Investor Faceoff: When Murray met Lesley

Both contestants solidly in the black

By Paul Brent
Globe Investor Magazine Online, April 17, 2008

North American stock markets have given investors a rough ride over the last six months, but you wouldn’t know that from the virtual portfolio performances of the Globe’s Investor Faceoff contest.

At the half-way point of Faceoff’s year-long stock struggle, it’s the age and experience of 65-year-old retired active do-it-yourself investor Murray Soupcoff prevailing so far over
24-year old financial consultant Lesley Scorgie. But just barely.

Click here to view Lesley's portfolio
Click here to view Murray's portfolio

Mr. Soupcoff, who continues to stick with a three-pronged investment theme of gold, energy and agriculture holdings, has managed to clock in a “profit” of $11,281 for the trading period ended March 31, 2008, on his original nest egg of $100,000.

“Basically, I tried to mirror my strategy in my real-life portfolio,” he said. “I wanted to stay reasonably invested in gold, agricultural and oil sands holdings for the long term, even though I was anticipating a continued equity correction in March. I was still bullish long term on gold bullion, ag stocks and established oil-sands holdings like Suncor and Canadian Oil Sands Trust.”

Mr. Soupcoff reacted to the March market madness with his most active trading month since Investor Faceoff began. He started by selling 1,800 units of Molybdenum Participation Corp. (MLY-TSX) at $4.52 each for $8,136 on March 4. The next day, he sold 900 shares of Uranium Participation Corp (U-TSX) at $11.88 each for proceeds of $10,692, purchased 100 shares of tractor maker Deere & Co.(DE-NYSE) at $89.28 (U.S.) each for $8,928 and bought 50 shares of fertilizer producer Mosaic & Co. (MOS-NYSE) at $110.64 each for $5,532.

On March 10, he purchased another 50 shares of Mosaic on a dip at $95.36 apiece for a total of $4,768 and that same day, purchased 100 shares of Terra Industries (TRA-NYSE), another fertilizer stock, at $38.51 apiece or $3,851. He made three other trades on March 10: buying 400 shares of organic-waste-to-fertilizer processor Converted Organics Inc. (COIN-Nasdaq) at $10.79 apiece for $4,316; selling 200 units of Saskatchewan Wheat Pool (VT-TSX) at $11.86 (Canadian) or $2,372 in total, and; selling 400 shares of fertilizer company Hanfeng Evergreen (HF-TSX) at $11.83 or $4,732.

Far from done, on March 12, Mr. Soupcoff sold his 100 shares of Deere & Co at $83.98 (U.S.) or $8,398, which represented a loss from his week-earlier purchase. The same day he added to his current holdings of Horizon Beta Pro Global Gold (HGU-TSX) by buying 100 units at $32.60 (Canadian), or $3,260. On March 18, mirroring his personal trading, he sold 200 units of the Horizon gold index for $31.12 or $6,224. (That was prompted by the Fed-assisted Bear Stearns bailout, which he believed would prop up the greenback and drop the price of gold.)

Finally, on March 20, he sold 100 shares of the Ishares Canadian S&P TSX Gold Index (XGD-TSX) at $82.14, netting $8,214.

“I still expect the equity meltdown to continue for several more months,” he said of his March activity. “So I wanted to build up a good storehouse of cash – partly through the occasional sale of profitable holdings that may have gotten ahead of themselves in their price rise, (such as) some gold and agricultural holdings.

Ms. Scorgie, the author of Rich by Thirty: A Young Adult’s Guide to Financial Success, made one sell and three buys in her portfolio for the month, which was up $9,360 as of the end of March. A big believer in the prospects for financial services companies over the next few months, she added to already sizable holdings in this area.

On March 12, she bought 550 shares of Bank of Montreal (BMO-TSX) at $41.79 for $22,984.50. “I believe BMO is highly undervalued and has the strength to weather the storm of U.S. uncertainty,” she remarked.

Financial services firms make up more than one-half of her holdings currently. Besides BMO, she owns big stakes in Royal Bank (RY-TSX) and GMP Capital Trust (GMP.UN-TSX) and has a smaller holding in Manulife Financial (MFC-TSX). “I am holding onto my MFC and GMP because I feel they will strengthen over the next few months,” Ms. Scorgie said. “GMP, particularly, appears undervalued.”

On March 17, she sold 1,500 shares of Silver Wheaton Corp. (SLW-TSX), selling for $18.22 a share and netting $27,330. “I had a nice, but brief, ride with Silver Wheaton,” she said. The silver miner “started to really weaken last month. So to preserve my gains, I sold my position and have taken positions in BMO and PCA.”

On March 21, Ms. Scorgie bought 475 shares of Petro-Canada (PCA-TSX) at $42.77, for a total of $20,315.75. “I like PCA because I believe it is also undervalued,” she said. “They’ve embarked on heavy oil sands investment and are waiting for some of their projects to come to fruition.”

Finally, on March 25, she picked up 4,500 shares of First Venture Technologies (FEB-TSX) at $1.24 apiece for a total of $5,580. The last buy “is a fun one,” she said. “They research and produce better components of yeast for foods and beverages like wine.”

Special to The Globe and Mail