Jan 262012

Better late than never right. (・_・;) Here is what I propose to accomplish by the end of 2012.

1) Make at least $4,000 more than last year. This shall come from a combination of my 2 jobs, tutoring, and dividend income. If I can get just $1000 increase from each income source then I’ll be hunky-dory.
2) Put $10,000 into my retirement accounts. I’m lucky enough to have my employer match my own contribution up to 4% of my salary. A typical defined contribution plan. The rest I plan to save myself.
3) Put $5,000 into my TFSA. (Roth IRA equivalent in Canada) I plan to buy some value stocks in here.
4) Put $25,000 towards other investments (stocks or bonds or real estate, etc)
5) Have a six-figure investment portfolio. The net value of all my investments will be over $100,000.
6) Increase net worth by $40,000.

That’s pretty much it. How do I plan to invest so much and increase my wealth by $40,000 this year, when I can’t even take home $40,000/year from my full-time job? The same way as last year. In 2011 my net worth increased by more than my salary. Among other factors, having a 2nd job and multiple income sources really helps. All I plan to do this year is to continue focusing on my multiple income streams, live within my means, and use leverage to increase my investment returns, (which unfortunately also increases risk, but I currently see no better alternative.) My goal is to work smarter, not harder. I will put the money I already have to good use, and continue to do what I enjoy like designing art, teaching, and blogging. I hope to have a normal life, without over working myself, and still reach financial independence in my mid thirties.

“How am I going to live today in order to create the tomorrow I’m committed to?”
~Tony Robbins

Jan 242012

I went to the Vancouver Resource Investment Conference over the weekend. It was organized by Cambridge House. It was a conference for businesses and investors to come together and discuss all things related to energy, metals, and other resources. Over 500 companies set up booths, and thousands of investors like myself showed up to the exhibit hall. There were guest speakers, workshops, lots of press/media, and tons of company swag.

I learned about how gold is mined. Touched bits of precious metals embedded inside rock samples. Learned how to better swing trade from the experts. Got an industry perspective on the resource boom. Learned about the business of natural gas, uranium, silver, and other types of resources. How to buy and store gold/silver properly. How to identify opportunities in Canadian stocks using fundamental and technical analysis. Got a crash course on the Keynesian multiplier, the free market, and Austrian macroeconomics. The entire experience has been a blast. Best of all, the whole event was sponsored, so it was free to the public. I was lucky to find out about this event through my bank just in time. Next time there’s a conference in Vancouver I’ll post a reminder for you guys. I think anyone who considers themselves an investor should go.

Here are some key points I took away from the event:
I’ll write about some of these topics in detail in future posts.

-Most traders lose money because they don’t take the time to learn.That is to say, learn about themselves! The biggest risk to investors is not the market or the economy but the investor himself. People let emotions take over and usually sell at the wrong time. Human behavior is the biggest factor when determining one’s success. Know yourself first.
-Geologists are in high demand for mining companies.
– Use falling tops and rising bottoms from a Japanese candle chart to help decide when to enter into a stock.
-tradescores.com is a useful website to practice your stock trading strategy by using it’s market simulator before actually putting real money at risk. It’s free. Good for people who want to learn about the stock market and try trading, but are not yet ready to open up a brokerage account.
Don’t buy stocks. Buy companies. Consider their infrastructure, politics, risks, and consistency.
-Most of the world’s Uranium production growth will come from Kazakhstan, (Borat’s home) And half of the world’s demand is expected to come from China.
-Demand in economic terms is not what people want, it’s the amount of money to buy what people want.

On a side note. I’ll be making some changes to my blog over the next couple of weeks. It’s getting a small face lift and getting to a new host/registrar. If you come by and the site looks different, you’ll know why. During that time my blog could be down, un-readable, or unorganized, so just a heads up.

Jan 192012

Roughly a month ago I wrote about how cheap some companies were trading in North America, like Silver Wheaton and Halliburton Co. And there was a 75% chance that the stock market will move up in the short term based on my unique analysis of how much people were saving. So I started another swing trade and hoped to make a profit in the months to come, just like before.
Reasoning behind my timing
Reasoning behind my stock choices

Well earlier this morning, I sold both my holdings and due to leverage, made 19% return on my investment, or $380. Details below…

Dec 17th 2011
Starting Cash: $2000 ($1000 CAD + $1000 USD)
BUY (SLW.TO)   $29.76 x 66 shares = $1964.16 CAD (Only had $1000 so borrowed the remaining $964.16 on a line of credit)
BUY (HAL.NE)   $31.60 x 63 shares = $1990.80 USD (similarly borrowed $990.80 on a line of credit)
Final Cash: $0
Owes Bank: $1954.96 CAD/USD mixed currency

Jan 19th 2012
Starting Cash: $0
SOLD (SLW.TO)  $31.72 x 66 shares = $2093.52 CAD ( $129.36 gain)
SOLD (HAL.NE)  $36.38 x 63 shares = $2291.94 USD ( $301.14 gain)
Final Cash: $4385.46 combined
Still Owes Bank: $1954.96

After paying back the initial bank loan ($1954.96), plus interest ($9.60), plus trade commissions ($39.96), I’m left with $2380.94.
$2380.94 – $2000.00 = $380.94 profit.

I shouldn’t combine currencies like that, but I’m lazy and since we’re basically at parity it shouldn’t make a huge difference anyway. I sold because I had to follow my initial exit strategy. I wrote last month that I would sell if either stock rose by 10 to 15%, and Halliburton past 15% today. It’s important to have a plan before you buy and stick with it so you don’t let greed and emotions dictate your actions later on. I used Halliburton (HAL.NE) for my first swing trade as well but it under-performed back then. This time however it did exceptionally well. You never know with these things so that’s why I usually buy 2 stocks at a time, to mitigate the risks. Maybe both these stocks will go up another 10% next month, but I’m happy with my results and will wait for another opportunity in the future.
Some people say you can’t time the market, but I think they just haven’t found the right strategy yet. I think history tells us that there are some relationships between the charts that I mention on this site and how they affect the stock market. Certainly not 100% correlated, but even if it’s 60%, 70%, or 80% then that’s still better than randomly guessing. Swing trading can be fun, but also very risky, especially if you borrow to trade.

Jan 162012

We finally got some much anticipated snow here in Western Canada.  A lot of snow certainly can be a problem for cities because it slows down traffic, can be costly, cause accidents, school closures, etc. But a little snow is fun, and doesn’t hurt anyone. There are lots of international people in the city who have never seen snow before.
From an investment point of view, I love snow. This winter so far has been relatively warm in North America. The US only had one snow storm that I’ve heard about and Canada hasn’t gotten much snowfall either. This means that temperatures have been warmer than historic averages. This leads to people not using as much heat in their homes, which lowers the demand for natural gas (ಠ_ಠ )

Most popular song on Canadian radio

I have been, and still am, a big advocate of natural gas which is a cheap and relatively clean source of energy. I’ve invested over $4,000 into this sector. Winter is usually a good time for natural gas but not so this year. New technologies like fracking have increased the supply of gas, combined with the lower than expect demand, it snow wonder the price of gas has been falling like crazy. So I’m glad we are finally getting colder temperatures outside. They say winter is coming this year with a vengeance. Fellow Vancouver residents, prepare yourself for a freezing week ahead. Icy that other places in the country are also reporting colder weather in their forecast. Maybe we’ll see a change in natural gas prices soon.  But I am investing for the long run so I’m not worried either way. If gas becomes cheaper I will invest more into gas producing companies.

Jan 122012

The provincial government is giving us the opportunity to balance its budget. This is normally the responsibility of the finance minister but now we can voice our opinions as well.
What a great idea. Unfortunately what I really want to see are the live results of everyone’s inputs because it’s not like they don’t have that data already. Maybe they’ll post it up later with the final numbers but I doubt it. Governments are not known to be transparent.

Even if you don’t submit your ideas you can learn how we’re being taxed, and where those tax dollars are being used on. I’m surprised how much of the pie health and education take up. Health supports the old, and education supports the young, no wonder the working age people are getting taxed so much. Perhaps we should look at alternatives to health and education in Canada. Right now it seems like the waiting list for just about anything is too long. Other developed nations like Switzerland for example, has a 2 tiered health care program so people can either wait for a long time to have an operation, or pay money for quicker treatment. I work at a post-secondary private school. Our students have higher rates of employment than traditional universities, despite students paying the same amount of tuition to graduate. More solutions like these will take the stress off our public system and boost the economy by creating supply where there is actually demand. But what’s good for the economy doesn’t necessarily benefit everyone. I doubt current health and education workers want to lose their jobs. I hope we can find a happy medium to balance the books. In the meantime, save, invest, and continue to take control of your own money.