Big changes are coming to the Monthly Newsletter! My girlfriend Nat, who has skills related to publishing blogs, website design, and other things too, has finally convinced me to get real… using the (gasp) interweb. Well as long as she does the work, why not? So here it is!
The blog will provide a better platform to send out and share the Monthly Newsletter. The flexibility of this new format will also provide me an opportunity to share other related content like saving money, early retirement, and lifestyle choices that play a critical part in investing. I’m also hoping to provide an always-available and visually appealing portfolio page for all to see (coming soon).
What will these changes mean for the 5 people who actually read these monthly emails? Nothing really, except that your experience will be generally better and I promise, much more colourful! I will continue to send the Monthly Newsletter by email for a few months until I’m sure that everyone has managed to find the site. The Newsletter and Blog will remain free as I have no aspirations of monetizing them at this time 😉
Why the Change?
So why the change? Am I looking for a broader audience? Maybe… having a broader audience provides me with more opportunities to interact with other investor nerds. I am always looking for new ideas. I have historically tried to keep the Newsletter quiet, only offering access if I was asked. If you recall I write the newsletter for two purposes:
- To structure my own thoughts, build strategies, learn and be accountable for my mistakes and failures, and in doing so achieve my goal, which is to beat the market by 1 – 3% in the long run.
- To teach others about investing, share my ideas, strategies, and principles, and hopefully learn from them as well.
Over the last decade, I have managed to achieve market-like returns, some years ahead a bit, some years behind a bit, but overall ahead. To most people, this performance is not inspiring. However, anyone in the business would tell you how difficult it is to achieve this. 90% of fund managers cannot beat the market. These are often Ivy League-educated people. It’s worse for the small investor… almost 95% underperform the market in the long run. And these figures also don’t consider how luck plays a role in returns. Of the small number of winners, how many achieved this by luck versus skill? The answer could be scary. It’s also well known that top-winning managers never stay on top consistently (think Ark funds), so there you go.
So how do I beat the market over long periods, and most people can’t? Am I special? Not really. It could be luck, but my strategy is simple:
- Don’t be greedy or take on huge risks attempting to beat the market by a lot.
- Make moves that mimic the market most of the time.
- Don’t make dumb, emotional decisions.
- Avoid being influenced by the herd.
- Seek out an edge to gain some overperformance.
A few disciplined rules are all it takes to get market-like returns. That is all it is… kind of boring, but that’s how I do it.
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- Click the subscribe button (it’s bright pink… you can’t miss it!)
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- Stay tuned for the next post!
Back to My Regular Programming
We are technically in a recession, so why is the market going up? In the last 30 days, the S&P 500 was well on its way to a 5%+ return until Friday, when things got nasty again. The market cannot figure out if the economy is in good shape or bad shape, or if it will be in bad shape shortly. The Conference Board’s Leading Economic Indicator (LEI) has gone negative and GDP figures have been negative 2 quarters in a row, which puts us in an official recession.
However as I have said before, things are not normal and there are a number of factors that counter the recession argument. Notably, inflation has dropped due to a fall in energy. Employment data is strong, half a million jobs were added to the US economy in July alone. At the same time, higher rates seem to be the theme lately, the brakes are on. Does this feel like an economic contraction? Depends on the day, but not really, not yet.
So where is the market headed? Will it continue to charge upwards? It’s hard to say. In the last 30 days, the Energy sector continues to be the big winner, ahead almost 12%, Information Technology around the middle at 2.5%, and Health Care last at -2.6%. The market is still nutty and there are arguments that the market could still be heading down at any moment.
Marc’s Monthly Moves
| Buy | Sell |
| Archer Midland Daniels (ADM) Topicus (TOI.V), more Shopify (SHOP), more | Mondelez (MDLZ) |
I sold Mondelez (MDLZ) and bought Archer Midland Daniels (AMD) as a replacement. Note what I did there… both are from the Consumer Staples Sector. AMD is a big conglomerate with hundreds of different products related to nutrition for people and animals. It’s a much stronger business than MDLZ as measured through the usual financial metrics. It’s also a favourite of Sven Carlin, a very competent YouTuber I follow.
I had a small position in Topicus, but purchased more and now have a full position. It suffered with the rest of the techs in the last downdraft. One of you provided me with some analysis and as much as I originally thought of this position as speculative, I now understand it much better. I think their growth model is actually their superpower and I am more comfortable with it risk-wise.
Prior to the tech meltdown, I had mostly sold-off Shopify but now I am building a position again at these low prices. Could it fall further? Absolutely. Most things I buy tend to continue down as they are generally out of favour, but patience often pays off big in the long run.
Marc’s Portfolio YTD Performance
- Portfolio return -10.1% (Including currency gains)
- Portfolio return -13.2% (without currency gains)
- S&P 500 return -14.9%
- TSX -6.4%
The portfolio overperformed the S&P 500 by 1.7 percentage points.
Money with Marc 