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How’s Your Loonie Year? 8 Investment Entrees…

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BEWARE: If you don’t get off on boring “NUMBERS” stuff…

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… then click your way out of here right now.

Go jack up on some TRUMP’ed up FAKE NEWS and make your day happier. The enticing blood in the streets is found on other sites!

OK, let’s move on, my fellow Numbers’ Nerds.

It’s approaching the end of the year, days are staggeringly short, and the perturbed cats are perched at the back door, yowling at me because it’s cold outside, as if I’m God and have control over the outdoor temperatures.

All of this tells me the year 2017 is winding down and I have to look hard in the investing mirror and ask myself the tough question… who is the fairest investor of all?

I know that no song sounds the same to any two people. No investment looks as golden to any two people. We see the world through ourselves.

I’ve been an avid stock market participant since I was 10 years old in my Parkdale Steelers’ hockey pads, and so it’s a critically important question now that I’m on the “R” (shhhh, retirement) payroll.

Larry… I say to myself… Do I add value to my financial investments, or should I take a back seat and let someone else with “credentials” make the decisions about my New Worth and living income?

It’s a question I nervously skirt around, afraid of knowing the answer because I truly love reading investment reports, digging into Balance Sheets and Income Statements, deciphering and calculating to see if my choices are “value-adding” or “value-destructing”.

For sure it’s Number’s Nerd stuff.

Numerotica.

I’ve previously stated here that my annual goal of ROI (return on investment) or change in Net Worth is 15%.

ACTUAL Annual Returns? 1 year … 12.0%  –  3 year… 16.1%  –  5 year… 11.2%  –  10 year… 11.4%

There’s the nasty truth… Warren Buffett need not worry about being dethroned. I’ve modestly underperformed my 15% goal in every category except the 3-year return.

This year would be highly positive and I’d be bouncing off the clouds… except… the exchange differential between the US$ and CAN$ has narrowed sharply which has shaved nearly 10% off my returns (most of my stocks are U.S. based), leaving me… drum roll please… only ahead by about 6% at this point in the calendar year.

Cleese bring Monsieur a bucket

Bring Monsieur a bucket…

OK, I’m disappointed but not crushed.

I know that I need to eke out a return of at least 7-8% each year so that I don’t impinge on the principal value of what we’ve saved and invested for decades.

From this perspective, I’ve done OK as the upward momentum has been sustained, just not blown out of the water which I would truly prefer. Wouldn’t we all?

And now I’ve gone and added pressure to my decision-making in the last 6 months by boosting my goal returns to 20%, without sacrificing quality, safety, and security.

This means more diligence, more disciplined searching and selection.

In my earlier financier alter-ego, I scoured for quality undervalued stocks (that pay dividends) that I felt should provide a decent return with no quantitative idea of what “decent” really meant.

“Yeah, that company is kinda undervalued by most financial metrics, so I’ll buy some”.

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But now… now… I’ve nailed down my idea of what my bottom line expectation is for any investment I hit the BUY order on.

Bottom line? If the company I’m sussing out doesn’t have at least a 40% discount to its historical price based on reasonable assumptions, then I move onwards, seeking out the next possibility.

This narrows my selection list dramatically, ruling out tons of amazing quality companies that have produced fantastic returns…

FACEBOOK is a perfect example. I used to own Facebook but it stubbornly – happily – went up and up and up. FB is a great company with stupendous profits and return on equity, but then I looked at its price on the market and saw that it was sky-high relative to those returns.

SELL, I cried out. Great company, but not a great price to buy or own.

Here’s how I see it: It’s like if I wanted the new iPhone X and one day it was priced at $600. Then the following week, Apple decided to boost the selling price to $1400. Sure, it’s a great purchase at a $600 price, but I’m not going to lay down $1400, even though millions of others likely would. It’s about discipline.

A few other current classic examples of “too richly valued for my blood”? GOOGLE, Microsoft, 3M & McDonalds… great companies all for years or decades but too expensive to invest in at today’s prices. I do own Apple, Disney, Microsoft, Deere and United Technologies but wouldn’t add any more at today’s prices.

Discipline … Discipline.

There is a flip side.

Even though markets are at all-time highs, there are still some pretty fair companies available for purchase at reasonable prices. Most names you’ll even recognize.

More often than not, these companies have a short-term reason for their prices sitting at low levels, but when examined closely, these reasons appear temporary and not permanently destructive. Well-known brand names are resilient and difficult to destroy (although not impossible, just ask the department stores).

VS sales brawl

OK, akin to a Black Friday sale, I have a set of bargain basement choices for you- some examples of undervalued and unloved stocks on today’s market (almost entirely U.S.-based; Canada, sadly, has meagre selections for my tasting enjoyment)… I’ve included their annual dividend payout in brackets after their name  :

  1. L Brands (4.8%) –

    Every man’s candy store has been the Victoria’s Secret catalogue… Bath & Body Works is icing on the cake. Despite Weinstein and Cosby and Spacey and Franken and… OMG… this page doesn’t have space for all the names… sex and sexy still sells. Vive la difference entre Mars et Venus!

  2. AMC Networks (0.0%) –

    Watched The Walking Dead lately? Yeah, me neither, too much gory blood for me, but zillions do… AMC makes TWD and a bunch of other cable shows (including previously, Mad Men and Breaking Bad)… ’nuff said…

  3. CVS Pharmacies (2.8%) –

    I’ve always been impressed by the CVS drug chain stores whenever I’ve visited the U.S…. arthritis and diabetes and ED and wrinkles mean drugs and cosmetics are staples in every age group.

  4. Penske Automotive (2.8%) –

    Luxury car (BMW, Audi, Jaguar, Porsche, Ferrari, Maserati) brand sales have a wonderful habit of staying strong regardless of economic up or down trends. Penske sells and services all of these as well as those big 18-wheeler trucks that crowd our highway lanes! Zoom Zoom!

  5. Starbucks (2.1%) –

    I would have never believed that a $5 cup of coffee or green tea could make a sustainable franchise. Boy was I wrong… $5 is the cheap cup now, and caffeine is no FAKE NEWS. I’m a regular customer now, Tim Hortons be damned!

  6. Magna International (2.0%) –

    Finally, a Canadian company in the mix that competes well internationally. If you drive ANY car today, chances are pretty good that Magna produced a sizeable chunk of the parts that surround you on your drive.

  7. J. M. Smucker (2.8%) –

    PB + J your favourite sandwich too? Actually, I prefer PB and banana, but no matter. For more than a century, Jerome Monroe Smucker’s company has placed jams and peanut butters, syrups and ice cream toppings on the tabletops of North Americans and others internationally.

  8. Cardinal Health (3.3%) –

    Specializing in the distribution of pharmaceuticals and medical products, it serves more than 100,000 locations. In addition, the company also manufactures medical and surgical products, including gloves, surgical apparel and fluid management products. Cardinal Health provides medical products to over 75 percent of hospitals in the United States. The sickness industry is very healthy…

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That’s 8 Delicious Temptations – if my enticing sweet talk has you drooling with these delectable selections, lick the peanut buttah off your fingers and investigate them for yourself.

But please don’t rely on my sterling judgment to be anything except Fool’s Gold until you’ve looked more closely yourself. I won’t rely on others out there to make my final investing decision, and neither should you.

If you’re just starting out in the investment world, I wish you wealth and wellness and healthy returns.

If you’re an older Number’s Nerd like me with a few notches on your profit & losses belt, I’m willing to suffer your slings and arrows if you disagree with my choices.

I’ll also gladly entertain any gold nuggets you’ve unearthed that I’ve overlooked.

I got wrinkles round my eyes, I got grey in my hair
I’m puttin’ on a little bit of weight but I don’t seem to care
Fool say, hey slick, you lookin’ good, lie, lie, lie
That fool in my mirror’s singin’ the same old song… Guy Clark

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For now, this fool has decided to stick with my own investment counsel… and if you managed to stick with me through today’s financial numbers’ maze… yawn…  I’d suggest a nap is in order…

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Better Living Through Invisibility and Time Travel…

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black and white swans

How can you turn bloodthirsty ugly Black Swans into beautiful iridescent White Swans?

The forces of evil (Black Swans) and goodness (White Swans) do battle, each character standing on one of your shoulders, glaring viciously across the divide.

A duel to the depths.

Invisibility vs Time Travel

THEN – Young next door neighbour Gary and my titillated wee self – baby woodies in our pants – gleefully reflected on invisibility while perusing the X-Ray Specs ads in Batman comic books:

We could sit in girls’ changerooms and bedrooms and watch them undress.”

INVISIBILITY. The force of evil and sexual vice.

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Most boys, yes, young and old alike, want to see ladies naked.

I’m sorry, but we can’t help it. It’s in our DNA.

Do you think the porn industry is a fringe element? Nope!

The internet gives us (kind of) Invisibility. 

NOW – Me, reflecting on invisibility while watching the Trump Channel (CNN):

“I’d sit in the oval office laughing in sadness and pity at the smoky haze of profanities and expletives fired by Donald at the poor helpless waifs Sean Spicer and Kellyanne Conway or any other sycophantic lackey that wormed woefully across the carpet to his desk. And each time he berated anyone? I’d sadistically pull one shocking orange hair from his scalp so his pain reflected theirs’.”

INVISIBILITY. The force of goodness and atonement.

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THEN – Me, as a young man, reflecting on Back-to-the-Future time travel:

I’d travel into the future and find all of the businesses that skyrocketed from penny status to mega-billion dollar success with huge stock market gains. Then I’d come back and plow every cent I could get my hands on into these sure winners!

TIME TRAVEL. The force of evil and greed.

NOW – Me, reflecting on coulda/shoulda/woulda Time Travel:

I’d go back in time to 1973 and, knowing more about healthy lifestyles, equipped with some CPR and rudimentary life-saving skills, I’d help my Mom look after herself better- stop smoking, lose weight- and failing that, perhaps keep her heart beating a few minutes longer – as she laid dying from a heart attack on our family driveway – until proper medical personnel could revive and maintain her heartbeat and breathing.

TIME TRAVEL. The force of goodness and mercy.

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Time travel and invisibility are like super-power bribes offered by the stars.

It’s intoxicating, that alluring possibility of changing things, making things better – better for ourselves, better for others, better for the world.

The forces of good and evil, with or without the interference of religion, can assume their roles like characters in a Broadway play, or a Faustian bargain. Which road should we travel?

 

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What ever made me think of these things this week? Thanks for asking.

I was meeting for a tutoring session with my young East-Indian student friend the other day at the library – as part of his requirement for passing his IELTS (International English Language Testing System) exam he is required to talk – intelligently – for 3 minutes about a topic of the interviewer’s choice.

If you could choose the super-power of either time travel or invisibility, which would you select and why?”

This was the practice question I asked Ramesh. He’s damned good at this stuff. Usually.

To Ramesh, it was merely an academic question, a practice session, but I was interested to see how his mind worked and where he might take this idea.

Initially, he looked a bit stunned at the question, struggling with the proposition, the notion that such a feat was remotely possible.

I’m guessing that his cultural and educational background in the Punjab region of India had never addressed the airy concepts of imagination and head-play.

It’s pretty obvious that he had never read the story Anne of Green Gables – the ebullient orphan waif whose carrot-haired head floats on wings in the imaginary clouds more than her feet are on terra firma. Reality is less real than her inner visions and dream life.

Behind Ramesh’s dark eyes, I saw the question coursing through his mind… This isn’t something that could ever happen, so why would you ask me this nonsense? 

OK“, he said finally as he gave me that intriguing, yet charming head waggle that only Indian people possess.

I’d go back in time and save my country from the corruption that made things bad in the past for the people around me.” He explained the back story and gave me a lesson in Indian politics, succinctly and in 3 minutes.

He chose time travel and the White Swan force of goodness and remedy.

I smiled. I like Ramesh. His heart has a sympathetic rhythm.

Black swans are an unstoppable force. We can’t predict them. We can’t prevent them.

… who saw 9/11 coming and how it would change our world in countless ways… who saw the bullets that stole the breath away from Lincoln, Archduke Ferdinand, Luther King, Kennedy or Ghandi… who saw the tsunami that swallowed the coastlines of Indonesia and Thailand, snuffing out a quarter of a million loves in minutes… who saw the butterfly whose flapping ephemeral wings caused a momentous shift in your life…

But sometimes those real unstoppable forces – the black swans – need to meet an imaginative unmovable object – the white swans – invisibility and time travel… if only in our mortal minds and starry starry dreams.

Starry Night

 

You’ve Just Crossed Over Into … The Grey Zone …

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Fish in lightbulb

Why is no one paying ME billions of dollars for my ideas?

I wonder if it’s because I’m caught in the twilight of The Grey Zone.

I’m a prisoner in this quagmire and I need to make myself break free.

Well before 50 Shades of Grey came along, I invented the whole genre of the “grey zone”.

I can’t see anything as black or white.

50 Shades of Grey?

Hell, I can see the universe in 1,000 shades of grey.

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The other day while I was pouring drinks at my bartending job, someone said to me,

“Who are you voting for in the upcoming federal election?

Depends…

… the choices?

Conservative, Liberal, New Democratic Party (NDP) or Green.

Hmmmm… depends on where my sense of priority lies on voting day, I suppose… I think, I’m pretty sure!

  • Conservative if I feel angry at the world and want to fight wars and abortion laws and gun control and market controls.
  • Liberal if I like Justin Trudeau’s hair style that day and I want a bouncy mix of free markets and social justice.
  • NDP if I feel in sync with the friendly folks patiently waiting for me to open the doors to the Penticton Soupateria kitchen who need free daycare and subsidized dental care for their cavity-laden mouths.
  • Green if I’m sick of picking another empty Tim Hortons cup off the street under the ozone-thin rays of sunshine, AND perhaps I feel a subtle loyalty to them because my last name happens to be Green.
  • Is Obama a choice? Doesn’t Barack need a job after November 2016?

OK … you might have insinuated by my choice of words above that it won’t be a CONSERVATIVE check mark!

But other than that, I just don’t know!

And I don’t want to spend a lot of time working my way through the issues. I’m one politically lazy cat.

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And this political muskeg? This is just one small example of my grey zone or “sitting on the fence” outlook on life.

My “grey zone” often has me seized up by the glut of alternatives in our world… you know… the Walmart selection of choices in everything we do or purchase.

In the halcyon days of The Waltons (nope, not Sam Walton of Walmart, I’m talking John Boy Walton of Walton’s Mountain, Virginia), you would just walk into Godsey’s General Store and say,

“Ike, I need an iron, two spools of blue thread, a package of laundry soap, and a suit for Yancey Tucker’s wedding this weekend.”

Two minutes later, with no further questions, Ike would smile his boyishly toothy grin and have everything tied up in a neat bundle and off you went, a happy camper.

No VISA, no MasterCard, no Air Miles or Loyalty Club cards… just cold, hard-earned cash slapped down on the old oak counter.

Can you imagine?

Now… NOW! … you need 2 days, 2 weeks, 2 months… whatever … to make all of the important decisions involved in these same purchases. Questions and more questions:

  • Self cleaning iron or auto shut-off? GE or Samsung or Toshiba? Corded or cordless? Removable steam tank? Retractable cord? Anti-burn control?
  • Sky Blue, royal blue, indigo thread? Cotton, nylon, polyester, heavy-duty, silk, wool, or metallic thread?
  • Powdered or liquid laundry soap? Detergent with bleach added? Dye and perfume free? Cold water active? Top or front-loading washer?
  • And, it would take an entire blog post to go through the choices when selecting a man’s suit for a wedding.

Choices

I just don’t know! And I don’t want to spend a lot of time working my way through the consumer consumables. I’m consumerly lazy.

I like the idea of options, but the harsh reality of endless choice is endless decision-making and the need to do extensive research on the purchase of my next Bic pen or Gillette razor blade.

I sometimes rue having to use what little brain power I do have, to investigate and research and think and weigh options.

Really, I want to use my “grey’ matter to think about the things that are important to me. Things I’ve prioritized, or have wanted to prioritize.

Really, I want my head filled with story ideas for blog posts that infinitely stretch my thoughts and imagination.

Really, let me work on the concept of Idea Sex where I can take two or more unrelated ideas and tap my J.K. Rowling magic wand to marry them into something new and beautiful.

Really, the same for my music writing and playing. I don’t want to create everyday songs that anyone lacking imagination can pen for a commercial audience. I want unique songs with meaning and substance, stories filled with relevance, and emotion… and heart…

Experts such as psychologist/author Roy Baumeister (Willpower: Rediscovering the Greatest Human Strength) tell us that we have a finite amount of willpower.

The willpower needed in making decisions becomes depleted as we use it, and we use the same stock of willpower for all manner of tasks.

If I spend 10 minutes making a decision over something as seemingly simple as which toilet paper to buy (3 ply or 2 ply, 12 rolls or 8, super soft or Russian sandpaper, and on and on), those 10 minutes have depleted my eagerness for making sweet music.

Regrettably, almost unlimited choices in today’s world saps my energy.

In order to change, it’s a circular conundrum of making decisions about decision-making. Yup, my very own personal 1,000 Shades of Grey.

Meanwhile, I feel like I’ve crossed over into… Nu-nu nu-nu …. THE GREY ZONE.

rod serling