The Globe and Mail May 10, 2008
ME AND MY MONEY BY TONY MARTIN
The straight goods on this retiree's methods
OCCUPATION: Retired environmental and corporate health and safely executive.
PORTFOLIO: Stocks include Agrium, Brookfield Asset Management, Canadian Tire, Corby Distilleries, E-L Financial, EnCana, National Bank of Canada, Power Financial, Pfizer, Rogers Communications, Rothmans, Sun Life Financial, Thomson Reuters, TransCanada, TSX Group. Funds include Romspen Mortgage Investment, CIBC Monthly Income, Carevest Capital First Mortgage.
ETFS: iShares Canadian Scotia Cap Short Bond Index, Vanguard Emerging Markets, Vanguard European, Vanguard High Dividend Yield.
Despite getting serious about investing in the late nineties, Bebee managed to escape the tech wreck. She held the big losers, but got out of them early. For instance, she sold Nortel at the lofty price of $70. In part, this is due to a predilection for cutting her losses. It also stems from her common-sense approach to investing, and the fact that she immersed herself in the world of the markets, including taking the Canadian Securities Course and joining an investment club in Toronto. "I'm the kind of person who really gets into things." So much so that she recently put her thoughts down on paper, and published them in a book, No Hype - The Straight Goods on Investing Your Money.
HOW SHE PICKS STOCKS
Ms. Bebee wants the companies she invests in to make a profit. And she wants that profit to come from the main line of business, not from unique one-off sales or "accounting shenanigans." She's also a fan of companies that pay dividends. "You know that they are making money and that they'll be around for a while." Thinking about the company's long-term prospects is important to her. "Will this widget be useful in five years' time, and if not, what are they doing about it? Do they have research and development?"
WHEN SHE BUYS
Ms. Bebee looks at a stock's 52-week high and low. She also looks to see whether the stock has been steadily treading up or has peaks and valleys, in which case she'll wait until it falls back. "One of my favourite ways to buy a stock is when negative earnings come out and retail investors stampede out of it and drive the price down."
In 2003, Ms. Bebee came across Edmonton-based Melcor Developments, a residential and commercial property developer. She saw it as undervalued - in part because the stock was followed by few analysts. She paid around $4 a share, split adjusted, and sold a lot of her shares at prices ranging from around $15 to $25.
What could go wrong with a company that was into school buses and ambulances, Ms. Bebee thought, when she bought shares in Laidlaw International Inc. at around $11 in the late nineties. Unfortunately, a lot. Ms. Bebee jumped off Laidlaw's downhill ride at $9. "It caused me to come up with a rule about being decisive,"she says. "If I make a mistake, I correct it right way."
"Financial advisers advise, but you have to make the decisions that are best for you."
Special to The Globe and Mail