Thursday, 26 July 2012

Canfor Slashes Dividends...Again

I really should follow my own advice. Yesterday Canfor announced that it will distribute $0.05 in dividends for the quarter. This is an enormous drop from the $0.22 that it was previously distributing This was 2 cuts in consecutive quarters and last time I said that I would be willing to let go of my position is need be. After the announcement, the stock price took a nosedive and now I'm pretty deep in the red for this one. On top of that, this pulls me further away from my goal of $2200 in dividends (which seems very unlikely now that more than half the year is over) and I'm now DRIPing a company that I don't actually want due to my own laziness. Things look grim but I'm not super worried; I know stuff like this happens and will continue to happen throughout my investing career so for now I'm going to sleep on it so I can decide my next move.

Don't get me wrong, I do plan to sell it like I said before, but maybe I'll be able to recuperate some of my losses if I wait for the initial sell-off to finish... or I may be delusional and clearly I should be cutting my losses. However I feel that I should be a little more patient and see what happens in a couple days because selling now is a knee-jerk reaction and from what I read, those are the worse reactions to have.

So Canfor has not only taught me to keep on top of my investments in terms of news of the company, but also to follow-through quickly when I have made a decision; if I sold my position after my post on the first cut, then I would have avoided this mess but instead I held on and now I'm paying the price. This was a very expensive lesson... almost as bad as paying for tuition. Almost.

-the Paperboy

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