Luc Nocent
Luc Nocent, 51
Occupation: Owner of high-speed video software business
Portfolio: TD Bank, CIBC, Bank of Montreal, Bank of Nova Scotia, BCE, AT&T Inc., Wal-Mart Stores, TransCanada Pipelines, Pfizer
Solidly in blue chips Luc Nocent has said goodbye to trading, and hello to blue-chip stocks and index funds. In part, this is because of the lessons learned from the dot-com crunch. He also just doesn't have the time any more, running his own 15-person Montreal business that makes software for high-speed video recording. "Statistically, I'm just going along with the wave," he says. "Very few people are capable of beating the wave. How many Warren Buffetts are there out there?"
His Index Funds Mr. Nocent doesn't feel it's possible to outdo the market with any consistency. That's why he uses exchange-traded funds (ETFs), most of them broad market-based. "Who am I to choose a specific sector?" he says. "In the end, statistically speaking, I'm not sure it makes a big difference anyways."
Why He Doesn't Like Analysts "I manage a company. If you ask me what am I going to do in the next quarter, I'd say 'I'm sorry but I don't know.' It's so difficult to predict what your customers are going to do, what orders they're going to give you. When I read an analyst and he says he thinks RIM is going to keep going up, I say 'How do you know, my friend?' You don't know what their sales are like. Even if the CFO knows, he can't tell you."
His Take on The Brokerage Industry One day Mr. Nocent went to see a broker out of curiosity. I said 'What can you do for me?' What he says is, 'I could buy ETFs for you.' I said how much are you going to charge me to manage my money? He said 'Two per cent.' I kept my mouth shut, but this is the industry. These people will charge you two per cent to manage ETFs you can buy on your own for half a per cent."
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Best Move
"I didn't panic in the spring. I've been playing this game for a long time now, and I only check my portfolio once every 3 months." His strategy, he says, means that shorter-term drops make no difference to him. "I didn't sell anything, and in fact, I bought GE and added some more TD Bank."
Worst Move The above notwithstanding, Mr. Nocent said his worst move was panicking just enough in the recession not to buy more. "I'm a bit like everyone else and I thought it might be the end of the world. I knew that people were panicking. On the other hand, I didn't know how long the recession would last. There were rumours Citibank and Bank of America could go bankrupt." And what if there's another crash? "That's what I pray for every day," he says. "I would definitely buy more blue chips and the S&P 500 Index."
Advice "I just don't understand why people go to brokers. I don't think it's hard to manage your own money. It's a lot easier than people make it out to be. I look at how much money people spend on advice, and in my opinion, I'm sorry, but you're getting screwed. Two per cent on a fund or brokerage account over a lifetime is a hell of a lot of money."
Special to The Globe and Mail
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