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Friday, January 13, 2012

Reviewing my position within the troublemaker stock, I have name: Rogers Sugars Inc. (RSI)

Today, I did something I wanted to do for a real long time: I partly sell my holding in Rogers Sugars Inc. (RSI). I made my investment in Rogers Sugars Inc. (RSI) back on February 1, 2011. Since that time, I never had been able to make real good capital gain on RSI. Yesterday was a good day for RSI and it was the same today. While giving a quick look at my stocks today, I notice that RSI was still on a high for a second day on a row.

I am not a passive investor. When a stock fails at giving me what I want, I take care of business.

I had been lucky enough to have the opportunity to sell some GCL stocks at a good price. Just like RSI, GCL is another of what I have named around here as being troublemaker stocks. A troublemaker stock profile is the following: a too high dividend yield, unstable in the value in good like in bad market condition, no capital value gained been realized on the investment even after more than 6 months of being hold.

Once you hold them in your investment portfolio it’s terribly difficult to get rid of a troublemaker stock. Why?

Let’s take my example with Rogers Sugars Inc. (RSI). Back in February 1, 2011, I had invested in 300 stocks of Rogers Sugars Inc. (RSI). Since that time, because I am registered to an automatic DRIP for everything that I hold, the dividend distribution I received from RSI has mostly been reinvested to generate extra stocks of RSI. With those reinvestments, my book value was, until today, 5.57$ per stock.

It’s difficult to get rid of a troublemaker stocks because their value is unstable. Chances that you can eventually sell a troublemaker stocks at profit is very low. Most of time, the selling generate a capital loss. In this case, I have sold today more than 200 stocks of Rogers Sugars Inc. (RSI) at 5.56$. I am loosing here 20$. I still have some stocks left of RSI in my portfolio, but now, I don’t even have 100 stock of RSI.

Today, after broker commission fee, my sell of Rogers Sugars Inc. (RSI) generate 1 229.89$. It felt great to reduce my holding in RSI!

So far for January 2012, I had been able to reduce my position in 2 troublemaker stocks: Rogers Sugars Inc. (RSI) and Colabor Group Inc. (GCL). This is very great because I had been waiting a long time to do this.

Another troublemaker stock of mine is Data Group Inc. (DGI). I had bought some stocks of DGI at more than 6$+ per stock. Since that time, DGI value went below 4$ and it never went back to the 6$+. I don’t have problem with holding DGI at this time. When I first invested in DGI, I did so because I really like the company. No matter what, I am currently experiencing a capital loss of 1 587$ on this investment.

DGI recently transform into a corporation and since that time, DGI gained in value. It’s a course a bit scary to experiment this capital loss on Data Group Inc. (DGI), but you have to understand that there’s really nothing that the Dividend Girl cannot handle.

Fact is, an investor need to have the courage to make some change to its portfolio when its truly needed.

Next step will be to find a very great company to invest my freshly 1 229.89$ that been suddenly liberate from my sell of some RSI stocks.

When I decided to sell my troublemaker stock, I usually don’t sell them completely. I usually keep a small amount of shares in my portfolio, just as a souvenir that at some point, I had been sexy and adventurous. 2012 will mark my first 5 years of stock investment. So far, its look like this fifth year is going to be very amazing.

I am never getting enough of that TSX sublime stock market. Like never.


James said...

I don't see what has been so bad about RSI. I looked at the the chart and it is up and relatively stable in 2011 and pays a nice distribution. Why would you want to sell it? I hope you were not expecting huge capital gains from it.

Anonymous said...

no need to point the obvious, all the companies you've mentionned are small. you were lured by the high dividend yield and now you pay the price. in fact you have to invest in a lot of small companies and maybe at the end of the day only a few will make a lot of money for you - that's how it works. just look at your portfolio, look at your large cap holdings of your portfolio - that are part of the TSX 60, you will likely see this holds true. OBVIOUSLY it also depends at what price you pay too. again, the idea is to stick with big companies, with moderate dividends in the range of 3-5%. slow and steady wins the race. happy investing.

Anonymous said...

Picking stocks out of hat is not a proven method to be successful. You invest in companies without even knowing anything about their finance, how much debt they have on their balance sheet, the payout ratio of their dividend vs their earnings, the outlook for their future, etc. Keep on looking at your portfolio, I see many more stocks that are much bigger troublemaker.

Lucky for you, we are in a period where lots of stocks are undervalued. If this would be 2007 and you would be picking these stocks, you would get hammered in a stock market correction. (Ex. you paid 6$+ for DGI, and are down 30%+, but you would be down 75% if you paid 12$ in 2007. Aren't you glad you didn't have more money to invest in stocks or used margin in 2007.

So it's fair to say that RSI was another investments done with margin that didn't serve any purpose but to stress you out during all of last year.

The accountant

Anonymous said...

I got RSI in dec. 2003 for 3.27. It was a income trust that time paying 10% yield. I see nothing wrong with it. Nice dividend and everyone eats sugar

Anonymous said...

Does WEQ-UN also fall into that category? It has a very high yield. However if one were to have invested in that company long-term money would have been made.

Anonymous said...

Accountant, you are right I believe. There are no mention on these things when she purchases a stock and does a post about it. If she does them she should briefly tell it to her readers, as this is what most dividend bloggers do. It doesn't have to be a long post, one or two liners on each topic would suffice.

That being said, Sunny puts her portfolio out there and her dividend income, which is 7 times more income then mine right now. Sunny has been investing in Canadian Blue Chips right now and has done well on them. Sunny also says she is not chasing the high yield low growth stocks. If she keeps doing this, her portolio will be more stable.

Sunny said...

I don't like RSI because I made my purchase at something like 5.57$ per stock back in February 2011. Since that time, RSI was under the 5.57$ for most the time and I find it very annoying.

The dividend yield is good for now, but in the past, the dividend got reduced, from what I understood.

The only reason why I invest in this stock in 2011 is because back than, it was my rush to increase my dividend income.

Since that time, my way change and I focus more on quality rather than cold cash coming from dividend. I should have take a deeper look at RSI chart at the time.

Anyway, like I said, I am much the kind of sophisticated investor now. Or try to be.

I plan to reinvest the money in a blue chips.

Not all of the companies I invested in are small. ECA, BNS, MX, TRP, PPL, KBL, FR, PGF etc etc etc. Those are not small companies.

If I would have get my RSI stocks at 3.27$, I wouldn't be naming RSI a troublemaker stocks and I would have be happy holding it. It's all relative to my experience and the price I pay for my shares.

Another troublemaker that I have invested too much in is DGI. Otherwise, the rest is pretty much ok.

TIM, HE and BNT were investments made in 2008-2009, I haven't done well on those. They never been able to go through the 2008 stock crash. I don't consider them as troublemaker stocks because they are victim of a bad economic situation. Wouldn't be far to name them as troublemakers.

Because yes, there's a difference between stocks near the bankruptcy and troublemaker stocks.

WEQ.UN is not a troublemaker stock, it's actually a good performer.

Anonymous said...

TIM is not a victim of bad economic situation.It is hype from the solar cell era and Sprott Asset Management.Pump & Dump scheme.

Anonymous said...

Warning to readers,
Please don't take advise from this blog. This blog is more how not to invest. What she says doesn't make any sense.

Sunny says RSI is a trouble stock because she paid 5.57 but if she would have paid 3.27 she would be happy to hold it. If a company is trouble, you get rid of it no matter what price you paid for it. And on the other side the price you paid for the stock doesn't determine if a stock is still good to hold.

The fact is she doesn't know anything about the company because she doesn't understand financial of a company, like I said, she picks out of a hat. She doesn't understand how to calculate her own return how do you expect her to know anything about the profitability and health of a company.

For your information, KBL is a much smaller company than RSI. RSI has a market cap over 500 million while KBL has a market cap of just over 150 million.

And if you define trouble stocks by the price you paid for the stock. RSI wouldn't qualify as a trouble stock as you didn't lose money on that stock. But you did lose lots of money on JE, ECA, NFI, SII, DGI, K, PSLV which are down between 20 and 40% this year.

I suggest you put a disclaimer before every post you write advising your readers not to take any advise from you.

The accountant

Anonymous said...

HI Sunny/"The Accountant",

Sunny I hope you don't take this personally but I do read your blog for the sheer entertainment of it. From your posts so far it seems like you are more of trader than an investor. What do I mean by trader-people who trade stocks based on their technicals rather than on their fundamentals. Case in point you refer to stocks by their tickers not by their full names. This suggests to me, a traders mentality. Also, from reading your blog over these years I have noticed you are quick to pull the trigger on a buy stock without ever telling us(The readers of this blog) what your thought process is for choosing your stocks.

The Account is correct when he correctly points out that small cap stocks(stocks that have a market cap of less than 300M) are more prone to volatility and the 'mood' swings of the market. That is why I have been encouraging Sunny for some time to 'spill the beans' on her reasoning for choosing a security for her portfolio. For example, I have a number of small caps in my own portfolio and yes, they do fluctuate from time to time(some of my small caps are down nearly 98%) but my reasoning for holding them has not changed-so why would I sell them? This all goes back to my original reasoning for owning them.

Finally I am thankful that Sunny runs this blog-so she may get constructive advice from her readers and receive some pointers from all on how not to invest from her loyal readers.

Anonymous said...

The accountant,
If the world stop using the U. S. dollar as reserve currency, would stocks go up or down ?
If you can get 10%interest rates,would you sell everything and buy 5 year GIC?

The Confused

Anonymous said...

A large cap companies started as a small company. Look at Appl or msft 25 years ago.
I been in one of the KBL plants. Its a great big huge laundromat. Wages will be under control from mostly immigrants working there. Not much growth but the work is steady. Bought a bit of that stock at 12 bucks, july 2009. Still holding it today.

Anonymous said...

Re: The confused,

Please don't confuse me for being a professional. Giving general information and getting into specifics is not the same. I came across this blog doing research on dividend investing. I read this blog for entertainment like someone else reads gossip magazines. When something is posted that doesn't make much sense, I like to respond. In the future, I might want to stay on the sidelines more. It just amazes me how some investors don't have much plan and just throw money at the market and hope for the best.

Now for your questions, if the world stopped using the US dollar. If this happens, it would probably be because of an incapacity of the US to pay interest on it's debt. I don't see this happening as the US is a rich country and could afford to raise taxes to make up for any shortfall. I also can't see why other countries would agree to stop using the US $ as currency as I believe the effect would be devastating. The value of the US $ would plunge and most countries who hold the US$ would all lose. Oil price would increase dramatically just about everything else would follow, creating high inflation.

If that scenario would ever happen though, you would more than likely get your wish come true and interest rates would skyrocket and the stock market would more than likely crash in the short term.

So do I put all my money in GIC's. If I see it coming before I lose half my money in the stock market hell yeah. Unfortunately, I don't think we see it coming. I would probably increase my holding in fixed income from my normal 40% to maybe 50% or even 60%, just like right now I have my fixed part decreased from the normal 40% to 30% because I think the rates are too low and eventually will have to go up.
My only question is why would you ask such a question?

Anonymous said...

In the past, Sunny would buy stock because of being promoted by Sprott, Tardiff and the likes. Then she went on to invest in stocks because someone on this blog suggested stocks to her. That's about as far as her reasoning went for picking stocks. Don't try to get more out of it, there isn't.

Here's what she said when she bought RSI:
Rogers Sugars Inc. (RSI) is another latest investment. Rogers Sugars Inc. (RSI) is a Montreal base company that currently trade under 6$ per stock, which made RSI very affordable to all. It's a good deal and you could see the value of Rogers Sugars Inc. (RSI) rise in the next couple of weeks. Why? The reasons are good, according to search I conduct online. This is all pure speculation as always, but chances are that Rogers Sugars Inc. (RSI) will increase in value.

Anonymous said...

I haven't checked up on Sunny for months. I'm glad to read the comments here. She certainly misses nuances, financial and language-wise. Read the blog for entertainment. I don't read it because it makes me want to smash my head against a brick wall.
Please stop encouraging her.

Anonymous said...

I agree with Mark, that you should tell people why you invest in a certain company. Such as company XYZ has grown earnings rate of 5% for the last five years, 5 year of dividend growth rate of 8%...etc. Do you believe this is a good company? With an entry yield of 3.01% and with annual dividend increases, that you believe this is a good long term hold?

As most people know, if the dividend increases and you do not make anymore purchases that your yield has gone up meaning YOUR MONEY is working harder for you.

pattirose said...

Anonymous said...
"I agree with Mark, that you should tell people why you invest in a certain company. Such as company XYZ has grown earnings rate of 5% for the last five years, 5 year of dividend growth rate of 8%...etc. Do you believe this is a good company? With an entry yield of 3.01% and with annual dividend increases, that you believe this is a good long term hold?"

First of all, why don't all you people who don't have a name or can't make one up at least type in #1 or #22 after anonymous so other readers are not confused.

Why should Sunny have to write about what you want to know, anonymous?

Sunny is writing about why she has decided to do something. Whether it's because another commenter mentioned it, or another blogger wrote about it or Tardif likes it, or the CEO is female or whatever reason she gives. She always gives a reason for what she's doing and just because it doesn't fit into the criteria that you feel is how to pick a stock doesn't mean it's wrong or give you the right to tell Sunny what to write about on her blog. It's her money and her blog and her followers and some people like it just the way it is.

Thirdly, you gotta give Sunny credit for posting every comment, positive or negative, not many bloggers would have the b*lls to do that.

Bravo Sunny!!

unbalanced said...

What ever Susan Brunner does, Sunny does. Plain and simple. Alot of her picks have been that way. Ask her?

Ruth said...

if i could recieve 10% interest on a GIC such as my aunt did many years ago...bought a new car every year. i would for sure go for that interest rate and in fact did tie up money for a little over 5% for 5 years , i never regretted that. A bird in the hand is worth two in the bush.

Anonymous said...

The accountant,

How can U.S be a rich country with over 14 trillion in debt and even more in unfunded health care and pension liabilities? Debt is equal to annual GDP.

Do you really think they can raise enough taxes to pay the debt? Every war they start cost another trillion.

Don't you think in the end they will just print more paper and pay all the debt in worthless fiat currency and then say we never defaulted. Sure it may not have any value like Zimbabwe money but we paid.

I read that russia ,japan,china and some other country are trading among themself with their own currency.

The confused

Anonymous said...

Flogging Dead Horses here, but...
RSI is NOT considered in a growth industry.Sugar works on Quota. Thats basically inherited & can also be bought & sold. Cane & Beet sugars (beet for Canada) r grown & r intermixed when refined. In other words even tho there's few players, its a very highly regulated industry. Its also terribly polically driven: check out the US Sugar Lobby. Look up the comments on Stockchase. The divi ninja's blog touted it in Apr 2011/so did golden girl in Nov 2011 & so did a stack of others. It's still kicking out a good yield at todays prices.
KBL: The big business here is hospital linens & cruise ships. It's a regional business, only west coast oriented. Most hospitals have consolidated their existing laundry facilities into non-profits. The hospital market is a huge deal cause their laundry requires very special monitoring, sorting, handling & washing. Cruise ships? Well who knows how much is done onboard. IMHO not much room for expansion.

Anonymous said...

US debt as skyrocket in the last few years because of wars, recessions, increase in interest payment, increase in spending and tax cut. As we're seeing in Greece, when you have debt problems, you don't cut tax, you raise them, but the US has been cutting them.

The US have room to raise tax, right now they are ending a war, their economy is starting to pick up and interest rates is at an all time low. All these factors plus cuts in expenses favors the US.

Why does everyone still flock to US treasuries for safety? They believe the US will be able to repay their debt when their economy improves. You don't see investors flocking to Europe for safety.

If you have another outlook on the future, do yourself a favor and stay out of the stock market. You will only cause yourself stress.

Just my opinion

The accountant

Anonymous said...

Flogging Dead Horses,
Who said RSI and KBL is in a growth industry? It is for a steady dividend income. This blog is about dividends

Anonymous said...

I know for a fact Sunny does NOT post every comment.
Because I've posted a few she hasn't.
I think if she posts, she can look after herself and her content. Stop defending her. You sound like an over defensive mother hen.

Anonymous said...

I see people going to physical gold and silver. China told their citizens to sell U.S. dollars and buy gold.
The confused

pattirose said...

@ anonymous



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