Archive for November, 2007

This and That

November 30, 2007

  1. I wouldn’t count the blessings just yet but the days of 40% to 50% margins for the cellphone companies might be over. The Government has decided to reserve spectrum for “new entrants” in an upcoming auction, paving the way for more competition in wireless. That’s good news for Canadian consumers but not so much if you are a shareholder in Telus or Rogers.
  2. Sun columnist Linda Leatherdale offers tips for choosing a legitimate charity to qualify for the Charitable Tax Credit
  3. If you are buying a car in the U.S., you should be aware that some new models that do not meet new Transport Canada regulations are banned from entering Canada.
  4. Rob Carrick makes a shaky case that mutual funds held up better than the TSX Composite Index in the bear market. One datapoint of a few mutual funds outperforming one equity index in a narrow and shallow equity market doesn’t amount to any “evidence” that mutual funds are better than index funds in a bear market. Not to mention, there is little reason to believe anyone’s prognostication of a bear market.
  5. Pat McKeough, the publisher of The Successful Investor newsletter, tells Jon Chevreau that despite the scary headlines about the greenback, he is bullish on US equities.

Note: I’m a bit short on time this week, so the blog roundup will return next week. Meanwhile, if you’ve been procrastinating, don’t forget to enter the third blog anniversary giveaway which closes at 8 p.m. EST today.

Altamira Precision Series Index Funds

November 28, 2007


I am a big fan of TD e-Series Index Funds but if you already have an account with a discount broker other than TD Waterhouse, the Precision series index funds from Altamira would an acceptable, albeit slightly more expensive option. A couple of readers also mentioned that TD Mutual Funds are not ideal for RESP accounts that are eligible for the Canada Learning Bond (CLB) or the Canada Education Savings Grant (CESG) for low-income families.

The interesting index funds in the Precision series are:

  1. Precision Canadian Index Fund (AIS930) tracks the narrower S&P/TSX Index and would be equivalent to investing the iShares CDN LargeCap 60 Index Fund (XIU).
  2. Precision International Currency Neutral Index Fund (AIS932) tracks the MSCI EAFE Index and hedges the currency exposure.
  3. Precision U.S. Currency Neutral Index Fund (AIS931) tracks the S&P 500 and hedges the exposure to U.S. dollars.

The MER of all the above funds is 0.54%, which is significantly higher for Canadian equities but only slightly higher for U.S. and EAFE equities when compared to the equivalent TD e-Series funds. Unfortunately, Altamira does not offer a bond index fund and the bond mutual funds available have MERs of more than 1.5% but they do offer a decent T-bill fund to park your cash (MER of 0.52%).

What ails Loblaws?

November 28, 2007


I owned Loblaws (TSX: L) at one point earlier this year but sold the entire position at a small loss last spring. I had no idea that the troubles at Canada’s largest grocer would worsen and sold simply to increase our exposure to bonds, which was far less than target.

Earlier this year, it was easy to see that Loblaws was in trouble because of empty shelves and high-priced wilted produce. At a store near our home, they even regularly ran out of staples like brown sugar. When I gently mentioned to the girl at the checkout counter that a grocery store should always have basic necessities, she replied that many customers have been saying the same thing and could I please let the store manager know. I did, but got the impression that the manager was annoyed by the complaint and didn’t once promise to look into the issue.

From my recent experience, it seems that Loblaws is a long way from fixing its problems. Yesterday, I dropped into a store near work around lunchtime. The bakery section carried bread that is three days old though I managed to find one loaf that was only one day old. Unfortunately I also purchased an item from the deli counter that had a “best before” date a full two weeks earlier!

Sadly, I will continue to shop at Loblaws because they are the only ones that carry the Jamaican-style ginger beer that I’m addicted to. But I am not at all surprised that the stock has fallen off a cliff and is currently at multi-year lows.

Do you shop at Loblaws? Do you see any evidence that they are starting to fix their problems?