Dec 262014
 

I finally sold my shares of Potash Corp./Saskatchewan Inc a couple of days ago. I first bought this company in 2012, and when it dipped in price earlier this year I bought some more to average down. I got rid of this stock now because I don’t want to risk it dropping in the new year. Overall I only made a $129 profit on my investment of $2260. Not the greatest win I’m afraid, but better than a loss. 🙂

Here are the details of my transactions.

June 26th,  2012
I bought 45 shares of POT on the Toronto Stock Exchange. The earnings of the company looked good, and the dividend was stable. Potash Corp provides fertilizer and other services to help grow the food we all eat. I thought the fundamentals for farming is strong so I bet $600 of my own money on it, and borrowed some money on margin.

Purchased 45 shares at $43.74 per share.
Total number of shares owned = 45
Average cost per share = $43.74
Total investment = $1968.30 ($600 of my own money. The remaining ~$1370 from a bank loan.)

Jan 21st, 2014
After a potash producing cartel in Russia unexpectedly pulled out of the global market the price of potash mining companies around the world, including POT, fell sharply. Instead of selling my stock at a loss I decided to double down on my investment and picked up another 45 shares with $1660 from my savings.

Purchased 45 shares at $36.90 per share.
Total number of shares owned = 90
Average cost per share = $40.32
Total investment = $3628.80 ($2260 of my own money. The remaining ~$1370 from a bank loan.)

Dec 24th, 2014
Sell everything. I don’t see any catalyst in the near future that would give POT shares a boost so I’ve decided to take my winnings and move on.

14-12-swing-trade-potash-sell

Gross Proceeds: Total = $3933.80 
Sold 90 shares at $41.72 each = $3754.80
Dividends: $179

Expenses: Total = $1545
Margin loan principle: $1370
Margin interest at 4.25%/year: $145
Trading commission: $30
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Net Proceeds: $2388.80
Principle Investment: $2260

Total Profit = $129 or 5.7%

This the longest time I’ve held onto a stock for swing trading. It technically isn’t even a swing trade anymore lol. I plan to use the money from selling my POT shares on better opportunities in the new year. 🙂

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Random Useless Fact:
When choosing a baby name, put an important title in front of it and see if it still works.

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 😯

14-01-potstockbuy2

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 😀

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 😛

14-01-potbuyswingtrade

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.

Mar 082013
 
Happy International Women’s Day

13_03_friendsbenefits, celebrate women's dayToday is March 8th so let’s celebrate women’s economic and social achievements. I watched an 11min interview featuring a couple of representatives from TD Bank. Ms. Caranci is an economist and Ms. Caskey is a portfolio manager. They mentioned that studies from Credit Suisse and other notable institutions show that corporations with more female board members outperform those that have less. For example looking at the S&P/TSX Composite index over the last year companies with at least one woman on the board have seen a 7.2% return on average, while the overall index returned just 4% 😀 Makes sense to me. Women represent half the consumer market place. So if I was running a company I would certainly want to have a woman’s perspective when it comes to making strategic business decisions. It’s too bad that only 11% of board members of companies on the TSX Composite are female. In the interview, Ms. Caranci says this is partly because of the composition of our industries. For example, half the stock market index is made up of resource companies and they “only have 6 to 7 percent representation of women, so they’re really pulling down those numbers.” So what can corporate Canada do to get more women represented on company boards? There are a few ideas floating around. For instance some European countries have strict quotas for their companies. In Norway publicly traded companies must have at least 40% female representation on the board, or else the company faces penalties or sanctions, such as being de-listed from the stock exchange 🙁 I don’t think Canada should necessarily adopt those kinds of laws because some argue mandatory quotas does more harm than good for women in the workplace, but I’m sure we can figure something out.

So how can the average investor use this information? Well since the research has suggested that a board of directions with a diverse background of both men and women tend to outperform the benchmark, we should consider this information when researching which stocks to buy. Thankfully, Ms. Caskey gave us a list of some notable companies that have a relatively high female representation on the board or executive team. I’ve listed a few below. Stock symbols are in (brackets) 😉

Potash Corp (POT) – 23% female board
EnCana (ECA) – 30% female board
Lululemon (LLL) – 45% female board

I currently have POT and ECA in my long term buy and hold portfolio. LLL is a very interesting company that started in Vancouver and has expanded very successfully into other countries. The brand was even featured on Oprah, lol. I’m a little concerned about the stock’s valuation because I don’t know how long it’ll continue to grow at its current rate. So this athletic apparel company is only on my watch list for now (^_^) Side note: LLL is not included in the TSX Composite index.

13_03_lululemonbrand, women's day

February Employment

How about some good news to end the work week 😀 Canada created 51,000 new jobs last month, and most of them are full-time work. The overall unemployment rate remains unchanged at 7.0 from the month prior, however this means more people are in the workforce which is a good thing. ON and BC made up most of the gains, with 35,000 and nearly 20,000 new jobs respectively. In the United States about 236,000 new jobs were created in February and unemployment edged down to 7.7% which gave investors the confidence to push the Dow Jones Industrial Average up by almost half a percent today to end the week at $14,397, yet another record high 😀

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Blog roundup – Personal finance and other interesting articles from around the web
Passive Income Earner explains the difference between Bonds and Preferred Shares
Mrs. Pop from Planting our Pennies shares their up to date balance sheet (net worth) They have a ton of assets
Mr. CBB from Canadian Budget Binder has some pretty impressive numbers for his family as well.
Laurie from Frugal Farmer encourages anyone who might be struggling with their finances to take back control
Money After Graduation on the value of a concert ticket
Pauline from Reach Financial Independence on realizing not everyone has to have the same goals because we all have different values
Jordann from My Alternate Life on what it takes to become an entrepreneur
Frugal Rules has several tips on doing your income taxes
Mo’ Money Mo’ Houses tells us a little bit about the writer behind the blog, herself

 

Jun 262012
 

Just bought some shares of the fertilizer company, Potash Corp. I think this is a great opportunity to make some easy money, if I’m lucky. I’ve only used $600 of my own cash for now. It might not sound like much but that’s because I’m going to borrow extra money from the bank and leverage it up to roughly $2000!

Earlier today I bought 45 shares of Potash Corp at $43.74 each.
Initial investment: $600
Leveraged up to $1,978.29

 

This means I bought almost $2000 worth of stocks for only $600. My bank was nice enough to provide me with the remaining amount I’m short on. That means I owe the bank money, (at 4.25% interest annually) but I believe it’s worth the extra risk.

I’ve always liked this company. They specialize in fertilizers, animal feed, and other chemicals used to produce food. As they say in their advertisements, potash is food for the food we eat :). They also have a great balance sheet and trades at a decent 11 x forward earnings. They are the largest potash producer in the world and a leading phosphate and nitrogen producer. They will continue to be profitable as long as people continue to eat (=^_^=). Why did I buy Potash now? Because over the last year the stock has been falling. But lately it has bounced off a low and is moving up with above average volume. I think they have reached an inflection point.  The short-term technicals for this company is simply too amazing of an opportunity for me to pass up. By the way, Potash Corp is also publicly traded on the NYSE for those interested in the US.

My strategy is simple. I will consider selling this stock when it gets above $48. Or I will buy more of this stock if breaks support and falls below $39, thereby lowering my average cost base and I will sell another day. Since this is a S&P/TSX 60 listed blue-chip company, and is a leader in its industry, I’m not concerned about it going out of business any time soon ;-D