The Best Advice When Getting Auto Insurance

autoinsuranceGetting auto insurance can be a perplexing and aggravating thing at times because there are different types of auto insurance policies and that it is often hard to determine which one is best for you.  To add insult to the issue, most auto insurance agents tend to use jargons that will usually confuse you even more.  The worst part in getting auto insurance is that you either pay more for the coverage you are getting or that you are getting the least amount of coverage protection that does not suit your particular auto insurance needs.

When getting auto insurance, it is best that you are able to get the best advice possible.  In fact, you may even find any type of advice useful as it gives you a certain idea on how to approach getting auto insurance.  Getting advices as well as important or relevant information online these days is the easiest and most reliable way of knowing what to do when getting auto insurance.  If you need to get auto insurance, here are the following things you need to do:

Research About Auto Insurance – before getting your auto insurance, it is only proper that you equip yourself with the necessary information on auto insurance along with the different policies that are being offered.  This way, when you have an overall idea over the different auto insurance coverage and policies, you do not have to spend a much longer time getting your auto insurance as you will only have them explain to you the particular things that you do not understand or have difficulty comprehending.

Identify Your Auto Insurance Needs – before going out to get your auto insurance, try to identify the most suitable auto insurance coverage you need based on your daily or regular drive.  While going for more gives you adequate protection, the added cost of it may not fit perfectly with your budget.  Get the ones that give you the most adequate protection and stick only to that one unless properly advised not to do so.

Get Your Auto Insurance from an Auto Insurance Broker – auto insurance brokers like that of auto insurance brokers Grande Prairie do not work for insurance companies but instead are affiliates of different insurance companies.  If you go to then for auto insurance, they will provide you with the necessary education on the different policies and provide you with different auto insurance quotes from different insurers.  Going to auto insurance brokers when getting auto insurance provides you with better options on which insurer you want your automotive vehicle insured.
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Insurance

Guidelines to Getting Auto Insurance after DUI Conviction

duihelpGetting DUI conviction can be quite embarrassing, but as it turns out, it is only the beginning of another problem. After paying fines, doing community services, and getting your driver’s license suspended, the next issue is what you may call quite hefty. Once all is said and done about your DUI conviction and you need to get car insurance, you will be surprised to just how high it has gotten that you may not even be able to afford it. In fact, this high insurance premium of yours may last up to three years just because you got caught of driving under the influence.

Getting auto insurance after a DUI conviction is possible. However, there are some guidelines that you may need to follow or you might wan’t to try getting a professional liability insurance locally to protect yourself from this kind of hindrances.

  1. There is no immediate remedy for this issue. The demands required by court may become a struggle so simply get a local auto insurance company that will be will to provide you with insurance after your conviction. Most companies will not provide you with coverage for at least three years of clean record.
  2. The process of getting insurance after conviction is expensive. Since you have been convicted, you are therefore high risk and high risk insurance is quite costly, no matter what insurance company you get it from.
  3. Fight the DUI Charged against you. You will probably need to get a good lawyer for this so thing can be resolved quickly and in your favor. If you think you have a good chance of getting the charged dropped or even reduced, you will need an exemplary lawyer to help you. This way, no insurance company will even learn about the charges against you. If the charges are reduced, this will show on your record.
  4. Get your coverage from a widely-recognized insurance carrier. You will have much better coverage with at least more than competitive rates. Regardless of where you go, you are considered high risk so your premiums will naturally be high. If this will be the case, by the very least, get yours from a good insurer.
  5. Make sure to follow all your court obligations. Make sure to attend all the hearings, finish the community service you have been given, and pay all the necessary fines. If you are cooperative, things may turn out better for you when getting your car insurance after DUI conviction.
  6. Do all the necessary paperwork properly and make sure it is accepted by your state agency. Normally, you have around 6 months in getting this done, but this all depends on the restrictions given to you.
  7. Shop around and find the insurer that is the least expensive. Make sure the insurer can help you with some of your paperwork and that they accomplish it within the allowed time. Basically, this will be the order to follow: best coverage, most help, and best price. You may want to indicate that you can stay with them after your DUI issue and have normal auto insurance again.

The truth is, getting your privilege back after a DUI conviction may be costly and a lot of hard work. However, if you stay clear of driving when you are under the influence of alcohol and that you follow your court commitments and pay your premiums dependably, then your usual auto insurance premiums will be back to normal again before you even know it.

While the high premiums after DUI conviction are not pleasant, it is enough of a lesson to make you feel and never once again consider the idea of driving when you are under the influence.

Insurance

The Fisher Transform

No matter what “technical indicators”, “technical studies”, or whatever equations you wish to throw at a financial instrument, they are all derived from the same information: price. You can take indicators of indicators, constantly bludgeoning the data into some kind of form that seems to tell us something that the price movement hasn’t told us already, but that’s useless if there is blind faith involved.

That said, indicators have their uses. I just must impress upon anyone reading this that one must appreciate that the indicator is based on price action in the PAST, and any indicator, distilled down far enough, really doesn’t tell you much more than a naked chart does. Many indicators do make it easier to interpret, however, such as those that attempt to distill out the freaky spikes before deciding the trend is changing.Traders

One indicator that is a bit more obscure than the standard set is the Fisher Transform. I encourage you to google it to find some downloadable material about it, because I feel it would be pointless to get into much of the mathematical theory behind it here, most of which asserts that prices don’t have a Normal PDF, and assuming so is a bad idea. Anyway, the equation of the transform is this:

y = 0.5*ln[(1+x)/(1-x)]

where x is the input, y is the output, and ln is the natural logarithm.

Don’t worry about the look of it. You can see the inputs are limited to numbers within the open set (-1,1), and there’s no mention of length. Well, the Fisher Transform for our purposes is actually plotted point by point, and using the previous point plotted. The input is a normalized version of the price (centered at zero) based on highs and lows relative to one another, with resulting inputs beyond 0.99 treated as if’s with a feedback of +/-0.999, so that way the input is never 1 or -1. I have actually found numerous approaches to the normalization in my research, and to be honest, I’m not even sure how my own charting package does it. (typical alpha’s are 0.33 and 0.5 – I’ll explain in a second) So here is one example of how to normalize the price between -1 and 1, with inputs approaching +/-1 (+/-0.99ish) returning a value of +/-0.999 or so, so as to prevent the equation from blowing up, over the past x periods, which is typically 10.

An alpha of 0.33: (note: referring to a value such as “AmountX[1]” is the value of AmountX from one period ago, or the last plotted AmountX.)

Take the last period’s ~median ((H+L)/2), minus the Low from the last (x) periods – again, typically 10 – and divide by the High from last (x) periods minus the Low from the last (x) periods, all minus 0.5, and now double that and multiply by 0.33, and add 0.67 times the previous value of all that. (note that 0.67 =1-0.33)

Price = (H+L)/2, of last period.
Min = Lowest Low of last (x) periods.
Max = Highest high of last (x) periods.
Input = 0.33*2*((Price-Min)/(Max-Min) – 0.5) + 0.67* Input[1]
If Input > 0.99, then Input = 0.999
If Input <-0.99, then Input = 0.999
(restricting the range of inputs)
FISHER = 0.5*Log((1+Input)/(1-Input)) + 0.5* FISHER[1]

…and FISHER is plotted against FISHER[1] as well, and the crossovers present the signals. “Log”, as in most programming languages, refers to the natural logarithm of base ‘e’, just so we’re clear.

The idea is after manipulating the data in this way you get a lagless indicator with clear turning points in the trend. Using a shifted fisher transform as the trigger line, it’s actually not so bad. (the alternative being just the slope of the plot to indicate the trend, which can generate a lot of false signals) Of course, with any “lagless” indicator, there is going to be some shakearound, but that’s what we get for attempting to be early all the time.

Take a look: Fisher vs (or coupled with) MACD, standard parameters. Another standard pair of parameters for the Fisher is (9,2), or a length of 9, with a signal line delayed by 2.

So, in terms of trading with it, what you’re looking for is to enter on a temporary reversal after a confirmed signal. For example, Fisher crosses signal long, the market comes back down temporarily before the trend continues it’s movement up. Enter long on the reversal.

Disclaimer:Any information contained in the above article represents my opinions only, and should not be construed as personalized investment advice. I cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the article bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice.

Technicals

Metro Inc. (TSE: MRU.A) – Better Shop Around, The Bargains Here Are Over.

Here’s a quick little trade idea for you: sell, short or buy puts on Metro Inc. (TSE: MRU.A). Metro Inc. is the operator of A&P, Food Basics, Metro and Loeb grocery stores in Ontario and Quebec. It’s not that I think being in the consumer staples sector is a bad thing in this environment, but this is a stock that has been a high flyer over the last year and I think it’s time for it to come back down to the market’s miserable reality.

Metro purchased the A&P/Dominion stores in Canada back in 2005 and have spent the last few years integrating them into their Metro brand. 2008 was the year they reaped the rewards, and the stock price soared. In 2008, while the rest of the market was plummeting, MRU.A advanced over 90% making it one of the best performing stocks of the year.img2

But is there any reason for this outperformance to last? Sure, grocery stores are essentially recession proof – people always need to eat – but Metro stores are branded as the premium grocers and their products sell at premium prices when compared to other major grocers like Loblaw and Wal-Mart. It’s not exactly the market segment you want to be aiming for in a recession like this when frugal spending and saving money have are in vogue.

A lot of Metro’s success over the last year has come at the expense of Loblaw. The chart below shows the relative performance of the two stocks (along with the TSX Index) since the beginning of 2008.

MRU+-+relative+performance

As you can see, Metro is the clear winner. So while safety stocks like consumer staples are what you want to own in this environment, Metro’s stock has simply gotten too far ahead of both the market and its peers.

From a technical perspective, the chart looks like it could be to be forming a double-top pattern (check out my colleague’s Double Top and Double Bottom Chart Patterns article for an more information). In addition, the stock has now begun to seriously test its 50-day moving average, which it has been trading well above for the last 3 months. I think it’s entirely possible that the stock may even head lower to test its 200-day moving average.

MRU+-+stock+chart

MRU+-+moving+averages

Even the insider’s believe the stock has gotten ahead of itself. À recent insider trading report shows that 10 different members of management have exercised their stock options and sold their shares. From the report it appears that beginning in January 65,900 shares in total (roughly $2.5 million) have been sold. Insider trading doesn’t necessarily mean the stock is heading lower, but it certainly doesn’t make a strong argument for it to be heading higher.

Owning a premium grocery retailer that has significantly outperformed its closest competitors and the market in a recession like this doesn’t make a whole lot of sense to me. Add the fact that the chart maybe forming the dreaded double top pattern and some insider selling and you’ve got yourself a reason to sell.

Medium Term Picks

Double Top and Double Bottom Chart Patterns

The Double Top and Double Bottom Patterns are classified as reversal patterns, this means that once the chart pattern has been identified, the most probable outcome, is that when the price breaks out of the pattern it is going to go in the Opposite direction as when it entered the pattern. So, if a chart is heading Up, then it hits some resistance and a Double Top appears, once the price breaks out it is going to start going down. Conversely, If the chart is heading down, and then it hits resistance and forms a Double Bottom pattern it is going to start heading up once it breaks free. For this reason, both of these patterns are great to help you decide when it is a good time to enter a position, or exit one.

The Double Top pattern is recognizable from its resemblance to the letter “M” and conversely the Double Bottom pattern is recognizable from its resemblance to the letter “W”. The Double Top has two peaks with a V drop in the center of the two, the peaks do not have to be at exactly the same level, but they should be close to each other. the lowest point in the center ‘V’ of the Double top (and the opposite center point of Double Bottoms), creates the breakout point, so the pattern does not truly form, until the chart has broken out past that point. In both patterns you will normally see an increase in volume and/or an increase in the slope of the price movement as the price breaks out of the pattern.img3

For chart patterns, I feel the best way to learn is ot look at some examples. so take a look at the examples I quickly drew up. As you can see in figures 1 and 2, both patterns are easily recognizable by their resemblance to M’s and W’s. To recap, the important points to remember when looking for these patterns, is, a beginning trend in a certain direction, then a peak, followed by a trough, then followed by another peak, and finally the patter nisn’t full until the price drops below the LOWEST point in between the two peaks.

Double Top and Bottom Chart Patterns are a fairly common occurrence so it may be in your best interest to take a moment to look at Figures 3 and 4 which are an examples I have provided of both the double Top and a double Bottom patterns in action. You’ll notice that they don’t always follow the clean lines that were in Figures 1 and 2, but the pattern is there. and it reacted as we had predicted. I have marked out the pattern with yellow lines.

Technicals

Nova Chemicals (TSE: NCX) – Bankruptcy, Or A Screaming Buy?

I hate sounding like the perma-bear, but we have another company on the “bankruptcy watch” list: Nova Chemicals (TSE: NCX), Canada’s “premiere” chemical manufacturer… actually, they’re pretty much Canada’s only chemical manufacturer. In the eyes of the equity markets, bond markets, and credit markets (i.e., CDS market) this company may be insolvent within months. But that fate is far from certain. For the gamblers out there, there may be a long-shot trade to be made.

As an introduction, Nova Chemicals (TSE: NCX) is Canada’s major chemicals producer. Basically, they produce a variety of plastic resins and styrenics that go into the manufacturing of stuff like plastic bags, plastic containers, disposable cups, and vehicle dashboards.img4

A Grim Outlook for the Industry

For all commodity producers, the economic slowdown has meant declining demand and a devastating fall in the prices for their products. NCX is no different. Prices for their commodities (ethylene and polyethylene) have plummeted (down some 44%), but the company believes that prices bottomed in December and are now on the rebound. Unfortunately, consumers of ethylene/polyethylene built up their inventory levels of these commodities over the last few years in anticipation of higher energy prices. Now that the economic slowdown is upon us, these consumers are just letting their inventories run down and only buying when needed (which appears to be rarely). In addition, major projects are being brought online in the Middle East, pushing the market into an oversupply situation. So until demand for goods in the marketplace begins to improve, there’s no real reason for prices to increase. The point here is that the industry in which NCX operates is in bad shape.

NCX’s competitors are falling apart as well. The US operations of LyondellBasell and Tronox Inc both filed for bankruptcy last month and Basic Industries Corp – a Saudi chemicals company recently reported 4th quarter profit that was down over 95%.

The Market’s Opinion

While the chemicals industry looks bad, NCX’s situation is particularly worrisome. The market believes they won’t have enough cash to repay their debt – debt that comes due April 1, 2009.

NCX+Bond

The chart above is the price of the company’s Medium Term Note (MTN). This is a 7.40% coupon note that matures in April 1, 2009. NCX issued $250 million of this note. What is alarming about this MTN, is that the bond market is currently pricing it to yield 374%. The bond market clearly doesn’t believe NCX will be able to repay this debt.

Not surprisingly, Credit Default Swaps (CDS) on the company’s debt are currently trading at record highs:

NCX+CDS

Just incase you needed more evidence of the market’s disdain for NCX, the below chart show’s NCX’s share price reaching all-time lows:

NCX+Stock

Nova Chemical’s Financial Situation

I’ll begin by calculating a few of the financial ratios I discussed in my “Introduction To Ratio Analysis” article. Below I’ve included the ones I believe are most pertinent for assessing a company’s ability to pay off its debt:

NCX+Ratios

The company has 5 revolving credit facilities (i.e., lines of credit) totaling $683 million. As of Dec 31, 2008, the company had utilized $184 million of this available credit, leaving $499 million available.

Including the April 1 debt repayment, the company has $333 million in obligations coming due this year (net of restricted cash). Given that as of December 31, NCX had $573 million in available funding (cash plus unused portion of revolving credit facility) it would appear the company should be able to repay their obligations.

However, as you peruse through the earnings release, you come to a section where the company talks about a forward transactions they have in place with a counterparty. The forward is designed to neutralize the mark-to-market impact of the company’s stock-based compensation plan. The problem is a clause that states that the counterparty is allowed to terminate the forward should Nova’s stock price remain below $8 for three consecutive trading days starting February 2, 2009. If the counterparty elects to terminate, then NCX will owe the counterparty $84 million – not an inconsiderable sum when you consider they only have $74 million in cash. Given where NCX’s stock price is now, this $84 million charge is pretty much in the bag.

The latest earning’s release states that two of NCX’s revolving credit facilities are governed by financial covenants that require NCX to maintain their net debt-to-cash flow ratio below 5:1 and their interest coverage ratio above 2:1. So it looks like NCX is ok here. But remember, this is what things looked like at the end of December. Things are going to change dramatically when it comes time for the company to repay the $250 million in debt that’s due April 1, and to pay the $84 million charge on the forward unwind. So in anticipation of these charges, NCX successfully renegotiated some relief on those covenants, with the condition that the company can raise $100 million by February 28, 2009, and $100 million by June 1, 2009.

It appears the company’s ability to remain solvent rests on their ability to secure this $200 million. Management insists they are well on its way to securing the first $100 million, but you really should always take statements like this from management with a grain of salt.

How will NCX gain the additional funding? For the first $100 million, NCX’s best bet is probably the Alberta government and my view is that NCX will actually be able to get this financing. NCX has a major footprint in Alberta. The company employs 1,700 in the province and their Joffre facility accounts for over 20% of Alberta’s natural gas consumption. A Nova Chemicals failure would be bad news indeed for Alberta. The second $100 million, however, is still up in the air. But, NCX only needs the first $100 million to pay down the debt due in April.

The Sunny Side of Nova Chemicals

The situation for Nova Chemicals definitely looks dire. However, to say Chapter 11 is a certainty is a little premature, I think. Here are a few reasons why over the long term, NCX is a good company:

  • Nova Chemicals still generates over $100 million in operating cash flow per quarter.
  • NCX is one of the market leaders in the ethylene/polyethylene and styrene/polystyrene industry.
  • The Alberta Advantage – NCX has a competitive advantage over their peers. Management refers to this as the Alberta Advantage. The advantage comes from NCX’s manufacturing facility in Joffre, Alberta that gives the company a competitive cost advantage in the production of ethylene and polyethylene when compared to its US peers. Historically, this advantage has averaged $0.08 per pound on the cash cost of ethylene production. Lately, however, this advantage has been much lower ($0.02 per pound last quarter). This advantage should improve as commodity prices improve.
  • The prices for Nova’s chemical products move in the same direction as oil prices (one of the reason the industry is doing so poorly right now). They also move in the opposite direction as natural gas (this commodity is one of the main inputs to production). So when the oil to natural gas ratio increases (i.e., oil becomes more expensive relative to natural gas), NCX makes more money. While it’s hard to find a reason to be bullish on oil prices nowadays, I believe over the long term, the supply and demand picture for oil seems a little brighter than natural gas – there’s more natural gas supply out there than there is crude oil, and while demand for both commodities has fallen off a cliff, it’s been the oil companies who have been putting the brakes on current and planned projects, destroying future supply in the process.

Take whatever solace you’d like from those points above – the reality is good companies can go bankrupt. But the point here is that should NCX get through the next few months, the stock should recover dramatically and the company could be a good long term holding.

The Trade

For those that believe there’s a chance NCX could make it out of this alive, buying out-of-the-money call options may be an interesting trade. Since April is the month NCX needs to get through, you’re going to want to buy the options maturing in May or later (no April options available). The May $3, $4, and $5 calls are currently offered at $0.30, $0.25 and $0.20, respectively. Your upside is unlimited and your downside is if the options expire worthless (i.e., the stock price is lower than $3, $4, or $5 at expiry). These options don’t necessarily need the stock to get back to those strike prices, for you to make money. The options will rally as the stock rallies and you can sell the options before maturity. Remember, options are levered instruments, so if NCX’s stock price rallies 100%, the options will rally much more than 100%.

I want to emphasize, this trade is a lottery ticket – for very little upfront cost, you can either earn a substantial amount, or lose your entire upfront cost. Proceed with caution!

Medium Term Picks

The Hull Moving Average

There are many, many kinds of moving averages out there. All of them suffer from one kind of weakness or another, much like any sort of parameter does. The Weighted Moving Average and the Exponential Moving Average both try to address lag in the Simple Moving Average by placing emphasis in the calculation in the more recent minutes. I recommend going to Investopedia for calculations of the basic set of technical indicators. For the readers sake with regards to moving averages, an SMA is simply plotted as the average of the past ‘n’ periods. (usually the closing prices of said periods) General interpretations involve a faster (smaller ‘n’) MA crossing over a slower MA to indicate a trend. I prefer price action relative to the usual set of MA’s, myself, rather than MA’s relative to each other.

But, I digress. Enter the Hull Moving Average, or HMA, which attempts to address both lag as well as to smooth out what might otherwise be a choppy line moving in a choppy market. It’s an obscure moving average created by Alan Hull and many chart packages won’t have it available. Here is the equation based on period n (and, “of the price ‘p'”, obviously):

HMA(p,n) = WMA[(2*WMA(p,n/2) – WMA(p,n)), n^1/2]img5

A bit of a mouthful I know. Let me walk you through it. An HMA of the price ‘p’ based on ‘n’ periods is essentially a WMA of the difference between 2-times the value of a WMA of length ‘n/2’ and a WMA of length ‘n’, based on the square root of ‘n’ periods. Follow? Working from the bottom up, to find HMA(p,n), find WMA(p,n/2), double it, and take away the value of WMA(p,n) to get…. let’s say ‘h’. (as opposed to ‘p’, as in price) Now the HMA (p,n) = WMA (h, n^1/2). Oh and of course every parameter must end up being an integer so rounding occurs in the event of uneven, non-square numbers…. which is exactly why I prefer to use even square numbers as parameters.

Why those particular relations (n/2, n^1/2) exist in the equation is actually beyond me, (probably the result of lots of trial and error) but it doesn’t matter, because as a rule the HMA does what it sets out to do: produce a smoother, less-laggy line. But, as a side effect sometimes the line is prone to overshooting. This is because the two relations can sometimes overcompensate, as any two elements that attempt to eliminate lag are bound to overtake the issue at hand; kind of like rear-ending the guy in front of you if you’re following too close in your car.

Okay, interpretation: I would say that the slope of the HMA is best used as your filter and you wait for a pullback from the direction of the HMA and then a resumption of the movement. For example, the HMA has changed from pointing down to up, and the market is doing that ahead of it. This means that you shall only take long positions in the next short while. So, wait for a pullback from the upwards movement, and get in as the momentum resumes upwards, using the bottom of the pullback or the recent low as a stop. It’s noteworthy that the pullback might occur “within” a candle.

Another way to look at the HMA is, especially in a fast market, the price action relative to it. For example, breaking highs of candles above the HMA, that sort of thing.

Here’s the HMA(16 in blue, 36 in white) in action on Potash (NYSE: POT – which, incidentally is a buy anywhere below 100 I say) today. Also, Apple (NASDAQ: AAPL) and Exxon Mobil (NYSE: XOM) The HMA is useful on dailies as well, but unfortunately, given the incredibly large swings day-to-day in the equity markets these last many months using any indicator on a daily chart with that recent data won’t provide a good sample at all. The good news: daily activity in ’09 has been, while fast, a lot more reasonable than the craziness that was September through November.

Technicals

The Cup And Handle Chart Pattern

The Cup And Handle Chart Pattern (sometimes referred to as “Cup With Handle”) is a continuation pattern, which means that it once the pattern has completed and the chart breaks out of it, the price will continue moving in the same direction that it was heading before it hit the resistance that led into the pattern forming. The cup and handle isn’t as common as some of the other chart patterns like any of theTriangle Chart Patterns, but what it does have going for it, is when it appears it has an extremely high chance of following through as expected. Note: All chart patterns have high chances of success, which is why they have been highlighted in the first place, but I have personally found that some, like the Cup and Handle, seem to have a bit better chance of following through once they form). The cup and handle is definitely one that you should keep an eye out for, because from my personal experience, it almost always ends up giving a better return then expected.img6

So what is the cup and handle chart pattern? Well, the cup and handle usually forms after a bit of a gain (or loss for the bearish variety) then the chart will form a “U” pattern, when the far side of the “U” reaches roughly the same height as the beginning of the “U” (usually a little lower then the far side, but not always) it will start to form a ‘handle’ which can be compared to a small flag shape. If you get both the “U” followed by the Handle (small flag pattern) you have a successful Cup and Handle pattern. You will normally notice a large increase in volume, followed by a rapidly ascending (or descending for the bearish cup and handle) price. One thing to keep in mind, is that the closer the chart pattern resembles a “U” shape the stronger the signal, try to avoid shapes that take on more of a “V” shape, because they aren’t as strong of signals. The handles should also be short, so a good rule of thumb would be no longer then the top half of the cup. Take a look at the following example in figure 1, which shows a bullish Cup and Handle Chart Pattern.

Technicals