Cutting Through the Noise
July 30, 2012
A great, timeless sketch from Carl Richards. Richards is an American fee-based financial planner and author. His sketches appear in the New York Times Bucks Blog and he writes a column for Morningstar (USA). Through simple drawings, he makes complex financial concepts easy to understand. We admire that.
Read MoreJuly 25, 2012
We’ve been vocal about our aversion towards federal government bonds. We noted in our Q2 Report that the Government of Canada 10-year benchmark bond yield dropped below 1.6% in June, and 10-year U.S. Treasury yields sit below 1.5%. Both Canadian and U.S...
Read MoreJuly 23, 2012
It’s been a few months since we last checked in with Bruce. Things are good on the work and home fronts, and his portfolio is holding steady in a bumpy market (as of June 30th, he’s up about 3.5% year-to-date). The family took a two week holiday to California in the spring, which included stops at Disneyland for the kids and a few wineries in Santa Barbara for the adults, before settling in Palm Springs. The sun and cheap merlot had a lasting impact. Bruce has long wanted a...
Read MoreJuly 22, 2012
If you really want to delve into someone’s personality and character, take them golfing. There are few pastimes that are more revealing. Golf takes four to five hours to play, is laden with emotion and is mankind’s greatest equalizer - it humbles...
Read MoreJuly 12, 2012
Stock markets around the globe declined in the second quarter as investors focused on the ongoing debt saga in Europe. Bonds fared well as the yield on the Government of Canada benchmark 10-year bond dropped by roughly 0.4% and fell below 1.65% in early June to reach a new low (when yields fall, bond prices rise). Our funds held their ground for the most part and have provided strong...
Read MoreJuly 11, 2012
From our Quarterly Report: To generate returns in excess of the risk-free rate (GICs and government bonds), Steadyhand portfolios take four types of risk: interest rate, credit, liquidity and equity risk. If you think about portfolio construction as the process...
Read MoreJuly 7, 2012
There’s one research report in my reading pile I’ve been avoiding, although it eventually worked its way to the top. Vanguard, the giant U.S. mutual-fund company ($1.8-trillion U.S. under management) produces some great research, particularly in the...
Read MoreJuly 6, 2012
June 28, 2012
There is lots to worry about these days. Rob Arnott, of fundamental indexing fame, talks about the 3D hurricane - debt, deficits and demographics. As part of the hurricane, I’ve been questioning how sustainable U.S. corporate profit margins are, given...
Read MoreJune 23, 2012
A greed moment? So here we are. The economic outlook is bleak. Systematic risk is high. Investors are scared. And Warren Buffett’s words are ringing in my ears, “We simply attempt to be fearful when others are greedy and to be greedy only when others...
Read MoreJune 21, 2012
It was announced this week that Yamana Gold is buying Extorre Gold Mines for $395 million. Yamana is one of the power houses in the mining industry, while Extorre is a smaller company that’s struggling to finance and develop a large silver mine in...
Read MoreJune 19, 2012
There are many headline-grabbing risks in today’s investment climate: Greece and the teetering European financial system; slowing growth in China; debt issues and the pending fiscal cliff in the U.S. Investors can’t be blamed for feeling concerned...
Read MoreJune 15, 2012
A friend of mine forwarded me a quote today from Credit Suisse (allegedly) that says it all: "The market is currently like a strapless bra; half of us are wondering what is holding it up and the other half are waiting for it to drop so they can grab the opportunity...
Read MoreJune 13, 2012
In our conversations with clients recently, many are shocked to hear the extent to which the Canadian market has trailed the U.S. and even global markets over the past few years. For much of the 2000’s, our market was the place to be. Resource stocks were...
Read MoreJune 11, 2012
As a follow-up to my last Globe column, which focuses on return expectations, I want to update our guidance to clients on asset mix. I’ll use the Founders Fund as a live example. The fund has a long-term asset mix of 60% stocks and 40% fixed income. (All the...
Read MoreJune 9, 2012
The market had a good run for a while, but now it’s right back to where it was.” “I haven’t made any money in 10 years.” “Whatever it is, I don’t want any more downside.” “I give up.” These statements reflect the sentiment of investors today. The headlines...
Read MoreJune 7, 2012
The Castlerock funds, which were formerly the Hartford funds, are becoming CI, Cambridge and Black Creek funds. Got it? This confusing reorganization is the result of another round of mergers in fundland. It’s CI’s turn this time, as they plan to...
Read MoreMay 31, 2012
Don Cranston and Sheila Norman, both partners at CGOV (the manager of our Equity Fund), stopped by our office this week to give us a review of the fund. We’ll report on the portfolio in detail in our Q2 Report (early July), but in the interim we felt it would be...
Read MoreMay 28, 2012
May 26, 2012
‘[T]he market’ is rapidly becoming something of an endangered species. Your mission, should you choose to accept it, is to try and identify any asset of significance that isn’t experiencing huge and artificial distortion to its price by forces that we might...
Read MoreMay 23, 2012
I find the kerfuffle about the Facebook initial public offering (IPO) interesting. I don’t know if anything nefarious went on behind the scenes, but it seems to me that what played out on this overhyped and highly priced IPO (the $38 issue price equates to over 20x revenue) fell within the range of possible outcomes. Facebook...
Read MoreMay 17, 2012
In this space, we talk a lot about transparency, and we try our best to walk the talk. There was a piece by Barrie McKenna in the Globe and Mail this week about the Federal government’s transparency around financial reporting. The conclusion: If the...
Read MoreMay 16, 2012
We don’t spend a lot of money advertising at Steadyhand (at the end of the day, investors pay for it). If we did, you might see something similar to IA Clarington’s latest campaign on Active Mind. But with a Steadyhand spin, of course. As part of their campaign...
Read MoreMay 14, 2012
We’re in one of the greatest bear markets of all time. In natural gas, that is. The commodity’s price has fallen from over $10 per thousand cubic feet (Mcf) in July 2008 to about $2.50 today. Last month, it touched $1.90, representing a decline of roughly 85% from peak to trough. Natural gas is used to heat and cool homes and...
Read MoreMay 12, 2012
A long-standing investment strategy is back in vogue. “Covered call writing” is designed to generate income from a stock by selling a call option against it (the right to buy the stock at a set price in the future). While the strategy has been around forever...
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