March 2017 Update




Celebrating Gramma’s 94th Birthday


March Results

A mediocre month at best.  By mid-month the recent bull market looked intact, but as turmoil mounted in the US political system, the markets gave up all of the March gains.  Both Canadian and US markets were basically flat for the month (up 1% in Canada, down 1% in the US).   On a YTD basis the year still looks OK at almost 2% in Canada and 5% in the US.

My results for March were pretty much in line with the markets (up in Canada, down in the US), with the total portfolio, including exchange, being flat.  For the year, I am slightly ahead of the Canadian market and slightly behind in the US market (I don’t have any “Trump” stocks).

March YTD
TSX 0.96% 1.70%
DJIA -0.72% 4.56%
S&P -0.04% 5.53%
BB CDN 0.69% 2.95%
BB US -1.01% 2.69%
BB Total (no FX) 0.17% 2.86%
BB Total (incl FX) 0.08% 2.91%


Beat the Market

Can an investor regularly beat the market?  Most experts will say no.  But the better question is “What are your investing objectives?” and “Are you meeting your objectives?”  If your objective is to beat the market, then you can measure results against that objective.  The reality is that the VAST majority of fund managers DO NOT beat the market.  Here are some articles that verify that statement:

My objective is not about beating the market.  My investing objective is as follows.

First I want to protect my capital; I don’t want my capital base to erode, thus hurting my ability to earn an income on my investments.  This is why I only invest in a variety of  large strong companies.  I use an investment analysis firm (ValueLine) to determine my universe of stocks.

Second, I want to generate an income stream for my retirement.  Therefore I only select stocks from this universe of stocks that consistently pay a good dividend – for me that means dividends that produce a 3% or greater yields.  I have a couple of stocks that are slightly below that threshold.

Third, I want my income to increase to keep pace with inflation, so the companies I select must have a record of increasing their dividend.

So my strategy is designed to protect me when the market drops, but I may not enjoy the full benefit during a large upswing, such as the recent surge in the US markets due to “Trump stocks”.  However, a by-product of my strategy has been long-term returns that regularly do beat the market.  My long term average annual returns have been in the 10% range, considerably above the market averages.

There have been 62 trading days during 2017.  On 36 of those days (almost 60% of the days), my Canadian portfolio outperformed the Canadian market.  On the US side, my portfolio beat the market 30 days or almost 50% of the time.  For March it was 14 of 23 days in Canada and 12 in the US.

In 2016 the return on my Canadian portfolio was over 21% vs the TSX of 17% and my US portfolio was up 16% vs the DJIA of 13%.  For 2015 my overall returns were 10% vs the TSX being down 11% and the DJIA down 2% (Note: my returns excluding foreign exchange rate fluctuation were down 2%).

The following table is from my January 2015 update showing my long term returns.  Return 1 and return 2 are my returns, adjusted for when new cash entered the portfolio.   “Registered” refers to money invested by an investment advisor on my behalf.  Due to poor performance, I “fired” the advisor in 2015.  See my book (Simple and Successful Investing) for a full explanation.

  Return 1 Return 2 TSX S&P Registered
2014 19.23% 19.23% 7.42% 11.39% 7.46%
2013 29.03% 26.45% 9.56% 29.60% 10.86%
2012 13.60% 13.00% 4.00% 13.41% 6.67%
2011 8.06% 6.13% -11.07% 0.00% -1.33%
2010 6.63% 6.18% 14.45% 12.78% 8.69%
2009 -2.07% -2.07% 30.69% 23.45% 22.49%
2008 2.16% 1.98% -35.03% -38.49% -17.08%
2007 -9.26% -8.72% 7.16% 3.53% 4.57%
2006 19.88% 15.26% 14.51% 13.62% 12.41%
2005 16.98% 14.31% 21.91% 3.00% 13.15%
Average 10.42% 9.18% 6.36% 7.23% 6.89%


TD Bank and other Canadian banks

On March 10, TD bank shares dropped by a whopping 5%, almost unheard of for a Canadian bank.  The reason is similar to that of the recent fiasco with Wells Fargo bank in the US where employees were under pressure to “sell” rather than “service”, resulting in shady business practices.  It was later discovered that all Canadian banks were doing the same and their share prices were similarly affected.

I do most of my banking with HSBC because they are one of the only true international banks and provide excellent service.  However I like investing in Canadian banks because their first loyalty is to the shareholder rather than the customer – and I have enjoyed years of financial benefit as a result.  I have encountered nothing but frustration any time I have tried to get customer service from a Canadian bank.   This recent news reports just provide further evidence to support my banking and investment decisions.

Reader DP provided the following article on the perils of using “bank” advice.

More evidence of why I say “STAY AWAY FROM ADVISORS”.


Stock Picks

Here is my latest rudimentary screening of Canadian and US stocks.  I have a total list “Raw” of all strong companies regardless of yield.  I have also included a tab of only those stocks with a yield of 3% or better (some exceptions in US).

Screener March 8 2017

Following are the top stocks from the screener in order of which ones are “best” right now. In making purchase decisions start at the top and decide if that is a stock you want in your portfolio.  For example, RUS always screens high, but I have recently disposed of it at a large gain, mainly because it has low volume of trading and high volatility. Feel free to ask me specific questions about any companies you are looking at.

Canada US
Russel Metals RUS.TO Qualcomm Inc. QCOM
Domtar Corp. UFS Wal-Mart Stores WMT
Manulife Fin’l MFC AT&T Inc. T
Bank of Nova Scotia BNS.TO Public Serv. Enterprise PEG
Nat’l Bank of Canada NA.TO Intel Corp. INTC
Toronto-Dominion TD.TO Infosys Ltd. ADR INFY
Sun Life Fin’l Svcs. SLF.TO Int’l Business Mach. IBM
TELUS Corporation T.TO Verizon Communic. VZ
Emera Inc. EMA.TO Total ADR TOT
Fortis Inc. FTS.TO Novartis AG ADR NVS
Suncor Energy SU.TO Pfizer, Inc. PFE
Can. Imperial Bank CM.TO Chevron Corp. CVX
Royal Bank of Canada RY.TO Exxon Mobil Corp. XOM
Shaw Commun. ‘B’ SJRB.TO Novo Nordisk ADR NVO
Power Financial PWF.TO Boeing BA
Bank of Montreal BMO.TO Williams-Sonoma WSM
BCE Inc. BCE Lockheed Martin LMT
Rogers Communications RCIB.TO Cisco Systems CSCO
Enbridge Inc. ENB.TO Merck & Co. MRK
TransCanada Corp. TRP McDonald’s Corp. MCD
Pembina Pipeline Corp. PPL.TO Johnson & Johnson JNJ
Bristol-Myers Squibb BMY
Kimberly-Clark KMB
Coca-Cola KO
Procter & Gamble PG
Emerson Electric EMR
Unilever PLC ADR UL
PepsiCo, Inc. PEP


Simple and Successful Investing


These are links to my investing book.  If you want a Kindle or a hard copy, click the first link.  If you want to just read a PDF proof for free, click the second link and download a copy.

Although the book is a couple of years old, it is still relevant.  This blog provides regular updates to the application of the concept.


Reader Commentary

DP, traveller of the world, now in Nicaragua, wrote the following commentary which I thought was worthwhile sharing.

Subject: Bannon’s Rosebud… or it’s time in the stock market, not timing it, that counts

It appears from the Wall Street Journal’s story at the link below details the motive for Steve Bannon’s anti-glogalization stance: his father got burned for selling his stock positions in 2008 and lost it all. Here’s a blurb to illustrate the point:

Then came the 2008 market chaos. “That day, I found out how dumb the people were who I thought were smart,” he says. “They couldn’t control the situation, and it escalated during the day. I said, this thing is going so fast I’m going to be totally wiped out.”

Marty Bannon says he lost more than $100,000 because he sold the shares for less than he paid for them. It was a decision he made without consulting a broker or his family, including his two sons with investment backgrounds, who only learned about the sale days after it was finished. The shares subsequently regained much of their value.

“It wasn’t a winner, so…” he says, trailing off. “Shame on me that I made that decision.”

(source: )

Indeed, shame on him. Within a few years, the stock market was up to it’s pre-2008 level, then continued on its rise. Selling off when the market goes down is a losing proposition. So much for the credo, “buy low, sell high.”

Herd mentality, panic, what have you, cause normally reasonable people to do irrational things. The thing is, historically, the stock market goes up. Here’s a graphic illustration of the Dow Jones Industrial Average from 1900 to now:

Inline image 1

There are two ways to view stock investing (well, really only one): try to time the market or time in the market. Timing the market is the notion that you “buy low and sell high” but no one is very good at timing when to enter the market (unless you have some insider info or something on a particular stock). Time in the market is the key, if you want to preserve wealth. Higher dividend yielding, large cap, blue chip stock investment is a means to preserve and grow wealth. Day trading and riskier investments are for those who have some other form of income to play with. For those, stock investing is like a game or sport.

That all said, there is risk involved with any form of investment, and I mean any form, be it the stock market, betting on horses or basketball, supporting a friend or family member in their enterprise, buying real estate, and so on and so forth.

But back to Steve Bannon: to think the entire thrust of the current US government’s economic and foreign plan is based on Steve Bannon’s dad losing in the stock market in 2008 is hardly a tenable rationale for a national policy. The motive to be so weird is like Charles Foster Kane’s ruthless pursuit of power in the Orson Welles film Citizen Kane. Turns out the motive was to get back an old snow sled he named “Rosebud.” Bannon’s Rosebud is this:

…[Steve Bannon’s] decision to embrace “economic nationalism” and vehemently oppose the forces and institutions of globalization, he says, stems from his upbringing, his relationship with his father and the meaning those AT&T shares held for the family.

“Everything since then has come from there,” he says. “All of it.”


Suggested Articles

Rob Carrick always has something interesting to say.  Click HERE

    pay attention to the first section on home maintenance

The Oracle of Omaha, Warren Buffet, provides words of wisdom.  Click HERE

    I don’t disagree with his point #6 on ETFs, but as you see I follow a different path


Happy Investing!!



About borgford

Feel free to contact me with questions:
This entry was posted in Commentary. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s