COMMENT

There has been a lot of insider buying, which is always a good sign. They’ve go into small deserted gold mines and chemically treat them in order to extract potash. Roads have already been built, so infrastructure is already there. Very low liquidity, so highly volatile.

TOP PICK

Looking over the next 20 years, there is going to be roughly $687 billion of CapX in energy infrastructure. Capital is going to flow to the ones that already have existing assets, as well as those that have the ability to create new assets. This is one of those companies. You’ll make 8%-10% a year, not a wild 20%-30% upside. Yield of 6.42%. Thinks this is going to go 11 innings.

TOP PICK

Organic milk. Have defensible market share, but also high free cash flow. This is a high-margin business. Not only retail distribution, but also commercial distribution through school programs. Just struck a joint venture with a Chinese company to deliver organic baby powder formula into China.

TOP PICK

A great, deep value play. You get paid to wait with a sustainable dividend. This is a favourable entry point. Strong management team. Yield of 2.8%.

N/A

Markets. This market seems to be ignoring what he considers a Big Story. The Iraqi government is falling apart. Jihad seems to be advancing at will. There are 2 million barrels of production in southern Iraq that are at risk, and nobody seems to be paying any attention. He feels the geopolitical situation could spill over into the broader equity markets, not just energy. He is getting more defensive, and watching the situation. Taking some profits where he can. Certainly not rushing out and putting money back into the market at the moment. We are overdue for a correction, and he is expecting one anytime soon.

BUY

Utilities have done OK, but we certainly haven’t got the kind of bounce out of them that he got out of other parts of the market. Bought an energy company out of Arizona, so it shows that it is a company that is able to grow. Got hit with the “taper tantrum” last year, but it is coming back and seems to be moving back up on the chart. A good, safe place to put your money. 4% dividend yield.

COMMENT

Has liked this company for a long time. Very predictable deposits. Heavier oil, but it flows and you don’t have to pump it that hard. Have also been very heads up in terms of using “oil by rail”. Have good connections in the US, and have been moving a fair amount of oil. Stock has always had a very good yield. Yield of almost 6%. Could see $52.58 in the next 12 months.

N/A

Portfolio diversification. How should the average investor decide on the appropriate degree of diversification, in terms of kinds of diversification and degree? Part of this depends on how large a portfolio is. If you have $50,000-$100,000, you could have as many as 25 stocks. Feels that 18 to 20 is a reasonable number. You may want a couple oil stocks, possibly 3 bank stocks, etc. You could also get into the US, but you have to realize the currency risk. You could also use Exchange Traded Funds where you can get diversification. This way, you can probably get away with 10 different holdings, because they are diversified themselves.

COMMENT

He is looking at the Brookfield Group. This one is an experienced package of companies. Just raised some money, so they could be looking for transactions and infrastructure stuff. Very large organization. If you are looking for a long-term growth stock, possibly some volatility, this looks like a pretty good bet.

WATCH

Gold has been out of favour. We are into some seasonality currently and gold stocks are generally up 10%+. He has been wondering if he should be lightening up, but it is acting very well. If he sees other kinds of problems on the horizon that may shake markets up, gold stocks may tend to be the offset.

DON'T BUY

Not one of the big integrateds that he would choose. A little too quiet, not enough going on. Have a reasonable dividend. You don’t hear much going on with the company. Prefers others. (See Top Picks.)

WAIT

(Owns preferreds, not the commons.) Thinks the company has great potential, but it always seems to be on the doorstep, just about to achieve their objectives. Have a great rail sector. Their airline side can be extremely profitable or, extremely dangerous. So far, this has been the millstone around their neck. The C series has a great design, and the engines are supposed to be great. With the world airline expansion going on right now, they can do quite well, but they’ve got to get the plane up in the air with no problems.

PAST TOP PICK

(A Top Pick July 19/13. Up 34.96%.) Still likes this. The stock is acting well. Moving lots of fracing sand.

PAST TOP PICK

(A Top Pick July 19/13. Up 29.02%.) Still one of his core stocks because of the dividends. It is now pushing back into its higher range, so he is a little concerned. Also, worries about flood problems in Saskatchewan.

PAST TOP PICK

(A Top Pick July 19/13. Up 29.24%.) Still likes this. Have managed to enter the US like other Canadian banks, but have made a success of it. Their technology is as good as anything you’ll find in the US.