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Saturday, February 11, 2012

Is silver still the investment of the decade?

My non-registered portfolio closed yesterday session at very good 119 909$. My security book value is of 118 412.30$, which mean that I had been good enough to recover from ALL internal capital loss. FINALLY! The glorious time had come. Ok, nice, but the Canadian stock market like many other worldwide seems to be extra-sensible to what’s going on in Greece. Not that I don’t care, but we all deal with our own reality, I have my own problems, I have put a great deal of efforts in my portfolio and I won’t accept trouble from anyone so Greece, just get out of the way please, deal with your own reality.

This is how I like to deal with troublemakers.

This being said, I am now out of internal capital loss, but if the stock market get unstable, I could face internal capital loss, one more time... A NIGHTMARE. But I am pretty good at holding stock so there’s no nightmare I cannot really fight see. That’s the magic of the Dividend Girl.

Dealing with internal capital loss is no big deal, it just it can take some time to recover. While investing in stock, it’s always good to have a portion of your portfolio in cold cash. Why? Because if part of your portfolio is experiencing capital loss, you’ll be able to rely on your cash rather than on your stock in case of an emergency situation suddenly emerge. I am really good at giving advice but I don’t respect those advices myself. For the past 6 years, I had been invested every single pennies I could find and I use leverage as you know, like crazy.

I may not be good at respecting my very own advice, but at least, you know with who you are dealing with.

This is even I will say spectacular that I recover from my capital loss because this portfolio of mine, the non-registered part, include my MAJOR loss of 4 065$ in Timminco (TIM). That was back somewhere in 2008 or 2009. Currently, the same investment worth 1$... From 4 065$ to one single dollar. I started investing in stock in 2008 and I invested in Timminco (TIM) shortly after that. I had some knowledge, but it wasn’t enough I guess at that time to save me from a stock salvation.

I invested in Timminco (TIM) because it was promoted by Eric Sprott of Sprott Asset Management. Eric Sprott is the man who made me loss 4 064$ on the stock market. Thank you very much Eric Sprott for all the trouble and all the shit, but even you couldn’t destroy my portfolio forever. Sometime, I wished I would get stuck in an elevator with ONLY Eric Sprott and solve the problem I have with him.

Ok, it didn’t turn right with Timminco (TIM), but I recovered very quickly and I had hit the 6 figures portfolio using leverage in 2010. And later on, Sprott started the Sprott Physical Silver Trust UTS (PHS.U) and the Sprott Physical Silver Trust ET (PSLV). From that time, it was the silver mania.

Eric Sprott actively promoted silver as investment and again this time, I got totally fascinated.

In 2011, I traded silver on a regular basis, buying-selling, buying-selling. Always small amounts, but it was fun.

Later on, I made my first investment in US dollars in the Sprott Physical Silver Trust ET (PSLV) when the units were something like 20$+. Almost immediately after... Sprott silver drop under the 15$. I am very good at provoking events, catastrophes, cataclysms. Shortly after I made my first stock purchase in Sprott Inc. (SII) in 2008, the stock market crash. Remember? lol...

Currently, the Sprott Physical Silver Trust ET (PSLV) is still far behind the 20$ mark per unit. And now, I just wonder if silver can be a profitable investment.

Is silver really the investment of the decade like declared by Eric Sprott? I guess only time will tell if Eric Sprott was wrong or not.


Anonymous said...

this is a very poor return. just to show by picking your own stocks, you can't do better than the stock market. you should invest in XIU ETF instead. you should be up in the past 3 years close to 12% compound annually...

Anonymous said...

What the heck is an "INTERNAL CAPITAL LOSS"? I'm guessing its an unrealized paper loss. I would recommend anyone trying to stock pick take the Canadian Securities Course and at least 3rd year CGA accounting (if you can't read, understand, & analyze financial statements let alone perform comparison analysis & some technical analysis otherwise you,re either flying blind or on someone,s coattails, its like throwing darts at a dartboard). Anonymous above me has a valid point. This whole portfolio could have been couch potatoed ...if you don,t know what that mean google it or "lazy investor"...with better returns & less work. Cheers!! Anony-me-a-tonimous

Anonymous said...

I mention this ETF XIU several months ago and don't margin. But don't listen to me, I'm just stupid.

Crystal said...

I would like to be in an elevator alone with Jean-Francois Tardiff!

Anonymous said...

The XIU lost 1.12% in the past 3 years and -9.73 in the past year. Meanwhile companies like PPL for example, had a return of over 140%. If you have trouble picking stocks, buy the ETFs and pay someone else to help you. Leave the more exciting fun companies to smart people like Sunny and her folllowers.

Anonymous said...

Running some very rough numbers here: Book Value of Investments (Purchase Price): $119,000 Current Market Value of Portfolio: $120,000Infused Capital (Reinvested Divi's as per 2011-2012 statement-not taking into account any other new money or other years)$1,497. Increase in Portfolio value minus new money (divi's): $585.00 ROI Less than half a per cent p.a. Cheers! Anony-hippo-pota-mices

Sunny said...

See, last year, the market loss like 10, 11 or 12%. How in the world do you expect a big profit? You have to be realistic.

I always like to received investment suggestions, but if I invest or not in the suggestion is all about me. I never look into that one really. No offense, but I am just missing time and currently, I am dealing with a lot of problems, one being my RRSP contribution for 2011.

Anonymous said...

To the anonymous that think XIU lost 1.12% in the last 3 years, you shouldn't be giving advice to anyone and probably not picking stocks if you can't calculate performance as XIU averaged a yearly return of 13.47% in the last 3 years.

Anonymous is right, Sunny hasn't made any money since she started investing and is just now recouping her losses.

She could've been invested in a low fee mutual fund like the Mawer Canadian Equity and had a yearly average return of 17.42% for the last 3 years. That means if she would've invested 100,000 in this fund 3 years ago, she would have $161,892. The 5 year average return on that fund is 3.71%. So if she would've invested $100,000 at the high of the market before the crash 5 years ago, she would still have a gain of $20,000.

So if you haven't made any money yet, the reason is simple. You have been picking more bad stocks than good ones (small cap, gold and silver). Yes, the Canadian market loss money last year, but had very good years in 2009 and 2010 and you should've made money since you started investing. Also, the US market and bonds did not lose money last year so a little more diversification would've helped.

You prefer to follow guys like Sprott, Tardiff and gamble on silver & gold that hasn't paid off for you. The fact is that they don't know any more than we do. They can make predictions and like us, have a 50% chance of being right.

While you're wondering if silver will be the investment of the decade (basically gambling), I prefer to invest in stocks people need every day. They might not double in value like you taught silver would, but they also won't lose half their value. I rather steady growth with less volatility.

You need an investment plan and follow it, not pick what you or any other reader think is the next hot stock.

The accountant

Anonymous said...

Hi Sunny-If you are like me, making less than 40K/year making an RSP contribution doesn't make sense. The tax refund won't make it worth your while. I never really did understand why everyone is all hyped up about RSPs. Let's assume the following:
1) You want your standard of living to be higher 30 yrs from now
2) In order to make that happen you have to be a careful judge of risk(ie investing in stocks/bonds at the right yield/ and or price)
3) If you agree with statements #1 and #2-and you do end up with a higher standard of living in 'retirement' that means you have invested correctly over your investment lifetime, why would you want your portfolio taxed as employment income??(ie giving 22-42% of your portfolio's value to the gov't) How can you become financially free when your number 1 expense over your working career is taxes??? To me a TSFA is a much superior vehicle for sheltering ALL TAXES from the greedy hands of gov't.


Anonymous said...

PPL had a great return since Mar. 2009 but you would never risk buying $100,000 worth of it. However you could invest the same amount in XIU and gained 50% from Mar.2009 to 2012. But don't listen to me, I'm just stupid.

Anonymous said...

@ anonymous: isn't that the point? Even capturing PPL's performance we're looking at a meagre total portfolio return with large risk. Yes the TSX 60 did poorly in the last year. But I don't think anyone would recommend that as a sole holding. Banks have taken a beating, some worse than others. XTR (50/50 balanced) managed to hold, despite a very bumpy ride, its value with a greater than 5% divi yield (caveat- some of this big yield is Return of Capital). So has CDZ (divi aristocrats minus banks) with a 3% divi yield. Bonds have had a good run with XBB and XRB up 6% in the last 6 mos. and 7% over 3 years. GIC's are paying about 1.25% with no downside risk. The mantra: your entire investment portfolio should be treated as a single entity, asset allocation, & don't guess the market cause the train has left the station by the time you pack your bags. Cheers!! Anony-moustache.

Sunny said...

Fact is, I am making more than 40k a year.

For that reason, I have to invest in RRSP. Its almost at no choice in my case. Invest in RRSP or pay more in tax, I decided to go with a temporary tax break but that's for now, I am just not 100% sure at this point.

Anonymous said...

did you know that some of your debt is tax deductible? did you ever include those amounts on your tax return? besides your school loan, rrsp loan tdwaterhouse margin, what are the other debts used for? are they solely used for investment purposes? you should consult an accountant too to help you out.

Anonymous said...

rrsp loan is not tax deductable


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