Newsletter January 25, 2003 Newsletter January 25, 2003

Free Research Report

Click here for a link to a free report on Canadian Utilities. A boring company that has a history of increasing its earnings year after year.

You can access all of my research, including my strongest buy picks, by subscribing to the paid option.

Market Outlook

The market in general is still relatively expensive. My focus is always on finding individual under-valued stocks. A stock is under-valued when it is pricing in a lower level of growth compared to a conservative outlook for its actual growth. My formulas allow me to analyze how much growth is priced-in to each stock.

Since there is no certainty that stocks will rise this year, it does make sense for most investors to have a portion of their money in bonds.

While short-term rates are at record lows, long term rates are far above their record lows. This means that there is room for longer term bonds to perform well in the next few years.

Some analysts believe that there is a significant risk of deflation. If that happens, long term rates will decline and government bonds will end up being an excellent investment. Under deflation, stocks will not do well, due to low profits and corporate bonds would likely experience higher defaults. Government bonds would do very well in this scenario.

Even if there is no deflation but if inflation remains low, then long term rates will likely decline and medium to long term bonds will do well.


Performance of my stock research in 2003 to data has been very good. I have been conservative in my valuations and this has paid off. Six out of seven stocks in the model portfolio are up and the seventh is down only 0.3%. The strong buys are up 4% while the TSX is only up 0.8%. The model portfolio is also up about 4%.

Now is a good time to access all of these reports for a total charge of CAN $10 per month. You can unsubscribe at any time which means that you can access all of this information for 30 days for just $10.00

These reports will be updated over time. In particular, I have begun to to make updates as the Q4 2002 figures start to roll in over the next few weeks.

These tend to be reasonably conservative stocks when purchased in a diversified portfolio. All of these picks are based on solid fundamental analysis that takes at least 4 hours when a new company is added and about 90 minutes for a quarterly update.

When you purchase this research you are getting access to many many hours of diligent educated effort at a bargain price. And, it is from an independent source. I have no reason to flog any particular stock.

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Goofy Award

To Air Canada for starting a new price war with West Jet. The courts recently ruled that it was not illegal for Air Canada to aggressively cut prices and try to under-cut competitors. The problem is that West Jet clearly has lower costs and Air Canada cannot win this game. In the past both parties to this game have lost. This court ruling hands a loaded gun to Air Canada’s Robert Milton. He is already using it to try and blow the company’s brains out!