June 30, 2009, 5:34 am

4 Stocks for 2009 Competition: Another Quarter, Another Champion!

by: The Financial Blogger    Category: Investment, Market and Risk,Trading

As you probably remember, a few personal finance blogger and I entered into a friendly stock picking competition on January 1st 2009. The purpose was to pick 4 stocks each and pray that we are lucky enough so we can create a positive return at the end of the year. As 4 stocks is definitely not enough to maintain a well balanced and diversify portfolio, this is far from being a scientific competition and I do not encourage you to take our picks for granted.



What is really interesting to see into this stock picking competition is the ranking from one quarter to another. After the first quarter result in March, I was second and most of my fellow bloggers were showing negative returns. However, now that the market surged from March to beginning of June, the ranking has completely changed.

Some people who had “bad stock picks” for the first quarter saw their very same stocks (we are not allowed to change our picks… unfortunately!) soared during the second quarter. We had a few bloggers that decided to bet on the price of crude oil. Since there was a lot of speculation lately (it went from $35 in December to $70 during last month), they are showing a much better portfolio yield now!

As for my own choice, Google (Nasdaq: GOOG) keeps doing well this year. There is a lot of changes in the techno world and betting on a highly liquid cash company is definitely a must. Google can easily survive this economy crisis and grow stronger from it.

Com Dev International (TSX: CDV) is not doing much right now and it is definitely not helping my portfolio to outperform others ;-). However, we still have another 6 months ahead of us and I strongly believe that it is a good pick (maybe for 2010 😉 ). The thing about stock picking is that you must be patient!

Bank of Nova Scotia (TSX: BNS) is still doing fine but the bank rally seem to be over. I guess I won’t get much out of this stock this year. If it would be include in my own portfolio, I would have to decide if I keep it for its good dividend yield or I sell it in order to cash in my profit. There was definitely a misevaluation of Canadian bank stocks at the beginning of the year but the results from the last quarter seemed to have brought all investors on the same pace.

Unfortunately, my “safe pick”, Johnson and Johnson (NYMEX: JNJ) was not a great one considering that we just went through a stock rally (bull market? Who knows!). Therefore, this one is slowing me down in the competition… for now ;-). What influences my results compared to a real portfolio is that I don’t get to count the dividend (from JNJ and BNS) in my returns. It would have contributed to give me a few additional percent ;-).

So here’s the ranking and their latest post about the contest (will be live at the end of the day!):

1

FourPillars

48.83%

2

IntelligentSpeculator

43.32%

3

WildInvestor

41.45%

4

Wheredoesallmymoneygo

28.52%

5

TheFinancialBlogger

13.29

6

Million Dollar Journey

4.76%

7

DividendGrowthInvestor

0.70%-

8

ZachStocks

-3.04%

9

MyTradersJournal

-11.36%

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June 29, 2009, 5:36 am

Life After The MBA

by: The Financial Blogger    Category: MBA

I’m shortly starting the month of July, my very first month as a free man! Ok, I am ignoring the fact that I still have to write a final paper but it doesn’t matter; I got my weekend back, I got my life back. So what’s next? Where is my promotion, my bigger office and my new BMW? Huh… not quite there yet apparently!

Will I change job?

Funny enough, spending 2 years with managers and learning how to become one gave me all the reasons in the world to not become one! Ok… I am exaggerating a bit. However, looking at the number of hours worked by manager around me makes me wonder why do accept such responsibilities if it’s to be paid per hour as a burger flipper? Is it for power? Is it because they just love their company? Or maybe they would love to own their own business and this is the closest they found with a (virtual) “guaranteed income”. So will I change job after my MBA to become a manager? Hell no!


However, I have built a hell of a network and I can easily get myself better employment conditions as a financial planner ;-). I have made great friends and I also learned how to “play” their game. If you know how a manager thinks before he hires you, you can get much more (Fred, please ignore this line ;-0 ).

What is my next big project?

NONE! Huh… then again, a little bit of exaggeration from my evil me. I actually have 3 huge projects in mind:

– Taking care of my wife and my family (which is by far the most important thing I will do!)

– Keep losing weight and getting in shape (this is definitely happening already so I should succeed by the end of the summer by weighting 170-180lbs and get rid of all my fat!).

– Bring my business to another level. I really would like to wonder if I keep working or if I can simply live from my online income… I think that by putting more effort into it, I’ll be able to achieve this goal within the next 2 years…. This would be amazing!

If I had to do it again, would I do it anyway?

If I had the power to go back in time in August 2007, I would still come to my first class and do my MBA. This was a painful experience where I almost lost my sanity and my family. However, this brought me where I am, this helped me become who I am today and this will surely be helpful in the future. So I would still do it, knowing what was coming for me!

What is the next step once you have done your MBA?

Take a deep breath and relax!!!! I am actually considering taking more days off and going on vacation… I’ll see if I can manage something with my manager 😉

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June 27, 2009, 6:25 am

Financial Ramblings

by: The Financial Blogger    Category: Financial Rambling

Man! I think that if my life with be included in the VIX (volatility index), I would make the index soars to new highs in the past months! There are some important movements within our internet company and we are currently thinking about making some important moves. I guess I have to find something else to get busy with since I’m almost done with my MBA! I can’t tell you more about it right now as we are not quite sure what we are doing with our company anyway ;-).

I keep going to the gym and I try to resist as much as I can to ice cream (we all scream for ice cream!). I must say it is easier to go to the gym than saying no to a delicious blizzard (vanilla ice scream with bits of Crispy Crunch and Coffee Crisps…. Aaahhhhh). Nonetheless, I stick between 182 and 185lbs… slowly going down toward the 180 lbs psychological bar… At this rate, I should go under 180lbs sometimes in July… This is quite exciting! I also noticed that the more I work out, the less I want to eat junk food and sweats. I even surprised myself to stop eating my Tim Horton morning breakfast halfway. I tasted the enormous quantity of salt inside and I throw it away.

Here’s a few good read for the weekend:

The Credit Tool Box tells what a good Beacon Score is.

The Dividend Guy bought some more fixed income.

The Digerati Life provides some useful money saving tips.

The Simple Dollar comes with his rule#2 of investing: don’t over-think your investments!

Intelligent Speculator introduces us to managed account.

ABC’s of investing is giving us more information about dividend stocks.

Four Pillars tells that good debt is truth. (all debts are good 😉 even the one to buy a plasma TV ;-)!… just kidding!).

Where Does All My Money Go comes with a credit card payoff calculator.

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June 26, 2009, 5:35 am

Can We Still Make Money Out of Rental Properties?

by: The Financial Blogger    Category: Investment, Market and Risk,Properties

Yesterday, I wrote about the fact that I truly believe that we can still make money out of the stock market. I think that there are 3 main ways to make a lot of money (there is technically a 4th one which would implicate you working like a damned demon for a company for several years and hope to get the VP position). The first one is to invest in the stock market. This one is quite “easy” as if you simply buy ETF’s and wait 30 years, you will wake up one day with a lot of money! However, it requires golden guts 😉

The second option that we will be discussing today is through rental properties. This is the baby boomer’s classic success story of the guy who didn’t have much education but was a hard worker. He pilled up his money to buy his first property, than his second one and he bought a land, build 20 properties on it and he is now living by the lake… I must agree with you that I also fell in love for this story. We all know people who succeeded through real estate. We all know them because real estate is easy to see, buildings last and it makes us think it is safer.



However, while I still think that we can make money through real estate, it is far from being a safe investment. There plenty of risk that you must consider (illiquidity, default payment from renters, major repairs, drop in value (think of the American market), etc.). So don’t think that it is that amazing! What is really cool though, is that it can be used as a big “dividend tank” that send you money months after months!

Why you can still make money with real estate:

Depending on where you live, there are several reasons why you can still make money through rental properties. The major point is that borrowing doesn’t cost much right now. I am convinced that people who have the guts to borrow as much as they can today will be greatly rewarded in a few years. We have a unique chance of paying almost no interest in order to buy depreciated assets… Doesn’t this sound like the opportunity of a lifetime?

The second point is that there are a lot of rental properties which has been depreciated in value. This is probably a great timing to start looking around and look at how much it would cost to buy real estate in your area. Unfortunately, this is not the case everywhere. In Quebec, value didn’t drop much. In fact, my house keeps increasing in value years after years. However, I would be curious to look at properties in Florida!

The third point is the blessing of having a recession (say WHAT?). Well if people start losing their job, they will probably consider selling their house and start looking for an apartment. Therefore, you have better chance of getting renters. On the other side, it might become harder to get paid on time 😉 Nonetheless, the demand for apartment will definitely increase in the upcoming year. I don’t think that young couple will get their first 350K mortgage at the age of 25 anymore… they will stay in an apartment for a few more years and gather more money before buying! This would be the client you should be looking for!

Any thoughts on real estate investing?

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June 25, 2009, 5:48 am

Can We Still Make Money Out of the Stock Market?

by: The Financial Blogger    Category: Investment, Market and Risk

I have been a financial planner for the past 15 months. During this period, I decided to pursue build my book of business with two different types of clients: The first group is the ones that my banks want in order to grow right away (people with more than 250K invested). The other group is what I think is the future of all organization and what banks seemed to completely forget right now: the young professionals / the first group’s children!

This is how I sign a lot of “small” account with people my age making 75K+ with very promising career. They barely show in my numbers since they didn’t have time to accumulate 250K, however, I know that I can build a strong relationship with them and they will be the one brining in the money to banks in 15 years! One thing I really like about young professionals is that they ask a lot of smart question such as:

Can We Still Make Money Out of the Stock Market?

They look at what happened to their parents in 2008, the huge amount of money loss on paper, and they really wonder when they will get it back. It is going to take a while…. That is the cold hard truth. However, it will come back 😉

So they think; what if there was another way to make money then investing in the stock market? Most of them refer to start their own business or investing in real estate properties. So today I will answer the first part of the question (can we make money out of the stock market?) and the following day, we will look at those 2 other options that may become great financial solutions as well.



I do believe that we can make money investing in the stock market

After so many years losing money and looking at others being discouraged, a lot of people are wondering if their RRSP wasn’t the worst joke in history. This perception comes a lot from the lack of financial knowledge or the way their portfolio statement is built.

When we look at the current market, we lost about 5 years of growth, which bring us back right before the techno bubble. 3 months ago, I would have said that the last 10 years brought a 0% yield (this happened 5 times since 1920). We you look at these facts, there is nothing glamorous about investing in stocks. Why bother when you could have made 4-5% with bonds? Unfortunately (or fortunately), numbers can say everything we want them to say. In 2007, most financial advisor were talking about the last 5 years returns. Why? Because since 2002 (after the techno bubble, September 11th and financial scandals such as World Com and Enron), the market surged and never look back. Therefore, we were talking the stock market at one of its low and showed them in 2007 at its peak. Most funds were making double digits numbers (emerging market funds were showing annualized return of 20% +!). Nobody was questioning if we could make money at that time!

Now that we are back to a low level on the stock market, we are discussing if we really can make money out of it. Well, let me tell you that I signed accounts in the middle of the market turmoil (in October and November), and they are all making more than 10%, even if they were conservative investors. Why? Because they happened to invest in the right timing!

So my point is the following; if you are 30 and you wonder if investing in your RRSP is a good strategy to retire wealthy, you should look at the next 30 years in term of yield instead of thinking what happened last years. I’ll tell you a big scoop; this is not your last financial crisis 😉 However, we should not got through another one as big as this one!

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