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A View From Here November 2010

November 26, 2010 • Print This Article

"I know my life is nearing its end and I accept that. As for my career, I always said to my kids, 'You don't cry because its over, you're happy because it happened.' That's the main thing. I'm happy it happened." - Pat Burns

Our Accounts

The patience we emphasized throughout the spring and summer months have enhanced our portfolio values throughout the autumn, culminating into a particularly strong October performance. Many accounts experienced increased valuations between 2% - 4% in that month alone. November has continued this trend, however, we must be open to the possibility that these exponential returns can slow down, plateau or even retreat at some point. That being said, earnings releases and corporate developments from our holdings have only served to enhance our performance. Further, we have begun to add new positions, which we think will augment our portfolios over the long term.

I would like to reiterate that the performance in our accounts have provided a long-term rate of return that few, if any have been able to achieve. As such, many have now exceeded their all-time highs, which were set before the financial crisis. This is an accomplishment we are most proud of.

The Markets

Stock markets crept into this year on a somewhat optimistic note despite the negative sentiment from many market watchers and newsletter writers. I have noticed over my 20 plus year career that after periods of turmoil there is fear that another shoe will drop. Buying into the big picture is a loser's game, and I have never had a client do so successfully. Few have ever got it right and when they do, they become celebrities. One must ask whatever happened to the hero's of the past who have successfully called market trends? Does anybody remember how important a figure Elaine Garzarelli was in calling the stock market crash of 1987 or how Meredith Whitney is doing these days?

There really is no advantage trying to predict the unpredictable. We have been much more successful focusing on the merits of our individual investment positions and monitoring each one for trends or corporate developments that maintain our conviction or give a reason to exit. I have found that the longer we stay with a position that is performing well from a corporate level, the higher the ultimate return is. It's just having the patience to persevere.

I often think of a successful investment as the journey between point A and B. From a finality point of view it all seems so easy. Buy at a low price and sell at a higher one, but it's the journey that brings us our conviction to stay. For example, we have owned Methanex for over 6 years and outside of its consistent growth as an entity, the share price has not really performed all that well, but through constant valuation and re-valuation, we may have just identified the possibility of a significant rise in future earnings potential that the market is only becoming aware of. As such, we have used this variant perception or unique insight from having been invested in the company and understanding its business to our advantage. We hope to capture that move because we have had the patience to hold onto a position that for the most part has delivered on a corporate level. The shares are within 1% of their all-time highs in US dollars. I see tremendous potential and have become quite passionate over the past two months, as we have added to our positions in that name.

There Are No Secrets

I recently finished an interesting book called "Bumping Into Genius" by music promoter Danny Goldberg. The book opens up with a recollection of a meeting he had with the president and industry legend, Ahmet Egan, who claims that there are no secrets to success. Being an individual in the practice of building and managing wealth, I am constantly amazed about publications offering individual investors secrets and strategies to create wealth,whether it be trading strategies or building long-term wealth. I especially enjoy the ones which focus on the individual investor with no background in investing on how to take control of their finances and turn their lackluster performance they have been receiving into millions of dollars using their strategies. What is even more amazing is that there is usually little or no evidence of their own real success.

The Little Book that Beats the Market

While there are number of investment books available, there are a few that I would highly recommend. Michael Steinhardt's 'No Bull' and Charles Ellis's 'Winning the Losers Game' are two that come to mind, but perhaps the one I would recommend most is a small and very short investment lesson entitled; "The Little Book That Beats the Market", by Jerry Greenbalatt. I believe that his philosophy is similar to the one we employ on your behalf and breaks down investing to an introductory level with tremendous clarity. I have many copies on my desk and if you would like one, please let Afsi or myself know and we will be happy to forward one to you. It's just that good!

We are in the process of revamping our website and putting up more tools to help you track our investments. We look forward to the fruits of this over the coming months. Also, we are now able to provide you with your statements and transaction confirmations online. If you would like to make this change, please let us know.

Until Next Month, (which is only a short distance away),

All Good Things,

Adam

Filed under: Uncategorized

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital Corporation ("MRCC"). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRCC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRCC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member-Canadian Investor Protection Fund / member-fonds canadien de protection des ├ępargnants.

Mackie Research Capital Corporation (MRCC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRCC website please understand that it is independent from MRCC and that MRCC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRCC.

 

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