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Value Investing

Four of Canada’s brightest investors go head to head
in a battle for portfolio supremacy

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Meet Value Investor Norman Rothery

Latest Columns

There’s no shame in migrating to low-cost index funds

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

I enjoyed chatting with a group of investors from the Financial Wisdom Forum recently. Over drinks, we quickly got to telling tall-tales about life’s more colourful moments. But I’ll spare you the details of a dog’s unfortunate encounter with a septic tank.

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‘Net-net’ stocks: A timeless value strategy – but pickings are slim

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

The summer was cool and rainy in cottage country this year. The weather had me huddling by the fire at a cottage on Georgian Bay near Lion’s Head, Ont. But the conditions were perfect for sipping hot chocolate and reading.

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Timing the market is tempting – but it doesn’t end well

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Temptations abound on the road to Long Point Provincial Park, which sits on the northern shore of Lake Erie. On the way to its beaches, I drive perilously close to the small town of Vittoria, whose inhabitants make devilishly tasty butter tarts.

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Value investors, build a portfolio of three dirt-cheap ETFs

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Index investors are partying like it’s 1999. The bull market is giving them reason to cheer, and fund companies are slashing their fees. It’s now easy to build a portfolio stuffed full of dirt-cheap exchange traded funds (ETFs).

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Ten stock picks for a value investor’s portfolio

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Bull markets test the mettle of cautious investors who find themselves left behind as stocks race higher. The temptation to buy high in an effort to join the fun can be overwhelming.

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Better than index funds: Buy a conglomerate’s stock

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Staking out a bold position in the stock market is anathema to most Canadian fund managers. While a few mavericks are willing to load up on stocks they really believe in, the majority are too timid to deviate significantly from the market.

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How too much information can sink your portfolio

NORMAN ROTHERY

Back in my graduate school days, one of my physics teachers had the habit of impishly giving his students a little too much information for their own good on tests.

The set up was simple. He asked a classic mechanics question of the sort that gives many students the heebie-jeebies. It involved two trains hurtling toward each other at different speeds with the goal being to figure out when, and where, the collision would occur.

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The 4 per cent rule doesn't always work in retirement

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Following the 4-per-cent rule is sure to lead to a happy retirement. That’s how much an investor can extract from a balanced portfolio when they retire without having to worry about running out of cash before running out of time. At least, that’s the theory.

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Stocks are expensive. Time to buy debt? Maybe not

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

It’s relatively easy to figure out when the stock market is expensive. Profiting from that knowledge can be much harder.

One of my favourite market measures is economics professor Robert Shiller’s cyclically adjusted price-to-earnings ratio (CAPE). The ratio is based on the current price of the S&P 500 Index divided by its average earnings over the past 10 years, adjusted for inflation.

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Like value? Then you’ll love momentum investing

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Humans are quirky things. If you sit one down in front of a black box that spits out random numbers, they’ll likely see a pattern in them that doesn’t really exist.

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Tulips and stocks: Don’t succumb to their charms

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

The tulips are in bloom in Toronto and the entire front yard of a house on my street is devoted to them. The flowers were originally planted by the owner’s parents who passed away some time ago. But their memory lingers in the glorious blanket of red and yellow that appears each spring.

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Want high returns? Don’t pay for liquidity you don’t need

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Warren Buffett has a problem that most investors could only dream of. He has too much money. His company sits on a huge pile of cash and he’s having a hard time investing it all.

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A fund manager who refunds fees? Meet Francis Chou

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

I recently met legendary value investor Francis Chou at his office in North York and my trip to get there was an interesting one.

He works at a great distance from the financial centre of Toronto in a neighbourhood that’s in transition.

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Budding value investors find Liquor Stores NA is no bargain

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Alcohol beverages represent one of the joys of university life. But three teams of savvy business students didn’t show Liquor Stores NA Ltd. much love when they evaluated it this month.

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Index funds, passive? They trade far too much

NORMAN ROTHERY

Investors tend to be an impatient bunch. There was a time when most people held stocks for years, or even decades. But that was long ago.

These days some hyperactive traders swap stocks every few milliseconds, with the aid of computers.

Thankfully, the idea of buying stocks for the long term hasn’t vanished entirely. Many buy-and-hold investors have turned to indexing in an effort to build broadly diversified portfolios while keeping costs down.

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Fairfax’s Torstar investment scores points for value

NORMAN ROTHERY

Flint knapping was an important skill many years ago and then technological change made it obsolete. But, in a strange twist of fate, it has been making a bit of a comeback thanks to the Internet. It’s now easy to learn how to knock out an arrow tip the old-fashioned way.

While the Internet is a great boon to hobbies such as flint knapping, it’s knocking the stuffing out of some businesses. Newspapers are a case in point. They’ve suffered mightily due to a shift in the advertising market and the ubiquity of free content.

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Fairfax annual meeting is a big day for value investors

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Value investors are set to descend upon Toronto for the Fairfax Financial annual meeting. They’re making the trip from all over the world to hear Prem Watsa, the firm’s CEO, talk about strategy and investing in early April.

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The stock-bond mix: Conventional wisdom doesn’t necessarily apply

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

The stock market regularly makes a mockery of reasonable strategies and smashes them to pieces like a deranged bull rampaging through a china shop. Its latest victim is the idea that investors should invest heavily in stocks when they’re young and then gradually move into bonds as they prepare for retirement.

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A contrarian investor's useful lessons in spotting undervalued stocks

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

When you think about the sort of people who grow up and go into the investment business, you might imagine characters such as Alex Keaton from the 1980s TV series Family Ties. Michael J. Fox brought the role to life and played a straight-laced conservative kid who was a little too obsessed with money.

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Value investors might be better off on vacation

NORM ROTHERY

The mood is glum in Valueville these days. Conditions are so depressed that its inhabitants can be spotted packing up their Bloomberg terminals and heading off on extended vacations.

As other investors pile into stocks they must be wondering why value investors are leaving. After all, the market is well up from its lows of 2009 and it continued to move sharply higher last year. Even better, the economy seems to be on the road to recovery and there are signs that the good times are here again.

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Why you should be suspicious of funds' returns

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

I’m looking forward to watching the rest of the Winter Olympics. Win or lose, the skill and dedication of the participants are proving to be extraordinary.

To win the gold requires a huge amount of effort over many years. But it’s easy to overlook the people who tried to reach for the top and failed. As in many fields, failure is a real probability even for those who put in enough effort to stand a chance.

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Stick with buy-and-hold: Don’t try timing the market

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

The investing world is awash in simple mechanical strategies that promise prosperity. But they all suffer from a fundamental problem: They’re well suited to robots, but humans control the cash.

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Value investors haven't (quite) given up the search for bargains

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

We are fast approaching the fifth anniversary of the market lows of 2009 and the subsequent start of a great bull run. After years of gains, most investors hope the party is just getting started.

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Three easy ways to mimic the best investors in the world

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

Thrift is a rare virtue in the investment world, and it tends to go unheralded. Instead, hordes of salespeople try to lure in investors with the possibility of big returns, while charging a pretty penny.

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Why smart investors don’t play the prediction game

NORMAN ROTHERY

Norman Rothery is the value investor for Globe Investor’s Strategy Lab. Follow his contributions here and view his model portfolio here.

With a spectacular 2013 in the record books, stock market forecasters have been busily looking forward to what 2014 might bring.

You should avoid listening to them.

Simply put, market forecasters make weather forecasters look good. We’ve all been led astray by the weather man from time to time, but his short-term predictions are right more often than not.

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Welcome to Strategy Lab




Stock market ideas, investing insights (and competition): Watch and participate as four of Canada’s brightest investors go head to head in a battle for portfolio supremacy. Whether you’re a dividend collector, a value hunter, a growth junkie or an indexing enthusiast, you’ll find inspiration for your own investing.

About Norman Rothery

Norman Rothery

Norman Rothery, Ph.D., CFA, is the founder of StingyInvestor.com and has been catering to value investors since 1995. He publishes the Rothery Report, a value stock newsletter, that recently celebrated its 11th anniversary.

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