On Tuesday the S&P 500 was down 0.3% and Toronto was down 0.7%. I never know where markets are headed int eh short term but after weeks of gains it is not surprising to have at least a few weak days.
Most of our stock picks were down but nothing dramatic.
I am still working on the Couche-Tard update. I want to take extra time to understand its success as best I can. I consider it to be one of the most admirable companies in Canada. For one thing, it’s a rare exception to the usual rule that Canadian companies expanding into the U.S. do poorly. It purchased the U.S. circle-K chain some years ago in huge acquisition and this has worked out extremely well. I am pondering its ROE which it says is over 20%. Warren Buffett grew Berkshire into one of the larger companies int he world and himself into one of the riches people in the world by compounding (and retaining) earnings at right around 20% average for the 48 years from 1965 to today. Now, getting 20% for decades is the holy grail of investing, but it makes sense that if you ever want to compound money at 20% a possible strategy would be to climb aboard a company that is making 20% (and expected to continue to do so) and hand on for the ride. The way most people try it is through aggressive trading and leverage and risk (options and such). I actually have never hard of a documented case where that worked out. (George Soros may be one case though I have not seen exactly how he grew all his wealth, it is known that some came from aggressive trading).
Any suggestion that 20% or even 15% is remotely possible is unconventional advice. Conventional and safer (so the conventionals tell us) is to invest in a balanced portfolio widely diversified. Conventional advisors don’t earn that much more if you earn 15% and you might leave them or try to sue if you have a bad year and so conventional financial advisers cannot and will not suggest unconventional strategies even if they happen to think they have merit and are safe in the long run.
I am not 100% sure that we can continue to beat the averages, much less continue to spank the market or to approach 15 or 20% but so far our track record is very good. Follow the advice on this web site at your own risk, however. It is for adults only. It’s for people who are ultimately willing to take responsibility for their own trade decisions. It’s been maybe a couple weeks since I mentioned… InvestorsFriend Inc. (much less myself) offer absolutely no guarantees of investment results. If that is not acceptable, then by all means cancel your subscription. (Note that refunds are not possible after 6 weeks from the date of a payment). Very few people ever ask for refunds.
I did really mean to get into that whole topic, I just write what comes to mind and sometimes the process takes off in unexpected directions. One cannot really talk about 15 and 20% returns without mentioning that such things are by no means guaranteed, nor is any return level guaranteed, but I repeat myself now.