This is the third installment of my series on comparative company analysis. For this column, I’m looking at two “hot” tech companies, Amazon (AMZN) and Shopify (SHOP) and contrasting them with an old school Canadian industrial company Linamar (LNR), which has an agricultural connection through the ownership of MacDon. My analysis was done in late […] Read more
Outside of speculative fervor, numbers count
How tech giants Amazon and Shopify stack up against Linamar
How to make sound purchase decisions: company analysis, Part 2
Another example of stock purchasing decision metrics (that sounds boring!)
The current series of articles were prompted by a couple of emails to further outline the process I use to buy individual companies. So don’t blame me for putting you through this! Hopefully, by the end, you will be able to relate to the small amount of number crunching required to make sound purchase decisions, […] Read more
Company analysis, real live examples
A focus on price/cash flow, cash flow/assets and cash flow growth
Following up on recent articles, it might be beneficial to work through real stock selection examples. My first example compares two of the largest worldwide integrated oil companies, Chevron (CVX) and Exxon (XOM), along with the largest Canadian company, Suncor (SU). I will attempt to cut through much financial gobbledygook (it’s a real word in […] Read more
Four market success factors, Part 2
Portfolio construction and how you manage yourself
While individual stock selection gets most of the airtime, organizing those stocks into a high performance, resilient portfolio is equally important. This aspect is referred to as diversification, but it is bigger than that. Some may think owning a number of companies in a couple different sectors qualifies as diversification. However, the market tends to […] Read more
Four market success factors
And how they affect our personal investment success
There are four key factors affecting our personal investment success — understanding market behaviour, security selection, portfolio construction and managing yourself. I will discuss two in this column and two in the next. Most discussion is around security selection, but the other factors are equally important. Understanding market behaviour The market often exhibits perplexing and […] Read more
The looming energy predicament
I use the word predicament because “crisis” and “catastrophe” are grossly overused
A short 14 years ago, as oil approached $150 per barrel, chants of “Drill, Baby, Drill” were often heard at republican campaign rallies. While the republicans lost the election, the U.S. oil industry heard the message loud and clear, unleashing a torrent of investment in shale oil, boosting American production from about five million to […] Read more
Beware the feeding frenzy — buy the numbers
IPO stands for initial public offering or it’s probably overpriced
Stocks, like other commodities, trade based on supply and demand except, unlike many commodities, both supply and demand are elastic. If there is a short canola crop more can’t be made until the following year, regardless of demand. But if there is high demand for stocks — voilà. Wall Street makes more by accepting more […] Read more
Don’t buy the story — buy the numbers
Becoming a successful public company is as daunting as becoming an NHL star
Market action early in the new year is vindicating much of what I have written over the years, as numerous new concept and speculative stocks decline. This is normal market behaviour but has been devastating to many market participants, especially speculators who thought they were investors. Let’s look at the process of new company formation […] Read more
Investing versus gambling
Short-term investing is an oxymoron
One of my frustrations with common verbiage around stock investing is the plethora of gambling analogies. Common expressions include sayings like, “If you wish to play this sector.…” as if purchasing a stock is like playing a craps or blackjack table. Another common expression is to “go all in,” as someone would at a poker […] Read more
‘I’ve looked at clouds from both sides now’
“It’s cloud illusions I recall ... I really don’t know clouds at all”
Since viewing the Kennedy Centre 2021 honoree ceremonies, including Saskatchewan native Joni Mitchell, I have not been able to lose the earworm from her famous 1969 hit song. I doubt when she wrote the lyrics she was thinking about stock investing, yet her descriptive words about clouds are in many ways analogous to such activity. […] Read more
Cyber-Savvy Farmer
