Thursday, October 22, 2009

Money Show 2009 3

The first thing I did today was sign in for a Webcast. I did not see any presentations for the 10:45 to 11:30 period that I wanted to be at. The one presentation I wanted to see has a webcast, so I thought I would go to the show later and see the Webcast on my computer. I knew that the Webcast would occur at 9, but I am really glad that I looked at the site much earlier.

For starters, I had to sign up again at the site of I had not expected that since I signed up when I registered for the Toronto show. I also spent a long time looking for Webcasts of other days of this show. I finally found out that it takes Money Show 10 days to get the Webcasts online after they are broadcasted online. How could I know that and they certainly do not tell you, but I found a note attached to the webcast I signed up for stating this.

The Webcast I viewed was one by Benj Gallander of Contra the Heard Investment Letter. He thinks that the market is currently schizophrenic. Why? In a few words, information overload. He does not have a blackberry. Is he thus crazy? He thinks not. Just because he does not have a blackberry does not mean that he does not know what is going on. For the new letter portfolio, they will only buy companies that have been in business for at least 10 years. By doing this, they missed the tech bubble. They specialize in small cap stocks. The thing is that a lot of Mutual Funds cannot buy a stock unless it is $5 or $10. They do not “buy and hold” and feel that this is stupid. They usually hold a stock for 3 ½ years. They do both fundamental and technical analysis on stock they buy and they concentrate on stocks under $5. They also do not buy anything over $25. They sometimes average down, but will only do this once on a stock. They do not do dollar cost average, feeling this also is stupid. They look at the risk and the reward aspects of any stock they buy. A recent buy was Bank of Ireland. They have stayed away from Income Trusts because too many trusts have paid out so much money they will not survive. Benj Gallander feels that investing should be boring. You have to decide if you want excitement or good returns. He also thinks that tax loss season is a good time to buy.

I went to the Money Show at the convention center for other presentations of today. The first speaker I head was Robert Gorman of TD Waterhouse. He talked about the investment look out for 2010. First, he spoke about residential real estate in the US. This market still has an over supply and there will be further foreclosures. He feels the bottom will be hit this year. The next problem he talked about was commercial real estate in the US. The recession hit this area hard. The value of commercial real estate is way down. Apparently, commercial real estate is always a late recovering in a business cycle. He feels that this real estate market is not as bad off as the residential market and it will recover. The major concern with the US is that there will be a recovery, but it will be modest. This is not the problem for the stock market that people might think it is. He feels that slow, steady growth is always better for the stock market than rapid growth. He also feels that inflation will be under control for a while, but that long term inflation is a concern.

Robert Gorman feels that we should be buying stocks. Currently stocks yields are higher than the 10 year government bond yields and this is good. For Canada, he recommends stocks like Power Corp., Trans Canada and Scotia Bank as conservative picks. If we want some less conservative picks, he thinks we should get into gas. Buying Encana would be a rather conservative gas play. A high risk stock will be Precision Drilling. He expects a 4 year bull market and he includes 2009 in this 4 year period. He thinks that the TSX will be up in the high single digits or the low double digits in 2010. He expects the US market to do less well and be up only in the high single digits.

The next speaker I went to hear was John Stephenson of First Asset Investment Management Inc. He writes a news letter and he also has had a new book published called “Shell Shocked – How Canadians Can Invest After The Collapse”. John thinks we have a great stock buying opportunity in Canada. The US may be having problems, but we are doing just fine. The rise of China and the rest of Asia will help us recover. He thinks that the US will grow again, but it has to pay off its debt. He (and others I heard) feel that the US will print money in order to pay off there debts. (The US did this for the debt of WWII and the Vietnam War.) He thinks the US dollars decline will be done in an orderly fashion. The only stock he recommended by name is Suncor. It is in the oil sands and currently there is no replacement for oil.

The Nest speaker I heard was Aaron Dunn of Keystone Financial Publishing Corp. They publish investment letters. What keystone believes in is growth at reasonable prices. They give buy and sell information in their news letters. They recommend investing for value and they do not recommend speculating. They like companies with resilient business models, which are profitable and are growing their earnings. They also like companies with strong management teams, health balance sheets and compelling valuations. They look at the P/E and the Price/Cash Flow ratios. He recommended 3 stocks of Telus Corp (TSX-T), Ag Growth International (TSX-AFN) and Davis and Henderson (TSX-DHF.UN).

I then attended some panels and I will talk about them tomorrow.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets.

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