October 31, 2008


"just a little bit"

Aretha Franklin

For some time now, I have found myself getting concerned about the lack of courtesy evident in everyday living. From the grocery store to the mall, on the freeway or the hockey rink, in the airport and the office hallway there seems to be an ever-increasing disregard for common courtesy as people bump and jostle their way through the day without a thought for the space of anyone else. The only problem with these thoughts is that courtesy is an "effect" not a cause so there must be something deeper at play here and then it occurred to me while reading an article in the sports page about a young player is serious condition after being hit in an NHL game. We have lost touch with the need to treat each other with respect. I'm sure there are many causes including television, teaching, parenting and in particular watching the actions of sports and movie heroes. Whether in real life, or in a movie or game the "actors" are displaying a total disregard for the effect that they are having on their fans. This isn't true in every case because their are still some celebrities who display a genuine personality that shows they have the maturity to respect the rights of others. It would do us all well to support and hold up these people as the real heroes in life.

October 29, 2008

Ya gotta wonder

Many thanks to the friend who passed this along after reading yesterday's blog:


I work, they pay me. I pay my taxes and the government distributes my taxes as it sees fit. In order to earn that pay cheque, I work on a rig site for a Fort MacMurray construction project. I am required to pass a random urine test, with which I have no problem.
What I do have a problem with is the distribution of my taxes to people who don't have to pass a urine test. Shouldn't one have to pass a urine test to get a welfare cheque because I have to pass one to earn it for them?
Please understand that I have no problem with helping people get back on their feet. I do on the other hand have a problem with helping someone sit on their ass drinking beer and smoking dope.
Could you imagine how much money the provinces would save if people had to pass a urine test to get a public assistance cheque? Please pass this along if you agree or simply delete if you don't.
Hope you will pass it along though, because something has to change in this country, and soon!

October 28, 2008


"as goes --, so goes America."

There seems to be something morally bankrupt (if not financially) about the bastions of capitalism and free enterprise lined up at the government trough for taxpayer handouts. Am I the only one who finds this to be an unprecedented paradox? If the governments keep printing money and handing it out - doesn't that mean that the nations' debt is increasing and won't somebody have to pay it back someday? I'm just a poor country boy but I don't understand this eagerness to reward failure. Perhaps I missed something in those economics classes about risk, reward and laissez faire - or is that just in the good times?
In keeping with the current trend, due to an unexpected electrician's bill today, the household budget is going to be about $500.00 short - where do I line up???

October 23, 2008


more answers in search of questions

Lunching with HJ is always a time of enlightenment, whether needed or not! Occasionally we create a topic of the day but most times we enter this hallowed space armed with nothing more than our deep convictions about how the world should operate. This intelligensia is free for the asking....if only someone would. Yesterday was no exception as we spouted forth on a wide variety of topics, all aimed at making the world a better place. So, I offer here a compendium of answers and you can play the Jeopardy Parlour Game by making up your own questions to go along with these highly researched and clarifying results:

answer # 1 - more sex - the attractive young lady at the buffet in the "one size too small blue jeans" was noted to be smiling in sympathy at the protestations of the two old farts at the table in the corner.

answer # 2 - cut spending - this applies to the excesses and extravagances of various wives and in no way should impinge upon the R & D budget required to continue these weekly lunch sessions.

answer # 3 - being right - especially important when one lives the philosophy of "zig when they zag."

answer # 4 - opinion masquerading as news - except at this corner table, of course.

answer # 5 - better is bigger - imagine the possibilities.

There you have it - the answers to this week's burning questions that imbibing minds want to know.

October 15, 2008


Executive Summary

OK, here's the Reader's Digest version of yesterday's blog:

1.) the media will always emphasise negative news

2.) stock market volatility is caused by a combination of negative opinions, enormous media exposure, emotional responses, lack of research and too much opinion without second thoughts

3.) the stock market responds to economic news, NOT the other way around

4.) buy low - sell high

5.) news programs (including business news) are more about entertainment than information

6.) having an attention span longer than a gnat will make you money

October 12, 2008


The thing that has fueled the Information Age is communications and we have financed, encouraged and embraced communications with a fervor that is as surprising as it is immense. The very fact that you are reading this blog is proof of the incredible speed with which information can reach each of us. While many of us marvel at the miracle of email, newer and faster and even more marvellous forms of communication have taken us to places that could not be imagined just 10 years ago! The ability to access and create information is mind boggling and while we stand in amazement, we are only now beginning to see that this coin has two sides. Let's see if we can connect the dots....

The fuel of financial markets has always been information and was generally a question of who had it and who didn't. Information was somewhat dry and cold and numerically inclined and basically the purview of economists, accountants and people who could read a balance sheet that pointed out where a company had been historically. This was combined with information about what a company was currently doing and its prospects for the future and the people who shared that information often profitted rather handsomely, so various regulatory agencies brought in insider trading and public disclosure rules requiring information be made available to the investing public before the keepers of the information could use those facts to make an investment decision. The theory was that everyone operated on a level playing field but the communications apparatus was unwieldy at best and the importance of access to information became ever more apparent as the average investor or man on the street was forced to rely on various advisers who had their collective ear to the ground (or heads in the sand). Speed became the new religion when it came to financial markets and the 100 channel universe began to create very targeted delivery systems known as CNN, CNBC or in Canada, BNN, etc. We are in the 250 - 300 channel universe now and have access to instant information from almost every corner of the world that includes weather, political, environmental, financial and every other discipline imaginable, if you consider sports and entertainment disciplines.

OK, I know this is a long one, but in order to understand the importance of the last paragraph, we really need to cover this stuff first.

During the past 2 or 3 years, the amount of information available to anyone with a laptop computer and Internet access is staggering and the portals to this information have become easier, cheaper, faster and bigger while names like Google, Facebook, Blackberry, Yahoo and YouTube have reached iconic status in the blink of an eye. The fact that the successful sites have 100's of million of users is a power that most of us can't imagine. The fact that each of those users can add or receive information from this infinite source, in a split second, is beyond the ability of any government or legal and financial body to control, assuming they can even understand it. By the way, in case you are wondering, I'm not about to call for control or dis assembly or anything else like that, but you will need to read on to see how this connects to the world we are viewing and how YOU can profit from it.

In addition to the staggering amount of information available (and we haven't talked about the quality of the info yet), the easy and cheap availability is supported by the nano-second recovery time and these have combined to create a new paradigm while we still cling to many historical thought patterns that serve to create uncertainty in our financial markets. Instant access combined with shorter and shorter attention spans as we lurch from crisis to crisis has spawned a financial version of the perfect storm. Greed and lack of self control along with unfathomable amounts of debt to support wars and mortgages for the down and out (but who still have a vote), run away credit on every level and a desire to have everything right now, added to a multi dimensional media (desperate to offer "breaking news") that chases after negative stories with the fervour of a circus tent preacher has created a tsunami of gyrating opinions that all demand action right now! We have politicians in the middle of election campaigns making up policy on the run as the media demands answers and action immediately and public opinion is being created by so called panels of experts whose areas of expertise are marginal at best, but they look good on camera.

Can you see what I'm getting at? We think we need instant everything from breakfast to health care, from sneakers to wine aeration, from landscaping to travel times and anyone who offers immediate fulfillment from news networks to Dr. Phil are feeding the info junkie in all of us. The media is interviewing anyone with a pulse, seeking their opinion on the latest disaster and they keep repeating words like "financial meltdown," "recession," "banking crisis," "frozen credit," "bail out" and whatever they dream up today. This need for instant gratification has left little time for due diligence and sober second thought is now a distant memory. In their haste to provide opinions, the media has invited conjecture and hyperbole to create sound bites and headlines that masquerade as NEWS or fact. In order to attract the viewers attention in a universe that is powered by a channel changer, it has become necessary to create ever increasing amounts of drama and breathless "on the scene" reporting and the area that screams loudest gets all the attention. Today it is the stock market.

Yes, I'm getting to the point soon.

Ok, one of the keys is that we are being fed an enormous amount of OPINION in the guise of breaking news. We have made pseudo celebrities out of talking heads and treat their every word as gospel which gets repeated over and over until it sounds like truth. We are inundated as absolutely every media outlet jumps on the bandwagon and pretty soon we have been stampeded into a recession because we believe (and so do the politicians, pundits and economists) something if it is repeated often enough. Only a few months ago everything was upbeat, house prices were climbing, jobs were plentiful, people were buying second homes in the sunbelt, luxury cars were driving themselves off the lot and the stock market was on an endless journey up - go ahead, check the on line archives of your local newspaper - spring of 2008 editions!

Notwithstanding the fact that their are enormous and unprecedented pressures on the economies of the world, the race to the stock market basement has been overblown, over hyped and overheated by this relentless outpouring of conjecture in every media outlet on the planet. There seems to be a race to report the worst possible news and the whole affair has been exacerbated by elections in which competing parties trip over themselves to bring bad news (whether true or not) to the electorate. Rather than look at solutions, they get more press coverage by blaming ills on the party in power. Cheap thrills by cheap people that is affecting in a very real way, your world and mine. We have talked ourselves from "controlling growth" into a full blown free fall of the world's economies in a matter of months. Fiscal responsibility has morphed into printing money as fast as we can without any plan to change the system that got us here. There is over reaction everywhere and it is fueled by instant opinions and hypothesis that are totally untested and untried. Information is king but the information is tainted by the incessant need to be first with the breaking news. Everything is moving faster and faster from communications to the reaction time of stock markets. Computerized trading systems that spark automatic buy and sell orders can move markets by 10% in a single trading session.

So, how does that affect you and I?

Markets that can come down that quickly based on emotion and over reaction can turn around and go in the other direction just as quickly. There is no way to know where the bottom is and so there is no point in trying, nor is there any point in waiting. To jump back to historical reference for a minute, by the time the economists declare that a recession has ended, the market has already moved up about 25% . We may be in for some wildly gyrating markets as they jump to and fro based on what the darlings of the media speculate and postulate about, but it seems to me that a few ounces of common sense would allow us to find a way to gradually invest over a period of time, in a basket of well managed companies, in one of the world's strongest economies and create ( or re-create) a nest egg that may move just as fast on the upside as it did on the down. As an old stock broker (investment advisor, in the legal sense), I am reluctant to admit that a nice mutual fund might be the ticket, but it might be the ticket.....

A long range viewpoint is the best antidote to short term hysteria

October 10, 2008


Ya gotta think we're near the bottom when the local sports radio station brings on a former NHL player, who is now an investment advisor, to discuss the impact of the current financial meltdown on the health of teams around the league.
How does creating more debt help us get out of a problem created by too much debt in the first place?
It will be interesting to see where reality is after the elections are over.
Consider carefully - who do you want in charge of the cookie jar for the next few years?

Regardless of the turmoil of the past few weeks, this has been a year to be truly grateful for so many things - I hope you can say the same.


October 8, 2008


naked shorts

I've been an interested observer of the stock market for many years including the years I spent in Winnipeg as a stock broker. Being able to tell the so-called unwashed masses that you are a stock broker has mixed benefits. When times are good, it is a rather popular career to tell people at a cocktail party, along with property developer, software inventor and plastic surgeon. When stock market news hits the front pages like it has lately, those same people tend to look at stock brokers rather skeptically, as though they are to blame for the financial woes that are being experienced.
Throughout these scenarios I have observed that about 90% of people I have encountered have little or no knowledge of how the market works - and that includes the politicians currently vying for your vote. It definitely includes the wags of the media breathlessly reporting the ups and downs of currencies, market indices and commodities. The industry, like most, is couched in a language that precludes the average person from understanding the workings of the market. It forces people to seek the advice of a paid professional or abandon the whole effort all together. If there is a course in high school explaining the financial markets, it is probably a little used optional or at best, something endured rather than presented in a light that could offer real possibilities to each of us.
Consequently, I am thinking about writing a common sense based outline of the stock market for people without any sort of industry based esoteric initials behind their name. Something for the average person to be able to understand and perhaps make use of the markets to help as part of a financial plan and if nothing else, present a starting point to asking questions of those salesmen masquerading as financial planners. What do you think - would it be useful?
At the very least you would be able to drop the phrase, "covering my naked shorts" into a conversation and understand what it means.