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Weekend Discussion Points
July 13th, 2007 by 
investoid
Here are some tidbits to chew on this weekend. I look forward to reading about what you think in the comments below.
- According to EDC, the Loonie is expected to fall to 83 cents US or so by the end of next year. Do you think it’s going in that direction, or heading up?
- Lululemon has stated that they will offer about 16 million shares in their IPO, down from earlier estimates of 18 million. The majority of these shares are through the sale of existing shares. Is this a bad sign for the company’s prospects? If they’re supposed to be expanding globally and have great growth opportunities, why the massive insider exodus?
- How many of you watch BNN Market Watch and follow their picks? I’ve always wondered if anyone is comprehensively tracking their longtime performance using the database from mid-2005 that’s available on their website. I wouldn’t mind doing it at some point provided I can get a historical data feed at reasonable cost.
Have a great weekend everybody!
Posted in General | 
July 13th, 2007 at 6:53 am
I’ve been feeling more and more that now is a good time to be buying in US currency (maybe something like Bank of America in an RRSP account). With the strong dollar, when/if the American dollar gets stronger, you’d get the gains from the stock itself plus the currency.
I don’t really understand currency fluctuations but my gut seems to say our dollar won’t stay at the same level (or above) as the American dollar (although I suppose the argument could be made that the British pound has no problem staying above the US dollar).
Does anyone have any insights about if there are any constraints on currencies long term fluctuations (or if its totally random and can go in any direction)?
July 13th, 2007 at 7:41 am
I think the Cdn dollar will certainly go down again. It might take a long time (5 years?)but if you are a long term investor then I don’t think it makes sense to concentrate your holdings in Canadian dollars - especially now. Some people look at the poor returns their foreign holdings have gotten in the last 6 months and might be tempted to switch to Cdn - big mistake!
Mike
July 13th, 2007 at 8:47 am
With respect to Lulu Lemon, insiders selling is not necessarily a bad thing. Without having read the SEC filing, insiders in these types of situations sell because their options are vesting and they need to sell shares to pay the tax man, they are cashing out or they need the money to buy that new house. If the SEC insider filing simply says “tax reasons” for reason of sale, it has less to do with the prospects of the company and more to do with the individual’s life-style choices.
July 13th, 2007 at 6:45 pm
Since BNN interviews a diverse group of money managers with different perspectives, risk tolerances and competencies, I think it’d be unjust to some astute money managers if we simply generalize the program by averaging the performance from all guests.
I use BNN as “one” of my research tools, but I never buy or sell based solely on their recommendations. I don’t watch all the segments, but only when they host my favourite managers including David Driscoll, Laura Wallace, Norman Levine, Michael Sprung, Sandy McIntyre, Bruce Campbell, and Gavin Graham.
July 13th, 2007 at 8:25 pm
I think the CAD$ is nearing it’s highs right now.
LLL will be an attractive IPO no matter what insiders do.
I like Brian Acker and Bruce Campbell on Market Call. Some stats on manager performance might be interesting but only if it is done long term.
July 13th, 2007 at 10:23 pm
I’m neutral on Brian Acker mainly because his model is proprietary, which means I can’t take anything away from his commentary. E.g A 20% discount to his model price is meaningless to me if I don’t know his rationales.
July 14th, 2007 at 2:00 pm
Great comments, keep them up!
With regards to Lulu, I am not concerned with the fact that insiders are selling. I am concerned that they a) are not issuing as many shares as previously stating, indicating that there is lukewarm response to their offering and b) they are raising only $20-25 million, which is not a lot of money for worldwide expansion. I think this is mostly a liquidity event for founders, which doesn’t necessarily bode well for investors in the first year or two.
July 15th, 2007 at 4:19 pm
Like FinancialJungle, I use BNN as one of my tools. The guys from Sprott are my favourites. I’ll never go out and buy their top picks just because they’re recommended but I definitely look into them further if their reasons are profound.
If you’re interested in finding what the experts on BNN are saying about your stock, you might find stockchase.com useful.
July 16th, 2007 at 4:46 pm
Am I the only person that see’s the Canadian dollar gaining more strength?
The US isn’t publishing the M3 index and its printing MASSIVE amounts of USD (some people believe 10 to 15%!). It took China years to get to $1 trillion in USD reserves, but just three months to climb to $1.2 trillion. The Chinese have discussed diversifying away from the USD (in other words, not buy as many… ) and many countries around the world have been talking about switching to the EURO for oil trading…
Then combine the fact that the Canadian government is PAYING off debt, lowering taxes, and seeing massive surplusses, combined with the strong resources available in Canada and the rising interest rates… I see only strength. Demand for resources can’t drop that much due to the large and growing populations on this planet and their determination to have ’stuff’.
The only thing that I think can change the direction of the USD is a massive change in policy within thier government (controlled spending, stop printing excess dollars, raise interest ratse slowly) and I’m not sure it will happen anytime soon. For the next few years I see the Canadian dollar continuiing to be strong against the USD. That doesn’t mean there won’t be some corrections. I doo think it has appreciated too fast lately.