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Wednesday, April 29, 2009

Investing like a pro of Bay Street with no or little knowledge: possible or not?

This is basically my own personal challenge at this time. I had the time of my life since I begin this blog back in 2007. Even before that, I had done my first investment with Desjardins Fidelity True North Fund. It was a 1 000$ investment back than. I will never forget – first, all the misery made by Desjardins over me just for one little investment. It’s just they are trying to cover themselves through too much paper works and investor profile. And after what, I am supposed to be satisfied with the quality of their services?

I do not recommend Desjardins financial services to anyone. As for myself, I remain as far as possible of whatever is call a “Desjardins advisor”. Annoying, inconvenient, bad services and the list could be longer. I actually live another bad experience with Desjardins not too long ago for my 2008 RRSP. I just didn’t get the change to write about it yet. But it shouldn’t be too long.

Anyhow, for me, the real fun begins when I purchase my first stocks earlier in 2008. Back than, it’s 500 stocks of Sprott Asset Management (SII) that I had purchased at almost 10$ per stock. In date of today, this investment could be seen as a mistake as SII stock only worth less than 5$ each but – there’s a but – SII provide dividend and they also provide a one time special dividend of 10 cents per stock. Overall, the investment was not too bad made from my part, I could have done worst. But I did worst with Timminco (TIM).

My biggest mistake was when I purchased Timminco – now worth less than 2$ per share – just to follow the natural investment flow. There was a time in 2008 when Timminco was very popular – it had been called the “TSX darling” and so on. I was stupid and I invest in Timminco just to do like the big guys. And talking of big guys, I am thinking of Sprott Asset Management who own 16.9% of common shares of Timminco, AMG Advanced Metallurgical Group N.V. (50.7%!!!), and Fidelity Management & Research Company (14%!!). Again today, I had received another “voting package” coming from Timminco. All of those Management Information Circulars I had received lately are just too much reading for one person.

Let’s say that for now on, I stay away from “popular” stocks. In order to get a good portfolio I copied Derek Foster portfolio. From my portfolio, Bank of Nova Scotia (BNS), Pengrowth Energy Trust (PGF.UN), Livingston International Income Fund (LIV.UN) and Pembina Income Fund (PIF.UN) are directly coming from Derek Foster portfolio or from what use to be Derek Foster portfolio. As for the rest, like Fortis (FTS), Hanwei Energy Services (HE), Methanex Corporation (MX), and also Sprott Asset Management (SII), they come from my reading and other.

I don’t know for sure if it’s possible to invest like a real pro without having any good knowledge of the whole investment deal. But for sure, what I know, is that no major mistake can be made if instincts are being followed and if not too much money is being involved in each investment. By “not too much money” I mean an investment of less than 5 000$. As a small investor, 5 000$ represent a lot of money.

Like nothing is easy. And especially now, as my revenues had been cut because of different factors – job looses and other. And also add to this the fact that I had to pay almost 3 000$ in income taxes. This year, the Canada Revenue Agency had received a big paycheck from my little person. And knowing how much I had work so hard, well, it’s not fair! I am not giving away my precious money so our Governor General Michaëlle Jean can travel the world on myself! I would just like to travel alone without her husband – it will make it cheaper for poor Canadian tax payers.

Anyhow, I guess it is possible to invest like a pro if diversification rules are being followed – the same one that had been ignored by Henri-Paul Rousseau former CEO of Caisse de dépôt et placement du Québec. And just to thank you more, we are offering you 378 750 $ so you can live with your peace of mind. I do not have any investment made at the Caisse de dépôt et placement du Québec and I do not plan to invest any of my money with Caisse de dépôt – even with their new CEO Michael Sabia who had gave up on almost everything he had for Quebec. Quebec Province does not deserve someone like Michael Sabia to be in charge of a major part of its finance. Quebec just deserves what happen in 2008 - a $40-billion drop. I won’t ever invest in the Caisse de dépôt et placement du Québec because it’s too much of Quebec stuff in a one investment and their new CEO Michael Sabia – who’s a look-a-like Woody Allan if you ever notice – won’t remain CEO of the Caisse forever. After Mr. Sabia, a new CEO will come one day and will do what Henri-Paul Rousseau did – screwing up everything!

That’s why since I start investment – I pick my own fund and do what I want with my money because when it’s come to my money, I do not trust no one, especially Quebeckers. I am just not open to any suggestions at all and if it happens that I find another fantastic mutual fund like Crestsreet Alternative Energy Fund, I will, again, invest in mutual funds. I am not closing the door to mutual funds. Because I find Derek Foster too much into the market and in his books he literally closes the door to any mutual funds.

My Crestsreet Alternative Energy Fund is one of those funds! The minimum investment to be made is of 1 000$, which is pretty affordable. The only inconvenient is at the time of the selling – if it had to happen. It cost 50$ to sale the investment, no matter how much you have at the time of the selling. Crestsreet Alternative Energy Fund is the type of investment you made for the long run.

Amateur can bet the pro without any trouble if simple rules are being followed. And for this, the reading of Derek Foster books had been more than helpful. In my life, I never read anything else related to finance other than Derek’s Foster books. I recommend them to anyone even if he had decided to sale out EVERYTHING and almost kill me along the way lol. An interview of Derek Foster with the very good looking George Stroumboulopoulos host of The Hour can be view at:

And what if amateur investor like me would have more gut and be more powerful than the Henri-Paul Rousseau and Derek Foster of this world? I guess I have the answer to my question lol. But on this, of course, I am only joking. And only time will tell if I can beat, if not the TSX, the pros.

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