Does the word “economics” trigger a yawn and glazed eyes from you? I was the same… until I started tasting a bit of what some basic, common sense understanding of economics can do. Case in point: I bought a stock on May 1st, 2007 for $3.66. As of today (Aug. 7), it’s trading at $7.02. “What is it?!?” you eagerly enquire, gentle reader?
It’s a company that’s not glamorous or sexy at all. It’s canadian, it uses some best practices of sustainability, and it produces silicon – the stuff that is used in computer micro chips, and lcd screens (most flat screens), and most importantly in this case, solar cells (the things that convert light into energy). It’s called Timminco.
Why is it doing so well? Back in March, it won a big contract to produce solar cells and in April it won a second contract. Then, the company successfully got an investor (an investment firm, actually) to lend it a lot of money to build a facility for this new level of production. The loan rate: US prime plus 1%. Low rate loan + new facility + 2 good contracts = a company poised for success. And it’s part of the whole sustainability movement. It’s all good.
Full disclosure: in this case, I didn’t twig onto this company. My mom did. She, like me, does not have any formal education in financial planning (so NOTE: I’m not advising anyone to buy this stock! I’m just an amateur sharing a story!). But she, like me, makes it a point to be informed about what’s going on in the world of finances and economics. Term deposits at 4%? Yeah, I guess… but I’d rather put a bit of energy and interest into becoming informed and doubling my money now and then, wouldn’t you?