Be bold when others are fearful . . .

Investing is a lot like stamp collecting if you are serious about either

Some people are obsessed with collecting sports cards, some with antiques, some with military regalia an others with stamps. Collecting things that may appreciate in value is a hobby with rewards. I collect art, not because if its value appreciation but because I appreciate art. I collect dividends which is perhaps the closest my investment approach is to philatelism. Since to collect dividends you must necessarily collect dividend paying securities, it is really collecting those securities which is my obsession. I have been doing it for decades.

My wonderful first wife used to enjoy garage sales since valuable items were often for sale for a fraction of their real value. It was a hobby for her but over the many years we were a couple, it added up to a lot of money saved. Buying things no one else wants can really pay off.

The same is true of stocks. I buy stocks when everyone else is selling them, add them to my collection, and keep them. Here are a few examples from the recent past:

Whitecap Resources - 10,000 shares at an average cost of $1.10 per share. Today that $11,000 investment pays $7,300 a year in dividends.

Birchcliff Energy - 10,000 shares at an average cost of $0.88 per share. Today that $8,800 investment pays $4,000 per year in dividends.

Peyto Exploration and Development - 10,000 shares at an average cost of $1.14 per share. Today that $11,400 investment pays $13,200 a year in dividends

Athabasca Oil - 10,000 shares at $0.1465 per share. Today those shares trade for over $5.00 a share and the $1,465 investment would sell for over $50,000.

MEG Energy - 1,000 shares at $3.199 a share. Today those shares trade for about $30 a share.

Baytex Energy - 5,000 shares at $0.33 per share. Today those shares trade for about $4.50 a share.

Those are just a handful of examples of why “buy and hold” makes sense. The COVID-19 pandemic scared the pants off many investors who dumped their energy stocks pell mell. I bought them. In the examples shown, an investment of $37,500 in 2020 now pays $24,500 in annual dividends and has a trading value of about $375,000.

I have since sold the MEG shares, the Athabasca shares and the Baytex shares since I wanted the approximately $100,000 to pay for personal expenses and, of course, taxes on the gains, but the net result of the sales was that I retained over a quarter of million dollars (at today’s trading prices) of investments at a net cost of zero.

I can see no case for the sale of Whitecap, Peyto, or Birchcliff and expect I will hold them for the rest of my life. I have added to each of these holdings over time and they are core holdings for me, joining many other solid investments that pay dividends.

It does not take a lot of money to make serious money in the stock market - it just takes patience and courage. Patience to wait for opportunity to buy at deep discounts to intrinsic value, courage to buy when the world thinks the sky is falling, and patience to keep the investments for long periods and let them work for you.

Excess sovereign debt, rampant deficits in United States and Canada, nosebleed housing costs, rising income taxes, and persistent inflation are leftist policy outcomes that have created an unsustainable economy which will eventually crumble under the weight of government stupidity. When it does, and it will, investors will have another chance to buy well run companies with valuable assets at a fraction of their value. Think of investing as a cross between fishing and stamp collecting. Bide your time, reel in some winners, and put them in a drawer rather than checking their trading prices four times a day.