Apr 072014
 

I’m pretty confident that there will always be a healthy number of frugal people in this world. So last Friday, as some of you may already know, I purchased 15 shares of Dollarama Inc (DOL). Each share was purchased at $87.61 for a total investment amount of $1,324.

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This is a dollar store chain with over 800 retail locations across Canada. The reason I decided to invest in this company is because I’m really impressed with how fast it’s expanding, and don’t want to miss out anymore on that growth. It’s also a recession proof company. There are frugal consumers when times are good, and there are even more of them when times are bad. So Dollarama has a very solid customer base that is not going anywhere. Here’s a look at how much profit Dollarama made in the last several years.

2010 – $73 million
2011 – $117 million
2012 – $173 million
2013 – $217 million
2014 – ??? (not released yet)

That looks like a pretty good track record of growing profitability to me ;)

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Mar 062014
 

According to brand consulting company Interbrand, Apple has overtaken Coke as the world’s number 1 brand last year :D Second place goes to Google! For more than a decade Coke has always been on top. No matter where you go in the world people will recognize the smooth taste of Coca Cola, but this time it has fallen to 3rd place.

The research estimates the value of Apple’s brand to be about $100 billion, which is a 28% increase from the previous year. That means the brand itself is worth roughly $110 per share. I invested in Apple stocks not long ago because I believe in the brand. Even though I don’t own any Apple products I trust their marketing and product line to deliver great returns to shareholders :)

Few brands have enabled so many people to do so much so easily, which is why Apple has legions of adoring fans,
~Interbrand

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Below is a look at the top 10 brands in the report.

Top 10 global brands

Apple*
Google*
Coca-Cola
IBM
Microsoft
GE
McDonald’s*
Samsung
Intel*
Toyota

* = Companies I currently own

I think a smart way to invest is to put your money in companies that have strong brands. In fact, branding is one of the economic moats that will often keep a company profitable during recessions because people would want to buy goods and services from names they trust :D

Looks like I have 4 out of 10 on that list so far. I will add Coke and IBM to my list of stocks to buy and maybe one day collect all 10 of the best brands in the world :D

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Random Useless Fact: It’s an urban myth that gum takes 7 years to pass through the digestive system. It usually only takes one or two days.
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Feb 232014
 

It’s so easy to make money in the market these days :D If you bought the Dow Jones index 18 months ago, your investments would be up 30% today!

But the chart below may be a strong signal that these good times will likely be ending very soon! *gulp* 8-O The darker green line indicates the Dow stock market index today and its performance over the last 18 months. As you can see it’s mostly good news :D But the lighter cyan line above represents the same index, also over an 18 month period, but 85 years ago.

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As you can see the 2 lines are very similar so far ;)  There’s probably something fundamentally the same within the different periods of time that’s driving this synchronicity :? It was right around this time of year back in 1929 when the market had a major correction, and by summer of 1929 the Dow had lost 20% of it’s value from the peak in early January. Does this mean the Dow will do the same this year in 2014? A 20% correction is not that rare for the stock market, and if the Dow continues to follow the historical trend set 85 years ago then maybe it’s time to sell some positions and lock in the profits. I mean, look at how eerily similar the 2 charts are :|

If you believe we are in for a downturn then maybe add more bonds, like XBB, to your portfolio as a bit of protection. But if you think the charts lining up is purely coincidental then carry on with your stock investing. Personally I have no idea what to think about this data so I’m going to sit on the fence and hold all my long positions, and will not buy any new stocks until April.

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Random Useless Fact: Most foreign students only seem smart because all the dumb ones stay in their home countries. #NoOffence

Jan 212014
 

Awhile ago I started a swing trade with Potash Corporation of Saskatchewan. I used $600 to purchase about $2,000 worth of POT shares using leverage. Unfortunately some time after my purchase, Russia’s Uralkali got out of the potash cartel which sent the price of potash lower, which of course meant all potash producers around the world had their profits squeezed. Potash is an alkaline potassium compound used in fertilizer.

When I initially bought 45 shares, POT was trading at $43.74 CAD per share. It dropped down to about $30 per share when Uralkali pulled out. But today POT has recovered a bit and is trading at about $37. Instead of selling and taking my losses, I’ve decided to double down on it :) So earlier today I bought another 45 shares at $36.90 each, doubling my total holding to 90 shares, wow 8-O

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I should have pulled the trigger earlier but I’m just glad I got in today before the price can get any higher :) Thanks to my new trade I’ve averaged down my ACB from the initial $43.74/share to $40.32/share :D

I got the idea to increase my position in POT after reading PC’s post about Potash Corp’s recent performance. It’s risky to invest a second time into a company that is worth less than before. There’s a very real possibility for the price to continue falling and I could lose my new money as well my previous investment (o_o) But risky is my middle name and I like to go big or go home :P

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With a P/E ratio of 15.2x I feel POT is currently at reasonable valuations. It’s also a low cost producer of nitrogen, phosphate, and other chemicals needed for industrial use. Farmers will always need fertilizer as long as there are people in the world, and I think POT is in a great position to capitalize on that market. Also, the 4.09% dividend yield is a nice bonus :)

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Random useless fact: If you find a lost driver’s license, you can drop it in any mailbox and the Postal Service will deliver it back to the owner.

Dec 262013
 

Earlier this year I explained how to profit from the growing world of smartphone and tablet devices by using the mobile trinity strategy :D I didn’t have enough money at the time to complete the trinity and only had 2 out of 3 parts. Well I finally saved enough and earlier this week I bought 30 shares of Qualcomm Inc.

Qualcomm designs and manufactures chipsets and other technologies that go into mobile gadgets. With a market capitalization of ~$125 billion, it’s worth more than ARM, NVIDIA, and AMD combined. Qualcomm is about the size of Intel Corporation, which I also own shares in :) The reason QCOM is so successful is because its technology is pretty much ubiquitous in all our cell phones. Its entire business is getting the licensing fees (like royalties) on pretty much every smart phone we use.

“We believe Qualcomm will pick up significant smartphone share on multiple platforms into 2Q/June. There have been numerous reports that Qualcomm could supply up to 70 percent of the Galaxy S4s, supplying to both US and European S4 models versus only US on the prior S3 platform.” ~Rakesh in a statement to ZDNet in April 2013

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Last week Apple announced that it has just partnered with China Mobile to bring the iPhone to the carrier’s 4G and 3G networks starting in January 17, 2014. This is a huge deal :) T-Mobile, Verizon, and AT&T only have about 100 million to 130 million total subscribers each. But China Mobile, the largest mobile network operator in the world, has about 750 million subscribers! So even a small percentage of that market could be very lucrative for Apple :)

snap_dragon_chip

Although iPhones use one of Apple’s own chipsets, they still use Qualcomm’s RF transceiver, baseband processor, and power management chips. So this new agreement Apple made is good for QCOM shareholders too :) There is also speculation that Apple may use more of QCOM’s technology in future generations of their more affordable devices like the iPhone 5c, which is meant to target the medium price range of the smart phone market. This is because QCOM’s chips have the ability to integrate Bluetooth and Wi-Fi directly into the main chip which would save Apple money.

“Smart phone growth is projected to be 16% annually through the end of the decade. (Qualcomm’s) LTE chip has about 97% market share, so they are in good shape. Have gone from being the 8th or 9th chipset producer a few years ago and are now number 3. It tends not to get the credit that it should. Trading at about 15X next years earnings. Its growth is not only fairly robust, but is quite predictable.”  ~Gordon Reid , GoodReid Investment Counsel

QCOM allows us to invest in the growing cell phone market (mostly driven by Asia) without actually having to pick a leader :D Pretty good deal I think ;) Now that my trinity is complete, I can just sit back and enjoy my profits as all 3 companies have incredible cash flow. How do you plan to take advantage of the fast growing mobile market in the future?

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I also bought 40 Comcast shares on the same day I bought QCOM. Both were purchased in my RRSP. Comcast Corporation (CMCSK/CMCSA) is the largest mass media and communications company in the world by revenue. It owns NBC, Universal Studios Inc, and also provides cable and internet to tens of millions of Americans. It’s Comcastic :lol: Investing is so much fun because you get to learn how all sorts of businesses operate :)