coffee with benefits

Down on your luck? Don't despair. Just when you thought the Canadian economy was in shambles, with economic growth sputtering and job losses making headlines daily, a glitter of hope helps all of us Canadians remember how lucky we are to live in this great country.

If you can't quite make out the photo here, it's actually a Tim Hortons coffee cup. What's so special about this cup is, that printed on the bottom it reads:
"Imagine a job that fits your life"

The massive coffee shop chain is actually using their ubiquitous brown and tan cups to solicit for potential new hires. Most Canadians are very familiar with these cups as Tim Hortons (THI) sells about $6B worth of coffee and donuts each year. That's a lot of double-doubles. These cups are probably the most common piece of litter on Canadian roads, as well as fixtures in vehicle cup holders from Kelowna to Kingston. Not to mention, apparently some of the most valuable advertising space in Canada.

With Alberta's economy zooming along some Tim Hortons outlets in the oil rich province have been forced to close their doors before dinner time due to lack of staff. While the rest of the country may not quite be in the same boat, and not everyone would enjoy working at Tim Hortons, it is nice to know that the coffee chain is so in need of new staff that they're selling their products emblazoned with this help wanted ad.

net worth update september, 2008

Results for the 2 Months Ended September 14, 2008

A 'record' high net worth!

• Debt/Asset ratio fell to 0.50 (we officially have $1 of assets for every $0.50 of debt)
• Net Worth moved up 6.5%
• Total Assets increased 2.6%
• Total Liabilities decreased 1.0%
• House Value/Total Assets fell to 69.9%
• Non-Registered Portfolio rose 13.9%

Calendar Year to Date Gain/Loss: +14.0%

Well, we sprung back nicely from our last report on July 15, which was ugly and revealed our first net worth decline ever. It just so happens that July 15 was actually a 52 week low for the S&P 500 index, so it's easy to see that the market helped us rebound. Having a greater affect than the market though, was the appreciation of the U.S. dollar. The Loonie was dead even with the Greenback on July 15, and it now sits at $0.94 USD. This gave a serious boost to our non-registered portfolio which is about 35% U.S. equities. I am pleased with our year to date percentage change of 14%, during a year of poor stock markets and reduced employment income.

Nevertheless, it feels good to be headed in the right direction again.

friday links and comments

Richer than Your Parents? From the Globe & Mail

Michael James on Money explores the meaningless term Record Earnings

You heard it here first; Reitmans Eyeing Acquisition, on TMWTFS

Comments & Emails
Also, I've implemented a new format for commenting on posts. Let me know if you like this better than the old style. I think it will be more convenient. As always, I appreciate all the comments and emails I receive daily. Keep them coming!

crude drop fueling gains

It seems like crude oil has fallen just as fast as it rose during the summer. The crude oil price has declined from as high as $147/barrel to where it currently sits under $102. Many news outlets are now reporting that much of the rise in price was due to pure speculative trading. It is always interesting to see what the crude oil price does to the share prices of several stocks of companies that have oil as a large expenditure. Particularly I like to pay attention to price fluctuations in the shares of really strong companies that have paid ever- increasing dividends over the years.

United Parcel Service (UPS) - The connection is obvious here. They move stuff around.
Performance since July 11 when oil traded above $147/barrel = +16%

The Clorox Company (CLX) - Resin (oil derivative) is used to make several of their consumer goods including Glad® bags.
Performance since July 11 when oil traded above $147/barrel = +21%

SYSCO Corporation (SYY) - Distribute food products all over North America.
Performance since July 11 when oil traded above $147/barrel = +21%

Performance of the S&P 500 Index during the same period = +0%

dividend investing, measured in years

This article appeared originally on The DIV-Net on September 3, 2008

I've been through a lot as a dividend investor, but yet I've been through nothing. As I mentioned in my previous post, I've been seriously investing in dividend paying companies for about 2 years. It is important to note that this is an incredibly short period of time to be invested in equities. In order to garner the maximum benefit from the risk that you assume when you're invested in equities, I believe you should hold them for a time frame of at least 7 years. Looking at things in this light, I've really been through nothing as a dividend investor. So why do I feel as though I've been through so much? Well there are are likely several reasons for this:

Personally: Investing has required us to postpone spending the thousands of dollars that we've accumulated over the past 2 years. How many times has temptation crept up; and it's not like we don't 'have' the money. I've weeded out a few stocks that I should never have bought in the first place by selling them. Some were sold for gains and some for losses.

The Market: The market has been an ugly place to have your money for the past several quarters. The S&P 500 Index is down about 18% since October of 2007. The credit/housing crisis has dragged on for several quarters and the end is not in sight. I've watched my some of my individual stocks plummet, while others have spiked; some have gone both ways.

It's important to keep perspective through all of this, as a dividend investor, and realize that the journey is very long and is measured in years rather than months, weeks, or days. After all, I've seen many dividend raises and no cuts within my portfolio. When it comes right down to it, dividend growth over the many years is the key to success, and will bring share price growth. Solid companies that raise their dividends regularly and run profitable businesses for the long term will become cash generating machines, and share price growth engines over time. What goes on day to day and week to week is just noise.

Le Château of dividends

Canadian clothing retailer Le Chateau (CTU.A) has increased its quarterly dividend by 16.7% after announcing a whopping quarterly net earnings increase of 56%. This marks the 60th consecutive dividend paid by the company.

Here is a glance at Le Chateau's recent dividend history:
2003 - $0.10
2004 - $0.16
2005 - $0.20
2006 - $0.28 + $0.75 (special)
2007 - $0.50
2008 - $0.625
2009 - $0.70 (EST) - assuming no raise in late 2009.

This represents a compound annual growth rate of the dividend of over 38% through 2009. This is not including the special dividend paid in 2007 and assuming no dividend hike in late 2009.

don't believe the hype

In the midst of ongoing election campaigns in both the U.S. and Canada, I can't help but notice a few aspects of pre-election posturing that seem to be sprouting up all over the place. I don't intend to get political on the moneygardener, however this is more of a general commentary on politician's attempts to gain approval of the masses, which I feel is an insult on the intelligence of many. Here are some of the points which I feel are laughable and just plain untrue that are brought up incessantly by those running on both sides of the border...

1. High oil prices (aside from taxes) are the fault of government.
2. Weak economies are the fault of government.
3. Shareholders are pure evil and should be placed next to Satan himself on the totem pole. Likewise corporations are sinister and offer no purpose to better the country.

These points seem to be accepted as fact by most contenders in electoral circles, while I would argue that all three are false in most cases. I can't help but think that many of these politicians do not actually believe these points to be true, but just espouse them in a feeble attempt to gain votes from naive people who do believe them to be true.

Yes, the economy is the number one issue now that I've been laid off and gasoline is so expensive, let's go out there and fix it!

friday links

Here are some interesting articles I've read over the past week:

Be The First To Order in a Restaurant, by Michael James on Money
Telus Calling: Dividend Growth a Reason to Pick Up The Phone, The Globe & Mail
A Breakdown of My Expenses, at Million Dollar Journey

CarInsuranceList review - (andy)

Andy's back, and now he's looking at a handy car insurance website.

All summer, the news on television and on the Internet has been focusing on the cost of gas, and relating it to all aspects of car ownership, including insurance. We are told that less driving means cheaper car insurance rates as well as less money spent on fuel, but that even though smaller cars use less gas, they cost more to insure. With conflicting advice, and gas prices that are now going down in much of the country, where should we turn for information? CarInsuranceList.com is an excellent choice.

The primary aim of CarInsuranceList.com is, of course, to sell insurance and the site offers fast free insurance quotes users can request from any page, by clicking a large friendly button. The quote engine is elegant in its simplicity. You plug in some basic information about the type of car you wish to insure, as well as your contact information, and you are matched with insurance companies that serve your area, allowing you to contact them for lower rates, or make comparisons between several insurers.

Insurance quotes are only one part of CarInsuranceList.com's offerings, however. In addition to the quotes, there is a wealth of information related to auto insurance. News stories, updated roughly weekly, highlight financial and legislative changes within the industry, so if, for example, your county begins to enforce a rule that you have to have your insurance card with you to renew your license plates, that information will be on the site. In addition, there longer articles that are also refreshed fairly frequently, that go into detail on insurance-related issues. Recent topics include the use of scooters and bikes in lieu of full-sized autos, as well as pieces on insurance for performance cars and race track insurance. Clearly, this is a site that embraces all aspects of auto insurance, and not just the mainstream products.

Not everyone needs to know which cars are the most fuel efficient, though, or whether or not Allstate will sell auto policies in Florida, but CarInsuranceList.com has their needs covered as well. The static pages of the website provide the basic information every consumer needs to know, like what discounts to ask for, how to save money, and, should they have poor credit or even poorer driving records (or both) how to obtain SR-22 coverage so they can still drive to and from work, even after a DUI conviction.

Let's face it: auto insurance is not the most exciting subject in the world. Nevertheless, it's something every driver needs, and CarInsuranceList.com presents the information in as interesting a 'voice' as possible, while still keeping their site user-friendly, and offering free quotes.

my brief dividend growth history

This article orginally appeared on The DIV-Net on August 27, 2008.

Two years ago this month I was 27 years old and I had just opened an online brokerage account with aspirations to build a portfolio for my family's future. I slowly put together a watchlist of stocks and concentrated on saving money and learning as much as I could about stocks and the market. Over time, and as I educated myself, I became naturally attracted to dividend growth investing. The characteristics of dividend growth investing which drew me in are many, and the enthusiastic authors of The DIV-Net will likely cover several of these attributes in detail.

In August of 2006 my dividend portfolio of stocks yielded less than $150/year in income. As the months went by I continued to save money regularly and buy dividend stocks when I felt that they offered good value. Many of the companies I own have raised their dividends several times since I originally bought chunks of them. By August of 2007 my yield had grown to $1,252/year, and today it sits at $2,087/year. Today I continue to view dividends as half of my journey to financial freedom. Dividends are the brushstrokes that I put on today, in creating a masterpiece for the future.

I've been through a lot as a dividend investor, but yet I've been through nothing. I'll write more about what I mean by this in next week's post.

Please visit The DIV-Net to read my follow up post September 3.