In this first of a five part series, I take a deep dive into trying to answer a fundamental question that works directly and indirectly into every investment decisions. What makes stock prices go up and down? What makes a stock valuable? In this episode, I start at a high level by exploring a core foundational element that we often overlook but plays a critical role in driving stock prices.
March came in like a lion for my portfolio. An angry lion. My portfolios took some body blows that I really didn’t see coming and it forced me to make some hard decisions. There were also some good outcomes as well as some stocks continue to benefit from the market reinvigoration thanks to the 180 pivot by the Federal Reserve to pause on future interest rate increases for the rest of the year.
Investment Decisions Taken:
After coming off the previous month where I made no decisions to buy or sell stocks and ETF’s in my portfolio, February couldn’t be more opposite. The trigger that got me to move was the louder chatter that the Federal Reserve was going to put the breaks on any future interest rate increases. To me this sudden 180 degree shift by the Federal Reserve was a game changer for the markets. In this episode, I walk through the investment decisions I made in February.
Investment Decisions Taken:
NEW POSITION: BOUGHT SHARES IN ISHARES GOLD BULLION ETF (TICKER: CGL.C)
NEW POSITION: BOUGHT SHARES IN VANGUARD EMERGING MARKETS ETF (TICKER: VEE)
NEW POSITION: BOUGHT SHARES IN SOUTHERN COPPER COMPANY (TICKER: SCCO)
NEW POSITION: BOUGHT SHARES IN CANADIAN NATURAL RESOURCES (TICKER: CNQ)
NEW POSITION: BOUGHT SHARES IN ISHARES PHARMACEUTICAL ETF (TICKER: XPH)
With commodity prices including copper falling, I thought it might be a good time to take a look at some copper stocks. Southern Copper was one I've owned in the past so I thought I'd check in and see if there may be an opportunity to buy in.
With commodity prices falling off and the Federal Reserve signalling they will pause on future interest rate hikes, the dynamics of a falling US$ and rising commodity prices including oil could be in play. I decided to do a quick analysis of CNQ which is considered among the big players in the Canadian Energy scene to see if there may be an opportunity to jump in.
Yes it been a full 4 years since I opened up my Robo Advisor account. For those new to investing, a Robo Advisor is a new wave of wealth management companies that invest on behalf of others using an online platform and a combination of algorithms and computer coding to buy and sell specific investments and manage portfolios. Four years ago these firms were just stepping into the investing conciousness, but since then they have mushroomed and even traditional investment companies are now offering some flavor of online investment management services. It all seemed quite appealing however there was one thing that many marketing materials, blogs, and mainstream media was avoiding (and still are I might add)…do these types of services make money for investors?
Since no robo advisor company back then was interested in disclosing their performance (they still avoid it) other than citing research that their strategy is superior, I decided four years ago to try an experiment and find out for myself. I setup an account with one of the big Robo Adviser firms. My goal was to go through the process and blog about my experience and more importantly, the results. I’ve always said that we need a good five years to really get a handle on how effective these services are compared to traditional wealth management services. Well, we’re at the 80% mark of my ROBO journey, so let’s check back in and take a look at how it’s doing now and see if we can squeeze any conclusions about the service.
The way 2018 ended in the markets with culminating in the Christmas Eve massacre followed by the post-Christmas bounce, it looked like 2019 would be more of the same. Turned out the market continued to bounce high and at one point erased most of the damage of last year. In this episode, I share the Investment “Decisions” that I made in January.
I always get questions from people about investing. In this episode I share a few questions and offer my takes:
Is stock picking more art than science?
How do you come up with different investment ideas?
What is the first metric you look at when you research a stock?
What are the tricks in investing in the stock market?
One of my motivations as an Investment Coach is to make people more street smart when dealing with the investing industry (banks, mutual funds, wealth management companies, brokers, robe-advisers etc). Even though more people today are investing on their own, the reality is you cannot invest in a bubble, and whether you go the Do-It-Yourself (DIY) path or work with someone, you will still have to work with the industry. You have to co-exist with them.
So loyally and faithfully we will march into our local branch (or lounges), or a financial adviser’s office, or a Starbucks and begin the dance. The thing is before you even make contact they have you sized up.
They think you’re an idiot and they are going to go out of their way to make you feel like one.
The industry has developed a rather air-tight formula for getting us to shell out our hard earned savings and the core component of their value proposition is to make us feel inadequate or give us a bad money image. In this episode I will share with you this formula and give an example of this ritual and more importantly how we can overcome these negative connotations they are projecting to us.
December brought more pain and angst in the markets. It forced me to make some tough decisions and take some losses, but it didn’t dissuade me from staying true to my investment ideology and my search for buying quality investments at a discounted price. In one case I had to do a 180 and retract my decision.
New Position: Bought shares in Vanguard FTSE Canada All Cap ETF (Ticker: VCN)
New Position: Bought shares in Exon Mobil (Ticker: XOM)
New Position: Bought shares in Tiffany (Ticker: TIF)
Sold Shares in Johnson and Johnson (Ticker: JNJ) for 7.5 percent gain (Net Forex)
Bought more shares in Big Lots (Ticker: BIG)….and then sold it all
Sold shares in MGM Resorts for 21.1 percent loss (net forex)
Luxury retail stocks were taking a pounding along with the broader market. Stocks like Tiffany had been falling from the $140’s to the mid $80’s. Tiffany is a stock I’ve held in the past and had on my watch list to look at if it were ever to fall back. So with the tumble I did a quick analysis to see if there is an opportunity to jump in which I share in this episode.
Happy New Year indeed! It seems like many investors are more than happy to turn the page on a new year and fast!
So much for the Santa Clause rally. The markets continued to roll over as 2018 wound down. While it will definitely crimp some of my returns for the year. I actually viewed it as an opportunity to do some Christmas shopping. This is the type of shopping I like where the money I spend on high quality assets that will have a good chance of growing into more assets in the future. The core tenant of investing is to buy low and sell high. The times where you can buy low are unfortunately when the market is cratering. The later part of the yea is a usually quiet period for making decisions but this year some companies that I really never would considered in the past because they’ve been just too expensive looked very appetizing to pick up on the cheap. So I made a fair number of investment decisions in November and December. I bought small positions, because given the negative sentiment in the market, I wouldn’t be surprised to see prices fall further, which is fine because I’m happy to slowly build up these positions at a lower price point.
So in this first of two posts, I share with you my investment decisions from November 2018. In part 2 I will review my decisions in December 2018.
Sold shares in Starbucks (Ticker: SBUX) for gain of 29.6%, net FX)
Bought more shares in Activision Blizzard (Ticker: ATVI)
Sold shares in Activision Blizzard (Ticker: ATVI) for 25% Loss – Net FOREX
Bought more shares in Electronic Arts (Ticker: EA)
Sold shares in Walmart (Ticker: WMT) For 20% gain (net FOREX)
Bought more shares in iShares Germany ETF (Ticker: EWG)
Throughout the year I’ve shared with you the investment decisions I’ve made. It’s important to me that as someone that teaches people how to make better investment decisions, that I model the concepts and principles I teach. Well it’s that time of the year where in this episode I walk it back and see what I did right and more importantly what I did wrong…and what if anything did I learn from the experiences of the past year that will help me become a better investor?
One of the most under performing asset classes so far this year has been German equities. As of this writing, German stocks were down over 20 percent year-to-date. Everyone complains about the weakness in the Dow Jones indexes, but the German markets have been in a serious downfall. This despite some of the most well-known and dominant global companies like Daimler Benz and Seimens. The German economy is the enginge of Europe and the opportunity to get exposure to that market at a 20 percent discount was appealing to me. I decided the best way to get the exposure was to passively own a basket of German stocks and that led me to evaluate some German equity ETF’s. In this podcast episode, I walk through my analysis of several German equity ETF’s.
Oil prices have been nose diving in the past few months and along with it oil stocks. I thought it would be a good opportunity to do some due diligence on some oil stocks to see if there were some opportunities to buy low. Instead, I decided to have a look at some ETF’s to see what if that may be a better road. In this episode I share my analysis and review of several energy ETF’s.
There was a fair bit of hand wringing going into October, a month where there have been historically some iconic stock market meltdowns. The market was starting to show some signs of fatigue. At one point the S&P 500 index crossed below its 200 day moving average which hasn’t happened in literally years. Interest rates keep tracking up. The Mad King continued to elevate the trade trash talking and investors were getting nervous and stock prices in the early part were trending downward, but nothing crazy that motivated me to look into buying. Sue enough on October 23, the market had a fit. Suddenly words like “crisis” and “turmoil” were being thrown around, when historically they weren’t even scratches. It’s times like this where having my investing playbook is critical as it gives me an anchor to check in and review my investing ideology and how should be executing. It makes me review my Wish List to see if there are any stocks I’ve liked are now more affordable. The last thing I should be doing is panicking and reacting. It’s these stress points where we need to be put all the upfront hard work and making thought-out decisions.
In this episode I walk through the various decisions I made during the month. With quite a few stocks that I owned had fallen in value enough that I thought it was worth jumping in and buying some more shares to lower my average cost down. There were also a couple of stocks/ETF’s that I had on wish list that had become a lot cheaper and thought it would be good to start building a position.
Bought more shares in Las Vegas Sands (Ticker: LVS)
Bought more shares in Activision Blizzard (Ticker: ATVI)
Bought more shares in iShares US Financials (Ticker: XLF)
Bought more shares in Nutrien (Ticket: NTR)
Bought more shares in Winpak (Ticker: WPK)
New Position: Bought shares in iShares Germany ETF (Ticker: EWG)
New Position: Bought shares in Electronic Arts (Ticker: EA)
With Emerging Market stocks taking a hit, I thought it would be a good time to explore building up a position in the sector. In this episode I evaluate several ETF's to determine which would be an appropriate one to add to my portfolio.
It’s a golden age for investors. Never at any point in history has it been this cheap to get into investing. Management fees and trading commissions have been falling over the past 20 years, thanks mostly to technology which have improved speed and efficiencies of transactions. In the last year or so, the competition over lower fees has been quite intense with ETF companies like Vanguard and Blackrock going back and forth lowering fees to almost zero. This has trickled down into traditional investment products like mutual funds which have lowered their fees, albeit less aggressively. Well the race to the bottom in fees has reached a new level.
Free. As in nothing. Nada. Rien.
It’s a great time to be an investor. Eliminating a focus on fees can allow more due diligence on the investment itself, however I’ve been wondering if these products and service offerings are really free and is free in the grand scheme of things a good thing for investors? In this episode I dive into the the illusion of free that the investment industry has been pushing on us.
Amazon has been one of the “It” stocks for the last decade. It has had an epic run. If we were to look at Amazon from a 1st level thinking perspective, the conventional thinking behind buying Amazon is that they are disrupting retail. Any space Amazon enters, be it grocery, streaming, pharmaceutical drugs, diapers is met with fear and doom by the existing players. 1st level thinking would tell us that in the future we will shop at Amazon only. I would consider Amazon to be a Fear of Missing Out or FOMO stock. Many have missed the moves up and feel compelled to jump aboard so they won’t miss out. In this episode I try to take a look at Amazon from a 2nd level thinking perspective.
I’ve owned Las Vegas Sands in the past and it has been good to me. I’ve also sold it prematurely because of some questionable financial reporting treatments that didn’t sit sell with me. With the stock down near 14 percent this year and at a 52-week low, I thought it may be worth revisiting it to see if anything with the company has changed. As from my position in MGM, many of the fundamentals with LVS are quite similar. The question is how are they performing. In this episode, I apply my 8 Questions framework and see if indeed an opportunity is at hand. This decision was also a very difficult one because there is also some politics at play here.