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  It's time to look at how well we did

BENJ GALLANDER and BEN STADELMANN

Saturday, December 23, 2000

With the end of 2000 approaching, it's time to examine the stocks we mentioned throughout the year. To do so, we used globeinvestor.com's handy portfolio tool. We "bought" equal weights of each stock discussed when the articles went to press, and the application tracks the results.

Keep in mind that the returns in the Contra portfolio, where hard cash is plunked down, will differ from this pretend portfolio, because our positions were purchased earlier at different prices -- sometimes lower, sometimes higher. Also remember that we are skeptical of performance that is measured in months rather than years. Short-term volatility reveals little about the success or failure of an investment program.

Overall, our hypothetical Canadian portfolio is down 11.5 percent, lagging behind the TSE 300 index, which has sunk 9.1 percent since February 17, the inception date of our portfolio. Our best Canadian performer was Gulf Canada Resources Ltd. From the $5.10 mark when we recommended it last March, it zoomed, nearing the $9 level in September. It has since slackened with the softening in oil prices. This major producer is now a hold, but if cold weather induces another rally, we will be tempted to sell before an economic slowdown takes oil prices lower.

Last May, aviation service specialist Spar Aerospace Ltd. was our idea of a company that would prove resilient during difficult times. It has shown itself to be just that during this autumn's tech mayhem, with the stock up nearly 20 percent. Spar also pays a handsome dividend of 19 cents a quarter.

Our coal picks, the trust units of Luscar Ltd. and Westshore Terminals, haven't done much since our recent column in October. We remain very bullish on coal, but this resource play is an area where a long-term horizon is a necessity.

In September we laid bare our sorry history with food processor High Liner Foods. We certainly made some mistakes with this one, and wondered aloud if it was finally time to cut it loose. Ultimately, we elected to hold.

Kelman Technologies looks rough on paper, but that is a bit misleading. Like many thinly traded stocks, Kelman shows more volatility than is justified by its underlying business. And like all low-priced stocks, it doesn't take much of a shift to make a huge difference in percentage terms. The company remains a speculative buy for investors who can wait for the improved environment for oil and gas producers to trickle down to the smaller service players.

Our worst Canadian performer is Moore Corp. Ltd. Recently the market cheered news that Chancery Lane/GSC Investors LP of New York will raise $70.5 million (U.S.) for Moore in a convertible debenture that would give them about a 19.7 percent equity stake in the business forms company. In our next column, our U.S. picks will be reviewed.


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