There is a paradox in the information age whereby the more information becomes publicly available, the less people want it. Overwhelmed by the deluge of often conflicting data and opinions, there has been a distinct tendency for people to staunchly commit to a narrow point of view, hang on to it like grim death, and snarl like a rabid dog at any conflicting perspective or information that threatens it. This is the root, I think for the 'fake news' phenomenon which makes it easy to dismiss opposing views as fabricated.
Market debates have become not just heated but venomous, as the authors of a recent Wall Street Journal feature on cryptocurrencies discovered ('You Do Not Understand Bitcoin': Readers Bite Back). It's no longer enough for cryptocurrency investors to reap exorbitant profits, they need to shout down any skepticism. In Canada, precious metal and energy bulls can show the same tendencies.
I've avoided a lot of criticism by adopting a policy of using data to support any opinion – every column has a chart (well, except the ones for newsletters). It is possible to argue with the interpretation of the numbers, but hopefully it's clear that the conclusions weren't pulled out of thin air.
The internet makes the development of data-supported market views widely available. The Globe Investor Markets site has a wealth of market data. The Federal Reserve Economic Data site is a remarkably comprehensive source for market and economic information, including things that aren't even available on a $2,000 per month Bloomberg terminal.
For energy investors, the U.S.-based Energy Information Agency provides free access to oil and distillates inventory data, forecasts on global demand and supply, and many other fundamental factors that are currently driving the commodity price. The gold price has been tracking U.S. real interest rates, which can be followed through Treasury Inflation Protected Securities prices listed daily by the Wall Street Journal .
A lot of us, I think, were hopeful that the resources of the internet would result in a reduction in the number of stereotypical barroom bores, but social media seems to have pushed things the other way. Investors can decide for themselves whether it's more productive to argue their existing opinions, or use the freely available resources to inform their portfolio decisions.
-- Scott Barlow, Globe and Mail market strategist
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Stocks to ponder
Enercare Inc. This stock appeared on the negative breakouts list earlier this week but its share price rebounded sharply on Tuesday after the company reported its quarterly results. It is a stock yielding 5 per cent and has unanimous "buy" call from seven analysts. Toronto-based Enercare provides water heaters, furnaces, air conditioners and HVAC (heating, ventilation, and air conditioning) rental products, as well as services such as protection plans to its customers. Jennifer Dowty reports.
CanWel Building Materials Group Ltd. This dividend stock appeared on the positive breakouts list earlier this week. It is an industrial growth stock that yields 8 per cent and has seven buy calls on it. Vancouver-based CanWel operates two business segments: Building Materials Distribution and Forestry. The company reported better-than-expected top line third-quarter financial results. The company has maintained its dividend at this level since 2012. Jennifer Dowty reports.
RBC to launch its own robo-adviser business
Royal Bank of Canada is set to launch its own robo-advisory service, making it the second Canadian bank to offer an automated online portfolio platform for investors. The platform, RBC InvestEase, is a new and separate business for Canada's largest bank. The platform will offer automated investment advice and discretionary portfolio management, delivered through a digital platform and supported by accredited portfolio advisers. Clare O'Hara reports.
Today's apparently calm market disguises a rapidly brewing storm
This is the bull market nobody believes in, but everyone keeps investing in. A survey this week underlines an odd fact – few people, including the folks who are making money from rising share prices, think Wall Street can keep defying gravity. Yet, even fewer people appear willing to take the next step and duck away from a money-making machine that just might deliver one last burst of gains. The result? An apparently calm market that is being driven, up or down, by wisps of news. Investors aren't complacent; they're merely waiting for signs of what is to come. Ian McGugan reports.
Gotham's Greenblatt: Recent U.S. stock gains unsustainable
Investors counting on sustained double-digit percentage gains in U.S. stock prices should lower their expectations, according to Joel Greenblatt, a hedge fund and mutual fund manager who also teaches value investing at Columbia Business School. Speaking on Thursday at the Reuters Global Investment 2018 Outlook Summit, Mr. Greenblatt, who blends buying stocks he likes with "shorting" overvalued stocks, said the Standard & Poor's 500 has appeared cheaper only 16 per cent of the time over the last 27 years. Reuters reports.
Bumpier ride ahead for the quarterly profits of Canada's biggest banks
Prepare yourself: Canada's biggest banks will likely report bumpier quarterly profits from now on, but not because of a housing implosion, new competition or oncoming recession. Instead, the source of this expected profit volatility is a new accounting standard that was adopted this month by the Big Six banks, at the start of their fiscal first quarter of 2018. David Berman takes a look at the changes.
Here's why Telus and CT REIT belong in John Heinzl's dividend growth portfolio
His Yield Hog Dividend Growth Portfolio is barely six weeks old, but it's already churning out a steady stream of dividend increases. So far Emera Inc., Fortis Inc, A&W Revenue Royalties Income Fund, CT Real Estate Investment Trust and Telus Corp. have boosted their payouts. John Heinzl takes a look at the latest changes.
Three stocks from different sectors that could provide value for investors
Some prominent professional investors have been talking about the difficulty of finding value stocks in a market that seems to go nowhere but up. Even Warren Buffett's Berkshire Hathaway is sitting on $100-billion (U.S.) of cash looking for places to invest. But Mr. Buffett is a value investor and the fact that even he is looking in every nook and cranny for a big idea means the average investor is probably also working extra hard these days to find value plays. John Reese looks at three stocks that might be of interest to value investors.
The loonie is refusing to take its cue from oil
Analysts from Bank of Montreal, Toronto-Dominion Bank and Bank of Nova Scotia are forecasting that the loonie will get a big boost from rising oil prices but, if that's the case, there's little sign of it yet. Bond yields continue to drive the bus where the value of the Canadian dollar is concerned. The loonie's value has been more or less ignoring changes in the oil price recently, which is contrary to the historical trend. It's reasonable to expect that crude prices will reassert their influence in 2018, but the chart in this article show that this process has not yet begun. Scott Barlow takes a look.
Contra Guys: Beware 'the devil of overdiversification'
There is a common investing trope about how a monkey throwing darts will do better than a financial adviser. The Contra Guys take a look at a portfolio that looks in the rear view mirror and also is far too diversiied.
How WealthBar's chief investment officer is preparing for higher interest rates
Rising interest rates have some investors rethinking their portfolios, in particular, the fixed-income portion. For Neville Joanes, WealthBar's chief investment officer, that could mean a shift in the robo-adviser's portfolio away from government bonds that carry interest-rate risk. In response to another investing concern, he says the Vancouver-based company has added more environmentally friendly investment options to its mix. Brenda Bouw reports.
Top books for investors, recommended by the pros
Warren Buffett once said that one factor behind his success is a lifelong habit of voracious reading. He would read 1,000 pages a day when he started his career, though the billionaire later pared that down to about 500 by age 87. Like compound interest, he says, knowledge builds up. There are thousands of investing books on the market, but just a few strike a chord with people. We asked some of the country's leading investing minds to share the titles that have had a lasting impact on them. Gail Johnson reports.
Zero-fee ETFs can come with strings attached
Exchange-traded funds have exploded in popularity, spurred by lower fees that improve returns. But these funds, which trade like stocks, can be an even better bargain if investors don't have to pay commissions to buy and sell. Several Canadian discount brokers offer the allure of zero-fee ETFs. While these deals can be enticing, investors also need to be aware of limits to these freebies and potential pitfalls, some personal finance experts say. Shirley Won explains.
Pay close attention to your foreign assets to avoid tax troubles
Most high-net-worth investors have accumulated a good chunk of their wealth in non-registered investments. Once they max out RRSPs and TFSAs, there's little choice but to add investments to non-registered, taxable accounts. If you opt to hold the most tax-inefficient assets – fixed income – in registered accounts, odds are you're holding a lot of stocks outside them. If they're considered foreign property, you need to pay close attention to their cost base. Jonathan Chevreau explains.
Artificial intelligence – coming to an adviser near you
For financial advisers like Paul Shelestowsky, artificial intelligence is starting to get real. "The popular belief until recently was that artificial intelligence (AI) would work best alongside a human, active portfolio manager," says Mr. Shelestowsky, senior wealth advisor at Meridian Credit Union in Niagara-on-the-Lake, Ont. "This theory is starting to be tested. Large firms have been investing in research behind portfolios managed solely by AI." David Israelson reports.
Fully automated investments? We're not there yet
For everyone wondering whether black boxes will replace living-breathing investment managers, if bitcoin will become widely used and whether computers will one day take over Bay Street, the answer from financial professionals isn't a resounding "yes" or "no." It's something more nuanced. Paul Ebner, senior portfolio manager at the Canada Pension Plan Investment Board (CPPIB), likens it to chess. "The combination of a grandmaster and computer still beats the best computer." But it also probably beats a grandmaster playing without computer assistance, he said, speaking at a panel discussion Thursday on technology and investing at The Globe and Mail. Guy Dixon reports.
The cryptocurrency craze – are digital coins on verge of going mainstream?
Legendary investor Warren Buffett once described it as a "mirage" to be avoided by any sensible investor. JP Morgan Chase chief executive Jamie Dimon has famously described it as a "fraud" and last month warned that if "you're stupid enough to buy it, you'll pay the price for it one day." But other prominent financial voices such as Richard Branson, Nassim Taleb of Black Swan fame and most denizens of Silicon Valley see it as the future of money. Welcome to the complex world of cryptocurrencies, where the only people without strong views on one side or the other are still trying to make sense of a red-hot asset that almost no one took seriously as an investment just a few short years ago. Brian Milner reports.
Ask Globe Investor
Question: I am curious as to your thoughts on Rogers Sugar (RSI-T). I have been following this stock for over a year now and it has had its periods of positive movement and has had decent quarterly reports but it seems a bit range-bound between $6 and $7. It pays an excellent dividend and I like its long-term prospects as an investment…but am waiting for the stock to drop below $6 (which it did very briefly not that long ago, in fact) to wade in on this one.
Answer: Rogers and its operating company Lantic is the largest distributor of refined sugar in Canada. The stock has a history of volatility but has traded consistently in the $6 to $7 range for the past year. It's now at the lower end of that range, closing on Nov. 3 at $6.24. The shares pay a quarterly dividend of $0.09 ($0.36 per year) to yield 5.8 per cent at the current price. The dividend has not changed since 2014. At that time, the company cut it by 50 per cent, which dampened investor confidence.
The company recently released interim results for the third quarter of fiscal 2017 (to July 1). It showed adjusted net earnings per share of 10 cents, up from 8 cents the year before. For the nine-month period, adjusted EPS was 35 cents, up from 29 cents in 2016. Free cash flow for the third quarter was $6.9-million, down from $8.6-million in the comparable period last year. That was less than the total dividends pair out of $8.6-million. However, for the first nine months of the fiscal year, free cash flow of $34-million was well in excess of dividends of $25.4-million.
An important new development is the recent acquisition of L.B. Maple Treat Corporation, located in Granby, Que., for $160-million. LBMT is one of the world's largest branded and private label maple syrup bottling and distribution companies. It has three bottling plants in the heart of the world's maple syrup harvesting region (Quebec and Vermont).
This deal could be a game-changer for what has been seen as a rather stodgy company. It enables Rogers to diversify into the large and growing market of maple syrup, a natural sweetener, and will provide opportunities to grow organically, leverage sales and operational gains, and look at other acquisitions.
I don't expect to see much in the way of capital gains in the near future but the distribution looks safe at this level and the LBMT deal may create new opportunities down the road. The past history of dividend cuts and volatility is a concern but if that is not a problem for you go ahead with your purchase at your price target.
-- 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
It's become a cliché to say that stocks are now overvalued. The problem is what to do with that fact, especially if you're in retirement or nearing it. Ian explores some of the best options, in Saturday's Globe Investor. Also, we'll reveal how an investor with a better track record than even Warren Buffett is investing his money right now.
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Compiled by Gillian Livingston