Contra's E-mail Update Service

Contra the Heard is a quarterly publication, but we keep our clients apprised of our most recent moves via email. This is a very important part of our service that enables our readers to closely follow all of our buy and sell decisions. We also issue an update when there is takeover activity with one of our stocks.

If you a subscriber who is wondering if you have missed an email update, a complete list of the dates of recent releases can be found here.
For a discussion of issues relating to email address maintenance, spam filtering and safe lists, please click here.

Here is a sample of a release that went to our readers:

CONTRA THE HEARD

(Last update: January 11, 2007)

Update January 14, 2007

NYSE Sold: R.R. Donnelley (RRD)

Purchase Price ..... $14.52 (CDN, adjusted for Moore-Wallace and RR Donnelley mergers)
Initial Sell Target ..... $37.44 (USD)
Sale Price ..... $37.44 (USD)

It is hard to know exactly what a classic Contra play is as the scripts always vary somewhat. But RR Donnelley, which we purchased as Moore Corporation had one of the key elements: we definitely made our share of mistakes. These included buying early, overpaying, and not averaging down at a propitious moment. And if a takeover at a higher price is announced soon as is rumoured, that will mean another error.

Did we mention the eons spent under water before the stock price finally climbed back to our purchase price, let alone making any progress towards the target? Yes, we see long-term subscribers nodding in the back, some who bought their shares at less than half of what we paid.

But heck, it is hard to complain. The holding spanned about eight years, which doubles our average. However, with a triple now in the bag, patience proved exceedingly worthwhile. And that does not include the spicy dividend, which of course moved percentage wise with the stock price but was often better than three percent.

As often happens with our success stories, Donnelley had swelled in the portfolio, comprising better than nine percent. Therefore with one fell swoop, our risk of holding a high priced stock in precarious times dissipates. It also changes the Canadian–U.S. mix with the northern side now slightly better than 50 percent. It is hard to remember the last time that happened. Now if oil becomes priced in a basket of currencies instead of U.S. dollars ...

Old Moore specialized in printing forms, which has to be about as boring and staid as anyone could imagine. It was considered an irrelevant dinosaur in the digital age. But we felt the outfit still had a purpose, even in the paperless society. When purchased, this was definitely a contrarian classic.

For those who continue to hold their shares in an account denominated in Canadian dollars, it is worth noting that Toronto provides limited liquidity. The stock is easier to sell in New York. Based on Friday's exchange rate of 1.169, our sale price was equivalent to $43.77 CDN.

After this flurry of recent emails, perhaps we'll be quieter now and save our voices for the Financial Forum and MoneySaver events.