Investor Faceoff: When Murray met Lesley

Winning streaks continue

By Paul Brent
Globe Investor Magazine Online, May 14, 2008

It has certainly not been a year for faint-hearted investors. Oil prices are in the stratosphere, U.S. consumers have pulled back as the subprime mess ripples through the economy and Canada’s Goldilock’s economic status looks shaky.

None of that seems to have slowed down our Investor Faceoff contestants in April; retired journalist Murray Soupcoff, and 24-year-old financial consultant Lesley Scorgie.

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

Both are well above water despite the turbulent markets: Mr. Soupcoff’s $100,000 virtual portfolio has gained $19,715 since the start of the Faceoff contest last fall while Ms. Scorgie’s investments are up $17,465.

Mr. Soupcoff, 64, was as he typically has been, the more active trader of the two in the month. He made a total of six separate groups of trades in April, as he shifted his Faceoff transactions for the first time away from his real-world holdings.

“I started the month inclined to mirror my own personal portfolio, keeping the emphasis on long-term-growth commodity holdings, gold, oil and agriculture,” he said. But worried about the short-term prospects for gold and gold futures by mid-April, Mr. Soupcoff revamped his Faceoff portfolio.

“I thought it necessary to liquidate my Globe Investor gold portfolio holdings because of the shorter-term nature of this contest – only until November,” he explained. “Better to take the profits I had now then risk losing them all in a gold price decline that might only reverse itself after the contest was ended.”

He started the month reaffirming his love for the precious metal, buying 100 additional shares of StreetTracks Gold Trust (GLD-NYSE) for a total of $8,686 on April 1 and picking up another 100 units of Ishares Comex Gold (IAU-Amex) for $9,168 on April 15. With gold technical charts showing weakness, Mr. Soupcoff sold 100 StreetTracks Gold units on April 17 for $9,256 and bought 100 Caterpillar shares (CAT-NYSE) for $7,859. A few days later (April 21), heeding the advice of commodities trader Dennis Gartman, he sold another 200 units of StreetTracks Gold at $90.25 for total proceeds of $18,050.

The next day, based on a downgrade by brokerage UBS, he sold 100 shares of Caterpillar for $8,201. Mr. Soupcoff closed out the month with a flurry on April 23, continuing his short-term aversion to gold and betting on North American natural gas producers: selling 200 Ishares Comex Gold Fund units at $89.17 each for total proceeds of $17,834; buying 150 shares of Chesapeake Energy Corp. (CHK-NYSE) at $53.12 for $7,968, and; buying 200 shares of Calfrac Well Services Ltd. (CFW-TSX) at $24.57 for a total cost of $4,914.

“I’m still worried that the final shoe in the subprime financial fiasco has yet to drop and economic hard times appear to be on the horizon for most of Canada and the U.S.,” explained Mr. Soupcoff of his post-April outlook. “From my point of view, North American markets are likely overbought now and ready for another drop. So I’m holding onto a humungous cash horde of $47,000.” He is ready to spend some or all of it, when he sees some positive sector trends emerge that look like they will hold until November.

Calgary-based Ms. Scorgie stuck close to her Alberta home in her April trading. She sold her holding in EnCana Corp. (ECA-TSX), dumping 115 shares at $83.55 which netted her $9,608, and added to her Petro-Canada (PCA-TSX) holdings, buying 200 more shares at $49.84 each for $9,968.

“Over all, I’m really pleased that my picks have started to strengthen, particularly the bigger names,” said Ms. Scorgie, a financial consultant and the author of the book Rich by Thirty: A Young Adult’s Guide to Financial Success.

She said May will be a month to vigilantly watch the markets. “In terms of a strategy this month, I’m going to keep close watch on how my larger names are performing. This might be a good month to gather up some of my profits. I’m not certain the market has got all its ‘hiccups’ out just yet.”

After focusing on energy and financial stocks for much of the Faceoff contest, Ms. Scorgie is also mulling the addition of some Internet stocks to her portfolio. “I was eyeballing RIM and Yahoo. Actually, I was presenting ‘Get Rich By Thirty’ material at the RIM offices in Waterloo in mid-April.”

“I was very impressed with their staff, the security systems to get to the bathrooms, and their college-like campus. But I’m skeptical of the sustainability of RIM’s share price. I will continue to monitor it. On a Yahoo note, I’m really happy I didn’t pick up Yahoo” in light of Microsoft Corp.’s now-abandoned takeover attempt for Yahoo.”

Special to The Globe and Mail