Should we continue numbering these things where I left off back in 2017? Or should we start over? Or maybe I should get a new way of telling these bad boys apart since I can’t count past 48.
Before we get to the links, let me tell you kids about a contest over at the Lowest Rates website. They’re looking for the best piece of personal finance advice you’ve ever received. The best of the submissions will win a shiny new MacBook. That’s some serious swag right there.
I’m not really sure what the best piece of personal finance advice I’ve ever received. I remember my first boss at my very first job (Dairy Queen, REPRESENT!) used to tell me “take care of the pennies and the dollars will take care of themselves.” I also remember being taught the beauty of having your money work for you as you sleep around the same time. Both pieces of advice seem pretty simplistic now, but they really made a difference back then. It turns out 14-year old Nelson was pretty clueless. Some might argue 35-year old Nelson isn’t much better.
Now seems like a good time to remind y’all about the worst financial advice I ever received.
Alright, it’s time for some links. Let’s do this thang.
Links I liked
1. Let’s start things off with the nearest tab currently open on my laptop. No, it’s surprisingly not porn. It’s a series of networking tips from Tim Ferris, that guy everyone publicly says is annoying but actually they like his stuff. I am no different.
2. I’m a fan of these monthly investing ideas from Mr. Tako Escapes. If you like the way I invest, you’ll probably be interested in Mr. Tako’s takes.
3. Bruce Flatt runs Brookfield Asset Management, which might be the world’s largest asset manager. Okay, not quite, but the company is still a behemoth. It owns everything from real estate to power plants and everything in between. He recently gave a talk at Google about his investing philosophy and about 14 people showed up. Maybe everyone planned to watch it on Youtube after? I dunno.
4. About once a year, Freedom 35 Blog puts together a bunch of negative comments about his blog from various anonymous internet folk. They’re pretty funny. Nice to see he’s got a sense of humor about it all. I know other bloggers who would actually lose sleep over stuff not nearly as bad.
5. A nice post from Paul over at Asset-Based Life, talking about one of the reasons I’d say everyone blogs. We want to leave some sort of legacy. Paul wants a resource about money he can use to educate his kids. I’m firmly on Team No Kids, meaning my target market is bored tech employees doing anything they can to avoid real work. I feel your pain, brother.
6. I’ve been a fan of Dale Roberts’ writing over at Seeking Alpha for years now. His new site, Cut the Crap Investing, is dedicated to helping Canadian investors lower their investing fees while keeping their portfolios simple. Not surprisingly, he recommends a lot of ETFs. He recently came up with a bunch of model portfolios which are definitely worth a few minutes of your time.
7. The New Horizons Mall just outside of Calgary promised to be truly unique. Instead of vendors renting space, they would buy their own individual store. Think of it like a condo, but also a shopping mall. What started out as a great idea has stumbled. The mall has recently opened with a 98% vacancy rate. No, that’s not a typo. What a crazy place. I must visit.
8. Gen Y Money has some interesting thoughts on the ol’ FIRE movement, specifically why she wants a nice cushion before she retires and why many retirement bloggers have just transitioned from full-time work to blogging. Long-time readers might be interested to know I’m beginning to soften my thoughts on the definition of retirement, mostly because I just don’t care anymore.
9. Gonna sneak in a link to the ol’ investing blog here. I found an interesting company that’s buying up strip clubs. Nobody is surprised I wrote about this.
10. Here’s a fantastic discussion from actual small business owners about the new tariffs impacting goods traveling across the Canada-U.S. border.
11. Which Canadian bank has the country’s most popular credit card? Nope, not your bank. Or any other one. It’s actually a grocery store.
(Upon further reading, it turns out most of Canada’s most-loved credit cards don’t come from banks. This should surprise nobody.)
12. And finally, here’s Oddball Stocks, who points out that every business is a depreciating asset. If a business doesn’t continue to invest in itself, it will eventually die. Unlike my Italics Man joke, which will live forever.
Have a good weekend, everyone.
It was Daylight Savings a little over a week ago, that magical weekend where clocks go back an hour for no good reason and everyone notices what a difference an hour less sleep makes.
I could maybe understand the thought process back in the 1920s when electricity was scarce and light bulbs actually made a difference. But a lot has changed in 160 years, including the ability to do basic math. There’s no need to try to save electricity today. Energy saving measures are already doing that without us.
Which is why I was happy to hear the ruling NDP party in Alberta is considering abolishing the practice and leaving the province on central standard time all year round, which is the same as Saskatchewan. The party plans to vote on the bill soon (which will likely pass), making it two things the NDP has done I like.
The other was banning most door-to-door sales. If those guys keep going, I might have to vote for them.
(Realizes the Carbon Tax is still a thing)
(Shakes fist wildly)
Like I could vote for the socialists. How would I sleep at night? I normally sleep on a pile of money but the NDP wants to take it away.
Links I liked
1. Holy Potato weighs in on the fiasco that is the Home Capital Group fraud case, which a lot of fingers being pointed at CMHC. But as much as I want to see Home Capital fall, and much as Home Capital deserves it, I’m mostly bored of the whole exercise. I want it to be over with. It’s just the same people shouting the same arguments back and forth to each other. There’s more independent thought at a Trump rally.
2. Freedom Thirty Five Blog points out just how much better it is to live in Canada versus the United States. As much as I ideologically like the idea of free market health care, the U.S. is proof such a thing just doesn’t work. Socialized medicine is a huge plus for Canada.
3. The Federal government is getting ready to tax the living hell out of y’all with its next budget, which comes out next week. Potential changes include a 75% inclusion rate for capital gains, taxing stock options differently, higher taxes for small corporations, and more. Garth Turner has all the ugly details.
4. Here’s a story about how a convicted fraudster tricked a small town into giving him a bunch of money for a reality show. I’ll give the guy credit, it’s at least 47% more clever than most frauds.
5. Here’s a great interview with billionaire real estate mogul Michard LeFrak, from my new favorite Youtube channel, Investors Archive. Look for a lot more of these links over the upcoming weeks.
6. It’s not very often I enjoy a book review post, but Paul from Asset-Based Life could write an entertaining post on his grocery list. He reviews a Japanese decluttering book that’s far better than you’d think.
7. Barry from Money We Have asks an important question that needs to be brought up more often. What exactly is your money for? What are you working towards? There’s no point in having a goal if there isn’t a why attached.
8. Roadmap 2 Retire outlines why he recently bought TD Bank on the heels of its sales controversy. I agree with his thinking completely. People have already forgotten about it. It’ll be such a non-issue a year from now.
9. Interesting post from The Rational Walk, which thinks that investors shouldn’t share ideas with each other, saying that good investments are rare and should therefore be guarded. I prefer a hybrid approach, which is buying a full position and then sharing it with you guys.
10. Here’s how Peter Cundill, an extremely underrated Canadian deep value investor, approached investing.
Stuff Nelson wrote
1. A lot of people seem to think you need a minimum of $1 million to retire today. I disagree, outlining how retirees with significantly less can still avoid eating cat food.
2. I also pointed out four reasons why your “can’t miss” marijuana stock investment could turn out very badly.
3. Finally, I wrote about Target, which recently announced a $7 billion investment in its stores. Very little of that cash is going towards its digital business. This is a colossally dumb decision to make in 2017.
Tweet of the week
What am I supposed to do, not make fun of St. Patrick’s Day? What a useless holiday. Screw you and your green beer.
Have a good week, everyone.
The big story in the Canadian personal finance blog-o-net this week was definitely Sean Cooper’s tire fire of an AMA (ask me anything) over on Reddit. Cooper was clearly looking for some free publicity for his upcoming book — which I reviewed and didn’t really care for — but it didn’t really go as planned after several people questioned him on the validity of his mortgage free in three years story.
The issues basically come down to one thing. Cooper stated he made around $100k a year for each of the three years it took to pay off his mortgage. But once you factor in things like taxes, groceries, house expenses, and a big renovation, it becomes obvious he only had $60,000 or $70,000 a year to throw at a $255,000 debt. The math doesn’t add up.
Sean’s explanation for the discrepancy is… well, nobody really knows. He’s pretty vague with his answers, essentially saying “guys, the numbers add up. Trust me. And no, I’m not going to disclose what I made.” People are saying that’s a pretty weak argument from a person who’s in the credibility business, which is a pretty valid take. It’s all about trust.
And then this comment showed up, which really started to grind my gears:
Pardon my french here, but there’s way too much of this kind of bullshit going on in the financial blogging sphere, and I’m tired of it. Criticizing Sean using throwaway accounts or in private messages and behind closed doors is a cowardly thing to do. If somebody thinks the guy is lying or is giving dangerous advice, own up to it.
We criticize payday loans and credit card debt and mutual funds and a million other terrible financial products on our blogs every damn day, yet when somebody presents a message we disagree with, nothing happens but whispers behind the scenes. Electrons fly back and forth with people saying to their friends “Oh. My. God. Did you just see what Nelson wrote?” Meanwhile, my comment section is more dead than Jimmy Carter.
Wait. He’s not dead? Are we sure there isn’t a Weekend at Bernie’s situation going on there?
The point is this. If somebody thinks Sean’s message will ultimately make people poorer, take a stand and say so. They have a responsibility to do so, in a way. And if a blogger is typing something out to a friend they wouldn’t say publicly, then maybe it’s time to hit the delete key. It takes courage to criticize somebody on a public platform. It doesn’t take much to talk shit behind somebody’s back.
Links I liked
1. Let’s start things off with an interesting article from Institutional Investor, highlighting the changes made by Quebec’s giant pension manager Caisse de depot under former BCE head Michael Sabia. Changes included getting out of index funds and taking a far more concentrated approach, despite managing more than $150 billion in assets.
2. This inside look at the Microsoft IPO back in 1986 is a great read for the creepy cover picture of Bill Gates alone. He looks like he’s about to slip something into your drink.
3. Mr. Dividend Growth Investor points out some myths surrounding index investing, which are very valid. Ultimately, investing comes down to consistency. Switching up your methodology because one part of your portfolio is struggling is a bad idea. If there’s one thing we can say about Dividend Growth Investor, it’s that he’s consistent.
4. Andrew Hallam continues to be one of my favorite finance writers. Here’s a piece he recently did for Asset Builder that looks at how Captain Kirk’s mindset can help your retirement.
5. TD Bank’s aggressive sales practices made the news this week, as profiled in this CBC article. One teller said “customers are prey to me. I will do anything I can to make my [sales] goals. I thought this was much ado about nothing, but TD shares slumped 5.5% on Friday because of this report. Investors think there might be another Wells Fargo situation here.
6. The funniest story of the week comes from Business Insider, who profiled a 31-year-old who paid off $220,000 in student loans in three years. Inspiring, right? There’s just one problem. She had all sorts of help from her family, including her mom giving her a job, a free condo, and a free place to live once our hero decided to rent out the condo for more income. Sacrifice is hard, yo.
7. Speaking of which, Paul over at Asset-Based Life has our previous linkee beat. He paid off $65,000 worth of student loan debt in two minutes. No, that’s totally not clickbait. Really.
8. Bitcoin crashed some 20% on Friday because the SEC rejected the much-anticipated Bitcoin ETF sponsored by the Winklevoss twins. Yes, it’s the same twins that supposedly invented Facebook because they had the idea first. I appreciate anything that knocks Bitcoin down a peg. What a dumb asset class.
9. I’m a big fan of Boomer and Echo’s so-called “four minute” portfolio, which gets its title from the amount of annual work Robb puts into it. ETF investing is supposed to be simple, and you can’t get much simpler than Robb’s two ETF approach.
10. Half Banked points out that if you really want to accelerate savings, making more money is far more important than frugality. It’s an important, timeless message that I will pound into everyone’s head until goo comes out their ears.
11. The execution is the hardest part, or so says Studenomics. Nobody wants to hear about the nitty gritty of starting a business or making more money. Remember that when you’re struggling to get ahead.
12. And finally, here’s a profile of a mutual fund that only invests in stocks trading under $35 a share. A bit of an odd rule, but hey, I’m interested enough to give it a link.
Stuff Nelson wrote
1. I wrote about suddenly cheap Under Armor, taking a look at whether the stock is worth checking out for value investors.
2. I recently spent some time talking to “Jerry”, a millionaire next door type who amassed a $2.5 million net worth just after his 50th birthday. Jerry is an interesting guy with a lot to say. I’ll have some more Jerry wisdom next week for y’all.
3. I also spent some time discussing whether the TSX Composite is in a giant bubble. It’s no worse than Toronto housing, anyway.
Tweet of the week
This didn’t even come from me. Way to phone it in, Nelson.
Have a good week, everyone.
Is that my worst picture yet? Vote and win… I’m being told there is no prize and you can’t actually vote. Who runs this site, anyway? Sad!
Those of you who used to read my value investing site (may it forever RIP) might remember when I wrote about Information Services Corp (TSX:ISV), a great company I thought was trading at a very attractive valuation. ISV runs the Saskatchewan land titles registry, which a fantastic business. It’s one of the true monopolies left in today’s world.
Over its last four quarters, ISV did $17 million in net income on $90 million in revenue, for net margins of 18.9%. And that was despite a crummy first quarter. 2015’s full-year results had it doing $16 million in net profit on $78 million in revenue, for net profit margins of 20.5%. That is a succulent business.
I’ve balked at buying it because I’m a cheap bastard. It was slightly over $15 when I first looked at it. It promptly rallied to $19 and change. It went from being cheap (12x free cash flow, 15x earnings) to only fairly valued (at 16x free cash flow and 20x earnings). It pained me as a value investor to pay that much for a business, even one I view as being above average.
Maybe it’s the market euphoria talking, but I threw caution into the wind on Friday and tried to pick up some shares (my order has not be filled as I write this). The last time I paid up for a good business was Pizza Pizza, and my shares are up close to 50% (including dividends) in the 1.5 years since I bought. Here’s hoping for a similar result with ISV.
What a boring name for a company. Information Services Corp. They paid some marketing firm a quarter mil to come up with that, didn’t they?
Links I liked
1. Let’s start things off with Divestor, who pointed out some of the problems with selling covered calls as an income source. Remember one simple rule if you do try such a strategy — the higher the option premium the more volatile the underlying stock is. Something something no free lunch, in other words.
2. I have a feeling I’m going to be linking to Canadian Value Stocks a lot. Here’s his latest piece on Callidus Capital, a company with a succulent shareholder’s yield of 18.7% if you include the debt repayment. Yowza. Too bad leveraged financials give me nightmares.
Speaking of leveraged financials, First National Financial (TSX:FN) is pretty cheap. I’m avoiding it because of my aforementioned dislike of leveraged financials, but it’s super cheap (8x P/E) and is growing revenue at more than 10% a year.
3. Oddball Stocks points out that if a company has very little experience in growth, it can be a killer. It really depends on management.
4. I’m a big fan of the contrarian nature Freedom 35 Blog has taken on lately. Here’s Liquid arguing that real estate in Canada is still quite affordable. I’m not sure I agree, but I do like it when somebody writes something that makes me think.
5. I discovered this older post by The Money Wizard, and I agree with every last word. A much better emergency fund than cash in the bank is liquid assets. In other words, keep your cash on hand to a minimum and invest the rest, dummy.
6. Another interesting piece from Don’t Quit Your Day Job, who points out that often a cheque cashing place is a better alternative to banks, especially for poor people. The reason? No hold periods, among others.
7. My Own Advisor points out getting a tax refund is dumb because it’s a interest free loan to the government. Low interest rates do make this a bit of a moot point, but the point is still valid. I’d like to see more of these anti-tax refund posts mention the real reason to not want a tax refund, which is opportunity cost. I suppose it’s implied.
8. Somebody collected all of Charlie Munger’s speeches into a 350-page pdf and is giving it away for free. Saj Karsan has all the details.
9. My fellow Fool.ca writer Will Ashworth thinks Torstar Corporation is extremely undervalued. He has a target price 171% higher than the current price. It seems ambitious, but I do follow his logic. I’ve looked at Torstar a few times over the years. I just can’t pull the trigger.
10. And finally, here’s a link to one of the funniest unintentional pieces of comedy in the history of the internet. It comes from Canadian Money Forum and it starts out with the claim “the biggest emerging market we will see in our lifetime is the Cannabis industry.”
/takes bong hit
Weed cures cancer, man.
Things Nelson wrote
1. I told American investors how to collect $1,000 per month from a couple of popular REITs over at InvestorPlace.
2. I also compared gold to Bitcoin and asked which one was the better choice. Rant time: I don’t get Bitcoin, and never will. What’s the point? Your Bitcoins will never provide you an income stream. And even though the supply is tightly controlled (or so we’re told), it’ll still grow over time. It’s a dumb investment, IMO. Of course, gold isn’t much better, but at least you can get operating leverage from a gold miner.
3. Think you won’t be impacted by a Toronto housing crash because you were smart enough to take my advice and leave town? Think again, bucko. FEAR FEAR FEAR.
Tweet of the week
I really need to up my funny Twitter game.
Have a good week, everyone.
Let’s talk a little bit about childhood heroes.
There was a guy I knew as a teenager who I thought was the coolest person in the world. Here was a 35 year-old grown man who enjoyed movies, video games, pizza, and random fun weekend trips. He was kind enough to always be nice to me even when I was doing moronic kid stuff or acting like a real dumbass.
I remember going to him several times for advice over my teenage years, and he’s always have smart stuff to say. It was all pretty basic stuff in hindsight, but I sure appreciated it at the time. I remember just feeling really grateful he actually took the time to care about me and my problems. There weren’t many adults who did, at least from my (admittedly biased) perspective.
About 18 years later I ran into the guy on Facebook. I added him as a friend and moved on with my life. My feed was quickly filled with asinine political opinions, racist jokes, and other terrible nonsense. Every time he posted my respect went down a little more and a little more.
It turns out he’d suffered some hardship in his life. He wife divorced him and moved away. There were some issues at work and he’s cycled through a number of jobs since. There were even rumors of him doing some inappropriate things before he got divorced. So maybe that affected him. Or maybe I just put him on a pedestal.
A week or two later he dropped me as a friend and I haven’t heard from him since. I don’t even know if he’s still on Facebook or not. It was probably for the best.
There’s probably a lesson there about outgrowing your mentors, but I think the better one is just avoid Facebook. It’s for the best.
Links I liked
1. Let’s start things off with this story about Costco that appeared in the Financial Post. It’s a great look at a retailer that’s succeeding despite not following any of the rules of the game. Here’s a chain with no flyers, who pays its staff a decent wage, and that intentionally limited the number of skus it carries. And it’s killing it. Fascinating.
2. If you enjoyed last week’s post on Charlie Munger at the Daily Journal Corporation’s annual meeting, then you’ll want to watch these videos of him continuing to answer questions after. There are 22 videos altogether that’ll take you about an hour.
3. Speaking of Charlie Munger, Farnam Street Blog takes a look at how the underrated half of Berkshire Hathaway’s brain trust thinks. It’s filled with all sorts of fun Munger quotes if you’re into such things.
4. A long-time FU reader has set up a value investing blog, which is worth your time if you’re into such things. He wrote about a company called Input Capital that I enjoyed. I’m happy Canadian value investing blogs are popping up.
5. Warren Buffett’s annual letter is out. Read it or be square. Whoops, that’s a typo. It should be read it and be square. Financial Uproar apologizes for the error.
6. I enjoyed this post from Kapitalust about just how easy it is to ruin your reputation in five minutes. The examples alone are worth a couple minutes of your time.
7. My homie Stevonomics (we’re both cripplingly white) wrote about why he thinks real estate is a dumb investment for young guys looking to get ahead. I go back and forth on this all the time. There’s obviously big pluses on both sides of the debate. It’s fascinating.
8. Time for your weekly gold from Boomer and Echo. They point out that the key to a successful retirement isn’t cash in the bank. It’s regular multiple income streams. Should I see a shrink if passive income excites me sexually?
I should probably see a shrink anyway.
9. A helpful reminder from Don’t Quit Your Day Job is next. They point out predicting the direction of the stock market is usually pretty easy. You just take the consenting opinion and flip it. Contrarianism for the win, suckers!
10. Here’s a great story about a guy who got hired at one of the world’s most prestigious hedge funds despite never finishing college. It’s long but definitely worth your time.
11. Ever wonder how much your insurance agent makes when use them to get car insurance or home insurance? Here’s the answer.
12. And finally, here’s a fascinating look at structural unemployment in the United States and the issues facing these folks, which commonly include having a criminal record or being so poor they can’t afford to leave a dead-end town.
Bonus: Here’s a profile of an investment firm that buys dying malls and helps to bring them back to life.
Stuff Nelson wrote
As a reminder, you can hire me to write for your blog, newspaper, or poorly-Xeroxed newsletter. Hit the ol’ contact me page to get the ball rolling.
1. BlackBerry entered the self-driving car market with much fanfare in December 2016. I argue it’s too little, too late.
2. I also pointed out that just because Warren Buffett sold Wal-Mart doesn’t mean he’s signaling the death of retail. There are still opportunities in the sector. I won’t invest in them but it doesn’t mean you can’t.
3. I also pointed out it might be a good idea for Canadian investors to take some profits and move them to cheaper parts of the world.
Tweet of the week
A dumb tweet for a dumb holiday. I didn’t even take the day off.
Have a good week, everyone.