Investors Fleeing the Stock Markets

30-Jun-2010 | kate | Asia Canadian Investing Economics International Investing Market Outlook Stocks US Markets USA

Investors are fleeing the stock markets as global markets show signs of slowing down.

The world’s best hope for sustainable recovery starting to dwindle as Chinese consumers tighten their wallets, along government spending tightening increase shaky grounds faced by the US and Japan as their stimulus packages come to a halt.

Consumers are starting to worry. Their worrying about unemployment, deflation and of course the massive amount of debt in Europe and harsh cutbacks by governments.

Even Canada, considered one of the strongest economies in the world at the moment, has posted muted growth for the month of April.
As a result, investors are fleeing stocks, which were driven high in anticipation of a speedy recovery for government bonds and guaranteed investments, creating a down turn in the markets starting in Asia yesterday and quickly moving across the globe.

Many analysts say with the tax breaks and government incentive gone for consumers, spending by consumer is starting to tighten throughout the US, Japan , China and Europe.

In Japan, the world’s second largest economy, data showed production and spending declined, while their jobless rate moved up to 5.2%, which is rather high for their country.

As a result of removing stimulus packages, the global economy’s weakness are being re-revealed and highlighting the fact the credit system is still not working and that consumers (and countries) still have a great deal of bad investment/debts that have to worked off and aren’t as strong as their number were shown during the stimulus time period.

After closing over 300 points down on the TSX market, the stock market closed up 30.59 points, faring better than our neighbors to the south, whose stock markets all closed down. The DJI closed down 96 points while the NASDAQ was down 25.94 points.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Down Day on the Stock Market

29-Jun-2010 | kate | Asia Bonds Canadian Investing Economy International Investing Market Outlook US Markets

There is one thing about this business that is rather interesting, it can be 6am and we already know how our day is going to shape up.

Take for today for example. While we were sleeping, the Asian and European stock markets had headed south. The Asian market broke down after forecast for economic activity in China were revised lower. In Europe, protest by Greek workers to protest steep budget cuts helped drive the markets down into the red.

So here in Red Deer at only 6am, we already knew that our day was not going to shape up very well, and as usual, Doug Allan was right. Shortly after the market opened, we were hit with more bad news from the US.  US Consumer Confidence Index (CCI) has fallen sharply over worried about the job market and the shape of their economy, in all the CCI had fallen 10 point to 52.9.

Also signally a change a in the markets (at least for the short term) is falling interest rates in the bond market, as investors fled the market and corporate bonds for the safety of Treasury’s. The yield on 10 year bond dropped to as low as 2.97%. The 10 year bond yield is used as the benchmark for many consumer loans and mortgages.

The Shanghai composite fell 4.3% to touch their 14 month low. The Japanese market fell by 1.3, London FTSE 100 fell 3.1%, Germany 3.3% and France by 4%. The TSX is down 343 points or 2.96% to 11263. 85 while the NASDAQ is down 3.82% or 84.87points to 2135.83. The Dow Jones was down 268.22 points or 2.65% on the day.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Investing in Red Deer – GasFrac

28-Jun-2010 | Reggie | Canadian Investing Commodities Oil & Gas

Being able to invest in companies in your own backyard holds a lot of appeal for many investors.  It is one thing to read about a company online, or see interviews on BNN, and a whole other thing to see a company carrying out their day to day operations.  If you see the multitude of GasFrac trucks out and about you know it’s a real company with real guys working.  One of the old investing mantras is to invest in things you understand.  If you live in and around these businesses, that is a lot easier to do.

Fracturing

Lo and behold, the main business of GasFrac is fracturing Oil & Gas reservoirs to improve the production and recovery rate of that well.  The Western Canadian Sedimentary Basin (WCSB for short) remains a hot spot for this activity as well as a good central location for dispatch.

Compared to it’s competitors, GasFrac’s techniques are less energy intensive, requires less inputs, and fewer pieces of equipment.  As well GasFrac claims the technique requires a far shorter clean up time, that allows for a faster turnover to the next job.

For Oil exploration companies in Alberta, BC, and Saskatchewan, Fracturing as been absolutely crucial in the development of the most recent set of wells.  Fracturing is changing wells thought to be totally dry back into producers in the 100s of barrels.  For those who like to invest and support their local companies in Red Deer and/or central Alberta, GasFrac seems like an interesting story to look into.  It is currently in the process of going public and should be trading in the next few weeks.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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What Does the Belangers know about SunGro that you don’t?

25-Jun-2010 | kate | Agriculture Canadian Investing Green Investing Market Strategies Stocks

Today we are taking a look at a company called Sun Gro (GRO.UN) who produces and sells peat moss for both commercial and residential gardening purposes.

Peat Moss is harvested from bogs that are drained and their crops picked and packaged to head to the nearest Canadian Tire. North America’s peat moss supply is supplied entirely by Canadian producers. All in all, the peat moss world is pretty nice and on a business end of things, it’s pretty close to being recession proof.

So although this would sounds like a story about a great green, recession proof investment, it is really a question about what do industry players know about this company and we don’t.

But the story is really about the Belanger family of Quebec who started buying shares in 2007 and has accumulated around 23% of Sun Gro shares since. But what is really interesting is that the family owns Premier Tech Industrial Equipment Group, who is Sun Gro primary competitor and the number two competitor in the industry. So the question becomes, what do the Belangers know that all the sellers of Sun Gro do not?

Sun Gro went public several years ago listing on the market for 10 dollars a share and has headed south and never recovering fully from the 2008 lows partly due to expanding to quickly (debt) and the housing crisis forcing them to cut their distribution.

Well the Belangers, who were interviewed by a globe and mail writers, stand firm on that they just like the company management, their business (obviously) and the company over all, it seems to be that there might be more to the story and that’s all. No take over; no offers are in the near future.

Mr. Weaver, CFO of Sun Grow, says that their business is turning around and that they have been working hard on cutting cost, paying down debt and getting ready for the future. Their net income has almost double in the recent quarter and volume and revenue per unit is up in the United Sates.

Also strange is that the globe reporter found that IKO the shingle maker has been a big buyer of the stock as well.

So the question comes down to, if the stock appears to be a good investment to industry players, an upside might be materializing while are busy hunting around for companies with dividends.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Lifting the Gulf Coast Moratorium Worries Retire First

24-Jun-2010 | kate | Commodities Currency Economy Market Outlook

With the news that a US judge lifted the moratorium on drilling in the US Gulf things are starting to look less rosy for Canadians hoping to travel for less to the US.

The Loonie was enjoying a rise in value based on the shortage in oil created by halting the production of nearly 20% of the US domestic oil supply.  The New Orleans federal judge lifted the six month moratorium on deepwater drilling imposed by President Barack Obama following the largest spill in U.S. history.

The news has created a rush of economic activity including removing the support on the price of  crude oil. The Loonie is 68% correlated to to the movements in the price movement of crude oil.

The correlation with crude prices, makes the Loonie a commodity currency, the impending drop on oil, the Loonie is expected to follow suit and head south on the news. The Canadian Dollar slid the most in almost three weeks this morning compared to the US Dollar, amid concerns on the the price of oil and the stock market volatility. The Loonie moved down to 1.0442 (at 10.33am) compared to $1.026 yesterday, a 1.6% drop.

On the currency exchange front the Dollar also gained ground on the Euro and the British Pound this afternoon. As a foreign currency house, Retire First is expecting the Loonie to stay down on the US dollar for as long as the price of oil continues to slide.

Also moving on the news:

Meanwhile, the price of gold has done the opposite and has continued to climb upwards on concern on the moratorium effect on the US economy and FX rates. Oil service stocks are trading up on the moratorium news while the the stock market is continuing her slide ways movement over the last couple weeks with the TSX trading slightly down 33 points this afternoon.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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