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Saturday, August 13, 2011

Canadian National Railway Co (CNR), next month, it’s your turn

The TSX didn’t close today session on very high gain but at least, the situation remains stable. No matter what, even while the TSX gains less than 3 points today, my non-registered portfolio closed the week with interesting gains.

Non-registered portfolio value: 109 152$
Money used on margin: 40 899.59$
Money left on margin: 19 871.42$

This 109k value is interesting. I am reaching the 109k following a 1 000$ investment in TRP. My original 113k worth non-registered portfolio would have been at 108k, leaving a -5k behind. But knowing what the market has gone through, I think this is not bad at all. More than ever, I am to follow the plan I came previously with: to invest in blue chips once in a while to add value to my portfolio. It began quickly clear that this is the only I will be able to eventually recover from my lost. I am optimist. My next investment will be in Canadian National Railway Co (CNR). CNR pays almost nothing in dividend, but this stock will add a + value to my portfolio. CNR is of a very strong value. On top of that, it will add diversification to my portfolio. So be ready, CNR, because really soon, you’ll be in the club.

Some recent comments are making me laugh. This blog is my personal finance diary and I am totally careless about negative feedback I am receiving. I don’t think those individuals really have the intelligence to realize what this is all about. I have the arrogance to say this: in many aspects, my blog is much more interesting than the other financial blogs there is out there. Many bloggers blog like if they were experts on the topic they write about. And truly, I am pretty sure that the vast majority of them don’t even earn half of my dividend earnings and don’t half of my trading experience. You get to know what they hold once in a wild, but it’s about it. Nothing about their debt situation, portfolio worth, trading, etc. That being as well true with the so call experts that we read on the Globe and Mail like Rob Carrick, or so call debt specialist like Gail Vaz-Oxlade. And I will even say, much of them are just as much as hypocrite as Derek Foster is.

See, in response to my email, Derek Foster reply with this message: “Margin borrowing and other credit scares might consider paying down you debt for increased safety...just my thinking...derek”. Ok, you might ask yourself where is the hypocrite part? Well, Derek Foster pretty much builds his portfolio using leverage. He had used margin and he had borrowed to invest. From my part, I did the reading of Derek Foster on a perpetual basis so I am no longer able to tell you from which part of which books we are able to find information about his leverage but if I am saying that Derek Foster had used leverage, well, it’s because he did. Same thing for another know-it-all, Andrew Hallan said that he doesn’t believe in margin, but he had used leverage himself too! What’s the problem with those guys?

The only way to make it is to use leverage. Derek Foster and Andrew Hallan are kind of being “financial personalities”. They want to look good and be presented at their best advantages. In the financial Canadian small world, leverage is not being well-considered. Derek Foster and Andrew Hallan are more now of the banker type of personalities know-it-all. They are giving advices and are saying what is politically financially correct ONLY. They are representative of the banking high class financial. They want to be known as financial speaker and they want to sell their books. The only way for those 2 to make it happen in term of writer and speaker is to be politically financially correct. If not, no more interviews, no more books will be purchase.

Myself, I am satisfied with my term of leverage. I am coming roughly on those 2, they are just examples. I said very good things about Derek Foster on my blog and I continue to think all of those good things about him. However, I find in him a hypocrite nature. There’s what he had did and use himself to be where he is at this time and there’s that part of him who is an author and who’s coming with politically correct things that he never respected himself. So it’s not only Quebeckers who can be actively hypocrite, the rest of Canadians can also be quite hypocrite, I can tell you something about it.

So why Derek Foster, Andrew Hallan, blog readers who are getting hard on me in their comments, why all of these people are against leverage? Well, there’s a good and bad side to it. Good part being it’s the dangerous nature of leverage but truly, tell you this: if I had been able to manage my margin account and my leverage, anyone can.

While wanted to promote a don’t-use-leverage strategy, Derek Foster and Andrew Hallan are being hypocrite because leverage is what had made it possible for them. And now, they are transforming their methods into non-leverage one just to be out there, not to be just an individual blogging anonymously. So to be part of the financial world, you need to be correct but the nasty side is what I had described. They will tell you in response that the market had change, but the market did not change. For small investors, leverage is the only way to go. So go for it. Forget about paying debt. Paying off debt won’t bring in any dividend income. It will bring nothing at all, if not just an artificial satisfaction of your banker.

So when I read the latest comments on my blog, I am afraid I am facing the hypocrite nature of human being.

My best advice would be: push leverage for as much as you can but keep it safe. Meaning that minimal payment on debt should not exceed a certain point, and that a good amount of money should remain in the margin at anytime. What is missing right now from the Canadian scene is someone who can actually teach how to use leverage. But don’t you ever dare to wait for Derek Foster or Andrew Hallan to teach you that. Of course not.

I can easily make a good living out of an income of 1 300$ a month. Currently, I am about an average of 700$ per month in dividend earning. I should have started to invest in stocks much earlier. But this is how it went for me. The sooner the better. Anyhow, I am more than half way there. Once that goal reach, I don’t plan to stop working, but it will allow me to be much more aggressive in my career choices, to go back to school if I want to, etc. etc. etc. It’s not exactly a stop working strategy, it’s a strategy for a better life. Because don’t expect anyone to help you among the way. You are alone and if, unfortunately you live in Quebec, you are even more alone. That’s what is missing from Derek Foster and other so call guru. It’s missing the intelligence of the beginning. And I am still at a point where I believe in it very strongly. There’s really no one and no comments can stop me while being so deeply into it. Just watch me going. And may you forgive me. 

Let the margin and leverage be for my best advantage.


Here, There & Everywhere... said...

Hope you are right!
Had I started investing a while ago I probably would have done the same thing you're doing.

But one important thing I learned through the years is that it is important to rely on our own drives and instincts, but that completely discarding advices is not always teh best thing to do. It is ok not to follow them blindly, but to put them on stand-by in some part of your brain and re-analyzing the situation in regards to those old advices in a couple months / years can be more than useful ;)

Anonymous said...

ahhh great company and extremely well run -- a definite holding for me
hi there - is your fellow nb'er glad you enjoyed your vacation --
question -- what platform do u use to trade with -- i am looking at td waterhouse active trader platform -- u have any comments about this ... thanks
also maybe you not agree but now that ylo has reduced their dividend it may be an interesting dividend play .....
take care .....

Anonymous said...

Hi Sunny-I agree with you 100% about what you are trying to do with other people's money. That's what leverage really is. I'm happy that you are taking it upon yourself to succeed.



Anonymous said...

wow really harsh...


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