What I Learned About Investing by Watching Miami Vice

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In this high-fat, carb-filled, cheese-covered, extra mayo edition:

  • Feature: What I Learned About Investing by Watching Miami Vice
  • Market Guy Mailbag: Ticker symbols and performance; PC Financial’s Interest Plus account; Why take profits in the patch?; What the heck were you thinking with Superior Plus?
  • Trading Notes: Reitman’s; Futuremed Healthcare Income Fund
  • The Market Guy’s Closing Bell: Thoughts that have nothing to do with anything

Before we begin, here’s a special thanks to Rob Carrick of the Globe and Mail, for a favourable mention of this space in one of his columns. I’m pretty sure that a few years ago I saw Rob at an Ottawa-area Gap. I tapped Market Gal on the shoulder and said, “Hey, I think that’s Rob Carrick.” Because he’s never been on Oprah, she had no idea who he was. Meanwhile, I think his columns should be required reading for anyone interested in Canadian investing and personal finance. There’s at least one good idea in every column.

Feature: What I Learned About Investing by Watching Miami Vice 
In a time before dating, car payments, and any sense of responsibility whatsoever, there were the early years of high school. I was a geek and a nerd. I wore flood pants and striped shirts. I listened to Def Leppard and Journey. I carried an Adidas bag and straight A’s; and I wore a Blue Jays cap about 10 years before wearing caps was considered acceptable. It was the best of times…it was the worst of times.

Among the best of times, I’d have to include Friday nights at 9pm. For at that time, my buddy Crazy George and I were enjoying a combination pizza with anchovies, a 2-litre of Coke, and the latest episode of Miami Vice on NBC. On the surface, it was a show about two vice cops and their largely futile attempts to curtail the drug trade in 1980s South Florida. However, it was much more than the sum of its parts. It was a show in which the city and the music were as important to the narrative as plot and character. It was a show that captured an era and yet established a style of its own. It was a show that introduced the greatest cop combo of all-time, James “Sonny” Crockett (Don Johnson) and Rico Tubbs (Philip Michael Thomas). It offered the coolest lieutenant ever, the laconic to the point of being mono-syllabic, Martin Castillo (Edward James Olmos). It gave us scenes of movie quality, such as the scene with Crockett and Tubbs driving down the late night streets of Miami trying to head off Calderon, the man who killed Tubbs’s brother. I can still see the street lights bouncing off the hood of Crockett’s black, Daytona Spyder all the while “In the Air Tonight” by Phil Collins blasts in the background. And during the part of the song when the drums kick in, we’re witnessing pure, perfect, unadulterated cool. I remember the many, many times that I tried to replicate the scene. Unfortunately I was driving my mom’s baby blue Dodge Shadow, driving through afternoon suburbia and heading to McDonald’s…but we’re nit-picking here.

Meet Crockett, Tubbs, and the Daytona Spyder…or as the Market Guy knows them, “Friday nights during the mid-1980s.”  

At this point, you’re probably wondering what the heck all of this has to do with investing. Well, it was during the run of Miami Vice that my experiences with the investing world started to become richer and clearly rooted in my life and sense of self. At the dawn of the 80s I was all about GICs and cash. By the end of the decade, I was in mutual funds and on the verge of trading individual stocks. It was a decade in which I had one of the most important educational experiences of my lifetime…the stock market simulation project in grade 12 economics class. It was a time in which Market Dad littered the coffee table with broker reports and the Financial Post. It was a time in which the markets crashed and then began a rise, the likes of which we may never see again. So as I reflect on these formative experiences of my entertainment and investing lives, I can’t help but wonder if there are overlaps to be explored. So with that, let’s begin a consideration of What I Learned about Investing from Watching Miami Vice. To facilitate the process, I’ll use some of my favourite quotations and scenes from the series…and if all of this tries your patience, keep in mind that I could have devoted 3 columns to this topic. Also keep in mind that I’m focussing on the TV-series and not the recently-released movie starring Colin Farrell and Jamie Foxx (which was surprisingly dull). So, here we go:

Brenda: “How do you go from this tranquility to that violence?” 


Crockett: “I usually take the Ferrari.”

 

Ah, Crockett enjoying a tender moment with a date and coming out with one of the better lines from the series. Just once I’d love to deliver a line like that. Crockett lives in a seedy, violent, pessimistic world in which the bad guys keep coming and the good guys rarely win. In order to survive, he tries to be practical and control what he can. When it comes to the markets, I try to do the same thing. I can’t control the US growth rate or Canadian interest rates or the price of oil. So I’m not going to be trading around every data release, every jihad, or remark from a Fed governor. Besides, that just racks up trading costs and undermines the performance of my portfolio. I’d rather let specific investing fundamentals and diversification lead the way. Another favourite line from Crockett is “People in stucco houses shouldn’t throw quiche.”

“No, YOU wait a second. Now, you might have commendations up the ying-yang in the Bronx , or New York, or wherever the hell it is 
you’re from, but this is Miami, pal, where you can’t even tell the 
players without a program. Down here, you’re just another amateur.” 

-Crockett to Tubbs

 

As a newcomer, Tubbs had much to learn about working undercover in the Miami drug scene. He needed time to acquaint himself with the people, the procedures and the overall feel of the place. Similarly, I receive dozens of notes from new investors asking how I got started, where I get my information from etc. In other words, people want a copy of my “program.” Well, on the plus side, the information that I use is readily available to everyone. For example, each morning after feeding the cats I read the Globe and Mail Business section. I watch ROB-TV a lot. I browse the stories onglobeinvestor.com and a variety of other news sites. I read company reports, websites, and announcements. I read books on investing. Occasionally I’ll drop in on the Financial Webring Forum, a discussion board for do-it-yourself investing in Canada. Doing a little bit of each has, over time, helped me to learn some of the language of investing, some of the alternatives, and some of the ways that I can profit. It takes time and effort, but the rewards can be life-altering.

I also do strange things that are clearly outside the realm of normality. Earlier this summer I was in Toronto for a conference. Immediately after leaving the train, I walked around Bay Street in order to soak up the mirth. After a few minutes, I found myself outside the TSX media centre, the site of my one and only appearance on ROB-TV. Back in the day when the centre was open to the public, I managed to get myself into a background shot when they were interviewing some fund manager. Market Gal was sitting off to the side and had a peculiar “I married an idiot but he’s having so much fun that I’ll put up with this” look on her face. These are the things that I do with my free time.

As an aside from the aside, ROB-TV will be broadcasting live from BCE Place in Toronto for the week of September 18th. Yes, Market Call and Squeeze Play will broadcast in front of a live audience. If I lived in Toronto, I’d be on top of this like spit. Are they going to allow heckling? So if Ross Healey is on Market Call, can we hiss every time he suggests that income trusts are a Ponzi scheme? Market Gal is convinced that I have a crush on Amanda Lang, so how pissed would she be to see us in the same room? If I had the chance to speak with Kevin O’Leary, how much of an idiot would I sound like? For the first time since the Blue Jays were a playoff team, I wish that I lived in Toronto. They’re also holding a contest called “Lunch with Lou” in which the winner gets to hang out with ROB-TV personality Lou Schizas. For some reason, this made me laugh out loud and I’m not sure why. Yes, I have tenure.

“Unless I inherit about fifteen million dollars, I don’t stand a chance in this town.” 

- Rico Tubbs

 

That was one hell of a tangent…now you know what it’s like to be in one of my classes. Back to Vice: Tubbs spent much of his time undercover as Rico Cooper, a mid-level cocaine dealer with an occasional Jamaican accent and a turquoise Cadillac. Whether he was the cop or the dealer, Rico knew clothes, wine, and ladies…all of which seemed to be in decent supply. From this I learned the importance of capital. However, unlike Tubbs I learned that it’s possible to have a chance by starting with only a modest amount of cash. It’s all about saving, understanding the importance of compounding (especially in the early years of a portfolio), and being patient. The important thing is to stay invested and realize that money can work 24 hours a day…you can’t.

It should be noted that Tubbs was the greatest sidekick in TV history. First, he was always there when needed. I can’t tell you how many plot lines revolved around Tubbs trying to keep Crockett from going over the edge (a Vice staple). Second, he was really good for laughs…even if a fair number of them were unintentional and involved his love scenes. Third, Crockett tried to kill him and yet, he remained loyal. To be fair, Crockett had lost his memory in a boat explosion and assumed the role of his undercover alias, a drug dealer named Sonny Burnett…some great episodes here.

“The natural order of the streets has been disturbed. I must do what I can to restore it.” 

- Lt. Castillo

If you could mix Clint Eastwood, Yoda and a rich-man’s David Carradine you’d have Castillo. He commanded respect, dominated the room with only a look, and could even carry an episode from time to time. Castillo believed there was a natural order of the streets and he was particularly adept at knowing when to intervene and when to leave things alone. Similarly, I regard diversification as representing the natural order of my portfolio. It is an arrangement that, if disturbed, must be restored. Sometimes that means paring back on holdings or sectors that are beginning to disproportionately influence the direction of my worth. For example, over the past year I’ve pared back on my energy holdings and directed some of the profits to cash and international investments. Other favourite lines from Castillo include, “Don’t ever come up to my face like that again” and “I can kill 20 men in 6 minutes.”

Crockett: “Uh, let me get this straight, now….You let this guy just walk out. He didn’t tie you up, he didn’t pull a gun…” 

Zito: “Shut up, Crockett.” 

Switek: “Look, I had to take a whizz, okay?”

Zito and Switek were the clumsy, dim-witted, yet somehow sharp-shooting team B to Crockett and Tubbs’ team A. Unfortunately, when they tried to carry an episode it was sheer torture. Anyway, the dialogue in this particular scene comes after the bumbling pair lose track of a key witness. This led to Crockett and Tubbs heading to the everglades to locate the witness who just happened to have a daughter recently kidnapped by the creepy guys from Deliverance and a bunch of Colombian dealers. In the end, all of their butts were saved by a toothless elderly man with an elephant gun; in other words, just another day in South Florida.

Anyway, back to our bumbling idiots who let the witness get away. This reminds me of the various times that I’ve failed to keep up to date on the happenings of an investment. Sure, buying quality makes you feel better if you don’t go over every quarterly report as if it’s the Zapruder film. Index investments can make the job even easier. However, being a do-it-yourself, small investor means being disciplined and paying attention to your portfolio. You need to show your portfolio some love now and again, so that it can grow and thrive. Abraham Maslow, a famous humanistic psychologist believed that human beings strive for a psychological state known as self-actualization. To be self-actualized is to have achieved your potential. I believe that money needs to achieve its potential and to deprive it of the opportunity is wrong and sad. I can’t tell you how many times that I’ve failed to give my money the love and respect that it so clearly deserves (to gain a sense of the nasty, horrible, unspeakable things that I’ve done, have a look at two columns devoted to my worst investing experience: MG#12 andMG#13). To reinforce the point…

“You better stay clean because if you don’t, I’m gonna be on you like a baaaaad rash.” 

- Tubbs

 

Tubbs was great for laughs but had a temper…and if you crossed him, you were in for a world of hurt. However, he was usually smart enough to pick his battles. Similarly, when a company disappoints, try to separate the noise from the facts. Is the disappointment based on temporary factors or have the fundamental reasons for making the investment changed? If you’re not sure, be extra vigilant. Decreasing margins, increasing debt, higher payout ratios, customer decay, expiring contracts, regulatory investigations, and cost over-runs are all cause for concern. Be aware of the trends. If the factors are temporary and the stock gets hit, there may be a buying opportunity. If the factors are more long-lasting and symptomatic of management issues or a general decline in the business, ask yourself if there are better places for your money. In order to tell, you need to be on the company like a bad rash. If this doesn’t pique your interest or fit into the schedule, there are thousands of mutual funds and index products from which to choose.

  “I promised myself that when the Dow broke 1400, I’d buy myself a present.” 

-Cocaine-dealing financier, Charlie Glide

Wow. Since that line, the Dow has gained 10 000 points. And since that time we’ve survived a market crash, 9/11, many a jihad, and Shakespeare in Love winning the Best Picture Oscar over Saving Private Ryan (not to mention Arnold Schwarzenegger, Jesse “The Body” Ventura , Gopher from the Love Boat and Cooter from Dukes of Hazzard all being elected to political office). In any event, the quote illustrates the importance of staying in the markets and occasionally rewarding yourself for a job well done.

  Tubbs (undercover): “I’m looking to invest this at a good profit” 

One-note bad guy: “Well a money market will yield you 10%”

Remember when GIC’s were paying double digits? I remember the last GIC that I owned and complaining to my parents that I was renewing for 5-years at 8.75%. Today, what would I do to earn 8.75% for 5-years, 100% guaranteed? Perhaps the question is more accurately framed as, “whatwouldn’t I do?” I don’t really have a point here.

“That’s the trouble with always trying to do the right thing, Marty. Sometimes the right thing smells bad.” 

-Reese to Castillo

 

This is what I should be saying when Market Dad gives me that look of disappointment when I tell him that I’m paring back on my energy holdings. Paring back to maintain a diversified portfolio sometimes feels wrong and smells bad. But it has to be done. Similarly, sometimes I’ve made mistakes, been forced to admit it, and experienced the stench of doing the right thing and blowing the holding out the door. Other quotes from the series that reinforce the same point include the Crockett classic, “The secret to success, whether it’s women or money, is knowing when to quit. I oughtta know; I’m divorced and broke.”

   
     
  Tubbs: “The moss on a damn tree is supposed to tell us where the road is at?” 

Crockett: “Can I help it if the moss doesn’t know which side of the tree to grow on?”

Tubbs: “And the sun is in the wrong place? Hey, Jack, let me tell you something. I may not be an astronomer, but I know one damn thing. The sun is NEVER in the wrong place.”

 

Crockett and Tubbs were lost in the swamp and to find their bearings, were using the old saying, “moss always grows on the north side of the tree.” What do I take from this exchange? The sun is never in the wrong place and I should never try to convince myself that a fully-valued stock is a cheap stock. Investors do this all of the time. The endowment effect illustrates that we ascribe more value to items that we possess simply by virtue of our possession. In other words, the item becomes more valuable to us simply because it’s ours. The absolute value of the item doesn’t matter; it could be a car or a ballpoint pen. Our neighbourhood holds an annual garage sale and it was a one-day testament to the endowment effect. You’ve seen it before: That snow globe that you wouldn’t pay 25 cents for is going for $5; a dinged-up piece of furniture that someone bought 8 years ago from Zellers should be going for $5, but they’re asking $50 and wonder why it’s still there at 2:30 in the afternoon. The endowment effect impairs our ability to participate effectively in the marketplace and leads to suboptimal economic decision-making. Anyway, the lesson for our investments is to always look to the fundamentals and relative valuations. The numbers have never heard of the endowment effect.

Crockett: I need to know something, Caroline. The way we used to be together. I don’t mean lately, but before. It was real… wasn’t it?” 

Caroline: “Yeah, it was. You bet it was.”

OK, so I put this one in here because it’s the only real dialogue from the “In the Air Tonight” scene that I wrote of earlier. It’s Sonny calling his estranged wife, in large part because he’s been betrayed by a friend and doesn’t know which end is up. When it comes to my portfolio, a couple of thoughts come to mind. I frequently feel as though I’ve lost my bearings. At such times, I try to lean on an investing philosophy that helps to guide all that I do in the marketplace. It helps to lend a sense of direction and purpose to the portfolio. However, we should all articulate an investing philosophy that goes beyond “buy stocks that are going to go up.” Better would be something like, “invest in a diversified batch of companies that pay you a decent, growing dividend and add to positions when the shares are trading at either a reasonable absolute or relative valuation.” Hey, it’s a start.

That was fun. To close out this portion of the column, here are my favouriteMarket Gal reactions as we watched season 1 of Miami Vice on DVD:

  • Speaking of Tubbs: “Ewww, he’s in his underwear!” She was visibly shaken. 

  • During one episode, a woman that Crockett was falling for betrayed him and tried to have him killed by a psychopath played by Ted Nugent. During the final scene, the police are coming to take her away and so she looks at Crockett, hoping that maybe he’ll set her free. His response? He looks straight ahead, puts on his cool, black shades and doesn’t say a word. Meanwhile, “Cry” is playing in the background. I asked, “how cool is that?” No response. I said again, “how cool is that?” to which she offered, very impatiently, “yes, it was cool!” 

  • And finally, she noticed that Tubbs was carrying a handbag, a la Seinfeldian European carry-all. She noted that “He’s carrying a man purse. That’s just wrong. Cops don’t carry man purses.” Then after a brief pause, “Crockett wouldn’t carry a man purse.” That last part sealed it.
Crockett would listen to classic rock, drive a fast boat, and wear mesh shoes. According to the Market Gal, he would not carry a purse.  

The Market Guy Mailbag
Letter #1: Mike in Kanata
 sends along an interesting snippet from the world of behavioural finance. He found an article titled, “Study ties company names to stock performance” on the cbc.ca website:

“Shareholders are more likely to purchase newly offered stocks that have easily pronounced names, a pair of Princeton University researchers say. Adam Alter and Danny Oppenheimer found that a stock’s performance immediately after an initial public offering appears to be linked to how easily investors can pronounce its name and stock ticker symbol. “This research shows that people take mental shortcuts, even when it comes to their investments, when it would seem that they would want to be most rational,” said Oppenheimer, an assistant professor of psychology.”

Thanks for sending, Mike. I also enjoy the research investigating how other, seemingly irrelevant factors influence stock performance. For example, the number of hours of sunlight, various seasonal patterns, astrological issues, etc. Combining all of this with some fundamental and technical analysis may reveal that we need to purchase value investments that have broken above their moving averages on a sunny day in January, having the ticker symbol, “SEX.”

Letter #2: Loyal reader and self-described “old fart” William had a few things to say about my recent bout of profit-taking in the energy sector. In particular, he finds it incredulous that I would go against the advice of oil and gas crazed Market Dad

I can’t believe you would diss Market Dad that way. Here is the man who gave you life, instructing you with his lifetime of experience and you have the gall to take profits in the Energy Patch. What were you thinking? You buy good energy trusts like PennWest and you forget them!!! You sell them after you die, should you be so lucky!!! Advantage, you sell. No great loss. Daylight too. PennWest and COS , you don’t sell. What you do is buy AOG.UN and have all distributions tax deferred for another 6 years. You find me a better deal and I might thank you. You would have to stop all of the silly selling of units just because they have gone up in price that you pass off as profit- taking. It’s a trust, Man! Can’t you see that it isn’t an ordinary dull equity? It pays you to hold on to it. What could be better?

Andrew Carnegie said, “Put all of your eggs in one basket, and then watch that basket!” Market Dad has it right. The reason I’m upset at how you have treated your father is that my own children, the flesh of my body, talk to me about diversifying their portfolios. Di-worsify, I say! The energy bull still has strong legs and those who doubt it will suffer the pangs of remorse; thankless children even more-so.

Even though you should suffer a plague of mosquitos; No! Wait! This is Ontario in the summer so we all have that curse. Perhaps a plague of really hungry but silent mosquitos who are as large as chick-a-dees and as hungry as really hungry flying pests. That’s what should happen to people who diss their energy bull fathers.

BTW, Love your blog sort of thing.

I have nothing to add…except that William gets the “best email of the summer” award. OK, I do have something to add…I’m more apt to pare back holdings in a volatile sector like energy than a more stable sector such as financials. I’ve seen how energy corrections can be so brutal, violent, and swift. Investors get completely abused and wake up wondering what happened. Serious pain. So, I’ll always have investments in the sector but will also make sure to protect some of the gains along the way.

Letter #3: Barbara in Cornwall writes:

Thanks for writing about high interest savings accounts. There’s another option that just came out a few weeks ago from President’s Choice. They have what’s called an Interest Plus Savings account that’s paying 4% as long as your balance is over $1000. It’s a new account that’s different from their regular high interest savings account.

Thanks Barbara. For more information, here’s a link to the PC Financial page. Shortly after I wrote the column on high interest savings, ING raised their rates and PC introduced a new product. Who knew the world of high interest savings could be so exciting?

Letter #4: Derek feels bad about my profits in Superior Plus vaporizing in a matter of days. He is curious about one thing, though:

I wondered how you came about to owning this stock…It seemed to have a very hefty payout ratio combined with high debt, which seemed to make it unattractive. A recent income trust article in Canadian business magazine confirmed this…I would like to know your initial logic for buying this POS besides the high income if there was any?

The position was initiated several years ago and if I include distributions, I may have come out even on the deal. I don’t feel like making the calculations until we get close to tax season. My reasons for buying the trust were simple: a history of increasing distributions, a strong position in their market, a decent valuation and management with a proven track record. True, the payout ratio was pushing 100% and left very little margin for error. However, they had always been able to navigate through these waters before and gained an impressive reputation.

In terms of payout ratios, we need some context. I believe that Pengrowth may be useful in this regard. I owned Pengrowth for many years and it was one of the most profitable investments of my lifetime. In the early days, they were one of only a handful of royalty trusts and considered top drawer. Sure, they had an extremely high payout ratio…but few cared. We knew the distribution and unit price was going to bounce around a lot…but we knew the rules and accepted the risk. At the time, the high payout ratio was considered a plus because more money was being returned to investors. Similarly, in the early days Superior was considered top drawer among a very limited number of business trusts. The low payout ratio model hadn’t been invented yet and so investors made use of what was available…and it worked very, very well. Since that time, much has changed. We now operate in a different environment and the low payout approach is king. We’re not willing to tolerate reductions in distributions and will severely punish those who disappoint. As the low payout approach became a possibility, it also became a litmus test for my own investments. However, I made an exception with Superior because of their positive history. That was stupid.

As for the debt, yes, I should have been more mindful of how it was compromising the company’s resilience. As they went on an acquisition binge, the leverage was piling up; add in a really warm winter and the accompanying decline in propane sales and the trust was crushed. I had been rationalizing each and every quarterly report and was filled with a sense of invulnerability and undue optimism. Simply, I was dumb and had to pay the dumb tax….again.

All of this being said…I will still invest in a trust with a relatively high payout ratio if the numbers are headed in the right direction and the unit price is trading at a decent price. For example, I’ve written several times about my purchases in Dundee Real Estate Investment Trust. Their payout ratio has been over 100% for a while now. However, management has been moving in the right direction and the ratio is in steady decline. Meanwhile, the units have recently traded at a discount to the rest of the sector. That discount is quickly disappearing, especially since the REIT has been busy adding office properties in red-hot Western Canada …and the purchases have been accomplished without the company taking on crazy amounts of debt. The analysts have taken notice and with the extra attention has come solid unit performance. I believe it’s been one of the top-performing REITs in the country this year.

Trading Notes
Reitman’s (RET.A on the TSX)
Earlier this summer I initiated a position in Reitman’s, a Canadian retailer specializing in women’s apparel. The company operates over 800 stores under the Reitman’s, Smart Set, Pennington’s, Addition Elle, R.W. & Company, Cassis, and Thyme Maternity banners. A few notes:

  • They’ve been around for 80 years, 60 as a public company. 

  • The dividend yield is just under 3% and has increased 300% in the last 3 years

  • Reitman’s is actually pronounced “Rightman’s,” not “REIT-mans”…but nobody seems to care.  

  • The financial position of the company seems to be quite strong. The debt to equity ratio is under 0.3. Their cash position is on the rise.  

  • Same-store sales and revenues are headed in the right direction. The most recent quarter saw the company record a charge for a retroactive Quebec income tax assessment. Excluding this charge, earnings per share would have been up roughly 15%. 

  • They have no plans for international expansion. Thank goodness…a retailer that isn’t interested in getting slaughtered in the United States. 

  • Let’s be honest…the have cool commercials. 

  • In order to be closer to their vendors, the company has an office in Hong Kong. 

  • The company has placed a focus on private label merchandise, meaning that items are manufactured specifically for Reitman’s. These items provide a higher average mark-up than branded products. However, given the company’s substantial buying power, they’ve been able to offer these products at attractive prices.  

  • On the downside, they use dual-class shares and the company is tightly controlled by the Reitman family. I’ve never been a fan of this approach. 

  • Also on the downside, this is retail and women’s retail at that. Competition is fierce and being caught behind the trends can lead to a build in inventories that inevitably leads to a sagging share price. However, the company’s different banners appeal to different types of consumers (e.g., Addition Elle caters to plus-size women; Cassis will focus on 45-60 year olds, etc.) and this may spread the risk around.

Market Gal is a devoted fan of the stores and we’re in there at least twice a month. I don’t mind going in because they usually have chairs just outside the fitting rooms…an oasis for boyfriends and husbands. I should also mention that shopping with the Market Gal can be quite an experience. In most stores, she complains about never finding the right size or she gets angry everytime she looks at the twigs that are staffing the place. An exit usually involves a “did you see how thin she was???” or “We’re never coming here again. They only have stuff for size one’s!” or “The prices are ridiculous.” I just agree and do what I can to avoid the shrapnel. As a wise-man once said, “If mama ain’t happy, ain’t nobody happy.” At Reitman’s, she never gets upset, never gets angry, always finds her size, appreciates the obvious attempt to staff people of different body shapes, and usually leaves with a bag of stuff. Besides, it will be very gratifying each time she makes a purchase and I’ll know that a portion of the cash is going into my pocket. It’s almost as if I’m being paid each time she goes shopping. I suppose it’s following the wisdom of sage-investor Peter Lynch…invest in what you know. 

Futuremed Healthcare Income Fund (FMD.UN on the TSX)
I have eliminated my holdings in Futuremed Income Fund at a price of $13.32. The holding was initaited at the IPO price of $10. Originally I’d planned on holding this one for a while, but had second thoughts as the unit price continued to advance. Overall, I earned the equivalent of 3.5 years of distributions in less than 6 months, and in capital-gain, tax-friendly fashion. With only a limited history as a trust, such dramatic early gains, and a stretched valuation, I felt better about taking money off the table. I did not, asMarket Dad suggested, plow the money back into the energy sector.

The Market Guy’s Closing Bell
Here are a few closing thoughts that have nothing to do with anything:

  • On Wednesday, August 17th, the trading volume in XS Cargo Income Fund was 1 unit. How does that work? I really need to know. 

  • Scott’s, the lawn care people, offer a service that will send you an email reminder of when it’s time to fertilize your lawn. 

  • It’s official: I appreciate the Tiger Woods era but I’m not necessarily enjoying it. How many times do we need to see him make mincemeat out of the competition at a major on Sunday? We really need someone to step up and at the very least, make it interesting.
  • In the hallway just outside my office, a bat just flew by. I’m chairing the departmental recruitment committee again this year and we may have found a new slogan: “Carleton University: We have bats!”

The Market Guy is an Instructor with the Department of Psychology at Carleton University. He’s not a professional advisor. He’s just a guy who loves investing and talking about the markets…so do your homework before making any investment decisions. Basing any decisions on his column would be really, really stupid. Why is it that every car dealership has a business manager named Vera? Send answers to mail@marketguy.ca