lived up to that billing, but that’s not what I expect of them. Instead, I look for the best current example of my favourite type of investment, which I call a ‘heads-you-win, tails-you-break-even’ situation. No investment comes with a true guarantee. (Government bonds guarantee you’ll get your money back, but they don’t guarantee what the money will be worth.) But a ‘heads-you-win, tails-you-break-even’ pick offers highly attractive odds. The idea here is that you won’t lose much if the investment proves disappointing, which is a constant risk in investing. But if things work out in your favour — as often happens with our recommendations — the return can be substantial. That’s why we chose Agrium as our Stock of the Year for 2006. Increasing world population and prosperity ensure continued growth in demand…

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