The continuing turmoil in the stock markets during the last quarter of 2007 meant that the Sleepy Portfolio lost 2.2% in the quarter and posted a minuscule gain of 0.2% for the entire year. As mentioned in yesterday’s post, bonds, Canadian and Emerging Market stocks posted positive total returns but REITs, US and EAFE stocks finished in the negative column.

[Table of Sleepy Portfolio holdings as of 31st December, 2007]

Our personal portfolios returned 3.7% during the year due to nice profits from my participation in the ESPP program at work. During the quarter, I took advantage of the weakness in equity markets to initiate positions in Bank of Montreal (BMO) and RioCan REIT (REI.UN).

How did your investments do in the past year? Please do share any comments that you have about your portfolio.

This article has 15 comments

  1. I’m posting about it on Thurs but our portfolio returned 4.1% – it has a higher Cdn content than the sleepy portfolio which is the reason for the difference.

    Mike

  2. Basically even on the year, currency effects and interest rate effect on pref. shares weighed on returns.

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  4. Regarding your question about our portfolios, I don’t think I’m a very good candidate because I hold a LOT of small and micro-cap companies. By far my best performer is Cervus LP (CVL.UN-X) who operates a chain of John Deere Dealerships and also some Industrial Lift Equipment dealerships in Western Canada and they returned about 140%. By far my worst performer is Coventree (COF-T), which as everybody knows is has been totally crushed by the ABCP crisis and has returned about -96%. Everything else is somewhere between the two of them, so my personal investment portfolio is totally ALL OVER THE BOARD.

    But if we only limit the discussion to large caps:

    I am already a Bank of Montreal (BMO-T) shareholder and am slightly down on that investment. If you factor in the dividends, then I’m about breakeven. But I only have about half of what I would consider a full allocation in that stock (that one stock accounts for only about 2.5% of my portfolio – I would consider 5% of my portfolio to be “all in” if I may use a Texas Hold’em term). So, I am also waiting for the right time to add to that position.

    I have been eyeballing CIBC (CM-T) because their shares have been getting severely punished due to incompetence at the top. If they get out the “whacking stick” and start firing all of the people who put them into that big mess and also finally disclose how much exposure they have to everything, then it might be a buy. Until then, I can afford to wait and try to “find the bottom” on their share price.

  5. Phil, I’ve been thinking about CIBC as well.

    Mike

  6. Canadian Capitalist

    I am close to the maximum I want in Canadian Banks, so I’m not interested in this sector anymore. I have some powder dry for REITs, Emerging Markets and Real-return bonds to reach my allocation targets but other than that, I’m just staying the course.

  7. My 2007 results can be found here.

    http://themoneygardener.blogspot.com/2007/12/2007-final-portfolio-summary.html

    I’m nervous about adding to Canadian bank positions although they do seem cheap, I think they might be sick this year.

    I’m still holding a bias toward U.S. equities and ETFs as I believe the dollar is still at a higher level than it will be in 10 years.

  8. I am down 2.2% with my sleepy portfolio
    30% XBB
    25% XSP
    25% XIN
    12% XIC
    6% VWO
    2% Misc stocks

    Inception Spring 07

  9. Not very well I have to admit. Last year’s double digit returns were destroyed this year by my position in CIBC leading to a negative return. Excluding CIBC, I would have broken even. Though, as a DRIPper, total portfolio return is not really my objective, rather increasing my total dividend payment and individual dividend increases. The avg. increase across my holdings for the 2007 annual dividend was 14%, with the largest being Telus increasing it’s dividend 36.6% last year.

  10. CC – what is your “max” for Cdn banks?

    Mike

  11. My opinion on financials FWIW…

    “I do not think Canadian financials will have a good 2008. Bank EPS growth rates are slowing and the stocks should reflect this like they are already showing. Some of the weaker performers like NA, BMO, or CM might outperform due to the fact that they have dropped so far so fast. I’m not looking for much out of TD, RY, or BNS this year although I like BNS and RY long term at just below these levels.

    Canadian insurance stocks like GWO and MFC will probably perform better than the CDN banks. SLF will likely underperform MFC in 2008 due to the run SLF has had in 2007. MFC is probably the ‘buy’ of the sector right now.

    The U.S. banks are a different story and I see them outperforming the Canadian banks over the next year or two due to the fact that they have extremely low expectation built into their share prices. There will be further write offs but at some point these things will shoot up off of their lows. This might not occur until 2009 though, and the low levels could be lower than they are today, but if dividends are not cut, I doubt they’ll go much lower.”

  12. Canadian Capitalist

    Mike: My max for Canadian banks is 7%. Nothing scientific. Just 1/3rd of my Canadian allocation of 20%.

  13. CC – thanks for the number.

    MG – thanks for the interesting overview of financials.

    Mike

  14. 5.46% for the year with a mix of RBC funds (even with those high MERs). I removed my US$ holdings a few years back due to concerns I had with GWB & Iraq. I have therefore missed the losses I would have sustained due to recent currency fluctuations.

    I was reading a book “Cardinal Rules of Investing” which suggests that limiting losses in bad years is likely more important than matching the gains of the index in the good years. This may point out a fallacy in looking at whether or not a fund ‘beats the index’. While a value portfolio might not beat the high flying index, if it does not fall as far in the poor years, it may still be a better return than the index overall, as it does not have as far to climb to recover losses.

    I try to remember dear ol’ Dad’s comments when reading performance numbers: “There’s three kinds of untruths: Lies, Damn Lies and Statistics”

    DAvid

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