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me and my money

The recent plunge in oil and gas stocks has caught Michael Munro’s eye. One of his recent purchases was Arctic Energy Services.Steven Reilander

Investor

Michael Munro

Occupation

Registered nurse (studying to become a chartered accountant).

The portfolio

Mostly in: recently purchased oil and gas companies (including High Arctic Energy Services Inc., Suncor Energy Inc. and Phillips 66), and short positions in growth companies (including Tesla Motors Inc. and Netflix Inc.).

The investor

Michael Munro began investing in 2002. He is now taking courses to acquire a "more formal background in finance" and to become a chartered accountant.

How he invests

Mr. Munro is "a value investor with a contrarian perspective." He invests heavily during periods when the broad market or a sector is plunging, then goes "several years without trading a single share." For him, "most of the time is not a good time to invest" and if markets are breaking to all-time highs, it is "more prudent to save cash and wait for the next correction."

The recent plunge in oil and gas stocks has caught his eye. One purchase was the stock of Red Deer, Alta.-based Arctic Energy Services, which receives most of its revenue from rental and drilling services provided to a large liquefied natural gas (LNG) project in Papua New Guinea.

The LNG project supplies markets in Southeast Asia, where "the majority of increased demand is coming from." Moreover, this market is close to Papua New Guinea, so "very low shipping costs" bestow a "huge strategic advantage" to the project.

As a value investor, Mr. Munro is also on the hunt for overvalued stocks to sell short. By having long and short positions in his portfolio, he has a chance to earn positive portfolio returns in both bull and bear markets.

Regarding his short sale on Tesla, he feels the innovative auto manufacturer will "not likely become profitable in time to meet their increasing costs and capex needs, leading to further dilution and debt." As for Netflix, it is "a fantastic model that can easily be replicated, and is now facing significant threats from other competitors."

Best move

Most recently, it was "shorting the Chinese markets at their peak."

Worst move

His worst move was purchasing Allied Irish Bank shares in 2010. Weighed down by bad real estate loans, the bank was later nationalized to keep it from going under (and its shares were delisted from the stock exchange).

Advice

Mr. Munro believes investing legend Warren Buffett put it best when he said: "Be fearful when others are greedy and greedy when others are fearful."

Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com or his Website.