April 6 th , 2010 Investment Challenge Brant Rumpel John Brodsky Mike Rennie
April 6th , 2010
Investment Challenge
Brant RumpelJohn BrodskyMike Rennie
• Account Value (CAD) 108,916.24*
• Overall Return +8.91%*
• 5th place in “the game”
*Investopedia
How did we do this?
No, we had a plan.
CanadaInvest in what
does best.What does
do best?
Natural Resources
Banking
Canada rated world’s soundest bank system: Survey
U.S. And U.K. Sink in World Economic Forum rating
Rob Taylor, ReutersPublished: Thursday, October 09, 2008
Natural ResourcesWorld class deposits of:
• Potash• Uranium• Crude Oil• Natural Gas
Long termBuy and hold
Total Transactions: 13
What methodsdid we use?
• Qualitative
• Quantitative
How did we pick ourstocks?
Our Strategies• Buy and hold• Diversification• Safe investments
• Well run companies
• Good track record
• Long term need
Qualitative
Choosing Stocks
• Speculation
• Sharpe Ratio
• C.A.P.M
• Historical Trend
Quantitative
Choosing Stocks
Choosing Energy StocksCompare Sharpe Ratios of:
• Canadian Natural Resources (CNQ.TO)• Encanna Corporation (ECA.TO)• Suncor Energy (SU.TO)• Cameco Corporation (CCO.TO)
Short Sale & Margin BuyMarginUse C.A.P.M to compare:
• Saputo• ?• ?
ShortUse C.A.P.M to compare:
• Telus• ?• ?
How did we execute this plan?
Execution
18%
9%
13%
40%
20%
Sector Diversification (by value)
Industrials
Financial
Consumer Staples
Energy
Telecommunications
Our Portfolio• TD Bank• Potash Corp• Canadian Natural Resources• Bridgewater Systems• Research in Motion• Encana• Canadian National Railway• Trans Canada Pipelines• Canada Bread• Cameco• Saputo (margin)• Telus (short)
9%
9%
13%
9%
6%9%
9%
9%
5%
9%
8% 5%
Overall Contribution to Portfolio (by value)
TD Bank
Potash Corp.
Canadian Natural Resources
Bridgewater Systems
Research in Motion
Transcanada Pipeline
Encana Corp.
Cadian National Railway
Canada Bread Co. Ltd.
Cameco Corp.
Saputo
Telus Corp.
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
13.36%
15.89%
6.29%
30.46%
8.46%
6.76%
3.11%
8.92%
-4.04%
4.41%
-2.73% -0.14%
Percent Change
What were our topperformers?
Best Performers
Bridgewater Systems
Percent Change
+30.46%
Best Performers
Potash Corporation
Percent Change
+15.89%
Best Performers
Toronto Dominion Bank
Percent Change
+13.36%
Worst Performer
Canada Bread
Percent Change
- 4.04%
How did wecompareto the market?
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
1 6 11 16 21 26
Perc
en
tage
Ret
urn
Our Portfolio vs. TSX vs. Risk Free Investment
Risk Free Rate
TSX Market
Our Portfolio
Period (days)
Conclusion
• Outperformed the market (by .53%)• Qualitative measures are important • Canadian strengths
Thanksfor listening