When the dust settles

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DOUG  By Guest Blogger Doug Rowat
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The largest military invasion of a European country since WW II. An ever-growing humanitarian crisis. Immediate and severe sanctions against Russia from the most economically powerful nations in the world. Putin putting his nuclear arsenal on the highest alert as retaliation.

All of this can only mean one thing: requests from clients to move their portfolios entirely to cash.

Therefore it’s time again to review why such decisions are terrible.

1. First, are you correctly assessing overall global risks (risks, incidentally, that we simply have to live with and still continue investing) or just over-emphasizing what’s presently in the news? In other words, are you succumbing to availability bias? Over the past several decades, for instance, there have been many dangerous conflicts at the India-Pakistan border, including localized insurgencies and the shooting down of warplanes (one incident occurring as recently as 2019). Both of these countries rank in the top 10 of global military powers and have nuclear weapons. However, because these conflicts get little North American media attention as they don’t directly impact Western interests, nobody talks about them, but this rivalry remains a major geopolitical risk. But the number of our clients who have requested to go to cash over the years because of flare ups between India and Pakistan? Zero.

2. Second, is your decision reasonable relative to the range of outcomes? Moving a portfolio to 100% cash implies that you have perfect insight into what will happen next (markets will move lower). But you don’t. You have no idea what goes on inside the Kremlin or inside the mind of Putin. Maybe he’ll overtake Ukraine entirely and then move aggressively into bordering NATO-backed countries. Or maybe he’ll only claim a piece of Ukraine then withdraw after assessing the mounting economic downside. Who knows? But to take a portfolio to 100% cash implies that you have perfect clarity regarding how markets will react or what Russia will do next. Again, you don’t. Why make certain investment wagers based on uncertain outcomes? Such mistakes were common during the early months of the Covid crisis: “The global economy will be destroyed”, “markets will take years to recover”, etc. All such conclusions were emotion based and they burned investors badly. (As an aside, there will also be, in all likelihood, major tax consequences resulting from liquidating a portfolio, particularly the equity component.)

3. Finally, what’s your market re-entry strategy? If you raise cash you then have to decide when to reinvest and your timing will probably be incorrect. A common refrain is that you’ll get back into the market “when the dust settles”—the four most performance-damaging words in the history of investing. When the dust settles is actually code for “when I personally feel better in the pit of my stomach”, but by the time you “feel better” the market will have already rallied. Look how fast markets rebounded in 2020 during the Covid crisis. No one “felt better” in 2020. There were no vaccines, deaths and hospitalizations ran rampant, the global economy sat in recession (and we sat in our homes), the government response was often chaotic and contradictory…and yet markets soared. How you feel emotionally is never useful when making investment decisions.

So, is there an indicator that can be relied upon to offer guidance for when you’re probably making an emotional (and hence incorrect) investment decision? In fact, there is: The American Association of Individual Investors (AAII) Sentiment Survey.

The AAII each week asks individual investors whether they feel the direction of the market over the next six months will be up, no change or down. Essentially, the survey measures the mood of regular folks and, not surprisingly, at the extremes, it’s a pretty reliable contrary indicator. In fact, when bearish readings hit the levels that they’re at presently, it’s actually a positive sign for markets. Since 1990, bearish AAII readings this high have subsequently resulted in 18% average returns for the S&P 500 in the following 12 months.

I don’t highlight the AAII data to suggest that it be used as a market-timing tool—it’s not infallible—but I do suggest allowing it to be a check on your emotional impulses. If your bearish personal feelings about the market align with those of AAII respondents, well, it’s a pretty good warning that ‘going to cash’ would be a poor decision. Here’s where AAII sentiment currently stands:

AAII Sentiment Survey

Source: AAII; results as of February 28, 2022

Your best bet? Stay balanced and diversified. It’s recognition that market outcomes are never certain. Going entirely to cash may be tempting as we gaze at the horrors on the nightly news, but it’s virtually always the incorrect investment decision.

Tragically, Putin may get the better of Ukraine, but don’t let him get the better of your portfolio as well.

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

 

114 comments ↓

#1 Big Bucks on 03.05.22 at 10:43 am

The next 2 years proves to be the most challenging in history.Wherever you try and hide will be rough so best just keep some emergency cash on hand and ride out what will be a very tough period—especially for countries in debt up to their eye balls(ie Canada)All the best because we’re really gonna need it.

#2 VladTor on 03.05.22 at 10:50 am

DELETED

#3 Baba Novac on 03.05.22 at 10:53 am

Thanks, Doug. Another thought-provoking post; and the AAII is a new one for me.

What’s your take on the opposite side of the coin: invest more (buy low) when AAII is particularly bearish? (or, more objectively, when the market and/or a specific-market ETF is in correction by xy%)

This is often what I struggle with during such panicky events: is it enough of a correction to supplement a certain ETF with some leveraged funds? (that are not ‘on margin’ and can wait for years to be paid back, like via a low % draw HELOC; with deductible interest meanwhile)

Thoughts (on this opposite conundrum)?

#4 neptunian on 03.05.22 at 10:57 am

stay balanced and diversified and keep invested. cash will be eaten by inflation.

#5 Wolf of Bay St on 03.05.22 at 11:02 am

For those selling, I’ll be there waiting on the bid. Eating their lunch. Again.

#6 Get Out More on 03.05.22 at 11:07 am

#65 Ponzius Pilatus on 03.04.22 at 7:11 pm
Interesting:
The Jews in Odessa, among them Holocaust survivors, are taking their children to safety – To Germany.

==============================

How is it “interesting”?

Maybe to someone who’s last visit to Germany was in the 1940’s, but things have changed a bit since then.

Take your outdated prejudices and shove ‘em where the sun don’t shine. Sheesh.

#7 pPrasseur on 03.05.22 at 11:18 am

Asset class diversification is overrated, what really matters is the quality of the assets you own and their intrinsic value.

My biggest position (besides cash) is, by far, BRK, Berkshire Hathaway, the company created by Warren Buffet.

BTW BRK has about 150 billions in cash, think they will be in good position to profit from the coming recession…

Beats government bonds don’t you think!

#8 Sail Away on 03.05.22 at 11:24 am

Patience. A hunter’s mentality is helpful when investing:

1. Go where there is evidence of game, not where you wish it was
2. Carefully identify patterns of movement over seasons, years, major events
3. In emergencies, the game will vanish… but will always return unless there is a fundamental change- like a new subdivision
4. Move slowly and infrequently, don’t silhouette yourself, watch and listen
5. Act decisively when the opportunity presents. Otherwise don’t act; become one with the tree.

#9 pPrasseur on 03.05.22 at 11:26 am

If you raise cash you then have to decide when to reinvest and your timing will probably be incorrect.

True. I raised quite of bit of cash during the past few year, but that is spending money that will not re-enter, also to avoid worrying about having to pull money from potential crashing markets. I realize inflation will eat some of that but frankly the peace of mind is well worth it.

#10 VladTor on 03.05.22 at 11:30 am

International investors may lose $170 billion in Russian assets as a result of Russia’s special operation in Ukraine. This was reported on Friday by the Financial Times newspaper.

Such assets are owned, according to the publication at the end of 2021, by a large group of global investors-from pension funds to hedge funds, as well as state investment funds.

https://www.ft.com/content/dca77dfb-f5a8-4e99-a53f-a2778d115410

#11 Flop… on 03.05.22 at 11:30 am

Finally got around to making this years contribution to my TFSA, growth fund, nothing sexy.

Still got a little bit of room left if things go further south.

Moved 5k I somehow had sitting in a HISA earlier this year, so that is one less charge I will have to answer to at this blogs Portfolio Tribunal later this year.

For some reason I usually try to make the contributions at the end of January, not right at the start of the year, maybe just trying to cheat a little and see how the year is shaping up, dunno, the main thing is the money goes in, and stays in.

This blog does some good work, I’ve been trying to get Mrs Flop a bit more interested in financial matters, I am a poor teacher, but I can regurgitate with the best of them.

It’s not that she wasn’t financially responsible when we first met, she was saving, investing hard in her RRSP, and living within her means, it’s not like I’m going to stop travelling the world and get married after a six month courtship to some credit card bimbo, what do you take me for crazy?

Anyway, the other day she texted me, what does she want me to know about Kim Kardashian now I wondered?

I was wrong, she actually messaged me telling me that the bank of Canada had raised its rate, that was a shock, who are you, and what have you done to my wife, is what I was going to text back.

Perhaps even more surprising, instead of moaning about not going away for Spring Break, she has been talking about moving some money around to be more efficient for the next downturn in whatever I decide to do with her TFSA.

Mine is more pedestrian, lagging hers, which is more cowgirl with segment plays all over the place, precious metals, energy funds, REIT’s, banks, not really by design, just that she only wanted to do it through her financial institution so I played the hand they gave me and buy on the dips.

Works better than my system, at present, if it all blows up I take my 50% of the remnants plus my 50% management fee that I snuck into the fine print in divorce court…

M47BC

#12 Søren Angst on 03.05.22 at 11:31 am

Stayed vested and good advice Doug.

——————–

But, here’s the deal.

You live in Gainsborough Pastoral Canada.

I live next to an American Airforce Base, Aviano (10 km away), with its fair share of:

40 [Fourty] B61 nuclear bombs

https://www.icanw.org/italy#:~:text=The%20Italian%20air%20force%20is,endorsement%20of%20various%20alliance%20statements.

and I woke up this morning to read one of the local rags “Messaggero Veneto” article titled:

War in Ukraine, what if there was a nuclear attack on the US base in Aviano? “The dead would be more than 234 thousand”

https://messaggeroveneto.gelocal.it/udine/cronaca/2022/03/04/news/guerra-in-ucraina-e-se-ci-fosse-un-attacco-nucleare-alla-base-usa-di-aviano-i-morti-sarebbero-piu-di-234-mila-1.41274660

And speaking of WHEN THE DUST SETTLES they show nuclear fallout in one of the maps in the article.

——————–

At least your sentiment survey is by Americans that also have nukes.

#13 VladTor on 03.05.22 at 11:33 am

Putin signed a decree on special economic measures in connection with unfriendly actions of the West

The main thing:

▪️ obliges exporters to sell 80% of foreign currency earnings credited from January 1, 2022, and sell 80% of its earnings from February 28

▪️ banned Russians and Russian companies from transferring foreign currency to repay loans and crediting foreign currency to their accounts abroad

▪️ allowed companies to buy back their shares from the market if a number of conditions are met, one of them is the collapse of the price on the exchange by 20% or more (the weighted average price for any three months from February 1 to this price for the three months from January 1, 2021)

▪️ allowed Russians to open bank accounts without personal presence if necessary to change the bank

The impact is very strong on the West and on the dollar exchange rate. The dollar will go down tomorrow. As far as we’ll see.

. Plus, there are problems with importing goods from the EU.

There is no tourism. This will also reduce the demand for the currency.

UPD The ban on providing foreign currency loans to non-residents applies only to new loans, and not to servicing current debt, the Central Bank of the Russian Federation said

#14 VladTor on 03.05.22 at 11:40 am

Russia – The Ministry of Industry and Trade recommended suspending the export of fertilizers
The ministry said that farmers in Europe and other countries cannot receive fertilizers due to sabotage of supplies by foreign companies.

‘Taking into account the current situation with the work of foreign logistics operators and the risks associated with it, the Ministry of Industry and Trade of Russia was forced to recommend that Russian producers temporarily suspend the shipment of Russian fertilizers for export until the carriers resume regular work and provide guarantees for the implementation of export deliveries of Russian fertilizers in full,’ the ministry notes.

For the EU and the US, Russia’s share in fertilizer imports is 11-12%.

#15 TurnerNation on 03.05.22 at 11:42 am

3-4 people co-signing a house? Gartho sez don’t by property with people you do not share a bed with. Or something like this. Here is a bed for them.
https://www.maxtrixkids.com/blogs/inspo/best-selling-stacked-triple-bunk-beds

— Control over Travel, and Feeding? Yep. Food shipped using diesel fuel.

https://tnc.news/2022/03/04/carbon-tax-going-up-on-april-1-despite-record-gas-prices/
Carbon tax going up on April 1 despite record gas prices


-Get to know the concept of Energy Poverty. What our rulers want for us. Hey we are less likely to protest if we are tired from working, distracted via screens and fed 24/7 traumatic news right?
The plan was sold to us in the 60s: “Turn on, tune in, drop out”

— Prediction for the Fall. The Russian situation will move out of the news, the global goals having been achieved. Stuff like the bankrupting/re-making of nations.
FACT: every skirmish (Syria, Afghanistan, Ukraine) results in massive forced immigration/fleeing into the Former First World Countries.
“Covid” controls over humans will be bought back (unlimited power is…unlimited).
Why? Digital ID. Ontario’s drops in late 2022. And elsewhere.

https://digital-strategy.ec.europa.eu/en/news/european-digital-identity-online-consultation-platform-european-digital-identity-wallets
Publication 24 February 2022
European Digital Identity: Online consultation platform on European Digital Identity Wallets

– 2020 it was all planned out for that year. Old System was shut down in March 2020. Hey are we back to normal yet???? The QR code is part of it. https://id2020.org/

#16 willworkforpickles on 03.05.22 at 11:46 am

Money is going to continue to be created out of the blue adding to the debt and used to keep the whining shaking, knocking and banging market and economy engine going.
The market has soared entirely due to massive debt creation and could at the very least, putter along a little while longer with a great deal more of it.
Forget tiny interest rate increases coupled with endless debt creation anyway regardless of the lies to cut back. That’s like feeding a terminal cancer patient dying from radiation poisoning more radiation and giving him an aspirin. Inflation is only going one way at anyway. Higher.

#17 Søren Angst on 03.05.22 at 11:53 am

Again, I’m taking your advice and staying vested BUT weekly I check out the US 2, 10 yr bond spread.

After your article a ways back I had projected April 28th is when, if the then data continued, the spread ought to be 0.

Well this morning I see it’s…well, look for yourself (Hint: nose dive, face plant).

https://fred.stlouisfed.org/series/T10Y2Y

0.21

Mind you, an economic downturn better than getting nuked.

There’s always a bright side, you just have to look for it.

——————-

“Initial Sweep” Italia seizes Oligarch yachts, villas, wealth etc., €140M worth:

https://www.reuters.com/world/europe/italy-seizes-oligarchs-villas-yachts-initial-sweep-2022-03-05/

Meanwhile tough talk Canada still making lists, “moving against Russian business elites”:

https://www.ctvnews.ca/video?clipId=2395154&jwsource=twi

Italia. Making that bullseye on Aviano all that more compelling.

#18 Momentum is not market timing on 03.05.22 at 12:47 pm

“ what’s your market re-entry strategy?” Time-series momentum.

#19 Robert Ash on 03.05.22 at 12:58 pm

An Appropriate Song for these times, the Hopium extends to just about everything, today… Misguided Leaders and the seduction of Media attention, and False Prophets…

https://www.youtube.com/watch?v=BGBM5vWiBLo

#20 Søren Angst on 03.05.22 at 1:00 pm

#13 VladTor

Your first bullet basically, and per Russian business people, is robbing them to pay Putin for his war.

Russia per capita GDP is 57th just after Croatia and Kazakhstan.

And it’s going so well there, here read actual business news by Russians in Russia, Moscow to be precise:

https://www.themoscowtimes.com/business

and peruse how well it’s going.

And as for your words

“The impact is very strong on the West and on the dollar exchange rate. The dollar will go down tomorrow.”

All I can say to you is:

Lay off the Putin Percocet.

#21 Doug Rowat on 03.05.22 at 1:03 pm

#7 pPrasseur on 03.05.22 at 11:18 am
Asset class diversification is overrated, what really matters is the quality of the assets you own and their intrinsic value.

My biggest position (besides cash) is, by far, BRK, Berkshire Hathaway, the company created by Warren Buffet.

BTW BRK has about 150 billions in cash, think they will be in good position to profit from the coming recession…

—-

Cash isn’t a quality asset, it’s an unproductive one. And recessions are always coming. If it doesn’t happen for, say, five years what use has your cash been?

And thank you for enlightening us on Buffett’s (2 ‘t’s btw) relationship to Berkshire. A little known fact, apparently.

—Doug

#22 G on 03.05.22 at 1:09 pm

Thanks Doug for the reminder.

If WW3 with ICBM’s got going due to some other “leaders” doing something even more stupid.
(Can we keep a fly on the wall of the “leaders” and the marionettes/puppeteers get togethers?)

I’m guessing WW3 isn’t happening anytime soon. If you’re still worried stop watching the likes of CBC news.
I do wonder if anything might happen with Taiwan, I guess we will see, or not hopefully.

It’s always bad for anyone caught in the line of fire when war happens. Hopefully they can/will all stop, like yesterday.
Why can’t we all just get along and stop making things to kill each other with, but then there’s that, which can first the chicken or the egg thingy.

You could get or make one of the 1950’s shelters, you know the kind, the kid’s school desk to hide under, that duck and cover shelter, LOL.

It’s not going to mater were you have your savings, like under a matters or invested in the likes of good companies that pay dividends if ICBM’s start flying. Worrying to much about it just causes unneeded stress on you, and no one need that.
Hopefully and much more likely it’s not going to get kick off/ happens in the first place.

But we all know it is a for sure, we all are needing to plan on get older and still need money to live on.
What will your savings be worth when you need it, what can it buy in the future if you have it under your matters, less is what it’ll buy, given inflation from many sources.
And remember that inflation is eating away at your savings even if you’re sleeping on it.
You will need investments so it can grow on average, over time, to keep up with inflation and hopefully even grow a bit bigger too.

Who was it again that said the budget will balance itself, MPT2 said that.
And we can’t/shouldn’t use energy we have available presently, we need to tax/take more of your hard earned money if you do. We should let the people freeze while we wait for some ‘magic’ energy to come along.
Sure keep looking/investing for the ‘magic’ energy source but don’t let people go bankrupt and freeze in the dark waiting for it because you ‘wish it’ was so.

The available energy now is used to heat homes, grow food by running tractors, making fertilizers for the crops to grow well, run trucks to get food to market, to make electricity to light your home and run the internet in many places… Run PMT2’s plane(s)… and his friends stuff too!!

And sure keep a little bit of cash around so the next time T2 feeling get hurt by you, because he doesn’t like what you think, say and do, and he cuts you off from accessing all of your money, by just decided to label you a terrorist! Didn’t even try talking to them or have someone try for him at first at all, just called them names and hide.
(First they came for the peoples bank accounts that gave a bit of money to people holding up signs saying freedom, but I did/said nothing. Then they came for ‘them’ for thinking something he decided he didn’t like/that hurt his feeling, but I said/did nothing. Then they came for me, for just thinking for myself, but there was no one left to do/speak up for me.)

Don’t panic for sure, stay invested, keep doing the 60/40 rebalance thing, stop watching the news so much, go for a walk, and give a friend a hug, when you and they want to.
Love each other and help your neighbour when you can too. We are all just human beings after all.

The sun will always (for many billion(s) of years still) comes back up in the East in the morning after all LOL.

#23 Faron on 03.05.22 at 1:55 pm

#75 KLNR on 03.04.22 at 7:47 pm

crazy amount of putin apologists in here.

Cross-reference them with Trump fans. – Garth

Furthermore, Trump’s initial impeachment was because he blackmailed Zelenskyy by withholding arms funding and diplomacy in exchange for favours. This act has direct ramifications on Ukrainian strength including having undermined Zelenskyy as Russia was building strength to re-take Ukraine. Given the numerous Russian associations and controversies with Trump and the pro Russian stance of Trumpets this raises eyebrows.

#24 Stone on 03.05.22 at 1:56 pm

The largest military invasion of a European country since WW II. An ever-growing humanitarian crisis. Immediate and severe sanctions against Russia from the most economically powerful nations in the world. Putin putting his nuclear arsenal on the highest alert as retaliation.

All of this can only mean one thing: requests from clients to move their portfolios entirely to cash.

———

I enjoyed the above as I read my way to the punchline. Thanks Doug.

Fully believe in the value and power of having a B&D portfolio. Even though mine is sitting at -2.38% YTD, I’m really happy with how it handles all the negative news. The continuous divvies are nice too.

It’s strange how we live in the “information age” and yet, over and over and over, people continue to make the simple mistake to go to cash.

#25 Søren Angst on 03.05.22 at 1:59 pm

#14 VladTor

What is wrong with you?

Russia is a tinpot economy that relies heavily on oil & gas exports for its prosperity.

The only street cred it has is its military which as I type is bogged down in Ukrainian mud and will be for a long, long time.

https://www.youtube.com/watch?v=O_00uB8lf00&t=1s

Putin miscalculated. His war effort is a DISASTER.

And Europa as I type is going to make sure not a single bbl of oil or cubic foot of Russian gas nor a pebble of their coal makes it here.

https://twitter.com/nexta_tv/status/1500168918983450628

That will reduce Putin’s Russia to THIRD WORLD NATION status.

And stop reading the BS from the Russian Foreign Ministry. They are a joke. I subscribe to them on Twitter and believe me FARCICAL, DELUSIONAL is in an understatement.

Russians worried about Martial Law imposed by Putin:

https://twitter.com/BBCWorld/status/1500172559341572101

Ya, traffic jam to Finland.

Putin’s Russia.

——————–

And the sanctions are hurting. Here 10 min what Percocet Putin said.

Putin says Western sanctions are akin to declaration of war
https://www.reuters.com/world/europe/putin-says-western-sanctions-are-akin-declaration-war-2022-03-05/?taid=6223a3fd18c5730001d4b72c&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter

Percocet Putin.

#26 Ponzius Pilatus on 03.05.22 at 2:01 pm

#6 Get Out More on 03.05.22 at 11:07 am
#65 Ponzius Pilatus on 03.04.22 at 7:11 pm
Interesting:
The Jews in Odessa, among them Holocaust survivors, are taking their children to safety – To Germany.

==============================

How is it “interesting”?

Maybe to someone who’s last visit to Germany was in the 1940’s, but things have changed a bit since then.

Take your outdated prejudices and shove ‘em where the sun don’t shine. Sheesh.
——————–
Go there every two years.
This autumn again.
Germany is now the favorite place to live and visit in Europe.
Very good relationship with Israel.
My post was directed towards those posters who still call the Germans Nazis. Like CEF.
Also copied from renowned “DER Spiegel”.
Alles Klar?

#27 Faron on 03.05.22 at 2:03 pm

Furthermore regarding Ukrainian aid: consider that military supplies of an ally may be useful, but these can be complex pieces of armament that take substantial time to train people to use (one of the reasons untrained mercenaries going to “assist” Ukraine isn’t going to be of much use). How much utility was lost from the Ukrainian aid by its being delayed by Trump antics?

That weakening and delay was strongly desired by Putin and was done by a man who has praised Putin in recent weeks immediately prior to invading Ukraine.

But, I’m just a punter. Here’s a great thread about Putin’s error in engaging in this war. She is an expert:

https://twitter.com/ruth_deyermond/status/1499862127322046465

#28 Linda on 03.05.22 at 2:05 pm

Have to say I’m expecting good market returns this year. The nasty situation in Ukraine has caused a spike in the price of all sorts of commodities. I noted that the TSX has been creeping higher, which I take to reflect Canada’s commodity rich economy. The people of Ukraine & Russia have reasons to panic & expect dire economic fallout. North Americans, not so much.

#29 Dusty Shoes on 03.05.22 at 2:20 pm

The economic models are broken, none account for war and the implications.

One example – nat gas price explosion, fertilizer production collapse, food prices up, and meanwhile stock markets down.

NOBODY has a handle on anything, right now.

So short term, why is cash a bad place to be?

Re-entry is simple, cash will be used to buy distressed assets once we get more visibility on where things are going.

#30 Michael in-north-york on 03.05.22 at 2:21 pm

#134 on 03.05.22 at 9:47 am

Mad Max is an idiot. Idiots like him, just holding the offices, cause the Western alliance to excersise a sloppy policy instead of a coherent one.

That sloppy policy is extremely dangerous and greatly increases the risk of a nuclear war. How? Because both Putin and his generals perceive it as a sign of weakness. And they are tempted to push further and further.

Once Putin’s hands are free from Ukraine’s war, his troops will move to the north-west. They will probe the NATO forces protecting the Baltic states, and Putin will threaten to go for WW-3 and a mutual destruction if NATO defends those countries.

What our response should be? Defend them? Likely leads to WW-3 and the mutual destruction, unless one of Putin’s generals decides that he’d rather stay alive and sends a bullet, or preferably several, through Putin’s head.

Abandon the Baltic countries? That’s the end of NATO, and Putin’s dominance in much of Europe. Possibly except for France and England who have their own nuke arsenals. Plus, a mad rush to acquire the nukes by nearly every mid-sized country in the world. They will see that the rule of law has fallen, the rule of jungle prevailed, and you need a big stick to survive in that jungle.

All those risks would not exist if the Western policy was coherent. As in, 5-th Paragraph of the NATO Charter means we will surely unleash the nukes to defend any NATO member from any nuke attack. If that was certain for everyone, then noone would ever mess with NATO and WW-3 would never start.

#31 Ponzius Pilatus on 03.05.22 at 2:26 pm

Better dump the shares of your favorite Poutine restaurant chain.
It soon will be banned.
Quebec’s economy will take a hit, and the transfer payments from Alberta will increase.
They will call it Putin’s revenge.

#32 Brian on 03.05.22 at 2:40 pm

DELETED

#33 DON on 03.05.22 at 3:03 pm

https://www.dw.com/en/china-lowers-economic-growth-goal/a-61024081

This is interesting…not surprising. What other hidden messages are in this article?

#34 pPrasseur on 03.05.22 at 3:12 pm

And thank you for enlightening us on Buffett’s (2 ‘t’s btw) relationship to Berkshire. A little known fact, apparently.

—Doug

Well that was rude… My first language is French and yes I make mistakes when writing in English.

I hold cash to spend money, not because it is an ‘asset’ , I can do that because my investments made on average 11% yearly since 2004. No lecture required.

BTW Charlie Munger says diversification is (for idiots) mostly useful to even the odds for people who don’t know what they are doing!

https://www.youtube.com/watch?v=VCVvSsm5HtI&t=12s

#35 Doug Rowat on 03.05.22 at 3:17 pm

#29 Dusty Shoes on 03.05.22 at 2:20 pm

NOBODY has a handle on anything, right now.

So short term, why is cash a bad place to be?

Re-entry is simple, cash will be used to buy distressed assets once we get more visibility on where things are going.

—-

Being in ALL cash is a bad place to be. Read more carefully.

And why would assets be distressed unless they’re going lower? You don’t know this. If there’s limited “visibility” they could just as easily move higher.

—Doug

#36 jess on 03.05.22 at 3:23 pm

#23 Faron on 03.05.22 at 1:55 pm

Putin’s plan is really an old plan used in in Georgia

=========
yeah, same characters $$$$$$$$$$ rationalization is the “saviour” of self respect

Why Are American Anti-Vaxxers Spreading Pro-Putin Propaganda?
By Kiera Butler
March 04, 202210:00 AM

he business of anti-vaxx
Pandemic Profiteers

READ our report on the pandemic profiteers; the dozen leading anti-vaxxers who have enriched themselves by spreading misinformation. The Anti-Vaxx industry boasts annual revenues of at least $36 million and is worth up to $1.1 billion to Big Tech with 62 million followers across their platforms.

Through government PPP loans, affiliate marketing schemes and social media empires, these anti-vaxx businesses have been able to generate profits by spreading misinformation.

Organisations associated with leading anti-vaxxers have received more than $1.5 million
in federal loans
There are an estimated 266 people working for organisations associated with leading anti-vaxxers
Anti-vaxxers examined by this report are responsible for up to 70 percent of anti-vaccine content on Facebook
Anti-vaxxers admit they rely on mainstream social media for reach and revenue in court filings
Followers of anti-vaxxers are worth up to $1.1 billion to Big Tech
How leading anti-vaxxers collaborate
How twelve leading anti-vaxxers use social media to generate funding….read the report

https://www.counterhate.com/_files/ugd/f4d9b9_13cbbbef105e459285ff21e94ec34157.pdf

#37 Dave from St.Thomas on 03.05.22 at 3:24 pm

Reminds me of the interview that Floor Trader Art Cashin gave years ago….

In his early days as a trader, he was trying to short the market on its’ way down, due to some “Earth-Shattering-World-Ending Event”.

His boss promptly chastised him and told him he should have been buying stocks during the sharp decline, for two reasons….

1. The world never ends… and

2. Who will be around to settle the trade if it does?

Food for thought!

Dave

#38 Doug Rowat on 03.05.22 at 3:34 pm

#34 pPrasseur on 03.05.22 at 3:12 pm
And thank you for enlightening us on Buffett’s (2 ‘t’s btw) relationship to Berkshire. A little known fact, apparently.

—Doug

Well that was rude… My first language is French and yes I make mistakes when writing in English.

I hold cash to spend money, not because it is an ‘asset’ , I can do that because my investments made on average 11% yearly since 2004.

—-

That’s one of the certainties of the comment section: people will be rude. The other? People will pointlessly brag about their investment performance with zero ability to substantiate it.

And Buffett’s his name. It’s spelled the same in French and English.

—Doug

#39 jess on 03.05.22 at 3:36 pm

imf’s special drawing rights did they freeze out russia’s
https://www.imf.org/en/About/FAQ/special-drawing-right

#40 Sail Away on 03.05.22 at 3:47 pm

#38 Doug Rowat on 03.05.22 at 3:34 pm

People will pointlessly brag about their investment performance with zero ability to substantiate it.

———

I love pointless bragging, but always do my best to substantiate it.

#41 I don't know on 03.05.22 at 3:50 pm

While our host routinely provides excellent advice, the weekend posters often have the most concise and pragmatic investing nuggets.

Do people listen?

Only the smart ones.

Many others will continue to believe that somehow they have a divine insight into the direction of the world, and its financial markets.

The end of the current world order, hyperinflation, skyrocketing interest rates, crashing markets, famine, violence..all of these are possible, but represent the extremes of all possibilities.

Like the note today’s post ends with, the best bet is to humble yourself, understand that you know nothing, and hold as many assets as you can in a diversified and balanced way. Ignore the noise.

“Your best bet? Stay balanced and diversified. It’s recognition that market outcomes are never certain. Going entirely to cash may be tempting as we gaze at the horrors on the nightly news, but it’s virtually always the incorrect investment decision.”

-Indeed.

IDK

#42 the jaguar on 03.05.22 at 3:57 pm

#38 – ha ha!! I love Doug! He takes no prisoners.
I wish I was more disciplined about monitoring my investments, but there always seems to be something more interesting going on….
Only a fool would cash out, even I can see that.

#43 pPrasseur on 03.05.22 at 4:04 pm

People will pointlessly brag about their investment performance with zero ability to substantiate it.

The S&P 500 did 9.6% yearly (including div.) since 2004.
Even that is enough to bury diversified whatever…

As a guest host you don’t get to be rude ;)

Just Garth is allowed be arrogant and rude, that’s probably why Harper gave him the boot, but we like him that way :)

#44 VladTor on 03.05.22 at 4:31 pm

to #20 Søren Angst on 03.05.22 at 1:00 pm

…Russia per capita GDP is 57th just after Croatia and Kazakhstan.

*********

My friend GDP is fake evaluation for economies.

Need to watch Purchasing Power Parity.

GDP comparisons using PPP are arguably more useful than those using nominal GDP when assessing a nation’s domestic market because PPP takes into account the relative cost of local goods, services and inflation rates of the country, rather than using international market exchange rates, which may distort the real …

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)#:~:text=GDP%20comparisons%20using%20PPP%20are,which%20may%20distort%20the%20real

Russia is 6th.

#45 VladTor on 03.05.22 at 4:41 pm

to #25 Søren Angst on 03.05.22 at 1:59 pm

What is wrong with you?

Russia is a tinpot economy that relies heavily on oil & gas.

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

What is wrong with you?

Oil and gas only 47 % in export. And year after year this number decreasing.

#46 DON on 03.05.22 at 4:46 pm

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-03-04/card/shell-buys-russian-oil-at-bargain-price-2ZljvO2HQlmPm5d5aAgG&ved=2ahUKEwiU4Zu8-K_2AhUdLTQIHThzBr8Q0PADKAB6BAgEEAE&usg=AOvVaw1ZonrV3bj7U80ca_YOQy5c

Is it too soon for Shell to be buying Russian oil?

#47 T on 03.05.22 at 4:55 pm

What happened to the markets after the previous largest invasion of a European country, short term and mid term? We are all versed on long term.

History doesn’t repeat, but it sure does rhyme.

We are heading towards direct conflict with Russia. The western world can’t supply Ukraine with weapons and support, and enforce crushing financial sanctions, without Putin seeing this as an act of war. In fact, we are already at war with Russia and it’s just the beginning.

Comparing the ongoing standoff of India and Pakistan (over Kashmir) with a full invasion of a sovereign nation and everything that has happened around it is not a valid. How many refugees has the Pakistan vs India clashes created? How many cluster bombs were dropped on civilians? Has India or Pakistan asked for help from anyone throughout the world who wants to join the fight?

I understand you’re trying to calm the herd, but let’s at least be honest about the data and current situation – don’t downplay it.

#48 DON on 03.05.22 at 4:56 pm

https://www.nationalobserver.com/2022/03/02/news/canadian-banks-insurance-companies-pouring-millions-russian-oil-gas

Yikes…all in the name of profit.

#49 crowdedelevatorfartz on 03.05.22 at 5:00 pm

@#26 Ponzie’s paranoid Prussian presumptions

“My post was directed towards those posters who still call the Germans Nazis. Like CEF.”

+++
Nice deflection.
Suffering from “hoof in mouth disease” again Ponze?

Please supply proof as to where I called Germans nazis.

#50 crowdedelevatorfartz on 03.05.22 at 5:03 pm

Good topic Doug.

I’m sticking with my B & D portfolio untouched.

I hope you don’t mind if I load up on a bit of cash.
Perhaps 5-10 % overall.
Waiting to perhaps vulture some carrion.

#51 Ponzius Pilatus on 03.05.22 at 5:11 pm

#28 Linda on 03.05.22 at 2:05 pm
Have to say I’m expecting good market returns this year. The nasty situation in Ukraine has caused a spike in the price of all sorts of commodities. I noted that the TSX has been creeping higher, which I take to reflect Canada’s commodity rich economy. The people of Ukraine & Russia have reasons to panic & expect dire economic fallout. North Americans, not so much.
———————-
The cynics are saying “All wars are banker’s, financier’s wars”.
On the backs of the children.

#52 Grunt on 03.05.22 at 5:13 pm

Who’s making and selling the weapons of war and to whom?

#53 Yukon Elvis on 03.05.22 at 5:13 pm

#45 VladTor on 03.05.22 at 4:41 pm
to #25 Søren Angst on 03.05.22 at 1:59 pm

What is wrong with you?

Russia is a tinpot economy that relies heavily on oil & gas.

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

What is wrong with you?

Oil and gas only 47 % in export. And year after year this number decreasing.
+++++++++++++
How is the weather in Vladivostok? Is your atm working?

#54 Warren-the-lagging_indicator on 03.05.22 at 5:15 pm

Concurrency is as key in war as it is in the future of programming. As Russia invades Ukraine, Saudi Arabia bombards Yemen with dozens of missiles, the USA again starts bombing Somalia and Israel lobs its missiles at Syria.
Another good question is why is Russia showing such restraint? Are they anticipating full out war against NATO or something else?

#55 ogdoad on 03.05.22 at 5:17 pm

Doug, your focus on your job at hand is actually stellar. Although we are humans living on an orb encircling a star that’s whizzing through the unknown your dedication is astounding.

War, bubbles, AI, truckers, dupedness….you don’t let emotions distract you. My opinion, anyway. Big bucks for clarity in perspective?

Man…I wish I could do that. Baby blues at the gym’s got me drunk…I want more. Don’t want it to stop…like FOX news…give me sex, death, despair, happiness, elation.

They know what we want.

My search is now on for connection…the game is changing. And Og is at the forefront…

Og

#56 CDN high dividend payers on 03.05.22 at 5:27 pm

#24 Stone on 03.05.22 at 1:56 pm

Fully believe in the value and power of having a B&D portfolio. Even though mine is sitting at -2.38% YTD, I’m really happy with how it handles all the negative news. The continuous divvies are nice too.
///////////////

Current YTD 10%
Last year 35%+

#57 bdwy on 03.05.22 at 5:32 pm

My biggest position (besides cash) is, by far, BRK, Berkshire Hathaway, the company created by Warren Buffet.
……

And thank you for enlightening us on Buffett’s (2 ‘t’s btw) relationship to Berkshire. A little known fact, apparently.

—————–
i think the point was berkshire (as a legal entity) was not created by WB.

he did transform it entirely into a different kind of company, creating the mountain of strength that it is today. (it’s half apple!)

….

bragging?

timid cowboy port of 70%brk.b and 30%zeo is
15%ytd
41%ttm

no complaints here.

both purchases strongly influenced by the discussion right here , i am very grateful for this blog and every single comment.

#58 TurnerNation on 03.05.22 at 5:35 pm

Commodities have decoupled from equity markets.
Oil, Nat Gas uppa; CORN.US, WEAT.US ETFs uppa uppa.

Home prices in Kanada have decoupled from median household incomes.

How to spin the global reset.


– Blast from the past 2018. We should have closed down the economy and protected the vunerable!!?

https://fortune.com/2018/02/10/american-flu-deaths/
The Flu is Killing Up to 4,000 Americans a Week
BY BLOOMBERG February 10, 2018 9:53 AM EST
The amount of influenza ravaging the U.S. this year rivals levels normally seen when an altogether new virus emerges, decimating a vulnerable population that hasn’t had a chance to develop any defenses.

….in light of Asymtomatic spread, known in 2014:

https://www.jwatch.org/fw108600/2014/03/17/most-flu-asymptomatic
March 17, 2014 – Most Flu Is Asymptomatic
Influenza, whether of the seasonal or pandemic variety, is asymptomatic in most people with serologically confirmed infection, according to a study in the Lancet Respiratory Medicine.

#59 Michael in-north-york on 03.05.22 at 5:58 pm

#46 DON

Yep. Capitalism is performant during the times of piece, but has its problems during the times of a great challenge.

Although they claim that “Shell was still buying Russian oil to plug into refiners and petrochemical plants while it looked for alternative sources”.

Formal oil embargo is needed.

#60 Albertaguy in AB on 03.05.22 at 6:01 pm

If the markets don’t perform well this year despite past history to the contrary, it will be because i took the step to deploy 1/2 of cash holdings this week. Sorry in advance.

#61 Charity on 03.05.22 at 6:01 pm

Classic Doug
I think you are ready to take over for the almighty Dog
Move over you big bearded hound.

#62 Balanced and diversified on 03.05.22 at 6:05 pm

“Your best bet? Stay balanced and diversified.”

How is the portfolio often detailed here diversified when roughly 60% of it is allocated to the Canadian geography? 20% bonds (Gov, Provincial, corporate), 20% allocated to Canadian Preferred Shares, 15-20% allocated to Canadian equities and Canadian REITs?

How is this portfolio balanced when the “safe” portion of it contains a significant exposure to equity like assets. Like preferreds (hybrid between equity and cooperate bonds) and plain corporate bonds?

Where is the balance of this portfolio when the bonds are short in duration (advised here recently) and there isn’t exposure to any long vol assets. Where is the counterbalance to the equity exposure?

#63 Peter in Toronto on 03.05.22 at 6:11 pm

Diversification is for wimps. Hyper concentration is how wealth is made.

I’ve so far 10’xd all of my Canadian oil & gas plays since Spring 2020.

#64 willworkforpickles on 03.05.22 at 6:17 pm

A large part of the GDP calculation for the first quarter is going to come much in the same way it came in the 4th qtr.
From stockpilers with the difference coming from another group of purchaser/stockpilers than in the last qtr of 2021.
GDP will come in lower in the 1st qtr with the stockpiling of goods now being done mainly by regular consumers, whereas in the 4th qtr it was mostly by distributors.
After this 1st qtr , when the panic buying subbing for real growth that isn’t real growth drops off and the economy contracts , we could very well be at the start of another recession come October 2022.
Runaway inflation with the higher and higher costs of everything will pretty much suppress spending on services and durable goods to a great extent. The sharp decline in consumer spending will translate to a sharp decline in GDP followed by the next recession as the game changes again.

#65 Søren Angst on 03.05.22 at 6:30 pm

No more CREDITSKI for Percocet Putin.

Mastercard, Visa have the pulled the plug.

Dispatch from:

Tyranol, Russia.

https://twitter.com/FoxNews/status/1500249799865503744

#66 Ponzius Pilatus on 03.05.22 at 6:38 pm

#38 Doug Rowat on 03.05.22 at 3:34 pm
#34 pPrasseur on 03.05.22 at 3:12 pm
And thank you for enlightening us on Buffett’s (2 ‘t’s btw) relationship to Berkshire. A little known fact, apparently.

—Doug

Well that was rude… My first language is French and yes I make mistakes when writing in English.

I hold cash to spend money, not because it is an ‘asset’ , I can do that because my investments made on average 11% yearly since 2004.

—-

That’s one of the certainties of the comment section: people will be rude. The other? People will pointlessly brag about their investment performance with zero ability to substantiate it.

And Buffett’s his name. It’s spelled the same in French and English.

—Doug
———————-
We were at the famous “PEE-WEE Tournoi International de Hockey” in Quebec with my son’s hockey team some years back.
They had a great Buffet restaurant with all you can eat Putin.
I guess that closed now.

#67 Reality Check on 03.05.22 at 6:53 pm

Had to sit on the road today in downtown Victoria for a bit. Seems we have people protesting having to prove they are vaccinated in order to get into a coffee shop or gym. While residential neighbourhoods in the Ukraine are being bombarded to rubble.

In Canada we have the freedom to be self serving whiners.

Thankfully the media is occupied with a real life and death struggle for freedom and not the selfish/tonedeaf actions of a few antivaxxers.

#68 mark on 03.05.22 at 7:05 pm

Why do you need an adviser if every after every hiccup you’re wanting to switch to cash? Just leave it in cash and brag to everyone how you avoided every correction. Of course you also missed all the growth, but hey, you’ve got to enjoy your own reality.

#69 Nathan on 03.05.22 at 7:11 pm

As a good friend of mine rather crassly used to say, “those that try to pick bottoms get sticky fingers.” Don’t try to time the market bottom. You will fail.

#70 conan on 03.05.22 at 7:32 pm

What else will happen except the world deciding to stop Putin in Ukraine? This no fly zone posturing is redundant if Putin thinks the sanctions are also an act of war.

It is a bit of a Hail Mary, but just assume Putin can not order a first strike for getting his ass handed to him in Ukraine. Instead, he gets the boot and Russia goes away for 25 years licking its wounds.

Market turmoil ahead.

#71 Satori on 03.05.22 at 7:50 pm

#148 dragonfly58 on 03.05.22 at 12:37 pm

I am afraid it’s always a trade off Satori. At least for a good 85% of us.
Travel would be nice, but a very large commitment of an ever shrinking disposable $ in most Canadian households.
My plan was establish a home base, then branch out into whatever activities I developed an interest in.
As my life unfolded rising costs vs a nearly stagnant paycheque gave me a life of increasing limitations as the decades passed.
Sadly no money tree in the backyard , or even a Lottery win. Just a modest , middle class, Canadian income. In my early 20’s I made decent money when working , Skilled Trade, but did a significant amount of post secondary school to move beyond that life. Things were reasonably good for a time, even if paying back the student loan’s took a sizable bite, and house and family costs took care of most of what was left over.

These days retired, and yes , a modest house paid for. But travel ? Give me a break , unless you are talking about day trips in my geographic area.
——————————————————–
Sandy has $290,000 at 35 years old, and wants to lock it up in a GIC for an entire decade for an extra $60,000!!? Good move for her at 35??

What does she ‘really’ need, a few pounds of food, shelter, 6 feet to sleep in, and a work that gives her a sense of accomplishment. That is it, yet she, like so many, get caught up with saving every nickel and dime, working not living, existing – then getting caught up in giant mortgages, time payments, preposterous gadgetry and before you know it, suddenly the doors of youth are closed. Permanently.

Life is an adventure. She has money to live one. But the advice is best do that “9-5/netflix/work/9-5 and save so you can die rich” thing that most Canadians do?

Simply put: I’d rather be a fox without a tail than ”copy-what-ALL-the-neighbors-are-doing” and pull all those beastly traps behind me.

Your tail must be pretty wrangled, heavy and bent out of joint for all those traps you dragged behind you my friend…only saying…so if you had 300G at 35? Would lock it up for two decades in a GIC? And more importantly would your reply would be the same?

#72 Grant Demore on 03.05.22 at 7:51 pm

All cash? That’s just stupid. And miss the boom in oil, gold and fertilizer? NTR from $46 to $120.00. Miss the rush to safety in banks and telecoms? Fertilizer stocks have near tripled. XEG from $4 to $14. Banks to the moon and splits on the higher while increasing dividends. Preferred shares up up up. Transport like CP jumped $5 on Friday having already split down from $200. Having a comfy cash position yes, but I’d sell my real estate before I’d see my stock portfolio. I own only top tier blue chip dividend payers and if BCE is going out of business it means we’re being invaded by Obama. If your portfolio isn’t going gangbusters right now, buddy, you’re being led in the wrong direction.

#73 Doug Rowat on 03.05.22 at 7:58 pm

#47 T on 03.05.22 at 4:55 pm

We are heading towards direct conflict with Russia.

—-

You don’t know this. Western nations (particularly, of course, the US) and Russia have a nearly 75-year history of being rivals, often threatening each other but yet never coming into direct conflict.

—Doug

#74 Ponzius Pilatus on 03.05.22 at 8:25 pm

Regarding keeping cash on hand.
I think there will always be people who sleep better, with some cash stashed away in the mattress.
I tried gold, but that’s too hard on the back, and I followed Garth’s advice and got rid of it.

#75 VladTor on 03.05.22 at 8:44 pm

to #53 Yukon Elvis on 03.05.22 at 5:13 pm

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

I’m in Toronto – ATM’s still working!

#76 VladTor on 03.05.22 at 8:58 pm

#65 Søren Angst on 03.05.22 at 6:30 pm

Mastercard, Visa have the pulled the plug.

************
Here you are restless. You are naïve and learning economy from FoxNews probably.

Russia has its own payment systems. For example, the “MIR” . Cards are accepted in many countries.

Also “UnionPay” widely using.

Mastercard and Visa they will return as quickly as possible or lose the Russian market forever.

Will see!

#77 crossbordershopper on 03.05.22 at 9:00 pm

pay 3% a year to hedge your portfolio every year, at least you wont loose money and you can play during the year.
just a thought. no one ever talks about portfolio protection , its always, move here, exposure to this, inflation hedge, counter cyclical, go to cash, and govt bonds, mix changes.
man just buy some insurance. Puts save the day,

#78 Scott in Gibsons on 03.05.22 at 9:29 pm

Many signs that the “Great Reset” is being implemented. If successful, it won’t matter what you used to own….

#79 Yukon Elvis on 03.05.22 at 10:04 pm

#75 VladTor on 03.05.22 at 8:44 pm
to #53 Yukon Elvis on 03.05.22 at 5:13 pm

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

I’m in Toronto –
+++++++++++
Are u sure ? Sounds like u are in Russia. What’s for dinner tonight? Potatoes again? Never mind. I’ll bring some cabbage. I wonder what Vladimir is having tonight.

#80 red falcon on 03.05.22 at 10:24 pm

Hahahhaa… the sheeple has spoken yet again. must sell cuz Russia invadez. must sell everyting to cash to save portfolioz…. sheeple are only there to have hair cutz and it is happening again and again and again…

sheeple will never learnz.

#81 Doug in London on 03.05.22 at 10:35 pm

@Nathan, post #69:
You can’t predict market bottoms, but when stocks take a dive like they did 2 years ago from now you go on a buying blitz. Where do you get the money? You cash in any fixed income investments or even run up margin debt. Otherwise, don’t panic and do nothing.

#82 Doug t on 03.05.22 at 10:57 pm

Great Reset will take all of your worries away comrades- u will own nothing and care for nothing – All hail the Great Reset – the path has definitely been mapped out – are ypu ready for the future?

#83 Don Guillermo on 03.05.22 at 11:00 pm

#79 Yukon Elvis on 03.05.22 at 10:04 pm
#75 VladTor on 03.05.22 at 8:44 pm
to #53 Yukon Elvis on 03.05.22 at 5:13 pm

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

I’m in Toronto –
+++++++++++
Are u sure ? Sounds like u are in Russia. What’s for dinner tonight? Potatoes again? Never mind. I’ll bring some cabbage. I wonder what Vladimir is having tonight.
********
Caviar

#84 PeterfromCalgary on 03.05.22 at 11:01 pm

The World needs to kick the Putin oil, gas and coal dependency.

We need to quickly develop oil, gas, coal, biogas, solar, wind, geothermal, and nuclear. We need to continue to research fusion and other new energy technologies.

#85 Stone on 03.05.22 at 11:29 pm

#56 CDN high dividend payers on 03.05.22 at 5:27 pm
#24 Stone on 03.05.22 at 1:56 pm

Fully believe in the value and power of having a B&D portfolio. Even though mine is sitting at -2.38% YTD, I’m really happy with how it handles all the negative news. The continuous divvies are nice too.
///////////////

Current YTD 10%
Last year 35%+

———

Henny Penny, is that you? Are you not banned?

As I’ve said to you before, you aren’t balanced and diversified. I’m an investor, not a gambler.

Gamblers take big risks because what they have is tiny (in more ways than one) and they have a need to catch up with the big boys and girls who are way ahead. 35% of $10,000 is still only $3,500.

#86 Stone on 03.05.22 at 11:38 pm

#77 crossbordershopper on 03.05.22 at 9:00 pm
pay 3% a year to hedge your portfolio every year, at least you wont loose money and you can play during the year.
just a thought. no one ever talks about portfolio protection , its always, move here, exposure to this, inflation hedge, counter cyclical, go to cash, and govt bonds, mix changes.
man just buy some insurance. Puts save the day,

———

Isn’t being balanced and diversified and rebalancing your portfolio your protection? Paying 3% a year to “hedge” your portfolio sounds worse than buying a high fee mutual fund.

In other words, to get a 7.50% net return on your portfolio, you now need a 10.50% return to cover your “hedge” protection.

That sounds ridiculous for the average investor.

#87 PeterfromCalgary on 03.06.22 at 12:13 am

No reason ever to buy from Russia. Local vodka has just as much kick and most things you want from that part of the world can be bought from Ukraine

#88 T on 03.06.22 at 12:22 am

#73 Doug Rowat on 03.05.22 at 7:58 pm
#47 T on 03.05.22 at 4:55 pm

We are heading towards direct conflict with Russia.

—-

You don’t know this. Western nations (particularly, of course, the US) and Russia have a nearly 75-year history of being rivals, often threatening each other but yet never coming into direct conflict.

—Doug

————

Agreed. I don’t know we’re going to have a direct conflict, just as you don’t know we aren’t going to.

However, all things are heading towards conflict. Language, posturing, arms deliveries, sanctions, and the fact time is running out for Putin to fulfill his lifelong dreams. It doesn’t mean we will have direct conflict, but we’re definitely moving in the direction of.

#89 Bdwy on 03.06.22 at 12:25 am

 you aren’t balanced and diversified. I’m an investor, not a gambler.

Gamblers take big risks because what they have is tiny (in more ways than one) and they have a need to catch up with the big boys and girls who are way ahead. 35% of $10,000 is still only $3,500.

…….
Agree not b and d.
Is brk.b gambling?

10k is a good hour or 2 profit. 20 to 30k is a good day.

Is 41% ttm on 7 figures tiny ?

#90 Doug Rowat on 03.06.22 at 2:21 am

#88 T on 03.06.22 at 12:22 am
#73 Doug Rowat on 03.05.22 at 7:58 pm
#47 T on 03.05.22 at 4:55 pm

We are heading towards direct conflict with Russia.

—-

You don’t know this. Western nations (particularly, of course, the US) and Russia have a nearly 75-year history of being rivals, often threatening each other but yet never coming into direct conflict.

—Doug

————

Agreed. I don’t know we’re going to have a direct conflict, just as you don’t know we aren’t going to.

However, all things are heading towards conflict.

—-

What’s the correct portfolio then for thermonuclear war?

You’re not here to talk about investing, you just want to hold up a ‘the end is near’ sign.

Don’t waste our time.

—Doug

#91 BigAl (original) on 03.06.22 at 3:33 am

I read an article stating that the Ukraine crisis might create a broad liquidity crisis around the world. I don’t
know enough to figure out what the likelihood of this is. But central banks could use that as the reason to ‘suspended’ tightening and open the taps again.

#92 And the Nobel Prize for Medicine Goes To… on 03.06.22 at 6:31 am

…Vladimir Putin.

For single-handedly ending Covid-19.

#93 Ponzius Pilatus on 03.06.22 at 7:11 am

#83 Don Guillermo on 03.05.22 at 11:00 pm
#79 Yukon Elvis on 03.05.22 at 10:04 pm
#75 VladTor on 03.05.22 at 8:44 pm
to #53 Yukon Elvis on 03.05.22 at 5:13 pm

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

I’m in Toronto –
+++++++++++
Are u sure ? Sounds like u are in Russia. What’s for dinner tonight? Potatoes again? Never mind. I’ll bring some cabbage. I wonder what Vladimir is having tonight.
********
Caviar
——————-
Poutine, of course
Sorry could not resist.

#94 crowdedelevatorfartz on 03.06.22 at 7:11 am

@#88 T

“I don’t know we’re going to have a direct conflict, just as you don’t know we aren’t going to.”

+++

If that was the basis of all counter arguements….it would be a very boring world.

How about this?

Putin is a ruthless dictator who is increasingly isolated in his own country.
Covid has exacerbated his feelings of paranoia.
He has murdered opponents, jailed opponents, or frightened opponents. ( the latest “Law” in Russia. 15 years in prison for voicing opposition to the “Peace Keeping” mission in Ukraine. Even calling it a “war” is illegal).
Putin is losing it.
He repeatedly warned western leaders not to allow countries bordering Russia to join NATO.
Estonia, Latvia and Lithuania joined after nervously watching Putins’ violent excursions in other former USSR satellite states.
The final straw? Ukraine.
A country which extends deep into the underbelly of Russia. Another potential NATO country?
Not on his watch.
His wrath at Ukraine’s perceived traitorous embrace of all things Western was also his opportunity to get the Russian populations’ mind off their crappy lives.
He controls the media, the police, judges, ….everything.

So now the YouTube videos of dead babies, burnt tanks and missile strikes ramps everything up to a fever pitch.

The Wests biggest mistake?

We’re thinking Putin is a rational man.
He’s a desperate dictator with Nukes.
AND
We assume one missile fired ( accidentally or intentionally doesnt really matter ) kills innocent Russian or Polish, or Estonian, Latvian , Lithuanian….. civilians or from either side .

The outrage will be so bad that even Putin or Biden won’t be able to stop the chain of events as the public screams for revenge.

Archduke Frances Ferdinand was a nobody until he was shot…. Then millions died.

#95 crowdedelevatorfartz on 03.06.22 at 7:28 am

The rhetoric is getting worse as the West supplies Ukraine with Stinger missiles, guns and supplies.

https://www.reuters.com/world/europe/russia-calls-eu-nato-stop-arms-supplies-ukraine-2022-03-05/

Who will nuke who first?

https://www.reuters.com/world/europe/russia-without-evidence-says-ukraine-making-nuclear-dirty-bomb-2022-03-06/

Things are spinning out of Putin’s or the Wests’ control….

#96 VladTor on 03.06.22 at 8:47 am

#83 Don Guillermo on 03.05.22 at 11:00 pm

Caviar

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

Best answer! Exactly! It is funny but I really had on my morning coffee today sandwich with Red caviar!

Are you Nostradamus?

#97 don't poke the bear on 03.06.22 at 9:06 am

Russia just cut off Europe’s natural gas. The taps have been turned off. They won’t be easily turned back on. Expect prices for Coal, Oil, Natural Gas, and probably Uranium to continue to skyrocket.

Europe will be in Recession this year. There is no doubt.

Chicago Fed President Evans also talked up Fed Funds being raised to 2% by year-end, which is more
tightening than markets were expecting, and the NFP gave fuel to these concerns.

Expect the US to be in Recession this year. There is no doubt.

Russia banned the export of agricultural fertilizers. Ukraine produces 40% of the worlds NEON Gas, used for lasers to make CHIPS. Wheat and Corn will be in short supply as there will likely be no Ukrainian production or Russian Exports.

#98 Apocalypse NOW on 03.06.22 at 9:07 am

Doug is correct, and I follow this sort of advice.

Balanced and diversified =

20% in canned beans and other long-lasting food supplies

20% in fuel and heating sources

10% in self-protection and weaponry

30% in salable commodities that will become scarce and valuable to short term survivors (sorry, can’t disclose these to you all, no competition wanted)

20% in other investments (confidential)

Don’t spend your day lining up at Costco to save $20 on gas today. You should have many barrels already, like I do.

PREPARE

#99 conan on 03.06.22 at 9:16 am

Re 95

The Ukrainians “not” giving up all of their nukes back in 1994, or being able to assemble a nuke at short notice, is one element of this confrontation that no one is talking about.

This is much worse than the Cuban missile crises.

#100 NoName on 03.06.22 at 9:17 am

#95 crowdedelevatorfartz on 03.06.22 at 7:28 am
The rhetoric is getting worse as the West supplies Ukraine with Stinger missiles, guns and supplies.

https://www.reuters.com/world/europe/russia-calls-eu-nato-stop-arms-supplies-ukraine-2022-03-05/

Who will nuke who first?

https://www.reuters.com/world/europe/russia-without-evidence-says-ukraine-making-nuclear-dirty-bomb-2022-03-06/

Things are spinning out of Putin’s or the Wests’ control….

There is no enough fuel to make nooceelar kaboom in Ukraine, all that is tightly monitored, thay cant just turn on a dime and secretly make it in a week. But what is interesting and i just found is that you need to replace fuel in big kabooms every 10 yrs…

interesting read
https://www.facebook.com/IGORSUSHKORACING/posts/10158862499670662

or tweeter tread if you have no fakebook
https://twitter.com/igorsushko/status/1500301348780199937

#101 Dharma Bum on 03.06.22 at 9:57 am

#66 Ponzi

They had a great Buffet restaurant with all you can eat Putin.
I guess that closed now.
——————————————————————————————————–

I like it!

Good one.

#102 KLNR on 03.06.22 at 10:02 am

@#78 Scott into Gibson’s finest on 03.05.22 at 9:29 pm
Many signs that the “Great Reset” is being implemented. If successful, it won’t matter what you used to own….

lmao

#103 Chris L. on 03.06.22 at 10:26 am

BANNED

#104 don't poke the bear on 03.06.22 at 10:31 am

Russia will default on it’s debt. Anyone think there will be no repercussions?

Credit Suisse Default Swaps exploding.

Gunvor and Trafigura bonds selling off. Imagine if something happens at these two MASSIVE trading houses?

the Fed can print all the money it wants, but it CAN”T print OIL or GOLD or COPPER or COAL or NATURAL GAS or any other real asset.

the price of copper closed friday at the highest price in history. aluminium, tin – highest price in history. lead, nickel, steel all breaking out running rampant. coal – highest price in history. Wheat/Corn/Soy all near highest levels in history.

Gunvor and Trafigura are massively important to the world economy.

By any traditional measure, stocks are historically the most overvalued in 150 years.

Inflation (CPI) will print at over 10% this spring. Commodities are in short supply. Food will be in short supply in many parts of the world. Food prices in the first world will rise 20-40% or more, who knows. Europe and the US will be in recession this year.

anyone still think stocks are fairly valued? or a good buy?

markets have not even begun to discount what’s happening. as in the GFC, it was a slow motion train wreck for months before an actual collapse happened.
as in 2000, the market topped for months before collapsing lower.

at the very least, protect yourselves.

#105 Formerly known as Chris L. on 03.06.22 at 11:05 am

BANNED

#106 Philco on 03.06.22 at 11:10 am

#94 crowdedelevatorfartz on 03.06.22 at 7:11 am
——
Largest small war the worlds ever seen.
The effects are far reaching compaired to others, accept the biggy. WWII
Putin’s would never surrender its now to the end.
Correct he killed anyone that challanged or got in his way.
Nut case.

#107 Damifino on 03.06.22 at 11:14 am

#94 crowdedelevatorfartz

First you say this:

He repeatedly warned western leaders not to allow countries bordering Russia to join NATO.
Estonia, Latvia and Lithuania joined after nervously watching Putins’ violent excursions in other former USSR satellite states.
The final straw? Ukraine.
A country which extends deep into the underbelly of Russia. Another potential NATO country?
Not on his watch.

And I agree… but then you say this:

The Wests biggest mistake?
We’re thinking Putin is a rational man.

You can be sure I abhor Putin as much as the next westerner, but there’s still no case for ‘irrationality’.

At least… not yet.

#108 pPrasseur on 03.06.22 at 11:23 am

our best bet? Stay balanced and diversified.

Better yet, stay invested in stuff that has actual value, that is essentially solid businesses that make money and are poised to survive (even take advantage of) any crisis.. That means, among other things avoid RE and most bonds.

If your adviser wants you to buy any type of government bonds, fire him or her or it!

#109 pPrasseur on 03.06.22 at 11:39 am

Best explanation I’ve seen so far about Putin’s behavior.

https://www.youtube.com/watch?v=4f_Kphq8y48

It’s not about Russia’s greatness, NATO’s threat (which everyone know is nonexistent) or recreating the USSR. Sure he may care about those things but they are not his main motivation.

It essentially about him keeping his job and powers over Russia. All about keeping his giant kleptocracy going. That’s what criminally inclined dictators do, they’ll ruin their own country if they have to, just to stay in power.

#110 crowdedelevatorfartz on 03.06.22 at 12:43 pm

@#99 and 100

A nuclear “dirty bomb” isn’t a Nuke.

https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/fs-dirty-bombs.html

Its radioactive material mixed with explosives and then detonated.

Spreading radioactive material far and wide.

Hence a “dirty” bomb

Gas is $2.09.9 in Burnaby this am.

Hellloooo Recession.

#111 crowdedelevatorfartz on 03.06.22 at 1:44 pm

@#107 Damfino

“You can be sure I abhor Putin as much as the next westerner, but there’s still no case for ‘irrationality’.”

+++

Starting a war where thousands of civilians and your own soldiers die seems “rational” to you?

Paranoid and obsessed also come to mind.

#112 T on 03.06.22 at 1:58 pm

#94 crowdedelevatorfartz on 03.06.22 at 7:11 am
@#88 T

“I don’t know we’re going to have a direct conflict, just as you don’t know we aren’t going to.”

+++

If that was the basis of all counter arguements….it would be a very boring world.

————

Agreed. I just didn’t want to get into the specifics as you have.

My whole point is that Doug is comparing incomparable events to infer outcomes – and his crystal ball is just as good as anyone else’s right now.

#113 conan on 03.06.22 at 1:58 pm

Beginning to think the invasion was part of a long term plan to initiate a major global calamity after a series of major global calamities.

Nation’s are already stretched out financially because of the global financial crisis and the pandemic. Add in inflation pressures on food and oil, as well as commodities, and it is easy there is some higher level thinking though going on here.

No idea why the Russian military is performing so poorly, but that is an unexpected surprise and benefit for the west.
Where the hell is the Russian air force?

#114 Don on 03.07.22 at 12:54 am

#25 Søren Angst

lol!!!!!! Man !!

Where ignorance is bliss, ’tis folly to be wise.