How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
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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.
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Petrowest Corp., $1.35, symbol PRW on Toronto (Shares outstanding: 149.8 million; Market cap: $200.7 million; www.petrowestcorp.com), provides a range of services for the oil and gas drilling industry, as well as industrial and civil infrastructure projects. Petrowest operates five divisions: Construction, Transportation, Civil, Rentals and Environmental. The stock moved up after the company reported record results in the quarter ended March 31, 2014. Revenue rose 33.0%, to $61.1 million from $45.9 million. Petrowest earned $0.02 a share, compared to a $0.03-a-share loss a year earlier. The gains came from strong demand for the company’s services. The Civil division is benefiting from Petrowest’s large work program on Highway 63 in Alberta, which connects Edmonton to Fort McMurray. Meanwhile, the Construction segment saw increased demand from oil and gas clients in northeastern B.C. Petrowest is meeting the higher demand through its recent fleet additions....
Conifex Timber, $8.00, symbol CFF on Toronto (Shares outstanding: 20.9 million; Market cap: $171.2 million; www.conifex.com), owns three sawmills in the northern B.C. interior. In the three months ended March 31, 2014, Conifex’s revenue rose 1.5%, to $67.2 million from $66.2 million a year earlier. Earnings per share fell sharply, to $0.08 from $0.30. The big earnings decline came as shipments fell due to higher prices for logs and weaker demand from a year ago. The company increased its revenue because it shipped more higher-priced—but less profitable—products to the U.S....
Pure Multi-Family REIT, $4.76, symbol RUF.U on Toronto (Units outstanding: 24.1 million; Market cap: $114.7 million; www.puremultifamily.com), owns 13 apartment properties in Texas that contain 3,614 units. Pure Multi has just agreed to buy the Walker Commons complex in the Houston suburb of League City, about 30 miles from the downtown core. The property was built in 2008 and consists of 352 apartments in 12 two- and three-storey buildings on 18.7 acres of land. The complex boasts resort-like amenities, including a clubhouse, fitness centre, swimming pool, outdoor fireplace and a poolside cabana with grills. The expected purchase price is $43.8 million U.S. The acquisition should bring the REIT’s suite count up to just under 4,000....
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Dear Inner Circle member, Lots of investment advisors and commentators are worth listening to. However, one essential fact about investing is that nobody can foresee the future consistently. So, it pays to listen to the people who are worth listening to, but don’t take their predictions as sure things. Be especially skeptical about predictions that would lead you to take extreme measures with your portfolio. As you probably know, I always have an opinion on the way the market is headed, and I’m happy to share it with my Inner Circle members. But I’ve been wrong in the past and will be wrong in the future, just like everybody else. That’s why you need to follow our three-point Successful Investor approach to investing. Our goal is to help you make money in the good times and avoid losing too much during the inevitable downturns....
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Dear Inner Circle member, A friend, Mr. S., has a large profit on his home, and he wonders if he should sell. A lot of Toronto homeowners are asking themselves that question, but my friend’s case is different. He bought his house 15 years ago for $325,000. Similar houses six blocks away are now worth perhaps $750,000, but his is worth nearly twice as much. The value of his home went up faster than average because his area has been re-zoned for high-rise condo construction. Re-zoning can have a huge impact on real estate prices. The land under the house now provides a site for one house. But if a developer assembles a parcel of 10 adjacent houses, he might be able to win approval to build 50 or 100 or more condo apartments on the site, depending on the condo plan and the number of stories the authorities allow....