Investorial

My friend Michael was chatting with me on MSN today asking if I knew about WealthWeb.ca. It was a site that he found useful to him because Canadians really have very few financial article portals available for their research. Tongue-in-cheek, I reminded him the reason for Investorial’s existence, but I quickly checked out the site.

WealthWeb is a collection of personal finance articles for Canadians. WealthWeb is maintained by James Yih, who has a vision to turn it into Canada’s resource centre to build, protect and manage wealth. James Yih is an author of two financial books, and is currently an account representative and Investment Marketing Consultant for Manulife Securities. I knew of James’s writings from his days as a weekly columnist on FundLibrary.com. In fact, I had connected with James via email about an article he wrote last year in (more…)

My work with American customers clues me in that MorningStar is a ratings authority whom investors depend on for some investment guidance. The debate is not about whether MorningStar deserves that attention, but rather to point out that Americans have a lot of choices when it comes to analyst ratings for funds and investments with Barons, Lipper’s, S&P, Morgan Stanley and a host of other firms.

Where does this leave Canadian investors? We can depend on U.S. analyst firms regarding equity investments, but they are not much help when the topic is about Canadian mutual funds. MorningStar does hold a Canadian presence with MorningStar.ca. Admittedly, it is not the first media I would use or recommend for others to check out. I thought it’s about time I took a quick tour of the site.

I believe most investors think of GlobeFund.com first when they are researching mutual funds. Yet a quick comparison reveals that GlobeFund basically gets all its information and even ratings from (more…)

After featuring an “investment novel” about suspect venture fund blackholes that I found on Canadian Business Online, I went back to the site a few more times and found some pleasant changes. I used to be a subscriber of the magazine until I got fed up with its many pages of advertising editorials. Advertising editorials were pages of information designed to look like articles but were at least ethical enough to state that it’s actually an advertisement discreetly.

I realized that Canadian Business Online wore its new look just recently. I browsed through its roster list of columnists, pondering if I could ever write at the level of these professional journalists. (Hey, a blogger can dream right?).

I noticed something instantly. Out of the dizzying credentials of CFAs, accounting principals, and financial journalists, a very plain-looking staff writer Calvin Leung stood out. Yes, he’s Asian, but what caught my attention was his by-line compared to the other accomplished financial journalists.

Prior to joining the magazine, in 2005, [Calvin] worked in sales at Proctor & Gamble, in marketing at Unilever and in advertising as a freelance copywriter.

I’m not trying to take away anything from Calvin. In fact, with my contrarian thinking, I was actually excited to read (more…)

I’ve been participating in a comment thread with Canadian Capitalist about alternative investments. I mentioned an aversion towards ETFs because to what I understand, ETF’s are sort of like derivatives? Though I was hard pressed to find such a definition online.

Investopedia defines Exchange Traded Funds (ETFs) as:

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold.

Because it trades like a stock whose price fluctuates daily, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.

Great, now we know what the public knows. Here’s what I don’t know. My question is “What’s the asset backing the ETF’s?” Are there underlying stock? And how can there be such frequent trading and movement of money in and out without triggering (more…)

This truly sucks for Canadian traders! I’ve been lamenting the fall of Ameritrade Canada as the nation’s lowest cost discount brokerage (without using a tiered/incentive system). Ameritrade Canada offered US equity trades at US$10.99 per trade. There simply aren’t any discount brokerage that can come close this offer without being a high mileage frequent trader.

TD Waterhouse Canada bought out Ameritrade Canada on January 24, 2006 to strengthen their brokerage business. They are currently in the final stages of preparing to convert Ameritrade Canada accounts to TD Waterhouse accounts. The transition is expected to be complete on June 3, 2006.

That’s right! If you’re wondering whether TD will keep the same fee schedule, not a chance! The new fees will apply to new accounts effective June 3, 2006. The current Ameritrade Canada fees will remain in effect until close of business on June 2, 2006. If you are currently an Ameritrade Canada account holder, do remember that (more…)

If you’re wondering, the above title is a lame pun on the famous phrase “Who Watches The Watchmen?“. If you’re a regular reader of personal finance blogs, you should be familiar with the term “passive investing“. For the uninitiated, it means that you are investing in an index fund - a mutual fund that follows a well-known index such as the Russell 2000, or the most famous index of all, the S&P 500. The S&P 500 is the top 500 companies as determined by Standard & Poors to represent the stock market at large.

So What’s My Beef?
I have long contended that there is nothing passive about investing in index funds. Simply put, you’re paying a fund manager a little less than 1% management fee to enjoy having your portfolio actively managed by somebody else! Who’s that somebody else? The index of course! It’s no secret that indexes frequently add or drop companies from their list. How is this different from regular mutual fund turnovers? In the example of S&P 500 index funds, the only advantage achieved are (more…)

“You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”

We’re starting off with this quote to remind us that we should not follow opinions, but rely on our ability to reason and gather facts. Easier said than done, what are facts? Everybody has a way to interpret numbers, figures. One analyst can recommend a stock while another is downgrading it. There can be no consensus in the market for the buyer / seller principle to work - one’s man junk is another man’s treasure.

I am going to look at this post using some numbers; some publicly disclosed, some calculated. But rest assured only to the level that I can understand. Being a Bachelor of Mathematics doesn’t mean anything when it comes to analyzing financial numbers. I’ll only refer to common sense numbers, hopefully nothing beyond comprehension! I’ll also use Canadian dollars for convenience!

The IPO Story
To recap, Wendy’s decided to spin off 15% of its ownership of Tim Hortons in a public IPO. In total, 29 million shares will be made available at C$25 to C$27 per share. Here’s the press release that explains that the preliminary filing prospectus showed an initial target range of C$21 to C$23 per share. The stock IPO has garnered national attention, appearing in newspapers, television, radio, blogs and virtually any media out there! There is a mania going on and that’s why this is a story for Investorial!

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Now that I’ve let slip about why my next blog post will be, you can tell I’m deciding to have a little fun with this! Behold, my preview interview with myself!

Okay, self. Why are you doing this preview? Why not come straight out with your reasons and write the article already?
It’s very simple, Investorial is not a site that recommends or dis-recommends stocks. There are many blogs out there that do a great job. I don’t know of any of the top my head but if you know some, please let me know. I’ll publicize them here!

Wait a minute, you’re not answering the question! Why beat around the bush?
I was just saying that I’m doing this preview to clear up some of the mis-understandings that might occur if I posted the article right away. I don’t want there to be a conflict of interest with Investorial’s mission. I’m going to be coming at this story with a different angle. A perspective that is relevant to discussing about investment/financial media and the information these media gives us. When I write the post, I want to really concentrate on the piece and not have to explain myself.

Why choose Tim Hortons and not any other stock?
I’m Canadian, eh? And Tim Hortons is as Canadian as it gets. When you think about it, Tim’s IPO is a funny situation; with it being a really boring business but yet garnering all the buzz and hype of the next big tech company IPO. It’s also set to (more…)