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The Shopify sign is seen at its Toronto offices.Fred Lum/The Globe and Mail

Ritzholtz Wealth Management's Josh 'The Reformed Broker' Brown caused a stir recently with a quote from hedge fund manager Ray Dalio. Mr. Dalio – founder of Bridgewater Associates and multi-gazillionaire – recently published a new book called Principles in which he advises investors to "Ask yourself whether you have earned the right to have an opinion."

This idea made a lot of finance people angry on social media in a 'who are you to tell me what I'm allowed to have an opinion about' way, which is understandable given the implied condescension in the statement.

It might have been productive for Mr. Dalio to soften the idea to "Ask yourself whether you have earned the right to be certain about your opinion" but there's a problem with that too. No investor should be certain about anything market-related.

Investing is a probability game, as I've written previously, and investors lucky enough to find an investment idea with a 65 per cent chance of success are still faced with a one in three chance of failure. For my part, I'm never certain about any of the investment opinions in my columns – they are merely an attempt to find opportunities where the odds of success are significantly higher than the possibility of losing money.

Obnoxiously stated it may be, but I think Mr. Dalio's idea is a good one. In a culture where most people have expansive knowledge of their rights, and many have only passing familiarity with the corresponding responsibilities, social media (and occasionally my email inbox) are full of vehement opinions based on one aspect of one side of an investment story that has been extrapolated into ironclad, immovable belief systems.

Mr. Dalio attributes his enormous success to the humility that came from early failures. The 'have I earned the right' question is clearly something that drives him to keep learning, and help prevent over-confidence.

For investors, 'paralysis by analysis' remains a risk – reading so much varied research on an investment theme that it's impossible to form an opinion. There's also a limit to how much 'have I studied hard enough?' anxiety most investors want or need to carry around in their head. Even so, over-confidence is a cardinal sin of investing, and humility is to be encouraged.

-- Scott Barlow, Globe and Mail market strategist

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Stocks to ponder

Diversified Royalty Corp. The share price recently experienced a 'golden cross' – a bullish technical formation. The stock has an unanimous buy recommendation from the seven analysts who cover the stock. The share price has rallied over 24 per cent year-to-date. In addition to price appreciation, the stock offers investor an attractive dividend yield of approximately 7 per cent. Jennifer Dowty explains.

Premium Brands Holdings Corp. This stock closed at a record high on Wednesday. Earnings growth is anticipated to accelerate in the second half of the year with its new facility ramping up. For the past three consecutive quarters, the share price has rallied sharply immediately following its earnings release, rising by 5 per cent or higher each time. Also positive, for the past three consecutive years, management has announced a dividend increase of 10 per cent each year. Jennifer Dowty explains.

Shopify Inc. Investors who are betting that Shopify Inc. will refute a short-seller's recent negative report had better start hoping the company will also be able to justify the heady valuation of its stock. Stellar gains since Shopify's initial public offering in 2015 have clearly made the stock an easy target for critics. David Berman explains.

The Rundown

David Rosenberg: Why I'm feeling queasy about Canada's prospects right now

David Rosenberg wrote recently that Canada always seems to find a way to come through even as we shoot ourselves in the foot. But he's a bit pessimistic right now. So here's the good: The country is running a very pro-growth immigration policy and attracting high-skilled workers and entrepreneurs, and Alberta's oil-based economy is improving. Here's the bad: Canada's growth spurt earlier this year has fizzled. And the ugly: lots of uncertainty from the Bank of Canada, to higher minimum wages to NAFTA. He offers his views on what this means for the Canadian dollar.

How a rallying Canadian market hurts your portfolio

Here's the problem with a resurgent Canadian stock market. In a way, it's bad for your portfolio. When the S&P/TSX composite index is doing well, it's a near certainty that financials and energy stocks are driving the bus. If you own funds or stocks that mirror the broader market, every tick higher by the TSX skews your portfolio to these two dominant sectors. However, ten-year return data shows the Canadian stock market has underperformed the U.S. and international markets for most timeframes. Canada has some catching up to do, and Canadian investors are no doubt eager to catch the wave. Rob Carrick explains.

Fund manager offers up five dividend stock picks

From his office in Calgary, dividend fund manager Les Stelmach keeps a close watch on the energy sector. And, lately, he's been seeing some encouraging signs. With oil trading near $50 (U.S.) a barrel, "I think things are slowly, slowly on the mend," says the co-manager of the $700-million (Canadian) Franklin Bissett Canadian Dividend Fund. That's a good thing for Mr. Stelmach, considering roughly one-quarter of the fund is invested in energy companies. Here are five dividend stocks – including a few non-energy names – that Mr. Stelmach told John Heinzl that he likes right now.

A warning: Short-term bond funds are not loss-proof

When interest rates rise, investors often look to short-term bond funds as a way to protect their fixed-income assets. Because these funds only invest in securities with maturities of five years or less, they are generally not as susceptible to interest rate movements as longer duration funds. But that doesn't mean they can't lose money, as one reader has discovered. He invested almost a million dollars in two short-term ETFs: the iShares Core Canadian Short Term Bond Index ETF (XSB-T) and the BMO Short Corporate Bond Index ETF (ZCS-T). Now he's in the red and is not happy about it. Gordon Pape explains.

Four alternatives to traditional bond funds that can mitigate risk and boost returns

Investors in exchange-traded funds could be exposing their portfolios to higher interest-rate risk than intended, as investment dollars pour into Canadian broad bond indexes that track the fixed-income market. Canadians have more than 30 per cent of their domestic ETF holdings in fixed income, one of the highest percentages in the world, according to a recent report by research firm ETFGI. In the United States, it's just 16 per cent and in Australia 11 per cent. Clare O'Hara examines the issue.

Four top stock picks from Acumen analyst Brian Pow

In Jennifer Dowty's recent interview with Brian Pow, vice-president and equity analyst from Acumen Capital Financial Partners Ltd., he discussed his positive outlook on four stocks for the year ahead: Park Lawn Corp., Hardwoods Distribution Inc., Andrew Peller Ltd., and Pollard Banknote Ltd.

How much in advice fees should a million-dollar client pay?

The most coveted clients in the investment advice business may be paying excessive fees. High net worth clients – let's say people with investable assets of $1-million and up – typically pay a much lower advice fee than less wealthy individuals. It's basic economics – a smaller percentage of a huge portfolio makes advisers and their firms more than a larger percentage of a small portfolio. But high net worth investors may still be paying more than they should. If you're being charged a fee of more than 1 per cent, this column's for you. Rob Carrick explains.

Have you hurt your portfolio with destructive diversification?

Smart diversification is spreading your investing assets between bonds and stocks, economic sectors, geographical regions and size of company. And then there's destructive diversification. That's a term that applies to idea of spreading your personal investment accounts among multiple firms. Rob Carrick explores the issue.

There's no denying the rise of this ETF trend

Paul Tudor Jones, a prominent U.S. hedge fund manager who made his claim to fame calling and profiting from the 1987 stock market crash, is now putting his money behind a burgeoning sector: ethical investing. Mr. Jones is backing a not-for-profit firm called JUST Capital, which ranks companies on how they treat their employees, customers and the communities they do business in. He believes that the C-suite has gone too far in embracing economist Milton Friedman's "profit-above-all-else" ethic, and they need to change how they do business, he told the Forbes Under 30 Summit in Boston last week. Larry Berman talks about a few ETFs along these lines.

Professor invests in what he knows: resource stocks

Peter Arendas is a professor with a specialization in financial and commodity markets. Mr. Arendas is putting his expertise in financial and commodity markets to work in the stock market by investing in mostly small- and mid-cap companies that have an "interesting mining project" under development or study. Larry MacDonald explores his strategy.

What I learned while working with the wealthy

Barbara Stewart has been in the industry for 25 years, working with high-net-worth investors. She left her portfolio manager role in early 2017 to conduct research into how women approach money and investing. She tells Kira Vermond about what she's learned about high net worth clients over her years as an adviser.

Seven year-end tax tips for investors

Tim Cestnick outlines seven tax actions investors should consider as we approach the end of 2017, from donating securities to charity to selling losers to offset capital gains.


The week's most oversold and overbought stocks on the TSX

Friday's Insider Report: Companies insiders are buying and selling

Thursday's Insider Report: Companies insiders are buying and selling

Wednesday's Insider Report: Companies insiders are buying and selling

Echelon Wealth's top stock picks for the fourth quarter

Number Crunchers

Ten U.S. stocks that may be overstretched

Twenty Canadian stocks with analysts on their side

Nine Canadian financial stocks with cheap valuations and strong profits

Ask Globe Investor

Question: I would like to know more about Stingray Digital (RAY.A-T ). This company claims to be the world leader as a streaming music provider, and a multitude of music services. More than 80 per cent of revenue is recurrent. Last year La Caisse de Depot increased its ownership and recently the CEO/founder increased his ownership substantially. The stock pays a dividend and is increasing it. The shares keep moving up. I would certainly appreciate an opinion from you on this highly performing company.

Answer: There seems to be a fair amount of interest in this Montreal based company judging by the number of questions we have received. You may not know it, but you probably have its service on your TV set – Stingray provides the content for a large number of music channels in the upper ranges of your band.

As our reader points out, the stock has been a strong performer recently. After falling as low as $7.19 in June, the shares have moved higher and closed on Oct. 6 at $9.17.

The stock looks expensive at that level. The trailing p/e ratio is 50.9, which is pricy by any standard. The company is growing, but not by enough to justify that level of p/e. First-quarter 2018 revenue (to June 30) was up by 18.9 per cent, which is a nice bump although not enough to support that level of investor enthusiasm. Recurring revenue (the best kind for any business) was 87 per cent of total revenue and that, of course, is a real plus.

Adjusted net income for the quarter was $5.7 million ($0.11 per share) compared to $5.2 million ($0.10 per share) the year before. Free cash flow was $7.2 million, up from $5.9 million last year. The company recently increased the quarterly dividend to $0.05 per share ($0.20 per year). The stock yields 2.2 per cent.

The company appears to be solid and its revenue looks secure. However, as mentioned, it looks expensive at this level. As a result, I would not recommend buying at this time but it's worth keeping an eye on the shares. If they pull back below $9 you may want to take a position. – G.P.

--Gordon Pape is Editor and Publisher of the Internet Wealth Builder and Income Investor newsletters.

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What's up in the days ahead

Rob Carrick Saturday will explore a creative way to employ annuities in a rising interest rate environment: laddering. And Tim Shufelt just sat down with economics guru Robert Shiller; we'll hear his latest views on the markets.

Click here to see the Globe Investor earnings and economic news calendar.

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Compiled by Gillian Livingston