Thursday, June 29, 2006

Food for thought

Having read analysts reports in a professional capacity, I've certainly had cause to doubt them occasionally, as I've witnessed turkey after turkey get glowing "buy" or "hold" recommendations from allegedly independent analysts.

Having said that, I love -- LOVE -- a new feature by the Globe's personal finance columnist Rob Carrick. Using the Bloomberg database, Carrick has compiled two dream portfolios: one full of stocks that analysts love (meaning, a consensus "buy" rating) and the other comprised of stocks they by and large hate (with "sell" ratings as a whole)

What could be more fun than grading analysts' picks by tracking their performance?

The results? Although it's still early days, it's interesting to note that the "hate" portfolio has gotten out of the gate quickly, its net value up more than 2% since March 1. Ordinarily 2% would be nothing to write home about, but given the market's slide as a whole (to speak nothing of the "love" portfolio's dismal 10% slide in the same period) and admittedly, much of the discrepancy can be attributed to DOV Pharmaceutical losing 88% of its value on the "buy" side. But things like this are important to remember the next time I catch myself getting too high -- or low -- on any given stock's prospects.

At the end of the day, none of us really know what we're doing!

Monday, June 26, 2006

Caveat emptor

"If you're buying a resale condo," he says, "you need to know the history. Ask for the last two years' worth of minutes from the condo meetings." Is there any hint of a special assessment to pay for building upgrades? People often sell in advance of a fee increase, knowing it's on the way. "If there are any problems in the pipeline, they will be there in excruciating detail," Gray says about the condo minutes.

The above tip is an excerpt from a very interesting Ellen Roseman personal finance column in the Toronto Star today.

Not that I'm anywhere near being a condo buyer. But I would never in a million years think of reading the condo board meeting's minutes in making my decision. Just one more buyer beware tip for anyone thinking of taking the plunge.

Tuesday, June 20, 2006

Thoughts on RIM stock option news

Not that I was even contemplating buying them (a P/E ratio near 35 doesn't sound like value to me) but I did take notice today of news that RIM's co-CEOs recently cashed in a whack of stock options worth some $76-million.

Perhaps I shouldn't read too much into it. Executives, they say, buy shares in their company only because they think the price is going up, but they may sell them for a multitude of other reasons. So maybe I shouldn't take this as a sign that the RIM boys don't see much upside to their firm's growth prospects.

But still. It seemed noteworthy.

Saturday, June 10, 2006

Up and down

Bit of an up and down week for me in the ol' personal finance department. (Incidentally, I apologize for the lack of posting. Rather than some clicheed "I promise to post more, readers" vow, all I can say is my laptop died so I haven't had non-work related internet access in over a week. It should be fixed tomorrow. Sorry.)

UP - A pleasant surprise was that my tax return came in even higher than I was expecting. Despite my best efforts at accounting, I made a few snafus on my return, and as it turns out they worked in my favour. The extra grand that the federal government kindly gave me should come in handy considering the other side of my personal finance coin. Namely...

DOWN - What else? The stock market. Although my miniature diversification strategy has protected me a little in that not all of my investments have tanked by as much as my iShares international equity ETF has tanked for the past few weeks, I'm still hurting. I plan on sitting down and updating my net worth in the near future, to see how far away from my goal of $20,000 by the end of September I am. But off the top of my head? I'd guess I'm down at least $500 to $1000 in the last three weeks.