Comments on: First TFSA investment

By: Sacha

Sacha — Thu, 14 May 2009 20:07:33 +0000

The CMA program does not give people a proper background in evaluating financial market decisions. I do not even think the CFA program does so either.

All academic programs are similar to learning how to play poker with play money. One might be able to learn the rules, but to play the game with any skill takes a lot of experience.

By: VanCity Boy

VanCity Boy — Thu, 14 May 2009 01:18:48 +0000

I’ve read that one. There wasn’t much testing of Finance on the Entrance Exam so I think I need to re-read that chapter again :)

P.S. I think more emphasis should be placed on Finance in SLP, almost non-existing.

By: Sacha

Sacha — Thu, 14 May 2009 00:32:45 +0000

I’ve never read any. I generally don’t read books on investing, everything except for a couple books I’ve read (by Jack Schwager) have been garbage.

I’d read a corporate finance textbook under fixed income investing for a good start.

By: VanCity Boy

VanCity Boy — Thu, 14 May 2009 00:06:21 +0000

Sasha, can you recommend any good books on debenture investing?

By: Sacha

Sacha — Fri, 20 Feb 2009 06:13:14 +0000

The compounded yield is exp(ln(2.5)/3.7)) = 28.1% plus the impact of coupons ($32/half year) reinvested at 0%. Morningstar has a good calculator (http://screen.morningstar.com/BondCalc/BondCalculator_YTM.html#BondCalculator)

The standard “yield to maturity” is 39.7%, but this assumes you can reinvest coupons at 39.7%, which is not a good assumption.

By: Simon

Simon — Fri, 20 Feb 2009 04:33:36 +0000

Thanks, that explains the current yield of 16% (100/40 * 6.4). Any chances you could explain how you arrived to maturity yield of 33.25%?

By: Sacha

Sacha — Thu, 19 Feb 2009 20:22:41 +0000

Debt is usually quoted as a fraction of par, so 40 cents = 40% of par value.

The TSX quotes debt in terms of dollars per 100 dollars, so a quotation of 41.00 is 41 cents on the dollar.

You have the right symbol.

By: Simon

Simon — Thu, 19 Feb 2009 20:20:03 +0000

> The price I paid was 40 cents on the dollar.

Sorry for my ignorance, isn’t HTE.DB.D trading at 41.00$ right now? I’m quite new to debentures. I don’t see anything close to a dollar. Perhaps I’ve got the wrong symbol?

http://www.harvestenergy.ca/section/section.php?Page=20&Section=4