Commentary

Eye on the ball…

My wife and I have an awesome new puppy dog named George, he is a Cockapoo and just over a year old. He has energy to burn and he has developed the craziest obsession with balls, a black and red basketball, in particular. He literally quivers if he sees us heading to the front door, his bball buddy rests on the front porch in a bucket, I suppose waiting for George too. George can’t bite the ball, but he pushes it around the yard full tilt, mostly he uses his face, but he also has become very good at turning and steering the ball with his front paws. I have video, you really have to see it, it will make you giggle. I will try to get that uploaded to share.  In my youth I played many years of team soccer in Winnipeg, so I still think I have decent ball skills and moves. I kick the ball for George, and right from the start I have tried to fake him out, have tried to do deeking moves to trick him into running the wrong way. It is impossible to trick George, none of my fancy footwork or feints ever get him to miss the direction that I actually send the ball. In my playing days I could fake an opposing player out, I could sell a move as if I was really going to go one way but actually, I would pass or move the ball ahead in another direction. Last night I figured out why George can’t be fooled. He never, not ever, not once takes his eyes off the ball.

George doesn’t ever watch my face or look at my eyes so I can’t head fake him like you see Cristiano Ronaldo or Lionel Messi do. Eye on the ball. I can swing and spin and dance around in front of George with the ball at my feet, I even trick myself at times thinking I am going to go in another direction, that’s how impressive my moves are, but George never wavers. Eye on the ball!

In March of this year Covid-19 was just starting to become a noisier problem in the world and in the world press, our Pivot© indicator was already flashing warning to us and had us reduce our equity exposure. We avoided much of the markets downturn as a result. Eye on the ball with Pivot©. We are now seeing a second wave, huge spikes in Covid19 infection rates, especially in the southeastern states where there was such an impatience to re-open. Is the world really going to end, again? Keep your eye on the ball. Pivot© is positive today and is not flashing warning. Infection rates there are increasing but death rates are charting the other way, there are behaviors changing too for the positive. Trump can tell all the tall tales he wants, but keep your eye on the ball, listen to the infectious disease expert Anthony Fauci instead. Vaccines are in the works, some recently showing good results and into actual trials. Markets dropped the first time because of panic, and because countries and economies were intentionally restricted and shut down. Governments globally have responded by doing everything they can to fund repair. Interest rates are almost at the zero range, our own bank governor Tiff Macklem just confirmed our Key rate will remain at 0.25 (yes that is one quarter of one percent) for the foreseeable future. That helps consumers and business borrow money or service debt, it is powerfully stimulating.

In this historically low interest rate period, we have filled your accounts with dividend paying holdings with dividend yields anywhere from 3 to 6%. Eye on the ball, these dividends are significant, especially with interest rates as low as where they are. We expect these solid dividend payors will also see solid share price appreciation from where we bought them post downturn, so watch for that. Progress has been made and even with hot spots of infection rate spikes, governments are not going to completely shut down again. I am not naïve, debt levels and unemployment and Covid-19 and Trumpian tweets are disturbing and challenging. There will continue to be volatility, but with that there will continue to be opportunity. Your accounts are invested and in good order right now, if Pivot© starts flashing warning again we will act and get out of the way.

It just hit me, our Pivot indicator and George are very much alike. No matter how much noise or dancing or head faking they each have to endure, they never ever take their eye off the ball. Maybe we should rename our Pivot© indicator George?

 

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