I’m a voracious reader, and not just of crap I find on the interwebz. I also put the subtitles on the TV.
Oh, and books. I’ve read an average of 30 books each year over the past three (yes, I’ve kept track. I’m cool like that), and want to up it to 50 this year now that I’ve got a little more time on my hands. I’ve already completed one so far in 2019, so at least I’m not horribly behind quite yet.
Books are fantastic. You get to read the condensed version of somebody’s knowledge on a subject in just a few hours. The author has done all the work for you and gotten rid of all the crap. What remains is the best stuff. You then absorb that info, retain it, and use it to make your life easier in many different ways.
The real beauty of reading is you’ll never know when that info will come in handy. Sometimes you’ll take a concept on one subject and apply it to something completely different. That’s the good stuff, right there.
You don’t even have to pay a nickel to read, either. Here’s how I do it.
Go to the library
I won’t spend too much time on this, because libraries aren’t exactly a new thing.
What you might not be aware of is how libraries have embraced technology. Let’s use my library as an example. They allow me to use a website to order in virtually any book I want. If nobody else wants to read it I’ll have it in just a few days.
It also has a wide collection of e-books and even a decent number of audiobooks. I used to listen to audiobooks while I worked out but I find myself tuning out much of the time now. It has to be super good to replace my Taylor Swift playlist.
Using your Kindle
I’m still rocking the 1st generation Kindle, a machine that simply refuses to break. Even if it does, I won’t sweat it. I picked up a replacement on the local bidding wars site for $12. It even came with a purple case, which I rock out unironically. The conversation goes like this:
“I know, right? Isn’t it awesome?”
“No, I’m mocking you.”
(rips out their heart and eats it)
If there’s a way to access my library’s e-book selection on my Kindle, I’ve yet to find it. So I’m forced to find other means.
The answer is Libgen, a site put together by a bunch of Russians(?) who grew tired of paying library late fees(??). It has approximately 2 million books sitting there for you to download. There’s no special software or anything. You just go to the site, search for the book you want, and download away.
Whoa whoa whoa whoa whoa
Yes, Italics Man?
Downloading books is against the law.
If I wasn’t downloading them I’d just be getting them from the library for free anyway.
You sicken me.
Italics Man is right. This is sort of a moral and legal grey area. Don’t proceed if it makes you feel uncomfortable.
Getting files to your Kindle
You’ll need to use a program called Calibre to get your ebooks onto your Kindle.
Once Cailbre is downloaded, add your downloaded books to your list. At this point you’ll use the convert feature to convert any PDF or EPUB file formats to MOBI. Kindles read MOBI files, while a Kobo will read EPUB files.
Next (and this is the part that always annoyed me), you need to get out your USB cable and physically connect your Kindle to your computer and upload the files onto the mobile device. This was always a giant pain in the ass.
Fortunately I’ve came up with a hack that bypasses this. You’ll need to find your kindle email address (google it if you don’t know how) and add that to your Calibre. You do this by right clicking on a book, then going to connect/share, and then to email to selected recipients. From there you can add your Kindle email and you’re in business. Just email it to that address and your Kindle will grab it when it’s connected to wifi.
This is all super easy, which is the key to reading more. Try it, you’ll be hooked.
Wrappin’ it up
Feel free to continue buying books, especially from the Financial Uproar Amazon links. We like our referral nickels, dammit. Or you can do a little work and read for free.
Between your library and Libgen you’ll be able to find just about everything you’ve ever wanted to read, all for free. The only thing left is getting at the plan, but that’s the hardest part.
Long-term readers probably remember back when I used to do a stock picking contest, a competition that pitted the best personal finance and investing blogs out there (along with Financial Uproar) in a supreme battle to crown the world’s best investor. And then I got lazy and abandoned the whole exercise. This is my life in a nutshell, actually. I’m not sure how I manage to feed and clothe myself.
Paul from Asset-Based Life picked the bad boy up and immediately did more than I ever could have with the contest. He did a fantastic job running it in 2018 before adding a whole new element to the contest this year. Rather than just picking four stocks (my rules) or three (his version), he’d use an online simulator to tabulate the results.
Here’s a link to the 2019 version on Asset-Based Life.
This fancy new tool offered much more than just saving Paul some spreadsheet action. It enabled the contest to add things like portfolios with far more than three stocks in them, active trading, betting against stocks, keeping capital in cash, and an easily accessible leaderboard where I can witness my INEVITABLE VICTORY on a daily basis.
See what I mean? In just over a year of hosting the contest ol’ Pauly made it a million times better than I ever could have.
After my disappointing finish last year (I still beat the dog!), I was excited to reassert my dominance this year. Let’s take a closer look at my picks.
Before we get to the picks themselves, let me explain my strategy.
You can’t buy the kind of dividend stocks that I’ve been mostly buying lately for something like this. These blue-chips just won’t surge enough to win the contest. An 8-10% annual return (that minimizes volatility) is just fine in real life, but it’s not going to win a competition like this one. You need to be Hitler invading Soviet Union bold. You either take over the world or die in a Russian winter trying.
FINALLY, AN OPERATION BARBAROSSA REFERENCE ON FINANCIAL UPROAR.
Many people embrace this strategy by buying the sexiest growth stock in some new industry. Two separate people won my contests by choosing pot stocks before they were cool, for instance.
I’m a crummy growth investor, so I try a different approach. I’m looking at deep value stocks. Rather than focusing on companies trading at a big discount to book value like I’ve done before, I decided to buy stocks that trade at low price-to-cash flow yields.
Without further adieu, here’s my portfolio (and weightings) for the contest as it stands as I write this, January 10th:
- TransAlta (TSX:TA): 5.06%
- American Hotel Properties (TSX:HOT.UN): 5.19%
- Polaris Infrastructure (TSX:PIF): 4.36%
- Corus Entertainment (TSX:CJR.B): 5.14%
- Molson Coors (TSX:TPX.A)(NYSE:TAP): 6.06%
- Artis REIT (TSX:AX.UN): 5.82%
- Altagas (TSX:ALA): 5.20%
- Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY): 16.82%
- Dollarama (TSX:DOL): 5.04%
(Disclosure: Long TSX:PIF, TSX:CJR.B, TSX:TPX.A, TSX:AX.UN, TSX:ALA, TSX:BPY.UN in real life)
Primarily I plan to trash talk all opponents until they cry and drop out of the contest in embarrassment. If that doesn’t work then here’s my Plan B.
All of these stocks (except for Dollarama, which is my vain attempt at GARP investing) have one thing in common. They all trade at ridiculously low price-to-free cash flow metrics. Corus has a $1.1 billion market cap and generated more than $300M in free cash flow last year. TransAlta is similarly cheap. Brookfield isn’t quite as inexpensive, but it trades at 8-9x estimated free cash flow for 2019 (or in the REIT world, adjusted funds from operations), which is a great price to pay for those assets. There’s a reason why I made it a way bigger pick than the rest.
Now let’s move onto the cash balance. I’m hoping there’s another leg down to this bear market so I can put that cash to work in other assets trading at low prices. I have no special insight into this, I just figure having fresh cash will set me apart from my competitors if we see another big downturn.
I may dabble a bit into shorting too if the market keeps heading higher, but I dunno. Shorting is hard and I’m terrible at it.
Let’s wrap this up
I’m currently 5th (out of 16) in the contest so far, which is a pretty solid start. Jordan from Money Maaster is off to a nice lead to start with, his portfolio is up 7.77%. Then we have Paul’s kid, his dog, and then his other kid. I’m not kidding. I’m getting my ass kicked by a couple of wiener kids and a dog.
Finally there’s me; I’m up a cool 3.83% to start. Not bad considering the 42% cash position.
I might update this soon if I put the majority of that cash to work. If not you’ll have to wait until some other random date until I update this.
Poor Mackenzie Bezos. It’s never fun having your marriage crumble in public view, and it’s even less fun now that it looks like Jeff was a cheating scumbag.
Here’s a one-paragraph summary for those of you hiding under a rock last week. After 25 years of marriage, Jeff Bezos announces he and wife Mackenzie are getting divorced. Just hours later it’s revealed Jeff has a new lady who just happens to be the wife of one of his buddies. Further investigation reveals Jeff and his new lady have been an item for almost a year now.
So yeah. It sure looks like Jeff fucked up.
This decision is going to cost him a lot of money. There’s apparently no pre-nup in place, and they were married a full year before Jeff founded Amazon. They live in Washington state, which means she’s entitled to half of that Amazon money. Jeff’s stake in Amazon is worth approximately $140 billion today, give or take a few B’s.
Or, as Jeff likes to call it, chump change.
Let’s help Mackenzie out here. Should she hold out for half, or should she settle for less?
This argument is simple. Jeff built Amazon while the two were married (apparently she helped some during the early years), so she’s legally entitled to half the stock. Amazon doesn’t pay any dividends or anything, but she’d immediately become the world’s wealthiest woman with her share. I’m sure she could find a way to make ends meet.
And besides, Jeff is clearly in the wrong here. We don’t know what’s happening behind closed doors, but there’s only one spouse who we know cheated, and that’s ol’ horndog Jeff. Maybe she nagged him to death and practically drove him into another woman’s arms, but Jeff needs to man up and get rid of his wife before he cheats.
In short, the shitty behavior justifies Mackenzie going for every nickel she’s entitled to. Imagine if she got the whole $70B, put it into assets that aren’t Amazon, and then walloped Jeff in the net worth race because Amazon has peaked? That would be 57 different kinds of fun!
Take a settlement
Hoo boy. You haven’t even typed a word yet and I already know you’re getting in trouble.
Well how about that? Italics Man is right for once.
I don’t care what the law says. There’s no way Mackenzie Bezos is 50% responsible for Amazon. Her true contribution to Amazon is probably in the 1-2% range, and even that’s being generous.
This isn’t discounting Mackenzie at all. By all accounts she seems like a smart, caring, driven woman who is a great mom to her and Jeff’s kids. But is raising four kids really worth billions of dollars? Of course not. Even if she freed up every minute of Jeff’s time — which she likely didn’t, since he was a good family man who made an effort to be home most nights — that’s still not worth billions of dollars.
Thus, Mackenzie should take a settlement in the $10-$20 billion range. That’ll give her more money than she can ever spend while not totally screwing over Jeff. Yes, I realize she’s legally entitled to much more, but she knows she doesn’t deserve it.
I asked y’all on Twitter already, and the answer was pretty overwhelming. Mackenzie should go for most of the money she’s entitled to.
What say you, FU readers? Should Mackenzie Bezos fight for every nickel? Or should she take a reasonable settlement? The comment section is all yours.
When the hell did oil changes become so damned expensive?
I took my car in yesterday (thanks for the two reminders and two confirmations I made my appointment, btw) and it cost me nearly $90. This is for what, 15 minutes worth of work? They also checked the brakes and tires and whatnot, but my car only has 35,000km on it. None of this stuff is even remotely close to worn out.
I also asked them to top up the tires. They have fancy nitrogen in them for some reason so I figured I’d just let them do it. And those rat bastards wanted to charge me extra! It’s literally a minute of extra work. They have a machine that makes it much easier than when I have to guesstimate while kneeling on the cold hard ground.
At least I was able to drop it off and then pick it up an hour later after I had lunch. My old shop used to double book themselves all the time and keep my car all afternoon. When I called them out on it the response was “well that’s just the way it is.”
That was during Alberta’s boom time. Now that place is dead. Let that be a lesson to you, kids. NEVER SCREW WITH NELSON.
(Does throat slash motion)
Links I liked
1. Jeff Bezos’s divorce was a big headline grabber this week. It sounds as if Jeff was screwing around on Mackenzie, which means if it’s true he deserves some of our scorn. It also lead me to the best Jeff Bezos story ever about how he used to eat a whole can of Pilsbury biscuits for breakfast every morning.
2. Here’s an interesting piece by Mr. Free by 33 on fake entrepreneurs in his new home of Chiang Mai, Thailand. Specifically he laments the lack of real world success from these folks, saying they’re all a bunch of wannabes who aren’t willing to put in the time or effort to be successful.
He’s right about one thing: success is a grind. Overnight successes are years in the making. You just don’t notice the first few years.
3. Paul from Asset-Based Life published the results of his 2018 stock picking contest. Click through to see how I did. Spoiler alert: at least I beat the dog!
4. Speaking of stock picking contests, here’s what Money Maaster chose for his entries into 2019’s contest. He’s off to a pretty good start so maybe y’all might want to pay attention.
I’ll also publish my picks for the contest sometime next week. So you’ll want to stay tuned for that.
5. Here’s a hedge fund letter that I guarantee you’ll find more entertaining than the rest. It’s by Hillbilly Hamlet Capital Management, a totally real investment firm with billions — no trillions — under management.
6. Early Retirement Dude has a pretty entertaining story about that a recent trip to Florida that had him (and the missus) visiting a sleazy strip club (is there any other kind, really?). It’s also got all the details on how another neighborhood strip club rips off their customers, which is where the real entertainment starts. Hot damn are horny guys stupid.
7. Here’s a look at my top pick for 2019. I recently bought more of this stock to make it one of my biggest positions. It’s a fantastic company that owns great assets, all selling for a bargain price. To borrow a baseball analogy it’s a fastball right down the middle. All I need to do is take a swing.
8. I also wrote about how our collective smartphone addiction problem is very good for one particular Canadian stock.
9. Over on Seeking Alpha, Ian Bezek is a big fan of Jack Daniels’ parent company Brown-Forman, and not just because of the dividend growth history, either. Perhaps he even enjoys the product sometimes GASP DON’T TELL THE CHILDREN.
10. And finally, another article from Seeking Alpha. This one is by Sure Dividend, pointing out the reasons to be bullish on Altria today. Come for the 6% dividend, stay for the inevitable lung cancer.
Next week’s articles will include how to read (almost) anything for free, my picks for the 2019 version of the stock picking contest, and much more.
Have a great weekend, everyone.
I think we can all agree that having at least a portion of your portfolio in non-Canadian stocks is a good thing.
We’ve heard all the cliches before. Canada is only 3% of the world market. Our economy is too dependent on energy and basic materials to be a good investment choice. We have a massive real estate bubble. Canada’s tech and health sectors are worse than a botched plastic surgery. And so on. These arguments make sense so we diversify outside of Canada.
Even YOUR BOY Nelly has made some recent share purchases outside of Canada. I bought a Mexican airport operator I’m too lazy to look up the proper name of. I also bought Starbucks and Apple and still own some Berkshire Hathaway from a few years ago. Philip Morris was added to the portfolio because I want children to destroy their lungs. And I bought Facebook during the recent market carnage. SPY AWAY ZUCKERBERG AS LONG AS I GET ME SOME PROFITS.
But my U.S. portfolio is just a small percentage versus the Canadian assets. While I’d love to pick up more investments in the states, I’m holding off doing so until something happens.
I’ll buy U.S. stocks in a big way… eventually
The problem as a Canadian buying U.S. stocks has traditionally been the currency.
Blog genies can we throw up a long-term chart of the Canadian Dollar versus the U.S. buck?
The Canadian Dollar hasn’t spent much time under US$0.80 over the last 15 years. It’s mostly been a recent phenomenon.
This is happening today for a couple of reasons. Our Dollar is viewed as being tied to commodity prices. Oil, gold, and other commodities aren’t exactly getting investors hot and heavy right now. And it’s being attacked on the other side, too. The U.S. Dollar has been quite strong over the last few years.
Say I buy $10,000 worth of a stock today and then the Canadian Dollar rallies to US$0.95. How did my investment do?
- $10,000 Canadian is worth US$7,500 today
- I buy US$7,500 worth of stock.
- Stock stays the same but the currency rallies to US$0.95
- The stock is now worth $7,875 in my local currency
See how a big move in the currency can be a real wealth killer?
A better time to buy
It works in the opposite way buying U.S. stocks when the Canadian Dollar is at a high. You get more shares for your buck and you benefit when the local currency heads lower. That’s a fantastic way to juice your returns.
Another example? Don’t mind if I do. We’ll do the opposite as above, buying at US$0.95 and selling at US$0.75.
- $10,000 is worth US$9,500 today
- I buy US$9,500 worth of stock
- Stock stays the same but CAD weakens to US$0.75
- The stock is now worth $12,635 in local currency
Thus, the strategy is simple. Wait and buy U.S. stocks in a big way when the Canadian Dollar approaches par with its U.S. counterpart. You can then sell them when the two currencies move apart or choose to hold them over the long-term.
Many of you won’t like this strategy, saying I have no way to predict where exchange rates will go. And you’re right! I have no idea where the Canadian Dollar will trade next week, next month, or even five years from now. But remember, I don’t need to get a trade right to profit from this. I just need to use historical info to make sure I’m not blowing my brains out.
Others might not care because they want a permanent USD portion of their portfolio. There’s nothing wrong with that. But instead of converting that cash in the first place now, wait until you get a better price for it.
And remember, Norbert’s Gambit allows you to convert your cash without paying pesky 2.5% conversion fees. Those conversion fees are a bigger rip-off than that fancy reverse osmosis water. There are perfectly good puddles out there, thank you very much.
Wrappin’ it up
I only have something like 10% of my portfolio in U.S. names today. It’ll stay at that level until the Canadian Dollar rallies in a big way. I’m perfectly content to wait for years until this happens.
A little patience often goes a long way when investing, and this is yet another example. The Loonie might languish for years below US$0.80. That’s fine. Pounce when it approaches par again. That’s what I plan to do.