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A View From Here November 2013

November 5, 2013 • Print This Article

"I wonder what tomorrow has in mind for me, or am I even in its mind at all. Perhaps I'll get a chance to look ahead and see, soon as I find myself a Crystal Ball." - Tommy Shaw

Crystal Ball

When I was a University undergrad, a friend went to a Psychic and among others inquired about my future. She was told that I would become an Investment Advisor. I remember being irked by this consequence, as it had no relevance to my interests, which was music. Judging by the amount of store top locations I see around the city, there are a lot of people who seek value in knowing their future. A few years later, I took (what I thought would be a short-term) job as a personal assistant for the President of a brokerage firm and the irony of that comment came eerily back to me.

My preconceived notion as I headed downtown for a job interview in January of 1988, was a shallow one. Fast paced images of trading floors and office towers conjured up thoughts of a soulless existence. After the first day, my parents took me to the local theatre to see the movie Wall Street, which was supposed to be a cautionary tale, but like so many others who saw it, I found it to be inspirational. Within a short period of time, I believed in the parallel of finding investments to undiscovered music that could be shared with people. I've never stopped thinking of each investment the same way…particularly the ones that we hold the most passion for.

If we could only have a crystal ball to source the outcome of our investments, we could make (and some instances save) a lot of money. But in essence, that is what we try to do. We imagine potential outcomes through research and strike the canvas with our initial commitment. It is then colored in with ongoing comprehension, and augmentation of additional purchases until the picture is as complete as it can be. That is where the art of investing comes in…when to let go.

Loss Happens

One of the things we do with an investment that is not working is to stare into the abyss and act accordingly. Recently, we have found that one of our new investment commitments does not seem to have the potential first thought of. As such we will likely protect what's left of the investment and move on. In my opinion, this is the second biggest limitation that investors face; the fear of taking a loss (the first is apathy of terrible performance). Theoretically, it stands to reason that not all investments will be successful, but hope, fear or ego that it will pan out after its sold, keeps many engaged. My father often reminded me that buying is easy, but selling is the hard part…whether it is a gain or a loss.

Michael Steinhardt wrote in his book No Bull (one of my favorites) that he would walk into the office on certain days and sell the entire portfolio with an eye for re-buying positions the next day. His reasoning was that so many things would be left out because he didn't have a good enough reason to re-buy them. We often look at our holdings and ask if we sold the account to cash, would we buy them back?

October has continued 2013's stellar performance and if everything holds this will be the best year we have ever had. I cannot believe how large many of our accounts have grown, having watched them over many years. We hope you like the way the painting looks so far.

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 épargnants.

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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