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Business owner for over 30 years now working less and investing more. Our company has grown from $1M in sales to $25M in that time. I have recently sold my shares as part of an exit strategy. My philosophy for success in life and business is based on creativity. As Albert Einstein once said,... More
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Investing to Retire
  • Know When To Hold'em And Know When To Fold’Em 1 comment
    Jun 13, 2014 9:31 PM | about stocks: BNS, JPM, AGU, TD, MET, AAPL, TOT, QCOM, V, CVE, RY, BCE

    It's coming up to the end of our first half of 2014 and it's as good as time as any to review what has been going on for the last quarter. I have to admit that this market makes me feel like a poker player - it's hard to filter out the noise and concentrate on the game.

    I was nervous earlier in the year that the market had run up a little too quickly and that my picks for the year were not doing too well. The market did sink a little but seems to be range bound. Overall my portfolio is up about 14% so far this year, which is basically driven from good results from Canadian banks and a few stock picks that worked out.

    I'm going to add a more complete listing of my holdings to show you what I think works, but also as a journal to keep track of my decisions. These are my long holdings - no plans to sell, ever. (Nothing is written in stone, but I'm trying to be disciplined).


    Price Jan 1

    Price Jun 13


























































    Overall, this group of my core holdings are up 4% by share price which when you consider the risk of holding stocks, it's beginning to look like I need to take some chips off the table. At the same time, I get dividends or distributions from all of these which are almost doubling my capital appreciation.

    As of June 6th, 2014 - I have gone to 10% cash by selling 2 of my long time holdings BMO and CM. I don't dislike these stocks, but I already have RY, BNS and TD which are part of my core holdings and I don't need 5 Canadian banks.

    These stock sales will incur a lot of tax since my gains are in excess of 150%, but I plan on putting enough in my RRSP (tax deferred) account to avoid any tax. Note that the banks that I've held on to are all over 300% capital appreciation + dividends, so it wasn't hard to choose which ones to sell.

    In addition, I own 4 small oil companies which have done very well and when added to my core holdings, my return is 14% for the year. These companies are LNREF, MEI, PTA and OXC. These are extremely volatile and I would urge extreme caution on trading stocks like this.

    I do feel that the market is running out of steam, so I am beginning the process of options trading to protect some gains and possibly pick up some bargains. For now I will focus on purchasing Calls and Puts. While I don't consider myself a trader, there are trends in share movement where I think options trading will help. I expect volatility to return to the market. Not sure when, but any catalyst at all will move this market.

    So to recap all my moves this year

    1. rotate out of mutual funds to stocks
    2. rotate out of high PE into better valued stocks with lower PE
    3. shift 50% to US stocks to hedge CDN$ and seek more growth
    4. continue contributing new money, about 5% this year
    5. increase cash to 10% of portfolio because downside risks are increasing
    6. investigate further diversification options with consumer staples and other defensive industries like utilities. I don't own either sector right now.

    Disclosure: The author is long BNS, JPM, AGU, TD, MET, AAPL, TOT, QCOM, V, CVE, RY, BCE.

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  • ArtfulDodger
    , contributor
    Comments (2487) | Send Message


    Looks to me as though you have as good a strategy as I've seen. Excellent, quality companies. Good move with the Canadian banks. Congrats. Great work with your company, too.


    About all I can say somewhat differently is that I like very much the rifle approach over the shotgun approach, where you take dead aim at buying a few topline stocks when they're out-of-favor rather than making a shotgun blast buying across the board.


    But as well as you've done holding a lot companies, far be it from me to criticize. I just thought I would give you a slightly different strategy for thought.


    Two of the best investors of all time, Fisher (deep value) & Hines (the first contrarian), would own no more than four to six stocks at once. I currently own 12 and am 90% invested. Of course, we live in a time that you can more easily keep up with a larger number of companies, mainly because of the Net. Right?


    The best to you and your investing. I'll drop you a private note in case you don't check this thread anytime soon.


    I remain, the Artfuldodger
    1 Nov 2014, 01:41 PM Reply Like
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