Asset Allocation, Bushtits and Starfish

My asset allocation model is telling me that I should move some money out of Canadian equities and into US equities. I’m not surprised given the performance of the Canadian stock market and movements in currencies over the past two years. I have two questions to research before actually doing anything. 1) What US equity (or equities) should I buy? 2) What Canadian equity (or equities) should I sell?

Under Question No 1, I have topics to investigate.

What has Irwin Michael been buying? Irwin Michael is mutual fund manager with a value-based investment style. Unlike most other mutual fund managers he publishes information that anybody can read for free (you don’t even have to be one of his clients) about specific selected companies he is invested in, including why he purchased them, how they’re doing and why he sold them. I’m hunting for investment ideas in what he currently owns in his ABC American-Value and ABC North American Deep-Value funds.

The Global Tire Shortage: I first heard about this last summer. Major tire manufacturers (Michelin, Goodyear, Bridgestone, Titan, etc) are producing at maximum capacity and demand is very high due to booming economies and commodities prices around the world. The shortage and rising price of tires is beginning to impact the financial results of companies that rely on large off-highway vehicles, e.g., in the mining and energy sectors, construction and road building and truck manufacturing.

My Watch List: I keep a list of stocks that I watch. Sometimes a stock is on the list for years before I buy it or chuck it off as a bad idea. Right now the watch list only has one US equity on it that I don’t already own, Sea Containers (SCR.A on the NYSE). That’s a bit sparse. Maybe I’ll have a few more to watch once I go through Irwin Michael’s holdings.

Exchange Traded Funds: I turn to ETFs whenever I can’t decide on a particular stock. This morning I was looking at iShares Dow Jones Select Dividend Index Fund (DVY on the NYSE).

Now, back to the birds.

Today’s backyard bird is the Bushtit (Psaltriparus minimus). These are tiny little grey birds that travel around in largish flocks. The flock that stops by my suet feeder has at least 25 birds in it this winter. They don’t seem to mind crowds. Most of them will try to cling to the suet feeder all at the same time resulting in a squirming grey swarm that covers the suet on all sides and top and bottom too. Then they fly off, one or two at a time into the bushes and into next yard.

Before I knew they were called Bushtits, I used to think of them as “those scruffy little birds.” The first time that I really noticed them was during the summer while they were molting and they looked very dull and ragtag with bits of feathers sticking out here and there.

And, finally, the picture.

Here's a pair of Starfish. I took this photo near Long Beach on Vancouver Island.