Mad Cows!!

Week #5

Which cut of meat is your favorite? Because the moo cows have been taken to the butchers!

Our strategy to buy potash companies with the understanding that there is a higher demand for potash fertilizer due to poor soil conditions in the US may have been implemented to soon. Consider the fact that we are nearing the end of the harvest season across the northern hemisphere and that this time of year potash itself is not in demand. Potash companies may not have been the best choice at this point in time, however five months from now when farmers are planting and fertilizing crops again the demand for potash will be higher, and the stock will likely be worth more. So we have decided to quit POT and cut our losses.

Fool me once shame on you, fool me twice shame on me. Or shame on me both times?

Did we mention that it was not until Thursday and Friday rolled around that this theory about why potash companies are doing poorly occurred to us. Unfortunately we made the unwise decision to buy Potash One Incorporated which has not been doing very well. Thinking about it now we should have shorted KCL.TO and done more research into the agriculture industry and potash companies. It is interesting that CF Holdings, is doing well and our POT.TO and KCL.TO are losing more and more every day.

GDX share price fell $1.30 while we held it and with the end of the game fast approaching we needed out of losers and into some more winners.

This week we have come down with a case of...

An Apple a day keeps the doctor away! Apple is good, very good. On Wednesday when their stock price went down, we decided to wrangle up another heard of Apple shares. YEEHAW!!!

Moo.

How Now Moo Cow?

Week #4

Dancing between first and second place in the US market our focus needs to shift to the Canadian market heading into week four.  Our gold ETF’s and silver ETF have been good in terms of long term value and growth. Based on their performance, and reports that the price of gold will continue to increase we have selected another Gold ETF. Horizon Betapro Comex Gold ETF, HUG.TO.

GO GO GOLD!!!  Along with HUG.TO we bought 1000 shares of iShares S&P/TSX Global Gold Index ETF, GDX.TO. With two gold ETF’s in our Canadian portfolio we predict performance to reflect the success we have had with commodities ETF’s in our US account.

Everything Apple produces is basically gold. From the smallest iPod to their most powerful computers they constantly innovate and dominate the market. With the introduction of the iPad personal tablet we predict that going into the Christmas season Apple is a winner.

Week four marks the half way point in the stock game. We have seen profits thus far and believe that at this point we can handle taking loses to get out of “bearish” markets. 

mOOPS!!

Accidently shorted BWC.TO at $8.25, was a mistake during some buying on Tuesday… lost the commission fee of shorting and covering but nothing else.

Sold Research In Motion in the US and CAN markets at high prices making decent return on investment considering our strategy there was simply in and out, buy low sell high.

Speaking of highhhhhh… we bought some POT this week ;).

Corn shortages caused by dry unfavorable soil conditions in the United States made corn prices rise on the commodity exchange. The supply of corn was falling causing demand for corn to rise.  “But mister, what does corn have to do with pot?” Well Farmers rely on potash fertilizer for when fertilizing corn crops across Canada and the US. So we can say that potash fertilizer will be in higher demand to combat the dry conditions of soil.We looked at several potash companies in Canada and the US markets. Bought Potash Corporation of Saskatchewan (POT.TO) in our Canadian account. 

POT.TO one month chart.

In our USD account we bought CF Industries Holdings, which is a Potash fertilizer producer operating within the US. We will be holding Holdings.

Moo.




Definitions:

Pac-Man Defense

What Does Pac-Man Defense Mean?
A defensive tactic used by a targeted firm in a hostile takeover situation. In a Pac-Man defense, the target firm turns around and tries to acquire the other company that has made the hostile takeover attempt. This term has been accredited to Bruce Wasserstein, chairman of Wasserstein & Co.

Investopedia explains Pac-Man Defense

This term comes from the Pac-Man video game. In the game, once Pac-Man eats a power pellet he is able to turn around and eat the ghosts that are chasing after him in the maze. 

When one company makes an unsolicited and aggressive bid on another publicly traded company, the takeover attempt may not be welcomed by the targeted firm. In an attempt to scare off the would-be acquirers, the takeover target may use any method in an attempt to acquire the other company, including dipping into its war chest for cash to purchase the other company's stock.

Tunneling

What Does Tunneling Mean?

An illegal business practice in which a majority shareholder or high-level company insider directs company assets or future business to themselves for personal gain. Actions such as excessive executive compensation, dilutive share measures, asset sales and personal loan guarantees can all be considered tunneling. The common thread is the loss to the minority shareholders, whose ownership is lessened or otherwise devalued through inappropriate actions that harm the overall value of the business.

Investopedia explains Tunneling

This risk is especially prevalent for investors in emerging markets, where government and regulatory controls may not be sufficient to stop the practice from occurring, often under legal guises. The practice is not reserved to moderately advanced economies; many instances can be found in advanced economies, especially those under systems of "civil law". The U.S. legal system is rooted in "common law", which provides broad enforceable laws with simple maxims like "fairness" and "for the common good". Under civil law, the letter of the law is the most respected measure, so would-be tunnelers can pass an act of tunneling off under certain technicalities, which often hold up in court.

Yuppie

What Does Yuppie Mean?

A slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, affluence and business success.

Investopedia explains Yuppie

Coined in the 1980s, the term yuppie was used as a derogatory title for young business people who were considered arrogant, undeservedly wealthy and obnoxious. Yuppies were often associated with wearing high fashion clothing, driving BMWs and gloating about their successes. The term has become less of a stereotype and now promotes the image of an affluent professional.

Economic Article:
In regards to our Potash interests.
http://www.financialpost.com/Global+woes+boost+Potash/3411948/story.html

bull says "MOO!!!"

Week #3

Week three=testing week in most of our subjects=less time spent reading the financial post and more time spent reading our text books. Key word, “less” meaning this game aint over yet folks!

After two weeks we are beginning to see differences in company’s performance and have been able to categorize them accordingly. Imperial oil is a good example of what we call a “Steady Eddie”. IMOoooooo gained $420.00 on our original investment after two weeks IMO stocks present value to shareholders and less risk than other companies stocks, which translates to less potential for massive short term gains.

This week we’re going to sell some of our profitable investments which will increase our cash reserve. One of the first companies we bought was PAL at $3.89/share, we have seen 11.57% gains on our original investment. The decision to sell PAL and bank our earnings is part of our strategy to sell when prices are high before they drop down again.

Sold BCE and made $545.02 which over the past two weeks we have categorized as a steady eddy. Another step we have taken towards shifting our focus slowly from high value to high risk high return.

Bought 2200 shares of BWC.TO at $8.52/share for $18,763.99 CAN, based on technical analysis we’re betting on Bridgewater Systems Corp going into week four.

Wednesday we watched RIM.TO and RIMM take a hit and drop by about $3.00 in the CAN and US markets. This has happened twice in the last two week and both times they have bounced back. BUY BUY BUY!!!! We currently own 1000 shares of RIM.TO and 1000 shares of RIMM. This will be our first massive buy at what we consider a low trading price. Based on the past two weeks performance we predict RIM.TO and RIMM prices to rise up to around $50.00/share during week four, in which case we will sell.

Happy Thanksgiving to everyone!


Definition:
Bull Markets occur when Investors are optimistic about the state of that stock market and economy. Bulls are Investors who observe upward trend and invest according to their confidence that the markets are Bullish.

Week #2 Learning and Earning

Mooooooo its week twooooooo!!!!

During the weekend we decided to replace SPDR gold trust for iShares Gold Trust at $12.71/share USD and $13.00/share CAD. This should provide us with high rate of return as the price of gold continues to rise.

Apple’s Ipad has dominated the personal tablet computer market since its release. With Research In Motion introducing its new tablet we purchased 700 shares of RIM.TO for $49.81/share. The Play Book will be the first tablet alternative for non-Mac users on the market since the Ipad was released.

After two weeks of the game the market has had two rough days, September 23 and 28. We watched our stocks drop across the board. Nervous about what could happen to the markets we changed our strategy. Hold reserve funds in our accounts that we can invest when the market drops… BUY LOW SELL HIGH.

Sour cream! More like sour choice…

 PDL.TO was not doing as well as PAL in our USD account so we decided to get rid of it and CP rail as a way of freeing up funds that we plan on investing when the market falls.

 Cow cat needs to cheer up cause we're just getting started!

Week #1 Hit'em Up!!!

With basic knowledge of fundamental and technical analysis the MooCows intend to milk the Toronto Stock Exchange (TSE) and the New York Stock Exchange (NYSE) with a diversified portfolio. We decided the best way to learn the markets and develop a strategy is to buy shares of companies operating in different industries and then compare them based on short term performance. Keeping in mind economic uncertainty and current sensitivity of the stock market, we feel that 8 buys in the first 5 days is an aggressive approach. We believe that diversification now will help us develop a stronger strategy sooner than later. 

In no particular order is where we stand as of one week:

Evertz Technologies LTD (ET.TO)
A Small Canadian company operating with only 400 employees. ET.TO offers a solution for broadcasting service providers switching to multi-channel digital and high definition television. For instance, Shaw Communications Inc. and Telus offer digital television, high definition programming and movie rentals. This transition within the broadcasting industry creates a higher demand for the services Evertz provides. We purchased 500 shares at $16.65 for $8,344.99 and we are holding.


North American Palladium (PDL.TO, PAL) 

PDL.TO (TSE) or PAL (AMEX) is a Canadian mining company with operations in northern Ontario and Quebec. They produce precious metals Palladium and Gold. We purchased for $3.89/share USD and have seen decent returns, unfortunately however at $4.11/share CAD we have not had the same success. We are holding PDL.TO and PAL for the time being.


Bell Communications (BCE)
For some time Bell Communications has owned 15% of CTV. Earlier this month BCE announced that they will acquire the remaining 85% of CTV, in a deal that will be finalized sometime next summer. BCE is expanding their horizons and will be establishing themselves as one of the largest communications providers and television networks in Canada. We see this as a sign of strong management and an excellent investment. At $32.51 we bought 750 shares for $24,402.44, and it is our Bull!!! MOOOO!!!!!


Canadian Pacific Railway (CP)
CP Rail represents an essential part of the Canadian economy, shipping various imports, exports, and domestic goods across the country. Their chart shows steady growth in the past year, leading us to believe this is a safe investment. However, we do suspect that in the long run it may not provide the income we are looking for, yet we believe it makes a safe short term investment. We purchased 50 shares of CP at $61.53 totaling $3,096.49. It is our smallest investment and so we are sticking with it going into week two. CHOO CHOOO!!!!!


Imperial Oil (IMO)
For our oil and gas stock we picked Imperial Oil. They are 69% owned by Exxon Mobil Corporation (USA). They are involved with exploration, production and sale of crude oil, and natural gas in Canada. ROE, ROA, and profit margin are improving from 2009 to 2010. IMO was the last trade we made in this week and we acquired 300 shares at $37.09/share equaling $11,146.99.

SPDR Gold Trust (GLD)

SPDR Gold Trust investment goal is to reflect the performance of the price of gold. The price of Gold is sitting around $1,300/oz USD. Based on online news articles by investors and analysts we think gold is still on the mOOOOve. We purchased 150 shares at $126.48/share for $18,991.99. In hindsight the potential income from this investment may be sluggish for a seven week game. We decided that as of Monday we are selling SPDR Gold Trust.

iShares Silver Trust (SLV)

Similar to GLD, iShares Silver Trust owns silver and their stock reflects the price of silver at any given time less the Trusts expenses and liabilities. Silver hit an all time high this year. Based on our research we think the price of silver will continue to rise during the next few months.  Purchasing 500 shares at $20.75 for $10,393.44 we are holding SLV.

Thursday=EEEK!!!!

So if you were paying attention to the markets on Thursday September 23 you probably noticed that pretty much everything took a turn for the worst. Read this article… http://www.nationalpost.com/jobless+claims+rise/3567592/story.html 

Maybe this is a small part of what caused the markets to dip on Thursday, maybe not…  We don’t know. Bottom line, as of friday we were back in business.