Mike Simonato, Ontario. Presenter: “Investing for the Long Term”, presented to the Feb. 6, 2021 International Online Forum, you can watch by CLICKING HERE.
Well, another week in the books and not a great one for Canada. Some Highlights:
- Trudeau throws Alberta under the Bus in Glasgow
- Biden piled on. He said he was open to foreign oil, only not from Canada
- Hydro Quebec had a huge project in New England shut down
- Air Canada CEO goes to Quebec to pump up recovery but ends up with a PR nightmare over his lack of French speaking ability
- Sunwing cancels flights leaving customers stranded
- I had a friend coming from Halifax to Hamilton today (Bought ticket in advance) Only problem is no flights from Halifax to Hamilton today, so ticket is worthless
- Inflation to continue hot through 2022 (Dairy announced huge price increases in the new year as have other industries)
- Canada has announced 5 Rate hikes for 2022 causing the following scenario
- Only 26% of New Mortgages are insured. CMHC has been reducing the availability of Portfolio Insurance for big banks and with interest rates rising next year, a spike in Mortgage Delinquencies is expected putting the Big Banks at Risk
10 Let’s end this segment on a fun note The battle at Rogers rages on and to make it more fun, Videotron is suing Rogers for $850 Million over Breach of Contract and dealing in Bad Faith
The above as well as a lot of other things I’m being told are not making 2022 look like fun.
How about Businesses and the Economy? The 2 big issues continue: Nobody can find any workers and Supply Chain issues continue.
Going into this holiday season, I’ve never seen such a high-stress level in businesses across the board. It used to be 10% of job applicants wouldn’t show up for interviews now it’s 30%. Of those hired, most quit shortly afterward. Result, businesses are stuck in a hiring/ training mode going into the busiest time of the year only to have most new hires quitting shortly after training. On top of not nearly enough workers, I’m being told warehouses are disaster zones with stores not knowing what they’re getting or when. How are stores adapting to the current situation:
- There is a new chain in Toronto that has no cashiers
- There is a chain of coffee shops in Toronto that uses Robots to make/ serve and accept payment No human workers
- More and more stores are putting in self-checkouts and really beefing up security.
It will be a new world in 2022 where only those who have positioned themselves properly and who can adapt to changing circumstances will come through relatively unscathed.
As always nothing more than my 2 cents and I hope it’s of value and interest
USA
DOW JONES: New High, Weak Candle Fri but good volume
NASDAQ: Really nice run with good buying vol
S&P 500: Similar to the Nasdaq but Doji on Fri
MKT TIMING: Price and indicators up nicely. Watch next week to see if the party continues
READ Views and Strategy
CANADA
PTSE: Powering higher on increasing vol, could continue next week
VENTURE: On quite a run Buying on strong vol and selling on weak vol Run may continue
MKT TIMING: Price powered to new high and all 3 indicators had big moves up this week Watch next week to see if the party continues
READ Views and Strategy
AUSTRALIA Read Views and Strategy
BRITAIN Read Views and Strategy
Summary Ride the Bull until he throws you off but if he throws you off, get to safety quickly because when a Bull gets mad he can do a lot of damage
NOTE: I’ll be shutting the business down for the year very soon and over the winter when I’m not working, the market tends to go to hell in a handbasket so I apologize in advance for any market sell-offs or calamity.
GOLD: It is stuck in a very tight channel between the 40 SMA as support and the 79 SMA as resistance Note Stan always wants the 40 SMA to be flat or rising. Currently, both moving averages are falling, which is Bearish, however, we are coming into the seasonally strong time for gold (usually Mid Dec until at the latest the end of Feb). So will Gold be a Lil Heart Breaker or a Money Maker Only time will tell.
A Few Keys To Success
What happens when things go wrong
The goal of each and every one of us is either:
- Win the Lottery or
- Make enough money off our assets/ cash to enjoy a relatively worry-free retirement.
I still haven’t won the lottery. (That’s why I’m still washing windows at 68 yrs old) So I have to try to setup Plan B
NOTE I will explain My Plan next week
I am fortunate that I have a very diverse group of clients/ contacts that keep me informed. Sometimes I do get info that sounds like sure fire winners or sound warnings. At the end of the day while I really do appreciate all the direction I’m given I’m smart enough to know Trades don’t always go as planned and situations can change. Here are the Keys to Success when things go wrong
- Position Size (Dr Paul writes about this in this weeks British Views) No matter what you think or how good something sounds ALWAYS ask. If this goes to zero will I still be OK This recently happened. The Latest fad is Crypto currency. (I don’t understand this industry and personally think it’s a level of stupid that’s off the charts) however a lot of people have made a lot of money in this area but a lot have lost everything as well ie via hacking and crooked dealers. Recently apparently there was a New Crypto Currency associated with the show “Squid Games” well it hot up to $3,500 before going to ZERO and everyone involved last everything. So while it’s ok to get involved in some riskier trades NEVER Risk more than you can afford to lose.
- Look for a possible safer way to do a trade. For example instead of buying a Crypto Currency itself, as Stan showed us earlier in the week, there are ETFs we can buy that gives us exposure to Crypto Currency with perhaps not as much risk
- Minimize your risk. Know before you go in how much you’re willing to risk/ lose on any given trade. The benchmark is 1% of your Portfolio size. Since I’m a punk who crys when he loses I only risk 1/2% ($500) per trade.
- Protect the downside. Many do this by placing Protective Stops. Note Pros know where Retail Traders place their stops and use computers to trigger those stops and buy up your shares at the sale price. Also on a Gap down a Protective stop offers minimal protection. Pros use Options as insurance and thereby completely controlling the risk/ loss.
Let’s look at some examples. (Many from this week): We are currently in a very strong Bull Run and it would be easy to think all is good and I’m going to be fully invested and make a ton of money, Let’s see if that’s true:
- ZiLLOW Recently I was told by a Govt official in the USA that Zillow was buying up all the Real Estate they could get their hands on for Flipping or Future Rental Income. This sounded really promising until this week when they announced they were getting out of that business, looking at a %550 Million dollar loss and the stock gapped down big time
- MODERNA Covid Vaccine Supplier Life is Good right Look what happened this week
- PELOTON We see their ads on TV all the time. Nobody going to the gyms and everyone working out at home. Sound good. This week bad earnings/ guidance and letting go quite a number of employees
- REAL MATTERS Again I was told by a very high up source this company is well positioned to profit from Covid with the empty Office spaces and everyone re negotiating Mortgages/ Leases but again look at the graph
- PAYPAL This one makes no sense as they had done everything right and were the best of the bunch. Note they did walk away from one deal recently but everything I’m seeing is Debit/ Credit and Crypto Currency isn’t going away any time soon so why this is falling so hard I don’t know
The KEY is NOT EVERY TRADE WILL BE A WINNER To succeed we must protect ourselves at all times and not let big winners change how we do things.
I bought Amazon at $192.10. It now trades around $3,500. Do I wish I had bought more NO If I did that it likely would have tanked.
The Pros have a saying The BIGGEST LOSSES COME AFTER THE BIGGEST WINNERS. Why Because they throw away the game plan and get Greedy.
ALWAYS ALWAYS ALWAYS PTOTECT YOURSELF NEVER RISK MORE THAN YOU CAN AFFORD TO LOSE!!!!
As always nothing more than my 2 cents and I hope it’s of value and interest
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