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April 3, 2020 | Gold Bullion and Gold Mining Shares as a Hedge

Gold bullion and gold mining shares have been used at times as a hedge against the possibility of a cataclysmic event in the markets. Since the arrival of COVID-19 and a severe economic downturn, interest in gold as a hedge is making a comeback. Will gold and gold mining shares perform as a hedge this […]

March 27, 2020 | Traditional Safe Havens Can Disappoint

Savvy investors look for safe places for their money in uncertain times. Canadians consider large companies that pay generous dividends as reliable and safe. Are traditional safe-haven investments likely to perform well this time? Some Canadian companies have paid dividends continuously for more than one hundred years. Bank of Montreal paid dividends since 1829, Bank […]

March 20, 2020 | Timing the Bottom of a Bear Market

A full-blown global recession is inevitable at this point, due to government efforts to contain the spread of COVID-19. The world’s economy was slowing before the pandemic hit. A growth slowdown has now become a widespread economic contraction. Stock markets reacted sharply with most stocks down at least 30 percent, and some large firms in […]

March 13, 2020 | The OPEC Era is Over

The oil supply cartel known as OPEC continues to self-destruct. With the announcement that the Saudi-led group of oil exporters could not reach agreement with Russia the price of oil collapsed. Will OPEC ever regain control of the oil markets? In my weekend note on December 31, 2014 I wrote that OPEC was struggling with a worldwide […]

March 6, 2020 | The Bank of Canada Makes an Emergency Rate Cut

The Bank of Canada (BOC) cut its policy interest rate on Wednesday to 1.25 percent, the first cut in rates since 2015. The drop of 50 basis points was like Tuesday’s move by the U.S. Federal Reserve, which was done as an emergency response to risks related to the impact of COVID-19 on the global […]

February 28, 2020 | Buy the Dip is a Questionable Strategy

The stock market has started to react negatively to COVID-19 spreading outside of China. Markets are down about 10 percent from the peak valuations of mid-February 2020. During a steep correction, it has been profitable to buy stocks. This is called “buying the dip”. Is now a good time to add exposure to the market? […]

February 21, 2020 | Elon Musk Plans to Disrupt Broadband Internet Access

Space-X is launching telecommunication satellites that will become a network called Starlink. Starlink will bring high-speed, low-cost broadband internet to the world, starting in mid-2020. The requirements to use Starlink are the purchase of a pizza-box-sized receiver and a subscription. This service will be especially useful for remote areas outside of big cities that suffer […]

February 14, 2020 | The Stock Market Looks Past the New Corona Virus

The coronavirus that originated in Wuhan, China is causing worry all over the world, as the virus appears to cause severe sickness in about 20 percent of confirmed cases, and death in about 2 percent. The stock market is near record high levels, having taken a mild dip when the virus was first reported, and […]

January 31, 2020 | U.S. Energy Self-Sufficiency is a Game Changer

The U.S. is close to self-sufficiency in energy, which is changing the balance of power in the world’s oil markets. The price of crude oil surged briefly in the first week of January after the assassination of an Iranian general by the U.S. military. But the oil price came down to earth quickly, reflecting the […]

January 24, 2020 | Small Capitalization Companies Overdue for a Bounce in 2020

Large capitalization U.S. companies continued to outperform last year. The Russell Top 200 mega-cap index gained 30 percent last year, while the Russell 2000, a group of about 2,000 companies that average only $2.43 billion market value rose 23 percent. Since 2016, on an annualized basis, the small cap Russell 2000 gained about 8.1 percent, […]

January 17, 2020 | The Climate Change Crisis Hits the Finance World

A new year and a new decade triggers thinking about what the most rewarding investment theme will be over the next year and beyond. A leading candidate for a dominant theme is the impact of climate change risk. Bank of England Governor Mark Carney said that climate change is an example of the Tragedy of […]

January 10, 2020 | The U.S. Obsession with Iran

People are wondering what will happen after the U.S. assassinated a senior Iranian commander, Major General Qassim Suleimani. Iran is a long-time enemy of the U.S., after the hostage-taking of 52 Americans at the U.S. embassy in Tehran and the overthrow of U.S.-backed Mohammad Reza Shah Pahlavi, both events happening in 1979. Is war inevitable? […]

December 20, 2019 | The Trump Impeachment Begins

President Donald J. Trump, 45th head of state, is now the third President since 1776 to be impeached by the House of Representatives of the United States. The next step is a trial to be held in the U.S. Senate, and a vote that will determine acquittal or removal from office. Will impeachment or the economy […]

December 13, 2019 | A Comfortable Retirement is Not Guaranteed

The era of a comfortable retirement funded by defined benefit pension plans is fading rapidly from the scene in North America. Companies and governments offering defined benefit plans are struggling to fund their obligations. Some have even reduced payments arbitrarily for pensioners and most no longer offer a pension to new employees. Was the guarantee […]

December 6, 2019 | Canadian Banks Still Face Headwinds

Canadian banks face stiff headwinds next year. They will have to deal with increasing loan losses, weak capital markets and slow retail lending. This is the start of a period of elevated risk, as the credit cycle turns. Should investors reconsider their holdings in Canadian banks? In “When the Bubble Bursts, Surviving the Canadian Real […]

November 15, 2019 | Saudi Aramco is a Gamble on Oil Demand

The world’s largest company, Saudi Aramco, is proposing to list its shares on the stock exchange in Saudi Arabia. The prospectus issued last weekend, at 658 pages, includes a lot of interesting information about the oil business, the company’s size and value and forecasts for the future of the oil industry. Is it a good […]

November 8, 2019 | Too Much Cash Can be a Good Thing

Warren Buffett’s Berkshire Hathaway is invested in a lot of cash and cash equivalents, about $122 billion in August 2019. Most investment managers cannot afford to wait to invest in stocks when the market is rising, as missing out on gains upsets investors. A decision to delay investing cash can be a career-ending move if […]

November 1, 2019 | IMF Warns of Slower Growth

The International Monetary Fund cut its forecast for world economic growth for the fifth straight time this week. The IMF sees growth slowing as global trade tensions escalate and business investment is weak. The words “synchronized slowdown” and “precarious outlook” were used. Is the world experiencing prolonged stagnation? The full IMF report runs 208 pages while […]

October 25, 2019 | Canada Suffers from Dutch Disease

Canada, like some wealthy countries that receive substantial resource income, suffers from “Dutch disease”, according to some analysts. That label is used to describe a country that enjoys the income from selling natural resources but is hurt by the side effects of that activity, such as elevated currency valuation, inflated costs and atrophy of other […]

October 18, 2019 | Technology Disrupts Autos

The automobile industry is vulnerable to the advent of new technology. Electric-drive technology will force a revolution in the manufacturing and sale of automobiles. The incumbent car makers, auto dealers and those who finance the purchase of cars may not be ready. Worm Capital, of La Jolla, California wrote a report titled “The Big (Auto) […]

October 11, 2019 | Value Investing is Only for Very Patient Investors

Investment strategies get divided into two camps, growth and value. Most successful investors like Warren Buffet believe that value investing is better than growth investing. However, in the last decade, value investing has performed abysmally compared to growth. Is value investing dead? A Globe and Mail article in August 2019 is titled, “Five reasons why […]

September 27, 2019 | The 2020 U.S. Election Generates Anxiety on Wall Street

The next US election will be held on Tuesday November 3, 2020.  It’s probably too early to speculate about who will win. But markets will soon start to anticipate the outcome so investors might want to think about rebalancing their investments, especially if a substantial change looks likely. Is there a dramatic shift underway in […]

September 20, 2019 | Iran and the U.S. are Heading for Confrontation

The recent bombing of one of the most important oil processing facilities in the world brought everyone’s attention back to the Middle East and Saudi Arabia and the threat of war with Iran. If knocking out 5 million barrels of daily production can be done with armed drones, how worried should we be about renewed […]

September 13, 2019 | China Growth Rate Sputters

China’s GDP has overtaken the U.S., measured by purchasing power parity. Economic growth in the Middle Kingdom has outpaced the rest of the world for four decades, since economic reforms were instituted in the early 1980s by Deng Xiaoping. If China’s economy slows, due to the global trade war and other factors, the rest of […]

September 6, 2019 | Dr. Michael Burry Predicts a Crash in Passive Investments

Dr. Michael Burry, the lead protagonist in the movie “The Big Short” and successful speculator during the 2009 Global Financial Crisis, has called out the passive investing fad as a bubble that will end in a crash. He says that “the longer it goes on, the worse the crash will be”. Will the passive investing […]

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