When Lesley met Murray: Murray takes an early lead

She's a Calgary-based 24-year-old consultant. He's a 64-year-old trader. We "gave" them each $100,000 in September and we'll follow them for a year to see who has the best strategy.

By Paul Brent
Globe Investor Magazine Online, Dec. 13, 2007

One of our Investor Faceoff contestants is holding more than one-quarter of holdings in a money market fund, anticipating the worst. The other is "all in" with the initial $100,000 portfolio spread among just seven holdings.

If you knew that one of our contestants is a 24-year-old financial consultant (Lesley Scorgie) and the other a retired, 64-year-old day trader (Murray Soupcoff), you might guess that age and experience is behind the conservative, hold-cash approach. And you would be correct.

"If we do see another August-style correction, that may be the time to go in and buy some bargains," said Mr. Soupcoff. A former journalist who now spends his days researching and trading stocks, he has a bearish outlook. "I am expecting worse things because of the subprime mess. The economy in the States still looks like it is going to go down the toilet."

As a result, he has bumped his cash hoard up to $27,151 from his original $22,051 cash holding.

Though he has been an active trader, mirroring his real-life style, Mr. Soupcoff's investment strategy has not changed drastically since Investor Faceoff kicked off in September: He is a big believer in the story of Canada as the world's general store.

Viewing our country's agricultural sector as a breadbasket to the world, he'd originally loaded more than one quarter of his portfolio with agricultural stocks. To the end of trading on Dec. 6, his best holding in that sector was fertilizer-maker Agrium Inc. which has grown to $12,818.00, or a gain of 28.62 per cent, from an original $10,000 investment.

Click here to view Leslie's portfolio
Click here to view Murray's portfolio

Small bets on Hanfeng Evergreen Inc. (a TSX-listed Chinese fertilizer company), Viterra (formerly Saskatchewan Wheat Pool Inc.) and Market Vectors Agribusiness ETF (under the symbol MOO) have resulted in returns of 2.6 per cent, 7.5 per cent and 27.3 per cent, respectively.

Mr. Soupcoff's second-biggest bet is the $9,592 he put on nuclear energy in the form of Uranium Participation Corp. So far it has returned a respectable 7.5 per cent. "I believe in uranium for the long term but I don't know if it is going to pay off for this contest."

His biggest sell during the first quarter of the Investor Faceoff was unloading Research In Motion Ltd. at $120.42 a share on Oct. 25 for $12,035, a good return off his initial $8,961 investment. He jumped back into RIM on Nov. 29 buying 200 shares at $120.12 a piece only to be sideswiped by poor Dell Inc. earnings and he subsequently liquidated his position at $110.83 a share.

As of Dec. 6, Mr. Soupcoff's performance has been commendable given the turbulence of the past three months. His current total portfolio gain is $9,253 on his original $100,000 portfolio.

About the time that Mr. Soupcoff was unloading RIM for the first time, Lesley Scorgie was busy rebalancing her portfolio. On Oct. 29, she sold six of her 11 original holdings, three at a loss and three at a gain. Sales included: Canadian National Railway, Royal Bank of Canada, LuLulemon Athletica Inc., French water company Veolia Environment, Progress Energy Trust and Molybdenum miner Roca Mines Inc.

"They were as good as they were going to get so out they went," she said.

The money from the stock sales was used to buy major positions in special materials maker Neo Material Technologies Inc. for a total investment of $21,800 and children's media company DHX Media Ltd. ($20,400). "There is some really interesting research coming out" on the two companies, she noted.

As of the end of Dec. 6 her $100,000 portfolio was up $2,269.81.

Ms. Scorgie is currently eyeing the weather and the natural gas sector. "There are predictions that we are going to have the coldest winter in decades. That might be a signal to start reexamining natural gas and natural gas-weighted companies."

While dumping Royal Bank, she has hung onto her two other financial services plays: Manulife Financial Corp. (original holding of $5,000) and GMP Capital Trust ($15,000 in September).

"There is a little uncertainty in the banking sector but I think those two are very strong names," Calgary-based Ms. Scorgie said. "GMP is still in growth mode and Manulife is just really solid. GMP would be a really good (takeover) target for a big player."

Although not bullish about the market, she is more optimistic than her Toronto rival Mr. Soupcoff. "I don't know if (the market) is going to move that much in the next short little while," she said. "Things are going to slow down, but for my portfolio I'm okay with that."

She too, expects more fallout from the U.S. housing market's downturn, but said it might be a great time to buy bank names in a few months again when they have more writeoffs. "On my personal portfolio I have been doing that," she said. "When the banks have been writing off, I have been buying."