Stunted Evolution

I remember growing up in the 1970’s.  And, it was not uncommon for a father to pick up 8-10 five or six year old kids in his station wagon with not a seat belt in sight.  Invariably he’d have a beer in his hand and a couple ready for the drive.  We’d get to Mc Donalds order a whole bunch of food to eat in the car on the way to the bowling alley.  Once everyone was done eating, we’d roll down the windows and toss our garbage on the road.

Fast forward 30 years and things have changed.  There is a small percentage of our population that does not wear a seat belt, but to have unstrapped kids in a car is against at least 8 of the 10 commandments!  Yes, the odd time everyone does a little littering. However, the days of people on mass just throwing garbage in the street without a care are gone.  Sadly, each year, on our roads a small few still don’t get the message and there are DUI fatalities on our roads.  But, it is now a crime and drinking and driving has a real negative social stigma.  As a society, we’ve evolved.  Spousal abuse still exists, but it’s not cool.  Our views on racism, sexism, sexual orientation have also changed for the better.

So, I’m with Piers Morgan on this one, whudda up America on gun control?  Since 2001 the United States of America has lost approximately 2500 soldiers in Afganistan and since 2003 America has lost approximately 10000 soldiers in Iraq.  That is 12500 brave men and women lost to the tragedy of war.  Yet, in the same time period, on American soil the United States has lost over 100000 lives to gun violence.  Whatever your political beliefs are, something about those figures should strike you as wrong.  If we can curtail littering, restrict free speech, limit alcohol consumption, mandate seat belts, and drastically reduce domestic violence.  Why can’t we control the manufacture and sales of weapons in America? Arm the teachers? Arm the firemen? Let’s just arm everyone then? Or, why not reduce access to firearms and make this world a more evolved place?

Hold Tight!

An Ugly “V”, is there such a thing?

It has been a long time since I have encountered a social issue that has disturbed me so much.  I recently watched a video entitled “The Perfect V….”.  Now by “V” I mean that special female happy place.  The main concept of this video is that women are now having “V” enhancement surgery because they feel their “V” is unappealing.  Some even go as far as to suggest that they need an attractive looking “V” to secure, or keep, a man.

Ladies, for the record, I have not heard such nonsense in all my life.  I have played hockey, baseball, basketball, soccer, football, and lacrosse. I’ve played in a band, and done Karate.   I have, therefore, been in every men’s locker room imagined.  I have heard every stereotypical male discourse you can imagine.  And, out of tens of thousands of politically incorrect conversations, not one has ever been about the aesthetic quality of a “V”.

Men complain about not enough “V”.  They complain about being restricted to one “V”.  They discuss the joys of a highly viscous “V”.  They lament losing access to the “V”.  They discuss strategies of how to tell the owner of the “V” that it could use a little aroma therapy.  They talk about techniques to enhance the pleasure of the “V”.  They may show a picture of their favourite “V”. Some have asked for recommendations on a professional “V”.  And, of course, many postulate effective transition sentences that might spur on the discussion of introducing another “V”.  But, at no time!  And, I repeat, NO TIME, has a man in my presence in the last 28 years that I was fully aware of the nature of the “V” intonated that he would ever turn down, admonish, judge, criticize, reduce participation with, laugh at, point fingers at, or refuse an invitation from, the “V”.

Ladies, men love “V’s” and many women love “V” too.  And, speaking on behalf of men all over the world (and some women I’m sure), I am confident in stating that if you are with the right person, you need not worry about the appearance of your “V”!  We are all unique creatures on this earth and so are “Vs”.  Now, if you want to ruin my day or upset me, show me a “P”, now that’s ugly.

https://www.youtube.com/watch?v=uMJcGcBc2t8&feature=youtube_gdata_player

Please view the above video and let me know if you were as upset as I am.

Hold Tight!!!!

Oh Lord!!! "Good bye Hollywood"

Last June for us hockey fans starving for big sport legitimacy, we had achieved the “Holy Grail!!”  The Stanley Cup, for the 1^st time, would be in Hollywood!  This is it, Kim, Lindsay, Britney, and Paris would all be sipping Champagne from the cup.  We dreamed of Denzel, David Becham, Kobe, and the entire team of Victoria Secret Models in nothing but oversized hockey jerseys posing and partying with our Championship trophy (strictly for clarification purposes Denzel, David, and Kobe are all in suits!!).  The parade would be big, the parties would be loud, and our game would finally be in neon lights.

But in the true NHL backwater tradition, where the toilet stalls in our arenas have no doors, we have grabbed a lock out from the Jaws of shear glory. I’m not here to pick sides.  Nor will I delve into the financial analysis of each side’s platform in this dispute (save that for another day).   You will get but one thought, NHL owners and their executive, you had a chance to have the Young Stars of your game parading through Hollywood with the Stanley Cup...

I just can’t believe you didn’t see what we all saw!

Hold Tight!

Toronto Earns Respect !

Toronto, as a sports city, is always struggling for respect.  The Leafs, Raptors, and Jays always feel like the little brother who never gets picked in the older boy’s ball game.  It is etched in our psyche.  Evidence of this is how we boo feverishly any player that we feel spurned us in Free Agency as soon as they return to Toronto to play.

However, the latest “Toronto Spurning” was not by a player. It was by a Manager.  John Farrell left the Blue Jays for the greener pastures of Boston.  And, tradition dictates that we must Boo him feverishly every time he touches field play, the ball, or takes his position.  But he’s the manager, and this complicates things.  He will rarely touch the ball or the field and he doesn’t play a position.  He just kinda sits there and so it won’t even be easy to with single focus direct Boos at Coach Farrell.

I think Torontonians need to forget the tradition of booing in this case.  I really feel, even though I have no empirical evidence to prove my thesis, that John actually was the proverbial straw that motivated the Jays to stop the traditional we can’t compete with the Yanks and Red Sox mantra and got them to say “MLB, and World, we’re gonna show you”!!!!!!!!!! And, since then Alex the GM and the Jays have been on fire.

So, I think, when John Farrell and the Red Sox come to Toronto, we need to stand up and say “ThanK You John”!  And, if perchance, the Jays win the World Series in the next few years because of the moves made in the off season of 2012, we need to let go of the Toronto complex for good!  Because, other than the weather, this is the best city in the world and from now on, we know what to do!

Ok, fine, just his first trip to Toronto!  Let him have it!  ;)

Hold tight!

My Best Investment - Barclays Preferred Share

My best investment, and the one of which I'm most proud, is Barclays preferred share, series 3, the symbol for which was BCS.PR.A.

My average cost for this investment was between $12 (U.S.) and $12.50. My purchase dates ran from November, 2008, to Jan. 1, 2009, which was right in the heart of the doldrums.

The reason I'm so proud of this investment is this:

I could have bought it when the market totally tanked. I could have picked it up at $3 or $4 a share, or whatever the low was.

But buying Citigroup at 89 cents, for example, or buying GM at 89 cents - that isn't buying a stock, that's buying a warrant on management's ability to save the company.

That's not investing, that's betting.

However, once we knew that there were institutions that were going to be 'too big to fail' - as [U.S. President]Barack Obama has beaten to death - and once we knew that the Bank of England was behind Barclays, and once we knew that governments, globally, were going to do all they could to ensure the Tier One banks remained solvent, then I started to look around.

And, knowing that, historically, the long-term rate of return on the stock market is 7 per cent, I had these Barclays preferred shares, a security with a risk profile traditionally one-third as risky as a stock, one priced to give me a rate of return far in excess of the long-term rate of return of the stock market.

The Return:

The market value of BCS.PR.A as of Fri. April 23 was $24.16.

So my 'high' client has seen about a 95-per-cent capital gain, and my 'low' client has seen about an 85-per-cent capital gain.

But that's only half the story.

The second half of the investment: It's a preferred share, so my yield to clients, if they hold them for the rest of their lives, is an annual dividend of between 15 per cent and 17 per cent.

For my best client, the one-year return on this investment was more than 100 per cent.

This is the way I looked at it: Here I could buy a security with significantly less risk than equities as a whole that's positioned to give me a significantly greater return than equities as a whole.

And the beautiful part? As long as Barclays remains solvent and doesn't default on the dividend, this is an investment that my clients can keep for life.

Where else can you earn a 17-per-cent annual rate of return on your money from what was once a Triple-A bank and will again be a Triple-A bank?

That's not to say Barclays won't default on the dividend, but in the history of the bank, Barclays has never defaulted on a dividend.

Once the Bank of England was behind Barclays, why would I buy anything else? Why would I buy RIM? Why would I buy Citigroup? Why would I buy Bank of America?

At the time I made this investment, the most actively traded stocks were AIG, Bank of America and General Motors. And there was no volume, no interest in these preferred shares. I could go in and buy as much of this investment as I wanted.

It's a lifetime keeper. My clients that hold it are going to get 17 per cent a year for life.

You can't beat that.

I've bought all kinds of stocks, but this is the best investment I've made in the last 10 years. It's a once-in-a-lifetime trade.

The Takeaway:

There were two possible outcomes to the financial meltdown: The world as we knew it was either going to come to an end, or continue on.

There was no way the world as we knew it was going to continue if the people who finance it were not there. The world can function without banks, but the world as we know it can't function without banks.

So we, as humans, decided that the world as we knew it was quite fine, thank you very much, and we did what we had to do to save the banks.

And then we were at a place where I could say, "Okay, now I'm no longer gambling. Now I'm going to make an investment."

The next vital point: Whenever you have an asset class that is less risky than stocks that is priced to give you a return far in excess of stocks, back up the truck.

Maximize that opportunity, for it's the opportunity of a lifetime.

People seeking a 90-per-cent rate of return tend to lose their money. If, at that time, I invited people who invest in penny stocks, or people who were investing in GM or AIG, to buy this Barclays preferred share, they would have said no.

And that's the key. I don't try to get returns in the 90s; in this case, the market gave me this opportunity, and I took advantage of it. But I did so in a very prudent fashion.

My investment was rooted in research and understanding. I could have bought Barclays at 89 cents, at $1.20 - the opportunity was there. But I was not buying it as a bet. I was buying it as an investment. Until it became an investment, I had no interest.

That's my soapbox. I don't bet. I take educated risks, but I don't bet. That's for Pro-line.

This article was published in Globe and Mail

The Mayor? Really?

Toronto is the envy of the global financial world.  It is said that it is the 5^th largest market in North America.  And, thus, the Mayor of Toronto, believe it or not, is one of the most powerful people on this earth.   I say this because, upon further reflection, it is almost comical how the Mayor of Toronto was so quickly deposed.

Now, I did not vote for Rob Ford.  Nor do I feel sorry for the people of Toronto who elected him and are complaining.  However, it just doesn’t seem right to me how his term came to an end.  Globally, people in his position, have had ties to organized crime, have been caught with their ‘hands in the cookie jar’, and have had terms plagued with scandal.  But, they all seem to survive or have tenures that seem like they will never end.  Yet Mr. Ford, who seemed to “Do exactly as he said he would” (other than that weight loss thing that he failed miserably at) in my opinion has been dealt a bad hand.  Yeah I know, he shouldn’t have requested support for his kid’s football team on city letter head. And, I know he should have said sorry when confronted with this mistake.  But, to end his mandate, which I did not support, over $3100.00 just seems wrong.

Maybe I’ve been watching too much Kelsey Grammer in “Boss”, and I figure Rob should have the power to make this all go away!  Or, maybe the prospect of the city spending another 20-30 million dollars on court time and by-elections over this issue really sticks in my craw. (My fiscal conservative side) Or, Maybe I’m touched by someone that cares enough about other people’s kids to actually stick his neck out for them in this me, me, me world! (My Socially Liberal Side coming out) But, honestly, I was more offended by Rob’s attempted football move where he fell on the ground, or his sneaking off to eat French fries during his diet, than this $3100 football letter head, ethics vote, scandal.

Now Rob thinks it’s a “left wing” conspiracy that took him out.  But if you ask me, this is far too complicated a maneuver for those purported enemies alone.  It seems to me that Rob needs to accept that his biggest mistake was attempting to keep all his promises, which made everybody mad.  And in that case if there is a conspiracy, he should hold up his left hand and his right hand in front of a mirror and then he’d see what’s in between.

Hold tight!!!

Where do we go from here?

As 2012 is set to come to an end, I am blown away by the tremendous calm in the capital markets.  Global debt levels in Europe, North and South America, the Caribbean, and parts of Asia and Africa have reached unprecedented levels.  Many countries whether officially declared or not have defaulted on their debt.   And the prospect of a solution, to our international insolvency problem, seems very unlikely.  The pundits often claim that the markets are efficient, and if this is true, then why with the preceding information readily available are the markets for the most part stable?

I would not dare speculate on why we have oranges or wind or why there is a sun.  But the markets, these are “manmade” entities and therefore I feel much more confident offering some conjecture.  The one truly consistent premise in this world is the irrationality of humanity.  Yes I said it, “people are nuts!”  And, people made the markets.  Therefore, the markets are nuts! So faced with all of this, what can an investor do to make, or at least preserve, money in 2013?

#1 Buy some gold, why because it makes no sense.  Since the beginning of time we have arbitrarily decided that gold has currency like value, and because this ore exhibits de facto defensive currency characteristics every portfolio needs some in 2013

#2 Hold some USD, despite the USD Federal Reserve doing its best to devalue the “greenback” by printing more dollars than they can afford, the world economy is so bad that the $ is the prettiest in an ugly currency contest. And, as such, if there is a flight to safety in 2013 you will be ok.

#3 Invest in Government of Norway Bonds if you can!  I’ve been there, they are a healthy people, most can defend themselves with a firearm and yet they have a very low murder rate....hmmmmm!  A country with low debt, not saddled with the problems of the Euro, a Sovereign fund for their petroleum products and a proximity to Denmark which I only mention because I love their butter cookies over the holidays.

Now that I’ve retired, I look forward to openly giving you unfettered access to my perspective on the financial markets.  I hope you enjoy.

Hold tight!! 

Disclaimer

All opinions expressed by Steven Conville on this article are solely StevenConville’s opinions and do not reflect the opinions of any other company or organization. Nothing on this article should be regarded as a recommendation to buy or sell any particular investment or follow a particular strategy.

Steven Conville believes that this information is reliable, but does not warrant its accuracy. No information provided on this article should be relied upon as such. Steven Conville does not have any obligation to update or correct any information provided on this article. All opinions of Steven Conville are subject to change without notice.

You are a unique individual and nothing on this article takes into account your specific objectives & financial situation. Therefore, nothing on this article is intended as a recommendation that would be appropriate for you in your situation. Before acting on any information on this article, you need to strongly consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor.

At any time, Mr. Conville may have a position in any of the securities mentioned. Please be aware that the content of this article is not to be thought of as investment advice but is instead to help in educating people about different market topics.