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GS said

Doug:

Stocks - I learned a long time ago I cannot pick stocks. One day a long time ago when I had a spare $10000 I decided to invest in bank stocks. I forget which I chose but picked two of the big five based on their then current price of close to $50 per share, meaning I was able to buy 100 shares of two of the big five banks. Over the next two years those two were the banks that performed most poorly of the big five.

I've bought more than my share of stocks that should have done well and didn't. So, now I only buy ETFs, specifically CDZ, XIN, XIU, XSP. I also do own a good chunk of BCE and regularly hold my breath on that one. I am currently working to make sure my CDZ and XIU don't have too many common stocks.

On the US side I also own FDX (Fedex), SKT (Tanger Factory Outlets) and V (Visa). Each of those were the result of discussions with Mrs GS on trips home from the US where we were talking and she said, "why don't we own some of that?". They represent less than 5% of the total and have been doing quite nicely. My ROI% on FDX is 41%, SKT is 32% and V is 158%.

My bond holdings are in individual strip bonds, each one or set maturing over a year year period and their value is about 4% of the total. I just keep buying 7 -8 years out on those but am going to have to increase my 4% likely to 6% to keep the ladder to only 7-8 years. I own Nova Scotia, Quebec and Ontario government and Hydro strips as well as TD Bank, Molson Coors, Loblaws, BMO, Bell Canada, and now Fairfax and Transalta. I don't want any portion of my strip collection to represent more than 5% of anything, so once I have, say, 5% of, say, Molson Coors, it doesn't matter if there is more out there to buy that is paying a better return than anything else. I simply shy away from it. (I have yet another spreadsheet that tracks maturity dates, issuer type (Corp or Prov), ratings and finally maturity dates.)

As well I did buy some bond ETFs, specifically, CLF, XBB, ACM and ZLC. I rolled RQF, RQG and RQH into the mix when rates started going south but recently liquidated the RQF and will likely liquidate RQG and RQH and buy more strips after I get the asset allocation finished.

I also own one mutual fund CIB519 for Emerging markets. It is now of a size where I might sell it and buy an ETF that matches the investment objectrive.

I also hold cash in RBF2010 and the High Interest Savings Accounts we all know and love.

My first mutual fund was Bernie Cornfeld's IOS which I bought in 1966 at the tender age of 19. Riding that through a number of iterations taught me I knew nothing about what I was doing.

Greg

Thanks for sharing, at least in part, your portfolio make-up, Greg. You say you're "holding your breath" on your BCE shares...I don't know why the analyst community is always so negative on BCE (compared to Rogers and Telus). They say it's because BCE's wireless revenue contribution is only 30%, but the fact they have the biggest collection of content assets (which, in many cases, are profitable contributors) as well as growing high-speed Internet assets, I think that may makes them a "safer" bet because their revenue streams are much more diversified. As well, correct me if I'm wrong, but I don't think they've ever cut their dividend. And, you might be happy to know their "wireline" segment actually showed a slight uptick in revenue and profit growth this past quarter (a sign of a trend, perhaps?). Not sure if this was their traditional local phone service growing as well, or just due to Bell Fibe growth, but I'm actually bullish on Bell Fibe and Telus Optik TV and more negative on the cable companies (i.e., Shaw and Rogers) because, even though the cable companies' operate proprietary networks and don't have to sell wholesale access to their networks like the telcos, the telcos benefit on price by "bundling" which more than offsets any loss in subscribers to the "independents" who buy at wholesale rates from the telcos. Plus, Bell's wireless division would have more growth prospects than Rogers', given Rogers' market share. (Where's Rogers going to "grow" exactly?) Bell could dramatically expand out west (it's already big), into western rural communities and provide competition for Telus, as well.

I'm actually thinking about adding BCE to my portfolio - I wish I bought them back in the low $30s or high $20s though! Not sure if I should wait for a bigger overall market correction though.

In terms of TransAlta, I like them. I don't like their balance sheet, though. I'd rank their balance sheet slightly "on par". They're in the same camp as a Capital Power Corp. or a Hydro Quebec, I'd think (though the latter we can only buy their bonds, not their equity, since it's a Crown corporation). I just worry about TransAlta's dividend sustainability - they're paying it out of cash flow, not earnings, which does include debt issuance. As long as they can "grow" earnings into that dividend, it probably doesn't need to be cut (but, on the same hand, since you're getting the higher dividend in advance, can't expect any dividend increases in the short to medium term), but it's risky. That's probably the riskiest asset in your portfolio.

As for the CDZ, it's outperformed XIU and XIC (on the upside and downside) in the past, but I still think XIU and XIC have a place in portfolios in place of a Canadian Equity Index piece. Not sure if I should go with XIC (which almost exactly mimics the S&P TSX Composite in a capped weighting structure) and is a bit less volatile than XIU or if should go with XIU (which has outperformed XIC, with more volatility). Alternatively, should I go with Vanguard (which is next only to BlackRock in AUM) and its lower-fee VCE product (which tracks a different index, that has outperformed the S&P TSX Composite fairly dramatically and shows less volatility than XIU)? Decisions, decisions.

Cheers,
Doug

Doug:

BCE makes me pause only because my holdings of it represent 6% of my total. I don't minds having XBB represent 12.5% or XIU, XSP and XIN each represent about 8% as these are widely diversified internally.

One of my holdings is always going to be the one that concerns me most -- BCE is a good one to have to worry about.

Greg

SD:

When I was working we all knew our employer bought us at wholesale, sold us at retail and made money on the spread. These are facts.

I didn't start saving till I was 43 due to a number of factors. At 43 I "saw the light" and opened my RSP with two deposits of $7500, one for the current year and one for the next year -- done February 28th of 1990. Today I am 67 and am concerned by how big my RSP is. These are facts.

I bought my first house for $47,000 in 1975. I sold it in 1990 for $170,000 and bought a new home for $285,000. In 2007 I sold it for $403,000 and built a new home that when all was said and done cost about $450,000. I do not include that home in my "investment" calculations. These are facts.

Others are not so fortunate. But, I made my "fortune" by careful investing in Equities and Fixed Income. These are facts.

Others can do likewise if they stay the course. These, too, are facts.

Have a good evening.

GS

My water rates just went up 9% last month. I don't know anywhere that I can reliably get an ROI of 9%. Heat and power and property taxes are not far behind, not to mention user fees in lieu of further property tax increases. These are necessary costs, even though my house is relatively economical to operate.
What annoys me is that even the better pension plans only allow for increases according to CPI, as do OAS and CPP. But CPI does not, in my opinion, reflect the cost of necessities, only an overall basket of stuff people spend money on. So we all lose, even when income is indexed.

Oh my gosh, is there no end to the useless drivel and gross factual inaccuracies you pass off as "facts" in your multi-paragraph tirades?

I've been patient and tried to engage your rants long enough, SD2013. The last two posts you made were grossly over the line, particularly the parts about what companies have gone bankrupt and "wiped out existing shareholders". I don't believe AIG's shareholders "lost everything" - their holdings may have been massively diluted by the government exercising warrants for control of the company, meaning the value of each share was worth 80% less, but since then, AIG has fully repaid the government plus a profit on its shareholding of roughly 10-20%. Likewise, through that move, dividends, ongoing share buybacks and asset sales, existing shareholders (those that held on prior to 2008) have seen the value of their shares rise dramatically. AIG is a vastly different organization than it was - having exited or sold off the "risky" parts of its business. It is still massively profitable, albeit with much slower growth, with this lower risk profile: it's a "boring" property & casualty, life and mortgage default insurer now.

Similar story with Lloyds Banking Group and Royal Bank of Scotland Group. Though massively diluted through the government exercising warrants to assert majority control in the form of debt/preferred shares/common shares in exchange for a capital infusion, existing shareholders (those prior to 2008) still held onto their holdings which were arguably worth 10-20% of what they were, at their low point. However, they too have deleveraged and remade the bank into a "boring" slower grower.

CIBC never went bankrupt. Did it have writedowns? Sure, but that's the "ebb" and "flow" of the business. I was fortunate to buy CIBC shares after 2008 (in 2009, near the market bottom), but the shares are almost back to their all-time high and, so long as you never sold your shares, you've enjoyed the dividend (which has grown and which they never cut).

Fortis Bank also needed a cash infusion, as did ING Groep (which you curiously didn't list), but they too never went bankrupt to the best of my knowledge.

I honestly have no idea how you pull these names out of your mysterious "hat" because, if you're talking about bankruptcies, I've pointed to at least five or six (some of the names you list must be really small companies as I've never even heard of them) that never went bankrupt. If you're talking about equity offerings, that's a different story, and while never "fun", so long as there's a solid business there, they will survive. Barclays Bank plc never took a bailout from the UK government and neither did HSBC Holdings plc yet both did public "rights offerings" (equivalent to an issue of common or preferred stock from treasury), which diluted existing holders in a similar fashion.

All I ask is you quit claiming your opinions as "facts" and telling us to Google it. How about you, if you're going to state something as a "fact", link to the source?

Until then, I'm leaving this thread and will reply to your posts a lot less.

I just hope the rest of this forum's readers don't assert everything you say as "gospel" or Heaven help them.

Cheers,
Doug

Peter of Administration,

Please look at the prior 2 posts here on Feb 12/14 at 4:39 & Feb 12/14 at 9:26 and deal with them appropriately. I find the comments against another forum member offensive.

Everyone is entitled to their opinion, however the nastiness/personal attacks are unnecessary & I believe should be removed & anyone quantifying or giving lip service to: is not helpful.

Thank you,

BC

SD2013 said

To interested forum readers, I was on vacation with my wife for the last 6 days and I did not have an opportunity to respond to any of these comments.

I do not want to get into a huge discussion again but just regarding CIBC, I never stated they went bankrupt. CIBC shares are battered by 13% from 2007 to 2014 as of a week ago. I stated in my post above that bankrupt and battered shareholders lost between 13% to as much as 95%.

CIBC is was around $120 a share in 2007 and at that date week ago, CIBC shares were around $87. If you add all dividends received by shareholders, a CIBC shareholder is at a 13% loss.

Google is the main information source from the internet today and all the facts in my posts are from Google. Most people use Google.

Thanks, from SD2013.

SD2013, you did say CIBC went bankrupt and investors suffered badly. You listed it directly with some companies that did go bankrupt. If that's not what you meant, then I, quite frankly, will demand that you go back to that post and edit out all the list of companies you quoted as having either gone bankrupt. Lumping investor paper losses (from the 2008 market crash) in with companies that went bankrupt isn't helpful and is potentially grossly misleading. The fact is, those that bought CIBC in August 2007, have now essentially made back their money and, with share buybacks and steady dividend increases (and CIBC never cut their dividend), are probably actually up (not as much as if you'd bought in October 2008, obviously, but such is the case with stock market corrections and is why past performance should be looked at but not obsessed with as changing the study period by one month can grossly effect returns - positively or negatively). A company that has the ability to pay dividends to its common shareholders, which rank at the bottom of the corporate liability "food chain" in terms of payments, and grow those dividends, is so far removed from bankruptcy or financial ruin, to even mention them in your post, is both disturbing and appalling.

(And BC, that's not a "personal attack" - in point of fact, I'm not and will never attack SD2013's character personally. I'm simply choosing to express a personal opinion that frankly, "calls out", or draws attention to, some gross misstatements and outright factual errors made by someone who continuously states, "this is fact. Google it". I'm surprised no one other than myself or GS has called attention to the fact that these so-called "facts" where the reader is told to simply "Google it", with no direct hyperlinks. If a court of law, if SD2013 were the Crown counsel or plaintiff's attorney making an argument, that would be like him or her stating anything, calling it a "fact" and then telling the defense attorney to prove him wrong. Sorry, that doesn't wash with me at all, BC and SD2013. Canada is a democracy [thank goodness!] and, in Canada, the burden of proof, whether it be in a court of law or on a message board, lies with those making statement of facts.

I will not let up on this, on fundamental point of privilege. And, before you state I've done the same, I encourage you to re-read my posts. I've always either linked directly to a specific article where I've stated something as fact or quoted a direct source (i.e., name of publisher, date published, title of article, etc.) that is easily searchable (quoting "Google" as a search, in SD2013's case, is not proper citation standards in any developed country). Similarly, even where I've not cited something as "fact", but am reasonably confident it may be, I'll always preface my statement with an "I think", or "I believe this to be the case", or "Don't quote me on this, but I believe" - I think you get the picture.

If SD2013, or anyone else for that matter (though, in all honesty, I think pretty much every other forum member here is pretty good), refused to do this, then I would ask that a Wikipedia-esque disclaimer be added to SD2013's "signature" where his/her user profile is barred from editing that disclaimer. It should further state that where items stated herein as "facts" and no linked citation is made or the reader is instructed to "Google it", then that should be construed as "opinion" and not "fact".)

Cheers,
Doug

You're right, SD2013, about verifying everything you read on this forum. I have to ask, though, why will you not , when stating something as "fact", providing a quick hyperlink that helps to illustrate your case? Simply telling your posts' readers to "Google it", without so much as a mention of "what" to "Google" isn't at all helpful. In essence, we (or they) don't know what we're supposed to be looking for.

While I agree it's correct to do independent verification, there is also onus on you to provide citations (via hyperlinks or documented evidence) in everything you claim as "fact". Google is not a source, but a mere method for locating a source, if the reader knows what to look for.

Out of curiousity, is it out of sheer laziness and you wanting to publish your post as quickly as possible that you choose not to cite or evidence your claims of "fact"? Or, perhaps, is there some other motivation, that isn't readily apparent to myself and others, behind this lack of transparency on your part?

I think you a very nice person, SD2013, and enjoy your sharing your opinions on this forum as much as I enjoy the opinions of others, but where explicit claims of fact are being made without standard citations or documented evidence, I will not let up on this until you change your actions.

Cheers,
Doug

SD2013 said

[snip]

CIBC is was around $120 a share in 2007 and at that date week ago, CIBC shares were around $87. If you add all dividends received by shareholders, a CIBC shareholder is at a 13% loss.

[snip}

Dan (SD)

Virtually every stock worldwide fell during 2008. How about commenting on the following:

CM (CIBC Symbol)

October 31, 2002 $38.75 (the lowest point around that time)
January 31, 2009 $46.63 (the lowest point around that time)
January 31, 2014 $89.45 (close at the end of last month)

Then go here, click "MAX" on the Stock Price section where the graph is to see for yourself the entire history back to January 31, 1995.

Now, if one were to have purchased CM on Hallowe'en, 2002 and waited 6 years and 3 months till it had finally hit bottom after the 2008 crash, then one would still be up about 20%. If one were to have purchased CM on Hallowe'en, 2002 and held it till the end of last month (11 years and 3 months) one would be up 230%.

And, to take it a step further, if someone bought CM May 31, 2007 in what appears to be the top of the top and sold it at the bottom of the bottom in 2009 one would have lost something like 55%. If they still held it today they are down the 13% you keep referring to.

I have not bothered to research whether this includes or excludes dividends and really don't care.

Quoting one set of numbers to makes ones point needs to be challenged as relatively inexperienced investors will read what we more experienced folks write and take it as gospel. You suggest they Google it, but the problem is, if they don't know what questions to ask, they have nothing salient to Google.

Greg

GS said
Doug:

Spent 25 years working in machine tool sales and manufacturing management. Then in 1990 joined a large aerospace engineering company in their IT department. Spent 8 years there (got outsourced to CGI for 6 months athe end) and then in 1998 joined a company that provided billing software to telecommunications companies worldwide. In both organizations I was part of a team that managed the WAN 24/7. That last company was sold twice in 4 years, and was re-organized more times than I could count. At the close of the sale in 1997 someone decided I was 'too old" and "too highly pad" and so was not picked up in that transition. After about 6 months of considering my prospects and at the age of 57 I decided it truly was time to retire.

Having said all that, there have not been nor will there be personal attacks by me on anyone.

I will continue to challenge statements that are stated in such as way as to potentially mislead others.

Greg

Hi Greg:

I figured as much. Scratch that, I knew as much, but figured you'd want to respond to some of the allegations levelled against you and me by "BC" and "SD2013" yourself.

Interesting story about yourself and your career history. CGI Group is actually one stock that's starting to look somewhat attractive, from a valuation standpoint, in this market. Did you know that, as part of the "Big Banks" majority takeover of TMX Group (it's still publicly traded, albeit as TMX Group Ltd instead of TMX Group Inc, which is now a wholly-owned subsidiary of TMX Group Ltd and was renamed from Maple Group Acquisition Corporation), CGI Group took over the contract from the Canadian Depository for Securities to manage the technology and operations of both SEDAR and the National Registration Database (what Mutual Fund Dealers and other securities firms use to register their representatives)? I think the stock took a hit as one of the major players in the federal healthcare exchange contract healthcare.gov, but is otherwise a decent enough company.

SD2013: like Greg said, it's ridiculous to quote performance returns as, depending on your "start" date, you could have wildly different returns by picking just one day off - or even the period in which you choose. Stock markets, by their nature, obviously carry a higher degree of volatility than bonds, historically. However, over time, they generally offer above-average returns* and, since the 1950s, have massively outperformed all bonds (for sure government and likely corporates as well). It's all about risk/reward ratio. The higher the risk, the higher the potential reward. Low risk will translate to low returns, obviously. Higher volatility does not necessarily equal poor returns. If you're someone who isn't comfortable with wild 20+ percent swings in the market occasionally, then I'd encourage you to look at other asset classes (i.e., more weighted to fixed income securities like bonds and a smaller equity weighting that is focused on slower growing "steady Eddy"-type dividend paying blue chip stocks).

You won't get rich with a 100% bond portfolio, but that's not the point. The goals are to preserve purchasing power (i.e., beat inflation) and achieve low to, at the most, modest investment income and low to nil capital gains. One could reasonably expect, on average, 2-3% average annual return whereas, conservatively, with a balanced bond and equity portfolio, despite the market volatility, one should reasonably expect a 5-7% return. You may be able to tactically achieve higher returns than that, but not without bearing substantially more risk.

*barring pure investor stupidity, like buying at the absolute top of the market and selling at the absolute bottom of the market

Cheers,
Doug