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Ever invest in 'forward yield disbursement bonds'?

April 28, 2016 • Print This Article

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.

 

A View From Here April 2016

April 26, 2016 • Print This Article

"A consensus means that everyone agrees to say collectively what no one believes individually." - Abba Eban

It's Getting Better

Our account values are increasing. The highs achieved by early summer of 2015 became challenged and consolidation remained unabated until February when we started to see a resumption of growth that has carried into April. We used this weakness to augment our investment holdings which has served us well. In recent months, I have heard only negative views from most financial pundits warning that the recent rally is a bounce from oversold conditions and the downward pressure will reassert itself. From 30,000 feet, these short-term moves only serve to distort the long-term results, which is what matters most. It is my belief that markets are healthiest when they operate in anticipation of turmoil, which appears to be the environment we are in. In the end however, it is about our investments and I remain excited about their individual merits. This view could be summed up by the term, Variant Perception.

Variant Perception

Perhaps the most powerful key to investment success is to have a disparate view of each investment to how it is currently valued, and allow the time necessary for a change in that view to reach fruition. If proven correct, this should lead to a meaningful profit, we just don't know when. Also, we have to account for the possibility that we might be wrong, and if so - take action. It is equally important to have a realistic view of how each investment is currently valued so we can properly gauge the impact if our theory is correct. There is a lot of ongoing soul searching, reading comprehension, and digging throughout this process. Michael Steinhardt, who is one of the great minds of investment called this theory, Variant Perception. I recall reading his book ('No Bull') and having an epiphany when he described the term because it articulated in words how I thought about our investments. Below is a snippet of an interview in 2011 with Charlie Rose:

Charlie Rose: "What is Variant Perception?"

Michael Steinhardt: "Variant perception is the effort to become sufficiently knowledgeable about whatever the subject is that varies from consensus, because one of the few sure ways to make money in the market is to have a view that is off consensus and have that view turn out to be right."

UFO: Unforeseen Occurrences

Think about all the times markets have changed course from the crash of 1987, Y2K, 2008-2009, oil's stunning collapse in 2014 and more recently, the market sell off which brings up that old feeling of bread lines during the great depression. These moves were unforeseen at the time and occurred at a time of complacency, yet when they occurred, had the power to change the collective consensus. Adversity touches that place in the pit of investors' stomachs that says; 'I just know that this is going to be bad.' Perhaps this occurs because we are gluttons for punishment and more importantly, most don't have a firm grasp on why they are invested in, in particular companies. When the markets crashed in 1987, most financial analysts were quick to focus on the austere future that never came. I remember this well because that is all I read about when I started in the business of financial advisory in January of 1988, and it scared me as well. I remember thinking that it was my bad luck to enter an industry on the verge of economic collapse. When I'd survey all the books in the business section of bookstores, I don't recall much of anything positive outside of Donald Trump's, 'The Art of the Deal'. In fact the best seller at the time was Ravi Batra's 'The Great Depression of 1990' (that never materialized). But by 1999 when the markets were making new highs, one of the best sellers was Harry Dent's 'Dow 35,000' - which also never materialized. Interestingly, in 2010 Mr. Dent was at it again with his next prediction, 'The Great Depression Ahead' - predicting this time, that the Dow Jones will reach 3,800. Wrong again. When things go one way, expect surprise not consensus. Consensus is telling us that it is going to be bad out there. Let's see what happens.

Media Coverage: March 18, & April 15, 2016

It was a exciting but scary when BNN reached out and requested an interview and I knew I couldn't resist. Interestingly, all I could hear was my heart beating before the interview but then I settled down. I was asked to appear again on April 15th, which was the day that Rob Carrick of the Globe and Mail ran an article about a study we commissioned entitled 'Don't Fake It'. This was the culmination of a Google Survey I commissioned. If you haven't seen the interviews or read the Globe and Mail article, you can access them here:

Goodbye GTHL - Hello The Rest of Your Life!

I couldn't think of a better way to end my son's 12-year hockey run than to win the City Championships. I don't know what is in the arena air, but most of us get crazy about our kids' hockey. Nothing could have been a better experience than the past 2 years on the Goulding Park Rangers AA team. As my son focuses on academic aspirations, he plans to dial it back to where it began in house league, and leaves behind a lot of friends, a few concussions and a lot of amazing memories and life lessons. Of particular mention is one family that we moved with from team to team over the years. If I could sum up the rep hockey experience, it would be: "90% frustration, 100% fun." We are going to miss it, but it's time.

Thanks for taking a look and as always,

All Good Things,

Adam Hennick

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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