you're confused about interest rates, aghast at the dollar's freefall
and worried sick about the stock market, investment pundit Benjamin
Gallander says you're on the right track.
is a time to panic. Of course, it's better if you reach that point before
other people do," said Gallander, co-publisher of Contra
the Heard, a quarterly newsletter, and author of a new
financial guide, The Uncommon Investor,
which is being released this month.
is a good time to stay on the sidelines and watch carefully for the
next buy period. There's nothing wrong with taking a pause; at this
stage, it may be the best thing to do."
is practicing what he preaches. He and his newsletter partner, Ben Stadelmann,
who is based in Seattle, recommend only stocks they own in their personal
their publication comes out four times a year, they send out regular
email messages to subscribers, including notification of every stock
trade they make.
that the markets still have plenty of room to fall and that recession
is inevitable, the pair have only bought three issues this year and
they have "cut back dramatically," Gallander said, in the dollar value
of the equity stakes they hold.
been pulling our profits out of the market, " he said. "That's the lowest
acquisition rate in my 20-year history of investing."
in Vancouver to promote his book, said he and his partner will probably
be selling more stocks as the year-end approaches, ridding themselves
of their "tax-losers." He said they'll then scour the market for bargains
in December, as other people dump stocks as they adjust their portfolios
for year-end, "but we'll only stick our toe in; we're not going to be
jumping into the market."
constitutes a bargain? Gallander, who describes himself as a contrarian,
said he looks for "good companies that have been beaten, "undervalued,
out-of-favour stocks that have the ability to make big gains at a reasonably
explained that would-be buy candidates must have the potential to increase
in value by a minimum of 50 percent.
said he looks for companies with low or no debt, that have a track record
of a least 10 years and that pay regular dividends. He will only look
at issues listed on the Toronto Stock Exchange or the NYSE, because
they have stricter regulations.
said he won't pay more than $25 a share for any stock and always sets
a sell target. When an issue reaches that target prices, he normally
unloads about half of his holdings.
who is also author of The Canadian Small
Business Survival Guide, said he always buys with the
long-term in mind, but he's not an advocate of holding issues for the
long-term irrespective of price, riding out fluctuations.
don't believe in the dictum of buying and holding," he said. "At some
point, everything is overvalued."
portfolio is generally limited to about 30 stocks; right now; it's holding
at 29 issues. The stakes are all in individual companies because Gallander
said he's not keen on mutual funds, arguing that investors can do just
as well investigating companies themselves and buying through discount
said he last bought mutual funds in 1994, when we wanted exposure to
Latin America and Asia. He sold all those funds a year later.
funds can be good and you can get some expert advice and some good returns,
he said. "Most people - if they'd take a little time - could do just
as well or better on their own."
and his partner list their annual returns on the front page of each
returns - 10 percent of which they annually donate to charity - range
from a low of 1.5 percent in 1994 to a high of 77.8 percent in 1993.
Last year, they achieved 53.2 percent.
only three stocks that have tempted Gallander this year are Bombay Company
Inc., Utah Medical Products Inc. and Denison Mines Ltd.