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The Year of UPedNESS*

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money kids

I’m excited. I can’t help it.

It’s not easy to admit out loud that you like money. But I do.

All that “Money is the root of all evil” and “Earth provides enough to satisfy every man’s needs, but not every man’s greed” weighs on my sense of guilt.

But you know… I already feel guilty about everything I do, say, and eat in today’s world of rampant guilt-shaming.

I could be a Jewish mother… Oy vey iz mir.

So thank you, I know I’m not perfect. *shocked face*

If I was to make a resolution for 2020, it would be to repel the inner sense of guilt that pounds many of us, like a tsunami wave striking warm, sandy shores.

I’ve even come to admire and like mega-billionaires Bill Gates and Warren Buffett. They harbour a sh*tload of money, and yet, they have a heart and a desire to make the world a better place using their money as a resource for all people.

My heart wants money AND my heart desires to make the world a better place. Those two shouldn’t be mutually exclusive.

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Let’s get started, shall we?

If you don’t care about money and your financial future, well …. you might want to toddle off and get yourself a latte or green tea or something that is totally unrelated to numbers and money. This post perhaps isn’t for you today.

Right… now I know you haven’t left me, because, of course you DO care about your years ahead and want to know what you’ll do with those delicious mega-millions you’ve saved and invested. Am I right? I said, am I right?

This is my annual $$ letter describing my occasional successes… and oh-so-rare (ha!) failures where it comes to investing. Welcome!

Last year when I pulled this money blog post together, I used a lovely sweet term that I adore. FUCKedUPedNESS.

FUCKedUPEedNESS described my investment acumen over the 2018 year.

I sang a lot of “crying” songs in 2018… (I’ll Do My) Crying In The Rain, Grown Men Don’t Cry, Cry Me A River… you get the idea. Bottom line: I lost money on the markets.

No need to cry this past year, for 2019 was a year of financial sunshine, lollipops and rainbows cascading out my back-end and the word now reads: UPedNESS!

The year of all things screwy except investing.

Despite all the tariff battles and other nasty economic troubles, I found big profits in APPLE, MICROSOFT, ROYAL BANK, STARBUCKS and DISNEY.

Five years ago I was buying Apple at $99 per share, today it sits just above $300 a pop. Over that time, quarterly dividends have added a delicious shot of income along the way too.

Please go out and buy another iPhone and/or Apple Watch and make me a happy dude!

apple watch xmas.jpg

This is the good news that made 2019 a banner year in the markets.

Of course, I made/make spectacular blunders too.

My purchases of PIZZA PIZZA and B&G FOODS (yup, the folks who bag up your Ho Ho Ho Jolly Green Giant veggies), GILEAD SCIENCES (Hepatitis C cure), L BRANDS (how could Victoria’s Secret lead my manly eyes astray?!), IBM (yes even venerable IBM has been a stinker!) have made me look like a novice figure skater who spends more time on his ass than upright.

I try to learn from my missteps and get back up and attempt another Triple Lutz.

Here are a few words I shared with my kids recently (I invest a few dollars on their behalf as well) in the “financial” letter I send to them each year:

This end-of-the-year letter is so much more enjoyable to write than last year’s. Hallelujah!

But why you ask?

Of course you know why… the financial returns in ALL of your accounts (and mine too!) are significantly improved over last year.

And while I’d like to accept accolades and praise for my investing prowess, as Warren Buffett said: “A rising tide raises all boats”. Despite uncertainty in all directions, markets as a whole have risen bigly in 2019.

The one thing I will accept credit for is keeping risk levels low in all of our accounts by only purchasing shares in well-run, low’ish debt, profit-making companies. And almost all pay a reasonable and rising dividend as a bonus. High flyers and hot tips are not in my playbook.

So… how did I fare this year? *drum roll*

The average return across my RRSP, TFSA and Locked-in RRSP was… +24.6%. This compares much more favourably to last year’s losing -1.8%.

Investing is a game that’s best viewed from 10,000 feet… no over-the-top glee when the short-term returns are positive and no deep-in-the-dumps despair when they turn downwards (as they always will).

So here’s the view of my investment returns from 10,000 feet.

  • 1 year              +24.6%
  • 3 year avg.     +10.3%
  • 5 year avg.     +10.2%
  • 10 year avg.   +14.6%
  • 12 year avg.   +15.4%
  • 18 year avg.   +14.6%

In the 18 years (I’ve been investing far longer than this) that I’ve maintained reasonably accurate records of my investing process and proceeds, I’ve sadly ended 3 of those years with a negative number looking back at me.

This keeps me humble. We should all stay humble. And kind.

Highest one year return +67.5% (2009)… Lowest one year return -37.1% (2008).

Going forward into 2020, I’m searching high and low for bargains in which to park some dollars. While I continue to hold the shares of my “winners” (above), the idea of purchasing more at these levels is just not very attractive.

On the other hand (there’s always another hand, just watch Fiddler On The Roof), a few quality companies that come close to making me pull the trigger are :

  • Canadian Tire (CTC) 
  • McKesson Corp (MCK)
  • Amazon (AMZN) 
  • FedEx (FDX)
  • ABBVIE (ABBV) 
  • Manulife Financial (MFC)
  • CVS Pharmacies (CVS)
  • Whirlpool Industries (WHR)

But for now… I’d rather hold some extra cash until markets subside a bit.

I’ve said here before that my long-term investing goal is to bring in a batting average of 15% returns. That number comes and goes of course, but over 10 to 18 years, I get around the bases in the manner that I’m aiming for.

I’ll never be Babe Ruth. I’ll never be Bill Gates or Warren Buffett.

But also, I’ll never stop dreaming in lots of directions, and looking for a fine balance between my world’s opposing cultures of self-interest and giving to others.

Remember that investing in life is about time, money and energy. Take a few deep breaths and choose your investments with intent in all regions of your life.

I wish you well in your drive for material comfort in 2020, and also… I hope you find a way or two of giving back in some material way to others. Yeah, this is just me being a sh*t disturber and perhaps… pushing you gently over the cliff-edge of guilt (along with me)…

Cheers to you for another year of stupendous UPedNESS!

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Are You High or HIGH? A Half Year Investment Toke …

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How is marijuana stock sold on the stock market?

 

Buy high … sell higher.

 

marijuana stocks

BANG! Welcome to the second half of 2019.

Intermission is now over … I hope you’re enjoying the popcorn and red licorice because now it’s back to work!

And this week I’m taking a change back – yes, today I speak to the numbers’ nerds – from the art of music … to the science of investing and personal money management.

It would be easy to reverse that last sentence to say the science of music and the art of investing and personal money management. There is a bit of alchemy in there when you think about it closely.

So … how were your first 6 months of 2019? I mean financially.

Are you looking richer or poorer today than where you were when you were watching the Rose Bowl and Disney parades on January 1? I hope at least that your champagne headache has receded.

Let’s dig in here. Money is important in all our lives.

We all need shelter. We all need food. We all need Netflix… OK nix that last one …

The investment start to 2019 has been a refreshing change from the doldrums of 2018. And it’s extraordinarily amazing given that 2019 is becoming the Year Of The Tariff.

The U.S. (ie. Trump) vs E.O.E (EveryOne Else) – except Russia and North Korea – has become an economic World War III.

Every little whiff of tariff (and there are huge flatulently wafty whiffs out there) in the breeze sends a Freddie Kruger fear of financial oblivion throughout the world.

That’s what’s called the macro look …  but most of us are way more interested in the microscope take on our own treasure chests.

treasure chest

HEADLINES and highlights

If you bought a van-full of BEYOND MEAT shares in 2019 (I stayed well away from this helium balloon of swelling revenues but inert profits), you now own a non-meaty 18-Wheeler-full of $$ booty and a one-way ticket to Animal-Friendly heaven.

I shake your hand in Vegas-style “lucky” admiration.

Who said money couldn’t buy happiness for a cow or chicken?

But to be a yellow pea? ARMAGGEDON!

Next: If you made a similar altruistic purchase of LYFT shares, the ride-sharing company that drove away with investor money after listing at $72/share and have since dropped a bit more than 10%, well … patience is your best bet as you wait for the next UBER ride my friend.

And of course, there is huge interest and anticipation of the smoke-and-oil POT stocks. Marijuana is becoming legally legit more broadly with each passing month. The acrid reefer scent has become more common than the stench of day-after beer sweat.

All the major players in alcohol and tobacco are gobbling up weedy chunks to keep their interest in intoxication at sky-high levels. Marijuana is going to soar for years to come, but for investors, sticking out your thumb for a ride and hoping that none of these companies are financial serial killers is a big challenge.

This isn’t an area where I can guess the winners with any aplomb, so I think I might be more interested in those others who fly high resulting from pot sales: like takeout pizza (Dominos), chocolate (Hersheys) and potato chip makers (Pepsico).

munchies

Of course I also have some of my own favourites (Disclosure: I own each of these in my own account) that aren’t crazy expensive (relative to their earnings) like Apple, Penske Automotive, Great-West Life, Bank of Nova Scotia, CVS Health, Whirlpool, FedEx, Enbridge, Magna International. All great companies with a sweet kiss of dividends.

Alas, in today’s blog, I’m not making any personal BUY recommendations because quality companies – in BIGLY numbers – are out there… but the share prices for purchasing this quality have swollen just a bit too large to make a BUY and then hope to make a healthy return over the short-to-medium term.

And finally, keeping my toes to the fire … *drum roll* … my own investment return so far this year to the end of June comes to +12.9%.  This is actually lower than the returns of both the TSX 60 (+15.0%) in Canada and the Dow Jones Composite in the US (+14.8%), but of course, higher than the best Canadian 5-year GIC rate of 3.25%.

My fingers are crossed that The Year Of The Tariff doesn’t spell disaster over the 2nd six months of 2019… or …

or… I might have to make a MAJOR purchase from a Marijuana company … nope, not the shares… the product!

Willie w pot

Happy Money And The Gift Of Time

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Stock market.jpg

6:30 am Pacific Time.

Every weekday at 6:30 am (Toronto and New York stock markets fire up at 9:30 Eastern time) I log onto QTrade and check the share prices of stocks in my own accounts, my wife’s accounts, and each of my kids’ accounts.

It’s a numbers’ obsession. It’s a money obsession.

When markets wake up feeling depressed and downcast and I see my lifetime cache of dollars slowly circling the drain in a downward spiral (like a good part of last year), I catch a lonely grey sensation, rub my eyes and forehead, and remind myself that stock markets are bi-polar … doom and gloom one moment, sexy exhilaration the next.

Yes Larry, This Too Shall Pass.

money in toilet.jpg

And then, on other mornings, I sip from my steaming cup of latte – the frothiness on the surface forming happy little animal clouds –  and jump up and down inside when everything is floating upwards (like this year so far), the $$ in my accounts gliding up the x and y axes of the graph like a jet roaring upwards and away from the runway at 250 kph.

Yup, on these good days, I silently kiss myself for the wonderful assessments I’ve made of the various companies that comprise these portfolios. I feel like a clone of Warren Buffett. (Then I remind myself: A fool is wise in his own eyes. King Solomon)

It’s energizing and exciting. It’s Happy Money.

Or it can be.

Let’s face it, we need money only slightly less than we need oxygen and sleep and sex.

Happiness gets a boost in my world when there’s an increase in money… and … when there’s an increase in time.

OK, we all know that time will never increase, which is why it is so valuable for those of us mortals (everyone) that will revert to dust in too short a time frame.

Which brings me to today’s book tip (more valuable than any hot stock tip I might offer):

Happy Money: The Science of Happier Spending… (Elizabeth Dunn/Michael Norton)

My eldest daughter, a pretty smart cookie, went to a talk by the book’s female author in Vancouver and suggested I take a look at the book.

The bottom line message the authors send our way is to spend money on things that will actually bring us more joy in our lives.

  • Buy Experiences
  • Make it a Treat
  • Buy Time
  • Pay Now, Consume Later
  • Invest in Others

I won’t go into great detail about the contents here, because I’m gonna use my time to enjoy the experience of playing my guitar.

A couple of small examples that might send you on your way to happy money?

I savour the flavour and texture of a morning latte… hot, sweet and frothy. Caffeine wet dream.

But I know if I quaff this sensual treat every day it loses its delicious lustre. I become desensitized to its yumminess.

So… I consciously decide to regularly go for a day or two and sip milky tea or regular coffee instead – both enjoyable in their own right, but not so sumptuous.

When I return once again to a creamy latte, I’m transformed and delighted (Aside: this is why daily sex can be a bad choice too! … just sayin’).

Another example. When I travel, I avoid last minute bookings even though the money savings can be substantial. A healthy dose of the joy in travelling comes in the form of anticipation … the daydreamy visions and expectations that float through my head as I conjure the people, the sights, the scents and tastes costs me nothing and yet adds exponentially to the overall enjoyment of the upcoming journey.

Money is a passport to time. Money gives me the freedom to help others and explore regions of personal passion, like music and nature, running, cooking, and even for this Number’s Guy… investing in the stock market.

6:30 am is one small part of my weird but Happy Money time.

Happy Money.jpg

 

 

Christmas in February? Happy Warren Buffett Day!

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WOOT WOOT!

Capitalist Christmas… yes, children… each year in December, happily excited tykes send their wish lists to Santa with great hopes for future “riches”.

Sugar plums and train sets and Barbie’s.. ok, maybe I’m slightly outdated on the Santa wish list scene.

But today … today … in the doldrums of chilly February … my Santa-of-a-sort has sent a letter of riches back to me and millions of other little investors (that could be you).

The old, wise man of western capitalism – let’s call him Warren Buffett, shall we – released his annual letter (http://www.berkshirehathaway.com/letters/letters.html) that is a goody bag filled to the brim with witticism and sagacity and humour and good ole common sense where it comes to protecting and investing your hard earned bucks.

Buffett is an artful wizard of metaphor which makes what should be dry, cumbersome reading into a learning experience of kindergarten simplicity.

If you take the time to read through each of his 41 years’ worth of annual letters, it will take you beyond your MBA in investing savvy – all while enjoying the fruits of his homespun delivery.

You might even begin hanging out with Jeff Bezos and Dragon’s Den’ers or Shark Tanker’s.. nah….

The only caveat I might add is that while Buffett has a way of making investing sound simple… the reality is that he is a once-in-a-lifetime financial literate.

You will learn at the knee of greatness, but alas, you and I will most likely achieve only a tiny fraction of his wealth…

But … HELL … when a tiny fraction of Warren’s net worth is in your pocket, you will be richer beyond your dreams … even if you are a MEGA (not MAGA) dreamer!!

In the meanwhile my friends, I’m pretending (for the next week) to live the Warren Buffett lifestyle of the Rich and Famous while falling WWWwhoaaaaaa!!… clumsily from a surfboard off the white sandy beaches of Playa del Carmen…

Maybe it IS true… fake it until you make it!

F*** What????

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FuckedUpedness.jpeg

FuckedUpEdNess!

There, I said it… forgive me but… YAY!!

It’s a word I’ve anxiously saved and hoarded all of last year to make use of, so please excuse my bold application, but at last, its time has come.

And really, using it to describe my own actions (and those of the Man Down South) makes it OK to use, doesn’t it?

I’m writing this week’s post with a slightly rosy hue burning my cheeks (not the ones I’m sitting on!).

I spend a not-inconsiderable amount of time each day, week, and year, examining and studying, then finally purchasing (and selling) tiny amounts of publicly-traded companies in both Canada and the US.

My long-stated goal has been to swing a bat with care and sagacity to bring about an average return of about 15% on my accounts and those I advise on.

Each year (mostly), I happily highlight my investment acumen in the cases where I’ve made some head-swelling choices, and to be fair, grimly excoriate my less well-chosen trades on the markets.

BUT! The big bold F word above tells you which direction my choices have driven this past year… a Thelma and Louise skid off the steep cliffs of investment return. NEGATIVE!

Because I act as a kind of amateur investment advisor to my kids, I’ve already sent them each a letter of (FuckedUpedNess) apology and mea culpa for the bad news I wrought in their accounts that wasn’t so bad until … the final month of the year when the wheels were violently ripped off this market money wagon… CRASH!

To be a little gentle on myself, I know that all North American markets took a big haircut on the year. To be a little less gentle on others, I feel exasperated and irked with the Man Down South.

trump buck.jpg

But blaming others just isn’t healthy. I won’t go down that road. Please please please help me to not go down that road.

I know from lengthy experience that markets aren’t a solid, joyous ride up the rollercoaster…. on occasion, there is an underwear-staining heart-thumping tear down a steep track that we must expect.

OK… brass tacks … what’s all this FuckedUpedNess fuss about?

The bottom line: the return on my investments for 2018 was a sub-standard -1.76%.  My first down year since 2008. By comparison, the S&P 500 (the broad U.S. measure of markets) dropped 4.4% in 2018 and the TSX Composite fell 8.9%.

I hate it when I see my net worth sink even a little. When you invest on a serious level, net worth has a rough correlation with net self-esteem!

OUCH!

A negative result is different now than before.

I’m finding out in a non-fictional way today that negative returns have a real-life impact on a Retiree’s (there’s that nasty “R” word!) world… the regular bi-weekly paycheque has gone AWOL and is no longer a credit to balance the debits! The teeter-totter has lost one of its players.

But I’ve long known that a job is only one source of income. The American IRS suggests the average millionaire has seven sources of income. We should all strive for multiple streams of $, yes?

OK, enough delay… it’s time to pony up and share my results over the short and longer-terms.

I’m definitely no Warren Buffett when it comes to investing – the multi-billions keep slipping from my hands – but I’ve carried out my role in an OK kind-of-way over time, and more importantly, I love the pursuit, the challenge.

So here are my cumulative annualized returns over the past decade (to shrink my head a tiny bit, I’ve added in year 11 as that was the year of the big 2008 slide… a harrowing -37.1% return):

  • 1 year     -1.8%
  • 3 year     +6.1%
  • 5 year     +6.8%
  • 10 year   +19.7%
  • 11 year   +14.5%

Only over the 10 year period have I attained the pinnacle (15%+ returns) that I’ve been climbing towards. Clearly, my goals have outshot my reality. I’m not giving up!

And for this past year, I’m putting my investing acumen and self-accolades in the FUCKEDUPEDNESS column.

Guess I’ve gotta keep working on my swing (maybe I just haven’t reached my 10,000 hours of mastery yet). I hate those years when I strike out.

I don’t want to have to pull out that F word again next year!light sabre bat.jpg

 

How’s Your Loonie Year? 8 Investment Entrees…

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boring-businessman.png

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”.

girl and bull.jpg

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…

Sleeping business guy.jpg

BUY BUY BUY… Your Tollbooth to PFTM Wealth

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Buy Buy Buy

I was never terrific at math in high school…

I was OK… yes… but not super gifted. But I did have my style. Or more likely I discovered my style with age and experience like a modern day Marco Polo. (Marco?… POLO!)

I hung out in class with slightly nerdy kids like Jerome and Karen and another Larry (he called me Lawrence so we wouldn’t get confused), kids who grasped and consumed math concepts like they were ambling at ease amidst the orchard trees, snacking on juicy, low hanging cherries, whereas I clumsily had to climb a shaky ladder to reach and reach to find the answers.

More often than not I dropped the fruit or fell off the ladder.

Jerome would lean across the gap between our desks and patiently explain to me the misty concept that our teacher Mr. Warneke had just chalked up all over the blackboard. Regardless, my puzzled expression rarely changed. SOL again.

The abstruse theories and hypotheses were nebulous to me, more flighty feathers than concrete. I couldn’t squint hard enough to make the numeral picture on the canvas clear, not the way my gifted cohorts naturally could.

More importantly, it wasn’t something I enjoyed. It tasted a whole lot more like vinegar than chocolate.

I have a BIG lazy gene and math drew it up to the surface like bubbling oil crude. When it came to tough thought processes, you know, the 10,000 hour rule, even the 1,000 hour rule, well…. I flipped to the other channel seeking alternate fluff… maybe it was “fake fluff”!

fake fluff.jpg

I liked numbers and math, just not THOSE numbers and math. It was too much like masturbation instead of skin-to-skin sex.

I liked “real life” math that could change my life or others’ lives. Still do.

In the here and now, and in the many years since, whenever I deal with real life numbers… numbers that have an actual day-to-day meaning in my world… well… I’m in my element. The water feels so much warmer in this pool.

I like numbers that relate to meaningful things where I can have an obvious impact.

Here’s a couple of examples:

I compiled statistics for 10 years in a laboratory-based diabetes program. I was able to monitor and impact in some style the way in which people treated their own diabetes condition.

Every three months I prepared and mailed an individualized letter to thousands of local diabetics – a letter filled with real life numbers that included their blood test results for A1C (blood sugar test), Blood pressure and Cholesterol (ABC’s).

For those who had been wandering about blindly (often for years), a mechanism now arrived in their mailbox whereby they knew exactly where they stood. They could then make educated lifestyle changes (or choose not to as is sadly so often the case). That’s real world, easy-concept numbers and math.

The other real life math I invest my hours in is for my personal benefit.

It’s my tollbooth math.

Personal Financial Tollbooth Math. (PFTM)

tollbooth.jpg

I’ve talked about the idea behind PFTM before, so I’ll expand on it a bit further here.

Again, an example or two.

Remember how in high school you read JD Salinger’s book, Catcher in the Rye. He wrote that in 1951. Well, today, 66 years later, this book continues to sell a quarter of a million copies each year. For God’s sake, the man has been dead for almost 8 years and he makes more money annually than I do. Tollbooth.

Elvis Presley, Marilyn Monroe, and Michael Jackson are all long gone and yet each still racks up millions and millions of dollars of yearly revenues that pour out of swollen creeks into their estate accounts. Tollbooth.

Each of these people set up a tollbooth based on their strengths, and posthumously continue to feed voraciously from their early labours and talents.

If you have a business idea or some talent that provides a steady, worry-light, form of income, I encourage you to pursue it with gusto. Eat it for breakfast, lunch and dinner.

But since I’ll likely never pen a New York Times bestseller 50 Shades of Grey book or produce a song like Thriller, I need to build my own tollbooth in my own way with the tools I have at my disposal; hence Personal Financial Tollbooth Math.

More simply put, it’s about investing in good quality companies that spin off a steady stream of dividends, preferably a stream that increases each and every year. There’s an additional layer to this called DRIP investing that I’ll write about another day.

Ownership of a well-chosen batch of these companies is a ticket to long-term financial success, and fortunately they’re not hard to find in today’s information-laden internet world.

A few choices you ask? I’d be happy to share like the Warren Buffett wannabe that I am.

I have investments in tollbooth businesses like Apple (your iPhone is 2 or 3 years old… buy a new one… Cha-ching for Apple!), or Johnson & Johnson (running low on Tylenol…psssst… J & J will take away that headache!), or Bell Canada Enterprises (BCE) (another month, another $100 to the phone company that connects me to my Apple iPhone!). They all pay quarterly dividends that increase each year. Tollbooth.

AFLAC, CVS Health, TransCanada Pipelines, Royal Bank, Disney, United Technologies, Pizza Pizza Corp. are all good conservative choices that have paid ordinary investors for years and years, and likely will for many years to come. And those are just a few.

FULL DISCLOSURE: If you’re seeking a raging blast of adrenaline rush with your investments, none of these are high flyers with 10-bagger potential (Peter Lynch‘s catchphrase for a stock whose share price increases 10-fold)… but they all offer a steady drizzle of tollbooth money into your bank account every month or every 3 months.

Dividends

Tollbooths and “real life” math go hand-in-hand to bring ease and quality to our lives. You can tell me as often as you like that money doesn’t generate happiness. I’ll grind my teeth together and then quietly remind you that $$ are a cruise ship that carries you a long way in the right direction.

I’ll keep practicing my PFTM tricks and building a stronger repertoire of those businesses that work for me and my family.

I love my investments like little children. I watch them forge ahead and build on their strengths with the occasional scraped knee along the road.

I take pride in their accomplishments, and live in the reflected glow of all they do to enhance my quality of life.

Reflecting back, my bright high school friends who put in the necessary hours mastering math concepts have all likely made millions working in high-tech fields that require a strong understanding of mathematical models and nuance. Maybe theoretical math became their tollbooth. I applaud any successes they’ve had using their own toolkit.

Even though I wasn’t in the top echelon of school math class, I fortunately discovered that life often doesn’t require brilliance or genius to deliver the goods, sometimes you only need to unearth your Personal Financial Tollbooth Math.

Einstein math

Snowball BOOYAH!

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money-snowball

I don’t want to drop names or anything but last weekend Warren Buffett sent me a long letter.

He’s very thoughtful. Warren does this every year at this time. Has for 50 years now. It feels like a grandfather’s warm, reassuring hug.

OK, it’s not only me that Warren loves.

The letter is actually his annual missive to Berkshire Hathaway shareholders, freely available to anyone, even non-shareholders like myself.

In its entirety, it’s an encyclopedic message of knowledge and hope to anyone who wants to invest, live, and retire comfortably, spoken in a folksy, left-wing, socialistic kind of way.

Buffett and Bill.jpg

Buffett… Graham… Fisher… Lynch… Cramer… Green????

A world of great 20th (and 21st) century investors. You might want to remember and study the ideas and words of those names (except the last one!) if you crave a life of lessened financial worries.

I was loitering in my former lab workplace this past week while dropping by to pick up a lab buddy to go for a sweat session at the gym.

While waiting and listening to haematology analysers counting red and white blood cells happily in the background, another young former co-worker Trina, shook her head and smiled and said incredulously to me:

Larry, how did you manage to work part-time for 25 years, raise 3 kids, help them out with university costs, retire at 57, and go travelling around the world?”. 

A rush of warm blood flooded my face and I felt the sensation of my head swelling. Doesn’t everyone love a compliment, well deserved or not?

Thoughts rushed through my mind. This was the perfect smartass moment. I latched on for one pleasing drag off the cigarette.

Looking down and thumbing the rough calluses on my fingertips, I mentioned our most recent trip to India. Tongue in cheek, I spoke of how we journeyed to the jungle of humanity that is Mumbai, to try out life in a location where we would actually be raising our standard of living.

Lots of other thoughts flashed through my head. I wanted to smile and gloat about a huge inheritance from my Grandma who owned Bloomingdales, or a monster lottery win, or maybe a clever Bonnie and Clyde-style bank heist… bang bang, but unfortunately (or you might say fortunately) I had none of those stories to offer Trina.

No fake news today!

Bonnie and clyde.jpg

I soberly reflected back on the years of preparation and planning that had brought me to this point in time.

I admitted to Trina that, for sure, I’d had some lucky tailwinds that blew warm fortune my way, but the brutal reality is far more boring. Boring, but I think instructive as well.

Remarkably, she still looked interested so I pushed forward and… blah blah blahed.

First of all, while I’m wealthy in all sorts of non-financial ways, I’m truly not a financially rich man by current North American standards.

I worked in a part-time lab tech job that would have paid a full-time worker somewhere in the $65- 70,000 area with medical and retirement benefits layered on top. My wife did much the same so we finished with a combined income in the $70,000 neighbourhood.

We own a modest home in tiny Summerland, British Columbia’s Okanagan Valley where typical homes sell in the $400,000- $600,000 range, not Vancouver or Toronto’s $1 million plus real estate market.

I reflected that long before The Wealthy Barber made his millions by peddling the notion of saving 10% of each paycheque, we were on board.

The early years… before kids… were the golden opportunity to lay a foundation of savings, a sturdy structure to build the rest of the rise-to-the-heavens skyscraper of hoped-for financial fortune.

money-skyscraper

And this is that time I already mentioned where the “luck” tailwinds were gusting firmly at our backs.

As Jim Cramer says on his wacky CNBC TV show…. “there is always a bull market somewhere“. This is true yesterday, today, and tomorrow.

Opportunity will exist forever, or as it was said to Virginia about Santa: “… A thousand years from now, Virginia, nay, ten times ten thousand years from now, he will continue to make glad the heart of childhood”

Our “tailwind”? Ridiculously high mortgage rates of 20+% were terrible for those buying real estate in the early 1980’s. Monthly mortgage payments were absurd based solely on the almost usurious interest rate charged by banks.

But conversely, ridiculously high interest rates of 19.5% paid on Canada Savings Bonds were a crazy incentive to save and invest in bonds. Now there’s a low risk tailwind!

We avoided real estate and plowed our dollars into savings bonds. Cha-ching!

Time passed along and kids mysteriously insinuated their way into our world (I’m better at numbers than I am the birds and the bees). Changing the locks to the house that we finally purchased never seemed to keep them out. The little Olivers and Artful Dodgers always managed to pickpocket us and leave us bordering penniless… foolishly with our seal of approval.

It was a perpetual challenge to squirrel away 10% of our earnings, but it was a priority and when it was taken out automatically, the pain was fairly mild. Thank god I love Kraft Dinner and Friskies cat food…

And, sure as shootin’, the foundation of savings mixed together with decent returns on investing began the SNOWBALL effect.

Perhaps learning as much as I could about investing in quality stocks à la the investors I named at the top of this post helped. I’ve never scored huge gains, but a consistent annual return in the 12% range has made the snowball grow bit-by-bit.

Every snowball by necessity begins as a few grains of sticky white flakes.

But give the tiny snowball some time, and fresh snow to roll it in, and it begins growing larger and larger so that every turn of the snowball collects an ever-increasing amount of momentum-snow…. growing and growing and growing…

I’m not telling you anything you don’t already know. I’m never the smartest guy in the room, or on the web.

I’m not telling you to give up all the moments of enjoyment or pleasure you can garner, by squirrelling away every penny. This isn’t intended as a tribute to Scrooge.

Every era has its financial challenges and opportunities.

I’ve spoken with Trina about money matters before. She knows the path to her Money Valhalla. She’s doing the right things that will one day give her flexibility and financial freedom.

In the meantime, hopefully she’ll be receptive and spend a few minutes reading Warren’s wise and cozy letters each year.

Her $$ snowball merely needs some more time and patience.

BOOYAH!!

bull

 

 

 

 

YOU Are Your Own Lottery Ticket

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spin bike sweat

Another slow-motion drip of salty sweat falls to the wood floor.

SPLAT!

It’s the small beginning of Lake Lawrence, building, evolving, as heaving, melting bodies revolve on a dozen or more immobile bicycles surrounding me.

During spin class, energetic Sergeant/Instructor Cara plays that bouncy Latino-sonic tune FIREBALL.

It’s a great ear worm song.

I want to stand on the bike pedals and do a gyrating dance, it’s that catchy.

Actually, when I look up, Cara IS doing a pole-dancer gyration on her pedals. No way am I imitating her booty moves.

My distractible mind plays trampoline Olympics with the fiery music and the word Fireball … soon it migrates along the road a bit further until it lands on the word POWERBALL.

POWERBALL – that monstrous American lottery where 3 people shared 1.5 BILLION dollars a few weeks back. 1.5 … BILLION … DOLLARS.

Enough to make 1500 individual millionaires. Numbers. I love ’em.

Powerball

When I was a kid, the only lottery available in Canada was called the Irish Sweepstakes.

At the time of the Sweepstake’s inception, lotteries were generally illegal in the UK, the USA and Canada. In the absence of other readily available lotteries, the Irish Sweeps became popular. Even though tickets were illegal outside Ireland, millions were sold outside the country.

I also remember what an IMMENSE deal it was in Hamilton, Ontario way back in 1971 when they held a lottery to raise money to put Astroturf on the Tiger Cat football field …

The big win? $100,000.

People went mad buying up tickets for the “huge” prize, almost like they were scarce Cabbage Patch dolls.

In today’s world, $100,000 is chump change. Let’s face it, even a “small” 1 million dollar loan is just TRUMP change.

trump change

Lotteries, games of chance, poker, bingo, roulette … Las Vegas, Reno, Monte Carlo, Macau.

Many, if not most of us, want an instantaneous heroin fix to our money concerns, worries. We love the thought of the possibilities, the dream, the unimaginable high.

And there are just enough stories of winners floating out there to keep lineups long, like Moscow bread lines of old, at ubiquitous ticket-selling booths.

Full disclosure. I have bought the occasional lottery ticket. Maybe one every couple of years.

Sometimes I’ll get a birthday or Christmas gift of a scratch-and-win ticket that I enjoy playing the money chase with.

In my workplace, maybe like yours, I used to pony up $10 every month or so for a group lottery purchase.

Can you imagine the disappointment of crawling out of bed one morning and discovering that every one of your colleagues is an overnight Bill Gates? I think I’d just climb some stairs and jump off a building from money-lover’s heartbreak.

But do I really want to walk the sidewalks knowing that my friends and neighbours cast sidelong glances at “Mr. Lucky Rich Bastard”… me, with the innocent, haughty look of easy wealth? A Prosperity Walk of Shame?

NOPE.

Buried under my slight gambler’s intrigue is a very down-to-earth sensible guy who wants to unearth and create his own fortune based on a virtuous self-discipline of saving, followed by a modicum of investing knowledge to take those hard-earned dollars and transform them through the magic of time and compounding.

I’m competitive, sure. I want to win, absolutely YES.  But I want to win on my own terms.

My game, my rules.

Whatever luck I encounter should be at the intersection of  Preparation and Opportunity Streets (actually, it was Roman philosopher Seneca that said “Luck Is What Happens When Preparation Meets Opportunity“, reminding us that we make our own luck.)

  • I want that inner glowing satisfaction of winning the middle-class self-made dream.
  • I want the well-deserved white hair and wrinkles of the man who took the fitness discipline of health, translated it into a saving self-discipline, and mixed it with a dollop of investing ingenuity.
  • I want to feel the little secret pleasure of fatigue and patience from years of setting aside a magical 10% of every paycheque.
  • I want to submerge myself in the gratification of watching the tiny speck of a single snowflake slowly roll forward, slowly, ever so slowly gaining momentum picking up stray flakes along its journey. Despite the occasional slip back upwards on the slope it once again grips the icy surface and pushes its way forward, growing larger and larger so that the initial snowflake is so deeply buried that it’s only a faint memory of a long gone era when I wore bell bottom jeans and a paisley shirt … EWWWW!

bell bottoms

It’s just like grunting and sweating in a spin class.

Each drop of sweat that lands on the gym floor is a minuscule down payment.

The muscles and fitness that come from a long period of effort and good behaviour.

That satisfying tricep ripple I spot in the mirror from long-term effort is the same glow emanating from a work ethic of building a tiny financial personal miracle.

FIREBALL is an energizing tune that gives me a bootylicious kick-start.

It’s got that pulsing beat … a big saxophone burst that inspires me in the gym and also in the world of building my money muscle.

Nobody listens to Pitbull singing FIREBALL while buying a lottery ticket.

 

 

A Blog About Nothing …

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YADA YADA YADA …

Yoda

YADA … not … YODA …

You can nod off to sleep right now if you wish because I’ll be writing a thousand words or so here but I won’t be telling you anything you need to know that’s important other than to ignore the stuff happening that you think might be important, because it’s really not. Got it?

Let’s move on …

I mentioned last week that I’ve been writing this blog stuff for 3 and a half years now …

I also mentioned that I observe and steal from others … people I encounter day-to-day and people and ideas I see in TV and movies…

And if you’ve noticed, there are a few people out there in the artistic and investing community that I admire.

People like:

  • writer Stephen King who blows me away with his prolific writing and amazingly creative imaginary genius, even if I don’t always enjoy his “horror”-genre subject matter.
  • TV and movie writer Aaron Sorkin who concocts the most remarkable rapid-paced dialogue and clever one-liners to come out of actors’ mouths. The Social Network, Moneyball, Charlie Wilson’s War, Steve Jobs, A Few Good Men, The American President, The West Wing, Sports Night, Studio 60 on the Sunset Strip, The Newsroom. Just listen to the dialogue and Olympic-level verbal gymnastics that occur in these shows – in his writing.
  • Nora Ephron, the late queen of writing the classic romantic-comedy movie: Sleepless in Seattle, You’ve Got Mail, When Harry Met Sally, Silkwood, Michael. Ephron almost defines the Rom-Com scenario of the late 20th Century.
  • Warren Buffett, the Oracle of Omaha. An ordinary yet truly extraordinary investor guy who acts like a country bumpkin but has the calm wisdom of Solomon.

… and finally,

  • Jerry Seinfeld. Everyone knows Jerry. That guy who made TV shows about nothing. ABSOLUTELY NOTHING! And we all loved him for it. When we were in New York City a couple of years back, we visited the famous Tom’s Restaurant coffee shop where many of the group of 4 (Jerry, Elaine, George and Kramer) scenes occurred (in truth, just the exterior of the restaurant was real, the scenes were filmed on a soundstage elsewhere). A few weeks back, we took in a Jerry Seinfeld stand-up comedy “concert” in Vancouver – an hour and 15 minutes of non-stop laughter – yup, he still delivers.

Toms restaurant

So, in perhaps one of the strangest segues ever observed (And BTW? Segue – pronounced “SEGWAY” is one of my favourite words ever), let me take you back to the NOTHING I mentioned earlier…

If you’ve been looking at – or worrying about – all the turmoil and fear in world stock markets this week, try to remember Jerry Seinfeld and that all of this financial worry is just YADA YADA YADA …

A big NOTHING.

Background noise.

Markets go up … markets go down.

The sky isn’t falling and we’re living in a golden age even if we don’t always recognize it that way.

Most of us enjoy lives greatly superior to royal kings and queens of a few centuries back with our:

  • Heated homes and sometimes, indoor heated thrones too.
  • Sumptuous foods from every corner of the world every day.
  • Entertainment of a thousand varieties at the push of a button.
  • A pill to cure or assuage every affliction.
  • Teeth that shine like sparkly diamonds with no decay pain.
  • Our backs bathed in sunny warmth on sandy beaches in February while snowdevils whirl around our frigid northern homes.

I could go on but you get it, right?

I hear you saying I’m an interminable optimist who would have saluted Hitler with a smile. Sure, maybe you’re right.

But one of life’s lessons I think I’ve learned finally is that the things we worry about the most – MOST times never occur.

My mother passed on a minor version of her “worry gene” to me. This used to worry me… but the irony in that is just too silly to contemplate.

Of course, unpleasant things happen to all of us. BUT, to constantly worry about what could happen won’t prevent unpleasant things from happening. Quite the contrary, that’s usually a very efficient way to attract more unpleasant things into our lives.

Yes, unpleasant things happen. But when they happen, we find a way to deal with them, we find a solution and we learn and grow through them. We become bigger, wiser, better…

I used to worry about my financial health every time the stock market took a downdraft.

One Tuesday morning in October 1987 I was sitting in the cafeteria of Penticton Regional Hospital on a coffee break with some of my fellow lab co-workers.

They were talking to me but I didn’t hear a word they were saying.

The New York Stock Exchange had dropped 22.6% a day earlier and my – what I had considered to be substantial – investments took a beautifully elegant swan dive off an Acapulco cliff.

Black-Monday-the-Stock-Market

My bastard inside voices told me the world was ending and life would be terrible and barely livable.

How would I manage? How would I survive the future? My children would be paupers.

In a state of lucky near-panic, I did nothing and rode the waves of worry and weight, while others sold their investments in extreme anxiety.

A couple of years later, it was as if nothing had happened. My stock shares rebounded and grew higher still.

It wasn’t my calm persistence and belief in the positive that carried me through the worry then. It was paralysis.

Since those earlier years, I’ve encountered more heartwretching stock market plummets (2008 was a classic!). I’ve fashioned mistakes of my own making in choosing an investment – where an individual stock price dropped to featherlight nothingness overnight.

The main thing I learned in my own evolution through these and life’s other worries is that the end result is rarely as bad as the thoughts that ran through my head.

Repetition of these distressing life events slowly began to infiltrate and become absorbed.  The lesson I was learning was the belief that I could survive each onslaught and that the final result would be fine. Or close to fine.

The worry – the overwhelming worry? – it wasn’t worth the paper it was written on… OMG, that’s a terrible analogy. Sorry, you can probably think of a better one.

My worry was wasted energy. Looking back it was me running on a treadmill, never getting closer to my desired destination.

If all the physical, health, mental, financial worries that I had imagined countless times had come true, I would have perished years ago, a tangled mess of a train wreck. KA-BANG!!

The answer to life’s worries wasn’t found in the wise words of YODA, the reflections of Buddha or Confucius, the blatherings of Donald Trump.

When it comes to worry – and we all have worries, it’s part of the human condition … the first words I hear now aren’t from green goblins named YODA …

… the words I hear are YADA YADA YADA …

… loosely translated as THIS TOO SHALL PASS.

I’ve written that here before just so you know I’m not delusionally and unknowingly repeating myself.

Some things, like eating a bowl of butterscotch ice cream, bear repeating.

And that is today’s blog post about NOTHING.

YADA YADA YADA …

nothing

 

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