Owner: Middle Class Millionaire URL:http://middleclassmillionaire.blogspot.com/ Join Date: Wed, 16 May 2007 09:40:58 -0500 Rating:0 Site Description: I will document my journey from middle class to an early middle class retirement. I will share my financial progress, rant about the market, stocks, retirement, saving money and anything and everything related to money, investing and retiring early. Site statistics:Click here
Recent Canadian Dividend Increases 2007-12-21 07:27:00 There is nothing more satisfying to a dividend growth investor than a nice juicy dividend increase. Here is a quick recap of some of the Canadian
dividend increases in the last 3 weeks.1.National Bank (NA) increased their quarterly dividend 3.33% to 62 cents/share.2.Reitmans (RET.A) increased their quarterly dividend 12.5% to 18 cents/share.3.Astral Media (ACM.A) increased their semi-annual dividend 25% to 25 cents/share.4.Canadian Western Bank (CWB) increased their quarterly dividend 11% to 10 cents/share.5.Bank of Nova Scotia (BNS) increased their quarterly dividend by 4.44% to 47 cents/share.6.A&W Royalties Income Fund increased their monthly distribution 2.9% to 10.6 cents/unit.7.Laurentian Bank (LB) increased their quarterly dividend 10.3% to 32 cents/share.8.Fortis (FTS) increased their quarterly dividend 19% to 25 cents/share.9.Cameco (CC) increased their quarterly dividend 20% to 24 cents/share.10.Encana (ECA) stated that they would increase their quarterly dividend 100% to 40 Read more:Dividend
, Recent
Santa Claus/Christmas Rally 2007-12-20 07:03:00 Every year there is talk about whether or not we are going to have a SantaClaus
rally, and like many other phenomenon in the world of investing we can speculate about the possibilities until we're blue in the face. However, we won't actually know if there is going to be a rally until after it's happened.What is a Santa Claus
or ChristmasRally
?A Santa Claus rally is the phenomenon of the stock market rallying in the week between Christmas and New Year (this of course doesn't always happen).Why does it Happen?There is no single reason behind the Christmas rally but there are many possible explanations that have been suggested: 1. People investing their Christmas bonuses2. General happiness of fund managers and investors due to the festive season.3. Investors erroneously equating increased sales over the Christmas period to increased future share prices.4. Money managers pilling money back into the market so that they don't have to explain why they ended the year with such a h
Canadian ETFs 2007-12-26 11:37:00 Those of you that are pursuing (or interested in pursuing) an index or ETF based investment strategy might find the below list helpful. I've listed every ETF that trades on the TSX for your perusal.iShares CDN S&P/TSX 60 Index Fund (XIU)iShares CDN S&P/TSX Global Gold Index Fund (XGD)iShares CDN MSCI EAFE 100% Hedged to CAD Dollars Index Fund (XIN)iShares CDN Scotia Capital Universe Bond Index Fund (XBB)iShares CDN S&P/TSX Capped Energy Index Fund (XEG)iShares CDN Scotia Capital Short Term Bond Index Fund (XSB)iShares CDN S&P 500 Hedged to Canadian
Dollars Index Fund (XSP)iShares CDN S&P/TSX Capped Financials Index Fund (XFN)iShares CDN S&P/TSX Capped Composite Index Fund (XIC)iShares CDN Dow Jones Canada Select Dividend Index Fund (XDV)iShares CDN S&P/TSX Capped REIT Index Fund (XRE)iShares CDN S&P/TSX Completion Index Fund (XMD)iShares CDN S&P/TSX Capped Materials Index Fund (XMA)iShares CDN S&P/TSX Capped Income Trust Index Fund (XTR)iShares CDN S&P/TSX Capped Information Technolo
Stock Selection Process 2008-03-11 06:57:36 Here is the general process I use to evaluate a stock.1. Are their products/services in a growing or stable industry?-for me this would exclude companies such as newspapers, tobacco etc. Basically, I look for companies that I think will still be around in 50 years.2. Do they have a competitive advantage or are there large barriers to entry?-for example companies like TRP and CNR have huge barriers to entry. Other than the billions of dollars that would be required to build the infrastructure it would takes year and years to get the proper approvals.3. Do they have a history of returning value to shareholders?-for example, JNJ has raised their dividend for the last 44 years. MMM has paid a dividend since 1916. A history of share buy backs would also be a plus.4. Are they trading at a reason Read more:Process
, Stock
New Billionaire on Top 2008-03-07 06:27:20 There’s been a little shuffling at the top of the billionaire list this year. Warren Buffet is now officially the world’s richest man. His net worth is now an estimated $62 billion up from $52 billion last year. His 10 billion dollar ride has ended the 13 year reign of his longtime friend Bill Gates who was been bumped down two notches to the world 3rd richest man. But come on...once you hit a few hundred million does it really matter anymore? Regardless here is a list of the top 20 richest people in the world. 1. Warren Buffett 2. Carlos Slim Helu 3. William Gates III 4. Lakshmi Mittal 5. Mukesh Ambani 6. Anil Ambani 7. Ingvar Kamprad 8. KP Singh 9. Oleg Deripaska 10. Karl Albrecht 11. Li Ka-shing 12. Sheldon Adelson 13. Bernard Arnault 14. Lawrence Ellison 15. Roman Abramovich 16. T Read more:Billionaire
U.S. Recession? 2008-03-05 06:01:07 The talking head on business networks like BNN and CNBC have been debating the issue now for months, “is the U.S going into recession?”. Some economists are saying yes, while others are saying no. Well Warren Buffet has an answer for us…yes the U.S is in a recession. Based on the technical definition of a recession (two consecutive quarters of negative GDP growth) we haven’t yet entered a recession. However, Mr.Buffet was recently quoted as saying “I would say, by any commonsense definition, we are in a recession”. That’s good enough for me. If the world most successful investor says we’re in a recession I believe him. Read more:Recession
Portfolio Update as of Feb 28, 2008 2008-03-03 06:39:35 -no change from last month-up 0% in 2008-CDN 66.2%-U.S. 30.4%-International 3.4%TRP - 4.46%CSH.UN - 4.19%GWO - 4.31%PFE - 4.72%POW - 3.76%WAG - 3.30%L - 2.39%UNS - 2.27%GZ - 2.50%TD - 12.74%EIT.UN - 2.65%JNJ - 5.31%MMM - 3.41%C - 3.39%ATD.B - 3.05%BCE - 5.31%IIC - 2.80%O'Shaughnessy’s Global Fund - 3.38%American Growth Fund - 0.84%CDN Value Fund - 2.96%Small Cap Growth Fund - 4.02%Chou Associates Fund - 9.48%Money Market Fund - 8.78%The only change in my portfolio over the last month was that I added a quarter position to my Citibank holding. Read more:Portfolio
, Update
TFSA – Tax Free Savings Account 2008-02-29 09:51:48 As I’m sure you have probably heard the recently released budget contains a proposed “Tax Free SavingsAccount
”. This proposed account will allow individuals to contribute up to $5000 annually into an account that can accumulate interest, capital gains and dividend tax free. As there is already a lot of information circulating regarding these new accounts I won’t try to rehash it all but instead provide you some links to sites that you may be interested in:-How to Profit from a Tax Free Savings Account (click here)-TFSA Bonanza (click here)-The Tax-Free Savings Account (TFSA) – A Creative Financial Approach (click here)-Federal Budget 2008: Tax Free Savings Account (click here)-Benefits of Tax Free Savings Account (click here)-Tax Free Savings Account (click here)-Juggling the Mo
Citigroup - C 2008-02-27 07:19:55 "Citigroup
is organized into four major business groups: Global Consumer; Markets and Banking (M&B); GlobalWealth Management; and Alternative Investments. The Citigroup Global Consumer business includes banking services, credit cards, loans and insurance. The M&B business is in about 100 countries and advises companies, governments, and institutional investors on the best way to realize their strategic objectives. The GlobalWealth Management division at Citigroup is comprised of The Citigroup Private Bank, Smith Barney (private wealth management), and Citigroup Investment Research,and serves both private and institutional clients.”Here are my reasons for averaging down:-As a general rule I’ve found that the best time to buy large multinational blue chips is when everyone else hates the
Johnson & Johnson - (JNJ) 2008-02-22 06:46:53 “Johnson
& Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional.”Dividend Yield: 2.64%Dividend Yield 5yr Avg: 1.9 %ROE levels of above 21% for the past 10 yearsCurrent P/E– 17.3Projected 2008 P/E –14.3Projected 2009 P/E – 13.64 Star rating from S&P - $74 one year targetArgus rates it a buy with a $75 one year targetOther information:-44 years of consistent dividend growth.-3 year average dividend growth rate: 14%-5 year average dividend growth rate: 15.5%-5 year average dividend payout ratio: 40%-Dividends issued to shareowners every quarter since 1944. -Dividend raised each year for 44 consecut
Sub Prime Explained 2008-02-20 06:57:15 Here's a funny little cartoon series that actually does a good job explaining the subprime mess. It’s definitely worth the read.
3M - MMM 2008-02-19 10:33:06 Today I’d like to take a look at this member of the “Broad Dividend Achievers”. “3M Company is a diversified technology company with leading positions in consumer and office; display and graphics; electronics and telecommunications; health care; industrial; safety, security and protection services; transportation and other businesses. They are an integrated enterprise characterized by substantial intercompany cooperation in research, manufacturing and marketing of products.” They trade under the symbol MMM on the New York Stock Exchange and are included in the following indexes Dow Jones Composite, Dow Jones Industrial, S&P 100, S&P 500 and S&P 1500 Super Comp.-Current P/E – 14.5X-2008 Estimated PE – 14.7X-2009 Estimated PE – 13.3X-ROE – 37.74%-Current Yield – 2.36% -5
3M – Increases Dividend 2008-02-14 10:34:12 On Feb 11th, 3M announced a 4.2% increase in their quarterly dividend, making 2008 the 50th consecutive year that the company has increased their dividend. Although, the dividend increase is only marginally above the rate of inflation their payout ratio has slowly been coming down. The 5 year average payout ratio is approximately 39% while their current payout ratio is about 33.5%. The Moneygardener has suggested on his blog that perhaps the paltry dividend increases are a result of 3M bulking up for future acquisitions and I certainly agree that’s a probable option. However, another reason for the small dividend increase could simply be that management is taking a cautious approach. I’m speculating that the management at 3M is like most of the large and small players in the market, ju Read more:Dividend
Subprime – Do We Have a Problem Managing Risk ? 2008-02-12 15:07:05 Due to the ongoing subprime fiasco many banks and financial institutions are in the process of redefining how they assess risk. As an investor I find it hard to believe that these major financial players could have miscalculated risk to the degree that it now has some of them teetering on bankruptcy while potentially throwing the U.S into a recession. Personally, I’m hoping that they knew the risk and were just greedy. As an investor the greed argument is much more reassuring than the notion that almost all of the major financial players in the U.S do not have the ability to accurately assess risk, and therefore were investing in products that they didn’t understand.Recently Citigroup Chairman Win Bischoff was quoted as saying “managing risk within a bank is not just a matter of rely Read more:Problem
, Subprime
Thinking about Taking a Vacation? 2008-02-11 10:14:14 If you love adventure and go on vacation for an adrenaline rush then you might want to check out the below hot spots. Reuters has compiled a list of great travel destinations for the really depressed/insane. The article entitled “Travel Picks: The world's top 10 dangerous destinations” provides a brief description of each destination as well as the possible risks ie- warlords, kidnapping, land mines etc…Here they are in order of danger:1. Somalia2. Iraq3. Afghanistan4. Haiti5. Pakistan6. Sudan7. Democratic Republic of the Congo8. Lebanon9. Zimbabwe10. Palestinian TerritoriesTo view the entire article please click here. Read more:Taking
, Vacation
A Correction vs. a Bear 2008-02-08 07:44:32 When does a market correction become a bear market? Well according to InvestorWords.com the definition of a bear market is: “A prolonged period in which investment prices fall, accompanied by widespread pessimism. If the period of falling stock prices is short and immediately follows a period of rising stock prices, it is instead called a correction. Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.”Another general guideline that is used to distinguish a correction from a bear is that a correction can be defined as a 10% decline, while a bear market is a 20% drop. So what do you think correction or bear?
Portfolio Update as of Feb 2, 2008 2008-02-05 06:44:13 -up 1% from last month-up 9% in 2007-CDN 67%-U.S. 30%-International 3%TRP - 4.31%CSH.UN - 4.27%GWO - 4.49%PFE - 4.99%POW - 3.97%WAG - 3.27%L - 2.62%UNS - 2.47%GZ - 2.17%TD - 13.02%EIT.UN - 2.45%JNJ - 5.43%MMM - 3.52%C - 2.68%ATD.B - 3.09%BCE - 5.22%IIC - 2.36%O'Shaughnessy’s Global Fund - 3.39%American Growth Fund - 0.87%CDN Value Fund - 3.11%Small Cap Growth Fund - 3.87%Chou Associates Fund - 9.34%Money Market Fund - 9.08%The only change in my portfolio over the last month was the purchase of IIC. I also contributed some cash to the portfolio which increased my cash position to 9% from 6%. The cash injection was also responsible for the 1% portfolio increase. Excluding the cash injection the portfolio would have been down approximately 2%. The reason for the decrease was the general mal Read more:Portfolio
, Update
ING Canada – IIC 2008-02-04 06:46:29 I recently purchased a small amount of ING Canada
(IIC - TSX). I am going to continue to follow it and possibly double down in the future. I plan on holding this name for approximately 2 to 5 years (due to the cyclicality of the P&C industry). However, I don’t expect much movement in the stock for the next 6-12 months.ABOUT “ING Canada Inc. is the largest provider of property and casualty (P&C) insurance in Canada, operating through ING Insurance, ING Novex, Nordic, belairdirect and Trafalgar. Our principal products are automobile, property and liability insurance, which we provide to individuals and small to medium-sized businesses across Canada. Consumers can purchase insurance products from ING Insurance through a network of 2800 brokers across the country, from belairdirect through
TransCanada Corp – TRP 2008-01-30 06:45:15 "TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure. Our network of more than 59,000 kilometres (36,500 miles) of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with approximately 360 billion cubic feet of storage capacity. A growing independent power producer, TransCanada also owns, or has interests in, approximately 7,700 megawatts of power generation."Investors in TranCanada Corp. all received a pay raise yesterday (albeit a small one). TRP raised their quarterly dividend by 6% and reported fourth quarter net income of $0.70/share (up 27% from last year). While fourth quarter earnings were up 8% from
Dividend Reinvestment Plans - DRIPs 2008-01-28 06:40:05 If you are unfamiliar with Dividend
Reinvestment Plans please read the following posts from November, 2007 “DRIPS” and “To DRIP or not to DRIP”.I have recently chosen to enroll my entire account in a synthetic DRIP program. In a previous post I had mentioned that I chosen to DRIP some of my holdings however all holdings are now DRIPed and all new holdings will automatically be enrolled in a synthetic DRIP program without me having to notify a broker. Setting up an automatic DRIPing program is extremely easy and can be done with one five minute phone call to your discount broker. You simply call your discount broker, and tell them which account you’d like to enroll. I’ve chosen to DRIP my entire account to take advantage of recent declines in the market. Additionally, my portfo
The Facts about Wal-Mart 2008-01-25 08:10:19 I discovered a great article by Charles Fishman, “The Wal-Mart You Don’t Know”while doing my daily read over at Million Dollar Journey. The article explores Wal-Mart from the suppliers’ point of view and illustrates the enormous power that Wal-Mart can exert not only on their suppliers but also on the entire global economy. The author argues that: “The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line?”Here are some aspects of the article that I found interesting. -“ Wal-Mart is not just the world's largest retailer. It's the world's largest company--bigger than ExxonMobil, General Motors, and Gener
Warren Buffet’s Holdings as of September 30, 2007 2008-01-21 11:07:11 As WarrenBuffet
is arguably the worlds most successful investor I think it’s worth the time to periodically check his holdings to see where he’s deployed his capital. The below chart lists his holdings as of September
30, 2007. Although, this information is around 4 months old Warren Buffet
is a very long term investor and has been quoted as saying “Our favourite holding period is forever” as such I don’t think the composition of his portfolio would have changed in any significant way since September. Read more:Holdings
Canadian Bank Yields & Payout Ratios 2008-01-18 07:07:32 I came across these numbers yesterday in an article entitled “Could U.S. bank dividend contagion spread north?” by Rob Carrick from the Globe and Mail. Rob Carrick calculated the below figures based on the stock prices at the close of January 16th, 2008 and on the estimated earnings per share for 2008. Please click here to view Rob Carricks’ entire article.Bank of Montreal (BMO)Yield: 5.09% Payout Ratio: 46.7%National Bank of Canada (NA)Yield: 5.06%Payout Ratio: 39.3%Cdn. Imperial Bank of Commerce (CM)Yield: 5.03%Payout Ratio: 38.7%Royal Bank of Canada (RY) Yield: 4.11%Payout Ratio: 41.7%Bank of Nova Scotia (BNS)Yield: 4.00%Payout Ratio: 40.0%Toronto-Dominion Bank (TD)Yield: 3.43%Payout Ratio: 36.2% Read more:Canadian
, Ratios
Brookfield Asset Management (BAM.A) 2008-01-16 06:48:09 “Brookfield is a global asset manager focused on property, power and other infrastructure assets with approximately US$90 billion of assets under management. We own and manage one of the largest portfolios of both premier office properties and hydroelectric power generation facilities as well as transmission and timberland operations, located in North and South America and Europe.”In my opinion BAM.A is the perfect candidate for a long term hold as they are in relatively recession resistant, renewable areas that will continue to grow in the future. Their five primary areas interest are:1. Property - $35 billion of property assets under management in North and South America, Europe and Austraila2. Power – invested primarily in high quality, long life hydroelectric power facilities loc Read more:Asset
, Management
40 Year Mortgages are now in Canada 2008-01-14 06:34:18 Well it’s official 40 year mortgages have been in Canada
for about 6 months now. On June 20, 2006 Wells Fargo became “the first lender to offer nationwide to Canadian consumers a mortgage with a 40-year amortization". Since then virtually all of the major mortgage players in Canada are offering similar products. The timing seems impeccable given what’s currently happening in the United States mortgage market. Now everyone, even those who probably shouldn’t have a mortgage, can afford to buy a house in Canada. Although I disagree with 40 year mortgages in principle and under no circumstances would consider one for myself I’m not complaining as I currently have a significant amount of my portfolio in Canadian financial companies and any chance they get to increase earnings is fine
CIBC A History of Screw Ups and a Time to Buy? 2008-01-10 07:48:17 CIBC certainly seems to be unique among the big 5 Canadian banks. They have made themselves unique by the fact that they can’t seem to be able to avoid screwing up. They seem to have an innate ability to identify and then participate in risky market shenanigans. Let’s briefly take a look at some of the more recent debacles.Dec 22, 2003Canadian Imperial Bank of Commerce agreed to pay 80 million dollars to settle US charges that it aided Enron's financial fraud and pledged to assist a federal criminal investigationAugust 2005They took a $2.5 billion after-tax charge against its profit in the third quarter ended July 31, 2007 to cover the payment and other Enron issues. After taking this huge write down in 2005 CIBC was adamant about avoiding “risky investments”. Just 2 short years la Read more:History
, Screw
Global Credit Crunch 2008-03-13 06:36:22 The credit crunch caused by the mortgage fiasco in the United States is now truly a global phenomenon. The Bank of Canada announced yesterday that they will be injecting $4 billion in an attempt to ease some of the liquidity issues caused by the mess south of the border. During the same period a credit infusion will also be offered by the Federal Reserve, the Bank of England, the European Central Bank and the Swiss National Bank. It may be too little too late however at this stage in the game what other reasonable options are there? The bottom line is more liquidity is required to allow financial institutions to continue doing business. At this point the only other alternative would be to force the financial sector to liquidate its rotten assets and wipe out the leverage which would cause Read more:Crunch
, Global
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