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
A: Liquor Stores N.A. Ltd., $15.04, symbol LIQ on Toronto (Shares outstanding: 27.3 million; Market cap: $408.4 million; www.liquorstoresna.ca), is North America’s largest private liquor store operator, with 244 outlets. Of that total, 173 are in Alberta, 35 are in B.C., 23 are in Alaska and 13 are in Kentucky.
Liquor Stores’ banners include Liquor Depot, Liquor Barn and Brown Jug.
Alberta privatized retail liquor sales in 1993, prompting Irv Kipnes to found Liquor Depot and Henry Bereznicki to start Liquor World that year. Kipnes and Bereznicki, both Edmonton-based real estate developers, merged their companies and founded Liquor Stores Income Fund in 2004. The fund first sold units to the public at $10 each and began trading on Toronto in September 2004.
Liquor Stores Income Fund converted to a corporation on December 31, 2010, in response to Ottawa’s income trust tax.
The company’s strategy is to offer more choice, typically two to three times more products than its competitors. Liquor Stores lets each location juggle its product mix to meet local tastes.
...
Liquor Stores’ banners include Liquor Depot, Liquor Barn and Brown Jug.
Alberta privatized retail liquor sales in 1993, prompting Irv Kipnes to found Liquor Depot and Henry Bereznicki to start Liquor World that year. Kipnes and Bereznicki, both Edmonton-based real estate developers, merged their companies and founded Liquor Stores Income Fund in 2004. The fund first sold units to the public at $10 each and began trading on Toronto in September 2004.
Liquor Stores Income Fund converted to a corporation on December 31, 2010, in response to Ottawa’s income trust tax.
The company’s strategy is to offer more choice, typically two to three times more products than its competitors. Liquor Stores lets each location juggle its product mix to meet local tastes.
...
One of the costliest mistakes you can make as an investor is to sell your best stocks too soon. This mistake comes in two main varieties:
- Routinely re-balancing your portfolio—that is, selling stocks you own that have gone up, and using the proceeds to buy more of stocks that have gone down.
- Selling your best stock selections for small gains—taking a 25% or 50% profit on a stock when it’s just starting out on a rise that could ultimately produce a 250% or 500% gain.
Under Armour Inc., $78.59, symbol UA on New York (Shares outstanding: 213.9 million; Market cap: $17.0 billion; www.underarmour.com), designs and markets athletic clothing, shoes and accessories for men, women and children. It outsources its manufacturing to suppliers in China, Vietnam, Indonesia and other countries. Under Armour mainly sells its gear through general retailers, sporting goods stores, company-owned outlets and online. Clothing supplies 74% of its revenue, followed by footwear (14%) and accessories (9%). It gets the remaining 3% by licensing its brands to other companies. Most of Under Armour’s products use fabrics that wick away sweat from the skin. That makes them more comfortable and reduces their weight....
iShares Canadian Financial Monthly Income ETF, $6.99, symbol FIE on Toronto (Units outstanding: 45.0 million; Market cap: $314.6 million; www.blackrock.com), is a balanced fund with 16% of its assets in bonds and 16% in preferred shares. The other 68% is in common stocks. We don’t generally recommend balanced funds, as bonds are unlikely to perform well over the next few years, if only because interest rates will likely hold steady or rise. That means the fund would only earn interest income on its bonds; instead of capital gains, its bond holdings could produce capital losses. The iShares Canadian Financial Monthly Income ETF holds mostly corporate bonds, which expose you to varying levels of risk. Some are almost as safe as government bonds and offer only slightly higher yields. Others offer higher yields but are much riskier....
North American Palladium, $0.24, symbol PDL on Toronto (Shares outstanding: 391.5 million; Market cap: $94.0 million; www.napalladium.com), owns the Lac des Iles palladium mine near Thunder Bay. It also owns the Vezza gold project in Quebec’s Abitibi region. Palladium is mainly used in catalytic converters for automobiles, as well as in jewellery. In 2014, the company’s revenue rose 43.7%, to $220.1 million from $153.2 million in 2013. The increase came from higher palladium production and sales, higher palladium prices and more favourable exchange rates. Cash flow per share jumped to $0.12 from $0.04....
Acadian Timber, $18.23, symbol ADN on Toronto (Shares outstanding: 16.7 million; Market cap: $302.0 million; www.acadiantimber.com), supplies forest products in Eastern Canada and the northeastern U.S. Acadian owns and manages 1.1 million acres of timberland in New Brunswick and Maine. It also manages 1.3 million acres of Crown-licensed forests. That brings its total acres under management to 2.4 million, making the company the second-largest timberland operator in New Brunswick and Maine. It also owns and operates a forest nursery in Second Falls, New Brunswick....
Titan Medical, $1.81, symbol TMD on Toronto (Shares outstanding: 102.6 million; Market cap: $170.2 million; www.titanmedicalinc.com), is developing its SPORT (Single Port Orifice Robotic Technology), surgical system, a robot with flexible instruments and high-definition imaging. Right now, robotic systems are mainly used in hysterectomies and prostatectomies, but this device is designed to expand their use into procedures that are performed in small- to medium-sized spaces, such as general surgery (including gall bladder and appendix removal) and ear, nose and throat operations. The company has finished prototypes and will now move into final design and testing. It hopes to complete human clinical trials in mid-2016, then apply for regulatory approvals....
SCITI Trust, $9.13, symbol SIN.UN on Toronto (Units outstanding: 30.3 million; Market cap: $276.6 million; www.scotiamanagedcompanies.com), first issued units at $10 and began trading on Toronto in April 2003. The trust was scheduled to wind up on April 29, 2008, but unitholders voted to keep it going for another five years in March 2008 and again in March 2013. It’s now scheduled to wind up on April 30, 2018, though it could be extended again. The trust’s portfolio is based on the Scotia Capital High-Yielding Equity Index, which tracks the highest-yielding stocks (including many real estate investment trusts and former income trusts) on the Toronto exchange. SCITI Trust now holds the top 50 highest-yielding issues in the index, on a roughly equal-weight basis....
Here’s the text of the quarterly letter I recently sent to our Portfolio Management clients: “A client of mine, Dr. J., recently said, “Pat, you advise investors to spread their money out across most if not all of the five main economic sectors. Why not just leave out the resource sector?” I think that’s a bad idea. It disregards the one key contribution that resource stocks make to a sound portfolio, as you’ll see below. But I’m sure many investors agree with Dr. J. After all, the weak performance of the resource sector goes back much further than the recent plunge in the price of oil (from $110 U.S. a barrel last July to a recent low near $45 U.S.)....
Partners Real Estate Investment Trust, $3.66, symbol PAR.UN on Toronto (Units outstanding: 26.4 million; Market cap: $96.6 million; www.partnersreit.com), owns 36 shopping centres in B.C., Alberta, Manitoba, Ontario and Quebec. In all, these properties contain 2.5 million square feet of leasable space. The trust’s occupancy rate is 96.0%. Partners’ malls are mostly in smaller cities, such as London, Ontario, and Selkirk, Manitoba. Its largest tenants include Shoppers Drug Mart, Wal-Mart, Metro, the Quebec government, Sears, Rona and Loblaw. The units dropped sharply in August 2014, from over $5 to $4, when the trust cut its monthly distribution by 50.0%, to $0.02083 from $0.04167. The units now yield 6.8%....