The throne

.
DOUG  By Guest Blogger Doug Rowat
.

In May 2020, Tesla CEO Elon Musk unexpectedly tweeted that the company’s share price was too high. The shares, of course, immediately plunged. More recently, his Twitter poll asking if he should sell a chunk of his shares also caused a sudden price drop.

Elon Musk also does his best Twitter work while sitting on the can. Don’t take my word for it, just ask him:

Source: Twitter

Naturally, it might make a few investors uncomfortable that Elon Musk can dramatically move Tesla’s share price with a simple tweet from the commode, but lately, this is just one of many reasons that investors are becoming uncomfortable with Tesla stock.

But it’s not just Tesla. Many of the other high-growth companies that have dominated equity markets and headlines over the past few years are also making investors wary.

How so?

First, growth stocks are expensive. Growth stocks are traditionally compared to value stocks and growth stocks are now the priciest they’ve been relative to value in more than 20 years:

Growth vs value: relative valuation

Source: JP Morgan, Russell 1000 Growth Index vs Russell 1000 Value Index. Forward P/E.

I’ve cautioned before that valuations aren’t terribly predictive of future index or share-price direction, but when they drift into these unusual ranges, it’s worth paying attention.

Second, valuation takes on added significance when concentration risk increases and earnings power fades. The top 10 positions in the S&P 500, for instance, which are almost all growth focused, now comprise more than 30% of the Index, an elevated concentration level not even seen during the heady technology-bubble years (see chart below). And the earnings contribution of these 10 stocks, which sat at close to 35% in mid-2021, has now dropped to less than 26%.

Weight S&P top 10

Source: JP Morgan

Earnings contributions S&P 500 top 10

Source: JP Morgan

Finally, we have the virtual certainty of many Fed interest-rate hikes this year. Naturally, bond yields are already pricing this in with the US 10-year Treasury yield up from 1.4% to almost 1.9% in just the past month. Growth stocks face more sensitivity to higher interest rates. There are a number of reasons for this, including how the market values future cash flows and the higher cost of borrowing (something growth companies tend to do more of), but the bottom line is that sharply rising interest rates are an added headwind for growth stocks.

So growth stocks have had a rough start to the year, down almost 8%. One of the first changes we’ve made this year in our client portfolios is to trim growth and add to value. But keep in mind that all of the above is an argument for TRIMMING growth, not abandoning it entirely.

When constructing a portfolio it’s never prudent to entirely exit a region, a sector, a style or an asset class. Such decisions recklessly presume an infallible thesis and only create concentration risk. However, tilting a portfolio to improve performance or hedge risk is always fair game and we get paid to actively manage.

Therefore, for 2022, we’re swapping some growth for a bit of value.

Tesla may have another spectacular year, after all, betting against Elon Musk hasn’t proven wise in the past. Or it may not. However, with respect to growth stocks as a whole, we think that the risk of underperformance is increasing.

At the very least, by trimming growth, we’re reducing volatility every time Elon Musk takes a bathroom break.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

 

89 comments ↓

#1 Omicron Kenobi on 01.22.22 at 10:53 am

The first 100 responses to Doug’s blog post today will be infected and removed, once again.

Omicron rules everywhere. Especially on the toilet that is this comments section.

#2 the Jaguar on 01.22.22 at 10:53 am

Mercy. Field day for Sail Away.

#3 the Jaguar on 01.22.22 at 10:55 am

‘When constructing a portfolio it’s never prudent to entirely exit a region, a sector, a style or an asset class. Such decisions recklessly presume an infallible thesis and only create concentration risk.’

Tell this to the old meanies who don’t like the oil and gas business………

#4 RowatNation aka Prince Polo on 01.22.22 at 10:57 am

Well I hope this isn’t a hidden premonition that the economy is going into the toilet this year…thanks for convincing us to grab some Value ETFs! I wonder if the other 50% of the time, Elon is tweeting from his golden toilet…

#5 Bill zufelt on 01.22.22 at 11:03 am

12% crash on the Dow on Monday roughly 4000 points.We’ll see how patient the new investors(newbies since March 2020)are when the panic sets in.Even 4000 points will still leave us up 6000 from 2 years ago so people really shouldn’t panic but human nature being what it is,this thing will overshoot on the downside and take the Dow to under 20,000.

#6 THE DANDADA on 01.22.22 at 11:05 am

Bulls make Money.
Bears make Money.

PIGS get slaughtered!

#7 ogdoad on 01.22.22 at 11:09 am

I must say – Musk is on a roll. Anyone who can influence as many people as he does can tweet from wherever they want. Hate for him to get stuck, they’d have to call in the squat team.

Not that its new. How many working hours do you think are spent on a smartphone in the John? Can only imagine.

Happy Saturday – and thanks for the visuals.

Og

#8 MD on 01.22.22 at 11:21 am

For every one percent rise in benchmark rate the markets will drop by ten percent. Let’s see if FED actually keeps their promise or bow down to markets. This will expose them because their mandate is about unemployment and inflation and they always bow down to market crashes. Exciting times ahead of FED actually starts increasing rates.

#9 paddy on 01.22.22 at 11:24 am

That toilet looks cold and unwelcoming…I’ll take a plastic seat over that any day….brrrr

#10 VladTor on 01.22.22 at 11:38 am

….Elon Musk also does his best Twitter work while sitting on the can.

*****************

Dough, You make your best investments the same Musk’s way? If not – why?

#11 Stealth on 01.22.22 at 11:41 am

Thank you for the post.
I have been pondering a question recently about portfolio tilting.

Is the purpose of portfolio tilting via active management to smooth out/regulate human emotion Or is it to achieve superior results meaning beating S&P 500 index benchmark?

Could it also be providing returns close to the benchmark but with less volatility?

If you can provide a comment on the reason for portfolio tilt it would be much appreciated, I can’t fully comprehend it.

Thank you.

#12 Ray Skunk on 01.22.22 at 11:51 am

The decisions Musk makes while laying a length of brown cable are still leagues ahead of the decisions Trudeau’s PMO take weeks or months to make.

#13 Sail Away on 01.22.22 at 11:52 am

Well, there are few better hedges against uncertain returns than the $15k / per person / per year US Treasury Series I savings bonds, currently paying 7.12% and almost certainly increasing at next adjustment in May.

The whole Sail Away dynasty is knee deep in these.

#14 Dave on 01.22.22 at 12:14 pm

Once the war in Ukraine begins, oil prices will rocket well above $100?

Is the below correct:
– interest rates will go up next week with many more hikes in 2022?
– Oil price increases and so does inflation in a dramatic fashion?
– BOC then has to be more aggressive with rate hikes because of oil?
– With supply chain and gas issues…is Canada going into recession?
– Will BOC then start Reducing rates again?

Pls elaborate on your answers to the above…very confusing times for amateur investors. How does 2022 play out based on war scenario?

Thank you

#15 I'mshort_corpdebt on 01.22.22 at 12:24 pm

What the market giveth, the market taketh away.

#16 TurnerNation on 01.22.22 at 12:32 pm

Did somebody get a bit too Scotch-happy on the Delete button last night :-)
This weblog tests all spirts; 12-years in particular.

—Economic shutdowns: Is the “Atlantic Bubble” a carefully designed trap replete with virtual Berlin Walls?
2 out of 4 provinces there are shut down. UBI anyone?

— War on Small Business. They want the “Non Essential” people – so-named back in March 2020 – dependent upon the State UBI. You are expected to eat outside, like ANIMALS, in the frigid windchill:

https://www.blogto.com/eat_drink/2022/01/cafe-dip-patios-shut-down/
“Toronto’s most famous patio gets shut down by authorities”

https://www.blogto.com/eat_drink/2022/01/toronto-restaurant-patios-shut-down-too-covered/
“Toronto shuts down patios for being too covered”


— Controlling Our Feeding. Yep. The War on Meat.

https://twitter.com/i/events/1484529792280305664
Bloomberg – How Big Beef is fueling the Amazon’s destruction – The world’s biggest beef producer says it has no tolerance for rainforest deforestation. Bloomberg’s analysis shows that’s not true—and Brazilian law isn’t helping.

— Control over Travel. Gee, in mid 2020 you could fly almost anywhere, no mask, no QR code, no testing. In the midst of a “deadly pandemic”. Right?

Today: picture of Massive arrival line ups for ‘testing’ at the local airport. TON$$$ being made.
https://twitter.com/JasonJacobson33/status/1484684591696863241

#17 baloney Sandwitch on 01.22.22 at 12:32 pm

One problem FAs don’t consider is the tax hit you take while tilting or trimming. At a 53.53% marginal tax bracket this can be a substantial hit as you have to pay T2 our partner in crime. I prefer creating a bit of a rolling hedge by buying puts on SPY or IWO. If they expire worthless, great – they create a rolling tax loss. If we in a bear market they can pay off big. Its basically insurance and it requires some effort but its much more tax efficient.

#18 Sail Away on 01.22.22 at 12:33 pm

Ah, Tesla. Where to start?

Full Self Driving: I barely even touch that old fashioned steering wheel thingy anymore. Takes out the odd biker, but they shouldn’t be on the road anyway.

On the road climate-controlled lodging with wifi. Great benefit. This was my catalyst to build a small, woodstove-heated, tow-behind gypsy wagon for comfortable multiday hunting and camping trips, which is almost finished. Can’t wait to hookup and go.

Life-changing stock returns. Both for myself and Mrs, but maybe even better for the early 20’s kids who are in or very near 6-figure TFSAs after 3 and 4 years. Not a bad start. Also for the nephews/nieces, whose education accounts we helped fund with strong recommendation to their parents. Not all followed the TSLA suggestion. Haha.

Continually proving the Tesla-killers wrong. This might be the best. Such pure schadenfreudy satisfaction.

#19 Sagacity Sam on 01.22.22 at 12:40 pm

#5 Bill zufelt on 01.22.22 at 11:03 am

12% crash on the Dow on Monday roughly 4000 points.We’ll see how patient the new investors(newbies since March 2020)are when the panic sets in.Even 4000 points will still leave us up 6000 from 2 years ago so people really shouldn’t panic but human nature being what it is,this thing will overshoot on the downside and take the Dow to under 20,000

——————

Thank you so much Bill. Your contribution to the blog has not gone unnoticed. You are to be commended for your invaluable insights and priceless introspection.

Please tell us more.

#20 Doug Rowat on 01.22.22 at 12:49 pm

#8 MD on 01.22.22 at 11:21 am

For every one percent rise in benchmark rate the markets will drop by ten percent.

—-

Last tightening cycle (2015-19), the Fed raised 9 times and the S&P 500 gained 57%. The cycle before that (2004-07), the Fed raised 17 times and the S&P 500 gained 41%. In fact, the S&P 500 has advanced during 4 of the past 5 rate-hike cycles with an average gain of almost 30%.

Facts are so much better than gut feelings.

—Doug

#21 Bonds, James Bonds! on 01.22.22 at 12:51 pm

#13 Sail Away on 01.22.22 at 11:52 am
Well, there are few better hedges against uncertain returns than the $15k / per person / per year US Treasury Series I savings bonds, currently paying 7.12% and almost certainly increasing at next adjustment in May.

The whole Sail Away dynasty is knee deep in these.

————————–

Yes, these are golden…. But only for those that got in at precisely the right time. Not before; not after. A very specific window of opportunity. Seriously, who would have ploughed into these in any great quantity knowing they could have ended up being a real bad investment had inflation not come knocking?

Only in USA, you say… Pity!

#22 Ponzius Pilatus on 01.22.22 at 12:52 pm

#13 Sail Away on 01.22.22 at 11:52 am
Well, there are few better hedges against uncertain returns than the $15k / per person / per year US Treasury Series I savings bonds, currently paying 7.12% and almost certainly increasing at next adjustment in May.

The whole Sail Away dynasty is knee deep in these.
——————————
In the early 80S, when high inflation was reigning supreme, my father in law put all his money into 5 year fixed Canada Savings Bonds.
At 15% he did very well.

#23 Shawn on 01.22.22 at 12:52 pm

Capitalists – bash ’em or join ’em?

#141 SunShowers on 01.21.22 at 12:54 pm
#77 Shawn on 01.20.22 at 7:23 pm
“Our mission is clear, save and invest and become an owner, a capitalist.
No need to continue to be a victim.”

So, your solution to the mass exploitation of the working class is…more exploitation?

Also, what do you think an economy where everyone is a capitalist and nobody is a worker would look like? Capitalists can have all the fancy machines they want, but without anybody to operate them, they’re useless.

***********************************
Sunshowers, as you plot your own financial future, imagining that there are (or soon will be) no jobs and so striving to get a good job is futile, will not help you.

Take Linamar, it makes heavy use of robots in producing auto parts mostly in Canada but also elsewhere. It also offers great jobs.

If you or I buy some shares in Linamar from other investors that does not change the future for Linamar. It will be exist and be profitable whether you or I buy or not.

I certainly have no guilt in owning my share of the means of production that feeds and comforts people.

Might as well be me getting wealthier as opposed to someone else.

I have no guilt for being a stock owner (a capitalist).

This blog has “led you to water”. The next moves are up to you.

Contemplate this as you design your own future.

#24 Shawn on 01.22.22 at 12:55 pm

Growth versus Value

Some friends said, forget that slow boat to China approach and take a ForEx course instead and day-trade your way to wealth. Don’t bother working.

Thoughts? Horror stories?

#25 TurnerNation on 01.22.22 at 12:58 pm

– Ontariowe – The “Re-opening” aka Re-Closing Act (our leaders speak in tongues). Our globalist masters will allow some slim freedom in Feb yes. But the QR Code – the basis of the permanent and electronic global lockdowns – persists. Wait till the Fall when they will tighten the QR code thumbscrew a bit more.

Was I kidding when I wrote this:

#8 TurnerNation on 01.01.22 at 11:17 am
2022 schedule (Thanks to our sponsor, Fizer):
January: TFSA contribution; 3rd booster
March: RRSP contribution; 4th booster
June: 5th booster
September: 6th booster
December: 7th booster. Annual winter lockdown


Pay. Your. Taxes! Do your part.

https://tnc.news/2021/12/16/provinces-sacked-almost-10000-health-care-workers-over-vaccine-mandates/
“Provinces sacked almost 10,000 health care workers over vaccine mandates
By Cosmin Dzsurdzsa -December 16, 2021”

.US to close borders to unvaccinated Canadian, Mexican truckers on Saturday (freightwaves.com)

Old news. But strangely prophetic – 18 months ago.

https://wrenchinthegears.com/2020/07/24/introduction-to-the-fourth-industrial-revolution-the-covid-economic-reset/
“Introduction to the Fourth Industrial Revolution & The Covid Economic Reset – POSTED ON JULY 24, 2020”
“In mid-May 2020, Jason Bosch, documentary filmmaker and activist from Denver, came to Philadelphia to pick my brain about the things I’ve been researching for the past five years. He edited that footage into a series of five videos covering issues related to racialized technology, global finance, the Covid lockdowns, digital identity, and the rise of human capital data markets.”

#26 Ponzius Pilatus on 01.22.22 at 1:05 pm

24 Shawn on 01.22.22 at 12:55 pm
Growth versus Value

Some friends said, forget that slow boat to China approach and take a ForEx course instead and day-trade your way to wealth. Don’t bother working.

Thoughts? Horror stories?
——————-
Arbitraging?
Do they still have humans doing this in the age of Algos?
I worked for a Trust financial company.
They had a few whiz kids doing it with just a computer each in the basement.
You gotta have guts, or be crazy.

#27 Shawn on 01.22.22 at 1:12 pm

U.S. Treasuries 7.12% limited to $15k and U.S. citizens?

#21 Bonds, James Bonds! on 01.22.22 at 12:51 pm

Well, there are few better hedges against uncertain returns than the $15k / per person / per year US Treasury Series I savings bonds, currently paying 7.12% and almost certainly increasing at next adjustment in May.

****************
I have a sister who became a US citizen and lives in the US. Tell me more like how to buy.

I believe you or someone mentioned this before but other than on this blog I have never seen it mentioned.

#28 Dr V on 01.22.22 at 1:16 pm

“Therefore, for 2022, we’re swapping some growth for a
bit of value.”

Just a bit late here aren’t you Doug? And now you’re advocating active management?

Many bloggers here have noticed the overweight index
alottment to these high growth stocks. The problem
becomes what to do about it? Start buying sectors? How do you weight those in a changing world? How do you identify the next big thing?

All investment styles have their day – GARP, value,
sector rotation, momentum etc. But in the long term it
comes back to the index, which is doing it’s own rebalancing now. Would not the bearded one’s
recommended periodic re-balancing seen to the US out-performance, and taken out the guesswork?

While building my non-reg, I noticed my US index fund was outperforming other investments and stopped adding to it – a year and a half ago. Even after that, it still out-performed. So I sold a bit, now and then. Still have about 80% of it. I confess I’ve added to some actively managed funds that hold US stocks, but the index performance was obvious. I still see about 50% of all my investments as indexed. I like to call it “dumb growth”. I have been prepping for retirement so have tried adding more dividend yield to the mix. Some may
see that as a form of value management.

#29 Phylis on 01.22.22 at 1:22 pm

Cathy said her ark is in deep value at $85. Anyone care to get onboard? So what’s it in now?

#30 RG on 01.22.22 at 1:25 pm

Doug, I just read this is the Globe:

“There is a 15-per-cent withholding tax on U.S. dividends on U.S. stocks held in a TFSA… For RRSPs, “we recommend that they hold U.S. dollar-denominated funds listed on a U.S. exchange” because the dividends are not subject to withholding tax. Canadian-listed funds invested in U.S. securities have U.S. tax withheld on dividend distributions that cannot be recovered.”

I have never heard this– is this true? I hold a Canada-listed fund in my TFSA that invests in US stocks.

#31 Dr V on 01.22.22 at 1:30 pm

17 baloney – Thanks, worth checking out.

23 Shawn – good post.

Re: robots. I think I presented this in a previous post, but used china as a middleperson. I’ll take China out of the equation.

So is it better for a plant in Canada to eliminate 90 lower skilled (and lower paying) jobs while keeping 10 highly skilled jobs (even increasing this pay) by going automated so as to remain competitive in the world economy?

Should it be trickle up? Trickle down?

My answer – neither. Just trickle.

#32 same old song on 01.22.22 at 1:35 pm

with bitcoin on it’s way to $10K this quarter, expect lots more fallout in techland. ARKK will continue to get crushed. Michael Saylor will have effectively bankrupted his company, and Tesla will lose half it’s value.

it’s the same old song over and over but nobody learns.

re: #24 Shawn on 01.22.22 at 12:55 pm
you need commitment to trade. it can be done. you just have to be very clear what you are trying to accomplish and how. there are qualified people out there that will teach legitimate trading strategies and methodologies. but it’s basically a full time job, and to be treated as such.

#33 Sail Away on 01.22.22 at 1:35 pm

#27 Shawn on 01.22.22 at 1:12 pm
U.S. Treasuries 7.12% limited to $15k and U.S. citizens?

#21 Bonds, James Bonds! on 01.22.22 at 12:51 pm

Well, there are few better hedges against uncertain returns than the $15k / per person / per year US Treasury Series I savings bonds, currently paying 7.12% and almost certainly increasing at next adjustment in May.

———-

I have a sister who became a US citizen and lives in the US. Tell me more like how to buy.

I believe you or someone mentioned this before but other than on this blog I have never seen it mentioned.

———

Very simple. US citizens set up an online Treasury Direct account at:

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

…and fund it via transfer from a US bank. Done.

#34 Sail Away on 01.22.22 at 1:45 pm

#21 Bonds, James Bonds! on 01.22.22 at 12:51 pm
#13 Sail Away on 01.22.22 at 11:52 am

Well, there are few better hedges against uncertain returns than the $15k / per person / per year US Treasury Series I savings bonds, currently paying 7.12% and almost certainly increasing at next adjustment in May.

The whole Sail Away dynasty is knee deep in these.

———-

Yes, these are golden…. But only for those that got in at precisely the right time. Not before; not after. A very specific window of opportunity. Seriously, who would have ploughed into these in any great quantity knowing they could have ended up being a real bad investment had inflation not come knocking?

Only in USA, you say… Pity!

———-

Not really a timing thing since Series I always pays above the going rate, plus are cashable after 1 year. These are one of those very few ‘no-lose’ opportunities for fixed income. A benevolent offering from the US govt to their loyal patriots, if you will.

#35 Jake on 01.22.22 at 1:46 pm

I would title today’s blog to “The Throne Speech” haha. Elon has manipulated his stock, crypto and the markets on more than 1 occasion. Recently there was a release that Tesla signed a fleet deal with Hertz, the stock explodes and then a couple of days later Elon says nothing has been signed. How does he get away with this.

https://www.nytimes.com/2021/10/25/business/hertz-tesla-electric-vehicles.html#:~:text=Hertz%20said%20on%20Monday%20that,trillion%20for%20the%20first%20time.

https://www.cnbc.com/2021/11/02/elon-musk-says-tesla-has-not-signed-contract-with-hertz-yet.html

#36 leebow on 01.22.22 at 1:48 pm

#11 Stealth

#11 Stealth

Those exact two questions were the starting point for me.

I find that having the ability to incorporate market views and perform active management does indeed give the feeling of control and helps with emotions.

It’s hard to attribute performance to the specific components of the system. Active management via market views is an important part of my approach and I believe it directly contributed to the overall performance. Pleased to say that in calendar 2021 I was able to get about the same as S&P 500 with 1/2 volatility. No hot stuff or extreme bets, only a handful of ETFs and small infrequent model-driven adjustments.

I don’t know if I can do that in 2022 but I have reasons to be optimistic.

#37 Capt. Serious on 01.22.22 at 2:17 pm

@ #30 RG on 01.22.22 at 1:25 pm

Yes, it is true an ETF in the TFSA will see US withholding taxes. See:
https://www.pwlcapital.com/part-i-foreign-withholding-taxes-for-equity-etfs/

#38 Wrk.dover on 01.22.22 at 2:30 pm

#4 Dharma Bum on 01.22.22 at 9:24 am
Life Goals:
I pursue leisure. But not too much. My hours are between 11 am and 3 pm.

Other times I am usually in the process of sleeping, waking up, going to bed, watching movies and documentaries, drinking coffee, beer, or bourbon.
______________________________

Is that a four day/wk job or a full on seven.

And why is there no mention of the two hour lunch?

When can you squeeze in a nap without a break on that tight schedule?

#39 Søren Angst on 01.22.22 at 2:33 pm

#20 Doug Rowat

Well said. And a good argument to stay vested on top of what Garth said yesterday.

Trimming costs money. Selling into a down market. Ify to me.

Replace growth with value still entails uncertainty. Would require some hefty faith in future price for the value stock gains vs. growth losses.

Still some crystal ball Doug, then again, you have awesome resources at your disposal…that small guys like me do not.

————————

Better high dividend ETFs, ETNs. No growth stock, nor value bias.

Staying the course . Weighted average dividend yields for me that past few months:

12.5%, 9.3%*, 23.6%*, 13.9% & 18.1%.

*Timing thing when dividends received (e.g., Nov dividend received early Dec). Add the 2, divide by 2, 16.45% for those 2 months a good average of the dividend yield.

Mostly reinvested.

True, a Threadbare Portfolio but so far my high dividend yield safe ETFs (e.g., Nasdaq 100 – value, growth, in between stocks) to some risky ETNs (e.g., oil) strategy cushioning the current price swings.

Majority are US ETFs, ETNs. If Cdn ETFs they have to beat at least a 10% dividend yield or I will not buy them – I have a couple of Cdn ETFs.

Cash is King.

Banks don’t take % stock growth on deposit. They will accept dividend cash.

Don’t have to sell a single stock to keep cash flowing.

Nice sized dividend (to me, peanuts probably to most of you) coming due in a few days, going to buy into the down market with it (reinvest cheaply).

#40 Wrk.dover on 01.22.22 at 2:56 pm

#5 Bill zufelt on 01.22.22 at 11:03 am
12% crash on the Dow on Monday roughly 4000 points.We’ll see how patient the new investors(newbies since March 2020)are when the panic sets in
_____________________________

A real D&B portfolio for newbies must be balanced with a matching brain dead GIC collection, for those that aren’t holding 50% gain$ in the D&B yet, when markets have been this bubble gassed.

#41 Søren Angst on 01.22.22 at 2:58 pm

Never been big on the so called “growth” stocks.

For example past 12 month stock PRICE gains:

TSLA +11.5%
My Oil ETF +30%
My Oil ETN +8%

Difference:

Oil ETF pays quarterly dividends (not included in the above) of +8.5% annualized.
Oil ETN pays monthly dividends (–“–) of +25% annualized.

Beats the pants off of US 7.12% I Bonds.

While you wait for them to come due (cash them out before 5 years and you lose 3 months of interest, earliest cash out is 12 months), I reinvest the cash dividends monthly.

#42 Doug Rowat on 01.22.22 at 3:37 pm

#28 Dr V on 01.22.22 at 1:16 pm
“Therefore, for 2022, we’re swapping some growth for a
bit of value.”

Just a bit late here aren’t you Doug? And now you’re advocating active management?

—-

Cycles of outperformance and underperformance tend to persist. And we have exposure to value.

And Saturday posts are for the PMs. How do you think we earn our money if not through active portfolio and active risk management?

—Doug

#43 BillinBC on 01.22.22 at 3:40 pm

What a pleasure to read a financial blog and have the (almost) whole comment section sticking to the subject.

#44 crowdedelevatorfartz on 01.22.22 at 3:40 pm

@#9 paddy
“That toilet looks cold and unwelcoming…I’ll take a plastic seat over that any day….brrrr”

++++

You should go to Japan…

https://www.youtube.com/watch?v=oE0sddhCIdE

#45 I-bond, u-bond, we all bond! on 01.22.22 at 3:48 pm

#34 Sail Away on 01.22.22 at 1:45 pm
#21 Bonds, James Bonds! on 01.22.22 at 12:51 pm
#13 Sail Away on 01.22.22 at 11:52 am

Well, there are few better hedges against uncertain returns than the $15k / per person / per year US Treasury Series I savings bonds, currently paying 7.12% and almost certainly increasing at next adjustment in May.

The whole Sail Away dynasty is knee deep in these.

———-

Not really a timing thing since Series I always pays above the going rate, plus are cashable after 1 year. These are one of those very few ‘no-lose’ opportunities for fixed income. A benevolent offering from the US govt to their loyal patriots, if you will.

————–
Its been awhile since I looked at these, and i am not interested enough to look again because i am not eligible, but… If i remember correctly, it is based on the inflation rate difference between when you purchased an issue and what it is today. Purchasing new issues today will not be nearly as lucrative as some of the previous issues since inflation is already sky-high, unless it continues to increase. If you bought them at the sweet spot, then these things are amazing, no risk high income investments. But if i can only purchase $15K, its not even worth further consideration, even if i was eligible. Perhaps $300K would have at least captured my interest.

Besides, i had a similar Canadian investment that i just cashed in that paid twice that amount for several years. ( not government backed, but government funded). Worked out quite well and got all of my money back.

When opportunity knocks, open the door!

#46 MD on 01.22.22 at 3:56 pm

@20 Doug Rowat

Last two cycles of interest rate hikes did not come with inflation close to 7% and rising, debt at 130% of GDP and FED balance sheet at 8.5 trillion. This is not gut feeling but the current condition that market is about to experience and deal with so time will tell.

#47 Wise won on 01.22.22 at 3:59 pm

#41 Søren Angst on 01.22.22 at 2:58 pm
Never been big on the so called “growth” stocks.

For example past 12 month stock PRICE gains:

TSLA +11.5%
My Oil ETF +30%
My Oil ETN +8%

Difference:

Oil ETF pays quarterly dividends (not included in the above) of +8.5% annualized.
Oil ETN pays monthly dividends (–“–) of +25% annualized.

Beats the pants off of US 7.12% I Bonds.

While you wait for them to come due (cash them out before 5 years and you lose 3 months of interest, earliest cash out is 12 months), I reinvest the cash dividends monthly.

———-
Subtle difference… i-bonds are risk free, government backed and guaranteed!
You can’t compare the two. Its not always about returns… Except from those that have 20-20 hindsight.

This is an excellent investment for most people, providing you were fortunate enough to have chosen this series. They dont all pay this rate.

#48 Flop… on 01.22.22 at 4:01 pm

Here’s one of my posts from yesterday that the Blog Gods struck down

——————————————————-

Meatloaf.
What do I know about the guy?

I know a few of his hits, some of them pretty long for radio play back in the day.

He and actor Gary Busey appeared on a series of Donald Trumps Celebrity Apprentice and things got pretty fiery between the two a few times.

Being Half Australian, Meatloaf is known infamously for one thing though and that’s his performance 10 years ago at The Australian Rules Grand Final, that country’s version of The Super Bowl.

Many rate that performance as the worst Grand Final show ever, so much so the following artists and everyday Australians state when they don’t wanna stuff something up “ I don’t want to Meatloaf it.”

I wonder what will happen to this saying in Australia now that he has passed.

He once went on a ugly rant about that concert, not doubt a little embarrassed that things didn’t go his way, I think someone also said his throat was in terrible shape but wanted the payday.

He had this to say a few years later…

“Veteran US artist Meatloaf has taken to Facebook to apologise for comments he made directed at the AFL and its fans, regarding his highly scrutinised performance at the football code’s 2011 grand final. 

In an interview with Billboard a few weeks back, the 67-year-old singer slammed the AFL as “the cheapest people I’ve ever seen in my life,” however in the lengthy Facebook post he wrote that he was “truly sorry”.
“I have learned one lesson from now on no matter what happens or when it happens . there is only one person to blame and that is myself.”

While he hinted in that particular interview that he does want to return to Australia for a tour in the future, Meatloaf wrote that because Australia was the first country to break his acclaimed 1977 album Bat Out Of Hell, his actions were “extremely inappropriate”.

“I may never see you again and I can never repay what the people of Australia have given too me,” he wrote. 

“I betrayed your trust , I Apologize for any feelings that I have hurt, My behavior was extremely inappropriate, immature, and lacked the respect for the people of Australia and the Australian football league. Again, I am sorry for my actions and I hope that we can put this matter behind us.”

Here’s the 15 minute video of that performance.

https://www.dailymotion.com/video/xlgbzz

This is the bit where I normally crack a joke.

I would do anything for a laugh, but I won’t do that…

M47BC

#49 Flop… on 01.22.22 at 4:04 pm

I thought my tag line in my Meatloaf tribute post, where I normally attempt to say something funny was pretty good, when I said “I would do anything for a laugh, but I won’t do that.”

The Blog Gods disagreed, and struck the whole comments section down.

I knew I was on thin ice when Faron said I was the funniest guy on here.

Kiss of death on a career in comedy, that one.

As far as Today’s Robax Report, when Doug started talking about a throne, I thought he was offering up his opinion on this toilet spat between Charles and Andrew, some people call them prince’s, but I won’t bother.

“Throne a wobbly! Queen had to step in after Prince Andrew rowed with Charles about Royal TOILET
* A former Buckingham Palace maid said the Queen had to step in to resolve a row
* Janette McGowan said Prince Andrew and Prince Charles argued over a toilet
* She claimed that Andrew refused to move his toiletries from Charles’ bathroom
* The row, at Sandringham in 1999, was resolved when Queen stepped in, she said”

https://www.dailymail.co.uk/news/article-10429001/Queen-step-Prince-Andrew-rowed-Charles-Royal-TOILET.html

What else is going on, yeah, people are trying to cancel Australia Day again in late January, we escaped the English when they were arguing over who could use what toilet, and now we have to put up with someone else’s crap…

M47BC

#50 Concerned Citizen on 01.22.22 at 4:05 pm

I’d love to buy some value stocks, but the majority of so-called value stocks are very expensive on a historical basis too. Price to sales, price to book, price to free cash flow – you name it, “value” stocks are very expensive. And dividend yields are very low too, so you don’t get a lot of protection there. Yes, there are exceptions here and there.

The big growth names like MSFT and AAPL are multiple expansion stories moreso than growth stories. Sure, they’re strong/large moat companies that are growing. But does it make sense for AAPL – a $3 trillion market cap company – to have a forward P/E of 30, and trade for more than twice the price it did in late 2019? This commenter says no. Its historical P/E is roughly half that. Massive companies like AAPL make up a significant percentage of the S&P 500 total cap – if their valuations normalize, I expect the S&P 500 would fall significantly from here.

This past week illustrates just how much the perceived central bank put has warped everything, from stocks, to bonds, to housing, to crypto. Just the mere mention of quantitative tightening has sent “investors” (read: speculators) into a tizzy. Can you imagine if the central banks actually act, rather than just speak? We will probably have to imagine, because I’ve lost any faith I may once have had that the central banks will do their jobs and do what is required to limit inflation. In particular, I believe the Tiffster is either incompetent or more interested in politics than sound policymaking. Where there once was duty and competence, I now see institutional failure.

#51 miketheengineer on 01.22.22 at 4:35 pm

Garth et al:

What is the exposure of the average equity fund to these biotech companines. What happens when they suddenly drop like a rock?

https://www.forbes.com/sites/jonathanponciano/2022/01/21/moderna-stock-crash-intensifies-losses-top-130-billion-after-scientists-find-covid-boosters-arent-halting-omicron-infections/?sh=51ac5b03ef5c

#52 Stone on 01.22.22 at 4:57 pm

So growth stocks have had a rough start to the year, down almost 8%. One of the first changes we’ve made this year in our client portfolios is to trim growth and add to value. But keep in mind that all of the above is an argument for TRIMMING growth, not abandoning it entirely.

———

Sounds like a capitulation. If you had said rebalance, I would say sure, that makes sense. But trim? That has very different connotations.

How do you trim an S&P500 like VFV/XSP or a Total Market Index ETF VUN/XUU? Ultimately, the value component of those indexes will rise against a drop in the growth component. Not equally, I’m sure but that’s what rebalancing is for.

Right now, my B&D portfolio is -1.90% ytd. I understand the US component of the portfolio is currently down in the 8%+ range. So what? The fixed income component of the portfolio (VSB, MFT, ZPR) is doing what it should be doing blunting the blow and keeping the ship afloat. Same with the embedded value component of the various index ETFs that are comprised of various geographical areas of the world.

All I consider is rebalancing if it becomes necessary. It keeps me feeling relaxed and focused on what’s important: living. No one can predict the future.

Are you market timing? Don’t you advocate against that?

#53 miketheenginer on 01.22.22 at 5:15 pm

Garth et al:

There are alot of Meat Loaf vids out there. I like this one. There is a full orchestra, and it is recorded live, and the duet in the last 10 minutes was great.

RIP

https://www.youtube.com/watch?v=sM-Z8uc28sA

#54 Doug Rowat on 01.22.22 at 6:02 pm

#52 Stone on 01.22.22 at 4:57 pm
So growth stocks have had a rough start to the year, down almost 8%. One of the first changes we’ve made this year in our client portfolios is to trim growth and add to value. But keep in mind that all of the above is an argument for TRIMMING growth, not abandoning it entirely.

———

Sounds like a capitulation. If you had said rebalance, I would say sure, that makes sense. But trim? That has very different connotations.

—-

Sounds ominous. But when did we say we don’t actively manage?

—Doug

#55 Penny Henny on 01.22.22 at 6:18 pm

#52 Stone on 01.22.22 at 4:57 pm
Right now, my B&D portfolio is -1.90% ytd. I understand the US component of the portfolio is currently down in the 8%+ range.

/////////////

CDN blue chip dividend payers @ 4.3% YTD..

#56 espressobob on 01.22.22 at 6:21 pm

Retail investors worry too much. I was like that years ago, looking for an edge, maybe something that would produce a home run. Being a bit naive and gambling in commodity and sector plays along with individual stocks like I was smarter than Mr market. Wrong.

Today it’s more about diversification and maintaining those positions. Taking profit on the upside and buying the downside has proven profitable.

A cast iron stomach helps, whereas emotional timing usually results in a mess resulting in actualized losses. That’s nasty.

#57 cuke and tomato picker on 01.22.22 at 6:37 pm

Sail Away looks like he is sailing along just fine and has a following informing relatives and friends to a road of success. A great mentor. My son took delivery of a Tesla
at the end of October I think he had to wait about 3 months from time of purchase. So far very very happy.

#58 conan on 01.22.22 at 7:18 pm

Least it was the big dawg losing the comments. Not sure I have seen Garth angry before.

#59 Stone on 01.22.22 at 7:26 pm

#54 Doug Rowat on 01.22.22 at 6:02 pm
#52 Stone on 01.22.22 at 4:57 pm
So growth stocks have had a rough start to the year, down almost 8%. One of the first changes we’ve made this year in our client portfolios is to trim growth and add to value. But keep in mind that all of the above is an argument for TRIMMING growth, not abandoning it entirely.

———

Sounds like a capitulation. If you had said rebalance, I would say sure, that makes sense. But trim? That has very different connotations.

—-

Sounds ominous. But when did we say we don’t actively manage?

—Doug

———

I read on a certain blog that active management underperforms the indexes. Also, that dead people’s portfolios outperform active management.

Just sharing what I read on a certain blog. I found it to be useful advice. The less I play with my portfolio, the better the returns. 2021: 21.70%. 2020: 11.15%.

How do you hire a dead person to manage your money? Good help (the dead kind) sure is hard to find.

My piece of advice and observation. Don’t fiddle with the equity component of a B&D portfolio. It’s the fixed income component that should be diddled with depending on where the yield curve lies.

#60 R on 01.22.22 at 7:40 pm

2022 will be the break out year for Tesla.So far ,it has been languishing. Giga Texas & Giga Berlin will start production. Giga China will increase production to close to 1 million /year and CATL battery production is gearing up to match . FSD is already $12,000 and could be $15,000 by years end. Gross Margins are increasing and production is close to doubling.( I think 1.7 million units for 2022 up from 900,00 in 2021). Elon can tweet from anywhere he wants . BTW, Tesla is his hobby, reusable rocketry is his day job.

#61 Catalyst on 01.22.22 at 8:29 pm

What is your definition of growth/value? Is google a growth or value stock?

#62 the Jaguar on 01.22.22 at 8:32 pm

All this investment talk . Seems a bit ‘micro versus macro’ to my ear, but I only a Jaguar.

Following the tracks on the landscape, in the snow, broken branches, etc. The usual wildlife detective stuff. That’s my beat.

Every indication points to ‘systemic risk’, ‘moral hazard’, and the usual suspects. The big head scratcher will be why the lessons of 2008-2009 did not fully sink in. Lordy, lordy miss Claudie……

Oversight will be the usual suspect, rounded up for interrogation and water boarding, but on close examination the reality will present facts too ‘impolitic’ to release for public consumption. What to do, what to do……………………..

Rejoice in the small victories, of course. Like this one:
Betty White challenge $875K fundraiser astounds Alberta animal rescues! – Global News

That and follow your own true north. Maybe sing along to this tune on your way………. The Jaguar’s favourite .

https://www.youtube.com/watch?v=OqH7VwpSwBo

It never gets old. We don’t have to either if we don’t feel like it………….

#63 Stone on 01.22.22 at 9:13 pm

#55 Penny Henny on 01.22.22 at 6:18 pm
#52 Stone on 01.22.22 at 4:57 pm
Right now, my B&D portfolio is -1.90% ytd. I understand the US component of the portfolio is currently down in the 8%+ range.

/////////////

CDN blue chip dividend payers @ 4.3% YTD..

———

That’s nice. You don’t have a balanced or globally diversified investment portfolio though. Apples to oranges. I’ve already pointed it out and so has our host. I also remember your prior year returns where you underperformed (you were lucky in 2021) and you cried about it here.

#64 crowdedelevatorfartz on 01.22.22 at 9:18 pm

@#12 Ray Skunk
“are still leagues ahead of the decisions Trudeau’s PMO take weeks or months to make.”
+++

I believe those decisions are called ” baby potatoes”

#65 cramar on 01.22.22 at 9:27 pm

The blog ate the comments…new twist on an old theme.

#66 Stone on 01.22.22 at 9:32 pm

#40 Parksville Prankster on 01.21.22 at 4:49 pm
It would seem that the most successful investors use
the strategy of laziness bordering on sloth. Portfolios
seem to be like a bar of soap; the more you touch them
and fiddle with them, the smaller they get. Set it up
properly, rebalance when it goes outta whack once
every year or two, and the rest of the time, scratch your
hairy belly.

———

Yesterday, I took a screenshot of this comment because I thought it was really well stated. I’m happy that I did considering an internet whale ate Garth’s comment section yesterday.

Who doesn’t like slothing? And now I can equate bars of soap with investment portfolios. Totally relevant to today’s blog topic.

#67 Stealth on 01.22.22 at 9:32 pm

#36 leebow on 01.22.22 at 1:48 pm

========================
Thank you, your answer makes sense I can see how it helped you personally to manage emotions.

#42 Doug Rowat on 01.22.22 at 3:37 pm

===========================
Doug, you folks provide much higher value to your clients than active management, tilting etc.

For example, in millionaire next door, a paw (prodigious accumulator of wealth) spends at least 10h per month on financial planning , plus learning curve. That is more than 120h per year at minimum plus emotional management and access to advice breadth you can never learn.

So applying a reasonable hourly rate on 120h ++ gets you to a fair number of 1% out of say portfolio of 1MM which is 10k.

Thank you

#68 The Woosh on 01.22.22 at 9:39 pm

#54 Doug Rowat on 01.22.22 at 6:02 pm
#52 Stone on 01.22.22 at 4:57 pm
So growth stocks have had a rough start to the year, down almost 8%. One of the first changes we’ve made this year in our client portfolios is to trim growth and add to value. But keep in mind that all of the above is an argument for TRIMMING growth, not abandoning it entirely.

———

Sounds like a capitulation. If you had said rebalance, I would say sure, that makes sense. But trim? That has very different connotations.

—-

Sounds ominous. But when did we say we don’t actively manage?

—Doug

——————————————

0ne says market timing while the other quips active management. I say pota”i”to…you say pot”a”to. All the same in the end. And if that growth to value was “actively managed” within the last 2-3weeks….Lucy…you got some ‘splaining to do!

#69 Ponzius Pilatus on 01.22.22 at 9:43 pm

61 Catalyst on 01.22.22 at 8:29 pm
What is your definition of growth/value? Is google a growth or value stock?
—————
Good Question.
Just ask yourself what would happen to your life if Google would just vanish?

#70 crowdedelevatorfartz on 01.22.22 at 9:43 pm

Stumbling into war…

https://vancouver.citynews.ca/video/2022/01/22/lethal-u-s-military-aid-arrives-in-ukraine-as-threat-of-war-looms/

#71 fishman on 01.23.22 at 12:08 am

Never bet against the Yanks. I get that. Still, we pick our heroes on emotion, not logic. Putin’s picked up the torch dropped by our beloved Trumpster. Holding high (as high as a short man can hold a torch) against the darkness. Against the gloominess of Liberal Hegemony dressed up in inalienable human rights crossed with maximum individual freedom. Happy, Happy if we all cross that sulphur river into the sewer land of BIPOC, DIE, LGBQXYZ 1/2Trans, PC, CRT. All clones of little Maoists waving their little red books.
Putin isn’t bluffing. Brandon’s backed himself in a corner. Could be war. What happens if the Yanks counter with maximum financial punishment & it doesn’t hold, loses air? A flat tire. But its only flat on one side says Brandon. Faintly, I hear distant strains of that old classic “Its only a paper moon”. Wait, the words are: : : “Its only a paper tiger”

#72 Wrk.dover on 01.23.22 at 6:04 am

This is my first invested during a plunge rodeo.

If I have an open sell order twenty cents below closing bell, and it re-opens a dollar lower, did I just lose eighty cents in the wash?

If so, that sounds brutal in multiples of price and volume of shares.

#73 Margin Call on 01.23.22 at 6:07 am

Dear Client,

Your account has insuffucient funds, therefore we have sold your TESLA stock for you.

Regards,
Da Big Bank.

#74 crowdedelevatorfartz on 01.23.22 at 9:52 am

@#69 Ponzie’s Predicament
“Just ask yourself what would happen to your life if Google would just vanish?”

++++

We wouldnt be able to confirm you’re usually wrong?
:)

#75 Penny Henny on 01.23.22 at 10:22 am

#63 Stone on 01.22.22 at 9:13 pm

That’s nice. You don’t have a balanced or globally diversified investment portfolio though. Apples to oranges. I’ve already pointed it out and so has our host. I also remember your prior year returns where you underperformed (you were lucky in 2021) and you cried about it here.

/////////////

I’ll put my last three years returns against yours any day of the week.

#76 Ponzius Pilatus on 01.23.22 at 10:59 am

#71 fishman on 01.23.22 at 12:08 am
Never bet against the Yanks. I get that. Still, we pick our heroes on emotion, not logic. Putin’s picked up the torch dropped by our beloved Trumpster. Holding high (as high as a short man can hold a torch) against the darkness. Against the gloominess of Liberal Hegemony dressed up in inalienable human rights crossed with maximum individual freedom. Happy, Happy if we all cross that sulphur river into the sewer land of BIPOC, DIE, LGBQXYZ 1/2Trans, PC, CRT. All clones of little Maoists waving their little red books.
Putin isn’t bluffing. Brandon’s backed himself in a corner. Could be war. What happens if the Yanks counter with maximum financial punishment & it doesn’t hold, loses air? A flat tire. But its only flat on one side says Brandon. Faintly, I hear distant strains of that old classic “Its only a paper moon”. Wait, the words are: : : “Its only a paper tiger”
—————————
I read this while watching the trailer of Apocalypse Now.
“This is the end, my only friend, the end”
Col. Kurtz: The Horror, The Horror

#77 the Jaguar on 01.23.22 at 11:03 am

@71 Fishman

https://thesaker.is/a-short-term-geopolitical-forecast/

#78 T-Man on 01.23.22 at 11:10 am

Musk makes number 2 and manipulates share prices. His fawning admirers swoon. These sycophants will be first in line for musk brain chips. Pathetic.

#79 Stone on 01.23.22 at 11:18 am

#67 Stealth on 01.22.22 at 9:32 pm
#36 leebow on 01.22.22 at 1:48 pm

========================
Thank you, your answer makes sense I can see how it helped you personally to manage emotions.

#42 Doug Rowat on 01.22.22 at 3:37 pm

===========================
Doug, you folks provide much higher value to your clients than active management, tilting etc.

For example, in millionaire next door, a paw (prodigious accumulator of wealth) spends at least 10h per month on financial planning , plus learning curve. That is more than 120h per year at minimum plus emotional management and access to advice breadth you can never learn.

So applying a reasonable hourly rate on 120h ++ gets you to a fair number of 1% out of say portfolio of 1MM which is 10k.

Thank you

———

You must have missed something when you read The Millionaire Next Door. A PAW typically does not delegate the accumulation of knowledge to someone else. They do pay (within reason) to accrue new knowledge though. Decision making is based on the acquisition of that knowledge.

The way you’ve presented it above, you are describing the relationship that exists between an ignorant customer and [email protected] who flogs HISAs, GICs, and high fee mutual funds. Or the relationship between a realtor and home buyer/seller. Or the car dealership and an automobile purchaser.

120 hours/year is inconsequential compared to the unlimited benefits that knowledge acquisition provides.

You make knowledge acquisition sound like a chore. That’s pretty sad.

#80 Brian on 01.23.22 at 11:33 am

Check out the webcams at the border crossings. No trucks to be found. Stop up on foodstuffs!

https://511on.ca/map#:Alerts

#81 Doug Rowat on 01.23.22 at 11:39 am

#68 The Woosh on 01.22.22 at 9:39 pm

——————————————

0ne says market timing while the other quips active management. I say pota”i”to…you say pot”a”to. All the same in the end.

—-

The failure of active management often comes down to excessive fees.

But on a related note, when’s the last time your mutual fund manager called you up to give you advice on renting or leasing a car, funding a child’s education, proper use of a TFSA, planning a retirement, or simply calming nerves during choppy markets?

—Doug

#82 Shaggy on 01.23.22 at 12:13 pm

#72 Wrk.dover

This is my first invested during a plunge rodeo.

If I have an open sell order twenty cents below closing bell, and it re-opens a dollar lower, did I just lose eighty cents in the wash?

If so, that sounds brutal in multiples of price and volume of shares.

———————————————————————————————–

Suggest that you familiarize yourself with the difference between a market and a limit order, and you might want to take a look at how stop loss and stop limit orders work while you’re at it.

Sounds like you’re talking about placing a limit order after the close of the day’s trading. If you set the limit (i.e. $0.20 below the previous days closing price) and the stock opens lower than that, , your order won’t be filled unless the stock moves up to your limit price during the day. However, if you place a market order, you will be filled at whatever price the stock opens up at the next day (i.e. your example of oping $1 below the previous day’s closing price). Stop losses and stop limit orders are also good options if you want to protect on the downside, but won’t accept just any price.

And for the record, this is nowhere near a “plunge”. Spending a few hours reading some historical blog posts might give you a better perspective and prevent you from making some knee-jerk decisions that cost you in the long run.

#83 Dr V on 01.23.22 at 12:55 pm

42 Doug

“How do you think we earn our money if not through
active portfolio and active risk management?”
———

Of course. But a mix of broad-based index funds has always been this blog’s recommendation.

Trimming growth to add to value implies you actually have a way to define and separate the two. I believe this
is at least partially done by the indexes themselves and then also by re-balancing between the indexes.

#84 conan on 01.23.22 at 1:42 pm

Until Putin sends the hospital brigades to the front lines he is not attacking. They do have a nuclear brigade though. These are the new micro nukes. Not used on people or cities, instead they use them to alter geography. To create a path through natural obstacles such that the defender has to be doubly alert.

#85 Stone on 01.23.22 at 1:55 pm

#75 Penny Henny on 01.23.22 at 10:22 am
#63 Stone on 01.22.22 at 9:13 pm

That’s nice. You don’t have a balanced or globally diversified investment portfolio though. Apples to oranges. I’ve already pointed it out and so has our host. I also remember your prior year returns where you underperformed (you were lucky in 2021) and you cried about it here.

/////////////

I’ll put my last three years returns against yours any day of the week.

———

Oh Penny, I already know your returns. It’s why it’s so easy to laugh at you.

#86 Shawn on 01.23.22 at 2:02 pm

U.S. Social Security

From a Motley Fool article on Yahoo Finance

In 2022, the maximum monthly Social Security benefit is $4,194 per month. For retirees receiving closer to the average monthly benefit of $1,657 per month, a Social Security check that produces a whopping $50,328 in annual income may seem extremely generous.

In order to receive so much monthly Social Security income, you’d have to claim your benefits at 70, while most people start them sooner. You’d also need to earn an income equal to or exceeding the wage base limit in at least 35 years of your career.

The wage base limit is the maximum amount of earnings subject to Social Security tax and counted when benefits are calculated, which is $147,000 in 2022. And although it changes each year, it’s always the inflation-adjusted equivalent of that amount.

In other words, only very high earners are going to get a $4,194 Social Security benefit. This group of retirees is unlikely to be able to live on $50,328 in annual income. And while the monthly amount they’re receiving might seem generous, they’ll actually end up getting less money relative to their prior earnings than retirees whose checks are much smaller.

Higher earners don’t get as much value from Social Security as lower-earning workers do, even though their monthly benefit is bigger. That’s because Social Security is a progressive program. Retirees get benefits equaling:

90% of average earnings up to a certain income level.
32% of average earnings between that first income level and a second higher threshold.
15% of average earnings above that second threshold.

**********************
It seems no matter how much people get, some or most complain it is not enough.

It was not clear from this article if contributions also decline at higher income levels.

No doubt Social Security is higher than CPP but we also have to add in OAS and GIS. And we should be proud that CPP is funded by contributions and the money is invested wisely and professionally whereas Social Security is notionally invested in U.S. treasuries only, as I understand it and in fact there is no actual pool of investments.

#87 T-Man on 01.23.22 at 2:11 pm

Musk worshippers would stand in line to wipe him, if given the opportunity.

#88 Stone on 01.23.22 at 2:29 pm

#81 Doug Rowat on 01.23.22 at 11:39 am
#68 The Woosh on 01.22.22 at 9:39 pm

——————————————

0ne says market timing while the other quips active management. I say pota”i”to…you say pot”a”to. All the same in the end.

—-

The failure of active management often comes down to excessive fees.

But on a related note, when’s the last time your mutual fund manager called you up to give you advice on renting or leasing a car, funding a child’s education, proper use of a TFSA, planning a retirement, or simply calming nerves during choppy markets?

—Doug

———

Could you let Cathie Wood know ARKK is a failed one trick pony because of excessive fees?

All along, I just thought she was a gambler.

#89 All lies and manipulated u decide on 01.23.22 at 2:43 pm

Saloway
TSLA is a bubble and people are beyond irrational with some of these darlings for some time.. TSLA bonds are junk status. (market cap more that Toyota lol)
Lucky you bought early. Chart looks like a topping pattern to me. 1250 top now 950.
When I get a big win I take profits and hit my mortgages. Now 7 figures in RE mortgages all gone. Sleep like a baby :-)