As a self-described conservative long-term investor, today's topic of discussion is the opposite of conservative or long-term: volatile and short-term. Specifically, the topic is “Horizons BetaPro TSX Global Gold Bull Plus ETF”. This is a Canadian based ETF that trades on the Toronto Stock Exchange (TSX). It acts like an index of two times (200%) the daily performance of the S&P/TSX Global Gold Index. The S&P/TSX Global Gold Index tracks gold producers (as opposed to gold the commodity).
"Horizons BetaPro HBP ETFs are a unique series of alternative exchange traded funds ETFs used by investors and investment professionals to profit when the market is rising or falling, or to reduce risk by hedging their existing market exposure. HBP ETFs offer two types of structures: Bull+/Bear+ leveraged ETFs and single inverse ETFs. The HBP Bull+ ETFs HBP ETFs are designed to offer double the daily performance (inverse daily performance) of their underlying index or benchmark. … All HBP ETFs are denominated in Canadian Dollars.
HGU is the “bull” ETF for gold producers. As a double performance ETF HGU is volatile, as evidenced by the one month chart below ...
The Inspector is recommending this ETF as a trade (not as an investment). The trick is to buy this and sell a portion of the holding on a regular basis. The concept is to surf the chart’s ups and downs. In a just a few days, this ETF can move 10-20%. It represents a good opportunity to make a little bit of side money, away from core holdings of a portfolio.
Gold companies and the commodity have been on a general up trend. None the less, as mentioned, the chart is choppy. Do not buy this ETF unless you understand the concept fully. In general, gold is a nice hedge to have in an equity portfolio, and the HGU ETF is a nice way to add some dollars to a suffering equity portfolio.
DISCLOSURE: The author buys and sell units of HGU on a regular basis.
As always, do your homework and read between the lines.
Jon Stewart blames CNBC and Jim Cramer for careless financial news coverage. In a nut-shell, he believes (rightly) that CNBC has betrayed the trust of its viewers. However, the Inspector asks, which corporate-owned US news media does anybody trust? And it’s not just financial news that is untrustworthy, but any corporate-owned US news. A quick examination of coverage during Bush’s reign of “error” should provide ample proof of how ineffective and untrustworthy the US corporate-owned news media is. Talk about lap dogs.
Jon Stewart wants to point the finger at CNBC and Jim Cramer: The public was duped and they are to blame. The entire premise of a functional democracy is having a well informed public. But if the US public descends into mass stupidity, is it the media’s fault? Put another way, do you blame the drug dealer or the drug user? More often than not, junkies are portrayed as victims and the pushers as evil. No matter how sleazy CNBC and the rest of the financial and “regular” US news media may be, nobody is forcing anyone to watch their crap. Just say no.
Canada is blessed in comparison to US corporate-owned news. For the most part, Canadian news coverage is level headed and even handed. Financial news is no exception. Watch the Business News Network (BNN) and you immediately see the difference (check-out BNN.com). Rather than fast cash, crazy money and sensationalist reporting, guests are interviewed at length, topics are covered thoroughly and investment advice is top-notch. And guess what, BNN is available in the US. So Jon, time to change the channel!
That Mr. Stewart is calling out the US financial news is important. What the public needs to do is take matters into their own hands. Change the channel! There is plenty of reliable and thorough news out there. Let’s not forget international news. The BBC for example puts FOX news and CNN to shame. It’s not enough to blame the messenger. Instead, it’s time to shoot the messenger.
One of the central concepts behind Professor Noam Chomsky’s theory of the media is that it serves the insiders that own it, not as a matter of conspiracy, but as a matter of function. It is for that reason that any news source that is owned by the institutions that it is supposed to “keep an eye on” will never give you the real news. That is why you need to read this blog, and the next guy’s blog, why you need to search the world for news, and filter out the crap. Don’t point the finger, use the finger, and give the US news media the finger. You have the internet and with it more access to information than available at any other time in history. Why the f-ck would you bother with CNBC, MSNBC, CNN, Fox News or the rest of these lackeys?
Jon Stewart is one of the most entertaining people on television, but for him to excuse the public for being lazy and for trusting an institution (US financial news media, US news media) so obviously compromised – sorry, doesn’t work for this guy. Jim Cramer, like some of the most brilliant minds in economics (including Alan Greenspan, Warren Buffet) totally underestimated the coming financial meltdown in 2008. Are we mad that people of such intelligence unintentionally or intentionally led us astray? Of course, but who really is to blame? Well, for starters, check this out … from PBS. One of the best examinations of the financial crises out there.
Through me you pass into the city of woe: Through me you pass into eternal pain: Through me among the people lost for aye.
Justice the founder of my fabric mov'd: To rear me was the task of power divine, Supremest wisdom, and primeval love.
Before me things create were none, save things Eternal, and eternal I endure. All hope abandon ye who enter here.
Such characters in colour dim I mark'd Over a portal's lofty arch inscrib'd: Whereat I thus: Master, these words import.
Dante Alighieri
That pretty much somes up the second half of 2008, and unfortunately, the outlook for 2009. The sky has fallen. The fat lady is out of breath. The sh-t has offically hit the fan. Enron aint got nothing on this.
Hopefully, the small investors can make it through this economic hell, through purgatory and then into financial heaven. The time has come to say "bye-bye" to the NYSE, Nasdaq, TSX and say hello to FIXED INCOME. Corporate bonds are your friend. Stocks are now satan's domain.
Think of the Inspector as Virgil, your guide through the Inferno, through Purgatory, and finally into Paradise.
Step one is to adandon all hope in the stock market. Its done ... its over. 2009 is going to be an absolute blood bath. As comforting as it may be to think that Bernie Madoff has a special place in hell waiting for him, that is not gonna make you any richer. That's where fixed income comes in.
Like most investors, the Inspector's equity portfolio has taken a beating. The value has shrunk. But, the Inspector is a long-term investor and can afford to hold on to his stocks. As a way to regain some value in his portfolio, the Inspector is looking at corporate bonds.
Specifically, in today's post, the Inspector will look at a Canadian Bank, BMO, and a 10 year bond that generates between 8% - 10% annually. The bond is "BMO TIER 1 NTES - SER.A" which has a call date of December 31 2018. It is listed at 10.221% Pretty good. This bond is rated AH/Aa3 by Moodys and DBRS respectively. Investor grade.
The spread between government bonds and corporate bonds in general are at very high levels (so far this year, well above six points). This is a good time for corporate bonds. As far as risk is concerned, the most obvious one is the health of the company and their ability to pay at maturity. Well, if its any consolation, all of Canada's big banks are healthy, especially compared to banks world-wide. In fact, today, March 3, BMO beat analyst expectations . This is no struggling giant. If BMO can make a profit in the current environment, arguably the worst ever (as in the history of the universe), then it shows they are in it for the long haul. As a rule, as long as a bond issuer stays in business, you're likely to get generous payouts regardless of economic conditions.
The ultimate enemy of bonds is inflation, and we are likely due for some of that eventually. None the less, what is the likelihood that the average rate of inflation will be 10% for the next ten years? Also, consider that inflation has never been lower than it is right now. Bottom line: Inflation might end up eating into the 8 - 10% annual return, but it won't erase it.
DISCLOSURE: The author owns units ofBMO TIER 1 NTES - SER.A
Do your homework. Eat your veggies. Trust no-one ...especially not the devil.
Welcome to my blog dedicated to stock market analysis and investment advice. I am a stock enthusiast with a solid track-record. The focus of my blog is INVESTING in small, mid and large cap US and Canadian publicly traded companies. I typically go for a 12 – 18 month investment window. Making money is hard work and you must put in the time if you want to be consistently successful.
I am a stock enthusiast with a solid track-record, which you can SEE FOR YOURSELF! There is no need to take my word for anything - track my picks in Google Finance or Yahoo Finance – I’ll let the facts speak for themselves. My focus is INVESTING in small, mid and large cap US and Canadian publicly traded companies. I typically go for a 12 – 18 month investment window.
