Cutting Through the Noise
July 3, 2014
I opened the Financial Times website this morning to see that the unemployment rate in the U.S. had dropped to 6.1%. Beside that headline was a story about the Dow Jones hitting 17,000. Just minutes before, I saw in the Globe and Mail that Canada and the U.S. are ...
Read MoreJune 30, 2014
1). Make ‘Snowball’ your holiday read. 2). Go to summer school with Professor Buffett. 3). Read ‘The Essays of Warren Buffett: Lessons for Corporate America’. 4). Grab a beer and popcorn and watch a few Buffett videos on YouTube. 5). Head to Dairy Queen for ...
Read MoreJune 26, 2014
I saw a note that 150,000 people worldwide wrote CFA (Chartered Financial Analyst) exams on June 7th. It’s a reminder of how tough it is to get into the investment business. For some reason, lots of young people want a piece of the great gig that we have ...
Read MoreJune 24, 2014
When I was in Toronto a few weeks ago, I was walking north on Bay Street toward King and was struck by how quiet it was. It was probably just a lull in the day, but I couldn’t help but feel it was analogous to where we are in the capital markets. Things are calm ...
Read MoreJune 19, 2014
June 17, 2014
There’s a terrific article in the Globe and Mail today. It’s based on an interview with the new CEO of Canada Mortgage and Housing Corporation (CMHC), Evan Siddall. It’s terrific because Mr. Siddall and his team are taking CMHC back to where it should be ...
Read MoreJune 12, 2014
In a Globe and Mail column on May 8th, I talked about how investors have been moving from defense to offense in their fixed income portfolios. Indeed, many of the new income funds and structured products are aggressive enough, and/or complex enough ...
Read MoreJune 9, 2014
The attached chart came courtesy of Tim Price of PFP Wealth Management in London ...
Read MoreJune 6, 2014
Last week, the yields on Spanish 10-year bonds hit 2.82%. According to the Financial Times, this is the lowest since the early 1990’s. Also last week, an auction of 10-year Italian bonds came at a yield of 3.01%, which is the lowest since the introduction of the ...
Read MoreJune 4, 2014
“Should Ed Clark, a 50-goal scorer, be paid the same as a good two-way winger on a deep team, a dependable defenseman, a second-line center and a penalty-killing specialist?” With the NHL finals about to start, it seems like a good time to update ...
Read MoreJune 3, 2014
"Bradley says nobody can call the market in the short term, but here he is with 15% of the fund sitting in cash. Isn’t that market timing?” With cash earning next to nothing and stock markets going up, we’ve been getting a few comments like this about the Founders ...
Read MoreMay 27, 2014
The following chart is a screen shot of our Volatility Meter. The tool gives you the ability to toggle across different time frames and see how different asset mixes performed. The chart below shows the annual returns (1961 – 2013) for an indexed portfolio made up of ...
Read MoreMay 14, 2014
In a post last month, I gave my not-so-subtle view about borrowing money to invest – it’s possibly appropriate for a miniscule number of investors, and totally inappropriate for the rest. Last week I heard Cliff Asness speak. He is one of the founders of ...
Read MoreMay 8, 2014
When I headed west to join Phillips, Hager & North in 1991, I had to learn about bonds, and fast. My background as an equity analyst wasn’t going to cut it with the balanced pension clients I’d be working with. Fortunately, PH&N was already one of Canada’s ...
Read MoreApril 22, 2014
I’ve grumbled in this space numerous times that the mutual fund industry is stuck in the dark ages. Its automatic response is to resist change and improvement. Meanwhile, the world moves on and clients find other ways to invest (ETFs being one example). While ...
Read MoreApril 17, 2014
TD ran a large ad in the Report on Business yesterday. It shouted: Get up to 300 free “I’m feeling more confident” trades. Are you kidding me? 300 trades. I’m not sure I’ve done 300 trades in 31 years in the business. Is this a reflection of where we are in the cycle (I’m feeling more confident) or is TD encouraging its clients to do some high frequency trading of their own. 300 trades. Really?
Read MoreApril 7, 2014
Over the last couple of weeks we’ve met with two prospective clients who were dealing with unpleasant situations related to investment loans. In one case, the loan proceeds were used to purchase mutual funds with deferred sales charges. (I haven’t quite ...
Read MoreApril 2, 2014
Set up a long-term investment plan and stick to it. It’s easy to say and difficult to do. What makes it so hard are the inevitable market extremes, which range from “I can retire today” euphoria to “I hate the stock market” depression. At both ends of the spectrum, it’s ...
Read MoreMarch 31, 2014
BRIC is an acronym for Brazil, Russia, India and China. It was created by Jim O’Neil, the Global Economist at Goldman Sachs (who became a celebrity in the business press as a result). BRIC was meant to symbolize the shift in economic clout from the developed ...
Read MoreMarch 27, 2014
“The potential growth rate has fallen to 7-8 per cent, partly because of a shrinking labour force; excess capacity has become massive even by Chinese standards; financial risks have risen, driven by excessive local authority borrowing, housing bubbles and growth ...
Read MoreMarch 24, 2014
I generally don’t go through prospectuses of new issues. Scott put one in front of me last week, however, and it made me wonder if I’ve been missing out. The document, which was related to the PIMCO Global Income Opportunities Fund, had all kinds of ...
Read MoreMarch 13, 2014
In the Report on Business on Monday, there was an article on a case playing out in the U.S. courts that involved RBC. It reinforces my previous comments with regard to the sliding standards of conduct that exist in the investment banking arena ...
Read MoreMarch 12, 2014
“Your investment philosophy is very interesting. What you’re saying about investing, does that apply to how you live your life?” I was asked this question at the end of a media interview. My response: “Hell no. They’re very different. If I lived my life the way ...
Read MoreFebruary 26, 2014
Ballast /bal•last (noun)/ Any heavy material used to stabilize a ship or airship. Also: weight, bulk, stabilizer, balance, counterweight, counterbalance. In a recent post I suggested that one reason clients are resistant to re-balancing their portfolios is that our ...
Read MoreFebruary 25, 2014
Fortune magazine got a scoop on Warren Buffett’s annual letter. In an exclusive excerpt, Mr. Buffett writes about the basics of investing in a way nobody else can do, including real life examples (purchases of a farm and commercial building). For those of you ...
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