For the second month this year, the only investment decision I made was…to make no decisions. I decided to stand pat. In this post I share my thought process that led me to decide to stand pat.
Like anything there are some things that we don’t like to do but have to do in order to get to the bigger goals we want to achieve. Sports offers some interesting strategies for success that port over quite nicely into the investing game. In this episode I share some insights on how what strategies we can adopt to allow us to stay in the investing game and improve our probabilities for success.
This episode is about how the game of basketball and specifically the strategies behind it can teach us a lot about investing as well. I was originally going to do this around March Madness time, but never got around to it, so the timing is great! The game of basketball is so much different than when I grew up. It’s all about 3 points shots and perimeter offensive strategies. In many ways, the investing world has evolved quite similarly with the shift more index, low cost strategies.
April saw the markets continue to melt-up and regain their losses from 2018. In a couple of cases I was able to lock in some nice gains and pick up some shares in areas that have actually been lagging the market surge. What’s even more pleasant is that the stocks and ETF’s involved below are one’s that I’ve held in the past and I think there are some takeaways we can get from it.
New Position: Bought shares in Cal Maine Foods (Ticker: CALM)
Bought more shares in iShares Pharma (Ticker: XPH)
Sold shares in Disney (Ticker: DIS) for 39 percent gain (net Forex)
Sold shares in Southern Copper Company (Ticker: SCCO) for 18.2 percent gain (net Forex)
In the last of my 5 part series where I dive into answering a fundamental question that factors into every investment decision we make, I look at the nebulous concept of valuation from a perspective that goes beyond simply buying stocks with some low valuation multiple or ratio. I also try to bring the various concepts discussed together to provide some kind of framework that we can takeaway and carry with us as we go forward and make investment decisions.
I continue on my deep dive into figuring out what drives stock prices by looking at the one metric the rules them all and factors into every investment decisions we make. There are numerous mechanical and technical methodologies and strategies that are available to us when evaluating investment opportunities. At the end of the day all that due diligence may go for naught when we bring in this important metric that drives stock prices.
For most people investing revolves around the application of rules. Buy stocks with P/E ratios below X and have Debt/Equity ratios below 0.5. Index investing is better than active strategies, which is better than value investing. The reality mechanical strategies work until they don’t. In the third of our five part series, I dig deep further to look beyond mechanical investing strategies and examine the importance of how tendencies, principles, and to a certain extent fate, play critical roles in the setting of stock prices and how we frame our investment decisions. I also look at how we react to what market does, can also be a critical factor to setting stock prices and what investing competencies we need to develop to manage these tendencies to make more successful investment decisions.
In Part 2, I start to drill down a bit further on trying to answer a fundamental questions that every investor is asking. In this episode I apply one of the core principles of market based economics. Supply and Demand. Makes sense as a stocks trade in a…market…that contains buyers and sellers. The way buyers and sellers behave plays a critical factor into how stock prices are set.
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 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.
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?
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.
March 2019 - Sold shares for 18.9 percent gain
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)