# My long term value portfolio



## Kropew

Hello,
I'm a 20 years old student and have been investing for a few years now. My plan is to focus on long term value with a concentrated stock portfolio.

I currently hold:

88 shares of Canadian National Railways (CNR.TO) - 
193 shares of Bell (BCE.TO) - 
121 shares of Transcanada Corps. (TRP.TO) - 
74 shares of Enbridge (ENB.TO) - 

For a total of approximately 28,500$ with a 4.5% dividend.
My portfolio has a 30% progression (w/o dividends) since I started back in late 2010.


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## My Own Advisor

Good start with those companies. I own them all as well.


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## Ag Driver

How did you manage to accumulate ~20k by the time you were 17?


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## Kropew

Ag Driver said:


> How did you manage to accumulate ~20k by the time you were 17?


Ive been working since I'm 15 while studying and barely spent anything. I've always been investing my money. I think the key with stocks is time. The first shares I bought were BCE, i bought them at 30$ and now they're worth 46-47$, a progression of more than 50%.


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## MasterCard

Good job kiddo.
After you finish your undergrad you'll probably end up in some investment bank.
You'll get your MBA and make millions and millions of dollars.
Kudos.


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## Kropew

My Own Advisor said:


> Good start with those companies. I own them all as well.


Im curious if you have any advice of other companies with a good long term perspective


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## Eder

Grats on your saving so much so early in life....my 30 yr old kid makes $42/hr and blows it on beer/women & hockey equipment....whats left he just wastes.

Oh...and don't forget that Royal Bank will make you rich over time.


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## Kropew

Update:

176 shares of Canadian National Railways (CNR.TO) - 
193 shares of Bell (BCE.TO) - 
121 shares of Transcanada Corps. (TRP.TO) - 
74 shares of Enbridge (ENB.TO) - 

Will buy FTS (2000$) soon

Total: 33 000$ (debt-free)


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## My Own Advisor

I never did respond to your post..whoops 

I own FTS as well.

Consider CNQ and some Canadian banks, after a correction of course. 

REITs like REI.UN, HR.UN and CWT.UN may be the only things that are priced reasonably still, now.

Keep saving, wait for a correction and dive in. Very well done ($33k and debt-free).


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## tygrus

Kropew said:


> Update:
> 
> 176 shares of Canadian National Railways (CNR.TO) -
> 193 shares of Bell (BCE.TO) -
> 121 shares of Transcanada Corps. (TRP.TO) -
> 74 shares of Enbridge (ENB.TO) -
> 
> Will buy FTS (2000$) soon
> 
> Total: 33 000$ (debt-free)


Well you have to do a little thinking about the longer term on these companies. 

For Enbridge and TC, how will these companies grow if no new pipelines are ever going to be built which looks like the case. And while those problems are sorted out, the US becomes self sufficient in oil and solar and wind are ramping up big time.

For Bell, there have been rumors that they are very weak in the mobile space.

CN is probably ok as they will benefit from increased oil by rail.


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## techcrium

wow $33,000 at 21?

Going at this rate and saving at this rate, you will reach half a mil by 33


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## Kropew

tygrus said:


> Well you have to do a little thinking about the longer term on these companies.
> 
> For Enbridge and TC, how will these companies grow if no new pipelines are ever going to be built which looks like the case. And while those problems are sorted out, the US becomes self sufficient in oil and solar and wind are ramping up big time.
> 
> For Bell, there have been rumors that they are very weak in the mobile space.
> 
> CN is probably ok as they will benefit from increased oil by rail.


I actually think that we are gonna build new pipelines. We need to transport more and more oil and it's pretty obvious to everyone that it's safer to transport it via pipelines than trains. 
There are currently many pipeline proposals and if the ecologists are slowing the development, I don't believe they can stop it.
-Keystone
-West to East
-Northern Gateway
-Enbridge Mainline expansion

As for Bell, they are dominant in telecoms in general. They will have to step up in the mobile space but they still make huge ammount of money in the rest of the telecoms. 


Futur is always uncertain. If a company, eventually, loses his concurrential advantage I will sell and buy something else. I don't think its the case as of right now.


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## Kropew

My Own Advisor said:


> I never did respond to your post..whoops
> 
> I own FTS as well.
> 
> Consider CNQ and some Canadian banks, after a correction of course.
> 
> REITs like REI.UN, HR.UN and CWT.UN may be the only things that are priced reasonably still, now.
> 
> Keep saving, wait for a correction and dive in. Very well done ($33k and debt-free).


Thanks!

For the real estate investment, seeing how the housing market continues to heat up, I feel like we are in somesort of bubble.


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## SkyFall

just realize you are from Quebec!!! Yeahhhhh buddy!!!!!!!!


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## Pluto

Kropew said:


> Thanks!
> 
> For the real estate investment, seeing how the housing market continues to heat up, I feel like we are in somesort of bubble.


I agree with your real estate concerns. Reit prices will be under pressure as we inch towards interest rate raising time.


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## Kropew

Pluto said:


> I agree with your real estate concerns. Reit prices will be under pressure as we inch towards interest rate raising time.


The near futur could give some good value opportunities in this sector


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## Pluto

Kropew said:


> The near futur could give some good value opportunities in this sector


Yeah, sooner or later. With in 2 years or less, probably, although its a guess. If the yields on the riet etf's got > 7% it would be interesting because then one has a OK yield, and a good chance at an eventual capital gain. That means zre, for example, would have to go down to about 13.7. But that's going to take some rate increases to push riet prices lower and rate increases aren't going to happen until US fed is confident their economy can stand it. Their unemployment has to get below 6% and factory utilization higher before there is any real opportunity for them to raise rates. In the meantime, I doubt reits will break through the highs of may 2013 until the next cycle.


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## My Own Advisor

Won't REITs just raise rates with/when interest rate hikes? Pass the costs to renters?


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## HaroldCrump

My Own Advisor said:


> Won't REITs just raise rates with/when interest rate hikes? Pass the costs to renters?


Depends on the type of REIT, MOA.
REITs are as diversified as the underlying types of properties - residential apartments, office buildings, commercial R/E, industrial/factory, etc.
Not everyone will be able to perfectly match their rent increases with rise in bond yields.
Some REITs have long-term rental agreements with very low inflation-indexed rent increases built-in.

Also, there is excess supply in some segments, such as office space in the 5 major metro cities.
There isn't going to be a direct correlation between increasing bond yields and rent increases.
Some REITs will suffer for a while (although it should even out in the long-run i.e. 5+ years)


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## My Own Advisor

Thanks Harold, I think this is where I was coming from...your comment matched what I was thinking: "Some REITs have long-term rental agreements with very low inflation-indexed rent increases built-in."

At least the 'smart' ones would have done this


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## Pluto

My Own Advisor said:


> Thanks Harold, I think this is where I was coming from...your comment matched what I was thinking: "Some REITs have long-term rental agreements with very low inflation-indexed rent increases built-in."
> 
> At least the 'smart' ones would have done this


An additional factor is in a recession, some renters go broke, and the space is vacant. In such times, it is difficult to raise rents. (That's my favorite time to buy reits.)


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## Kropew

[]


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## gt_23

My Own Advisor said:


> Won't REITs just raise rates with/when interest rate hikes? Pass the costs to renters?


Very simply: if a REIT's cost of debt is 4% and it increases 100 bps, that's a 25% increase for the REIT. How does a REIT pass on a 25% rent increase to commercial/industrial tenants that are seeing 1-2% annual growth?

Even assuming it can increase it's rents to cover the entire increase in debt costs, it will most likely just drive down its occupancy rate as businesses make their own adjustments.

Actions have consequences...


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## yyz

Ok that's a 25% increase in interest on how much and over what period of time? I don't think corresponding that to a 25% rent increase is apples to apples.


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## Canadian

Let's not forget that a rise in interest rates will not immediately affect the earnings performance of most REITs. If interest rates rise tomorrow and a REIT has a fixed-rate mortgage with a few years until renewal, management has plenty of time to strategize a plan to overcome the higher renewal rate.


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## My Own Advisor

"Let's not forget that a rise in interest rates will not immediately affect the earnings performance of most REITs. If interest rates rise tomorrow and a REIT has a fixed-rate mortgage with a few years until renewal, management has plenty of time to strategize a plan to overcome the higher renewal rate."

This is partly where I am coming from. I just don't see how REITs will be suddenly exposed if rates bump up by 25 or 50 points in a couple of years. 

Anyhow, I don't see a rate bump happening until 2015 or 2016 now. The U.S. economy is still quite messy and we won't do anything (in Canada) because of that.


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## My Own Advisor

Back to the original post....

Any new companies?

Still holding: CNR, BCE, TRP and ENB?


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## warp

My Own Advisor said:


> Thanks Harold, I think this is where I was coming from...your comment matched what I was thinking: "Some REITs have long-term rental agreements with very low inflation-indexed rent increases built-in."
> 
> At least the 'smart' ones would have done this


I find Reits harder to evaluate than stocks. I am thinking of buying several reits for young family members for the long term.

So, Ok...which Reits would you say have been, and are today, the "smart" ones?

Thanks


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## cannew

It's great that you've started so young and wisely selected solid companies to begin your investments. I'd strongly recommend you open DRIP accounts for BCE, TRP & ENB. These three also allow additional share purchases at no cost. You'll see your portfolio grow even faster, not having to pay fees. You may be able to do an In Kind transfer of the shares.


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## Eclectic12

^^^

If the shares are held at a discount brokerage, there are good odds that the OP can signup for the broker's DRIP for free. 

The down sides of a broker DRIP are that they are typically for whole shares only and any additional purchases will a commission to pay.


On the other hand, getting the shares registered with the original company so that in enrolling the company DRIP/SPP (assuming a SPP is offered) is possible - typically costs around $150. 

The advantage to the company DRIP/SPP is that typically the DRIP will be allow fractional shares (i.e. full dividends value goes into a combo of full plus fractional shares), there may be a discount that is not matched by the broker DRIP and if offered, a SPP allows more shares to be purchased commission free.


It's up the investor to figure out if it's worth the fee to get the shares registered. 


I know some CMFers who have chose to leave the shares at the broker in the broker DRIP and used a discussion board or other means to get a registered share so that they can participate in the company DRIP/SPP without incurring the registration fee.


Cheers


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## Kropew

Eclectic12 said:


> ^^^
> 
> If the shares are held at a discount brokerage, there are good odds that the OP can signup for the broker's DRIP for free.
> 
> The down sides of a broker DRIP are that they are typically for whole shares only and any additional purchases will a commission to pay.
> 
> 
> On the other hand, getting the shares registered with the original company so that in enrolling the company DRIP/SPP (assuming a SPP is offered) is possible - typically costs around $150.
> 
> The advantage to the company DRIP/SPP is that typically the DRIP will be allow fractional shares (i.e. full dividends value goes into a combo of full plus fractional shares), there may be a discount that is not matched by the broker DRIP and if offered, a SPP allows more shares to be purchased commission free.
> 
> 
> It's up the investor to figure out if it's worth the fee to get the shares registered.
> 
> 
> I know some CMFers who have chose to leave the shares at the broker in the broker DRIP and used a discussion board or other means to get a registered share so that they can participate in the company DRIP/SPP without incurring the registration fee.
> 
> 
> Cheers


I don't really like DRIP. I prefer to have the money and invest when I see good opportunities. I feel like the fees I'd save is just not worth it. ENB is overvalued at the moment and I wouldn't want any share purchases at this cost.


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## Kropew

176 shares of Canadian National Railways (CNR.TO) - 
193 shares of Bell (BCE.TO) - 
121 shares of Transcanada Corps. (TRP.TO) - 
74 shares of Enbridge (ENB.TO) - 
[Added] 84 shares of Couche Tard (ATD.B) -

For a total of approximately 36,000$


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## Kropew

I currently hold 12,000$ in cash. I want to add to CNR, BNS and ATD.B.

Any thoughts about the current evalutation of these stocks?


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## Kropew

214 shares of Canadian National Railways (CNR.TO) - 
193 shares of Bell (BCE.TO) - 
121 shares of Transcanada Corps. (TRP.TO) - 
74 shares of Enbridge (ENB.TO) - 
213 shares of Couche Tard (ATD.B) -
Cash: 5000$ (gonna buy BNS with it)

Total: 51 000$


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## My Own Advisor

Impressive. And you're only 20? You'll be retired at 40 at this rate.


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## Kropew

My Own Advisor said:


> Impressive. And you're only 20? You'll be retired at 40 at this rate.


I'm 21, still student


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## Kropew

214 shares of Canadian National Railways (CNR.TO) - 
193 shares of Bell (BCE.TO) - 
121 shares of Transcanada Corps. (TRP.TO) - 
74 shares of Enbridge (ENB.TO) - 
213 shares of Couche Tard (ATD.B) -
[Added] 68 shares of BNS (BNS.TO) -


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## My Own Advisor

Solid picks, own most myself.


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## Kropew

Update

214 shares of Canadian National Railways (CNR.TO) - 
193 shares of Bell (BCE.TO) - 
121 shares of Transcanada Corps. (TRP.TO) - 
74 shares of Enbridge (ENB.TO) - 
213 shares of Couche Tard (ATD.B) -
81 shares of BNS (BNS.TO) -

57 000$


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## Kropew

...


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## Kropew

Probably gonna buy more shares of ENB soon.

Any thoughts about the current valuation?


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## Kropew

Still holding:

- BCE.to (17%)
- TRP.to (9%)
- CNR.to (28%)
- ENB.to (14%) (Bought more ENB recently at 44$)
- ATD.B.to (18%)
- BNS.to (13%)

Total approaching 70k.

I started a small position in ACQ.to at 17$. Thinking about increasing it a little bit. Any thoughts on ACQ? It seems to me that given the low valuation it could be an interesting entry point as bad macroeconomics won't last forever.


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## Kropew

Total Equity portfolio now worth around 75k.

I accumulated a bunch of Autocanada (ACQ.to) shares at an average price of 20$ in anticipation of a consolidation in the auto retailing industry and improving macroeconomics in Alberta and BC in the years to come. What do yall think?


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## Kropew

Reached about 125k.
Still holding:
-cnr/enb/atd.b/bns/trp/acq
-starting a position in msft


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## james4beach

Impressive progress, and an amazing one year gain! But how did you go from 75k to 125k in a year when those stocks are about flat?


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## Kropew

Mainly new contributions. Kept buying the same stock on the dips


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## james4beach

Kropew said:


> Mainly new contributions. Kept buying the same stock on the dips


Sounds like you're able to save an impressive amount of income... really nice!


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## Pluto

I'm not really excited about ACQ, however it will probasbly come to life sometime. As far as autos go, I like Magna with operations in 29 countries, and most recently moving into China. 
Anyway, you are doing a good job putting your money to work at a young age - very rare.


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## Kropew

Pluto said:


> I'm not really excited about ACQ, however it will probasbly come to life sometime. As far as autos go, I like Magna with operations in 29 countries, and most recently moving into China.
> Anyway, you are doing a good job putting your money to work at a young age - very rare.


I still feel ACQ's current valuation is excessively bearish


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## lonewolf :)

james4beach said:


> Sounds like you're able to save an impressive amount of income... really nice!


 When starting out safety then savings then investing most important.


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## Kropew

Reached 200k,
Currently accumulating a position in JP Morgan


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## Kropew

lonewolf :) said:


> When starting out safety then savings then investing most important.


Aren't savings supposed to be invested?


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