Podcast - April 8, 2023
Well, there’s a lot to think about in this episode of Barenaked Money. For one thing, Colin has jumped into a whole new arena…could Josh be far behind? Not to mention some surprising statistics that will, no doubt, leave you wondering why you still feel like (and some media folks are still talking like) the sky is falling!
Announcers:
You are about to get lucky with the Barenaked Money Podcast, the show that gives you the naked truth about personal finance with your hosts, Josh Sheluk, Portfolio Manager with WLWP Wealth Planners, iA Private Wealth, and Colin White, Portfolio Manager with the Verecan Capital Management Inc.
Josh Sheluk:
Colin, you have a bit of an extra hop in your step today. Why don’t you explain.
Colin White:
Well, yes. I no longer am part of WLWP. I am now a proud member of Verecan Capital Management, one of the newest players in the capital management scene in Canada.
Josh Sheluk:
So what does that mean?
Colin White:
Well, it means that we are now our own portfolio management firm. We’ve been working for a period of time now to get ourselves organized and we’ve taken the step to answer directly to the securities commissions and the various provinces that we operate in and kind of removed the middleman a little bit. Are you a little bit jealous?
Josh Sheluk:
I am because I’m still here at WLWP and iA Private Wealth doing my thing as we always have. So people might be asking the question now. Why are we on different sides of the fence?
Colin White:
Yeah. Josh, why don’t you want to come over and play in the big pool?
Josh Sheluk:
I do. I’ll be there, but in good time, Colin. So I’m taking my time here. There is a bit of a transition for us business wise to move over from the WLWP side to the Verecan Capital Management side. And I’m straddling the line right now because we need to make sure that all of our clients are properly serviced all the way through. So to ensure a seamless transition for everybody, we threw you over the fence and we’re leaving me behind for a little while to take flack, to take the bullets while you are there basking in your glory.
Colin White:
Yes, the vanguard as it were. No, I mean, there’s a lot of thought has gone to this and there’s a couple of key things we wanted to accomplish. We wanted to make sure that this was going to work out better for our clients and we think we put that in place and we also wanted to make the transition as seamless as we could make it. So by having me go over first and prepare the landing zone for Josh, we’re going to keep going with the military analogy, that will get things started and Josh can make sure that everything’s nice and smooth on the home front. And when we get things established, come over and join the new firm and then we can talk much more about what the new firm is and what it’s going to do. And we’ve been talking with a lot of our clients and we’ll talk with all of our clients over the coming weeks and explain it to them. But it’s exciting times, very excited.
Josh Sheluk:
Yeah. Holding down the fort here and excited to join you on the other side.
Colin White:
There you go. So do you want to kick off the podcast, Josh?
Josh Sheluk:
I have a surprise for you today, Colin. Actually, a number of surprises podcast wise and I’m pretty excited about this one. So the next episode of our Barenaked Money Podcast is going to be a whole bunch of surprises. And I started thinking about this because I heard this statistic, market related, finance related, and I was just like, “I actually can’t believe that, I have to look that up. I have to fact check that.” And this happens a lot where something is just almost so surprising, it just kind of knocks you off your chair and you say, “Does that even sound real?” And the answer is no. So I’ve come up with a number of these data points or pieces of information that to me have a little bit of that shock value to them where you are going to, after this podcast go and google some of these things so you can make sure that I haven’t been lying to you throughout the entire podcast.
Colin White:
So one of these is a lie and I have to figure out which one it is. Is it that kind of game? I don’t do well with that kind of game. I can’t tell when people are lying.
Josh Sheluk:
Not here to trick you, I’m just laying the facts on the table. But I guarantee you, you’re going to want to not only look up one of these, look up all of them to make sure that they’re accurate.
Colin White:
No. And listen, as an observation, this is the key to success of life is being curious and never accepting something at face value. Always asking why until you run out of energy. So what you are watching today is that probably the cornerstone of Josh’s entire personality and I’d like to think mine as well that I don’t understand that. So I have to understand that. And you start to dig and that’s how you learn things. So I can’t wait. Now, we have to give a disclaimer, Josh. You did send me the list 10 minutes ago, so I actually have in theory at least read it, but 10 minutes ago you sent it to me. So I may not be entirely surprised, but I only glanced at it. So this is still going to be a call and reacts podcast.
Josh Sheluk:
Yeah. Well, I intentionally left out the details around the topics that I’m going to bring to the table here because I didn’t want you to know exactly what I was talking about. But I wanted you to have just a little bit of a hint of where I was going. And not only does this express our curiosity, but it also helps I think drive home a lot of different lessons that you can learn when look in at some of these things. And we’ll go through that as we discuss the different ideas here.
Colin White:
All right. You built the suspense enough, Josh, you built it on. I’m too excited now. So what’s your first surprise?
Josh Sheluk:
Okay, well, I’m going to start with European stocks, not something we talk a whole lot about on this podcast, but I’m going to tell you again some things that you probably won’t believe. European stocks, one of the best performing developed markets over the last 12 months, Europe up 15% over the last year. You compare that to the Canadian stock market up about 6 in the US stock market up about 5. You say, okay, well, but they got crushed in early 2022, did they not? Yes, they did. But guess what? Over two years, Europe is still the best performing market out of those three, better than Canada, better than the US. Only marginally better than Canada, but beating the US by about 6% per year over that two year period of time. Year to date, Europe up 11% TSX for Canadian stock market and S&P 500 US up 7 to 8. So beating year to date as well. So, can you believe that the European stock market is done much better than Canada and the US over the last 12 months?
Colin White:
Well, Josh, if you keep asking the questions and answering them, I’m going to go for another coffee. But you were on a bit of a roll there and I appreciate that about you. No, listen, it is a very developed market and it’s a diversified market and we say Europe, but there’s some dash of real strength there. Germany as an example, is a manufacturing juggernaut. And dare I say, war can be good for business. Am I allowed to say that? Is that going to get us canceled? Am I…
Josh Sheluk:
Probably. You did it.
Colin White:
I mean, the stuff that you blow up, you got to replace and it costs money to blow stuff up and all of a sudden companies are producing more. So you know what? I did not know that, I had not consumed the information in the format that you had laid it out, but I can rationalize it in my head. I’m not going, “Oh my God, that’s unbelievable.” I accept your numbers, Josh, on their face.
Josh Sheluk:
Okay. So you accept my numbers, transport yourself back 12 months. We’re in the heart of the Ukraine, Russia conflict and that stuff’s going crazy. And you have all kinds of market commentators saying that a recession in Europe is inevitable. People might be going without heat for the winter because natural gas prices are too high. And you don’t know if we’re going to have any imports. People might be going without food because wheat prices and corn prices are too high. We don’t know if we’re going to have imports of that stuff. So 12 months ago, would you not have been shocked to sit here 12 months later and say that Europe was the best performing market over that time?
Colin White:
Oh look, it would be long odds for sure. But again, I would’ve sat there and said, “It doesn’t look good right now, but it’s not going to look bad forever.” So it would’ve been very difficult 12 months ago, to your point to say this is going to be the best performing market. I would not have said that. I don’t know that I would ever say that about a given market and that’s good. And actually, interestingly enough, that builds right back into how markets function because that’s how markets price things. And because the sentiment was so negative 12 months ago, is probably why it’s become so successful now. Because then we tend to overreact to these things. And a lot of uncertainty means people pull out and even if you weren’t pessimistic, you were uncertain, pessimism and uncertainty are going to drive prices down artificially. So if you’re in a moment of peak pessimism or peak uncertainty, that was sort of like the play we made with the Canadian mix not that long ago. Peak pessimism, peak uncertainty, there could be something there, right? Because that’s when you’re going to see priceless locations.
Josh Sheluk:
Well, my question was going to be kind of along those lines. If people start saying market commentators, investors start saying that a recession is inevitable in a given market, is that not the perfect time to buy? Because to your point, pessimism must be at its absolute peak. And if a recession is inevitable, even if a recession takes place, it’s already priced into the market.
Colin White:
So I mean, Josh, I keep waiting for you to come up with this wonderful analogy that you spawned within the group because I think it’s the perfect way to describe the way things have been behaving certainly over the last 12 months anticipating this recession. I’m not even going to say anything more other than to prompt you to tell your story, Josh.
Josh Sheluk:
So the last 12 months have been fraught with people calling for a recession. So the jobs numbers came out last week on Friday, and in both Canada and the US, they’re very strong. Unemployment rates taking down to new recent lows, which totally unexpected. And over the last 12 months and probably beyond, let’s call it 18 months, all these commentators calling for recessions have been consistently chasing something that they couldn’t quite put their hands on. And this recession keeps getting pushed out further and further and further and is seemingly definitely not here right now. Is that six months away? Well, we don’t know. But my analogy was this is a lot like that cheese wheel chasing event that they have in the UK every year where you have all these crazy people running down this steep hill, grassy hill, full speed, chasing a wheel of cheese that they’re never going to be able to catch, breaking limbs, get them bruised up doing somersaults, falling on their ass.
And at the end of the day, none of them, I guess, one of them ends up catching this wheel of cheese. But not until long after they’ve all injured themselves multiple times along the way. It reminds me a lot of what people are doing trying to predict a recession and really trying to predict anything about the future when it comes to finances. You end up doing a lot more harm than good. And as I wrote last week, you’re better off standing on the sidelines watching all this chaos unfold and just staying out of harm’s way.
Colin White:
And calmly walking out at the end after the cheese has come to rest at the bottom of the hill and putting your hand on the cheese.
Josh Sheluk:
And exactly, there it is. So we know all this stuff. We are able to define all this stuff in hindsight and a lot of times making drastic moves along the way, trying to be out in front of it or trying to predict it ahead of time is just going to lead to more harm.
Colin White:
Well, exactly. And we always talk about investible ideas. Is this an investible thing? And the fact that the European market has been top performer recently. Josh, is that an investible idea?
Josh Sheluk:
No, not on itself. And if anything, it’s something to shy away from. We would’ve said it would be more investible last year, like I said, when everybody was calling for a recession because that’s when the pessimism is at its peak.
Colin White:
Yeah. Oh, absolutely. So just to be clear, we’re not telling everybody to put all of their money in Europe and we are not putting all of our money in Europe, just making sure that we haven’t lost anybody along the way who’s just only listening to part of this podcast.
Josh Sheluk:
Yeah, very true. I think if you take anything away, it’s that you shouldn’t have been running away wholeheartedly from Europe last year, just like you shouldn’t be piling all your money in this year. My second surprising note or statistic here lies on some of the same information, commodity prices. So, I’m going to read some numbers out to you again. Oil started 2022 at $76 a barrel ended at $78 a barrel. It’s now $72 a barrel. Last year, if you remember, there were calls for $200 per barrel oil prices. Natural gas prices, they’re down about 50% since the start of 2022. They ended 2022 approximately flat. Wheat prices, about the same. Flat last year, down since the start of 2022 up to today. Bank of Canada commodity price index down 14% in 2022.
So, another thing where it was like it’s inevitable that commodity prices skyrocket and stay high and I’ve heard over the last couple of months, couple of years, multiple calls for a commodity supercycle, it’s not showing up in the numbers. And I think again, I’ll kind of transport us back in time 12 months ago, it would be very hard for most people to predict that commodity prices are going to be so significantly lower 12 months later. And that 2022, they’d finish the year kind of flat, notwithstanding all the spikes that they had throughout the year. But spike up and pretty material and significant and quick correction. I’d find that surprising if you told me 12 months ago.
Colin White:
No, absolutely. What I find is a lot of the analysis around commodity pricing is very linear and it’s very one dimensional. We’ll take a look at a disruption in a given commodity and say this disruption’s going to lead to lower supplies, it’s going to lead to shortages, it’s going to lead to higher prices. But they don’t allow for an organic system that’s going to morph. They don’t allow for the fact that, oh, at that price, this project now makes sense. So this company or this country that’s been holding onto resources is going to let them into the market or it’s not a static situation. And a lot of the commodity analysis that I see out there is very linear and it’s very one dimensional and they’re not wrong, but it’s not the whole story. And things are going to change. And you’re going to see changes in supply patterns, you’re going to see changes in consumption.
You’re going to see sometimes it’s possible to change the use of one commodity over another. Again, the whole food inflation thing, if grain gets too expensive, people are going to go to other forms of food. So there’s some price elasticity to go back to my economic days that can change patterns as well. And it’s super complicated, super nuanced, but doesn’t lead itself to a really good investment idea. And good investment ideas need oxygen and they need passion and they need some excitement. So the true nuance of the situation doesn’t lend itself to that. So that’s why I think there was a big opportunity. And I was at conferences recently as two weeks ago talking about the new commodity supercycle and there could be something there. But to say wholeheartedly, that’s exactly what’s going to go on. Did you read the book? Was it part of your reading at school, Boom, Bust & Echo?
Josh Sheluk:
No.
Colin White:
It basically talked about the population growth in the planet and it was going to drive all of the economic work. Like all of the stock markets are going to fall this boom, bust and echo because everything was about population. It missed every mark because again, there was a big birth boom for a long time. But since then, birth rates have plummeted. So it did not go in a straight line. People adjusted and it was not the dominant factor in a lot of the economic indicators and a lot of the economic outcomes. So again, they make for interesting reading and they can be a little bit informative. But to take something hook line and sinker and say, “Yeah, this is exactly what’s going to happen,” that’s always fraught.
Josh Sheluk:
Right. So moving on here, this is maybe not that surprising because I think it’s been covered so much over the last few months, but it’s still shocking some of the numbers. So I’m talking about Silicon Valley Bank here, and I know you’re bored of this already, Colin, but bear with me for or a few minutes and have a chat about it.
Colin White:
I’ll hear you.
Josh Sheluk:
$42 billion left that bank in a single day. That is an astronomical number. So just to use a 24-hour day as an example, that’s $500,000 leaving the bank every second for a 24-hour day or $30 million leaving every minute. No wonder the bank collapsed. No wonder it collapsed. So comment on that first and then I have one question for you.
Colin White:
Well, when numbers get to a certain size, you just can’t conceive of them and this is definitely beyond any kind of reasonable comprehension. But those numbers are so large that you say that to a lay person, it’s like, “Oh my God, that must be the end of time.” If something like that’s going on, then the sun didn’t come up the following day, the leafs won the cup, I mean, something cataclysmic happened because-
Josh Sheluk:
That’s what’ll never happen. I’m sure of it.
Colin White:
But that’s the response, this numbers is so big and big numbers are interesting and big numbers are attractive and a lot of people will read big numbers and then when they can’t put it in any kind of context, they start to draw conclusions from it. And that’s where the contagion kicks in. It’s like, is that going to lead people to make other decisions? And that’s just dropping a rock in a pond. It starts a ripple like, well, how big is the ripple going to get? How shallow is the water? All that kind of stuff. And those were the commentators that were like, “This could go somewhere or this could just stop here.” But it was such a big number. And again, you’ve done a wonderful job of writing headlines. You should be a headline writer, the way you just described it, I got a little bit afraid and I shouldn’t be.
Josh Sheluk:
So here’s my question for you based off of this experience. Have we seen a fundamental change to the way that banks function going forward forever? And I say that because of the speed with which we saw these withdrawals, it was very much a social network driven thing where there was so much overlap between the different customers of the bank and maybe a little bit of friendliness between them that it was almost like a viral bank run.
Colin White:
Yeah, no, and absolutely and we may see some regulatory changes come out of it, but I don’t think that we go through patterns specifically in the US of having more regulation and less regulation. Times like this mean a few more regulations will come in and things will get tighter for a while. And then the right president’s going to get in and say, “This is strangling the free market and we’re going to relax all these things because we don’t need them anymore.” So there’s always been that back and forth on the regulatory side, the size and scale of things, that’s the thing. I mean, the stock market had to react to flash crashes.
Because back when people were on the phone placing orders to buy and sell stocks, it was really tough to have a flash crash. When computers are placing 17 or 20,000 orders a second in a particular name, it can quickly. So the regulatory environment has to react to technology. Technology increases the speed of things. It’s funny when you read a little bit about history and we talk about back to the Great Depression and all these other kind of things and monetary policy back during the Great Depression compared to monetary policy. Monetary policy during the Great Depression, it took four days for a letter to get from the US to Europe to communicate anything. And it was a letter. So if you had a conversation with another central banker in Europe, it was going to take you some time.
So the policies in place and the way things were dealt with that kind of technology probably don’t teach us a whole lot about dealing with similar problems with today’s technology, with the flow of information and how quickly things can move. So I do think you’re going to see some regulatory changes come in to protect the system because there’s votes in it. A politician could stand up right now and say, “In order to protect the solvency of our banks, we are introducing the following” and they will get public support for it. And that’s how democracies work. But let me ask you a question, Josh, all that money left the bank, where did it go?
Josh Sheluk:
I actually don’t know. The story is that it’s-
Colin White:
Good chance it went to another bank, right?
Josh Sheluk:
Well, another bank and there’s some stories about it going into money markets and things like that, which is a story for another day. But any type of issue like this, I think kind of what you’re hinting at is it creates winners and losers and Silicon Valley Bank is an obvious loser at this point. But the other banks that are picking up assets are picking up dollars, deposits, they’re probably a winner. And banks that are buying assets at 10 cents on the dollar or whatever it is, they’re probably a winner too. So this stuff does sort of fix itself over time.
Colin White:
Yes. Which is why it gets boring after a while.
Josh Sheluk:
That’s why you’re bored about it. Thanks for humoring me though. So next number here, and I know you won’t be totally surprised because I’ve shared this with you before. But I looked at some Canadian CPI, consumer price inflation numbers for the last 10 years. The last 10 years, inflation on average per year has been 2.37%, we’re targeting 2%. We’re not that far off from our target. I know people are feeling it now and they’ve been feeling it for the last probably 18 months, big time. Because everybody I talked to is complaining about the same thing and I get it. But if you zoom out a little bit, we’re kind of right on track with where you’ve been for the last 35 or so years.
Colin White:
Yeah, well, what you want to say to someone is shut up. You had it so easy for so long, just shut up because the inflation was so long, the solo for so long. And for anybody that’s been alive for 10 years, it’s pretty much on average. Now that’s not a popular thing to do. It’s way more popular to go, “Oh my god, I know it’s terrible.” But inflation’s a thing, it’s going to drift in and out. There was a number just today came out, the US dropped at 4.9, the headline number, which is the lowest in two years. So inflation’s a thing. The central banks think it’s a thing. Policies are being put in place to bring it down. It’s going to run its cycle and it’s going to have short-term surprises along the way. But it’s going to get back something close to 2%, which by coinkidink is the inflation rate that I tend to use if I’m rejecting inflation going forward.
And I’ve did that before and people are going, “Well, it’s lower than that, we’re going to keep it at 2% because it’s probably going to be higher in the future.” I didn’t know it was going to go to nine. No, I didn’t know it was going to correct itself that fast. But I do know that a 2% assumption or two and a half percent assumption on inflation longer term, statistically that’s a reasonable assumption to make. And not withstanding the short term dislocations we see right now. But that’s so boring, Josh. You know what it is, what they say, what average is.
Josh Sheluk:
Yep. I’ve said it multiple times, I don’t need to rehash it again.
Colin White:
Well, hey look, I got a couple more average things. You have more arms than the average person.
Josh Sheluk:
True, I think.
Colin White:
Because well, nobody has three arms and there’s lots of people that have one.
Josh Sheluk:
Are you sure nobody has three arms?
Colin White:
I’m willing to bet that there’s more people with one arm or no arms than there are people with three arms.
Josh Sheluk:
Yeah, so that’s probably fair.
Colin White:
So on average, you have more arms than the average person. The other thing I’ll share, and Catherine may cut this out, you know the average person has one testicle.
Josh Sheluk:
That’s true too.
Colin White:
See, averages are so useful.
Josh Sheluk:
Yeah. Okay, let’s move on. This will not get you any more excited because it’s kind of financial nerdiness, but Credit Suisse. So Credit Suisse is a European bank that failed within the last few months or was taken over, I shouldn’t say it failed because it was acquired by another bank. But the bond holders of a certain specific type of bond were wiped out. They got 0 cents on the dollar, whereas some of the equity or shareholders recovered some of their money. Now, that is so bizarre and so surprising because based off of everything that I’ve ever been taught in financial theory and corporate organization is that shareholders should always get wiped out before bond holders. Therefore, bonds are safer than stocks. That’s been, I guess, put into question with this most recent transaction that took place. Have you ever heard of this before?
Colin White:
I was going to ask, is this similar to the non-recourse financing that the Canadian banks put into the markets that years ago?
Josh Sheluk:
Very similar, actually.
Colin White:
See, this is where the freaking marketing people got involved. People like bonds because they’re safe. If you can say the word bond and you can say a bigger interest rate number, people are going to stop listening and they’re going to flood into it. This is what’s evil in the financial… Now, this isn’t boring at all. This isn’t nerdy at all. This is going to make me angry. This is what’s wrong with the financial industry. They manufacture a product that looks one way but is completely another. And behind the scenes, it fixes their balance sheet. I know when they did it in Canada, they floated the first offering out there without a call to analysts and without any follow up information. So it wasn’t until after everybody oversubscribed the initial offering that it came to light that they’d actually bought equity. Because a non-recourse bond turns into equity in times of a crisis. If there’s an issue then what it does is fixes a bank tier one capital. So I hadn’t heard this, I hadn’t read this, now I’m angry.
Josh Sheluk:
But Colin, the offering documents from Credit Suisse said that you could end up with $0 and that you could get paid out behind equity holders in this situation.
Colin White:
Oh, well, that makes it all better for someone on page 87 or page 92.
Josh Sheluk:
It was in the fine print by one of those pages I’m sure. So there’s I guess, some nuanced differences based on my limited understanding of the stuff between the Canadian issued non-recourse bonds and these European issued ones. But nonetheless, it does show you that you got to be careful what you buy, right? Buyer beware.
Colin White:
Well, no, and listen, this is a plug for us because we are the nerds that when we go to do something and it seems untoward like they’re offering a higher interest rate on something. We’re not going to keep going until we read it and we will read page 97 in the fine print before we accept something like that. And so, some of it’s understanding the playing field. If somebody come up to me today and said, “Hey, listen, I can guarantee you a 10% rate of return.” I’m going to have a shit ton of questions. There’s no way I’m taking that on face value. I don’t care what name is on it, I don’t care who’s talking to me. I’m going to need to understand how it works. And that’s my defense and that’s the defense for our clients. And the same thing with Josh here, you may even be more cynical than me. Someone says something to you that’s outlandish, you’re going to go, “Just stop talking or show me in fine print how this is going to hurt me.”
Josh Sheluk:
If someone guaranteed me a 10% return, I’d say, “Thank you Mr. Madoff. But I’ve been around it long enough, I’m not going to bite for that one.” And I wouldn’t even look at it because I know it’s bullshit. It doesn’t exist, I’m sorry.
Colin White:
Well, and listen to go full circle because you could interpret my comments as somehow impugning the Canadian bank system that the Canadian banks are going to fail next, and bondholders are going to get wiped out. But that’s not what I’m saying. I don’t think that that’s going to happen. I do think that there’s financial instruments out there that shouldn’t be out there to the benefit of some of the larger financial institutions in Canada. But I don’t think that they’re remotely in the situation of Credit Suisse where they’re going to get taken out by somebody else and any of this is going to happen.
Josh Sheluk:
Yeah. So my next one’s a little bit fun and it should be close to home for us. So there’s a study done recently by the Swiss Finance Institute. Don’t know much about them, but it was an interesting study on financial influencers. They looked at 29,000 financial influencers around the world and found that over half are what they call the anti-skilled. So I love the way that they describe this anti-skilled. So the most followed and most active influencers provide the worst financial results through their recommendations to a point where you’d be better off not following them at all. They’re actually detrimental for your financial health. I don’t think… You’re probably not that surprised about this, are you?
Colin White:
No. And I can probably remember one of them that’s on that list because I watched some advice that they gave online where you were supposed to look at your credit card statement and buy shares in all of the companies you saw in your credit card statement. Because if you’re shopping there, a lot of people are shopping there. Therefore, that’s a good investment. So I’m not surprised, but I don’t think this isn’t even just influencers. You get into the mainstream media like the Jim Cramers of the world and then shows like that. The loudest, most opinionated people are the ones that are going to be followers. That’s great TV. That’s great entertainment. It’s patently terrible advice 90% of the time. But that’s the equation and we’re flying in the face of the monster. You and I are out here trying to be boring and getting people to listen. That’s been hard, this isn’t an easy thing to do.
Josh Sheluk:
Yeah, I was going to ask where that puts us, but we can talk about that another time. But I’m glad he brought up Jim Cramer because there actually is an investment product, an ETF that is an Inverse Cramer ETF. I don’t know if you have seen that? So the investment decisions that the ETF makes are the exact opposite of what Jim Cramer recommends on CNBC. Which I don’t know if it’s probably not a good investment process, but it is funny. But this is what I see from these results is this is actually something that’s useful. This is a useful result because it tells you that you go look at the most influential financial voices on your social media and you do the exact opposite of what they’re telling you to do, and you’ll actually have some pretty good results. So I’m just waiting for the EPF, Colin.
Colin White:
Well, only in a binary world you’re thinking that if they suggest actually do Y, but there’s a myriad of different ways. So it would be a difficult product to actually put together. But this little… And here’s the paradox. If we ever became really popular, does that mean that people should stop listening to us? Is that…
Josh Sheluk:
I’ve been debating that in my head all day after seeing this. So I don’t know.
Colin White:
[inaudible 00:32:43] embraces causation.
Josh Sheluk:
Look, I think we’re on the right side of this thing because in this study I’ll read just a short excerpt for you. Skilled fin influencers, they call them fin influencers, are return social sentiment and news contrarian. So I’d say we’re definitely social sentiment and news contrarian, are we return contrarian? We’re probably return agnostic, but they continue here. Anti-skilled influencers, ride momentum and social sentiment momentum and are likely to chase returns. That’s definitely not us. So I don’t know. If we get very popular, we might be straddling the line there. We’ll have to make sure we don’t get too popular perhaps.
Colin White:
Wait, you’re saying the answer’s nuanced? We’re some of these things, but not all of these things. What box do people put us in, Josh?
Josh Sheluk:
I don’t know. We’ll have to ask our audience for a poll on that one.
Colin White:
And we need to come up with a better way to describe this because when you say fin influencer, I think fish. So all I can see is Nemo, like every time you say that.
Josh Sheluk:
Okay, so last short one here, and Andrew mentioned this to me probably 15 minutes before we started this podcast. By one study, 90% of people don’t fact check things online. So all of these numbers that I’m talking about here, they sound outlandish. A lot of people are probably going to take them at face value and not fact check them like we do most of the time.
Colin White:
No, because it takes a lot of effort. It’s way easier to jump to a conclusion and run with it.
Josh Sheluk:
It takes a lot of effort? You have a phone in your pocket right now, you can Google something in 30 seconds, probably less, and find an answer to it. You might be able to just use your voice and have Google do it for you or have Siri do it for you. So it does not take a lot of effort, but it’s still too high of a bar for people.
Colin White:
But be careful, Josh, because remember, as one of our friends likes to say, “I need someone to trade against.”
Josh Sheluk:
Yes.
Colin White:
So if this is what’s causing price dislocations in the market and giving us opportunities to prosper longer term, you know what? Fair enough. I’ll sit in the cheap seats and point at it, but I don’t necessarily want it to change.
Josh Sheluk:
That’s all I got for you, Colin. Anything surprising for you?
Colin White:
Nope. But that was a lot. I think that there’s a lot there to chew on. And part of it is with age, I get less surprised, I guess, because these are all repetitions on a theme. Craziness is something that’s common. But one comment I guess, I will add is that I don’t think at any one point in time in history you can defend as being the craziest time. I don’t think that, again, people say to me is like, and I’ll wait for all this to sort out. That’ll make a decision. Like you understand it never sorts out, there’s always the next thing. Just living with that and accepting that there’s a certain amount of craziness out there and certain amount of surprise. But that’s relatively constant. So take a breath, take your entertainment where you get your entertainment. Don’t confuse entertainment with information and keep listening to our podcast.
Josh Sheluk:
Yep. That’s it for the pod. If you want sources for my surprising statistics, reach out to us anytime.
Colin White:
Based on observation, it seems that the time an investor is most likely to move his or her portfolio to a new advisor is when the old advisor dies. Let us go on record is saying that having a pulse is not a great reason to trust someone with your entire financial future. Stop putting your life in the hands of stillbreathingwealthplanners.com and call us.
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Verecan Capital Management Inc is a registered portfolio manager in Nova Scotia, British, Columbia and Ontario. Nothing in this podcast should be considered as a solicitation or recommendation to buy or sell a particular security. Statements made by the portfolio managers are intended to illustrate their approach and are meant for information and entertainment purposes only. Opinions expressed in this podcast are those of the portfolio manager only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc is a member of the Canadian Investor Protection Fund and the investment industry regulatory organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc operates.
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