It seemed like a good idea at the time and indeed it was, although I had to swallow hard to write it up. On April 24 of last year this space recommended an investment in Ford. It wasn't exactly a good time to be recommending an auto stock, let alone a Detroit car maker.
But recommend it I did on the grounds that the company had started restructuring before the financial crisis hit, wasn't taking a government bailout, had improved reliability, brought in good management and was making nice cars.
The upshot so far has been a double, more if you sold a few weeks ago. As we take stock of the Vox track record over the past year or so, Ford stands out as one of the best picks. It didn't hurt, of course, that the stock market as a whole pretty much bottomed around the time of that recommendation, but still, Ford did much better than the S&P 500 and is holding up just fine. The analysis wasn't that complicated either.
Not all Vox picks fared as well. Avoid Citibank a pronouncement that came around the same time, hasn't worked out: It's up double digits. And voicing worries about Bank of Montreal dividend was also a mistake since the dividend has been paid on time and in full ever since and the stock has gone up a lot.
But those calls were based as much on the fact that I didn't understand what these banks had on their balance sheets (neither did the market given BMO's dividend yield was almost 10 per cent, which screamed danger). So, no regrets on those grounds.
A much more serious mistake was suggesting BP stock looked mildly interesting at about $42 (U.S.). Interesting in the same way that personal bankruptcy is interesting, I should have added. That stock is now quoted at $33. It might have been cheap at $40, but there was really no reason for that stock to go up. There's still no reason for it to go up. And I didn't even take my own advice, which is to avoid any story with a heavy dose of politics.
I've been a RIM skeptic since November of last year and that worked out. The stock has fallen from $70 to $51 and in my view that decline isn't done yet. The industry is too competitive and I don't think this management team is up to the daunting task. They respond - late - to threats instead of blazing innovative trails.
My call on Aastra meanwhile, was brilliant if you used me as a contrarian indicator. The stock is down about 20 per cent since I called it value, blithely ignoring the weakening economy.
I wasn't contrarian with ZENN Motor though. I thought it was a zero in April of last year, and the stock is half way to proving me right. Never trust companies who can't or won't tell you what the plan is.
The numerous recommendations to buy gold have paid off very well. Wesdome and Semafo have done well (I own both). I think that will continue because both have merits that go beyond rising bullion prices.
Recommendations in and around the natural gas space haven't paid off as well. Prices are up a little but stocks not so much. That said, I still believe in my basic thesis. The price difference, on an energy basis, between gas and oil is too big and I don't care what you say about wind and solar and biomass and whatever else, you can't green the planet without using a lot more gas.
I did well by investors with a gas-storage play - Landis Energy -- which ended up being bought in March for a double in six months. Small caps are particularly risky these days but you do find some simple, compelling stories that make sense.
All in all it's been a pretty good composite return. My guess is that we'll have a big bull market starting in around October. Until then cash and stocks with fat dividends, including Atco Ltd., BCE Inc. and Pengrowth Energy Trust (I own the latter two), are where I'd put money.Report Typo/Error