Blog

Winter is Coming

I have long enjoyed using tropes and phrases from popular culture in explaining how things work in the world of finance.  As a person who binge-watched Game of Thrones during the pandemic, I couldn’t help but think that current circumstances are ideal for trotting out an oft-used phase that doubled

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Security Selection is a Nebulous Value Proposition

By now, you will have almost certainly heard a few stories about the folly of stock picking as a viable way to beat the market.  The problem that high net worth (HNW) investors are disproportionately saddled with is they are bombarded with people who purport to be able to add

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The Country of Perpetual Minority Governments

Now that the 44th general federal election is behind us, there seems to be an emerging consensus that it is unlikely that any party will be able to confidently secure a majority government at any time in the foreseeable future.   Stated differently, it now looks as though Canada is in

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Difficult decision

Resulting

Annie Duke’s excellent book Thinking in Bets is an applied case study on decision-making.  Now that Canada’s 44th federal election has ended, the postmortems are rolling in.  Almost all of them involve a narrative akin to it having been an exercise in futility. I’ve heard people reference the movie Groundhog

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child

What Childcare Tells Us About Economic Growth

Canadians will be finding themselves in voting booths soon.  While there are several issues being discussed this time around, the differences between the two parties that have a chance to form a government are more subtle than they have been in previous campaigns.  One policy question where there is a

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Drawn scales with empty cups on chalkboard

When was the last time you Rebalanced?

There are several approaches that individual investors and advisors alike might take to portfolio management.  One of those is rebalancing.  In simple terms, rebalancing is simply selling a portion of something that is up and re-positioning the proceeds into something that is down (or perhaps merely up relatively less).  It

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Woman votes on election day.

You Can’t Handle the Truth

The scene most people remember from “A Few Good Men” is the one in the courtroom where Tom Cruise emphatically asks Jack Nicholson for the truth and Nicholson looks Tom Cruise right in the eye and angrily says “you can’t handle the truth”.  That, in a nutshell, is where we

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INFLATION spelled out using wooden letter tiles going up direction on white surface background.

The 5% Solution

One thing that many economic historians often overlook is that one’s worldview is shaped by life experiences.  That includes matters like love, marriage and divorce, money and savings and attitudes toward political risk – to name a few.  If our values, likes and dislikes are shaped by our experiences, it

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Highland Cattle

Confirmation Bias in Action

I was recently caught by a friend who discovered I was talking to myself while I thought I was alone – lost in thought.  In my absent-minded ‘debate’ with an invisible counter party, I was explaining my rationale for employing specialty products designed to capitalize on the lessons of Prospect

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money background

“I Will Die by Fire”

The federal election campaign is now well under way.  People who have been following my views will know that I am broadly in favour of the public policy response that Canada (and the Western World) has used to combat COVID-19, but that there have been a number of so-called ‘unintended

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Stock market crash

No one saw it coming in 1929 either

Stock market bubbles are not as rare as many people think. They occurred throughout history, with multiple generations seeing large swaths of accumulated wealth evaporate in short order.  With very few exceptions, the shellshocked investors are left to survey the carnage while trying to discern what happened and why they

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Signing Last Will and Testament

Insure Yourself with Purpose

Some things in life are brand new.  Some things fall out of favour and disappear.  A few can pass through a high period, fade into the background, and then make a comeback.  It is rare, however, for a concept that has fallen out of favour to make a comeback based

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Girl in a straw hat and a sundress in a field of sunflowers

Think of Risk like Lawyers Do

Perhaps more than any other profession, lawyers are keenly aware of the need to manage liabilities – both real and perceived.  The liabilities being managed can range from overlooking evidence to underestimating opposing counsel to reputational risk to out and out malfeasance.  All professionals need to be careful, but lawyers

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Successful Afrcan Businessman

How (IN)Credible is the Transitory Inflation Argument?

If there’s one thing we’ve all learned in the past two years, it is that central bankers mean business – both literally and figuratively.  In other words, when central bankers say they ‘have our backs’ in both extending the business cycle by promoting fuller employment and doing so without causing

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Teenage Boy Drinking Caffeine Energy Drink Gaming At Home Using Dual Computer Screens At Night

Overconfidence leads to Optimism Bias

Are you an above average driver?  What about love making?  Are you better than most, worse than most or about average?  Surveys have shown over and over that people tend to overestimate their own abilities.  This tendency has become known as the “Lake Wobegon Effect” as a hat tip to

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Professional psychologist taking notes at couple meeting with patients

Whose Bias is it, Anyway?

One of the great benefits of living in a free society is that people can have legitimate differences of opinion about the meaning of information and best courses of action.  In this space and, more recently, on social media, I have taken to pointing out the small army of credible

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Domino game. Dominoes on a black table

History Might Just Repeat

Churchill is reputed to have quipped that, “those who fail to learn from history are doomed to repeat it”.  The quote is trotted out whenever something bad happens in the present day that seems similar to something bad having happened previously. Most of the time, however, the quote is used

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Father with a toddler boy walking on beach on summer holiday, having fun.

Great Expectations

With apologies to Charles Dickens, our views of what the future might hold may need some re-calibration. Like his novel Great Expectations, the world today is full of challenging circumstances.  The modern financial planning world is dealing with a situation that may ultimately border on becoming an existential crisis.  

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Woman hand with crossed fingers isolated on white background

The Debt Cycle gets a Stick in the Spokes

I’ve written a fair bit about market cycles over the past few months.  In truth, I have touched on the equity market, the bond market and the real estate market.  In doing so, I have opined that all three are in a bubble and that all three are being driven

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Political speech

The interplay between politics and economic choices

The past 16 months or so have been fascinating.  As we entered the 2020s, the world was a simpler, happier place.  People got together in public settings to socialize and strategize. In contrast, these days, we just sequester and soliloquize.  The other change that you may not have noticed is

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Cute dog behind the kitchen table

How to Invest in this Market

There are many who feel there’s a tragedy of epic proportions brewing in the stock market. The problem is we humans tend to have short memories and therefore expect the future to replicate the recent past. Research done by market economist Robert Shiller of Yale shows there’s a striking correlation

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Doctors discussing chest x-rays

Get Out!

  Owing to everyone cocooning during the pandemic, I suspect many of us have watched more movies than usual over the past year or so.  One of my personal favourites of the recent past is Get Out, a fantastic 2017 psychological horror (i.e., no ‘monsters’ in the traditional sense) film

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Bubble

The Bubble Blowing Contest

  One element of Bullshift that I cannot help but notice is how the finance business has selective and self-serving definitions and explanations that abound when explaining the business to the public.  We’ve already discussed how a 10% move downward is called a “correction”, but there is no term for

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Thoughts on the 2021 Budget

Overstimulated

By now, you’re likely aware of the many sordid details found in the 2021 federal budget.  I’ve been following the discussions closely and I was glued to my TV set as the long-awaited details were finally released on Monday.  This is a brave new world.  I’m a bit excited and

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Sport game hockey

The John Tavares Principle

This is an homage to number 91 in your program, the captain of your Toronto Maple Leafs – John Tavares.  It’s about a quick and dirty calculation hack you might find useful then thinking about market gyrations.   Big moves and market volatility can be killers to your portfolio value.  Even

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Define “Inconsiderate”

For better or worse, I tend to be a stickler for semantics and exactitude.  As you might imagine, that usually means going through life with this mindset is “for worse”.  I dislike it when advertisers use the word “fast” instead of “quickly” even though, as I have grudgingly learned after

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Are People Denying the Real Estate Bubble, Too?

By now, you’ll know that I have been alarmed by stock market valuations for a long time.  Late 2019, in fact.  Recently, I pointed out that the bond market is severely stretched based on current valuations.  It is now time to complete the TINA Trifecta by examining real estate.  

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Innocent by Association

Ever notice how there’s no counterpart to certain words?  For instance, have you ever met anyone who is “gruntled”?  The same might apply to phrases.   One phrase that I have heard often is “guilty by association”.  If that’s possible, shouldn’t it also be possible to be innocent by association?  I

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Belief Perseverance

According to Wikipedia, “Belief Perseverance” (also known as ‘conceptual conservatism’) involves maintaining a belief despite new information that firmly contradicts it.  Astonishingly, such firm beliefs may even be strengthened when others attempt to present evidence debunking them, a phenomenon known as the ‘backfire effect’.  We’ve all seen this playout south

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What About the Bond Market?

Over the past several months, much has been said about the stock market, and for good reason.  What can be lost in the shuffle is what has been going on concurrently in the bond market.  It’s at least as bad. Therefore, if you’re worried about stock valuations, you should probably

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How to Portray the Past 50 Weeks

On March 23, 2020, stock markets hit a bottom.  In places like Canada and the United States, they had just experienced a massive drop of about 1/3 in only 5 weeks.  Now that that experience is almost a full year behind us, we can look back on it to assess

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Unintended Consequences

Now that we’re into March, most of the world is coming up on the one-year anniversary of the start of a pandemic that almost none of us were prepared for.   Before it happened, the world was ‘normal’ – and very little of what has happened since would be described in

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What Are Your Prospects?

As we head into the dog days of winter, many people are feeling a sense of disconnectedness.  Many people have gone months without seeing their extended families and phone calls and zoom calls have replaced good old-fashioned face to face contact over the winter months.  There might even be a

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The Route Taken Matters

Last week, I had a lovely exchange with some friends on Twitter about advisor behaviour considering current market valuations.   Every time I write about this, I need to begin with the caveat: this is NOT about forecasting or market timing.  I can’t do it.  You can’t.  No one can do

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To Infinity – and Beyond!

With apologies to Buzz Lightyear, there seems to be a fair bit of cognitive dissonance in the world.  Over the years, advisors have collectively convinced their clients that it would be reasonable to expect high single digit returns on a fairly traditional (say 70% stocks; 30% bonds) portfolio.  I got

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How Rational is that Decision?

    Today marks the one year anniversary of my blog.  In celebration, I am announcing that it is now easier than ever to find and use it.  In addition to the usual way, you can also access it by visiting either: www.standuptobullshift.ca  or www.standuptobullshift.com *** Yogi Berra once quipped

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Stop Reassuring People with Stories

Almost everyone likes a good story.  That’s especially true about investment clients, and the financial advice industry has taken it upon itself to offer reassurance.  Too often, people who give advice to retail clients are so determined to keep those clients calm that they write and say things that they

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The Value of Advice

Over the past few years, there have been dozens of articles in magazines that are distributed to financial advisors about both the value and cost of financial advice.   Most are overly simplistic to the point of being inaccurate and downright misleading.  As you might imagine, any publication that caters to

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How Will you React to the 50% Incorrection?

Words are important.  Not only because of what they say, but also what they imply without saying.  The finance business is full of such words and phrases.  Today, we’ll look at one of my (ahem) “favourites” – the word “correction”.  Within the field of finance, a correction is when the

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What’s Truth Got to do with it?

Many of us know a few top-of-mind quotes because they are used so frequently and have nearly universal applications. We sometimes trot these quotes out in order to sound worldly, well-read and, at times, even a bit cynical.  The funny thing about personal finance is that many people recognize many

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Pascal’s Wager, a Vaccine and a Portfolio Hedge

  There’s an example from the history books that will help to illustrate the risk / return tradeoff between two alternatives that may or may not come to pass.  It’s called Pascal’s Wager.  In the 17th Century, a young French philosopher named Blaise Pascal suggested that a rational person should

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The First 100 Days of 2021

Happy New Year!  Later this month, Joe Biden will be sworn in as the next American President.  He has made an audacious promise to vaccinate 100 million Americans within the first 100 days of taking office.  It is an ambitious, optimistic and highly laudable objective.   One of the concerns

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Don’t Semmelweis Me

Some days, in my own small way, I feel as though I might get an inkling of what Ignaz Semmelweis must have felt.  Semmelweis was a physician who merely wanted what was best for his profession and endured a great deal of criticism for pointing out that the status quo

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A Proposal for Income Redistribution

One of the public policy issues I think about frequently is income inequality. It is becoming increasingly understood and accepted that this is a real problem that is contributing to societal unrest. Are there ways where we could change laws on the extreme ends of the income scale only? In

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If a Tree Falls in the Forest

We all know the existential question: if a tree falls in the forest and there’s no one there to hear it, does it make a sound?  While you contemplate how you might personally respond to such a query, here’s a follow up: if a stock market bubble gets bigger and

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Fear the GIC Refugee Renaissance

When I started in the business in September of 1993, it was a great time for new client acquisition.  The reason is simple: there were so many new clients to be had – in the form of first-time investors.  As interest rates plummeted from their all-time highs in the early

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The Great Reset

By now, you may have heard about “The Great Reset”, a theory (and book of the same name) promulgated by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF).  It seems our Prime Minister has caused a bit of a stir on social media for musing out

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Cautiously Pessimistic

If I had a nickel for every time I heard someone say they were ‘cautiously optimistic’ about one thing or another, I’d be wealthy.  This got me to thinking – why do I never hear anyone say they’re ‘cautiously pessimistic’ when invited to prognosticate about the not so distant future?

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Why I Continue to Play Defence

At least I’m consistent.  For about a year now, I’ve been telling everyone who would listen that markets the world over are expensive to the point of being dangerous…. especially in the U.S.  The thing to remember is that even people like Professor Robert Shiller who win Nobel Prizes in

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The information contained herein has been provided for information purposes only.  The information has been drawn from sources believed to be reliable.  Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment.  The information does not provide financial, legal, tax or investment advice.  Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.  This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document.  Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions.  Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances.  WAPW is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.