How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
[text_ad]
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.
[text_ad]
Read More
Close
How To Invest Library Archives
MANITOBA TELECOM $28.74 (Toronto symbol MBT; Shares outstanding: 78.9 million; Market cap: $2.3 billion; TSINetwork Rating: Average; Dividend yield: 4.5%; www.mts.ca) has acquired AWS-1 radio frequencies (or spectrum) in Manitoba from rival wireless carrier WIND Mobile. The $45-million purchase will boost the speed and capacity of the company’s wireless networks. Manitoba Telecom is a hold....
PENGROWTH ENERGY $1.64 (Toronto symbol PGF; Shares o/s: 539.7 million; Market cap: $892.2 million; TSINetwork Rating: Average; Dividend yield: 2.4%; www.pengrowth.com) now plans to spend $190 million to $210 million on its oil and gas properties in 2015, down from its earlier forecast of $220 million to $240 million. The company also wants to sell $600 million worth of less important assets. It will use the cash to pay down its debt of $1.9 billion, which is a high 1.9 times its market cap. Pengrowth continues to benefit from its hedging program, which locks in selling prices above today’s low oil and gas prices. However, to conserve cash, it’s cutting its dividend to $0.01 per quarter from $0.02 per month. The new annual rate of $0.04 yields 2.4%....
Not long ago, people still believed that growth in emerging markets would keep the world economy afloat, even if the developed countries stagnated. China fans took it for granted that China’s growth would stay above 7% a year. Events this past week rattled that view. Chinese stocks went through horrendous declines, continuing the plunge they began in the summer. Chinese leader Xi Jinping seems focused on shoring up the Communist party and the Chinese stock market, rather than strengthening the Chinese economy. Brazil officially entered a recession with news that its economy shrank in the second quarter this year, at a faster rate than in the first. Brazil’s per-capita income has been falling since last year, and the Brazilian real has lost a quarter of its value in the year to date....
Palo Alto Networks Inc., $164.22, symbol PANW on New York (Shares outstanding: 83.7 million; Market cap: $13.7 billion, www.paloaltonetworks.com), designs and makes Internet equipment and software, called firewalls, for protecting computers and mobile devices from online attacks. Instead of imposing blanket bans on entire networks, Palo Alto’s systems analyze traffic and let network administrators control users’ access to certain websites and applications. Over 24,000 businesses in 140 countries use the company’s products. Palo Alto first sold shares to the public at $42.00 and began trading on New York on July 19, 2012....
Mountain Province Diamonds, $4.17, symbol MPV on Toronto (Shares outstanding: 159.0 million; Market cap: $665.9 million; www.mountainprovince.com), holds 49% of the Gahcho Kue joint venture in Canada’s Northwest Territories. De Beers Canada owns the other 51%. Gahcho Kue consists of a cluster of four kimberlites (see below for more on these rock formations), three of which have a combined probable mineral reserve of 35.4 million tonnes grading 1.57 carats per tonne, for a total diamond content of 49 million carats. The partners are now building Gahcho Kue, which will be the Northwest Territories’ fourth diamond mine. The $1.0-billion project is now over 62% complete and is scheduled for completion by the end of 2016; it’s forecast to produce 4.3 million carats annually over 12 years....
Carmanah Technologies, $5.47, symbol CMH on Toronto (Shares outstanding: 24.6 million; Market cap: $134.4 million; www.carmanah.com), sells solar-powered light emitting diode (LED) lighting and solar-power systems. The company contracts out most of its manufacturing. Carmanah’s solar-powered LED light beacons are used for marine navigation, as well as on runways and roads. Uses include school-zone flashers, transit stops and internally lit traffic signs. It also makes lighting for industrial users, including warning lights, equipment-marking lights and railway-track and bridge markers. The company consolidated its shares on a 1-for-10 basis in late 2014....
Sirius XM Canada Holdings Inc., $4.95, symbol XSR on Toronto (Shares outstanding: 104.4 million; Market cap: $635.2 million; www.siriusxm.ca), sells satellite radio services to 2.6 million Canadian subscribers. The service includes up to 130 channels featuring a variety of musical genres, as well as stations devoted to news, sports, talk and entertainment. Most are commercial-free. The company licenses these channels from U.S.-based Sirius XM Holdings (symbol SIRI on Nasdaq), which gives it access to exclusive content by Howard Stern, Disney, Oprah Winfrey and Comedy Central. Sirius XM also has a 24.97% voting stake in the Canadian firm....
Twin Butte Energy, $0.39, symbol TBE on Toronto (Shares outstanding: 353.4 million; Market cap: $122.1 million; www.twinbutteenergy.com), produces oil and gas in Western Canada, with a focus on the greater Lloydminster area, along the Alberta/Saskatchewan border. Its output is 88% oil and 12% gas. In the three months ended June 30, 2015, Twin Butte produced 17,351 barrels of oil equivalent a day, down 17.8% from 21,109 barrels a year earlier. But even with the lower output and falling oil and gas prices, Twin Butte’s cash flow rose 17.4%, to $57.0 million, or $0.16 a share, from $48.5 million, or $0.14. That’s because it realized a $25.3-million gain on its hedging strategy: for the second half of 2015, it has hedged about 6,000 barrels a day at $80 U.S. (compared to today’s market price of $42), and in 2016, it has hedged 1,000 barrels a day at $65....
PowerShares Dynamic Healthcare Sector Portfolio ETF, $60.44, symbol PTH on New York (Units outstanding: 4.0 million; Market cap: $241.9 million; www.invescopowershares.com), holds 48 U.S. health care stocks. Its top holdings are Regeneron Pharmaceuticals, Allergan plc, Cooper Cos., Cigna Corp., Medivation Inc., Illumina Inc., Incyte Corp., HCA Holdings, Humana and Sarepta Therapeutics. The fund has a 0.60% MER. PowerShares Dynamic Healthcare Sector Portfolio ETF is okay to hold....
This recent market downturn doesn’t come as a complete surprise. But as I said in our July 28 edition of Advice for Inner Circle Members, my “best guess” called for a smaller drop. When you come right down to it, there are really only two kinds of market downturns. They differ mainly in how long they last. Some last three to six months or so, and others go on for a year or two, or even longer. I suspect this downturn is of the former, shorter variety. It may have already done most of the damage it is likely to do. I also suspect our Canadian market is less vulnerable to further decline than the U.S. market. For one thing, our market has gone up less than the U.S. market. The drop in our dollar’s foreign exchange value also makes our stock market cheaper and more attractive to foreign investors. To top it off, because of Canada’s economic dependence on the Resources sector, we are suffering more than the U.S. from the drop in resource prices....