Tuesday, October 20, 2009

Money Show 2009

I was down at the Money Show at the Toronto Convention center today. It was not as well organized as the Financial Forum, but everything seemed to turn out fine. I only realized by happenstance that the opening remarks included some of the best speakers I would hear today. This show was also an American show, compared to the Financial Forum.

One of the first speakers I heard was Howard Gold. Doing polls in US, people have found that buy and hold investing was not dead in US. They found that over 50% of investors have taken control of their own investing. Also, they found that buying stocks was up and buying mutual funds was down. It would be interesting to know what is going on in Canada.

The next speaker up was Ian McAvity. The first thing he said was you do not buy shoes that do not fit, so you should not buy investments that do not fit. The first thing you need to figure out is what you are. Are you’re an investor? A trader? Or a speculator? Only then should you invest your money. He is also very negative about our current financial situation. He thinks that this will be a double or triple dip recession. He says, yes stocks always go up, but sometimes you need to wait for 10 to 20 years for this to happen. He thinks the stock market will be in the doldrums for 7 to 10 years longer. He also said that investors make most of their mistakes in buying (i.e. bad buys) rather than in selling.

Gordon Page, the editor and publisher of “The Internet Wealth Builder”, was the next speaker. He was much more optimistic. However, he gave a more Canadian perspective. He feels that we are lucky, that the 2009 recession could have been much worse. For us, commodities are rebounding and the TSX is beating the S&P. Stocks he likes are Suncor, Brookfield Asset Management, Sun Life and TD Bank. In the mid range of stocks, he likes Crescent Point Energy, Kinross, Fortis, Shaw Communications and TransCanada Corp. I heard him speak later in the afternoon also. He feels that there are great opportunities for Canadians in the winding down of the Income Trusts. He feels there are good ones, with little debt and good cash flow and good revenue flow. He recommended Crescent Point Energy (TSX-CPG), Brookfield Renewable Power (TSX-BRC.UN), Pembina Pipelines (TSX-PIF.UN), Daylight Resources Trust (TSX-DAY.UN), Inter Pipeline Fund (TSX-IPL.UN), and Keyera Facilities Income Fund (TSX-KEY.UN).

Garry Shilling was another American speaker. He thinks the stock markets are acting as if the US consumer is going to come back strong and start spending again. This is because of the v shape stock market recovers going on. However, he does not think this is what will happen. He feels that the US consumer is going to retrench, and that there will be no rebound in US housing. He thinks that there will be deflation. He talked about good deflation, which is when increased productivity increases the supply side of the supply/demand curve. Technology companies are used to this as prices for all technology has been decreasing for a long time. He also thinks there will be bad deflation occurring. This is caused by weak demand. He also sees wage deflation for the US in that wages will actually be cut. He thinks that US economic recovery will be very weak and will need more stimulus in the months ahead. He thinks we are in a secular bear market and, although there will be some bull markets, the bear markets will be more frequent and very deep.

I found the most interesting speaker to be Jim Jubak. He has a blog called jubakpicks.com. However, he talked about foreign stocks that we have no hope of buying. He also said that what we want to look for is stocks that acted like McDonalds, which have risen very well over the long term. He also said we should avoid stock like Kispy Kreme. This stock rocketed up from its start of $11.50 to $44.20. However, it stalled and is currently selling at only $4.33.

I plan to go back to the Money Show 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 www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.

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