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.
With summer done, I was thinking I may be due to make a few investment decisions, but it was quiet month with one selling decision which I wasn’t counting on making anytime soon along with one decision to buy more shares and one new stock I added to my portfolios. At the same time, I was faced with a decision that challenged some of my personal values and given the times we’re in, I don’t think I’m the only one that may be facing similar decisions. In this episode I walk through my most recent investment decisions from September.
Investment Decisions Made:
In Part 1, I shared some thoughts on a recent report by the Ontario Securities Commission (OSC) outlining the challenges the financial services industry is having in getting Millennials to invest. The OSC report had a great opportunity to address those investing pain points, but like so many financial literacy initiatives, the messaging is not clear, consistent, and understandable. The report identifies solutions, yet they are separate and not integrated and use a lot of industry jargon that people just won’t connect with. They emphasize processes over results. What is the outcome we want Millennials to achieve with investing?
In this episode, I’d like to share from my experience as Investment Coach and as someone who works with people to develop their investing competencies, some ideas that I found have better motivated people and not just Millenials into become more engaged with investing. They address the pain points people have with expressed about investing which include; being scared of investing, feeling overwhelmed by the process, feeling paralyzed when trying to make a decision, and not knowing how to start and take that first step. These are my takes and perspectives. They are by no means the most definitive and all encompassing.
My motivation in starting my own practice to teach and engage people on investing revolved around financial literacy. I thought that if I could improve someone’s financial literacy, they will have a better chance at becoming a successful investor. I was always a big supporter of financial literacy programs, especially in schools. It made sense and I thought it was the right thing to do.
The reality is over the years I’ve learned and witnessed first-hand that while noble and done with good intentions, financial literacy programs just don’t work. A revolving door of programs, a lot of them government and industry sponsored have been rolled out over the years, starting out with enthusiasm and then just petering away in obscurity. Here in Canada, we even have a Financial Literacy Commissioner that acts and cheers Canadians into becoming more financially literate, but to no avail. So much effort, again all with good intentions, has been put into improving financial literacy but it just doesn’t seem to stick.
So queue the latest attempt at cracking the financial literacy daVinci Code. A 42-page report commissioned by the Ontario Securities Commission and prepared by a dream team of consultants and personal finance thought leaders. The report attempts to answer why people, specifically Millennials are not investing and what financial institutions can do to get them to invest. In this first of a two part series, I walk through the report and highlight some of the good points as well why the industry continues to make the same mistakes when it comes to engaging people about investing. In Part 2, I offer some some solutions that I have developed from my own practice and from my own experience helping people make more successful investment decisions.
I continue on with my analysis of video game stocks with a quick dive into Take Two Interactive. They are known for their Grand Theft Auto franchise.
Continuing on in my analysis of video game companies is my review of Electronic Arts. EA is more known for its sports games such as Madden Football and FIFA Soccer. It seems like a natural fit for EA to leverage their sports expertise into the E-Sports domain. In this episode I do a quick mind map analysis to see if EA is worthy of adding to my portfolios.
We’re half-way through the year and so I thought it would be a good time to check back into my ROBO portfolio to see how it’s doing and if there is anything interesting going on. Three and half years ago I decided to try an experiment and find out for myself. I setup an account with one of the big Robo Adviser firms and invested $5000 of my own money into it. My goal was to go through the process and blog about my experience and more importantly, the results. I 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 coming upon the 4th anniversary of my ROBO account, so in this episode I take a look at how it’s doing at the mid-year mark.
MGM has not been on my watchlist and I really wasn't thinking about getting into casino stocks but a recent Supreme Court decisions that essentially legalized sports gambling in the US I thought was a game changer movement that could really put gaming companies in a strong position to move. I did a quick scan and MGM appeared to be not the most producing gaming company but what drew me was management's foresight to build out sports betting platforms and services in the anticipation of the legalization of sports betting. In this episode I do a quick deep dive that lead me to the decision to buy some MGM stock.
As an Investment Coach, I spend a good amount of time working with people who are new to investing. Often one of the first questions I get from someone who is new to investing is "I want to learn how to invest are often in the form of: What stocks should I buy?" or "I have $10,000 I would like to invest. What stocks should I buy for the next 10 years?" I've been asking myself lately, why people believe that default position for investing must involve buying and selling stocks? The reality is buying and selling Facebook or bank stocks should not be your first thought when it comes to investing. In this episode, I try to figure out why people have this mindset and how it can have a devastating impact on your investing experience.
In Part 2 of my Investment Decisions series podcasts for March, (iTunes, Google Play, podcast, mind map video) I walk through the thought process that led me to my decision to buy some shares in Big Lots.
After the mini-meltdown in early February, stock prices boomeranged and made back a good chunk of their losses. In some cases the bounce was pretty big and it forced me to make a few decisions. There were a few days where the market tanked pretty big and I used them as opportunities to open some new positions. Like the previous month, I've decided to break down my decisions into 3 parts. In this post episode (blog post), I will review my decisions to buy more shares and sell some shares. The other two episodes will focus on my decisions to buy shares in Southwest Airlines (blog, podcast, mind map video) and Big Lots (blog, podcast, mind map video).
I've referred often to the stock market as the Teflon Stock Market because it seems that any small or major socio-political-economic event that gets occurs is casually brushed off by investors. Nothing seems to stick to this market. The day the Mad King got elected the market went down 1500 points but after digesting it, it went on to set record high's on an almost daily basis. I also think about how much technology has changed investing landscape and wonder if these elements are creating a situation where bear market cycles are getting shorter and shorter. Have we reached a point where we can say that we will have very little in the way of stock market "crash"? I offer some takes in this episode and try to dive in a bit on this concept.
It seems any conversation about stocks these days involves something about Amazon or Apple or Facebook. I remember back in the day when it was Walmart and Microsoft that were the toast of business. Like Microsoft and Apple, they were deemed to be indestructible and now even though they are still significant businesses, they don't carry the same level of cache. What happened to Microsoft and Walmart was nothing different for most companies. Companies, especially dominant one's lose their some of the mojo or comparative advantage. In this episode I share some of the reasons that cause companies to regress. They are worthy of keeping them in your back pocket if you are evaluating any of the big companies.
In this final instalment of my Investment Decision series podcasts, I shares my thought process that went into buying shares of Priceline (now called Booking Holdings) during the February mini-meltdown. When the market was going haywire in early February, I was watching to see if any stocks that I had on my wish list, were suddenly attractively priced. Priceline was a stock I've had on my wishlist for long while but I had never been willing to pull the trigger and get into it. During the mini-meltdown, the stock had made a big move downward, so I reviewed my notes to see if the fundamentals of the business were still intact. As always, for every stock that I am evaluating I utilize my 8 question framework. You can also read the accompanying blog post here as well.
Previous instalments of the series