Saturday, June 26, 2010

Smith Manoeuvre Portfolio Update – June 2010: Million Dollar Journey



Smith Manoeuvre Portfolio Update – June 2010: Million Dollar Journey

Posted: 16 Jun 2010 04:30 AM PDT
For those of you just joining us, below is my portfolio that is leveraged with money borrowed from my home equity line of credit (HELOC). As the money borrowed is used to invest, the interest charged is tax deductible. I write an update every so often to show new positions added along with any market gains/losses. For more details on the strategy and procedure, check out my modified smith manoeuvre strategy and my comparison of online stock brokers.
Since I started this portfolio in 2008, it has been a wild roller coaster ride.  I had great market timing in 2008 and leveraged the portfolio a few months before everything fell apart (note the sarcasm).  Even though the portfolio value fell over 25%, I stuck with the plan and the dividends never stopped rolling in.  Now in 2010, the portfolio is hovering around break even, with the dividend stream still going strong.
Since March of 2009, the markets have been red hot.  So hot in fact that I’ve been having trouble finding strong dividend companies with attractive valuations.  In other words, I have been doing very little buying.  I have, however, during this most recent correction initiated two new positions for the portfolio. They are Ensign Energy Services (ESI.TO) and Mullen Group (MTL.TO).
ESI is a oil well drilling contractor that has increased their dividend over the past 4 years, has a strong balance sheet with no long term debt and has a payout ratio of approximately 57%.  Mullen Group is mostly known for the oil field services and trucking business in western Canada.  Although their balance sheet isn’t as clean as ESI’s, they have a ton of cash, trade below book value and have a 3.6% dividend yield with a low 38% payout ratio.
My dividend watch list hasn't changed since my last couple reports.  I am looking to increase my position in T.BMO, T.TD, T.ENB, T.FCR and new positions in T.CNR and T.L when their valuations become attractive.

The Portfolio as of June 2010:

Stock Symbol Shares Avg Buy Price Total Div/Share Yield
Royal Bank RY.T 75 $47.62 $3,571.25 $2 4.20%
CIBC CM.T 45 $67.14 $3,021.25 $3.48 5.18%
Power Financial PWF.T 105 $35.14 $3,689.65 $1.40 3.98%
Scotia Bank BNS.T 105 $41.91 $4,400.52 $1.96 4.68%
Manulife Financial MFC.T 125 $33.12 $4,139.48 $0.52 1.57%
Fortis Properties FTS.T 150 $25.63 $3,843.98 $1.04 4.06%
TransCanada Corp TRP.T 100 $33.50 $3,349.74 $1.52 4.52%
AGF Management Limited AGF.B.T 50 $22.71 $1,135.49 $1.00 4.40%
Bank of Montreal BMO.T 25 $44.17 $1,104.24 $2.80 6.34%
Husky Energy HSE.T 135 $32.53 $4,391.27 $1.20 3.69%
TD Bank TD.T 50 $48.24 $2,412.23 $2.44 5.06%
Enbridge ENB.T 40 $37.36 $1494.39 $1.48 3.96%
TransAlta TA.T 50 $21.47 $1073.49 $1.16 5.40%
First Capital Realty FCR.T 100 $15.75 $1,574.99 $1.28 8.13%
Canadian Utilities CU.T 50 $36.40 $1,819.99 $1.41 3.87%
Ensign Energy Services ESI.T 100 $13.81 $1,380.99 $0.35 2.55%
Mullen Group MTL.T 50 $14.18 $708.99 $0.50 3.58%

More Stats

  • Total Cost Base of Equities (inc. fees): $43,111.94
  • Market Value of Equities (June 15, 2010): $44,223.65
  • Total Dividends / Year: $1,834.10
  • Portfolio Dividend Yield: 4.25%

Sector Allocation (based on market value)

  • Financials:    54.25%
  • Utilities:    16.97%
  • Energy:    25.53%
  • Resources:    0.00%
  • Real Estate:    3.24%
  • Other:     0.00%
With regards to sector allocation, you may notice that this portfolio is fairly concentrated in financials.  Note though that this is one of my accounts where I treat all of my accounts as one big portfolio.  In other words, my international and other sector equity exposure are in other accounts.
Disclaimer: There have been a lot of readers who have mentioned that they are interested in a leveraged portfolio.  Over the long term it may be lucrative.  However, over the short term, equities are volatile and can put the portfolio deep in the red.  My portfolio over 2008 is a prime example of what can happen.  If you can't stomach losing 20-30% in the portfolio in any given year, then your risk tolerance isn't suited for leveraged investing.  As well, the securities mentioned in this post are not recommendations to buy or sell.
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Normal is Broke

Living With A Chain

How to Get a Job when No One is Hiring

When the jobs are hidden

To get a job, you have to find the openings that no one's advertising, and really impress your potential employer.

By Jia Lynn Yang, writer-reporter
March 30, 2009: 12:31 PM ET

NEW YORK (Fortune) -- David Perry, a longtime headhunter, says you're wasting your time if you're looking for job postings online. And he should know: he's often the guy on the other side helping companies lure new talent. Perry, who's based in Ottawa, says that in the last 22 years he has accomplished 996 searches totaling $172 million in salary. And the bottom line in today's economy, he says, is you have to tap the "hidden job market."

Perry's also the co-author of "Guerrilla Marketing for Job Hunters" and he recently spoke with Fortune.

What's the "hidden job market"?

When companies say, 'We have a hiring freeze,' that doesn't mean they're not hiring. It just means they're not adding headcount. Every year there's 20-25% turn over. So in a 1,000-person company, 200 or 250 people are going to turn over, either through attrition, or someone moves. Those companies are still hiring but they don't want to tell you.

So how do you find these jobs?

What you have to do in a recession is map your skills to employers to where you know they have a problem you can solve. My advice to job hunters is pick 10 to 20 companies, no more, and pick companies you're interested in, and that you think you can add value to. That requires researching companies, and so that list may take you two weeks. If you're trying to crack the hidden job market and you know the job position you want reports to vice president, find that vice president on LinkedIn and look at his profile to see who else he's connected to and go ask them, 'What's this guy like to work for?' Do the research before you even pick up the phone.

How can you get someone's attention?

We can go into billboards, sandwiches - that stuff only works once. It's only for one person who figures it out once, once in a city. If you're looking for fun stuff, we have this thing called the coffee cup caper, 30% of the time it will result in an interview. You send an employer a coffee cup with a little $5 swipe card with a little note that says, I'd like to get together and talk with you over coffee. I'll be calling soon. And you send it by U.S. post two day delivery, and that gets registered. So when they've signed for it, you wait about 20 minutes and then you call them. And then you go, Hi, I know you just got my package.' You're proving you're imaginative and creative.

What something people should avoid during a job interview?

This drives me insane: I've seen people mentally deciding in the interview whether they want the job. That's the last place to decide. You go into an interview, and you sell like your life depends on it. You've got to get the job first. I've seen it thousands of times. There's this point in the interview, where people go 'Hmm, do I really want this? You can see their body change. The employer picks it up and it's gone. If the employer is telling you, 'I love you,' and you're not saying 'I love you too,' it's over with.

How about following up afterwards?

If you really like the opportunity, don't go home and write thank you very much. Go back and write a letter that says, upon further reflection of what we were talking about, here's what I bring to the table, here's how I see myself fitting into the organization, including a 30-60-90 day plan.

How can someone attract a recruiter's attention?

You have to go to ZoomInfo and LinkedIn and create a profile. All corporate recruiters and probably 20% of the headhunters in America have ZoomInfo accounts. When we start a search, companies aren't going to advertise. The headhunter goes to ZoomInfo, types in requirements that we need, like skillset, degree, city, functional title, and up will come anywhere from a hundred to several thousand people who fit that criteria. Then we go to LinkedIn and run the same search. If you're in ZoomInfo with a picture, we're going to call you first. Just reverse engineer what recruiters are doing so you get found.

How can you really impress a potential employer?

It hasn't worked in years just to bring in your resume, except only in the most junior positions. I concentrate on directors to CEOs, and the last interview for us regardless is always a Power Point presentation of what you've learned, pain points, and how you intend to fix that. Everyone talks about being a great leader and great communicator, so prove it. Don't go into an interview and treat it like it's just another business meeting. Your career is your biggest asset now - because it's certainly not your house. To top of page

From
http://money.cnn.com/2009/03/30/news/economy/yang_headhunter.fortune/index.htm

August 2008 Dave Ramsey on Barack Obama

This was aired in August 2008. So was Dave right???