Why I Just Bought Baytex Energy

I can remember a couple years ago telling another forum member that I would like to buy BTE under $5. He said "Don't worry you'll get that chance, patient".

There has been many chances in the last 5 years or so to flip this tock for short term gain but I never bothered.

It was once a $45 stock. According to Bruce Campbell it will never again get that high. He was recommending it at $2.52 back in January.

Eric Nuttall talked about Baytex as a go to name in the Canadian Oil Patch last November when it was at $5.40.

If oil could get to between $45-55 and stay there you could make a lot of money on Baytex.

Everybody including Josef Schacter has been calling this a buy for a couple years now. I've just been watching the market response and for money to roll in to take a punt.

Today I did and bought 2100 shares at $1.91

So I bought Baytex for under 2 bucks. WOW!

If it doubled from here I'd be a happy gambler.

If you would have held this stock for the last 10 years you'd be down 77%.

Market Cap: $1B
Beta: 1.63

ROE: (10%)

Forward P/E: 15.5

EPS Growth: 68.2%

Revenue: $1.27B, per share =2.93

Debt: $2.1B
Price Paid: $1.91

52 week high: $4.50

The stock continues to trend down as of this writing so I could have got in cheaper had I waited later in the day. However, I've thrown my chips into the middle so we'll see what hand I'm dealt.

There is tremendous upside opportunity for a lot of these oil names in Canada. I said yesterday they were being thrown away. Today I'm glad I bent down and picked this one up. It's just too cheap to keep being ignored but I'll have to be patient.

It could also move lower from here. It closed the day @ $1.87

I now own PEY (2%) and BTE (1.3%) as trading stocks.

Do you own any energy names? If so, which ones?

Flipping Stocks for Capital Gains

Just a short post on 3 speculative stocks I bought yesterday. My intent is to hold short term and hopefully flip them for capital gains.

I bought PEY.TO, GUY.TO and EFR.TO

Peyto Exploration

Price Paid: 1000 shares @ $4.30

52 week high = $12.44

I don't know what's going to get these Canadian energy names going but the upside potential of these positions can be huge. Almost a triple to get back to its high for the year. Oil is trending up but investors seem to be just throwing these stocks away.

Big bump up today of 6% on high volume is why I jumped in to establish a position. Double the avg. daily volume and comes with a 6% dividend.

Might have to be patient with this stock but I like the potential here. If it goes down 10% from here I'll let it go.

Energy Fuels

Price Paid: 1600 shares @ $2.57

52 week high = $5.38

Again, a double from here just to get back to it's high for the year. Uranium in the news a lot after it was announced that the U.S. will no longer restrict imports of uranium into the country. Maybe this will force local producers like EFR to get their costs of production down and get competitive in the uranium space.

This is a pure gamble on my part based on how beaten down this stock has been. It sold off from $3.98 last Thursday which was quite the dramatic drop. I believe it was a knee jerk reaction and am looking for it to regain that back on a bounce.

If it drops a further 10% from here I'll let it go.

Guyana Goldfields

Price Paid: 4000 shares @ $1.26

52 week high = $4.70

A gold stock lagging an uptrend sector. The best time to buy a stock is when it's down like this (my opinion).

It would have to triple in price just to get back to it's 52 week high. That is an amazing amount of profit potential and what I look for in trying to flip a stock.

Will it get there? Dunno. It is lagging the sector, but just announced positive results and the market seemed to like it. I would sell at $2 if it got there and let it go if it dropped back to 90 cents.

Thoughts on the Trading Day

All the positions lost money for me today. Still, I'm glad I'm in at what I consider great prices based on market action.

They are all trending up on higher than average volume and moving off their bases. I am only looking to hold them until September - MAX!

I hope NOT to have to sell sooner.

This is no different than one going to a yard sale and buying some tools, taking them home and selling them the following weekend for more than you paid for.

I'm buying these stocks as gambling positions only. This is NOT investing. This is buying and selling for capital gains.

I am hoping to not get BURNT by the market.

Wish me luck!

Do you flip stocks for capital gain?

How I Save for an Emergency

I don't have an emergency fund and have never had one. I just could never afford to start and maintain one. Too busy trying to pay the bills, have a life and help raise kids.

I never really understood where most people could find that kind of extra cash to put away for an emergency.

I have used money put away for life insurance, RESPs and home ownership funds. Ontario used to have a program back in the 70's called the RHOSP - registered home ownership savings plan. I tapped that account when I heard they were going to unwind it. I only had a few bucks in there anyway. It was never used for it's intended function.

Point is, I could never ever not touch those supposed savings accounts. I just didn't have the discipline. Something other than an emergency always came up so poof, there goes that money.

The next thing you know, guilt sets in and you give up. At least this is what happened in our case.

Buying a house pretty much puts the damper on that strategy. If you don't believe me try and convince your spouse that you need to also do this. There just was never enough money left.

You might have heard about this strategy a lot from a late night bleach blonde personal finance guru from the U.S.A. She constantly pounds the table on this. I haven't watched in years but I'm sure she still does.

I have also found out that the emergency never really shows up. It just doesn't. Buying winter tires for your car is NOT an emergency.

What else to do?

Home Equity Line of Credit

This is what I use when I need money fast for whatever comes up. I prefer this to emergency savings accounts because;

• costs zero dollars to set up
• interest rates on borrowed money is so cheap
• I would rather invest my money in stocks than save it
• HISAs - high interest savings accounts pay a shitty rate

HELOC is perfect to meet your needs if anything comes up plus you can make interest only payments.

The other beautiful thing about these gifts for owning your own house is you can use the money to pay off other spending mistakes you have already made.

Higher interest payments on credit cards or god forbid, department store cards. My HELOC rate is slightly over 4% on a secured account.

INVEST your money don't SAVE. It just doesn't work, like budgets and diets don't work.

THEY ALL JUST DON'T. If they did there would only be one choice. The reality is there isn't.

Get your money working for you in an investment account as soon as you can afford it and never worry about an emergency that will never happen. Let us pray!

I never bother with an emergency savings account. Go apply for a secured HELOC on your house. Much better option. My opinion and just what I do. 

What are your thoughts on saving for an emergency? Do you have a HELOC?

All The Money in the World

I watched the movie with Christopher Plummer in the lead role of American Businessman J. Paul Getty last night.

What a trip.

Getty amassed his fortune in the oil business during the depression. The movie was based on true events about the kidnapping of his grandson in Italy during the 70's.

The grandson J Paul Getty III died in 2011 at 54 yrs. old due to complications from a drug overdose earlier that left him a quadripalegic.

He became as fucked up as his father with his drug use while his father lived until 70 yrs old after cleaning up his life.

The movie is aptly titled because all the money in the world could not save this family from the disease of drug abuse and ealy death.

Starting with the old man who became just a Scrooge type miser in the end. It was all about the money in life and in the end while accumulating huge wealth died alone holding a painting.

The family is always struggling with the curse of making bad life decisions and early death and tragedy.

Getty sold his oil interests to Texaco for $10B and at his death the family trust went into the hands of his grandson's mother Abigail Getty Harris.

It is now worth $2B and in the hands of Gordon Getty the 4th oldest child. (Google the family for more info). He has his own problems of course but he has so far lived to be 81 years old. 

While the movie was based on the kidnapping of Junior III you can come away with some money and life lessons given out by Getty during the course of his crazy elderly years.

"Anyone can get rich but being rich takes work"

OK. he says being rich you have to work at living like a rich person and falling into the abyss. Getty says you have to learn this when without money nobody cares about you.

I dunno,  think for most it is pretty hard to get rich so they never get to learn how to BE rich. I think for most they would like to try anyway.

The guy was an art nut. Enough to start a museum in New York bearing his name. He believed in buying tangible assets that remained constant. People change but material possessions stayed the same. He liked thatabout things. He had a lot of stuff.

"If you can count your money, you don't have a billion dollars"

It's an arrogant I'm rich AF statement. He owned estates in England and California. He had billions but still died alone was cheap as fuck. He even had pay phones installed on site so guests or family members had to pay for any long distance phone calls.

My Final Lesson Learned

All the money in the world doesn't mean happiness, love, family or exempt from early death, drug abuse and tragedy.

This family just abused themselves with drugs and women. They had nothing meaningful to do with their lives it seems. I guess when you are a trust fund baby like Paul the third, life is just meant to be fucked up. I can't imagine his mother who worked tirelessly on his kidnapping to live long enough to see him overdose and become tied to a wheelchair. So f'n sad and what a waste of a fucken life!

People who have everything really have nothing. The Gettys were and are rich AF but man they have and have had big problems. Just like poor people.

The old cliche holds true, that all the money in the world won't save your kids or buy you all the happiness in the world.

We all have to find our happy, that's all that matters. The Getty family was far from happy. I hope this new generation can find some.

Having said that, I have no sympathy for people who still abuse drugs and their entitled lives. Pfft!

How to Keep It Simple Stupid

I'm talking about the principle of keeping it simple stupid as it pertains to investing. I just read a blog post from Ryan Lewenza over at Turner Finacial on his definition of KISS and this is my counter argument on the points he has made on the subject.

First of all the whole argument can be summed up in whether you believe in modern portfoio theory (MPT) or you don't. I don't and don't really give a fuck about it. I don't buy bonds, preferred shares, mutual funds or their ugly step sister ETFs. It's just me.

If you are a professional money manager and you are charging fees to hold a client's hand then you need talking points to justify why you do the things you do. Song in there I think. Anyways. This is where you follow MPT, buy ETFs and always mutter on about KISS.

It's like that's the only strategy out there. NO it's not but highly effective keeping the herd in line when they start to want to stray. I've been straying and following different paths before I settled on my path.

I DIY my own portfolios, I don't pay fees and I just buy common dividend paying equities. Does it get any more KISS than that? The hard part and it really is hard is holding on and letting it work it's magic.

Of course you can pay someone to do this for you. They call it 

'The Balanced Portfoio'

Here is my take on the points presented.

Balance

You need bonds in your portfolio on those days when your stocks are going down. Why would anyone with a small semblance of brain cells invest in 10 year government bonds paying 1.5% interest? Those seeking balance and poor returns is who?

It's just razzle dazzle in my opinion. I don't invest in them or any bond proxy funds and ETFs for simplicity and or convenience. You are left paying fees to the fund manger and fees to hold the fund or ETFs. Balance at Turner Financial usually means 40% allocated to a mix of bonds/preferred shares giving you a 3.5% yield on your fixed income side.

I don't want at anytime my income to be fixed. I want a growing income that I believe is better gained through a portfolio of dividend growth stocks. Better in retirement and better to combat the ravages of inflation as you age and shit get more expensive and we all get more unstable. 

Balance is all part of the twaddle referred to as MPT. It's just not necessary for you to hold bonds or pref shares and pay ongoing fees that slowly eat away at your money.

Don't know how to manage your money. Go fucken learn. Libraries are full of people seeking knowledge. Yes, you can do this and it's fun keeping more of what you earn and save.

Why pay someone to lose your money for you. You will ask yourself that when the next recession hits. Just sit tight and enjoy the stocks you bought and do nothing. That's all your money manager will do when you go asking questions.

Diversification

This is the idea that you need to hold 40% of your money split between preferred shares and bonds of all types including, federal, provincial, real return etc. etc.

I don't hold any of those types of products. It also preaches to spread your money out throughout the world to reduce risk.

Of course I don't do this and also you have to believe in Modern Portfolio theory which I don't.

Asset Allocation

Hold different asset classes depending on your age, income and how many years you are away from retirement. I only hold Canadian DG stocks.

I'm doing just fine. I will live on the juice those dividends provide. To me, it doesn't matter what age you are just BUY STOCKS!

Hold them forever and only sell unless you have made a mistake.

In Sum

Just be careful who you take advice from and how they get paid.

In this case you pay an ongoing management fee + ETF fees. They will eat into your returns over time.

Some love this model of letting others do this for them. I am not a fan and would rather be a DIY investor and if I lose money then I'm not paying others to do it for me.

You can do this on your own. If you don't know how, then go to the library, pick up a book and learn. Now that's how you KISS!

How do you keep investing simple?
How do you define

CI Financial and Why I Bought This Stock

You bought a wealth management company that sells mutual funds that you hate and abhorr?

Right?

So, why CIX.TO?

It's pretty beaten up, still making money and compounding income at a great clip so far. 

After the financial crisis they cut the dividend 50% from 10 cents down to 5 cents. This was not unusual for a lot of companies at the time.

Since then they've slow and steadily raised that dividend to now 18.5 cents a quarter.

Let's look at some of the numbers;

High Stock Price - $35.05
Now - $21.77
Price Paid (200 shares) - $20.47
P/E - 9.17
ROE - 36%
Yield 3.3%
Payout Ratio - 43%
FCF - $625M

Revenue and Earnings growth continue to move up.

The fact is as much as I would never own a mutual fund, many people still do.
Don't buy the fund, buy the company.

The stock is still way off it's all time high and for me is considered a low yielder. If you are looking for something different that has been beaten up and may provide significant potential to grow revenue and thereby give you some capital appreciation, this is one that I decided is worth that punt.

I bought it for my RRSP.

It has really taken a hit in the last 5 years and investors have thrown it away and have gotten frustrated with it. That's why I believe it's cheap. I also believe most of the risk here is to the upside.

I love stocks that have raised their dividends for 10 years and are still trading at a single digit price to earnings ratio.

From Yahoo:

CI Financial Corp. is a publicly owned asset management holding company. Through its subsidiaries, the firm manages separate client focused equity, fixed income, and alternative investments portfolios. It also manages mutual funds, hedge funds, and fund of funds for its clients through its subsidiaries. The firm was founded in 1965 and is based in Toronto, Canada with additional offices in Vancouver, Canada; Calgary, Canada; and Montreal, Canada.

My Final Take

I'm hoping to juice my returns a little bit with a stock that is rising off it's 1 year bottom of $17. It has recovered nicely. In the meantime I will collect the dividends and be patient. If it recovers to $30 or higher I'll be a happy camper.

This is just what I have done and not a recommendation for you to buy this stock. Do your own analysis and research before making any buying decision. 

Would you buy CIX? What other financial wealth management companies do you own?

Your Ever Growing Income - My Book Review

TITLE: Your Ever Growing Income
AUTHOR NAME: Henry Mah
AUTHOR CREDENTIALS: Certified Management Accountant, Canadian Investor
GENRE: Personal Investment Strategies
NUMBER OF PAGES: 151
PUBLICATION DATE: January 2019

SYNOPSIS/SUMMARY: This book will provide you with a method of stock evaluation that identifies quality income growth stocks and show you how to build an investment portfolio that will provide you with a steady and ever growing income.. 

It is only appropriate when you have a website on 'Strategies to Grow Money' that I have a chance to review a book by Canadian investor Henry Mah.

This is a nice short read of 151 pages and 6 chapters. Henry also includes some Excel work sheets, a list of discount brokers and recommended books and websites to read.

Chapter One

Breaking away from the norm and income is the answer.

In this first chapter Henry lays out a plan for you to;

• beat the slight of hand of market timing
• eliminate guessing of how to pick stocks
• a simple effective way to identify stocks
• an alternative to market returns
• a system where your returns are not tied to market fluctuations

Henry also follows Tom Connolly who wrote the foreword to his book and runs the site dividendgrowth.ca published bi-monthly for a small fee. Tom has been investing this way since 1981. Put simply this is how he buys stocks.

"If a company does not pay a dividend, don’t buy it. If it doesn’t grow the dividend don’t buy it either.”

You can't get any simpler than that when looking for what stocks to buy. The goal is to find a few stocks that will provide you with a growing income from your investments.

The big take away here is the focus on income growth and NOT the day to day swings in the stock price. Ignore that and focus on what the stock provides you in income. Of course, the more you invest and the cheaper price you pay will definitely impact your long term return.

Chapter Two

In this short chapter the focus is on generating savings to invest and how to offset the ravages of inflation. This is about generating income for retirement and not about saving for luxuries.

The worst thing to happen to you in retirement is to run out of money. You must invest in a way so that as your expenses rise they can be offset with a strategy to grow your income. The first step is to SAVE and then invest for INCOME.

Inflation goes up every year so we need to match that with an income stream that also goes up.

Chapter Three

The focus here is developing an investment strategy suitable for you. 

Henry also covers the hazards of ETF investing which I have constantly railed against on my own blog. They just contain too many bad stocks and businesses you would never invest in on your own. I don't own any but if you just want a market return then go ahead.

Income investing means focusing just a few investments in quality companies and NOT on total market return.

ETFs are expensive to own and also cost more, the more you have invested. They are also getting more complex all the time and the landscape is bulging with options to choose from. They are becoming more and more complicated every month.

The Four Guiding Rules

You will have to buy the book to see what is presented exactly as a strategy but suffice to say it depends on dividends, how long they have been paid and whether the company has cut a dividend. Is the company consistent paying that dividend and has the dividend grown?

Studying just these rules of DG stock analysis and questions, is worth the price of this book.

For stock analysis Henry provides a link to Morningstar where you can analyze all stock components of the TSX 60. This is how you will compile a list and where you will get all the pertinent information on the company. I use it when I have more cash to invest and choose the right company for my money.

A process is illustrated in this chapter RATHER than a recommend stock buy list for you. You apply the 4 rules to each stock and then determine if it's suitable for purchase. Rather than coming up with guesswork this process will eliminate stocks and also compile a BUY list for you.

I must do this for myself instead of just relying on the list that Tom Connolly provides on his site. This way the list is yours and gives you a great sense of how successful the process is by applying the 4 rules.

UPDATE: Since writing this review, Morningstar only provides this service for subscribers (still worth it).

Chapter Four

Topics covered include;

• where to invest your money
• how many stocks to hold
• when to sell (if ever? I try not to)
• recording your investments

Lastly, Henry goes into how 'you need to forget all you've heard and followed about the basic rules of investing'.

Chapter Five

Why should change your investing course now and follow your own path.

Chapter Six

Relevant proof is provided with income data and how Henry is meeting his income needs.

My Take

Everyone should have an investing strategy. The point is to have one. Buying lottery tickets IS a strategy, just not a very smart one.

Is this book the only one - Ummm NO!

I am a student of Tom Connolly's DG strategy as I've mentioned many times on this blog. As a retiree I use it for income ideas and overall motivation. Mostly I just let my concentrated DG portfolio sit, stew and do it's work.

For Growth stock strategies I follow Robin Speziale and his Capital Compounders and love to listen to Barry Schwarz and what he recommends.

You have to do what you think is best and be comfortable doing it. I love being a Dividend Growth stock investor. Why? I think it's fun and I love seeing those dividends automatically deposited into the accounts. From there I make buying decisions based on the criteria Henry teaches in his new book.

I don't use Modern Portfolio Theory and it's adherence to asset allocation, balance and diversification. I don't believe in it and neither does Henry, Tom or Robin.

You simply buy big stable dividend growing companies that pay a consistent and rising dividend. It is suggested to focus on companies that have a record of doing that for at least 10 years.

In his book Henry DOES NOT give you specific stock recommendations or any sample portfolios. This is also what Tom Connolly does not do. Henry instead provides you with a screening and evaluation process to determine what stocks you should or shouldn't buy. This way you learn how to do it your way.

Be Like Henry 

I try to be. I don't own any funds, ETFs, bonds or preferred shares. I only own Canadian DG stocks - banks, pipelines, utilities, railroads and telcos. I also own Costco. I just couldn't resist and hated all the Canadian grocers and their low yields. Most are very expensive compared to Costco. I shop there, so I wanted to be an owner. I only purchased it last September and am already up 20%.

Other than Costco it's just those areas I'm interested in. 

NO gold and NO weed! 

Most PFs are constructed whether by professionals or ETF marketers with a 60/40 split. 60% equities - Canada, U.S. and Int'l and 40% bonds and pref shares.

I hate to pay fees. As Henry says it's still a fee and it acts like a leaky faucet in your portfolio. Those small fees add up over a lifetime of investing. Just build your own portfolio of quality companies.

Henry's Words of Investing Wisdom 

• forget diversification, it's just investing jargon and propaganda to get you to buy funds or ETFs
• quality over quantity (Henry owns just 12 stocks)
• a few great stocks are a lot better than a bunch of lousy ones
• don't chase yield

In Sum

We've all made mistakes and have made some bad buying decisions. If you use the tools Henry provides in his new book, your chances of long term investing success will greatly improve.

This is a great little book written by a Canadian for Canadians and I have no trouble at all recommending it to all investors no matter where you are on your investing journey.