Ritch Wigham Investment Advisor

Junior Mining Firms left out of sector rebound

admin — Wed, 10 Mar 2010 21:16:47 +0000

With my new found bullishness for gold going forward, The premise behind this article should allow for the acquisition of comparatively “cheap” junior miners with good advanced projects!! I have a couple in mind!

See what I mean here.

Ritch Wigham
Mackie Research Capital
PH.(604)-662-1853
T.F. 866-662-1853

Mackie Research Capital Corporation (MRCC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-RCC website please understand that it is independent from MRCC and that MRCC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRCC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital Corporation (”RCC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor RCC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRCC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.

China sinks $1-billion into venture with B.C. miner

admin — Wed, 10 Mar 2010 21:12:31 +0000

The significant result of this investment by China is the continued demand for a product that they need!! Apparently they are concerned about maintaining their inventories beyond end use purchases.

See this article from the Globe and Mail to see what I mean.

Ritch Wigham
Mackie Research Capital
http://ritchwigham.com/
PH.(604)-662-1853
T.F. 866-662-1853

The Russians are on to Potash!

admin — Fri, 05 Feb 2010 19:09:27 +0000

The Russians are staring to understand Potash. Potash pricing improving internationally helped by Russian exporters!

See this article to learn more…

Research Capital Corporation (RCC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-RCC website please understand that it is independent from RCC and that RCC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by RCC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Research Capital Corporation (”RCC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor RCC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to RCC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.

Ritch Wigham
Mackie Research Capital
http://ritchwigham.com/
PH.(604)-662-1853
T.F. 866-662-1853

TFSAs in Your Best Interest or the Banks?

admin — Tue, 26 Jan 2010 21:36:27 +0000

This article illustrates why my opinion on TFSA accounts runs counter to what the banks would have you do.
I hardly think tying up less than $25,000 dollars makes sense at returns of less than 3%.

See the full article here.

Ritch Wigham
Research Capital
http://ritchwigham.com/
PH.(604)-662-1853
T.F. 866-662-1853

Tax Free Savings Accounts: What to do

admin — Tue, 19 Jan 2010 18:43:30 +0000

…and why you shouldn’t listen to your favorite banker!

Last year in his wisdom Jim Flaherty our vaunted and illustrious Finance Minister decided to appease the trust unit’s people, the banks, and finally the markets by introducing the TFSA or Tax Free Savings Account. The premise being that you could take five thousand ($5000) of your after tax dollars and “contribute” it to this account every year and accumulate in theory a sizable portfolio in a few years, while doing this tax free. Since the money you put in was after tax dollars you would be able to accumulate wealth without having to pay capital gains tax or withdrawal (withholdings taxes) as you would in an RRSP.

Great idea.

What this did for the banks was allow them to try and keep more of your money while also charging you for the privilege. Sound familiar? You see if you set your TFSA up with the bank they could charge an admin fee like they do for your RRSP since it is another kind of registered account, and at the same time try and convince you that their in-house investment products were somehow a good idea for your future. As a note I should mention now that my firm, Research Capital “does not” charge an administration fee but does charge minor fees when book-keeping functions are performed (withdrawals as an example).

The problem arises from here for these accounts. If it costs you anything in the form of a drawdown on $5000 dollars in charges then you must return those fees plus a percentage to make this plan worthwhile. So if you think that it is worth your while to tie up this money for a return of say $500/year (which is 10% by the way) minus anywhere up to $200 dollars for fees than help yourself and please continue allowing the banks to make more from your money than you do. At best that is what will happen if you invest in the “safe” products that you will be offered at any of the banks or mutual fund companies or credit unions that are offering these accounts. The reality is that you will more likely get a return of less than the 10% that I mentioned earlier and could well be lucky to have broken even at the end of the year.

So what is the alternative?

Well the alternative is to view this account as an account that you use to try and rapidly build up your equity until you do have it to a level where more sedentary investments do make sense. In my opinion that is somewhere north of $25,000.00 dollars. This means that you can put your $5000 in every year and accumulate the moneys at virtually no (or very little return) for five (5) years or get aggressive earlier on (first couple of years) and try and achieve that level of funds more quickly. This requires a more aggressive or if you will “riskier” approach. Personally I cannot see why I would tie that small amount of money up unless I was shooting for a superior return and willing to take the risk associated with that. I don’t mean” go big or go home” necessarily, but there are many emerging companies listed on our exchanges that make much more sense to me, as they are going (if properly chosen) to far outstrip the returns that you would achieve in a fund or some kind of similar investment.

My suggestion for your first couple of years is to take your initial money and choose no more than two companies that you think have upside. It is very hard to suggest more than that because your costs versus the leverage that you are trying to achieve have to be proportional. For example; if you buy 4500 shares of two companies @ $.50/share you will have two commissions of $110.00 (in this case I am using Research Capital minimums) and a share cost of $4500.00 dollars for a total of $4720.00. This is just under your $5000.00 contribution in year one. At this level all that you need to have happen is for your stocks to appreciate by $.05 to cover your costs. Every penny above this is potential returns on your money. (4 x $110.00 = $440.00/ 9000 x $.05= $450.00) I use the premise of both buying and selling your shares as you have made no money until you sell your stock.

The math is not at all complicated; the complication comes with picking the right stocks, at the right level in their development. Just because it looks cheap doesn’t mean that it is.

The point that I am making is that it makes no sense “not” to take some risk in trying to maximize your returns in your TFSA. Even if you don’t make money initially I really don’t feel that with the small amount of money that you are dealing with there are other strategies that can give you a return that makes having one of these accounts worth your while. If $5000.00 dollars is going to make a difference to your status you shouldn’t be making “any” investments with anyone anyway, that includes the banks. You should just be leaving your money in a savings account or an RRSP for the tax savings that it offers you.

If you would like to discuss setting a TFSA up, and looking at higher return strategies; please give me a call we can talk and I can tell you if this is right for you!

All the best for now,

Ritch Wigham

Questions about Agriculture & Potash

admin — Tue, 12 Jan 2010 18:07:40 +0000

An interesting link to a Globe and mail blog with Ravi Sood taking questions about agriculture and “Potash” companies

View the full story here.

Free Potash Report

admin — Sat, 07 Nov 2009 02:33:06 +0000

I’ve just released a free report on the Potash industry.

This sums up nicely the current problems in the U.S. crops

admin — Thu, 29 Oct 2009 19:48:26 +0000

See this post on The Pig Site about the current grain market situation in the U.S:

Standoff over fertilizer prices imperils world food supply

admin — Mon, 26 Oct 2009 17:41:03 +0000

After reading this article from the Globe and Mail: I have just finished a special report that you can request with my current recommendations on the Potash companies that we follow.

-Ritch

It’s up to China

admin — Wed, 14 Oct 2009 15:32:46 +0000

This article by Kenneth Rogoff helps explain why we have a dynamic change in the way the world is going to work moving forward. As you know if you have read any of my recent blogs/posts I am a firm believer in the premise that it will be Asia (read China primarily) and the other BRIC economies that will lead the world recovery.

The way that I interpret Mr. Rogoff’s assumptions is essentially that China primarily, and other emerging economies, can either spend their U.S. reserves back into their own economies or buy what they need in the open market for what their economy needs to develop further on it’s own. Spend it or loose it.

In the case of a currency that means basically spend it or watch it devalue ‘till you will only get a fraction of what it was once worth. The unwritten and verboten subject, and attitude in the U.S. may well be to allow their currency to devalue vis a vis the Yuan/Renminbi until it hurts. Remember that all those dollars have already been devalued by as much as 50% depending on when they were accumulated by the Chinese central bank. We also have almost everything that these economies needing, having gone up substantially in U.S. dollar terms. Copper, oil even the prices of the grains should continue to get support as these dollar rich economies continue to “spread the wealth” before it devalues further. Other producers such as the Oil cartel will continue to try and force higher prices from their production as the value of dollar pricing continues to decline and the monies they receive in U.S. terms diminishes their ability to support their own economies, and import purchases.

Again, as I have said before, as long as U.S. interest rates stay low, the need to spend dollars will continue, as the currency relationship is the proxy for these rates and gold becomes also the store of wealth that you would normally ascribe to the U.S. dollar as the primary reserve currency in global terms.

In essence Mr. Rogoff is suggesting as we have that Chinese spending will be of benefit to all and they not the U.S. consumer will lead world economic recovery.

Talk to you soon

RitchResearch Capital Corporation (RCC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-RCC website please understand that it is independent from RCC and that RCC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by RCC.