ABCs defense of capital tax charity 22aug2013

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ABCs made the case even as two markets diverged.

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ABCs defense of capital tax charity 22aug2013

  1. 1. “ Page 1 of 4 August 2013 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions. ABCs Defense of Capital, Tax Charity–22 August 2013 Risk Price analysis of balance sheets allows us to discern a most useful partition from all the equities in any market. These we call “likeables” because investors have consistently shown they prefer them and price them up. Investors like them and there is much to like. As a group 2 of 3 of these “likeables” equities tend to gain in stock price for long periods. We understand why and have shown our case in open public display, because we can. No one else can, so they do not. As open handed display of our methods in January 2012 we released the ABC’s portfolio comprised of just the of newly identified equities on TSX and NYSE we call “likeables” we partition. They are revealed by their rise above Risk Price, our metric that investors must know to defend their capital. Those ABCs made the case even as these two markets diverged. There were 16 equities in the TSX sample for an aggregate $33,580 invested and 13 in the NYSE sample portfolio for an aggregate $36,370 invested at outset. Through the year 5 were dropped due to negative change in their Risk Price metrics, as it turns out in both, finishing the year with the TSX sample up 122.64% and the NYSE sample up 138.97%. These were substantively different markets. The TSX had declined early in the year and then regained ending up 6.02% and the NYSE had started hot and then cooled to obtain a 8.35% gain in the year. Roughly a four-fold gain was made in both portfolios over their markets. The hedge fund industry recorded only 6.16% on the NYSE prior to their taking fees. Those two ABCs sample portfolios have continued through this year, gaining further to end of July on the TSX 11.95% (as the index gained 0.43%) to total 135.15% carrying its cash-outs of $9,533 (after those 5 having contributed modest gains of 14.74% before hand). Only recent volatility hit the StopLoss of 3 in the TSX leaving now $19,472 cashed-out and $33,146 still invested. The sample NYSE portfolio has gained 18.73% (as its indices gained 13.84%) to total 142.41%. carrying its 5 cashouts of $44,340 (after those 5 having contributed modest gains of 7.97% before hand). There was 1 recent StopLoss in the NYSE sample with now $48,940 cashed-out and $46,665 still invested. Idle cash value is eroded by inflation. Carrying idle cashout diminishes gains earned. We insist cash must be engaged in the economy in business ideas with valiant balance sheets or it loses value. That is simple fact. Equities that tend to hold their value and gain are better than cash. We like Capital Safety and Liquidity because we have consistently shown and proven that works. The TaxCharity portfolios we posted this past January 2013 took-up the challenge for the small investor to reinvest their cash under the constraining limits of annual Tax shelter provisions. You will have done well. Using the “likeables” Newbies of 01January 2013 idled ABCs cashouts reinvested would have gained further. Per below the TSX would have improved by 12.52% to 29.45% gained on 19.0 months with still $205.00 cash in hand. On the NYSE reinvestment would have achieved further 26.17% gain to 65.70% on 19 months with still $40.00 cash in hand. "there is risk in what you do not or cannot know." Thomas Tooke, 1844 "for the value of money is also perishable." Jean-Baptiste Say , 1803
  2. 2. “ Page 2 of 4 August 2013 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions. ABCs Defense of Capital, Tax Charity–22 August 2013 ABCs for TSX Firms Market Price Symbol SF (Risk Price) Stop/Loss ARC Resources 25.97 ARX.TO $25 $25 Brookfield Asset Management 37.01 BAM-A.TO $30 $36 Cogeco Cable 48.64 CCA.TO $39 $45 CCL Industries 70.00 CCL-A.TO $32 $63 Canfor Corp 20.97 CFP.TO $10 $19 Dollarama Inc 75.44 DOL.TO $45 $70 Emera Inc 31.41 EMA.TO $32 $31 Enbridge Inc 43.35 ENB.TO $41 $43 Buy-ins 01Jan13 CGI Group 35.72 GIB.A $23 $29 Gildan Activewear Inc. 45.89 GIL $35 $43 Linamar Corporation 34.25 LNR $19 $29 MTY Food Group Inc 30.5 MTY $21 $28 Sun Life Financial Inc. 31.73 SLF $26 $30 Buy-ins 31Jul2013 Calfrac Well Services Ltd. 32.90 CFW $30 $31 Portfolio Value 15August 2013 (including dividends) 58563.00 / 45239.00 Gain 19 months 29.45% Current Cash 205.00 (Pending Need for Change or investing new Savings) CML HealthCare Inc. 10.64 CLC $9 $9 Celestica Inc. 11.05 CLS $10 $10 Engage in “likeables” save your own bacon. The essential feature of “likeables” is that 2 of 3 tend to gain. What is essential in your portfolios is that you buy a full complement of at least eight or preferably more equities at any time (preferably in equal blocks of 100 shares for 'collaring options' as exit strategy to maximize gains, most often continuing to hold through volatility, earning more gains). StopLoss weeds the laggards as needed. Tendency for gain is not the same as pin-the-point on the mule as most encourage or seek. Those motley brayers are legend with survivor bias, even when 2 of their 3 crash they will talk only with whimsy of the one. Their mothers’ “Speak when you have something positive to say” is ignored. Let others chase the gamblers’ risk/reward model. Good reason knows that rarely works. But you can be charitable and buy a lottery ticket that donates support to community sports and arts, like buying a raffle ticket at the Strawberry Social.
  3. 3. “ Page 3 of 4 August 2013 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions. ABCs Defense of Capital, Tax Charity–22 August 2013 ABCs for NYSE Firms Market Price Symbol SF (Risk Price) Stop/Loss Alaska Air Group 120.5 ALK*48 $32 $47 American Express Co 73.86 AXP*48 $67 $69 Brookfield Asset Management 35.14 BAM*26 $27 $35 Colgate-Palmolive 116.9 CL*80 $46 $58 CSX Corp 25.18 CSX*20 $21 $24 Walt Disney Co 61.64 DIS*37 $52 $60 GATX Corporation ($topLoss sold 10Jul13) 46 GMT*33 $35 $46 General Electric Company 23.78 GE*17 $23 $23 Alexander & Baldwin (Sold on N* negative 31jul12) 58.50 ALEX Caterpillar (Sold on N* negative 30nov12) 96.00 CAT ConocoPhilips (Sold on N* negative 30nov12) 71.63 COP Cummins (Sold on N* negative 30nov12) 108.27 CMI Chevron (Sold on N* negative 30nov12) 109.00 CVX Buy-ins 01Jan13 Gamestop Corp CL A 51.91 GME:US $26 $41 Hasbro Inc 45.26 HAS $38 $43 HSBC Holdings PLC ADS 54.1 HBC:US $47 $53 Host Hotels & Resorts Inc 17.25 HST:US $14 $17 Huntington Bancshares Inc 8.62 HBAN:US $6 $8 Intercontinental Exchange Inc 185.51 ICE:US $131 $169 Interpublic Group of Cos 16 IPG:US $9 $14 KLA-Tencor Corporation 56.43 KLAC:US $45 $56 MBIA Inc 12.26 MBI:US $8 $11 Principal Financial Group Inc 42.45 PFG:US $27 $40 Tyson Foods Inc CL A 31.4 TSN:US $18 $25 Buy-ins 31Jul2013 OfficeMax Incorporated 10.81 OMX:US $10 $9 Pandora Media Incorporated Donnelley RR & Sons Company 17.49 RRD:US $15 $16 UBS AG 20.46 UBS:US $18 $17 Portfolio Value 22August 2013 (including dividends) 111687.00 / 64702.00 Gain 18.5 months 65.70% Current Cash (from 31Jul buy) 13.00 (Pending Need for Change or investing new Savings) Ciena Corp 21.22 CIEN:US $19 $20 First Horizon National Corp 11.93 FHN:US $9 $11 Genworth Financial Inc 12.38 GNW:US $12 $11 Engage in “likeables” save your own bacon.
  4. 4. “ Page 4 of 4 August 2013 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions. ABCs Defense of Capital, Tax Charity–22 August 2013 The conventional investment industry cannot prove any of their assumptions underlying their methods. As we have shown, luck is all that they trade in, 1.03 to 1 is just a coin-toss, not adding value. A tautology is just repetition until it appears to be logical. Lies told often enough are expedient and can even become politically correct. In our Modal Geometry "theory of the firm" we make only two assumptions, clearly as follows: 1. there is a balance sheet of the firm (that the rule of law governs its information is possibly weak assumption but at an accuracy to at least the modest degree accountants are prepared to be responsible for); and, 2. the firm will vigorously negotiate, “what it owns” (in order to stay in business “what is owed to it” with “what it owes” and vice versa, to make the best of what it has, that is in its trading connections). The Modal Geometry theory of the firm has unfolded more by rigourous observation in the real world of corporate ledgers relation to balance sheets. That is aided with logic, epistemology, and some powerful mathematics, not just conventional assumptions with little or no science. Our reasons for having any equity in our portfolios are clear, concise and consistent. “likeables” are equities shown valued by investors, tending to continuing gain, which investors have demonstrated a determination to buy and hold at stock prices above the price of risk. That tendency demonstrates 2 of 3 “likeables” gaining for the long term, as we continue to show. Proof is positive, as our TaxCharity shows. We do that for the small investor, because we can. No one else can. Know What You Have. Have What You Know. Our view is risk averse. Of course we require 2&20 fees for doing that. Mail us for our help. Hans Goetze, Architypes Inc. architypes@gmail.com and StockTakers Limited hg.stocktaker@gmail.com Head Office 76 Midridge Close SE Calgary, AB T2X 1G1 351 Chemin Boulanger Sutton, PQ J0E 2K0 450 538-1270

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