The Canadian Technology Sector

The beauty of the Canadian market is two-fold. It's small and it doesn't possess the volatility that has been coined the "new normal" on Wall Street. No, in true Canadian form, even our market mirrors our culture. Conservative, lower risk, and passive.

The market is divided into 6 sectors:

1. Mining
2. Energy
3. Diversified Industries
4. Life Sciences 
5. Technology
6. Clean Technology 

I'm bullish on technology. Technology is the foundation of business and government. Nothing happens without it. It generates data for informed decision making, delivers results, and automates manual processes. Every entity I've ever been employed by has been starved for technological solutions and upgrades. Technology is the driver of innovation, progress, and problem solving. I believe the effective use of technology has the power to drive economic growth, business success, and at a more humane level, solve food shortages, and the destruction of our planet.

The technology sector in Canada is divided into 5 Subsectors:

1. Software
2. IT Consulting Services
3. Internet Software and Services
4. Hardware & Equipment
5. Communications Technology

For a full listing of Technology companies listed on the TSX and the TSX Venture Exchange, visit http://www.tmx.com/en/pdf/Technology_Sector_Sheet.pdf


3-Month TSX Capped Information Technology Candlestick Chart

Technology today performed worse than the S&P/TSX composite index S&P/TSX composite index  (1.46% vs -1.1% respectively)

The Canadian Technology Sector

When choosing a stock to invest in, like making any decision,  there are a variety of paths that you can choose. The key to choosing the best path asking and answering the right questions. When you're choosing to make a relatively short term investment in a stock, you shouldn't throw your due diligence out the window, and forget about asking the questions that validate the company you're selecting as a sustainable one with growth potential.

What sectors do you expect to outperform within the next few weeks?
What does the company's balance sheet look like?
What does the income statement look like?
What do the statement of cash flows look like?
What does the technical chart for the company look like?
How does it compare to other companies in the same industry?
How does it compare to other companies in other industries in the same country?
What stories are in the news for the industry right now?
What events increase sales in this companies market?

My intent was to make this decision tonight, but I couldn't answer all of my own questions with confidence. The only thing worse than making no decision is making a high-risk uniformed one. So, I'll continue to do more Halloween research and hopefully be ready to place a buy order on November 1.

Never Ever Give Up

When I checked into this blog, after not having looked at it for over 9 months (and I didn't even have a baby!),  there it was. The first comment I've ever seen on my blog! It was the ultimate source of inspiration. Thanks Punch Buggy whoever you are!

I didn't stop investing, or my mission to a million. I just stopped blogging about it because I wasn't staying true to my mission. I was selling prematurely, and even worse, I was selling losses. I lost focus. Took my eye off the ball. All the things that you shouldn't do when you're trying to accomplish something.

Lesson learned. Time to start again.

Stay tuned for the fresh start pick of the second shot at a mill:)

GDP Outlook for Canada in 2011

At the beginning of the year it's a good idea to reassess the economic snapshot of the country that you are planning to invest in. What is the overall direction that you will be expecting the market to trend in? Will the country be experiencing growth or setback? What will be happening to inflation? Interest rates? Consumer confidence? 


In 2011,  Canada's Gross Domestic Product is estimated to be 2.0%. What does this mean? It means that the total value of goods produced and services provided by the country is expected to increase by 2.0% from the previous year. The fact that the number indicates that Canada is expecting that it's economy will grow in 2011. 


To get a better understanding for what 2.0% means, it is helpful to benchmark the number against the numbers that other countries are forecasting. China and India are forecasted to grow at 8.5% and 8.7% respectively. The United States is currently projected at a growth rate of 2.2% for 2011. 


http://web.worldbank.org/external/default/main?theSitePK=659149&pagePK=2470434&contentMDK=20370107&menuPK=659160&piPK=2470429


If GDP were the sole indicator used for choosing a stock, then it would suggest the most probable gains would be found in equities in the country's forecasted to experience the most growth. The easiest access investors have to gain exposure on the foreign exchanges can be found at http://www.tmxmoney.com/en/sector_profiles/exchange_traded_funds/funds/by_type.html


Search for an ETF that is bullish in emerging markets.

Another day in the green for the TSX, closed up 0.55% from yesterday to end the week at 13239. Every sector posted a gain, lead by metals & mining, health care, and telecom. http://tmx.quotemedia.com/marketsca.php?locale=EN

The S&P almost registered the exact same percentage gain, up 0.6% from yesterday to end the week at 1240. All sectors on the S&P also posted gains, lead by industrials, health care, and financials. http://www.standardandpoors.com/indices/sp-500/en/us/?indexId=spusa-500-usduf--p-us-l--

The Canadian financials finished the day up 0.87% to close at 184. Weekly financial chart shown below.



http://tmx.quotemedia.com/marketsca.php?locale=EN

BNS lead the Canadian financials.

BMO.TO	61.74	-0.10	-0.16%	BANK OF MONTREAL 1D 5D 3M 6M 1Y 2Y 5Y max News Profile Key Stats
BNS.TO	56.00	+0.66	+1.19%	BANK OF NOVA SCOTIA 1D 5D 3M 6M 1Y 2Y 5Y max News Profile Key Stats
RY.TO	52.75	+0.28	+0.53%	ROYAL BANK OF CANADA 1D 5D 3M 6M 1Y 2Y 5Y max News Profile Key Stats
CM.TO	77.31	+0.14	+0.18%	CANADIAN IMPERIAL BANK OF COMME 1D 5D 3M 6M 1Y 2Y 5Y max News Profile Key Stats
NA.TO	70.22	+0.71	+1.02%

Company name	Exchange	Currency	Price	Change	Chg %
TD	Toronto-Dominion Bank	TSE	CAD	73.25	0.00	0.00%

The US financials finished up 0.88% to close at 212.

Citigroup lead the way south of the border, with a 1.67% gain.
http://stockcharts.com/scripts/php/candleglance.php?C,JPM,WFC,BAC,RY,TD,BNS,$DJUSBK

This mini-rally should continue into next week, as commercial and retail investors get their year end trades in ahead of the holidays.

Stronger than expected economic data and consumer confidence levels should support the rally.
http://www.bloomberg.com/news/2010-12-10/most-asian-stocks-fall-euro-trades-near-week-low-on-china-rate-concerns.html