Caldwells Bad Investment Advice

Theo Caldwell, yes the Caldwell Investment Banker,

- Theo Caldwell, president of Caldwell Asset Management, Inc., is an investment advisor in the United States and Canada.

in the National Pest whines about Canada's support for Cuba through both business investment and tourism. He makes spurious claims, unsubstantiated by a single fact, in his opinion piece.

He claims;

"It grates against our national character that Canada continues to do business with Cuba, thereby helping to prop up Fidel Castro's tyrannical regime."

Oh really. Which national character is that? Perhaps it grates the right wing supporters of the Reform/Alliance/Conservative Party, but they are far from the majority of Canadians. In fact one of the ironies is that Alberta, home of the Republican Lite Right Wing in Canada is also the source of the greatest trading partners with Cuba; Sherritt Mining.

As well Albertans travel to Cuba, as Caldwell further whines about claiming that Cubans will go to jail and be tortured if they visit Canada's Delta Hotel Resorts.

The tragic irony of sipping a Cuba Libre beside the pool in a hotel that native Cubans are forbidden from entering under pain of imprisonment, and within walking distance of one of Castro's torture chambers,

And Alberta farmers have long traded cattle and bull semen with current Cuban Leader Raul Castro, who has spent years cross breeding Latin American cattle with Alberta Angus.

He concludes;

"But whether or not the despot has gone on to his reward, passing power to his equally brutal brother Raul, tyranny is tyranny and Canada ought to have nothing to do with it."

Not good investment advice. One would expect better from a capitalist like Caldwell. But with his cold war mentality he is out in the cold on his anti-Cuba strategy.

Cuba Fund Has Biggest-Ever Surge After Castro Resigns (Update3)
Bloomberg
Castro's decision is ``a clear step towards the possibility of the US resuming trade with Cuba,'' Miami-based investor Thomas J. Herzfeld said during a ...
How to profit from Castro's resignation CNNMoney.com
Investing in a Post-Castro Cuba U.S. News & World Report
Equity revolution! Globe and Mail
Stocks with Cuban exposure rise on Castro resignation CBC News
Cuba: The Investment Play Conde Nast Portfolio

The real question here is does Caldwell live by the principles he espouses? Well not really. Sure his Caldwell Canada Mutual Fund (Caldwell Investment Mgmt Ltd.) isn't invested in Sherritt.

But they are invested in Talisman Energy, the big oil company that invested in Sudan known for promoting slavery, torture, etc. making Cuba look like a workers paradise. That offended the national character of Canadians who forced Talisman to divest of its investment in Sudan.

No thanks to Theo Caldwell or his investment fund.

Caldwell focuses on companies with at least $500 million in market capitalization, and his current Caldwell Canada holdings are predominantly mid-cap stocks. He will re-assess the portfolio at least once every quarter and expects the portfolio turnover to be 100% or higher.

He wants to be fully invested at all times and is comfortable having a stock holding of 5% to 10% of the portfolio. In terms of his sell discipline, "once stocks stop going up, we sell," he says.

Caldwell will make significant sector bets. Compared to the S&P/TSX Composite Index benchmark, as of Feb. 15, Caldwell Canada is close to 100% overweight in both the energy and the basic materials sectors, and "considerably" overweight in communications and media.

By comparison, the fund is underweight by more than 80% in financial services. "As an owner of the fund, you will be overweight in the sectors that have been doing the best," he says.

But Caldwell will limit his sector exposure. Overall, his portfolio won't hold more than double the index weight in any sector or 10%, whichever is greater.

He'll also avoid some well known "sin stocks." Along with the strategy of owning "high flyers," the focus is on companies that at their core are "deep down helping people," says Caldwell. "So we don't own alcohol, tobacco or gambling companies. I don't need to own them to make this work."

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