Lazy afternoons are so nice...

Just finished cleaning my little place and getting the laundry well underway and it is only just 1:30!  The day is sunny and just a bit cold, but warm enough to have the windows and balcony doors open a foot or more.  With so much window space in my apartment, the place does heat up on a sunny day.    I am in a happy mood and ready to plan some new projects for the coming months.  But first my blog!

Stock Market Bouncing Back Up or Down?

Firstly, let  me report on the state of the stock market which now is officially in a rally.  For those of you who don't follow such things the market has been steadily rising in this last month.   In stock market speak it is a rally meaning that the market (my favourite - the TSE for instance)  is now trading above its 50 day moving average - which is a fancy way of measuring whether the market is going up and then down or just up.  When the a market index (say the TSE 300) closes at a value above the average of the last 50 days then you can say it for sure is moving up.  When it reaches 20% above its previous low it is called a bear market rally.     

In case you are wondering, if it were to close above its 200 day moving average (which takes a long time) they would proclaim a bull market (which by definition is a rally) and we would be officially out of hot water, at least as far as the stock market is concerned.

The RBC common stocks I bought on Feb 23rd (mentioned in my blog of that date ) have gained 35% in value - up $10.11 a share.  In all my RRSP has recovered  23% of its high water mark value recorded Jan/08.   This is good, but are we out of the woods?  No, not by a long shot.  

 The next question is where will it go next?  Is the market in recovery?  Often during bear markets (that means down markets) the market rallies only to sputter and fall back into a lower position than when the rally started.  That is why it is called a Bear Market Rally.  And this rally may well die and the market will then seek new lows.  

 We need to see if the  “I want my money back people" (those who bought at a certain level are happy to get out once the market returns to that level and they can say at least they didn’t lose anything because they believe it is going to go back down) outweigh the "I want to make a killing people" (those that feel a need to buy so get in while prices are cheap because they believe it is going to go back up where it was and keep rising).  

Time will tell.  This is where hindsight is the only thing to go on.  Either the market will go sideways a while (that is up and down) or it will start moving down.   

The other thing to remember is that the stock market is a leading indicator - that means it will recover before the economy recovers.  The stock market will start to go up long before people start to feel that the economy is once again booming.  

Early Retirement an Unreal Expectation?

I just listened to a video on the Globe's Financial website which discussed retirement expectations and whether one can realistically retire early, at age 65 or whether one should keep working as long as they are able to (health wise).  The point that was being made was that we can expect to live a lot longer than our parents and the defined benefit pension (such as government workers have now) is giving way to more modest plans which may not keep up to our needs during a 30 year retirement.  The thought is that we should work as long as we can because most of us will not have saved enough cash to do otherwise.  Sobering thoughts.  

I am thinking that maybe an adjustment in my expectations is in order.  Perhaps  a number of 4-6 month sabbaticals in the period of my live as I move from age 55-70 might be just as good as out and out retirement.  There is a lot going to be said for keeping mentally active while earning some money to help finance the wonderful holidays I could have over that 20 year period.  Might not be so bad.   

If you want to listen to the Globe Video go here.

Grand Canyon Bound - Joshua Tree Forest

I will finish with a bit more of a travelogue from my Vegas trip.



 We last left of at the breakfast stop and at that point we boarded our comfy mini bus and headed for the West Rim of the Grand Canyon.   We drove for about an hour and a half through a Joshua Tree forest.  Joshua Tree is the common name of at type of Yucca Tree.   This is a particularly slow growing tree - averaging only 1.5 inches per year if water fall is adequate.  Very long lived the forest we drove through was estimated as 900 years old.  Wiki says these trees can live for more than 1,000 years.   The tallest trees can reach a height of 15 meters. They thrive in the dessert grasslands but are not able to grow above the tree line at about 3000 sq feet above sea level.  They are native to areas in the south west mostly within the Mojave Desert. 

About the Grand Canyon

As we moved closer to the Canyon we started up the foothills of the toward the Grand Canyon West Rim.    The Grand Canyon is an fantastic gorge in Arizona cut out of the  surrounding rock by the Colorado River.  The canyon is 277 miles (446 km) long, ranges in width from 4 to 18 miles (6.4 to 29 km) and attains a depth of over a mile (1.83 km) (6000 feet). 

  

There are 3 main tourist areas within the Grand Canyon.  The South and North Rims lie within the Grand Canyon National Park.  The South Rim is the most commercialized and   The North Rim is not accessible by winter, it is 1,000 ft higher and is only serviced by summer roads.  You can descend the canyon and hike and camp within at both these areas.  I understand that the views from the North Rim give a better impression of the expanse of the Gorge, I would gather just because of the higher heights.

Interestingly, there is only about 10-12 miles distance between the South and West Rims.  However it would take 4-5 hours to drive between the two points because there is no way to travel directly from one area to the other.

Unlike the South and North Rim, Grand Canyon West is not part of the Grand Canyon National Park. It is located on the Hualapai Indian Reservation at the western Grand Canyon corridor about 120 miles east of Las Vegas and about 72 miles northwest of Kingman, Arizona. Because the West Rim is more easily accessed from Las Vegas than the South Rim, a great many tourists and tours originate from Las Vegas. 

For more information on the Grand Canyon go to this link.

My bus tour took me to the West Rim and into the Hualapai Indian Reserve.   In one of the coming blogs I will fill you in on the wonders that I saw there.

Incidentally, the Grand Canyon is not one of the 7 natural wonders of the world but is in the running for the New 7 Wonders of the World.  I just checked the "live ranking" at their website and it is currently placing #5 in the category of Caves, Rock Formations and Valleys.   The New 7 Wonders will be the result of a several year process where nominations and voting for the new 7 wonders is taking place via Internet.  You can see more about the New 7 Wonders voting and current results at this link.  And don't forget to cast your vote!

Have you Signed UP?

Support Earth Hour

This will be the second year I have participated in Earth Hour . Last year's Earth hour was very successful in Toronto and as the Video at the link below attests, power consumption dropped significantly in Toronto which showed that there was a great deal of participation.

Earth Day Toronto 2008

So what does this prove? Obviously, the energy savings from the one hour are not going to do anything to stem the tide of global warming or to save the world. However, it shows that people the world over are kee enough to make the effort to spend an hour without lights on. It shows awareness of the issue and a desire to make change. Politicians and policy makers take note of this and therefore it adds motivation (if there isn’t enough already).

It is also a good excuse to bond with neighbours. My condo apartment has an “earth day party” in the party room for residents to come and be “in the dark” together. Last year they served green jello shooters, which tells a lot about the age of the residents!. Ha Ha.

I work at RBC and the CEO sent out a note to all staff stating that all RBC offices would be participating to the extent possible allowed within the confines of safety. He encouraged everyone to sign up and indicate their support. Many companies world wide have joined the Earth Hour movement. This is important.

So, if you have not done so already, go to the link and sign up. There are also some other very interesting videos on the site and a lot of “blogger tools” (I added one at left which I will leave for the week) to help spread the word. And lay in a bunch of candles for next Saturday and plan a great evening to celebrate that we can reduce our consumption, not only of hydro but celebrate that there is a wide following promoting an attitude of careful conservation and preservation of all our resources.

I PASSED MY PMP EXAM YESTERDAY!!!!!!

Now that I have that out of the way - it was most important so had to go first in this blog - I PASSED MY PMP EXAM YESTERDAY!!!!!! I was somewhat dissatisfied, while they don't give a grade there were too many questions I puzzled over .
It is a computer exam and it is scored immediately upon finishing. You are provided with a result on each of the 6 sections of the exam: either "deficient", "moderately proficient" or "proficient" and an overall "pass" or "fail". This exam was unlike any of the technology exams I have written in that it did not test just knowlege of right vs wrong, but also required you to know "the best" of 2 or 3 fully correct answers! The other comment was that the question wordings frequently had me confused as to what they were asking. The only saving grace on the whole thing - which allows me to sit back and let all this stupidity just flow out of my brain - there was not one question on the exam which I felt the least uncomfortable with that mattered. So enough is enough.

Now that I have my PMP it is time to think up another stretch goal to assist my career. I am thinking about some ideas and will fill you in once they solidify.

The Great Recession

Now it officially has a name. Some of the major news sources have coined the phase "The Great Recession" and it seems to be sticking and was used by a US public official to refer to what otherwise is called "this mess". At this point, I don't think we have it nearly as bad in Canada as many places elsewhere - but we are not heading out of it yet it seems. Even if the stock market does start it's slow climb back up it that does not mean that we are out of the water. The stock market is a leading indicator for recovery - that means that the recovery of the stock market will happen before the recession ends.
The reason is that the folks that buy and sell stocks anticipate what will happen and react.... The other observation that one can make - because no one really knows in advance if it has ended - that the market will go up and down as people think the economy is recovering and they buy stocks then they realize it is not and then they sell them. Once you see we have had sustained improvements over a period of months then you can see that the market will have trended up over the previous months...

Last Friday we broke the record 8 straight days of up market improvements in the TSE and ended the Friday down 2.1% from the previous day, but up 2.4% for the week!. It was up overall for the week. So is the market recovering? Would be nice, but I think not - because there are many examples of what appear to be the start of a rally and which ends up subsequently looking for a new low. It seems too soon by my mind.

I listened with some interest in the news reports regarding a demonstration that was taking place in France yesterday - they were demonstrating that the government has not done enough to improve the economy. Many of the European governments have declined the kind of monetary intervention that the US and GB have been advocating - but of course they are the two worst hit countries, the ones with the most messed up financial institutions. Obama has made comments that he would like to see more Government stimulus in Europe, but the European governments are not biting. They believe their countries are in a better position as their financial institutions are better regulated - and make no mistake they are - but I don't know if that is enough. It may be that these countries will have a longer and more sustained recession as a consequence - we will have to wait and see.

This and That

I have clipped a lot of news articles in the last few weeks but not had time to blog about them. So I will now start trotting them out - a few at a time.

I had to laugh at a recent Globe and Mail Headline "Man Reluctantly Rescued from Leap Over the Falls". The wording of this headline made me think that perhaps the Paramedics were busy watching Dr. Phil and were reluctant to leave their program and go give assistance. That was not the case at all.

Apparently this man, hell bent for destruction, jumped into the Niagara River above the falls and went over the falls - without barrel - as is the choice of dare devils who try this - or other protective gear - it was not his desire to survive. Fortunately the rescue effort was launched very quickly and a helicopter was dispatched to fish him out. The rescuers were quite disturbed that the man waved them away telling them to let him drown! As it turned out the man was not reluctantly rescued but was reluctant to be rescued - quite a difference.

Globe Article: Man Reluctantly Rescued

Putting the gravity of the situation from March 12th aside for the moment, just goes to show you that when it is your time to go, perhaps a barrel (or a helmet referencing the recent death of  Nathasha Richardson from a skiing accident) would not help - just as in this example, if it is not your time to go you don't need to worry about any protective gear - even as you go over the falls!

Incidently, the first man in the record books to go over the falls wasBobby Leach in 1911.  He went over the falls in a "barrel" and is shown at right. 

As a last added note, you will find that the link above brings you to the Globe News Article - which can be purchased for $4.00 if you want to read it! This article was available and free for the reading in the internet version of the Globe on March 12th. I guess I will need to be vigilant about making notes relating to internet news items I want to blog about later. It also reinforces that the news industry is reaching out for new models toward profitability as so many of us are reading our news via internet - free without cost as an ever dwindling number spent their dollars on purchasing the Newspaper in print. This new media, I am coming to believe, will at some point make printed newspapers extinct. A sad thing, I know for at least one of my regular readers!

"There will be Blood"

That is the headline on the article that jumped out at me in today’s Globe and Mail Business Section. Harvard financial guru and author Niall Ferguson is predicting dire circumstances in our future for years to come and even used the term “Great Recession” to describe today’s economic reality. Frightening stuff! He is in Ottawa to participate in the public-policy think tank, Canada 2020 and is featured in a major interview published in the Globe today.

Life today is a little like being in a war zone – but an economic war zone. Bad news abounds and every authoritative voice covers the latest skirmish, the days end tally of market woes and sad predictions for continuing waves of job losses, recession and investment value freefall. We keep hearing that Canada is not going to have it as bad as the US, but also we hear that we cannot recover until they recover since we are joined at our economic hips.

Us Canadians are also are facing a double dose of depression (no, not the economic kind). This damned winter seems never to end and we are yet again enduring a temperature plunge into the -20 degrees, with wind chill. Makes you want to stay home and hibernate – with the news turned off! But I digress…

This morning I heard that with this latest wave of market freefall, which started on Friday, the Dow Jones had reached its lowest level in 11 years and the TSE was at a 5 year low. We will see if the market continues its downward slide today. Hard to be up when all we hear is down.

I like to fancy myself as a savvy investor. OK – that might be exaggerating, but I have my little RRSP and I have a few stocks in my nest egg and I look after it myself. In the last month I have been looking at the current stock market decline as an opportunity. I have a bit of unused contribution room and it seemed to me if I borrowed and topped it up I could get a big tax deduction and at the same time buy into the market at bargain basement prices. Optimism comes from the thought that I can take advantage of the current situation to vault myself into a better place retirement wise, in 2-3 years when we come out of this slump.

Last week I executed my plan. The market was having a small bit of a rally and ever the optimist, I was thinking that maybe the worst was over and I should jump in. I had borrowed the cash to top up my RRSP from my LOC (at the extraordinary rate of only 3.0%!) and it was sitting there not earning any interest. I had researched and earmarked some preferred and common shares to buy which would bring in 6.5% interest. Seems like a good deal to me and if in the coming years the market recovers, and the stock prices go back to where they were even before the start of this mess – I could double my money! No sense waiting, I thought.

I bought an equal measure of some RBC common shares for $30.35 and RBC Preferred at 25.30. I checked today. The RBC shares are trading at $25.80 – victim of this last major drop which started immediately after I bought them. Murphy’s Law! The series P RBC Preferred I bought had not lost any ground. These shares should stay relatively close to the purchase price because they are more affected by interest rates than anything else – like a bond. When rates go back up the price of these shares will go down – before which I would try and sell them or wait until after the shares go through a rate “reset” (they are pegged to the T Bill rate) when the price should go back near the $25.00 mark.

I am hoping by then the price of the common stock will be rising and I can sell the preferred and buy into the slow rising market to come.. In the meantime I am pretty assured of having a portion of my money in a more liquid asset in case I need the money out of my RRSP. I am hedging my bets.

Now, job done, I am best to just forget about my RRSP and just let it be. Watching it won’t help and will just add to the belief that I am feeling a real pinch – or rather blow - from this recession. I am down about 30% in value – pretty typical, I think. Almost all of my stocks and mutual funds are invested in companies which will no doubt weather this economic storm and in the end recover. Maybe that will be 2-3 years or maybe, God forbid, that will be a decade. The only thing certain is that my retirement is now looking as distant as that moon out in the sky.

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