Archive for the ‘Canadian Stocks’ Category
Horizons BetaPro Bull Plus and Bear Plus ETFs
Friday, July 11th, 2008
Canadian investors looking for the equivalent of the popular Proshares which are available on American exchanges can do so via Horizons BetaPro ETFs which trade on the TSX. These ETFs allow investors with long-only accounts to easily bet against the market or hedge their bets. The Horizons BetaPro ETFs provide either double or double the inverse of the daily returns of the asset classes they track. In the current market environment, the HBP Financials Bear Plus ETF (up 31.4%) and HBP Nymex Crude Oil Bull Plus (up 113.8%) have been huge winners.
Below is a listing of Horizons BetaPro ETFs and their YTD returns. YTD returns are not available for the funds launched this year.
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Tags: Agricultural Grains, Bear Plus, Bull Plus, ETF, Financials, Horizons BetaPro, Howard Atkinson, JovFunds, Mining, Natural Gas, Nymex, Proshares, S&P 500, TSX 60, ultrashort, US Dollar
Posted in Agriculture, Canadian Stocks, Commodities, Crude Oil, ETF, Emerging Markets, Financials, Fixed Income, Gold, Markets, Oil & Gas, US Stocks, mining stocks | No Comments »
Don Coxe’s Recommendations, Basic Points (05/30/2008)
Tuesday, June 3rd, 2008
June 3, 2008 – Here we feature the recommendations of Don Coxe, BMO Capital’s Chief Investment Strategist.
As usual, his paragraphs are eloquent and provide significant guidance. Don Coxe’s Investment Recommendations, excerpted from Basic Points, Traders of the Lost Arc, May 30, 2008.
1. Assume that the leading US forecasters on the US economy will be cutting back on their economic and earnings forecasts. You could be pleasantly surprised, but you’ll more likely feel the other kind of pleasure—the sensation of being right.
2. Assume that the leading global forecasters will be cutting back on their economic and earnings forecasts. The actual outcomes will doubtless vary widely, but enough to challenge the performances of global stock indices.
3. Until the US financial stocks stop declining, rallies in the S&P or Nasdaq are selling opportunities. If the US banks still have problems when they can pledge their otherwise-unmarketable merchandise to borrow T-Bills, then those problems aren’t going away in a hurry. If the BKX index breaks 75, assume that the bad news is about to become much worse.
4. Gold and gold stocks become more attractive each week that global food and fuel costs rise along with writedowns on bank balance sheets.
5. Natural gas prices have benefited from the unusually cold winter in the Northern Hemisphere. They could be hurt if the cooling continues through July—when air conditioning demand peaks. Nevertheless, we believe the natural-gas-oriented stocks are fundamentally attractive.
6. The dollar failed to rise significantly even as US stocks were rallying and economic forecasters were declaring that the worst of the housing problems were over. If it goes to a new low, it will drive even more global investment funds into commodities and/or commodity stocks.
7. Wheat is the only grain to have experienced a dramatic rise and fall—a short squeeze rally, followed by a collapse—amid evidence of a huge winter wheat crop. Otherwise, the grains and oilseeds have been wellbehaved, within strong uptrends. Build exposure to the leading agricultural stocks.
8. The risks to global economic growth from stagflationary food and fuel conditions continue to increase. The commodity class whose outlook is most negatively affected by such perceptions is the base metal and steel group. We believe those stocks are the only truly vulnerable commodity sector for the balance of this year—barring a sudden, Black Swan-style, reversal in oil.
9. We didn’t expect to see spot oil at $133. Nor did we expect the oil futures curve to move—albeit briefly—into contango. As this is written, oil for delivery in 2016 trades slightly above spot crude. If this move toward contango accelerates, expect response from the Fed and the ECB. Within the oil group, emphasize producers with long-lived reserves, and underweight the Big Oil companies that are failing to replace their production.
10. The only thing more bearish for nominal bond portfolios than a central bank that doesn’t fight inflation is a central bank that suddenly discovers it must stop inflation in its tracks. That’s what happened when Paul Volcker took charge after the ghastly mistakes of his predecessors. We shall become interested in nominal long-term bonds again when Bernanke & Co. Drive short rates strongly higher. In the meantime, investors should emphasize real return bonds.
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Tags: Banks, Basic Points, Bernanke, Black Swan, Commodities, contango, Crude Oil, Dollar, Don Coxe, ECB, energy, Fed, financial stocks, Food prices, Gold Bullion, Grain, interest rates, Markets, Traders of the Lost Arc
Posted in CPI, Canadian Stocks, Commodities, Credit Markets, Crude Oil, Economy, Emerging Markets, Financials, Gold, International Markets, Markets, Oil & Gas, Strategy, US Stocks, contango, inflation, wisdom | 1 Comment »
Gold vs. Mining Stocks
Tuesday, June 3rd, 2008
June 4, 2008 - Courtesy Nick Barisheff, Bullion Management Group, www.bmsinc.ca.
The above chart shows the comparative performance of the largest gold mining companies compared to the performance of gold bullion. While some juniors and small producers may have outperformed bullion, their high risk and volatility detracts from any meaningful comparison. While the major gold producers outperformed bullion from 2002 to 2006, bullion has outperformed these stocks since mid-2006. Generally, mining stocks do correlate to the price of bullion, but during times of weakness in the equity markets they become correlated to the broad equity markets. The rising price of oil is a contributing factor to production costs. In today’s market, a fully diversified portfolio should hold equities for speculative growth and, as core holdings, fully allocated, segregated bullion.
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Tags: Bullion, Gold, gold stocks, Markets, mining companies, mining stocks, physical gold
Posted in Canadian Stocks, Gold, Markets, gold stocks, mining stocks | No Comments »
Derek Webb Interview, Part 2 - Earning Superior Income (safely) in a Range Bound Market
Tuesday, May 13th, 2008
May 12, 2008 - GreenLightAdvisor.com recently interviewed [Part 2] Derek Webb, Portfolio Manager, Webb Asset Management. Here are some excerpts from Part II, in which Mr. Webb shares his strategy for earning superior investment income in volatile and range bound markets while minimizing downside risk. Here are some excerpts:On the investment income dilemma…
When you look at Canadians, they love their income; but where is the income coming from? Most funds are getting around this now by paying you back your own capital, so there it is. They offer 6-8%; the reality is nothing out there yields more than 5% and it costs 2% to run a fund plus an advisor gets 1%. The math just doesn’t add up. On top of that we have inflation. You don’t want that in a fund – where people are just paying you back your own money. To me it’s like investing in a utility where they have to sell a power plant each year to pay you your distribution. You would never invest in that company because long term the price of the stock is coming down.
How do we get around this? How do we do it? We spent a lot of time looking at this and the solution that we came up with is the following: Objective:
- Produce some decent high yields – we divided our strategy into 4 silos or buckets.
- Structure it so that it is tax efficient
Portfolio Strategy - For the full explanation, please read the complete interview:
Bucket #1 – Income Trusts
Income trusts have gotten a bad rap, but they are not bad especially if…
Bucket #2 – Earnings Driven Stock Buy Writes
We are buying the earnings driven stocks that we own in our hedge fund. How do we get income out of these stocks?
Bucket #3 – Value Stock Buy Writes
Bucket #3 is comprised of stocks that are not earnings related, but rather are washed out names, like banks. Let’s say banks trade sideways for the next 3 years…
Bucket #4 – Writing put options against short positions
Legally in Canada, we are allowed to be 20% short in a mutual fund and we are always 20% short because we have a very good short model. It’s very predictive, meaning simply,…
DW: It’s definitely lower than owning the stocks outright, and lower than a dividend fund.
Its lower risk than if you own a bank stock straight out vs. writing the call options on the same bank stock. Let’s say you own the bank at 100 and you write calls at 105…
GLA: Would you consider this suitable for a retired investor?
DW: Yes, certainly. Personally I think this is great for anybody, universally. It’s great for somebody who wants to grow capital, and it is great for somebody who wants a tax preferred income in retirement.
Download: Part II: Derek Webb Interview PDF File, May 2008, GreenLightAdvisor.com.
Visit Webb Asset Management for more information.
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Tags: covered options, Derek Webb, Earnings Discipline, earnings driven, Investment Strategy, Markets, option premium, option yield, strike price, wamfunds.com, Webb Asset Management
Posted in Canadian Stocks, Commodities, Financials, Markets, US Stocks | No Comments »
Derek Webb Interview, Part 1 - Outlook and Investment Strategy
Tuesday, May 13th, 2008
May 12, 2008 - GreenLightAdvisor.com recently interviewed [Part 1] Derek Webb, Portfolio Manager, Webb Asset Management. Here are some excerpts from Part 1, in which Mr. Webb shares his outlook and his thoughts about how he trades in volatile and range bound markets. Here are some excerpts:
Regarding the Fed’s recent moves…
Anytime the Fed puts this much liquidity in to the system it’s like blowing into a pipe; all that pressure has to go somewhere—When the Fed drops hay bails of money out of the helicopter, those hay bails of money are like molecules. They have to attach themselves to something.
When you look at the huge amount of money put into the system because of the Long Term Capital Meltdown and Russia—now that liquidity event created the internet bubble. This is no different.
All of this liquidity is going to find a home. I’ll tell you that I think it’s finding its home right now. Fundamentally I am very bullish because of all this liquidity.
On his investment focus…
Through our quantitative homework we found that the delta or change in earnings is the only thing that’s predictable in terms of determining the direction of a stock’s price. That’s all we focus on; that’s all our research focuses on. So, where is that delta accelerating right now—it’s in commodities. Agriculture is number one, Oil and gas are number two, some base metals number three, like copper—The shine has kind of come out of precious metals in the short run, but I don’t think that trade’s over, I think it’s more of a seasonal thing right now.
On when to sell:
[Firstly], If we saw one analyst lower EPS forecasts for Potash, for example, WE WOULD BE OUT. Analysts are out there doing site visits. They’re doing their homework – as long as they’re raising their numbers we’re going to be long. As soon as we would see them hold steady or lower their numbers we would be out.
Secondly, if the earnings themselves just start to de-accelerate, meaning we are looking at a smooth line of earnings, not to get complicated, but we look from 3 quarters ago out to the next quarter and if that rate of change de-accelerates were out.
Thirdly, one negative earnings surprise and we’re out.
And lastly, if the relative strength indicator of the stock de-accelerates were out.
We’re ruthless on all our positions.
And lastly, if the relative strength indicator of the stock de-accelerates were out.
PART 1: Derek Webb Interview, GreenLightAdvisor.com.
Visit Webb Asset Management for more information.
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Tags: Agriculture, bifurcation, Derek Webb, Fed, Investment Strategy, liquidity, Markets, Metals, Monetary Policy, Oil and Gas, Webb Asset Management
Posted in Agriculture, Banks, Canadian Stocks, Commodities, Credit Markets, Crude Oil, Economy, Financials, Gold, Markets, Oil & Gas, inflation | No Comments »
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