Canadian Dollars Blog

Savings @ 4%: $35892.30 RRSP: $32444.70 Securities: $29414.58 MBNA Mastercard: $(12,500) @ 0% interest until September 2007 CitiBank Mastercard: $(9600) @ 0% interest until October 2007 I currently have a net worth of about 76K. I'm up about 5K since my last financial status update. Astute readers will notice that I have lowered my cash holdings, increased my RRSP contribution and also increased my securities holdings.

Well it appears that the 2007 Moneysense Top 200 stocks is out now. There don't appear to be as many bargains in the list as there have been in the past years. Perhaps savvy investors are better at doing their own research and the plethora of free screeners out there have eliminated a lot of the truly great discounted equities. Who knows. In any case, as per the article, the top 7 value/growth stocks are as follows: E-L Financial Corp Ltd (ELF) Kingsway Financial Services (KFS) Algoma Central Corp (ALC) Goodfellow Inc (GDL) IPSCO Inc (IPS) Manitoba Telecom Svcs Inc (MBT) Russel Metals Inc (RUS) To be very honest, a few of these stocks are not that attractive to me. Manitoba Telecom is an aging dinosaur that will run out of steam eventually and Russel Metals, although it has had a lot of success with the rising price of steel, I believe that this is a very cyclical industry and the stock is priced accordingly. Should there be a downturn in the price of steel, this stock...

Sterling Shoes is a shoe retailer that has achieved exceptional growth in the last two years. With continuous monthly distribution increases, and more expansion in Canada, this company is definitely making a name for itself. Unlike another shoe retailers, this one operates with surprisingly high margins around 50% and has low cost operations. It has had double digit growth with a P/E of around 10. I'm generally not a big fan of retail as it can be volatile, but this company has proven itself and has grown successfully. In the last year they've increased advertising in the Toronto subways and has opened several stores in this city. Shoes are a high margin business that most females cannot avoid. Their stores are well lit, classy, and inviting. For 2 consecutive years now, they've paid a special dividend at the end of the year. Since November, the monthly cash distributions have increased 14%. This is one of the few excellent income trusts that has actually increase...

By using a robot to pick last year's bottom 10 out of favour stocks, John Dorfman's stock selector performed an astounding 31% return . It would be interesting to see how well his stock selector worked in the past. In any case, for those that are interested, these are the following ones that showed up for the 2007 screen: Here are the selections that came up: Trilogy Energy Trust of Calgary unit prices fell by half over the past year to $10.65 at the close Friday. Trilogy said recently it expects oil and gas prices will let it pay unit holders 16 cents a month. A tax on income trust distributions is four years away. Fording Canadian Coal Trust of Calgary mines coal for steel makers and has restructured as a royalty trust to attract more foreign investors. The unit price closed Friday at $23.90, before yesterday’s distribution of 95 cents a unit for the fourth quarter of 2006. Precision Drilling Trust of Calgary, yet another beaten-down income trust, provides drilling and othe...

While mining for financial information on the Bank of Nova Scotia website today, I came across an excellent link that contains Economics Publications . I read the 2007 year outlook and in offered some interesting information. In the short term Interest rates are expected to be lowered, inflation will remain steady, and commodities are expected to do well with the increase in demand from India and China.

A new update to my positions: I've recently purchased Quest Capital and Talisman Energy as they both have solid fundamentals and are potential takeover candidates. As per an early post of mine, I believe that Oil/Energy has declined signficantly enough and is now starting to rebound from it's recent bottoms. To me, Talisman is a solid, proven company that has been unfairly beaten down. Quest is a merchant banker involved in the resource and real estate sectors and has solid management and appears to be attractively valued. Those that know me know that I am bullish on resources and as a result I think this one has more room to grow. It also has high insider ownership which indicates that Management's objectives are properly aligned with shareholders. Disclaimer: I am not a financial planner. These are my choices only. Please do your own research.

(click the image to zoom) Is it me or does this make the price of crude oil very insignificant?

So it appears that Google is now set to offer Real-Time Quotes Free . I played around with it a bit this morning and liked how easy it was to setup a portfolio. The only caveat is that it currently only supports USA stock exchanges. When and if they start offering quotes with Canadian stock exchanges, I will switch over from Yahoo . For now I think they have a good start. Is there anything this company can't do?

Asset Class The valuations of equities is still attractive relative to the low interest rate. More money will be put into equities due to a lack of choices because other asset classes are unstable and no desirable. Oil has been massively corrected due to the unseasonably warm weather around the world and the bubble that had formed last year. I am taking a wait-and-see approach, and I will probably dabble in the stocks of oil companies if/when oil hits the $40-45 mark. As for gold, I would avoid it until the price drops to reflect the true industrial demand of it (or if we reach a hyper-inflationary period) Bonds is one of the worst asset classes in this environment. Right now the long term interest rates are lower than the short term interest rates. You are much better off directing your fixed income allocations towards short term rather than long term. Industry Here are some industries that will benefit from future macroeconomical trends. They are good places to focus your equity...

After abandoning automatic RRSP contributions for the 2006 calendar year, I've decided to start them up again for 2007. The main reason why I didn't bother setting up automatic RRSP contributions is because my new employer didn't offer any form of partial RRSP matching. As a result, I became lazy and didn't want to fill out all the paper work required to do it. It all changed last night when I filled out all the required forms for Scotia to process. All that's required is for me to bring the forms into a branch and then it should be handled automatically. I think I'll start off by contributing $400 a month and will top it up right before tax season. Does your employer do RRSP matching? How much do you contribute?

Those of you living in Toronto will know this but recently the TTC ( Toronto Transit Commission ) decided to roll out new tokens. What it means is that at the end of the month the old tokens will no longer be accepted. As a result the TTC is allowing customers to exchange their old tokens with new ones. Most surprising of all is that everyday on my way home, I walk by the TTC token exchange booth and the lineup is looong. At least 25 people in line everytime. Amazingly each of them has a large bag of old tokens. This begs the question, are these people hoarding tokens that they purchased over the years. Why the heck would anyone have literally hundreds of tokens? Did they buy them all 5 years ago anticipating the big TTC fare increases? Strange.

So here's the dilemma: I bought an item over the weekend and am now contemplating returning it because I noticed the exact same item on sale at a liquidator that is selling for about half the price. The cost difference we're talking about here is $15. I know it's not a lot of money, but my primary concern is reliability. The brand new item comes with a 1 year warranty while the refurb comes with a 90 day warranty. The risk in purchasing the refurb is that after 90 days, the item might crap out on me and stop working, which at that point I'd have to look at replacing it. Whereas with the new item, I have a whole year of warranty. I think I'll stick with the new item despite it costing 100% more than the refurb. My experience with refurbished products has been very mixed. Some items I've purchased in the past have crapped out on me within a few months, while others have lasted a very long time. What are your experiences with refurb products?

One reader recently asked me how I received 0% credit cards. I currently have two credit cards for this purpose: a) Citibank Gold Mastercard and b) MBNA Mastercard. Both are limited time only 0% credit cards which means that you can basically write yourself a cash advance and deposit it in your bank account and earn interest on the money until it is time to pay back the principle. Remember, though, that there are monthly minimum payments that one would need to pay. However, because it is a 0% card, any minimum payment you make is made towards the principle. Between the two cards, I like the Citibank card a bit more because there is no balance transfer fee. With the MBNA they charge you 1% of the balance transfer amount. To me this was a minor inconvenience as I have put the money into PC Financial and am earning 4% so I still come out ahead at the end of the year. The MBNA credit card promotion is currently over, but the Citibank Gold Mastercard offer is still available. The det...

Now that January 1st has just passed, we need to start thinking very carefully about tax planning. While cleaning out my apartment last night, I came across a tax book from Grant Thornton titled 'Smart Tax Tips'. Although it was written in 2004, much of the information in the book is still relevant. It serves as a good starting reference whether you are married, have a business, etc. For those that don't want to purchase a new book for 2006, the firm has graciously put up a page with updated smart tax tips . For those of you that file electronically, what software do you use? I used a free software last year that was really awful. They appear to have gone out of business and are not updating their software for 2006. I might give QuickTaxWeb a try as it appears to be on sale ($5 off! at the moment).