The Morning After

The market pullback yesterday has left a lot of investors jittery. If you're not careful you can start talking to yourself and then start doing dumb things with your money.

Personally I want to see even more of a pullback so I can look for more opportunities to add to my dividend stock portfolio and even for some short term trading opportunities for my gambling portfolio.

"If you are looking to buy stocks, why would you want the market to go up" - Warren Buffett

Exactly Warren. It is in this environment that your favourite stocks go on sale. It's because when people sell in a panic, they dump their funds and ETFs and providers have to sell off assets to meet redemptions. It's a game and that's how it's played.

It should take a person at least 6 months to put a portfolio together. Never go out in one day and buy everything with all your money. Take your time and look for more days like yesterday to build or add to your holdings.

Remember to sell on the up days and buy when things go south. That is if you have made any mistakes or are looking to dump companies that have cut dividends.

Dividend Stock Watchlist

Sometime during the summer I am hoping to add some more of these stocks to our retirement accounts.

EMA, TD, RY, BNS, CP, ENB, TRP and CNR.

Gambling Portfolio & Watchlist

This changes every day but currently I'm holding GSV, APH & THO.

6/7 stocks I added to the updated watchlist are in the green and one is flat. Did you take a chance and gamble on any of them? They have all been winners even after the carnage yesterday.

I dropped PNE from the list and added DGC. PNE hasn't moved anywhere in a couple weeks. Better opportunities exist. ALO, PONY, LAM, HIKU, ACB, MUX, DGC and KAT currently make up the list for play money.

Once again in these volatile times wait for these stocks to gain added strength on a firm rise in volume (relative strength RSI). 

I never ever hold a stock in a 20% losing position. You must recognize your losses early and SELL. Buy something else that is moving up. You don't have to be right every time to make money. This is what I do with money I can afford to lose.

Portfolio Changes

I decide to sell my position in the Int'l ETF - TPE. With the proceeds I bought more shares of Royal and TD banks. Why these 2 banks? They are Canada's largest by market cap so the most likely to buy more assets like robo-advisers and the least likely to experience a severe downturn. I'm looking at BNS as another strong candidate to add. It is down since the new year so over the summer I will look to buy a few shares.

All major markets up again today after yesterday's pullback, proving once again the ability of these markets to bounce back from any negative news. Investors just don't seem to care and are buying the dips every chance they get.

Stars & Thunder

Leaving for Timmins tomorrow to attend an outdoor concert called Stars & Thunder. I doubt I will post anything or even look at the markets until I get back next week. Have a great week on the markets.

Related Post: My Gambling Portfolio

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Monday Market Mania and News of the Day

I blog about what I do and not what I think you should do. That especially goes for buying and selling stocks to generate capital gains.

I own stocks in my retirement account that I will never sell. I focus on income and own those stocks for their growing income. In my RRSP I own;

BMO, BNS, BCE, CM, CNR, CP, ENB, FTS, RY, TD, TRP, TPE and VFV.

That is 100% equity all stock/ETF portfolio. Once again NOT for everybody. I get that. I have lots of pension income which I consider my fixed income portion of investing, even though it's all indexed and grows every year and NOT really fixed.

That is why and the main reason I am 100% equities. Once again, not for everybody and not a recommendation for you to construct your investments the same way. I leave this PF pretty much alone and just let it do it's work. I may revisit my exposure to the Euro zone via TPE because it just seems so volatile with tariffs and Brexit. This is not really a place I'm comfortable with for my retirement money. We'll see going forward.

In a recent G&M article the Yield Hog, John Heinzl talks about investing in HMMJ. That's a pot ETF by Horizons. Only one company pays a dividend and he doesn't mention the cost of ownership. The only pot stock I own is APH which is up 8.1% after taking a 3% hit on Friday. Very volatile and I have no idea how long I'll own it. It's part of my gambling portfoio. Most of HMMJ is ACB & WEED so just buy one and go for a ride. ACB is on my watchlist of stocks and up 12% since I added it.

I would never buy the ETF. Just too much junk inside. I think this is an area where you need to pick stocks based on market action and nothing else. Have an exit strategy and recognize your losses immediately if you're wrong on the timing. Lock in gains when you can. 

There appears to be a lot of new money moving into this area. You can make money here in a short period of time by just watching the tape and ignoring everything else.

Watchlist Update

Deleted - MARI

Added - ALO and PONY 

Now watching a total of 8 stocks. Are they all buys? Not yet waiting for more positive strength to the upside but all these latest additions spiked up on unusually high volume on Friday. Money has moved in on the buy side but we'll see if it lasts.

If it seems like all the money is moving to gold/silver commodity stocks it's because it is. Weed stocks is another area that has been beaten down so stocks seem to be rising ahead of changing laws here in the Great White North.

I don't question why this is happening or what the cause is. I simply look for strength in price reversals on unusually higher than average trading volume. 

I don't care about fundamentals, balance sheets, ROE, yield, debt levels or cash flow. I only care and choose those stocks trading at least 50% off their 52 week high and are now starting to move up on higher volume.

Due to all the negative news on global markets at the open I decided to lock in some of my gains to protect capital.

SOLD WDO 2000 shares @ $2.99
Bought for $2.29 on 25 May
Profit = $1400 (30.5%)

SOLD EXN 2800 shares @ $1.50
Bought for $1.41 on 29 May
Profit = $252 (6.3%)

TOTAL PROFIT = $1632.02 after trading costs

Subtracting my previously booked losses dated on 21 June
$1632.02 - $124.92 - $234 

= $1273.10

Gambling Portfolio

Still Holding GSV, APH and THO. Holdings up collectively 1.5%.

After the selling my cash position is now $10,180.

Total Market Value of Portfolio = $21,902

I will continue to look for trades and an opportunity to buy more stocks with my cash position.

Related Post: Stock Purchases

Recommended Reading:

Portfolio Update and Weekly Market Action

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The Nonsense of Stock Discussion Boards

This blog is just about my experience navigating Canada's personal finance and investing landscape. This is an area of interest to me and will probably always be even now in retirement. I love talking about all things money, finance and investing. It keeps my brain stimulated and for the most part love the discussions with other investors sharing their journey to financial freedom and retirement.

The first discussion board I tried out was Yahoo. I entered into numerous watchlists of stocks and corresponding discussions with other like investors. All stocks had a conversation feature, so in time I entered into these convos on stocks I either owned or was interested in buying.

I guess I was little late to the party in 2003 when I started to join a lot of these sites. Stockhouse was another one I was on regularly. At that time I was buying a lot of junior gold and silver stocks and this was where a lot of speculators gather for advice and general hand holding.

I was also a subscriber to Doug Casey's fairly new publication called 'The International Speculator'. It also came with a discussion forum for members only. It was cancelled in short order based on so many questions on specific recommendations that Doug Casey and his team no longer wanted to deal with. The noise created by losing stocks became too much for him and his team to take.

That's my brief 15 year history on-line and experience dealing with online personalities.

These stock specific boards on Stockhouse and Yahoo for the most part are just places for pumpers and bashers to spew hate and some stock love on a constant basis. Not all bad but way too much sifting through crap to get to anything meaningful. 

When their stock goes up everyone is happy and when they go down everyone has a dumb question. Just sell the stock if you can't sleep.

They are the worst places to go and ask for any advice on any stock. What you won't hear from a lot of members, while they incessantly cheer the stock higher is when they plan on selling.

You see in most cases these are just retail investors that are holding losing positions, so they try and cheer on while they wait for a 'Greater Fool' to show up and start buying shares.

The main thing that pisses me off on these boards is accusing anyone who speaks negatively about the stock of being a shorter or of trying to pick up stocks on the cheap.

This is why they are just cesspools of dumb people. They like to huddle in masses as parrots all agreeing they made the right move even though the stock has plunged 50% since they bought it. They see no reason to sell a junior stock that has dropped that much. Sheesh!

It's just because they weren't smart enough to sell at the first sign of trouble. When you point out the facts they attack you. Most of this type of confirmation bias is done by speculators who have no idea how to make money trading stocks. They never know when to take a profit and sell.

Never take advice or buy and sell stocks on the advice of ANYONE on Stockhouse or Yahoo. Just my opinion but feel free. Most are just idiots sharing info you can find for free on the company website or somewhere else less biased on the internet. It will only add to your confusion on what to do.

Negative opinion is all part of it. They just can't handle it. They love to use phrases like;

• c'mon stock XYZ let's GO
• this is a no brainer
• this stock will become the future of the internet
• get in now before it's too late
• this is a great time to pick up cheap shares (as the stock is plunging)
• I just picked up more shares to lower my ACB (stock is a falling knife)
• I'm hanging in forever because I believe in this company

If you want to kill time and get entertained these are great places to read DUMB comments. Over time they will rot your mind and bring you into dark places where you shouldn't spend a lot of your valuable time. 

More importantly, NEVER invest in a stock or company you know nothing about.

Spend your time trying to figure out how the stock market works and what companies you are invested in. This is where the majority of your time should be spent.

I would recommend places like financialwisdomforum.org and canadianmoneyforum.ca as places where intelligent investors here in Canada  go to share investing ideas and ask intelligent well thought out questions. The Bogle Heads forum is also great for American specific financial questions. 

Where do you go on the internet to engage other investors?

Related Post: Do You Need a Financial Advisor?

Recommended Reading: 

Beware of Financial Pornography

The heading on this white board should read;

'Your expenses will vary in retirement so you need a rising and growing cash flow.'

We are constantly being seduced by financial institutions to give them our money in exchange for some product they are selling. This sign is not new but it has appeared in the past and I'm sure is still affecting those people that fell for it. All the big banks sell these products, so buyer beware. Let's pop the hood and explore further.

$500 a month X 15 years = 500 X 180mo = $90,000

What happened to the other 10K?

Sucked up in fees just for the privilege of buying this product from the nice lady at the bank. Market linked GICs are mercilessly flogged by the bank as soon as they hear you like to invest yourself. They couldn't wait to pitch me this when I told them my house was paid off and that I was a DIY investor.

They didn't like the fact I mentioned that I don't leave money at the bank but only look at it as a place to get money.

Don't fall for this, it's a trap.

You are not protected and your money is not participating in growth. This is financial porn at it's finest.

If you invested 100K in just a 60/40 Balanced Portfolio and earned 7% which has been the average return of the last 15 years you would have;

100K X 15 @ 7% = $275,903.15

Why would you hand over that 100K to the bank? when you can generate that kind of return in a fairly low risk portfolio.

You are going to receive a lot less money and they guarantee it. It's all wrapped up in the sales propaganda of having a fixed income.

You don't want fixed income you want a growing income in retirement. This helps you stay ahead of inflation and if your expenses go up so does your income over time. You have to find ways to achieve that. This is not an investment that does that, the math is pretty simple. Invest the money and do not buy a market linked GIC from the bank. You can do so much better.

Don't fall for anything the bank is selling. Chances are they are the ones getting rich off of your money.

If that 100K is burning a hole in your pocket another option for you is to buy 100K worth of the bank's stock. Whatever bank you deal with just buy their stock. 

All you have to do is go online and open up a non-registered account with a discount broker. Every bank has a discount brokerage trading arm they use to appeal to DIY investors. If you don't know how to do this get someone to help you or ask the bank to help you open one (if they will).

Once you open the account, you fund it with the 100K. Purchase bank shares equivalent to your $100K.

Every quarter they will send you dividends into the account that are taxed a lot more favourably than the income from a GIC. The other positive behind buying the bank's common stock is the growth it provides. That 100K will continue to grow every year for 15 years. 

It's up to you, but you have more than one choice. On the one hand you can hand over 100K and give all control of your money to the bank OR invest in a balanced portfolio OR just buy bank stock. 

Let's look at an example of buying BNS which is where I hold all my investments. I use Scotia iTrade as my discount online broker.

The stock closed at $75.98 on Friday 15 June 2018. Using my 100K it would allow me to purchase 1,316 shares of the common stock. The stock is currently yielding 4.42%.

The calculation works out to 1,316/$82 per 100 share coupon rate = $1,079 every quarter.

Which breaks down to $359.70 monthly.

Yes that is less than the $500 a month the bank is giving you back BUT you have the following advantages;

• total control over your money
• spending or letting your dividends grow
• participating in the growth of your money
• a more tax efficient investment
• yield + growth = a better return on your investment
• zero cost on your invested dollars
• you are way ahead by NOT giving the bank 10K in fees
• it's your money, the bank is just giving it back to you over time

I think it's pretty clear what the best options are. I'm not suggesting that you dump 100K in any one stock, it's just an example to highlight just how much growth you give up when investing at the bank.

If you would have invested 10K in Royal Bank in 1999 today you would have 210K according to a recent article from Motley Fool Canada.

Do you own any market linked GICs?

Related Post: Why a Growing Yield Matters

Recommended Reading:

My Debt Plunge

Debt is the biggest thief of your personal wealth. At one time in the early 90's I owned 4 Visa and 4 Mastercards. It was so easy to walk into a bank or credit union and just fill out a paper application on the spot. Go home, wait a couple weeks and card is in the mailbox.

I also applied for and was approved for an unsecured LOC with the Royal Bank for 5K. I now had access to an unlimited supply of money that wasn't mine and I had no problem using it. In those heady days of a debt fueled lifestyle, I didn't just live paycheque to paycheque but instead tax return to tax return. You see I couldn't address the principal on my debt payments but interest only payments. Well, barely.

I also had child support payments of $500 a month to deal with.

No longer could I afford to live alone but I needed a roommate to help with the monthly rent. It was a crowded restricted life I was leading. I knew I hated being in debt and Ijust couldn't go on this way.

I ended up volunteering to take a military posting to Egypt for six months. I no longer had to pay rent and on top of that dramatically increased my income. This allowed me to address my ballooning debt with the added cash flow and new posting. I also worked our contingent bar for extra money in tips while in the Middle East.

Once I returned to Canada, I paid off all my debts (free at last). These drastic measures cost me a lot of time away from my kids and the cost of separation from family and friends can not be properly measured. It was a lonely time and spurred on only because I couldn't stop myself from borrowing money.

A couple years before my tour I had read 'The Wealthy Barber' by David Chilton. The year was 1990 and I was 34. I thought I would be able to get my financial house in order after my new found financial knowledge but I didn't.

The only thing I did was start investing in mutual funds that I later cashed in. I chose the Altamira family of funds as at the time they were doing well and were highly rated. I went on to later invest in Mackenzie and Fidelity funds before eventually many years later leaving the high cost world of mutual funds forever.

In a new study by the Bak of Canada, Canadians owe 168% of their disposable income to credit card debt. This statistic is actually trending down if you can believe it since 2016. That is $1.68 in credit card debt owed for every one dollar a Canadian makes. It seems I'm not the only one addicted to plastic.

I think the population just looks around and sees their provincial and federal governments in debt and decides that I might as well too. Just don't be like those guys, they have the power to tax other people for more money and you and I don't.

Get out of debt, save some money and invest the rest for your future retirement and post working life. It really is the only way to live. I wish my kids would listen to me every once in awhile.

If this is you, start by reading this new book a Worry-Free life and get your financial house in order before it gets out of control.

I could go on about the hazards of this debt lifestyle but if this has been you then you already know how pissy a life it is to be in debt. Get out now while you still can. Make more money or cut your expenses. Go over each and make the necessary changes to make a better life happen.

Are you a debt junkie? What have you done to get out of debt?

Related Post: Cashflow Cookbook

Recommended Reading: 

New Stock Purchases and Watchlist Update-Week of June 11-15

Monday 11 June 2018

I took the plunge and bought 300 shares of Aphria (APH) @ $11.75. I'm finally in the Cannabis space here in Canada. The stock opened lower so I set my bid price and it got hit around 10:00 a.m.

It's not sector investing and I'm not targeting weed stocks. It's just that it seems to be where the market action is day in and day out. I just keep watching and looking for opportunity. It is really hard to day trade these stocks and I hate sitting at my computer for any real length of time.

It's a small position in keeping with no more than 4K or less in each stock. I am now at my limit of 5 stocks. 

I have added Torex Gold to the watchist based on today's price and volume moves.

Stock Symbol: TXG
Current Price: $13.10
Purchase Price: $13.02
52 week high/low: $7.29/$26.23
Avg. Volume: 402K
Today's Volume:309K

The stock has the potential to double from here if it reaches it's 52 week high. With the world in chaos and so much nervousness, it is no wonder some of these slow to move gold stocks are starting to wake up.

I always look for a price that is starting to move up after sitting in the penalty box for a period of time. TXG and APH seem to be doing that. These kinds of stocks can turn on a dime and starting heading down in a hurry. You need to be vigilant every day.


Today I added Torex Gold to my holdings after just adding it to the watchlist yesterday. The buy signals for me were just too compelling to not take a punt at this low price.

Today's Closing Price: $13.09
Price Paid: $13.02
52 week High/Low: $7.29/$26.23
Shares Bought: 300
Cost of Transaction: $13.02 X 300 + $9.99 = $3,915 

Up $15 after purchase. Woot Woot!!

Just a small position which is what I like to take, This way my capital is spread around evenly.

TXG is down 41% in the past year
I love these kind of drops as they present great upside potential back up to $26 and reaching it's old high. 

What I have done differently with this purchase is extend my holdings to 6 stocks. I only like to hold 5 positions at a time for a total investment of 20K.

I am looking at trimming ELD as it is not really moving up the way I hoped after buying it. Market action is tepid at best so I might sell it for something else that is moving up. Time will tell and so will the market action. Having said that, it had a good day today and thee is just too much chaos to dump gold shares right now.

If you like fundamentals, here is the skinny on Torex Gold from Google;

"Torex Gold Resources Inc. engages in the exploration, development, and operation of mineral properties. The company explores for gold, silver, and copper deposits. It principally holds a 100% interest in the Morelos Gold property comprising the El Limón Guajes mine and the Media Luna project covering a total area of approximately 29,000 hectares located in the Guerrero Gold Belt in southern Mexico. The company was formerly known as Gleichen Resources Ltd. and changed its name to Torex Gold Resources Inc. in April 2010. Torex Gold Resources Inc. was founded in 1980 and is based in Toronto, Canada."

Technically the stock has just crossed it's 21DMA.

Current Holdings

APH, ELD, EXN, THO, TXG and WDO.

Updated Watchlist

On Monday I start to track PNE, FF and MARI
they have been added to the watchlist still including;

TXG, FIRE, ACB, MUX, KAT, BXE, LTV, NMX

Gambling Portfolio (as of 15 June)

Security	Total Shares	Avg.Price	Book Value	Market Price	Market Value	Gain/Loss %
APH	300	$11.75	$3534.99	$11.77	$3489	1.02
ELD	3000	$1.54	$4629.99	$1.52	$4560	1.3
EXN	2800	$1.40	$3957.49	$1.55	$4060	2.84
THO	600	$6.77	$4071.99	$6.86	$3936	3.10
TXG	300	$13.02	$3915.99	$13.07	$3683	5.45
WDO	2000	$2.29	$4589.99	$2.52	$5080	10.9
Cash			$554.30
Total			25,254.74		24,808	$177
Inception			24,700.44		25,508.00	.72%

Most of the stocks that seem to be rising in price and value are cannabis, gold and some oil stocks. The ones on my watchlist represent the best value based on past prices. Of course that does not mean they will continue to advance.

I also can't buy everything and 6 stocks is a more than I want to own at any one time.

Thursday 14 June 2018

I added a Gold Standard Ventures (GSV)and AcuityAds Holdings (AT.V) to the watchlist at the end of trading yesterday. 

I have been watching GSV for years actually but have never bought it. AT.V is more of a risk but it's in the tech space which has been leading the market higher for a few weeks now. I'll leave it up to you to do more due diligence. 

Watchlist now composed of the following;

GSV, AT, PNE, FF, MARI, LTV, ACB, MUX, FIRE, KAT, BXE and NMX.

You will always have regrets not timing the buy of a stock on your watchlist. The big winner from this list is KAT, which is now up 45% since I put it on the list. 
As of Friday's close 6/9 stocks are in the red. The total portfolio of watched stocks is still up 0.84%. As you can see you don't have to be right that often to make money.

This is why I do this in an open account and NOT a TFSA. I use a non-registered open trading account. Pick who you want it doesn't matter.

My gambling portfolio still holds TXG, APH, THO, EXN, WDO and ELD.
After you pick your horses let them run. Even though 4/6 of my positions are in the red, I am still up 2.8% overall.

Why and how does this happen? 

• You pick no more than 5 stocks. 
• You invest only 4K in each so risk is spread evenly. 
• You only need to pick one winner to make money. 
• WDO so far is the big winner up 15% which raises my gains into positive territory.

This is how you win the stock picking game. Picking stocks is a game and you must follow rules of entry and exit. Selling is where you make the money.

Dropped: NMX, LTV, FIRE and BXE from the watchlist at the end of trading Thursday. Stocks are down but volume is drying up. I see no reason to keep watching them until they start moving up. I need to pare down this list to better candidates.

Added: ERD to the watchlist - break out on strong volume and company specific news. Penny stocks like this tend to run hot very quickly and move away from speculators quickly. I have no interest in chasing stocks that behave like this and will watch for now.

Watchlist: ERD, GSV, AT, PNE, FF, MARI, ACB, MUX and KAT.

Portfolio: TXG, APH, THO, EXN, WDO and ELD

Friday 15 June 2018

Brutal day after the announcement of a new tariff tit for tat with China. Gambling Portfolio lost over 1K just on Friday alone. 4/6 stocks underwater. PF is barely in the green as most of the momentum gets sucked out of market. I don't day trade so I'm not very lucky at the moment with timing. What looks like a breakout on volume is most likely shorts coming in and playing with all the negative news.

Retirement Stocks I Hold

CP, CNR, TRP, BCE, TD, ENB, BMO, BNS, CM, FTS and RY. My RRSP

ETFs I Hold

VFV, TPE, XIC, XAW, ZPR, XQB held separately in 2 retirement accounts.

Mutual Funds

Mawer Balanced Fund (MAW104) in my wife's LIRA for simplicity.

Total Dividends Collected in the Month of May

$561.46

Weekly Summary

I added CP and CNR to my RRSP after selling EMA and NA. I had enough utility and financial exposure and nothing in the industrial space. My RRSP will not be touched for the next 9 years until it is converted to a RRIF. I am happy with the above stocks.

I will leave my wife's portfolio in Couch Potato and Mawer Balanced ETFs/Mutual Funds.

Gambling Portfolio changes regularly.

If you need to find some money to invest you might want to check out this post on the Cashflow Cookbook. for ideas.

We all worry about money. If you struggle and need help organizing your finances in a revolutionary new way then read this.