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Tuesday, June 7, 2011

Yellow Media Inc. (YLO): what’s going on?

Well, to this question, I could answer by using Linda McCurdy, President and Chief Executive Officer of K-Bro Linen Inc. (KBL), own words: “In order to be successful, a company must have a vision.” (K-Bro Linen Inc. (KBL) Annual Report 2010, p. 6). What seem to be happening in the case of Yellow Media Inc. (YLO) is that their lack of vision for the long run had literally killed their stock.

Until recently, I was a proud shareholder of Yellow Media Inc. (YLO). On May 3, 2011, I made the painful decision to sell my shared of Yellow Media Inc. (YLO) at 4.65$. In the selling adventure, I had lost 300$ of the dividend money reinvested in the DRIP. So I had been lucky enough to not actually lose my original investment (in real money coming from my very own pocket).

In 2009, I was a young investor and YLO high dividend yield of more than 10% was extremely attractive. YLO stocks (at the time, they were units under a .UN ticket) were cheap. That’s how I decided to invest 2 224.47$ in Yellow Pages. From 2009 until May 2011, I had enjoyed YLO high dividend. And of course, the dividend was reinvested each month to provide me more shares.

On May 3, 2011, I decided to sell the totality of my holding in Yellow Media Inc. (YLO) for a market value of Yellow Media is of 2 602.56$. In this sell, I had loss 305.46$. A 305.46$ coming in from the reinvestment of the dividend earn each month. I attempt to focus on this part not to be too much disappointed. It’s summer after all and really soon I will be turning 31...

Anyhow, this being said, since May 3, 2011 YLO stock continuously lost some important value and it’s seem like it’s not over yet. Currently, today on June 7, 2011, 12:40pm, Yellow Media Inc. (YLO) is trading at 3.36$. Despite the catastrophe, YLO high dividend yield of more than 18% (as shown in the trading information provided by TD Waterhouse) remains.

While facing my own stupidity for dividend hunger, my best recommendation for you would be to hold YLO is you did not sell before because there’s a tinny little chance that the stock may go up to 4$.

The temptation of investing in high dividend yield companies provider only may be high, but must be avoid. A company that pay an 18% yield cannot have an executive team who has a lot of common sense. It’s good to give, but a company need to have a cash flow and absolutely need to have good reserve to face difficulties and anything that could present among the way.

With all of my money invested in stock, I am certainly not a good example of what should be a good investment portfolio. Someone with common sense will have more than 550$ in savings in its banking account but there’s some temptation I cannot avoid. Like having everything on the stock market for example. Sexy and dangerous.

This being said, remember: always focus on high quality stock instead of dividend yield. Because in any cases, it take more than a 200 000$ investment portfolio to be able to live on dividend distribution. It takes a lot of money. And once you have the money, will you really gave up on your working live? Because in a way, not having a working life, is like not having a life at all, especially while being single. I guess it’s the girl in me who’s talking right now. This meaning if you are a single, rich and handsome man, don’t hesitate to write me an email ok?


Anonymous said...

Turns out you did the right thing!

Sunny said...


Anonymous said...

good trade... I actually jump back into it now...

Sunny said...

Not a good trade at all if you want my point of view. It's only a matter before they declare bankruptcy. This is not trading, it's more of a gambling game. You risk a lot.


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