Bubble forming?

Is a bubble forming? 6 signs ....
1. CIC ($300B China sovereign fund just opened up shop in Toronto to invest in resource companies in Canada)
2. metal/oil/commodity prices and demand are staying strong
3. Venture exchange stock trading volumes increasing (more speculative demand/behavior).
4. recent merger and acq of mining companies
5. huge profits being reported by mining co's.
6. economy improving and optimism strengthening

this smells like the start of a stock market bubble esp in the mining / commodity sector ..... it's in the early stages of formation. Get in but know when to get out and be careful. Bubble will grow but no one knows when it will pop. Bigger it grows, the bigger the pop.


For the more conservative, there is an interesting strategy called Dogs of the Dow/TSX. it's basically picking the highest yielding stocks in the Dow each year and rotating the list each year- selling lowest yield and buying one of the new dogs.

http://financialuproar.com/2010/06/19/dogs-of-the-sp-500/

This is 2011's Dog of the Dow list
Symbol Company Price Yield Small Dog
NYSE / NASDAQ The Dow stocks ranked by yield on 12/31/10
T AT&T 29.38 5.85% Yes
VZ Verizon 35.78 5.46% Yes
PFE Pfizer 17.51 4.57% Yes
MRK Merck 36.04 4.22% No
KFT Kraft 31.51 3.68% Yes
JNJ Johnson & 61.85 3.49% No
INTC Intel 21.03 3.42% Yes
DD DuPont 49.88 3.29% No
MCD McDonald's 76.76 3.18% No
CVX Chevron 91.25 3.16% No



Below is the list is the Dogs of TSX but it's focused on just 3 sectors - financial, telecom and oils.

Company Name Ticker Price Yield
Cdn. Oil Sands COS 26.60 7.50%
Transalta Corp TA 21.21 5.50%
BCE Inc. BCE 35.30 5.20%
Bank of Montreal BMO 57.66 4.90%
Arc Energy Trust AET.UN 25.67 4.70%
IGM Financial IGM 43.38 4.70%
Sun Life Finan SLF 30.34 4.70%
Great West Life GWO 26.5 4.60%
Power Financial PWF 30.66 4.60%
Telus T 45.50 4.60%
Average Yield 5.10%