If you’ve been following my blog, you might recall a few months ago I called out to Derek Foster, wondering what Canadas Youngest Retiree has been up to.

Back in September, Derek was a busy guy.  I found out he completed an interview with MoneyTalk host Patricia Lovett-Reid, he was preparing for a speaking engagement in Toronto at Canadian MoneySaver’s Investment Conference, he was putting the finishing touches on his new book and as always, he was helping raise his five kids.  I don’t know about you but that seems more like a year’s worth of work, let alone one month.

For those of you who don’t know who Derek Foster is, here’s a quick bio (photo courtesy of his website):

• Derek was born in Ottawa in 1970.
• Derek was able to become a millionaire and leave the proverbial rat race at the age of 34 by using various investing strategies, many he believes any investor can emulate.
• Derek, ”Canada’s youngest retiree” is a well-known Canadian author and has shared his personal investment experiences and strategies in his National Bestselling Books:
• Stop Working:  Here’s How You Can!
• The Lazy Investor: Start with $50 and no Investment Knowledge
• Money for Nothing: And You Stocks for FREE
• Stop Working Too:  You Still Can!
• *The Idoit Millionaire (*Latest book, Fall 2010)
• When not writing books or giving speaking engagements, Derek spends time with his wife and five children in Ottawa (in my old neighbourhood no less).

For a couple of years now, maybe like some of you, I’ve been both entrigued and somewhat skeptical of Derek’s investment journey.  I’ve read a few of his books (Stop Working:  Here’s How You Can! and The Lazy Investor) and to be honest I’ve been more inspired than skeptical of his success.  Sure, he may have had some great timing on his side and some risker investments paid off, but sometimes you make your own luck as well.  I know others don’t feel the same and have written so.  That’s fine because everyone is entitled to their own opinion. 

Overall, I’m happy for Derek because he had a dream, saw it fulfilled and then some.  Investment timing, luck, skill or otherwise, he’s a fortunate guy. 

I’m glad I got the chance to chat with Derek for almost a couple of hours a few weeks back.  Here’s what he had to say in Part 1 of My Own Advisor interview.  I hope you enjoy the read.

*     *     *     *     *     *     *     *     *

My Own Advisor:  Thanks again for the interview Derek. It’s a busy time of year for everyone and I’m glad you got back in touch with me. It’s great to finally chat with you – enough email already!

Well, onto my questions.  Ready?

Derek:  Fire away Mark.

My Own Advisor:  Youve just released the latest book in your Stop Working series entitled The Idiot Millionaire: You Can Become Wealthy! What inspired you to write this book?


Derek:  To be honest, it was largely because of the 2008-2009 economic downturn. Because my personal situation had changed since I originally left the rat race at 34, (I was earning an income from other sources such as book sales, etc), I wanted to switch my portfolio to higher growing dividend-payers as this would save me tax and generate better returns over the long-term. BUT I wasnt as smart as I thought I was; hoping to sell my stocks at one price and trying to get back in at a lower price. In some cases, it worked. I bought businesses like JNJ, Shoppers Drug Mart and Phillip Morris at reasonable prices. For other businesses, it didnt work. For example, I waited too long for Canadian bank stocks. I missed the bottom and their subsequent run ups in price. Admittedly I missed that boat. I would buy some if prices to crept lower. I guess the title of my book really applies to me, kind of tongue-in-cheek.


My Own Advisor:  What makes this book unique in your Stop Working series?

Derek:  More so than any of my previous books, this one discusses a companys competitive advantage. I describe what I mean by this and how investors would do well to invest in those companies that have it and it also offers a list of those companies.


There are many companies out there that are worth owning, companies that pay dividends but they do not have any economic moat around them. This is important because ideally you want to buy companies that not only pay dividends, but that increase their dividends over time and also have great growth opportunities because of their advantaged products and services. My new book includes a pretty good list of these companies in Canada and the U.S. In the U.S. for example, Coca-Cola quickly comes to mind. In Canada, Enbridge.

My Own Advisor:  Switching gears a bit, tell me about your investment strategy. Still a dividend investor?


Derek:  Absolutely, but my approach or maybe should I say my focus has changed. Before I was more focused on higher yields for income generation, maybe slower-growing stuff but now my needs have changed. I mean the books generate income which was an unexpected surprise (because being an author or a writer is not usually the path to riches). Really though, Im fortunate to have some other income streams with no debt and so things are different for me at 40 than 34 when I wrote Stop Working (Heres How You Can Too!). Geez, that was six years ago. Im now more focused on companies that have their moats and good long-term growth prospects. I try to explain that in plain language in the new book.


Also, the reality is many folks dont retire from the workforce at 34, or even 40 or 50. They are working their way towards retirement bit by bit and hopefully this book will provide them with a more complete list of companies to help them out.

My Own Advisor:  A short time ago, when the market was falling (in 2008-2009) you sold all your dividend payers. I read a few articles about that. You took some heat. Can you walk us through that decision?

Derek:  I was an idiot but at that time, I sold my shares in early February 2009, I thought I could get back in later and at cheaper prices. Turns out I did and I didnt as I told you before. I managed to buy a lot of stocks much more cheaply but a large part of this was luck. I benefitted from put-option premiums and the incredible strength of the Canadian dollar. After I sold my stocks, I remember humming and hawing for a couple of weeks – should I say anything to the media? The books encouraged folks to do the opposite; buy and hold dividend-payers for income. I didnt want to be hypocritical but I can see why some people were a little put off, you know what I mean? In the end, my approach did save me money and I came out ahead but not on everything; I missed the boat on those Canadian bank stocks and some other companies I would like to own.


The book (The Idiot Millionaire) actually includes some of this stuff and Ive got some details in there about my prices when I got back in.


My Own Advisor:  Made any recent purchases?


Derek – Yeah, I bought Strayer Inc (a for-profit university) at a pretty reasonable price. It just made sense with our Canadian dollar being so high and the recent stock price weakness due to pending potential changes to loans for students. Im very comfortable with this holding but I realize there are potential risks. The stock price had dropped from over $250 earlier this year to under $140 where I bought it. This is even cheaper than at the March 2009 low of $159 and the Canadian dollar is much stronger now, so the stock price is actually 30% below the March 2009 bear market low (in Canadian dollar terms).


My Own Advisor:  Something more fun now. Whats on your Christmas list for 2010?


Derek:  Well with five kids in house, Christmas is really for them, not me. Ive never been one to covet stuff, Im not materialistic. I finally got a GPS this summer for our trip out West and Ive got a laptop computer. During our trip, once the kids were in bed and all the chatter had stopped for the day, I pulled out my laptop and wrote a couple of pages (for the new book). Honestly, Im a cheap guy. If a burglar came to my house, he would quickly leave in disgust as my material possessions are not really worth stealing (except perhaps for my Sienna minivan). When I look at stuff, I always ask myself, is this really going to add any value to my life? If the answer is no, I dont buy it. I guess nothing Mark. I dont even own a cell phone. I guess I dont consider myself important enough to need one.


I had to laugh at this last response. I mean, with five kids, how can Christmas NOT be all about them?
 
It was great to chat with Derek.  He’s a bright and funny guy.  Foster’s fast track to early retirement through  savings and diligent investing in Canadian and U.S. dividend paying stocks may not appeal to everyone but I think it’s inspirational.  In the end, we’re all trying to achieve financial freedom and regardless if you’re a fan or a critic, learning something from Derek Foster can and should be done.  That doesn’t mean you need to follow his path or emulate what he did.  Knowledge is always different than the application, but learning what works and what doesn’t for you is important.  I’m trying to build my investment knowledge and application all the time because in my opinion, continuous improvement is critical to success. 
 
In Part 2 of my interview, you’ll hear more from Derek about his portfolio allocation and his stock market predictions for 2011.  Stay tuned for that blogpost after Christmas. 
 
I hope you enjoyed Part 1 and as always, I look forward to any comments!
 
Cheers,
Financial Cents

Many stocks sell below book value for numerous reasons. The industry or sector could fall out of favor, tax selling, and a bearish stock market are just a few examples. WallStreetNewsNetwork.com has turned up a list of over 25 stocks selling at or below book value, most of which have yields above 3.5%. One example is Telecom Italia S.p.A. (TI), the large Italian telecom company which provides fixed-line and mobile telecommunications, Internet, and media services throughout the country. The Italian government may be suffering but Italians are still making phone calls. The stock is trading at two thirds of book value and pays a yield of 3.5%. Earnings for the latest quarter were up over 207% on flat revenues. The stock trades at 15 times forward earnings.

Great Plains Energy Incorporated (GXP) is another discounted stock. This electric utility, which serves Missouri and Kansas, is selling at 87% of book value and sports a yield of 4.3%. Earnings for the latest quarter were up 67% on a 24% revenue increase. It sports a forward price to earnings ratio of 12.

The shares of Brandywine Realty Trust (BDN) are trading at 77% of book and yield 5.5%. This REIT owns office and industrial properties. The stock trades at 8.5 times forward earnings.

To see the complete list of the major high yield stocks trading below book value, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com. Fourteen of the stocks have yields above 5% and four provide yields over 7%.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Many stocks sell below book value for numerous reasons. The industry or sector could fall out of favor, tax selling, and a bearish stock market are just a few examples. WallStreetNewsNetwork.com has turned up a list of over 25 stocks selling at or below book value, most of which have yields above 3.5%. One example is Telecom Italia S.p.A. (TI), the large Italian telecom company which provides fixed-line and mobile telecommunications, Internet, and media services throughout the country. The Italian government may be suffering but Italians are still making phone calls. The stock is trading at two thirds of book value and pays a yield of 3.5%. Earnings for the latest quarter were up over 207% on flat revenues. The stock trades at 15 times forward earnings.

Great Plains Energy Incorporated (GXP) is another discounted stock. This electric utility, which serves Missouri and Kansas, is selling at 87% of book value and sports a yield of 4.3%. Earnings for the latest quarter were up 67% on a 24% revenue increase. It sports a forward price to earnings ratio of 12.

The shares of Brandywine Realty Trust (BDN) are trading at 77% of book and yield 5.5%. This REIT owns office and industrial properties. The stock trades at 8.5 times forward earnings.

To see the complete list of the major high yield stocks trading below book value, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com. Fourteen of the stocks have yields above 5% and four provide yields over 7%.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Of course, there are mortgage income REITs with extremely high yields, such as Two Harbors Investment Corp. (TWO), which yields 16.9%, but I don’t think that kind of yield is sustainable; plus, the trust invests in mortgages that include Alt-A mortgage loans, subprime mortgage loans, and derivatives.

However, Home Properties directly owns and operates apartment communities throughout the eastern United States. The stock trades at 17 times forward earnings. The operating cash flow of $151.5 million significantly exceeds its dividend payouts of $87 million by over 70%. Home Properties yields 4.7%, much higher than some of its competitors, such as Apartment Investment & Management Co. (AIV) which yields 1.8%, and AvalonBay Communities Inc. (AVB) which yields 3.2%. On September 30, KeyBanc Capital Markets upgraded Home Properties from a Hold to a Buy.

Another residential equity REIT with a decent yield is Mid-America Apartment Communities Inc. (MAA), which pays 4.1%, and serves the Sunbelt area. The stock trades at 16 times forward earnings. The operating income of $129.8 million greatly exceeds the total dividend payouts of about $80 million. Jeffries recently initiated coverage on the company, giving it a Hold rating.

If you like the idea of investing in residential REITs, you should check out the free list at WallStreetNewsNetwork.com, which includes the stock symbols, market caps, forward PE ratios, and yields.

Disclosure: Author does not own any of the above.

By Stockerblog.com

The first-time claims for unemployment benefits dropped to 473,000 last week for the first time after crossing the 500,000 mark for the first time since November, in the week preceding the week in question. According to Thomson Reuters, the drop that was anticipated was at a modest 490,000.

In a strong economic condition, the weekly claims are usually less than 400,000. However, the latest statistics in job claims reveal that hiring in the economy has been weak. In March 2009, when the recession was at its peak, the claims were as high as 651,000 per week. This has caused many of the currently employed to live Payday to Payday, constantly worrying about whether they will lose their job.

Nevertheless, on the positive side, this week saw a noticeable decline after three consecutive weeks of increasing claims. The report also slightly allayed fears of the economy falling into a recession for a second time, considering that there were numerous economic indicators that implied a very slow growth rate in the near future.

The biggest hurdle that is keeping the economy from a faster recovery is the fact that unemployment rates are still high. People fearing the loss of jobs in the near future are holding back expenditures, which implies an overall low spending level in the economy. Companies have slowed the hiring process, due to the upcoming financial regulations and various health care reform costs, and because of the uncertainty surrounding taxation. Consumer demand is another worry.

On the unemployment announcement, bond prices didnt waver much, showing clearly that there was still a great section of the economy that would take time to get comfortable and become positive about the latest report, and would still want to rely on government debt for security. The yield on the ten year treasury notes, which helps in setting interest rates on various consumer loans including mortgages, showed a slight increase from 2.54 per cent to 2.55 per cent towards the end of Wednesday. Long-term bond yields remain at almost the same levels, though at levels which havent been recorded since the first quarter of 2009 when stocks hit their lowest of more than a decade. Even though lower interest rates are supposed to stimulate economic spending, it is not happening in the US right now as people are fearing a possible loss of their jobs, so are saving instead.

So what is an investor to do? Investing in quality high yield stocks is a way of dipping your foot in the investment waters. Not just electric or gas utilities, but other industries, which pay CD beating yields. Lists of these investments, including dividend increasing stocks, can be found at WallStreetNewsNetwork.com.

This news however did little to bring optimism back in the market. The total number of unemployment benefit claims remained at a high level. There is a predominant worry among the investors regarding the constantly high unemployment rate of 9.5%. The reluctance among employers to hire workers is also a cause for vexation in the market. Even though the claims have come down by a certain percentage in comparison to the staggering numbers in the previous week, they still seem to be at overwhelming levels.

The first-time claims for unemployment benefits dropped to 473,000 last week for the first time last week after crossing the 500,000 mark for the first time since November, in the week preceding the week in question. According to Thomson Reuters, the drop that was anticipated was at a modest 490,000.

In a strong economic condition, the weekly claims are usually less than 400,000. However, the latest statistics in job claims reveal that hiring in the economy has been weak. In March 2009, when the recession was at its peak, the claims were as high as 651,000 per week.

Nevertheless, on the positive side, this week saw a noticeable decline after three consecutive weeks of increasing claims. The report also slightly allayed fears of the economy falling into a recession for a second time, considering that there were numerous economic indicators that implied a very slow growth rate in the near future.

The biggest hurdle that is keeping the economy from a faster recovery is the fact that unemployment rates are still high. People fearing the loss of jobs in the near future are holding back expenditures, which implies an overall low spending level in the economy. Companies have slowed the hiring process, due to the upcoming financial regulations and various health care reform costs, and because of the uncertainty surrounding taxation. Consumer demand is another worry.

For every two stocks that fell on the New York Stock Exchange, three stocks rose, bringing the volume up to 120 million shares for the day. Bond prices however didnt waver much, showing clearly that there was still a great section of the economy that would take time to get comfortable and become positive about the latest report, and would still want to rely on government debt for security. The yield on the ten year treasury notes, which helps in setting interest rates on various consumer loans including mortgages, showed a slight increase from 2.54 per cent to 2.55 per cent towards the end of Wednesday. Long-term bond yields remain at almost the same levels, though at levels which havent been recorded since the first quarter of 2009 when stocks hit their lowest of more than a decade. Even though lower interest rates are supposed to stimulate spending in the economy, it is not happening in the US right now as people are fearing a possible loss of their jobs, so are saving instead.

So what is an investor to do? Investing in quality high yield stocks is a way of dipping your foot in the investment waters. Not just electric or gas utilities, but other industries, which pay CD beating yields. Lists of these investments, including dividend increasing stocks, can be found at WallStreetNewsNetwork.com.

The show was held at the San Francisco Marriott Marquis Hotel on August 19th through August 21. The keynote speaker was Steve Forbes, Editor-in-Chief of Forbes Magazine, who spoke very candidly about his opinion of the current administration and its policies adversely affecting the economy and the stock market. However, he was positive about the future and expects many favorable changes to take place over the next couple of years. He went into detail about how capitalism and the free market can save the economy, even with health care, Social Security, and Medicare. His latest book has recently been published, How Capitalism Will Save Us: Why Free People and Free Markets Are the Best Answer in Today’s Economy.

The Opening Ceremonies panel discussion was on Nanotech, with four panelists discussing the various aspects of this fast growing industry, and how nanotechnology is used in heathcare, technology, batteries, transportation (boats with nanotech hulls), and many other areas.

Some of the stocks that were mentioned in this industry include Harris and Harris Group (TINY), the stock with the great stock ticker symbol, a venture capital company which specializes in early stage nanotechnology companies. Other companies mentioned were Nanosphere (NSPH), Starpharma (SPHRY.PK), A123 Systems (AONE), Cree (CREE), First Solar (FSLR), and SunPower (SPWRA).

There were 55 seminars to choose from on Thursday, 99 on Friday, and 24 on Saturday, covering everything from options, to ADR’s, to ETF’s, to dividends, to low priced stocks, to China stocks, to numerous other topics.

One interesting one was called The Top Ten ETFs and Stocks You Should Buy Now, with Mark Skousen and Doug Fabian. Skousen mentioned Enterprise Products Partners (EPD) due to its rising dividend, currently yielding 6%, and insider buying. He also recommended Ford (F), due to the fact that sales are rising substantially, the early paydown of debt, and a forward PE of 10.

Fabian recommended iShares S&P Global Telecom ETF (IXP) due to its 4.8% yield, paid quarterly. He also likes PowerShares CEF Income Composite (PCEF), which invests in master limited partnerships but doesn’t issue K-1s. It pays an 8.5% yield.

Another informative speaker was Michael Murphy who’s presentation was called ‘Best Tech and Biotech Stocks for the Next Ten Years.’ In the Content on Demand sector, he likes TowerStream Corporation (TWER), a company that puts wireless towers on buildings and offers broadband services to businesses. The company has already signed up eleven cities. Insiders own 30% of the company.

In the biotech arena, one of the stock he recommends is Rochester Medical Corp. (ROCM), which makes catheters made of silicone instead of latex, to avoid the latex allergies for some patients. This also allows the use of anti-fungals in the catheters.

One stock he favors in the energy sector is Connacher Oil (CLL.TO), a Canadian company that is in the oil sands industry. Murphy also likes the geothermal industry due to the very favorable government tax credits and loans available to developing projects.

If you missed the MoneyShow in San Francisco, you can check out other upcoming MoneyShows at MoneyShow.com. And if you want to find more information on buying dividends, check out our recent article on stocks going ex dividend.

Author owns F.

By Stockerblog.com

If the need is small and you require funds for short term period then unsecured option suits to your requirements. Through this loan option people can avail amount varying from 1,000 to 25,000 for the term period of 1 to 10 years. Moreover, you are free from collateral valuation process but high interest rates have to be paid. But it can also be negotiated.

To avail this service you can apply online which is quite easy to handle and fast to apply. But make sure while applying online provide all the financial information. So, with debt management you can easily manage your unlimited debts and avail proper guidance to enhance your credit position.

UK FINANCIALS LTD is one of the best online loan arranger; just to fill up it’s a simple application form and within few hours of his applying loan amount credited direct to his account in a very least time span.

One of the friendliest loans for businessmen is small business loans for further expansion of the organization. Sometimes, it is quite hard for the people to collect huge funds for the sake of their firm. In such circumstances, they look forward for small business loans. These loans are of utmost importance for the stable growth and work flow of the firm. Though business is the best way to earn money, yet it linked up with various risk factors entangled with it and requires stable financial back up.

Small business loans are quite helpful to start off a new firm, a small business loan is must, in order to invest for its purchasing computer hardware, renovation, steel automobile etc. One of the most advantageous features of this loan is that it can be used for anything in the business. In fact, there are no limitations from the lenders for the utilization of such borrowings. With this loan, you can get an amount ranging from 1,000 to 500,000. Collateral matters on the amount taken and the position of the borrower.In fact, Small business loans are considered to be one of the most convenient modes of finance gathering because of its loan protection policy. This policy acts as a back up plan for the borrower as it helps to cover the amount in case of emergency or accidental situations like sickness, accidents etc. One of the most stunning facts is that it has an extended repayment system and borrower can easily extends repayment period to a limit of 30 years. This decreases the repayment pressure of the borrowers and also saves them from the bad credit history tag.

Now, you don’t need to waste your time in searching your documents and faxing them to lender. These loans are also known as no credit check or faxless loans. People having credit problems such as mortgage arrears, missed payments, defaults etc can apply and get approval.

In payday loans today, you have complete freedom to select the loan amount according to your financial needs. Normally, lenders offer amount in the range of 100 to 1500 for the repayment term of 14 to 31 days. Still, you can choose your amount according to your repayment ability. As these loans are for short term, the rate of interest is slighter high in comparison to long term loans. Vast online research and proper assessment is suitable for a hopeful to get affordable quotes.

If you wish to avail payday loans today you can apply online. There are number of companies as well as private lenders are available in the market and offering online application process. You need to complete a simple e-form with necessary details and you’ll find your cash into your personal bank account within next few hours.

Borrower has full liberty to utilize the loan funds for fulfilling numerous expenses like pay utility bills, monthly home installments, pay school fee, home renovation, etc. The main purpose for designing payday loans today is to provide financial support to the salaried people and that too in a hassle free manner.