Yes, yes, I know. There is a banking crisis going on. Wild market commotion, too.
But, for those of us in the Globe Investing Club, the most significant event of this week is a happier occasion – the official debut of our Readers’ Portfolio.
As regular visitors to this space know, we recently launched the Investing Club as a just-for-fun way for Globe investing writers and readers to exchange ideas about interesting stocks. At a time like now, when the world’s financial machinery is throwing off sparks and making odd grinding noises, what could be more welcome than a source of solid, sensible investing ideas?
Our hope is that the Investing Club can deliver at least a little bit of insight into the current tumult. If nothing else, we guarantee it will be entertaining.
To help make it personal, those of us who write for Globe Investor have put our own egos on the line. Two weeks ago, we published a list of 11 stocks we like for the year ahead. We called it the Hot List. (Give us credit for optimism, at least.)
At the same time, we invited each of you to submit your own top three ideas so we could construct a Readers’ Portfolio composed of your top selections. Over the next 12 months, we will see whether the collective wisdom of pundits or the collective wisdom of the public performs better. We will also see whether either one of us can beat a simple indexing approach.
To be completely candid, our hope is that The Globe and Mail’s crack team of investing experts leaves the market (and readers) in the dust. On the other hand, experience tells us that we shouldn’t be entirely shocked if victory goes instead to the collective brain power of readers across the country.
Whatever happens, we plan to deliver regular monthly updates on the progress of both the Hot List and the Readers’ Portfolio.
In addition, we hope to profile some of the people whose individual selections are performing best. Perhaps these outperformers can point to trends the rest of us are missing.
However things shake out, we have already been pleasantly surprised by your enthusiastic participation. Five hundred and seventy-three of you sent us your picks. Some of you included nothing more than a terse list of ticker symbols. Others provided thoughtful, multipage explanations of your selections.
We have compiled all of your picks and used them to construct the Readers’ Portfolio. It consists of the dozen stocks most frequently cited in readers’ submissions.
We began tracking the comparative total returns of the Hot List and the Readers’ Portfolio this past Monday, March 13, and will declare a victor one year from that date.
The battle between pundits and the public should prove to be an interesting contest because the Readers’ Portfolio strikes us as a solid, well-balanced strategy.
The single most popular stock in readers’ minds is the distinctly unglamorous TC Energy Corp. TRP-T, a pipeline operator that delivers a steady gusher of reliable dividends. Just behind it in the popularity sweepstakes are convenience-store operator Alimentation Couche-Tard Inc. ATD-T and oil-and-gas producer Tourmaline Oil Corp. TOU-T
Helping to fill out our readers’ top dozen picks are a trio of tech stocks (chip maker Nvidia Corp. NVDA-Q, software giant Microsoft Corp. MSFT-Q and online retailing specialist Shopify Inc. SHOP-T) and a couple of Canadian banks (Bank of Nova Scotia and Toronto-Dominion Bank). There are steady dividend payers (telecom giant Telus Corp. and pipeline operator Enbridge Inc.), fallen stars (Shopify and Algonquin Power & Utilities Corp.) as well as a bet on the newly reconfigured investment manager Brookfield Corp.
Speaking on behalf of grizzled investment writers everywhere, I’m impressed. Money managers and academics often deride small investors for their emotional, unbalanced approach to investing. Yet the Readers’ Portfolio – the summation of many small investors’ opinions – seems impressively rational.
It spreads its bets between two countries and a half-dozen different industries. It doesn’t swoon for the new and flashy. Instead, it tends to celebrate businesses that have the potential to deliver steady, recurring streams of revenue in just about economic climate.
But let’s not get too carried away by the wisdom-of-the-crowds stuff. What also stood out in your submissions was the wide diversity of opinion. While TC Energy was the single most frequently selected stock by readers, it appeared on only 37 of 573 submissions.
Lots of you are fans of dicier propositions – from small biotech companies to broad bets on the Mexican economy. In the months to come, we hope to explore some of those notions. If you have thoughts about what you would like to see discussed, drop us a line at firstname.lastname@example.org.
We look forward to hearing from you.