Wednesday, July 18, 2007

Where is the Value?

With the exception of resource companies I invest for the long term based on a number of factors (mainly fundamentals). However, lately I’ve been having a hard time finding any attractively priced equities that I’d want to hold for the long term (if you’ve found any let me know). I have a personal philosophy that once money enters my investing account it can’t be taken out until retirement. As a result, I’ve been accumulating cash in my regular bank account (which isn’t included in my monthly nest egg statements). Instead of depositing this money into my nest egg investing account I am going to be using this money on real estate in 1 of 2 ways:

1. Going to pay down my existing mortgage (which would be equivalent to generating a guaranteed after tax return of 5%)
2. I’m in talks to purchase a house privately and would use this money as a down payment/deposit (would be over a year closing time).


MG (moneygardener) said...

Well, depending on your view of the $USD, this could be a great time to buy many U.S. equities (for us Canadians).

Currency situation aside, I agree that it is difficult to find any value, I believe the following to be pretty good value at the levels that they trade at today. Going forward I believe they will all garner better than 5% after tax return.

Manulife Financial
Sun Life Financial
Bank of Nova Scotia
Bank of America

Anonymous said...

Markets in the US and Canada are hitting all times highs. I can't blame you for having trouble finding value.

However, if you can't find value, then there is nothing wrong with paying down your mortgage which carries a guaranteed rate of return.

Anonymous said...

I agree that there is still some value in the US but I want to limit my US exposure to no greater than 35-30% and I'm at about 30% right now.

However, since posting this morning I've revisited ATD.B and think that there could be some value in it (it doesn't fit my dividend growth strategy but I think it might be an attractive entry point---I'm going to check it out later today).

Anonymous said...

There is still some value but its hard to determine... a lot of value can be found in the Income Trust arena due to the uncertainty. Of course, that uncertainty is making it difficult to tell which ones are undervalued... a real issue.

Several years ago I created a Income Trust portfolio (it did really well) but one of the stocks that I thought was undervalued at the time was Clearwater (CLR-un) and I was obviously wrong (they had some setbacks since) but now that its down 50% it MUST be a bargain... especially with thier new state of the art ship coming on board and I heard rumours of a LARGE share buy back because management can't believe how cheap the stock is... I should check to see if they have done that buyback yet as I'm not up-to-date on the stock (I don't really like the industry its in to be honest).

There must be a hundred stories like this though... value... but hidden really well...

Anonymous said...

I personally like Alimentation Couche-Tard as the stock dropped this year but the company is still in a really good shape. They plan to buy another 250 stores in the US for the following year. It could also be a good defensive stock if the market starts to slow down.

Anonymous said...

financial blogger,

Great minds think alike! Just after I posted "Where is the Value?" I started looking back at my old watch lists and rediscovered ATD.B. I agree there is some value there.

Unknown said...

Implement Smith Maneuver with extra cash. You will still get to purchase instruments with your money, and earn tax credit for it.


Theirs always stocks out their that are great values.

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