Monday, September 15, 2008

how my crystal ball has worked

I don't really shy away from making predictions and bets when it comes to the stock market because I don't mind being wrong, and's fun. I wanted to check up on a few of the predictions I've made on this blog to date and see how I made out.

Prediction #1 Canadian Financial Stocks Have Bottomed
On April 18, 2008, I declared the bottom on Canadian financial stocks to be March 17, 2008 ($21.50 was the level of XFN, an ETF that tracks these stocks). Well I was wrong on this one as currently the bottom is looking more like it actually occurred on July 15, 2008 ($20.00 on XFN). Or is the bottom yet to come...?

Prediction #2 The Candian Dollar Will Weaken To Levels Well Below $1USD in 2008, & Buying UPS, JNJ, and MO Now Might Be a Good Way To Benefit From This
On November 9, 2007 I posted about this and recommended UPS, JNJ, and MO when the Canadian dollar traded at about $1.06 USD. I was right on this one, as the Loonie now trades at $0.93 USD. If you had bought the stocks here is how you would have fared after currency conversion. These are the currency adjusted returns before any dividends.
UPS +9.4%
JNJ +22.3%
MO +5.8%

Prediction #3 Bank of America Will Not Cut Its Dividend
On November 3, 2007 I used some of my valuable Canadian dollars to buy some Bank of America, claiming that this purchase made a lot of sense as long as the big bank didn't cut its dividend. Well I was right on this one, so far. Bank of America is still paying out the same $0.64/ share that they were at that time, and while they failed to raise the dividend at their usual time of year, they have not cut it, yet....


Anonymous said...

BAC should be able to continue its payout. I am "John Holmes" on BAC and it looks extra jucy with MER in its pocket. But 50B is alot of money. I guess time will tell if they continue into next year.

Potato said...

Well, at the time I think I agreed with both #1 and #2, of course I bought WAG and GE with my Canadian dollars; today that looks like an oops. I also made a prediction when oil was at $140 that oil would drop back, but not below $120. So I'm not doing very well at this game.

MG (moneygardener) said...

Potato. Don't call WAG and GE oops's for another 10 years. I didn't buy them so that I could see them higher in a year..and I'm assuming your thinking was the same. Just use these opportunities to buy more if you believe in the companies.