Remember how hard it was to part with that spiffy plaid sports jacket with brass buttons that went so well with the flared lime-green trousers?
It may have gone out of style but it kind of grew on you.
“Honey?” you said one day. “Where’s my favourite jacket, you know the plaid one that goes with the lime-green trousers?”
“I’m so-o-o-o sorry,” she replied. “It seems the drycleaners lost it.”
Well, the same can be said of the $100,000 Traders’ Edge Portfolio, which has also been taken to the cleaners (and we’ve lost it — ed). Launched in the left margin of the Financial Edge just over a year ago into the clutches of a bear market, the Traders’ Edge Portfolio has gone the way of the “lost” jacket. Like the plaid jacket, it was starting to draw some strange looks and creating mass confusion with the Edge editing team.
“I think there’s a typo in your portfolio,” the editor would say. “It says here that Fantom Technologies is down 98 per cent. Should I change that to 9.8 per cent? Whaddaya mean, no? You’ve got to be kidding!!”
After a year and almost 100 trades, the portfolio, dragged down by cash-burning tech stocks, went up in flames in a bear market, losing $40,000 or 40 per cent. That was even worse than the performance of the TSE 300, which lost 35 per cent in the same period, but better than the tech bellwether, the Nasdaq Composite, which has lost 53 per cent in the past year.
A year ago, we cautioned readers about the perils of falling in love with a stock and then we flogged a beloved dead horse named Compusoft Canada in the portfolio from day one to the bitter end as if it was the cherished old plaid jacket.
The Edmonton software company even changed its name to Traceability Solutions, but still wound up down 90 per cent.
At times, we watered the weeds and weeded the roses before they had a chance to bloom.
Liquidation World, one of the roses in the original portfolio, has doubled. Alas, we broke one of the fundamental rules of investing — patience — by selling Liquidation World after one week at break-even, passing it off as “dead money.”
Our intention is to unearth a few more “roses” with the makeover of the Financial Edge.
Beginning this week,One-year Ed we will provide readers with an expanded version of the Pro’s Three Stars, the popular stock-picking feature in the column.
The Three Stars has grown up to become a separate column featuring the top picks of some of Canada’s most successful investment pros and jam-packed with financial data and charts.
Leading off this week is Calgary investment guru Fred Pynn, senior vice-president and portfolio manager of Bissett Investment Management.
Bissett has a stellar record of faring well with its mutual funds even in down markets.
Pynn’s previous picks in the Edge six months ago —Suncor Energy, Metro Inc. and Magna International — have knocked the socks off the bear, gaining 24 per cent. As far as is known, Pynn does not own a plaid jacket.
* STREET TALK: “Gold is positioned to move to $320/oz U.S. It has not looked this constructive since 1980 and we would be remiss in not pointing out this fact.”
— Roman Franko, Dundee Securities, in a recent weekly report on technical analysis.
* LAUGHING OUT LOUD: Standup comic Alan Greenspan, the U.S. Federal Reserve chairman, desperately tries to sugar-coat the state of the economy in his report to Congress and refuses to utter the ‘R’ word — recession.
In the same issue of a newspaper carrying Greenspan’s gobbledygook, the following headlines tell the real story of the economy: McDonald’s Cuts, Celestica Axes, Alcan to Axe, Apple Profit Nosedives, Thomson Warns, Quebecor Cuts, Ford Loses $692 Million U.S., Oil Prices Fall . . .
Which begs the question: Shouldn’t Uncle Al be appearing at Yuk-Yuk’s?
* CALL RIPLEY’S! Believe it or not, Nortel Networks’ outgoing CEO John Roth says he can see signs the telecommunications industry has bottomed, in the conference call in which the company releases a quarterly report showing another $3.5 billion in losses.
Based on Roth’s pathetic record of guidance in the past year, it should be a good bet that the telco industry hasn’t bottomed.
* CHEERS: To Edmonton-based biotech company Biomira (BRA-TSE), which has achieved another milestone with approval for Phase II clinical testing for a vaccine for patients with prostate cancer. But a grim market could only boost the stock two per cent on the news, to $7.57, a far cry from the year high of $15.95.
* JEERS: To Calgary-based PanCanadian Energy (PCE-TSE) which has rankled shareholders by acting like a private company and not providing details of the stunning resignation of CEO David Tuer.
* SAGE ADVICE: “There are two times in a man’s life when he should not speculate — when he can’t afford it and when he can.”
— Mark Twain, one-time stock market enthusiast.
HOT ALBERTA STOCK: Cytovax Biotechnologies
CXB-TSE $3.50
Up 76 cents (+27.7%) on 5,000 shares (for week ending Oct. 19) At first glance, you wonder what's going on, but a spike on weak volume indicates not much has changed at Cytovax. But the Edmonton-based company does have some intriguing prospects in its development of therapeutic products for prevention and treatment of infectious diseases.
COLD ALBERTA STOCK: Westminster Resources
WML-TSE $1.40
Down 40 cents (-22.2%) on 241,300 shares (for week ending Oct. 19) Investors who were initially fired up over Westminster's California interests flamed out on news that the Calgary-based gas exploration company had decided to minimize future investment in the San Joaquin Valley and focus on Canadian opportunities. The stock is nearing its year low after trading near $6 earlier this year.
