Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
I have readers to thank for my best stock trade of the year.
Amidst the early January market carnage, I wrote that I would buy a technology stock. Without that subtle pressure, I may not have bought F5 Networks Inc. My cost was $96 (U.S.), and I sold it in November for $125.
I got a bump from the currency, but I'm not bringing this up as an example of a huge win. It was, however, exactly the way I like to invest.
In this case, I had previously identified a strong growth sector – cloud computing – and jumped in when market volatility pushed the stock price lower. I will be attempting the same feat in health care stock during the first quarter of 2017.
"@SBarlow_ROB FFIV 1Y chart " – Twitter
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The 1980s movie Wall Street popularized the use of Sun Tzu's Art of War as a guide to investing.
Typical of the adrenaline-drunk finance environment the movie, and most investors, focused on the wrong, fighty parts, "attack like water,""when strong, appear weak," etc.
This is just my opinion, but the most useful part of Art of War, and good advice for investors for 2017, is this,
"If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle."
I take this to mean that any investor accepting the challenge of outperforming the benchmark must first have a clear idea of their own psychological strengths and weaknesses before even looking at the market. I'd write them down. I know my weaknesses – overly skeptical to the point I have trouble pulling the trigger, which means I carry too much cash and sell winners too early – and I'm aware of them on every trade.
"The Latticework" – Psy-Fi Blog
"@SBarlow_ROB Sun Tzu quote ' – Twitter
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Morgan Stanley published a review of global investment flows for 2016, and it's a bit surprising in light of recent market moves,
"Long-term mutual funds generated -$177B of outflows this past year (vs. -$151B in 2015) with equity MFs outflows of - $193B (vs. -$168B in 2015), FI fund inflows of +$41B (vs. +$24B in 2015), and balanced fund outflows of -$25B (vs. -$7B in 2015) "
"@SBarlow_ROB MS: Year end fund positioning ' – (research excerpt) Twitter
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Business Insider's Josh Barro is writing about the U.S. economy here, but the column encapsulates my skepticism about the potential economic benefits of Canadian government fiscal spending,
"Now that Manhattan has the world's most expensive subway and its most expensive train station, New York and New Jersey officials at the Port Authority are bickering over where and how to build the world's most expensive bus terminal. They want to spend $10 billion on a bus station. They claim it's impossible to rehabilitate and improve the existing Port Authority Bus Terminal. Given the way the Port Authority has mishandled so many other capital projects, I don't believe them."
Government spending is great in theory, but most often ridiculous in practice.
"New York's incredibly expensive new subway explains why we can't have nice things" – Barro, Business Insider
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Tweet of the Day: "@SBarlow_ROB Citi: much depends on U.S. wage growth and consumption ' – (includes four charts from Citi research) Twitter
Diversion: "From Theranos to Space Waves, These Were the 9 Biggest Science Stories of 2016" – Wired
Scott Barlow