These have been such tough times for investors that even the prospect of a hurricane visiting destruction on the Texas coast qualified as an improvement on their usual bad news. Ike could wreak havoc on the area's extensive oil and gas infrastructure, including refineries accounting for nearly a fifth of U.S. capacity. Of such concerns are small energy and gold rallies born.
The TSX also got a boost from Stephen Harper's campaign promise to lift restrictions on foreign takeovers in the uranium racket. But any bounce is bound to be short-lived, because of rising worries about the global economic slowdown, the tattered U.S. financial system (Will there be yet another weekend bailout, this time of crippled Lehman Brothers?) and the obstinate refusal of consumers to return to the good old days when they happily handed over money they didn't have for stuff they didn't need.
The speculators have been exiting energy and other commodities for greener pastures, and everyone else is wondering what the heck happened. What's worse, when we look around for a safe harbour, none is evident in this particular bear of a market. Indeed, banks and other traditional value plays have become downright dangerous places to dock.
This is when panicky people need some wise counsel and a careful reassessment of their strategies and portfolios. Yet all too often, the advisers who were so eager to solicit our business during the bull run suddenly become harder to get hold of than a straight answer from a politician on the campaign trail.
Jeff Tory knows that feeling. Which is why the Montreal-based chairman of GBC Asset Management makes a point of facing the music in person. When we caught up to him this week, he was in the Toronto area talking to clients and explaining what an experienced stock picker does to weather a market storm like this one.
"What happens is that advisers don't call and people don't open their statements. Everybody's afraid," he said after one such gathering in his firm's Toronto office.
"What we [investors]should be doing is asking for accountability from our advisers after the correction and making sure the merchandise we own is what we thought it was and what we were told it would be."
The mature investment pro is one who has been through miserable bear periods in the past, understands what's happening and has a good idea how things will probably unfold.
"People who have lived through enough investment cycles know that conditions normalize, the good-quality things resuscitate themselves and you make a bunch of money again," Mr. Tory said. "It's the history of the business."
Mr. Tory, who specializes in small and mid-capitalization stocks, ought to know. He started his investment career during a bear market in 1982 and went to work at GBC's parent, Pembroke Management, just before the crash of 1987.
"If the fund manager really was investing and not speculating, then his investments will grow their way out of the cyclical malaise that we're in right now," he said. "If you were hanging ten in a bunch of speculative stocks right out on the edge of the surfboard, then of course that stuff gets unmasked in the cycle as junk. And it never comes back."
The Canadian small-cap stocks Mr. Tory favours have had a rough ride over the past couple of years. Which, he says, presents buying opportunities for patient, disciplined investors.
"A lot of the companies I'm turning over are businesses I rejected a year or two ago because the valuations were too high. Not because I didn't like the business or the people. And now the stock market is giving me a chance. It's like nice suits on sale. I'm taking advantage of the prices."
He tells clients they should have an asset mix such that "they're not tormented by the volatility or the action in their stock prices. If it's affecting their objectivity, then they're too heavily invested."
His best advice, though, came straight from his father when the son called him in a panic during the '87 crash.
"Do you have to sell?" his dad asked.
"No."
"Do you have leverage or margins?"
"No."
"Are you invested in good companies?"
"Yes."
"Then go back to sleep."