Key takeaways from Turmoil

I haven’t written much lately, and that’s been for a variety of reasons. The most important being that I had to ensure clients capital was sheltered from what seems like Tsunami’s of bad news. Not much changing to do, just some re-balancing into less risky investments and continuing to hold our oldies but goodies.

Some of my observations or takeaways over the last few months:

  1. Don’t panic, analyze
  2. Ensure you always have enough cash on hand in case of an emergency (worst case scenario)
  3. Make sure you have adequate Insurance on all hard assets, including your lives
  4. Believe in your ability and instincts
  5. Never rely on others to help you out financially
  6. Never assume someone in authority is smarter than you are
  7. Question what seems too good to be true
  8. You always get what your pay for.
  9. Consistency always pays off
  10. Take care of yourself and your health (mentally and physically)

Stay sharp, stay committed and stay focused

Rick

 

 

Leading a Horse to Water

It’s a classic saying, yet never more appropriate than when it’s applied to professional advisors in any field. Be it medical, legal, counselling or financial. All professions that deal with the public can relate to this expression. In the beginning I used to cringe when good advice fell on deaf ears. But as I matured and raised a family, I learned to let things play out.

Failure is good. We forget about that. I’ll borrow a line from Batman and use these lines as a great reference;

“Why do we fall down Master Bruce?” “So we learn how to get back up Alfred”.

Our culture and especially our families have become too protective over failure, to the point of stifling effort. In sports the score does matter. It provides a clear indication of ones reward or effort and also spurs reflection and drive for those on the wrong end of the scorecard.  Life is similar. It owes you nothing. Sooner or later you will learn its harsh realities. The longer you prolong or protect individuals from these lessons, the harder it will be for them to learn from them.

Parents, Teachers, Counsellors, Lawyers, Doctors and yes Accountants, are all there to help us make good decisions. As professionals, we must also understand that not taking our advice is also sometimes necessary for the greater good. I know I have learned the hard way several times, and wish I had just listened the first time. I also know that these consequences made me who and what I am today.

Rick Barbosa

 

What to do when idiots run the world?

When you combine Trudeau’s Selfie politics with Morneau’s silver spoon trust fund mentality, you get ongoing budget deficits, careless spending on wasted programs and social agenda’s with no economic merit. Couple that with Trump’s war on everybody, and our lack of true leadership, and voila. Stock market downturns, investors pulling out of Canadian projects and infighting between provinces for political gain without consideration for economic fallout.

So what’s a person to do? Well if you’ve invested using time-tested fundamentals you weather the storm. When deploying new capital, go for fixed income instruments that have low volatility and meager returns. Now is not the time to bet the Farm.

Stay Calm and Build your Cash reserves.

Rick Barbosa

 

Royal Bank pulls ahead in Electronic Banking Options for Business

Full disclosure, I use Royal Bank and own Royal Bank stock.

Recently Royal Bank did something that changed the game for small to medium-sized businesses alike. Very quietly they installed two brand new features that automates the electronic collections process previously only available through standalone software.

The first feature is Interact Collections, yes collections, not just payments. You can now issue requests for payment to registered “payee’s” and have them pay you using the familiar Interact System. It allows room for Invoice numbers and comments to provide detail to the recipient.

The second feature is the introduction of Wave to produce invoices and send them with the built-in option to pay via various means. This is a great tool for mom and pop businesses, allowing them to send professional looking electronic invoices to their customers and get paid.  I still would not recommend using Wave to handle your bookkeeping for a few reasons. The main one being that you still need an Accountant to work with you and your business to handle the various remittances, payroll and tax issues that go along with it.

That being said, I have tried both and liked them. There is a free trial period for both options, and available upgrades for various Wave features, but the free version does the job.

Good work Royal.

 

 

 

 

4 Pillars of Building Wealth

Believe it or not, the manner in which you can build your nest egg hasn’t changed since the dawn of the 20th century. The tools may have improved but these foundational pillars still exist.

  1. Discipline – Stay true to your purpose and never lose sight of your goal.
  2. Save – Learn how to keep and grow your money
  3. Research – The best results come from the most informed decisions.
  4. Plan – Anticipate life, surprises, retirement, and set out to meet these obligations.

Contact us to learn how to use these tools and start building your wealth.

Rick Barbosa

 

BBT Financial Update 10 days ahead of Barclays Analyst

Our clients enjoyed a 10 day window to buy up depressed stocks from our client update on May 12th. See the Barclays post below:

BUZZ-Barclays upgrades 5 Canadian banks on valuation, outlook

23 May 2017 – Reuters

BUZZ-Barclays upgrades 5 Canadian banks on valuation, outlook** Barclays raised its outlook on 5 Canadian banks due to low valuations following Q1 results

** Analyst John Aiken writes depressed valuation also attributable to housing market worries arising from non-bank lender Home Capital Group’s rapid decline in deposit accounts
** Cites upcoming switch to 2018 valuation year as painting rosier earnings growth outlook
** Among ‘big 6,’ raises Bank of Montreal to equal weight from under weight, PT to $98 from $95
** Lifts Bank of Nova Scotia to overweight from equal weight, PT to $84 from $78
** Upgrades National Bank of Canada to overweight from equal weight, PT unchanged at $59
** Boosts TD Bank Group to equal weight from under weight, PT to $69 from $64
** Also raises regional bank Laurentian to equal weight from under weight, though trims PT to $58 from $59
** In last 12 months, banks have outperformed the broader Canadian equities market, with the Thomson Reuters Canada Banks Index up 14.9 pct vs. the TSX Composite (up 11.1 pct)

Even with the BMO earnings today,  we see a buying opportunity.

Our Call 05/24/17
We predict that enough republicans will vote for impeachment before US Thanksgiving, leading to further depressed values for banks in the US. Canadian Banks should see continued strength as safe havens. Oil will bounce higher despite incremental supply. Overall infrastructure spending will boost oil demand over the next 2 years so hold on or add to your energy stocks.

Rick Barbosa

 

Trust and Competency

Companies and Individuals that exude both trust and competency in their work are increasingly hard to find.

A few recent examples:

Samsung

  • Leadership charged with collusion
  • Produces sub-standard home appliances
  • Revealed only recently that “Smart TV’s” are prone to hacking and can be used to record behaviour

City of Toronto

  • Road maintenance contracts awarded to “select” firms who are then sub-contracting to lower bidders

Province of Ontario

  • Contractors using sub-standard asphalt to win the bid, only to keep repaving because of the poor quality
  • Ontario Power Generation/Ontario Hydro-Ridiculous solar re-purchase agreements for residential producers that lead to super high hydro rates

I could go on but would rather focus on why this continues to happen. When we accept sub-standard and poor performance as the new “Norm” we endanger the very existence of our institutions and companies. Dealing with poor performance adds costs and inefficiencies. We must go back to demanding more from our workers, management and governments to live up to what is expected of them.

Holding people, managers and representatives to account is not easy, nor HR friendly, but it must be something we are prepared to do. Accepting sub-par performance will mean that people will go elsewhere or lose faith entirely. Both scenarios are not good, but losing someone’s trust can be devastating.

If you are not happy with your product, service or government representative, make it known that you demand better. Hold them to account, vote, or find someone that you can trust and is competent.

Remember

Are you with me?

Regards,

Rick Barbosa