New Direction

I have decided, after a long sabbatical, to take this blog in a new direction. The focus of my efforts will be towards relaying details on my personal portfolio and track its performance. I will list my ideas and methodology as it applies to the makeup of my portfolio and hence the broader investing landscape. I will continue to post my views on the economy, but try to relate it back to generating investable theses. However, you can rest assured that I will continue to express my views on free market capitalistic principles and its interlock (or lack there of) in modern western politics.

Investment Objective:
To provide capital growth through a total return approach on a short – medium term horizon. Investments are made across all industry groups and capitalizations. Country exposure will be mainly in North America, with overseas investments made primarily using ADRs and ETFs. Leverage is utilized through margin trading, with the constraint of standard Canadian margin borrowing rates applicable; the maximum amount of leverage undertaken will be to a maximum of 50% of equity invested. The use of short selling is allowable and will be used to the extent that conditions warrant.

Calculation and Reporting:
Returns will be presented net of trading fees and irrespective of any additional management fees. Reporting currency is Canadian dollars and all positions for calculation purposes will be converted to Canadian dollars at the current market rate. The margin interest rate for both Canadian and US debit balances is P+1.5%; this margin cost is calculated once a month and debited from the cash account around the 16th of the month.

Methodology:
My process is most easily identified as value in nature, although I consider value in the context of relative or intrinsic value not simply in terms of its classic definition. If the price of a stock does not fully reflect such relevant factors as future earnings potential or the current value of its tangible assets, it may be attractive based on trading at a discount to its intrinsic value. Relative value may be realized if a stock is a laggard to its peers with no relevant reason or recent events have had a misguidedly detrimental impact on it’s current price. I favour a top-down approach to selection, preferring to identify underlying industry or macroeconomic factors that would support prices in a certain sector or business structure.

Portfolio Breakdown:
KFN - 42%
YRI - 8%
PHM - 12%
BAC - 15%
DD - 13%
PRGN - 12%
APP - 12%
CAD Cash - 17%
USD Cash - (31%)

Portfolio Performance:
Return Since Last Update - NA
Return Since Inception - NA
S&P 500 - 918.90
S&P 500 Return (June 28) - NA