The value of both Maple Leaf Foods and Toronto Dominion Bank are both up but the long dipping and dragging Shopper’s Drug Mart is bringing the entire portfolio down. I had fleetingly considered dumping Shopper’s and vowing never to step in to retail again but last night I read this article http://www.theglobeandmail.com/globe-investor/investment-ideas/strategy-lab/dividend-investing/shoppers-drug-mart-a-sickly-stock-thats-poised-for-recovery/article8279334/ in The Globe And Mail (Canada’s national newspaper without scantily clad women).
The Globe thinks that Shopper’s is poised to increase and it is now being considered by several major funds as a good investment. Are the experts correct in their analysis? Or, my theory, does the stock increase because 1 good article in a reputable publication starts people thinking and buying the stock. Do people read the paper, read the quotes from the experts and think of it as a stock tip and buy?
How many people only read the title of that article and are making their decision based on a headline?
How much does media, old school newspapers and online blogs, influence stock purchases? I read the papers (online) and the blogs and watch a lot of television news. Were my purchases influenced by the facts I read or was I swayed by the opinions of the commentors?
I bought Shopper’s because I am a fan of the store and the stock price was low and at some point a big American pharmacy chain will want to make their entry in to Canada and this is the perfect way to gain a Canadian presence. I had read a little article many years ago about an American pharmacy chain entering in to talks with Shoppers about some sort of joining together but all plans were put on hold when the economy started to dive (2008?). That article stuck with me until I made my purchase in 2012.
Maple Leaf Foods was low when I purchased it last summer and it had still not fully recovered when I bought more shares in December 2012. Maple Leaf Foods has been fighting to regain their reputation after a manufacturing problem 2 years ago allowed a powerful bug, lysteria, in to some of their processed meat line and some Canadians became ill. It was headline news in Canada. Daily updates of the number of sick people and when another flavour of luncheon meat tested positive for the lysteria. Luncheon meat sales from all manufacturers slowed dramatically across the country.
There is $245.00 cash in my TFSA (tax free savings account) where I hold my stocks. I am itching to get that amount up to $1,000 so I can make my next purchase. I like to buy about $600 to $1,000 worth of shares at a time to minimize the commission I pay from my discount broker. I will continue to read and watch and follow companies I am interested in and when the time comes to hit the buy button on the computer there will be a lot of memories of different types of media as well as some emotion wrapped up in the decision.
All my stock experience is wrapped up in 3 stocks with a total value of about $2,700 so I am no expert but I have selected good Canadian companies that provide regular dividends. I am anxious to start increasing the size of my portfolio but I have to concentrate on getting rid of the dreaded HELOC (home equity line of credit) before I can jump in with both feet.