Investing in 2010

[Devil's Rule]

With 2009 (and 2008 firmly) behind us what are your thoughts and ideas of investing in 2010?

The first trading day of this new year started with a bang...still there are certain area's of doubts (Dubai, Greece...more?) time will tell, but there is one indicator that says the energy sector should be performing quite well for some time to come, and that is the continued mergers and acquisitions of energy companies. http://www.theglobeandmail.com/globe...rticle1418042/

This bodes well for Calgary and Alberta and many of their companies even with all the climate talks happening in Copenhagen and the black eye given to the energy industry. Note that the main polluters both in the US and Canada as they are all over the World are coal power generation stations. So this should be good news for oil and gas companies (as well as other alternative energy solutions) as they should be prepared to take over some of the energy demands that the coal industry would lose.

Another game play in the energy sector is to move into Income Trusts as they are lower price valued today than what they will be when they convert to a non trust company, also it doesn't hurt that they have a nice monthly pay out.

These are just my thoughts what are yours? Also to note that having all of your eggs in one basket as keeping everything in the energy sector is not a good idea. A good portfolio is always well diversified.

[Winsor_Pilates]

I hope the energy sector shoots through the roof and Albertans get back to counting their fat bonus cheques and hiring everyone with an arm for $20/hr to serve fries.

Than people will start buying real estate again, and my Calgary real estate investments may start to make sense again.

[Slava]

I disagree with your last comment about diversity actually. People have gone way overboard on that part over the last decade and the idea of "not putting all of your eggs in one basket" is just trite. Instead many Investors would be better served to put all of their eggs in one basket and "watch the basket".

This doesn't mean you should buy 15 energy companies to make sure you are buying the best one; it's more about finding a great investment where the odds are in your favour and betting heavy on that investment.

As far as energy goes I think that there is still money to be made here. Some companies are still good bargains and there could be years of growth ahead. I wouldn't leave other areas off your list though. I've found some relatively amazing deals in some consumer areas lately (at least in my estimation of their value!)

[I-Hate-Hulse]

Originally Posted by Devil's Rule

Another game play in the energy sector is to move into Income Trusts as they are lower price valued today than what they will be when they convert to a non trust company

Hmmm can you elaborate on your train of thought here? I would have assumed that with a less tax efficient corporate structure in place that valuations would head downward, not upward. (I actually think most current valuations have taken this into consideration already)

Unless Kinnear's new GOR Financial Instrument takes off I guess.

[Devil's Rule]

Originally Posted by I-Hate-Hulse

Hmmm can you elaborate on your train of thought here? I would have assumed that with a less tax efficient corporate structure in place that valuations would head downward, not upward. (I actually think most current valuations have taken this into consideration already)

Unless Kinnear's new GOR Financial Instrument takes off I guess.

That is what I had thought originally as well, however having owned income trusts for a long time and observed how they have performed against non-trust corporations in my portfolio it became clear just how different the two types of investments they really are.

Income Trusts, for the most part even in their hay days were never a growth stock per se, but as their title insists are income generating to the shareholders. They generate steady monthly income but the stock prices moved slowly. On the other hand you have non-trust companies having their stock price advance considerably more than the trust companies but had lower pay-outs if any dividend.

So the idea is that today income trusts have been devalued considerably for multiple reasons and are somewhat affordable. Their share prices would be moving slowly until they convert but the payouts are still good and I'd have those re-invested and once they convert look for stock price appreciation.

But that is only my opinion.

[macker]

That job data today is kinda scary. Looks like a jobless recovery to me. We saw this in the 90's and in 2001 and the big fear now is if this is like 1937 where we had the second breath during the depression. That is likely over stated but 2010 is going to be a very interesting year in the markets. Tighten up the stop losses as a lot of this data doesn't quite add up.