Includes shares in Toronto-Dominion Bank, Industrial Alliance Insurance, Financial Services Inc., Cummins Inc. and Vermilion Energy Inc.
Dean Borle is a "Warren Buffett enthusiast" who buys stocks at bargain prices. His average annual return over the past five years is 11.6 per cent.
He also uses a covered-call approach. It involves selling call options on his shares to generate income and share appreciation up to the price at which the option holder has the right to buy his shares. "This approach makes up the bulk of my portfolio gains," he notes.
How he invests
Mr. Borle likes value stocks with good dividends, so is always looking to buy shares in the Canadian banks whenever they go on sale. He currently holds TD Bank stock for its sizable operations in the U.S., where the economy is stronger and the rising U.S. currency is boosting earnings.
He is not worried about a correction in the Canadian housing market torpedoing the banks. A high percentage of mortgages are full recourse: the mortgagor is still on the hook for payments even in foreclosure. This reduces the incentive to "mail in the keys," as so many did in the United States.
Canadians don't have the same incentives to carry large mortgage balances, either. Mortgage interest is not tax deductible like it is in the United States.
Even if mortgage defaults jump, the federal government's insurance program provides a shield for the banks. And there are indications that the Bank of Canada stands ready to initiate quantitative easing should the economy weaken noticeably.
"I bought Agrium shares on three occasions when the stock pulled back. Each time, I collected the dividend and covered-call income until the shares were sold at a much higher price."
He bought a "large block of thinly traded put options" to bet on a falling stock. But it suddenly spiked higher on positive news and he got "an expensive lesson in leverage and liquidity."
"If one is looking to invest, one should first look at paying down their personal debt."