Tuesday, January 08, 2008

Trading note -- BVF to CDZ

Last week, in an attempt to stop the bleeding, I put my first ever stop-loss order on my stake in Biovail. A few days later, the trigger was hit, and my online brokerage sold the entire stake. I haven't calculalted what the total damage was, dividends and all, but i'd guess it was somewhere between a 40-50% loss.

For what it's worth, everything I've ever said about the company remains true. I think it's an excellent speculative high-dividend payer that has the potential for huge gains to anyone willing to roll the dice. I'm just not, at the moment. The stock market is doing some strange things at the moment, and I'm reasonably confident in saying that if we're not in a bear market, we're at least in one that's moving sideway for the foreseeable future until this subprime mess shakes out. I'll stick to my savings plans, and whenever I accumulate enough money, I'll probably add it to some long-term holdings I already have (many Canadian banks are well below where they were this time last year, for example.)

That said, I've decided to park what's left of my biovail cash in my dividend focused ETF. I own Claymore's Dividend fund, (CDZ on the TSX) a basket of stocks that's tailored towards the members of Mergent's Dividend Achievers, who have track records of steadily paying, and increasing, their dividend payout. No sense having cash in the investment account not earning anything for me, and CDZ provides me with some downside protection (in the form of dividends) while keeping me invested in Canadian large caps. I can live with that until another opportunity presents itself down the line.

1 comment:

FourPillars said...

CDZ sounds like a good strategy.