How to Invest Money to Make Money

Picture of a tiger superimposed on a picture of the Yangtze River.

How to Invest Money to Make Money

Hi friend! Okay, I’ll get right to the point. There is a single-stock wealth machine – a must-own stock that has the potential to make you a heckuva lot of money.

This one stock wins all the marbles.

If you’re on the prowl for just one stock that will put a smile on your face, this could be the single most important investment of your lifetime.

And, if you’re at all concerned about how to invest money to make money, this could be a good starting point.

I am talking about a company that is becoming the burgeoning global e-commerce killer.

But, before we get to it (you can go there now, if you want), here is the Table of Contents for this blog post (there’s something in here for everybody):

Table of Contents:

Tiger in the Yangtze
As Cheap as a Year Ago
Access Small-Cap Market
Most Important Half Hour
Loonie Moves
Go Canada Go!!!
Growing Money
Higher-Quality Companies
Exposure to WTI Price
Lots of Runway Left
A Tech Darling
A Tireless Innovator
* My All-Time Fav Stock *
Near-Vertical Take-Off
Exciting News at PayPal
For Fitness Fanatics
Bring on the Booze
Takeover Candidate
The Most U.S. Exposure
A Software Giant
A Great Performer
More Strong Buys
U.S. Equity Exposure
It’s All Buffett’s Fault
Dirt Cheap U.S. ETFs
S&P 500 Growth Beats Value
The Search for Value
A Low-Price Value Stock
Global Exposure
Industrial/Base Metals
Market Moves
Money on the Sidelines
Market Cycles
The Ides of March
U.S. Infrastructure Spend
Currency Moves
Rising Interest Rates
Tracking the Yield Curve
Why Bond Yields Rise
Boo on Bonds
Boo on Banks
Retail Sales
Timing Measure
Be a Market Timing Genius
Growing Cash Flow
The Biblical Number 666
A Rising Star
Beaver Pelts, Gold, & Salt
The Future of Trading
Inspiration and Quotes
Legal Notice

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Tiger in the Yangtze

If you’re ever contemplated investing money in an e-commerce giant, this could be your lucky day.

I’m talking about Alibaba Group Holding Co. Ltd. (NYSE: BABA) – the ‘Tiger in the Yangtze.’

Because of its diverse portfolio of ecommerce-driven businesses, the company it most resembles is, Inc. (NASDAQ:  AMZN).

Alibaba has great growth prospects and a much better valuation than Amazon.

China is a much bigger market than the U.S., but CEO and founder of Alibaba Jack Ma is always looking to grow the business.

China is the most populous country on the planet.

Coming in a close second is India.

In 2016, Alibaba bought a gaming company called AGTech Holdings.

Last year, Alibaba spent a lot of time shaping this online gaming firm into its own competitive game plan.

It landed a five-year contract to run an online and offline operating license for Guan Dan Poker for a cash prize.

It is also penetrating the Indian market via a joint venture with India’s mobile games and entertainment player PayTM Group.

Played by more than 150 million Chinese, Guan Dan Poker is the only online game that offers a cash prize, together with the right to be designated a certified ‘Master,’ and the opportunity to travel outside China to tournaments.

Its JV with PayTM group will give AGTech exposure to 200 million gamers in India, one of the fastest growing online gaming markets in the world.

In sum… there’s a lot of growth and value stored in Alibaba stock for many years to come.

(Info via Louis Navellier of Investor Place, as reported at, January 10, 2018)

For more on Alibaba, please visit this blog post:  

More on Alibaba

CEO Jack Ma expects revenue growth to exceed 45 percent in 2018.

Alibaba is more diversified than AMZN and GOOGL.

  1. It has cloud computing;
  2. It runs a distribution network;
  3. It has a significant presence in mobile media;
  4. It’s an online platform for retailers.

It’s the best-of-class and biggest in China, and has arrived at this point with the Chinese government’s stamp of approval.

China is a huge market with far more potential organic growth than Europe and the U.S., but Alibaba isn’t stopping there.

It has partnered with Indian mobile gambling and gaming firms.

BABA has a number of top video games and gambling platforms in China, but 2018 will see expansion into the second most populous country in the world (India).

It has built the UC Browser that’s not only lighter, but better suited for less reliable connectivity and cheaper phones.

It already has 430 million users globally, and that number is expected to grow in years to come.

The company has begun talking to Kroger Co (NYSE:KR), the largest grocer in the U.S. by revenue.

This would be an opportunistic move to gain entry to the U.S. market by supporting Kroger’s efforts to build out an online operation that could rival AMZN and Wal-Mart.

(Info via Louis Navellier of Investor Place, as reported at, January 26, 2018)

For more on Alibaba, please visit this blog post:

And, still even more on Alibaba

Alibaba opened a new datacenter in Mumbai, India, which will afford it the opportunity to capitalize on that country’s cloud computing boom.

It issued senior unsecured notes to the tune of $7 billion, which will help provide the financing of its ambitious growth plans.

Singles’ Day saw Alibaba realizing a staggering $25.3 billion in sales from its e-commerce platform, which included customers from at least 225 countries.

According to the New York Post, it is reported that the company is in talks with Kroger Co. (NYSE:  KR) with a view to using Alibaba’s e-commerce expertise to digitize the grocery business, taking on Amazon in the process.

According to’s James Brumley, “Alibaba already operates about a dozen grocery stores.  And, in the middle of last year, it developed an app that enhances and simplifies the grocery shopping experience.  The Hema app was built from the ground up to be a revenue-bearing product.”

There are long-term growth drivers behind Alibaba’s ambitions:

  1. The Chinese middle class is expected to reach 600 million by 2020 (compared with the total population in the U.S. of 320 million);
  2. China is the world’s largest retail market, coming in at about $4.9-billion;
  3. As to its e-commerce component, there is still lots of runway left;
  4. Its retail marketplaces have approximately 488 million active consumers;
  5. It has been aggressively expanding its platform into growth areas like cloud computing and entertainment;
  6. It has continued to make prudent investment plays, like Weibo (Nasdaq: WB);

(Info via Tom Taulli, as reported at, 30 January 2018)

Alibaba’s Q3 results beat revenue estimates, but missed on EPS.

The company agreed to a 33 percent equity stake in Ant Financial for expansion and retail benefits tied to mobile payments.

Under the new terms, Alibaba will acquire newly-issued Ant Financial equity in exchange for certain IP rights.

Following the transaction’s completion, there won’t be any cash impact on Alibaba.

After closing, the companies will terminate the current profit-sharing agreement that saw Ant paying service fees that amount to 37.5 percent of its pre-tax profits.

(Info via Brandy Betz, SA News Editor, as reported at, Feb. 1, 2018 7:37 AM)

This Chinese e-commerce behemoth is a global growing juggernaut.

Despite the recent gyrations in the price of the stock, opportunities to get into it abound, especially after the recent market scare.

Underlying earnings are still looking good.

(Info via Larry Puglia, as reported in the March 2018 edition of Report on Business) 

For more on Alibaba, please visit this blog post:

If you are still wondering how to invest money to make money, BABA is a good place to start.

As Cheap as a Year Ago

Hedge fund billionaire David Tepper is optimistic about Trump’s corporate tax cuts, and says the market is as cheap as a year ago.

He doesn’t see overvaluation in the market.

He told CNBC that the market is “almost as cheap as coming into last year (2017).”

One of the most respected investors in the hedge fund business, he told CNBC, 4 Jan 2018, the bull market still has room to grow.

“Explain to me where this market is rich?  It’s not rich with the tax thing that just changed earnings projections.  With earnings forecasts going up and interest rates where they are, how is this market expensive?  I don’t see the overvaluation.  World growth is higher,” Tepper said in a phone interview.

“There’s no inflation.  The market coming into this year doesn’t look rich; in fact, it looks almost as cheap as coming into last year.”

The tax overhaul that President Donald Trump signed into law last month lowers the corporate tax rate to 21 percent from 35 percent.

Tepper’s comments that the market is nearly as inexpensive as the beginning of 2017 is noteworthy, given the S&P 500 rallied 19 percent last year.

He said bond prices are the key indicator of whether the stock market can keep going higher.

“The market can’t go down until the bond market gets hit.  It’s amazing where interest rates are,” he added in the interview on CNBC’s ‘Fast Money Halftime Report.’

His Appaloosa firm managed $17 billion as of March last year.

(Info via Scott Wapner/Tae Kim, as reported at, 12:30 PM ET Thu, 4 Jan 2018)

David Alan Tepper (born September 11, 1957) is an American hedge fund manager, investor, and philanthropist.

He is the founder and president of Appaloosa Management, a global hedge fund based in Miami Beach, Florida.

He graduated from the University of Pittsburgh in 1978 with a bachelor’s degree in economics.

His net worth is ‎US$11.7 billion (February 2017).

As such, his voice deserves to be heard.

(Info via Wikipedia)

Access Small-Cap Market

For the first time since 2014, the U.S. economy recently experienced two quarters of three percent GDP growth.

With more jobs being created each month than are needed to sustain full employment, the U.S. labour market is firing on all cylinders.

As well, nearly all leading economic indicators are trending upward, suggesting overall conditions are getting better, not worsening.

That strength is a positive for domestically-focused small-cap companies, which receive the bulk of their proceeds from within the U.S.

In that such firms tend to pay the highest effective tax rate, they stand to benefit big time from the recent Trump tax cuts.

Larger companies, as you will find in the S&P 500, tend to be more international in nature in scope and, as such, derive something like half of their revenues from overseas.

Accordingly, they pay a lower effective tax rate than those companies that operate exclusively within the U.S., and stand to benefit less from the recently reduced corporate tax rate.

Some estimates suggest that the move to a 21 percent corporate tax rate will result in small, domestically-oriented companies realizing an increase in free cash flow between from 15 to 20 percent.

If this were to happen, it would provide ample resources for these smaller companies to grow, invest, and possibly return capital to their shareholders.

Together with the positive economic environment, this makes small-caps the place to be going forward.

To that end, the iShares Russell 2000 ETF (IWM) ETF provides diversified exposure to all sectors of the small-cap market.

With a low expense ratio, it is an ideal way for investors to access the small-cap market.

(Info via Matthew Kerkhoff, Editor, Dow Theory Letters, as reported at, 01/08/2018, 5:00 am EST)

That addresses the conundrum of how to invest money to make money.

Most Important Half Hour

How stocks trade in the 30 minutes leading up to the close of markets – often referred to as the most important half hour of the day – “typically sets the tone for the next trading session” – this according to Ian Scott, an equity analyst at Manulife Asset Management.

(Info via David Hodges, as reported in The Globe and Mail, 10 February 2018)

Loonie Moves

The Canadian dollar tends to move in relation to several types of data – particularly commodity prices.

When oil prices tumble, the loonie typically follows in kind, especially versus the greenback, given oil prices are denominated in U.S. dollars.

(Info via David Hodges, as reported in The Globe and Mail, 10 February 2018)

Go Canada Go!!!

According to economist David Rosenberg, “Canada right now offers up some of the most compelling valuations in the world.”

(Info via Rob Carrick, as reported in The Globe and Mail, 16 February 2018)

Around the world, there are very few jurisdictions where the forward and trailing multiples are trading below their historical norms.

As a matter of fact, besides the TSX, the only major market trading below its 10-year average is Japan.

Many pundits like to justify buying U.S. stocks because they have a 300-basis point equity risk premium (the excess return over bonds).

Well, get this… that ERP in Canada is closer to 500 basis points.

BTW, a basis point is 1/100th of a percentage point.

(Info via David Rosenberg, as reported in The Globe and Mail, 14 February 2018)

While Canadian earnings season is till in its infancy, as at 14 February 2018, analysts are expecting 19 percent earnings growth year-over-year.

According to David Rosenberg, chief economist at Gluskin Sheff + Associates, since the summer of 2014, corporate earnings have grown by nearly 30 percent.

Talk about how to invest money to make money.

Growing Money

Stocks remain the average investor’s best chance for growing and investing money over the long term.

I’d say that adequately addresses the question of how to invest money to make money, wouldn’t you?

There has never been a decline from which stocks didn’t recover.

Ten years would normally be enough for the ups to more than offset the downs in the stock market.

The best opportunities come when stock prices are falling.

(Info via Rob Carrick, as reported in The Globe and Mail, 16 February 2018)

As to how to invest money in stocks, you will find ample information in that regard in this blog post.

Higher-Quality Companies

Medium- to large-cap stocks typically have higher-quality revenue streams than their smaller counterparts, and also have a track record of performance.

(Info via Peter Ashton, as reported in The Globe and Mail, 16 February 2018)

The focus should be on higher-quality companies having strong underlying cash flows and conservative dividend payout ratios.

Such companies help weather the storm during times of market volatility.

(Info via Bryden Teich, as reported in The Globe and Mail, 14 February 2018)

See Market Moves for more on this.

How to Invest Money to Make Money Stock News

Exposure to WTI Price

Hot Stock Encana (ECA – NYSE):

The company’s exposure to the improving WTI price through its U.S.-based portfolio qualifies this stock as a strong buy.

(Info via David Leeder, as reported in The Globe and Mail, 8 February 2018)

Posted better-than-expected fourth-quarter profit 15 February 2018, and indicated that profit rose four percent.

Announced a buyback of up to US$400-million worth of shares.

Plans to invest nearly 70 percent of its spending budget to boost production in Permian and Montney.

According to Thomson Reuters, excluding one-time items, the company earned 12 US cents a share in the fourth quarter, above analysts’ average estimate of 10 US cents a share.

(Info via Anirban Paul, as reported in The Globe and Mail, 16 February 2018)

Lots of Runway Left

Strong Buy Apple (AAPL – Nasdaq):

Apple says it could repatriate US$252-billion to the U.S., which would benefit investors.

It is anticipated that Apple would use that cash for significant share buy-backs, dividend increases, and possible M&A activity.

(Info via Barry Schwartz, CIO at Baskin Financial, as reported by Bryan Borzykowski in The Globe and Mail, 8 Feb 2018)

I covered Apple in this blog post:

Warren Buffett has upped his stake in Apple, doubling down and tripling down, per CNBC.

A Tech Darling

Strong Buy Cisco Systems Inc. (CSCO – Nasdaq):

Cisco provides exposure to technology and a lower volatility way to play the sector.

A plus is its yield of 3.0%.

(Info via Charles Carlson, as reported at, 01/26/2018, 5:00 am EST)

I reported on Cisco in this blog post:


Strong Buy DowDuPont Inc. (DWDP – NYSE):

If you buy into the notion that global economies will strengthen in 2018, then economically-sensitive stocks, like DWDP, should be on your radar screen.

This is the entity that resulted from the merger of Dow Chemical and DuPont.

The stock provides a ‘break-up kicker’ dimension to it, in that it plans to split into three companies in the next 24 months, although the timing of that move could be pushed back due to the complexity of the restructuring process.

This could be a nice way to get ahead of the value stock curve, given the expected resurgence of value stocks in 2018, and satisfy your curiosity about how to invest money to make money.

(Info via Charles Carlson, as reported at, 01/26/2018, 5:00 am EST)

A Tireless Innovator

Strong Buy Blackstone Group LP (BX – NYSE):

The Blackstone Group L.P. is an American multinational alternative asset management, financial services, and private equity firm headquartered in New York.

The largest alternative investment firm in the world, Blackstone is noted for private equity, credit and hedge fund investment strategies.

(Info via Wikipedia)

Here are the highlights:

  1. Exceptional year for Blackstone;
  2. Exceptional earnings growth;
  3. Record capital activity;
  4. Highest-ever level of aggregate cash distributions to shareholders (this takes care of your worries about how to invest money to make money);
  5. Huge jump in EPS compared to a year ago (stock has good value at just 10 times EPS of $3.25);
  6. Another strong quarter of core business trends;
  7. Total assets under management ballooned an elevated 12 percent sequentially;
  8. Record capital deployment in the quarter;
  9. Future capital deployment levels look promising;
  10. Half of the revenue this year was realized from carried interest on prior year inflows that were deployed to generate big gains of which Blackstone gets a percentage of the profits;
  11. $95-billion available to put to work to do more of the same;
  12. Assuming the company can collect a 10 percent carry on that money, that means they just doubled their business;
  13. Tireless drive to innovate with large-scale new product areas that reach a wider client base, and serve existing clients in new ways;
  14. Investors entrusting the company with more capital than ever before, leading to a new record of total assets under management.

(Info via Todd Shaver, growth and income expert and Editor-in-Chief,, as reported at, 02/12/2018, 5:00 am EST)

* My All-Time Fav Stock *

Strong Buy Visa Inc. (V – NYSE):

This is a global payments processing technology company, connecting banks, businesses, consumers, and governments in more than 200 countries by allowing them to use digital currency rather than cash and checks.

It went public in 2008.

Its fiscal year ends September 30.

It’s been around since the 50s.

Here are the highlights:

  1. Should continue raising dividends for many years to come;
  2. Ubiquitous products and/or services (worldwide);
  3. Growth potential in countries that still accept cash, like Thailand, especially with the advent of mobile payments;
  4. One of only a few major global players in this field;
  5. The world’s largest payments processing technology company (much bigger than American Express and Mastercard );
  6. Generates its revenue via credit and debit card fees, data processing fees, and international transaction fees;
  7. Collects fees based on the number of transactions it processes, as well as the gross dollar value of the transactions;
  8. Just over three billion Visa cards in circulation;
  9. Revenue growth between FY 2013 and FY 2017;
  10. Revenue growth equated to a compound annual growth rate of 11.73 percent;
  11. Earnings per share have grown in kind;
  12. Over the same timeframe, EPS growth increase amounts to a CAGR of 10.18 percent (CFRA, a professional analysis firm, predicts that Visa will compound its EPS at an annual clip of 17 percent over the next three years);
  13. Positioned to grow at least as fast moving forward (continued share buybacks, electronic payment growth, and recent acquisition of Visa Europe);
  14. It is reasonable to expect that Visa will continue to raise its dividends well into the future (has been paying an increasing dividend for as long as they’ve been able to; nine consecutive years of dividend increases; five-year dividend growth rate of 28.4 percent; payout of just 27.9 percent, which leaves a lot of room for continued dividend growth; the payout ratio will be moderated by the continued buybacks (see point 20 below) and, because it is so low, it shouldn’t be hard for the company to come up with 20 percent dividend increases for years to come;
  15. Low yield of 0.71 percent, but more than compensated for by strong earnings and dividend growth;
  16. Healthy balance sheet, despite recent acquisition of Visa Europe;
  17. Profitability is very impressive;
  18. Requires very little capital input, so the cash flow is equally impressive; very small capital expenditures; most operating cash flow turns into free cash flow;
  19. Incredible margin – about as good as it gets;
  20. Apart from the decent dividend picture, the company is committed to share buybacks, having repurchased over 20 percent of the shares outstanding since the IPO in 2008;

In sum, this global payments processing company ‘trumps’ the competition with its processing volume.

The growth in cashless transactions offshore and ubiquitous mobile payments should propel dividends, profit, and revenue even higher.

It’s not a stretch to assume that people will continue to use their plastic and/or digital currency, allowing Visa to continue to profit and share the spoils with its shareholders.

(Info via by Jason Fieber, Mr. Free at 33, as reported at, 8 December 2017)

Visa pays a 0.7% dividend yield.

It is a major player in money transactions, and is also at the forefront of financial technology.

It will be one of the biggest beneficiaries in the continued transition from cash to credit and debit cards.

It is further being driven by the rise of e-commerce, given that it owns more than half of the electronic payments market.

Its dividends and earnings keep growing because it is at the forefront of a shift toward cashless payments.

(Info via Marshall Hargrave, editor of Wyatt Research’s Daily Profit, as reported at, 01/29/2018, 5:00 am EST)

If you are still wondering about how to invest money to make money, look no further.

Visa, full stop!

How can that be such a bad idea, given the fact that the sold gain in wealth, thanks to a surging stock market, could make many Americans more confident, and encourage them to spend more (with plastic), which typically fuels economic growth. 

(Info via AP, as reported in the Times Colonist, 9 March 2018)

Near-Vertical Take-Off

Strong Buy Boeing Co. (BA – NYSE):

Boeing’s 787-9 commercial airliner is capable of near-vertical take-off.

It is set to become the new giant in town.

See the action –

Not only can that plane achieve near-vertical take-off, but Boeing’s stock has demonstrated similar attributes.

The company has a massive backlog of more than 5,860 model 737 and 787 Dreamliners, and it still has upside remaining.

It added an additional 912 orders in 2017 alone.

Boeing’s innovation in aerospace has never stopped.

Its super-efficient 787 Dreamliner is still way out in front of its biggest rival Airbus and its A380 Mega-Jumbo.

And the innovation goes beyond passenger jets, having a solid foothold in the drone business.

(Info via Bill Patalon, as reported at, 16 February 2018)

For the fourth quarter ended December 31, Boeing’s core earnings nearly doubled.

Boeing forecast at least US$12-billion in free cash flow this year.

Its reported earnings beat Wall Street’s estimate.

(Info via Alwyn Scott, as reported in The Globe and Mail, 1 February 2018)

Exciting News at Paypal

Strong Buy Paypal Holdings (PYPL – Nasdaq):

When Paypal split from eBay, it had 152 million registered users with revenue around $7.2 billion.

Fast forward to today, and it now has 281 million users with revenue running around $13 billion annually.

Enter PayPal’s Venmo peer-to-peer payment solution, which adds a whole new dimension to the company’s business model.

Q3 saw it rise 93 percent to $9.4 billion.

Venmo is rapidly becoming one of the most popular ways to send money.

The app is a peer-to-peer service, obviating the need to use a banking service or write a check.

And, the beauty of it is it isn’t platform-dependent.

Working with Android, iOS, and not linked to larger banks, there is no need for a certain phone or an account with a particular financial institution.

This is a big deal when you consider that digital payments represent the new in-thing in banking for Gen Zs and millennials.

(Info via Louis Navellier, Investor Place, as reported at, 29 Dec 2017)

So, there you have it… even Gen Zs and millennials are getting in on the act, and will invariably figure out how to invest money to make money.

For Fitness Fanatics

Strong Buy Planet Fitness (PLNT – NYSE):

The company owns and operates more than 1,300 fitness centers in Canada, the Dominican Republic, Puerto Rico, and the U.S.

It has nearly 9 million gym members, with lots of room to grow.

This has translated into a three-year earnings per share (EPS) growth rate of some 28 percent.

The company’s shares have responded in kind.

Its value proposition rests with its low membership fees.

Earnings are expected to grow some 24 percent in 2018.

Expect further highs for the shares.

(Info via Jim Woods, Editor, Successful Investing and Intelligence Report, as reported at, 01/19/2018, 5:00 am EST)

Even fitness buffs now have a clue as to how to invest money to make money (think fitness stocks like PLNT).

Bring on the Booze

Strong Buy Constellation Brands Inc. (STZ – NYSE):

With positive earnings surprises the past seven quarters, Constellation Brands is a global manufacturer and marketer of beer, wine, spirits, with a wide range of brands, including Clos du Bois, Robert Mondavi, Ruffino, and SVEDKA vodka.

The company also owns the rights to brew and market Modelo Mexican beers, including Corona, in the U.S.

It is the world’s largest wine producer, with more than 12 percent of the U.S. market and nearly two percent of the global market.

As such, it should continue to benefit from economies of scale.

Recent additions to its brand portfolio have included craft beer, which it could become a leader in.

It appears that its brands are well positioned to grow more rapidly than those of other alcoholic beverage companies.

With a favorable product mix, strong consumer demand for Corona and craft beers are driving growth in free cash flow and margin expansion.

Capacity additions are expected to temper growth just slightly, but will have long-term benefits.

It is reasonable to expect that line extensions, new packaging, and new products will propel earnings and sales growth at Constellation.

Expectations include greater-than-expected cost synergies.

(Info via John Staszak, Securities Analyst: Consumer Discretionary & Consumer Staples, Argus Research Corporation, as reported at, 01/23/2018, 5:00 am EST)

Takeover Candidate

Strong Buy Voya Financial, Inc. (VOYA– NYSE):

This is a New York-based insurance, investment, and retirement company that has been retooling its business mix, and has become a more attractive takeover candidate.

The company struck a deal in December to divest its troubled variable-annuity business to investors, including Apollo Global Management LLC.

According to Mr. McElvaine, “Senior management is highly incentivized on increasing the return on equity,” and ultimately “I think they would be open to an offer.”

Also, according to Mr. McElvaine, American International Group Inc. was reportedly negotiating to buy Voya last fall, but they couldn’t agree on a price.

Voya has more than US$220-billion in assets under management.

(Info via Mr. McElvaine, as reported by Shirley Won in The Globe and Mail, 21 February 2018)

The Most U.S. Exposure

Strong Buy Waste Connections, Inc. (WCN– NYSE) and

Strong Buy Waste Connections, Inc. (WCN.TO – TSE):

Waste Connections has a high tax rate and more U.S. exposure of any other TSX 60 company; so, it qualifies as a top beneficiary of the overall rate cut in the U.S.

However, it might get hit by BEAT – the new Base Erosion Anti-Abuse Tax.

These rules will tax inter-company payments for management, royalties, services, and other fees, including interest and re-insurance.

(Info via Dimitry Khmelnitsky, Veritas Investment Research Analyst, as reported by David Milstead in The Globe and Mail, 15 February 2018)

A Software Giant

Strong Buy (CRM – NYSE):

This company is expanding, it’s global, and it generates recurring revenues.

Don’t miss out on the growth that is taking place in China and India.

(Info via Larry Puglia, as reported in the March 2018 edition of Report on Business)

A Great Performer

Strong Buy Micron Technology (MU – Nasdaq):

Micron continues to be a great performer.

On the basis of EBITDA, valuation is attractive.

It reads 4.1, well below the semiconductor industry’s average.

Despite that, the company’s fundamentals remain strong, as evidenced by higher cash flow, improved margins, and rapidly increasing revenues.

Further, return on invested capital has improved over the past year, while R&D is being raised to promote future growth.

(Info via Richard Marzouka, hedge fund consultant, as reported by Larry MacDonald, author, economist, and writer in the Globe and Mail, 3 March 2018)

Micron is a semiconductor company which focuses on memory chips and storage.

The stock has had a solid past year of performance, after struggling for several years.

Demand for flash memory is on the rise, judging from Micron’s competition.

Flash memory is one of Micron’s specialties.

(Info via by Jay Soloff, Investors Alley, as reported at, March 5, 2018)

I reported on Micron in this blog post:

More Strong Buys to Help You Deal With the Dilemma of How to Invest Money to Make Money

More Strong Buys

A Agilent NYSE

AABA Altaba Inc. Nasdaq

ABMD ABiomed Nasdaq

ABT Abbott Labs NYSE

ADBE Adobe Nasdaq

ADI Analog Devices Nasdaq

ADSK Autodesk Nasdaq

AEP American Electric Power NYSE

AGIO Agios Pharma Nasdaq

ALGN Align Tech Nasdaq

ALXN Alexion Pharmaceuticals Nasdaq

AMAT Applied Materials Nasdaq

AMBA Ambarella Nasdaq

AMZN Amazon Nasdaq

ANAB AnaptysBio Inc. Nasdaq

ANGI ANGI Homeservices Inc. Nasdaq

ANTM Anthem Inc. NYSE

APO Apollo Global Management LLC NYSE

ASND Ascendis Pharma Nasdaq

ATVI Activison Blizzard Nasdaq

AVGO Broadcom Ltd. Nasdaq

AVXS AveXis Inc. Nasdaq

AYX Alteryx Inc. NYSE

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BKNG Booking Holdings Inc. Nasdaq

BMRN BioMarin Nasdaq

BMTC Bryn Mawr Bank Corp. Nasdaq

BOLD Audentes Therapeutics, Inc. Nasdaq

BUD Anheuser-Busch Inbev Sa NYSE

CASH Meta Financial Group Nasdaq

CDW CDW Corp. Nasdaq

CG Carlyle Group Nasdaq

CLSD Clearside Biomedical Nasdaq

CLVS Clovis Oncology Nasdaq

CMCSA Comcast Nasdaq

CME CME Group Nasdaq

CNC Centene Corp. NYSE

COHR Coherent Nasdaq

COST Costco Nasdaq

COUP Coupa Software Inc. Nasdaq


CRSP Crispr Therapeutics AG Nasdaq

CSCO Cisco Systems Nasdaq

CSFL Centerstate Banks Nasdaq

CTSH Cognizant Nasdaq


DAL Delta Airlines NYSE


DHR Danaher Corp. NYSE

DLTR Dollar Tree Nasdaq

DPZ Domino’s Pizza NYSE

DRNA Dicerna Pharma Nasdaq

DWDP DowDuPont Inc. NYSE

EA Electronic Arts Nasdaq

EHC Encompass Health Corporation NYSE

ENSG The Ensign Group Nasdaq

EQIX Equinix Nasdaq

ESIO Electro Scientific Nasdaq

EVBG Everbridge Inc. Nasdaq


EXPE Expedia Nasdaq

FANG Diamondback Nasdaq

FB Facebook Nasdaq


FFWM First Foundation Nasdaq

FL Foot Locker Inc. NYSE

FLIR Flir Systems Nasdaq

FLXN Flexion Therapeutics Nasdaq

GBT Global Blood Therapeutics Nasdaq

GM General Motors NYSE

GTES Gates Industrial Corp. plc NYSE

GTT GTT Communications NYSE

GWPH GW Pharma Nasdaq

HAL Halliburton NYSE

HCLP Hi-Crush Partners NYSE

HD Home Depot NYSE

HQY Healthequity Nasdaq

IAC IAC/InterActiveCorp Nasdaq

ICHR Ichor Holdings Ltd. Nasdaq

ICLR Icon plc Nasdaq

IDXX Idexx Laboratories Nasdaq

ILMN Illuimina Nasdaq

INCY Incyte Corp. Nasdaq

INN Summit Hotel Properties NYSE

JAZZ Jazz Pharmaceuticals Nasdaq

JD Nasdaq

KAR Kar Auction Services Inc. NYSE

KHC Kraft Heinz Nasdaq

KLAC Kla-Tencor Corp. Nasdaq

LDOS Leidos Holdings NYSE

LGND Ligand Pharma Nasdaq

LITE Lumentum Holdings Nasdaq

LOGM LogMeln Nasdaq

LOPE Grand Canyon Education Nasdaq


LOXO Oncology Nasdaq

LPLA LPL Financial Nasdaq

LRCX Lam Research Nasdaq

LSXMA Liberty Media SiriusXM Class A Nasdaq

MCD McDonald’s Corp. NYSE

MDCO Medicines Co. Nasdaq

MDGL Madrigal Pharmaceuticals Inc. Nasdaq

MDLZ Mondelez International Nasdaq

MDT Medtronic NYSE

MIDD Middleby Corp. Nasdaq

MKSI MKS Instruments Nasdaq

MO Altria Group NYSE

MOMO Momo Inc. Nasdaq

MRTX Mirati Therapeutics Nasdaq

MRVL Marvell Nasdaq

MSFT Microsoft Corp. Nasdaq

MTN Vail Resorts NYSE

MU Micron Nasdaq

NBIX Neurocrine Nasdaq

NBL Noble Energy NYSE

NEE NextEra Energy Inc. NYSE

NKTR Nektar Therapeutics Nasdaq

NMIH NMI Holdings Nasdaq

NTRI Nutrisystem Inc. Nasdaq

NXST Nexstar Nasdaq

OKTA Okta Inc. Nasdaq

OLED Universal Display Nasdaq

OLLI Ollie’s Bargain Outlet Holding Nasdaq

ON Semi Nasdaq

OTEX Open Text Nasdaq

PENN Penn National gaming Nasdaq

PFPT Proofpoint Inc.

PODD Insulet Corp. Nasdaq

PRU Prudential Financial Inc. NYSE

PTLA Portola Pharma Nasdaq

QSR Restaurant Brands International NYSE

QVCA QVC Group Nasdaq

RCL Royal Caribbean NYSE


ROST Ross Stores Nasdaq

RTN Raytheon NYSE

SABR Sabre Nasdaq

SAGE SAGE Therapeutics Nasdaq

SBAC SBA Comms Nasdaq

SEDG SolarEdge Technologies Nasdaq

SF Stifel Financial Corp. NYSE

SHPG Shire Nasdaq

SHW Sherwin-Williams Company NYSE

SIVB Svb Financial Group Nasdaq

SIX Six Flags NYSE

SLB Schlumberger Limited NYSE

SMMT Summit Therapeutics Nasdaq

SNA Snap-on NYSE

SOI Solaris Oilfield Infrastructure NYSE

SPLK Splunk Inc. Nasdaq

SRE Sempra Energy NYSE

SRPT Sarepta Therapeutics Nasdaq

SSTI Shotspotter Inc. Nasdaq

STLD Steel Dynamics Nasdaq

STMP Stampscom Nasdaq

STZ Constellation Brands Inc. NYSE

SWKS Skyworks Solutions Nasdaq

TEAM Atlassian Nasdaq

TECD Tech Data Corp. Nasdaq

TJX TJX Companies NYSE


TTEK Tetra Tech Nasdaq

TWLO Twilio Inc. NYSE

UCBI United Community Banks Nasdaq

UHS Universal Health NYSE

ULTI UItimate Software Nasdaq

VMC Vulcan Materials NYSE

VRTX Vertex Pharmaceuticals Nasdaq

VYGR Voyager Therapeutics Inc. Nasdaq

WB Weibo Nasdaq

WCN Waste Connections, Inc. NYSE

WCN Waste Connections, Inc. TSE

WDC Western Digital Nasdaq

WEN Wendy’s Nasdaq

WM Waste Management NYSE

WMT Wal-Mart Stores NYSE

XPO XPO Logistics NYSE

YY YY Inc. Nasdaq

ZBH Zimmer Biomet Holdings NYSE


I hope the above list helps you as you wrestle with the issues of how to invest money in stocks and where to invest money to get good returns.

Remember… the above stocks have been hand-picked by me, and pass my rigid requirements.

That’s why I call them ‘strong buys.’

NB:  More stock news and info on how to invest money to make money in future blog posts – plus more to follow in this blog post.

U.S. Equity Exposure

Many passive investors get their U.S. equity exposure through the S&P 500the benchmark for many index funds.

(Info via David Berman, as reported in The Globe and Mail, 9 February 2018)

Fourth quarter earnings in the S&P 500 are expected to grow 14 percent, according to Thomson Reuters estimates.

Of the 275 companies in that index that have reported their results, 77.8 percent posted earnings above analyst expectations – a rate approximately 13 percent higher than the historical average.

(Info via Sinead Carew and David Randall, as reported in The Globe and Mail, 8 February 2018)

Bank of America expects that corporate profits among companies in the S&P 500 will rise 16 percent this year (2018).

(Info via David Berman, as reported in The Globe and Mail, 9 February 2018)

Thomson Reuters’ estimates show that all of the S&P 500 companies together are expected to show earnings of about US$155 a share this year in aggregate, up about US$9 since December 20.

(Info via Caroline Valetkevitch, as reported in The Globe and Mail, 3 February 2018)

In the past six weeks, S&P 500 earnings estimates for this year and next have increased by seven-to-eight percent.

(Info via Tim Shufelt, as reported in The Globe and Mail, 15 February 2018)

Of the more than 350 companies in the S&P 500 index that have released fourth-quarter results, as at 14 February 2018, 80 percent of them have beaten Wall Street forecasts.

According to Thomson Reuters data, the increase in earnings per share for the entire S&P500 is tracking at about 15 percent over the same quarter last year.

(Info via Tim Shufelt, as reported in The Globe and Mail, 14 February 2018)

With more than $300-billion in assets and a cost of 90 cents, the enormous SPDR S&P 500 ETF Trust SPY is the largest and oldest ETF in existence.

Five years ago, it had $130-billion.

SPY shares have risen in price by 50 percent in the past two years alone.

(Info via Shufelt, as reported in The Globe and Mail, 27 January 2018)      

As reported on CNBC, Mark Cuban is buying the SPX ($SPX S&P 500 Large Cap Index INDX).

Other exposure to the S&P 500 can be achieved via:

$SML S&P 500 Small Cap Index INDX

IVW iShares S&P 500 Growth ETF NYSE

IVE iShares S&P 500 Value ETF NYSE

VO Vanguard Mid-Cap ETF NYSE

VOO Vanguard S&P 500 ETF NYSE

For the record, I own VOO, and plan to buy more or variations thereof.

It is my favourite ETF investment vehicle, bar none!

I reported on it here:

You can do-wacka-do, and get some yourself.

If you want to know more about VOO, check out John C. Bogle’s excellent book, ‘The Little Book of Common Sense Investing.’

It is recommended by Warren Buffett (me too!).

Canadians can’t buy the S&P 500 index fund referenced in that book, but they can participate via the VOO ETF, which mimics that fund.

Every single day, index-investing pioneer Vanguard is now taking in about $1-billion in new investor funds.

(Info via Shufelt, as reported in The Globe and Mail, 27 January 2018)

Another option for U.S. exposure is:

VTV Vanguard Value ETF NYSE

You might like its diversification.

It’s invested in consumer staples, energy, financials, and technology.

A well-established ETF that was launched in 2004, it has almost US$38-billion in assets under management.

It invests in 330 large-cap U.S. stocks, based on five stock price-based valuation measures.

The MER is very low, coming in at just 0.06 percent.

The largest sector exposure is U.S. banks – a desirable sector, given the opportunity for higher dividends, earnings updates, and tax reforms.

(Info via Lindsay Patrick of RBC Dominion Securities, as reported by Terry Cain in The Globe and Mail, 13 February 2018)

According to Bloomberg News, companies in the S&P 500 reported average profit growth of 14.9 percent so far during the fourth quarter reporting season.

Sales have been rising at an impressive 7.8 percent clip.

(Info via David Berman, as reported in The Globe and Mail, 21 February 2018)

Seven times since 1985:

  1. S&P quickly crossed 50 DMA after testing 200 DMA;
  2. Median return of 3.78 percent one month later;
  3. Only 2002, 2008 were sharply negative.

(Info via CNBC)

The benchmark S&P 500 is forecast to end this year about 8.5 percent above 2017’s finish.

(Info via Rahul Karunakar Bengaluru, as reported in The Globe and Mail, 1 March 2018)

With U.S. earnings season nearly finished, S&P 500 companies have posted year-over-year growth in earnings per share of about 15 percent.

On top of which, the U.S. profit outlook for this year and next has taken a giant step forward, as Wall Street analysts and corporate managers have started to factor in the benefit accruing from tax changes.

To quote Ed Yardeni, a U.S. economist and strategist, “The Tax Cut and Jobs Act’s cut in the corporate statutory tax rate at the end of 2017 will send earnings hurtling beyond the Earth’s gravitational pull this year into outer space.”

(Info via Tim Shufelt, as reported in The Globe and Mail, 28 February 2018)

If you still want to know how to invest money to make money, look no further than VOO or a derivative thereof.

It’s All Buffett’s Fault

It was Warren Buffett who caused a rush into ETFs.

It’s quite strange that he would praise the merits of indexing, given his stature as the world’s greatest stock-picker.

Vanguard, arguably the lowest-cost and purest advocate of indexing, has seen its total assets under management reach the stratosphere since Buffett plugged that group in March of 2014.

Buffett asserted that most people would do just fine if they followed the investing instructions he has left executors of his personal will:  to put 10 percent of his US$66-billion estate into short-term government bonds and 90 percent in “a very low-cost S&P500 index fund.”

He unequivocally endorsed Vanguard.

The Wall Street Journal reported that he had telegraphed that endorsement to Vanguard chairman F. William McNabb III.

As a consequence of his actions, investors poured US$5.5-billion into Vanguard over the subsequent five months, roughly three times as much as during the same period in 2013.

Vanguard entered the Canadian scene in 2012.

In Canada, the closest domestic equivalent to Buffett’s recommendation is the S&P 500 Index ETF (ticker VFV, trading on the TSX), with a 0.08 percent MER, as at this writing (I bought some).

That’s a tad higher than the ‘pure’ version trading on U.S. exchanges under symbol VOO, although Canadians can also buy that American ETF version (VOO with a 0.04 percent MER), but not the fund itself.

Canadians can’t normally own U.S. mutual funds, but they can easily buy U.S. ETFs.

Also, Vanguard Canada sells only ETFs, not mutual funds tailored to Canadian investors.

In addition to the VFV ETF referenced above, Vanguard Canada also offers the S&P 500 Index ETF (C$ hedged), ticker VSP, that also comes with an MER of 0.08 percent.

That version hedges exposure to the U.S. dollar back into the Canadian dollar.

Translation… for Canadian investors, if the S&P 500 keeps rising, but the U.S. dollar falls in value in relation to the loonie, they would benefit from the U.S. stock exposure, but not suffer from the exchange rate.

Conversely, if the loonie sinks, and the U.S. dollar gains relative to it, they wouldn’t enjoy the gains in the U.S. dollar.

In that event, they would wish that they had gone with the unhedged version or the ‘pure’ Vanguard S&P 500 index fund trading in the U.S.

The ETF version is the Vanguard S&P 500 ETF (ticker VOO, trading on NYSE Arca), sporting what’s got to be among the lowest investment management fees anywhere:  0.04% or 4 basis points.

Those who prefer index mutual funds (which is good for smaller investors with automatic savings programs) can also go with Vanguard’s comparable S&P 500 index mutual fund, VFNIX (again, trading in the U.S.) – not available to Canadians.

No matter which flavour you choose, you’ll be getting the largest American blue-chip companies.

The S&P 500 Index comprises some of the world’s largest companies by market capitalization

This is viewed as a safety factor; larger companies tend to be more liquid, while having more consistent and stable revenue streams

(Info via Sean Pugliese, as reported in the Globe and Mail, 22 February 2018)  

There you go… the world’s greatest stock picker endorses the world’s greatest maker of ETFs and index funds.

(Info via Jonathan Chevreau, blogger at, as reported at, August 21, 2014, 1:14 PM EDT)

Rob Carrick, of The Globe and Mail Report on Business fame, reports that, “There’s a good case to be made for holding VFV or VSP, traded on the TSX, based on investors paying less in foreign exchange fees than if they bought NYSE-listed ETFs.”

He posted this ETF tax guide:

VFV and VSP are cheaper than VOO. 

Regarding the choice of going with those options or the American iconic VOO, if you already have U.S. funds at your disposal, then the exchange rate difference is a moot point.

For the record, as I have previously reported, I am already heavily invested in VOO.

I also recently ventured into VFV (TSE), plus other variants listed under Dirt Cheap U.S. ETFs.

Up until now (and still is), VOO has been my favourite ETF investment vehicle.

Any ETF that approximates VOO is also on my wish list.

I reported on it here:

For more on this, go to U.S. Equity Exposure

Last year, Warren Buffett, perhaps  the world’s most famous and successful stock picker of all time, said that, for most investors, consistently buying a low-cost S&P 500 index fundmakes the most sense practically all the time.”

(Info via Hugh Smith, as reported in The Globe and Mail, 17 January 2018)

“Equities are the superior choice over bonds.”  (Warren Buffett)

He doesn’t see stocks as being overvalued at this moment (26 February 2018).

There you have it… Warren Buffett has just nicely addressed the issue for you of how to invest money to make money.

Where to invest money to get good returns should no longer be a concern.

Dirt Cheap U.S. ETFs

It makes abundant sense to diversify one’s portfolio by incorporating U.S. ETFs, given the exposure to consumer, health care, industrial, and technology companies south of the border.

But first, a word of caution about currency hedging:

That adds costs, and doesn’t always live up to the hype that is advertised.

Further, holding un-hedged U.S. dollar assets has diversification considerations; in times of turmoil, investors often snap up U.S. Treasuries, which increases the value of the U.S. dollar in relation to other currencies.

Tax Consequences:

Dividends from individual U.S. stocks or U.S.-listed ETFs do not incur the 15 percent U.S. withholding tax, so long as the shares reside in a registered retirement account.

However, that tax does apply to registered education savings accounts, non-registered accounts, and tax-free savings accounts.

In addition, regardless of account type, Canadian-listed ETFs that hold U.S. stocks are generally not exempt from that tax.

Five U.S. ETFS That Offer Low Costs and Diversification:

DGRO iShares Core Dividend Growth ETF AMEX

Diversification is excellent – with 456 holdings, the highest-weighted company (Microsoft) accounting for just 3.3 percent of the fund.

The management expense ratio is attractive at 0.08 percent.

DGRO trades in U.S. dollars on the NYSE.

(Info via John Heinzl, as reported in The Globe and Mail, 3 March 2018)

Sporting an MER of 0.08 percent, this ETF includes Apple, Coca-Cola, Home Depot, McDonald’s, Microsoft, Procter & Gamble, Wal-Mart, plus plenty of others.

These companies like to shower their investors with annual dividend increases.

IUSG iShares Core U.S. Growth ETF Nasdaq

This ETF is focussed on large-cap and mid-cap stocks with above-average earnings growth.

It also has double-digit exposure to the consumer discretionary, health care, and industrial sectors.

It has a nearly 40-percent weighting in tech stocks, including Alphabet, Apple, Facebook, and Google.

The one proviso here is, should the tech rally stumble, this ETF could get hit hard.

And now, onto my fav ETF:

VOO Vanguard S&P 500 ETF NYSE

As previouslyi reported, I am heavily invested in it.

See more about it here:

And here… U.S. Equity Exposure and It’s All Buffett’s Fault

This is a low-cost ETF that encapsulates the large-cap companies that comprise the S&P 500 index.

The top five holdings are Alphabet, Amazon, Apple, Facebook, and Microsoft.

They make up more than 13 percent of the fund.

The list includes Disney, J&J, Mastercard, McDonald’s, and Visa.

The TSX version of this ETF, which trades in Canadian dollars, is ticker VFV (I now own it).

Sure, you still pay the withholding tax on the U.S. dividends, but this will get you around the potentially egregious currency conversion costs involved in buying VOO in U.S. dollars.

SPTM SPDR Russell 3000 ETF AMEX and

VTI Vanguard Total Stock Market ETF NYSE:

SPTM is intended to track the SSGA Total Stock Market Index.

Although it has fewer stocks than the VTI option, it has a lower expense ratio.

VTI is intended to track the performance of the CRSP U.S. Total Market Index.

It comprises several thousand large-cap, mid-cap, and small-cap U.S. stocks that are diversified across both growth and value investment styles.

Both of these super-cheap ETFs are extremely well diversified.

Their returns for last year were pretty much the same.

(Info via John Heinzl, as reported in The Globe and Mail, 20 January 2018)

Positive Total Return of 1.28 percent:

XSP.TO iShares Core S&P 500 Index ETF (CAD-Hedged) TSE

XUS.TO iShares Core S&P 500 Index ETF TSE

(Info via John Heinzl, as reported in The Globe and Mail, 3 March 2018)

There you go… dirt cheap solutions to the challenge of how to invest money to make money.

For the record, I own DGRO, IUSG, VOO, VFV, SPTM, and XUS, as at this writing.

S&P 500 Growth Beats Value

Over the past five years, the iShares S&P 500 Growth ETF (IVW) has risen by 110 percent, whereas the iShares S&P 500 Value ETF (IVE) has come in with a much more modest return of 66 percent.

(Info via Peter Ashton, as reported in The Globe and Mail, 2 February 2018)

The Search for Value

Value investing strategies typically entail searching for stocks that are trading below their ‘intrinsic value,’ thereby rendering them undervalued as compared with their peers.

A stock’s intrinsic value is defined as its perceived ‘true value,’ and represents the theoretical price that the stock should eventually ascend to when properly valued.

A common way to find such stocks is to look for companies that have a low price-to-earnings multiple as compared with their peers, signalling that such companies are currently undervalued in relation to other stocks.

The search for U.S. value stocks should involve selecting those stocks that display positive price movement relative to their 200-day moving averages.

The approach could also include the following factors:

Price-to-Trailing Earnings – measured by dividing the company’s most recent share price by the previous four quarters earnings’ per share – low values best;

Free Cash Flow (a profitability metric) – the latest four quarters’ free cash flow per share – high values best.

Stocks in the screen should pass the following smell tests:

  1. They should have a trailing P/E in the bottom two-thirds of all stocks;
  2. They should have debt-to-equity ratio of no more than 1:1 (translation: not over-leveraged);
  3. Their price changes must be greater than three percent in comparison with their 200-day moving averages (to help with the timing of share purchases).

(Info via Emily Halverson-Duncan, an account manager for CPMS at Morningstar Research Inc., as reported in The Globe and Mail, 6 March 2018)

The following three stocks come up as ‘strong buys’ in my research:

ANTM Anthem Inc. NYSE

LRCX Lam Research Nasdaq

SF Stifel Financial Corp. NYSE  (see note below)

A Low-Price Value Stock

Headquartered in St. Louis, Missouri, Stifel Financial Corp. (NYSE: SF) is a financial services holding company.

Stifel offers securities-related financial services in Europe and the United States through several wholly owned subsidiaries.

Its clients are served through…

  1. Stifel, Nicolaus & Company, Incorporated (Stifel Nicolaus) in the U.S., a full-service institutional and retail brokerage and investment banking firm;
  2. Stifel Nicolaus Canada Inc. in Canada;
  3. Stifel Nicolaus Europe Limited (SNEL) in Europe and the United Kingdom;
  4. Thomas Weisel Partners LLC (TWP);
  5. Century Securities Associates, Inc. (CSA), an independent contractor broker-dealer firm;
  6. Stifel Bank & Trust, a commercial and retail bank.

The company’s broker-dealer affiliates provide securities brokerage, investment advisory, investment banking, trading, and related financial services to businesses, individual investors, municipalities, and professional money managers.

Stifel Bank & Trust offers a full range of commercial and consumer lending solutions.

Stifel Trust Company, N.A. offers trust and related services.

(Info via Wikipedia)

For more in-depth coverage of Stifel, head on over to:

Global Exposure

Lindsay Patrick of RBC Dominion Securities favours:

EFV iShares MSCI EAFE Value, United States

It is based on value stocks in Australia, Europe, and the Far East.

It has more than US$6-billion of underlying assets, and has been trading for more than 12 years.

It provides international exposure with a value overlay in one ticker.

It holds the stocks of almost 500 large-cap, blue-chip international companies with the largest exposure to Britain, France, Germany, and Japan.

(Info via Lindsay Patrick of RBC Dominion Securities, as reported by Terry Cain in The Globe and Mail, 13 February 2018)

Industrial/Base Metals

Robert (Hap) Sneddon, president and portfolio manager at Castle-Moore Inc. in Mississauga, recommends:

XBM iShares S&P/TSX Global Base Metals, Canada, Toronto

He says that, with the trend towards central bank increases and global economic growth, industrial/base metals offer one of the best opportunities in the next six months.

He points to dwindling commodity stockpiles, increased infrastructure spending, and few new mine projects as tailwinds for the sector in 2018.

(Info via Robert Sneddon, as reported by Terry Cain in The Globe and Mail, 13 February 2018)

For more on commodities, go to A Rising Star.

More on Materials

XLB Materials Select Sector SPDR, United States, NYSE:

XLB’s roster is small, at less than 30 stocks.

The broader materials sector comprises a sizable number of sub-industry groups, but just four – chemicals, construction, metals, mining, and packaging – reside in this ETF.

Like many materials ETFs, XLB is dominated by a small number of stocks.

DowDuPont Inc (NYSE:DWDP) – the combined entity of Dow Chemical and DuPont – constitutes nearly a quarter of the fund’s weight.

Agribusiness giant Monsanto Co. (NYSE:MON) and Praxair, Inc. (NYSE:PX) together account for another 15 percent of the fund’s assets.

And overall, the fund’s top 10 holdings make up a whopping 70 percent of total weight!

(Info via

Market Moves

According to Jonathan Clements, the personal finance expert behind the blog, the typical loss for stocks in a bear market is 35 percent.

Switching to a portfolio of half bonds and half stocks would mean a typical bear market loss would carve only 17.5 percent hole off an overall portfolio.

(Info via Ian McGugan, as reported in The Globe and Mail, 10 February 2018)

Credit Swisse believes that high-yield bond spreads have behaved well, despite equity market swings.

A major market peak is likely a long ways off, given high-yield bond spreads remain near post-crisis lows.

Investors can pay close attention to bond spreads by tracking them at the U.S. Federal Reserve Bank of St. Louis data site:

Any prolonged, significant rise in spreads would signal the upcoming demise of the rally – time to reduce portfolio risk big time.

(Info via Scott Barlow, as reported in The Globe and Mail, 9 February 2018)

Canadian Facts:

The unemployment rate remained below six percent for a third consecutive month in January, matching a streak that has happened only once in records going back to 1976.

That’s a sure sign of strength, as a jobless rate that low suggests that the economy is running near ‘full employment,’ – the level at which economists figure that additional hiring would begin to put upward pressure on inflation.

Another sign of strength comes in the form of average hourly wage, which jumped 3.3 percent in January from a year earlier – the biggest increase since 2015 and the fifth consecutive month that wages gained in excess of two percent on an annual basis.

(Info via Kevin Carmichael, as reported in the Financial Post, 10 February 2018)

Investor Sentiment – Contrarian Indicator:

Every bear market starts with bullish investor sentiment – what Warren Buffet refers to as greed – and ends with extreme bearishness (fear).

Investor sentiment should be used as a contrarian indicator.

For instance, if your cab driver or golf buddy is pushing a particular stock, it’s time to raise the antenna.

(Info via Tom Bradley, as reported in the Financial Post, 10 February 2018)

According to Richard Bernstein, chief executive of Richard Bernstein Advisors in New York, bear markets tend to occur when excessive investor optimism coincides with deteriorating fundamentals.

What potentially sets the current market apart from past bubbles is the state of both corporate earnings and the global economy.

According to Citigroup, the broadest global expansion since the financial crisis is now firmly entrenched, with global earnings expected to rise by 14 percent this year.

(Info via Tim Shufelt, as reported in The Globe and Mail, 3 February 2018)

For a sentiment survey, go to:

Good economic news implies higher interest rates and a possible resurgence in inflation, both of which are problematic for stocks.

Corrections are a normal part of the market’s ebb and flow.

(Info via Gordon Pape, as reported in The Globe and Mail, 12 February 2018)

David Rosenberg, chief economist at Gluskin, Sheffkin + Associates, said in a recent note that, in a typical correction, valuation multiples contract by about 3.5 points.

(Info via Tim Shufelt, as reported in The Globe and Mail, 15 February 2018)

Whenever market fears are featured in the news headlines, we could very well be at or close to a market bottom, as was the case during the week of 5 February 2018.

Generally, investors/traders don’t pay much attention to the VIX index till it spikes above 20, which it did recently, causing a market meltdown to the tune of ~10 percent, which is the norm in terms of annual corrections.

The generals, or high-quality stocks, are usually the last stocks to succumb to a market swoon.

Investors/traders are not inclined to sell companies that are delivering solid dividend growth and earnings, so they don’t incur the sell-off as compared with lower-quality stocks.

Stocks with poorer fundamentals often suffer the most during times of market mayhem.

After a market meltdown, it’s the generals that step up to the plate; these are the first stocks to lead the charge.

Cautious investors/traders will jump back into the market by snapping up stocks with strong fundamentals.

(Info via Jennifer Dowty, as reported in The Globe and Mail, 14 February 2018)

There have been interim declines, in the form of bear markets or corrections, no fewer than 125 times since 1900.

That translates into once a year, on average – great buying opportunities!

(Info via David Rosenberg, as reported in The Globe and Mail, 7 February 2018)

A market correction is the best time to buy quality companies.

(Info via David Berman, as reported in The Globe and Mail, 25 January 2018)

What finally brings the great bull market of the past decade to it knees may not be a jolt of bad news, but rather too much good news about rising wages.

(Info via Ian McGugan, as reported in The Globe and Mail, 17 February 2018)

It’s recessions that usually cause a bear market.

(Info via Rob Carrick, as reported in The Globe and Mail, 27 January 2018)

Low volatility suggests that stocks should be valued higher, as equity risk declines.

Acquisitions are taking place, dividends are on the rise, margins are up, taxes are down, revenue is improving, and taxes are down.

In other words, business is robust.

The market is driven by corporate earnings; as such, it is no big surprise that the market is responding in kind to what we see happening in the business world.

(Info via Peter Hodson, as reported in the Financial Post, 20 January 2018)

Put options enable you to sell a security at a specific price up to the expiry date.

So, should the market drop, you are protected.

(Info via Gordon Pape, as reported in The Globe and Mail, 25 January 2018)

Tax-loss harvesting entails selling a security that has gone down in value to offset taxes.

It is widely used by traditional advisers, usually at the end of the year.

(Info via Brenda Bouw, as reported in The Globe and Mail, 18 January 2018)

One of the oft-quoted sayings of Benjamin Graham, the legendary value investor and teacher of Warren Buffett, is that, over the short term, the market is a voting machine, and over the long term it is a weighing machine.

(Info via David Milstead, as quoted in The Globe and Mail, 20 January 2018)

Look for dividend payers that are still showing short- to medium-term momentum, hoping that a sustainable yield will offer some protection in a market swoon.

(Info via Ian Tam, CFA, relationship manager for CPMS at Morningstar Research Inc, as reported in The Globe and Mail, 15 February 2018)

All major regions are growing for the first time since the financial crisis a decade ago.

Finally, the shadow of the great recession is lifting.

Stay focussed on stocks of reliable, steady companies that actually make money.

(Info via Ian McGugan, as reported the March 2018 edition of Report on Business)

According to Ms. Sonders, Chief investment strategist for Charles Schwab, we can normally expect one correction a year (which represents a great buying opportunity!).

Financial analysts consider corrections to be normal events.

Many posit that a serious decline from here is not in the cards because of the strong global economy.

According to Morgan Stanley, most corrections don’t involve a bear market or recession.

They expect positive returns to follow.

Understanding market moves better prepares you to address to challenge of how to invest money to make money.

Money on the Sidelines

According to Tracey Warson, Citi Private Bank, there’s US$50-trillion sitting on the sidelines.

She’s trying to encourage her investors to invest it in the markets.

(Info via CNBC, 7 March 2018)

Market Cycles

Late-Cycle Markets:

Cyclical sectors (now):  commodity sectors (XLE), emerging markets (EEM), financials (XLF), materials (XLB), and technology (XLK).

The typical late-cycle backdrop consists of underperforming bond portfolios (and, by extension, dividend and income stocks) and weaker housing prices.

It is best to remain very short duration within fixed-income portfolios in order to protect against rising long-term interest rates.

Shorter-duration bonds tend to experience lower price volatility than longer-duration bonds.

Value Stocks:

They tend to do well, and out-do growth stocks, when the economy is super-charging, and interest rates are on the rise.

That’s because the future cash flow of high-growth companies takes a hit during periods of rising interest rates.

When rates rise, these companies’ future cash flows end up being worth less in today’s dollars, when discounted back to the present value (the inverse is true with falling rates).

That makes value stocks, which are valued on profits that are more consistent and predictable, look relatively appealing.

(Info via John Reese, as reported in The Globe and Mail, 1 February 2018)

Early-Cycle Markets:

Auto, housing, and retailing, which tend to be very credit-sensitive.

Economically-Sensitive Markets Sectors:

Industrials and materials outperform as inflation rises.

Defensive Market Sectors:

Consumer staples, which benefit from slower economic growth and low interest rates.

(Info via Scott Barlow, as reported in The Globe and Mail, 15 February 2018)

We are witnessing late-cycle stuff – overheated economies cause markets to rise, Fed tightening expectations intensify, and these lead to stocks market corrections.

(Info via David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates Inc., as reported in The Globe and Mail, 6 February 2018)

Markets move in cycles.

This bull market is already one of the longest on record.

This really doesn’t mean anything, as overvalued markets can go on being overvalued for quite some time.

(Info via Ian McGugan, as reported in the March 2018 edition of Report on Business)

Late-Cycle Bull Market:

With interest rates on the rise, many market pundits see the bull market we are in now heading toward the last of the expansionary phases, as the business cycle moves closer to switching from expansion to contraction.

Over time, stocks in the energy, health care, and materials sectors tend to outperform in the late cycle phase.

This is according to research by Fidelity’s Asset Allocation Research Team, which examined those sectors of the U.S. market that perform the best in the early, mid, late, and recessionary stages of the business cycle.

(Info via Peter Ashton, as reported in The Globe and Mail, 2 March 2018)

The Technology Select Sector SPDR tracks an index of S&P 500 technology stocks:

XLK Technology Select Sector SPDR, United States, NYSE

Screen shot of XLK ETF top 10 sectors and XLK ETF top 10 holdings.

Tech only S&P sector up for February, per CNBC.

(Info via

For the record, I own XLK.

The Ides of March

March tends to be a tempestuous month for markets – driving stocks up early in the month, and then battering them down at the end of the month.

Utilities are one sector that begins their seasonally favourable periods in March.

If the 10-year Treasury yield breaks out above 3.04 percent, and interest rates continue to climb, this could prove problematic for utility shares.

That said, if interest rates are on the rise as a result of economic expansion, then that sector could be a beneficiary of the increased demand that could arise from higher growth.

Seasonal strength in the utilities sector usually begins after an early March bottom, and typically lasts through early October, although the bulk of the move invariably takes place sometime in May or early June.

(Info via Jeffrey Hirsch, seasonal timing expert and Editor-in-Chief, The Stock Trader’s Almanac and Almanac Investor, as reported at, 7 March 2018) 

Strong Buy:  Exelon Corp. (EXC) NYSE

Strong Buy:  NextEra Energy Inc. (NEE) NYSE

U.S. Infrastructure Spend

According to Tahira Afzal, managing director at KeyBanc Capital Markets, construction and engineering companies “are a late-cycle industrial play, so we have just started to see the juice kick in for a lot of them.”

“Even without an infrastructure bill or infrastructure stimulus, the next two years should see the sector outperform.”

(Info via Lewis Krauskopf, as reported by The Globe and Mail/Reuters, 15 January 2018) 

Trump will impose tariffs on aluminum and steel next week – week of 5 March 2018; hence, strength in aluminum and steel ETFs and stocks.

Investment/Trading Considerations for Steel: 

Strong Buy:  Eagle Materials Inc. (EXP) NYSE

Strong Buy:  Steel Dynamics (STLD) Nasdaq

Strong Buy:  Reliance Steel (RS) NYSE

SLX VanEck Vectors Steel, United States, NYSE

Investment/Trading Consideration for Aluminum:

Strong Buy:  Alcoa Inc. (AA) NYSE

Understanding market cycles better positions you to deal with the concern of how to invest money to make money.

Currency Moves

From a flow-of-funds standpoint, China has been reducing its exposure to U.S. Treasuries, the net effect being upward pressure on yields and downward pressure on the greenback.

(Info via David Rosenberg, chief economist with Gluskin Sheff + Associates and author of the daily economic newsletter Breakfast with Dave, as reported in The Globe and Mail, 21 February 2018)

Jeffrey Edward Gundlach, the founder of DoubleLine Capital LP, an investment firm, with a net worth of Net worth: 1.86 billion USD (2018) Forbes, sees weakness ahead for the greenback.


The week of 19 February 2018, the Federal Open Market Committee minutes indicated that the U.S. economy is robust, and that they see an encouraging global economic picture.

Recently passed tax cuts raised the prospects for solid growth going forward and for continued interest rate increases out into the future.

The minutes explicitly stated that “a majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate.”

In the ECB minutes, there was a strong indication from Mario Draghi that they were in a wait and see mode regarding their current monetary policy.

They also indicated that the ECB is concerned about the strength of the euro, which could lead to an attempt to weaken the euro rather than strengthen it.

Central bank policies and selling pressures should be driving this pair lower.

(Info via Blake Young, Senior Currency Strategist)

Currency moves affect decisions in the on-going debate on how to invest money to make money.

The Canadian dollar is the worst performing Group-of-10 currency this year.

(Info via Alexandria Arnold/Bloomberg News, as reported in The Globe and Mail, 6 March 2018)

Rising Interest Rates

When rates rise, financials generally do alright.

Industrials and materials also tend to fare well during signs of a strong economy.

Improving economic prospects and the effects of the recently passed U.S. tax cuts increase the prospects for solid economic growth and for continued interest rate increases in 2018.

Higher bond yields indicate investors expect more risk of inflation, and weigh heavily on U.S. tech stocks.

(Info via The Canadian Press, as reported in The Globe and Mail, 22 February 2018)

A recent working paper from researchers at the Bank of England posits that the ever-increasing appetite from the older folk for safe bonds and similar income-producing assets will keep the lid on interest rates.

(Info via Ian McGugan, as reported in The Globe and Mail, 17 February 2018)

The Law of Finance Math (discounted cash flow) states that future cash streams, such as corporate dividends and earnings, steadily increase in value as interest rates fall.

Stock prices, as a representative estimate of the current value of future profits, should automatically rise as rates decline.

In more basic terms, lower bond yields make bonds less attractive than equities.

Historically, over the past 20 years, the domestic utility and real estate sectors appear to be the most sensitive to changes in interest rates.

Accordingly, they are the most vulnerable to rising interest rates and bond yields.

Both industries are capital-intensive, and require frequent loan rollovers and bond issues.

As such, higher borrowing costs have dramatically put a dent in bottom-line profits.

Utilities’ stock prices move in the opposite direction of yields.

The negative effects of higher interest rates can be offset where companies have the ability to raise prices or rents, if economic conditions improve.

Investors in real estate and utility stocks, as well as all dividend-paying equity sectors, should be cognizant of the threat posed by further increases in bond yields.

(Info via Scott Barlow, as reported in The Globe and Mail, 6 February 2018)

Any increase in interest rates nudges bond yields higher, and makes such fixed-income investments more attractive.

As a result, investors find corporate dividends and earnings less appealing.

(Info via David Hodges, as reported in the Times Colonist, 7 February 2018)

Rising interest rates punish the price of electrical utility stocks, which in turn causes their dividend yields to rise.

The combo of falling prices and rising yields imply that a stock is falling out of favour with investors.

Utility stocks are classic rate-sensitive stocks, and can remain under water until rates stabilize and move lower.

(Info via Rob Carrick, as reported in The Globe and Mail, 23 February 2018)

With rates rising, bonds are usually less attractive investments, with prices moving opposite rates.

Simultaneously, corporate earnings are rising, and U.S. corporate taxes are falling.

Here we have an asset class with negative influences (bonds) and an asset class with positive influences (stocks).

This could very well represent a generational shift away from bonds and into stocks, and could be one reason why the stock market party is still on a rip.

Bonds went on a 30-year run; maybe stocks are now in a very longer-term bull market that many investors aren’t yet buying into, although they seem to be piling on of late.

(Info via Peter Hodson, as reported in the Financial Post, 20 January 2018)

Higher yields generally negatively impact stock prices by making bonds seem more appealing to investors.

(Info via The Canadian Press, as reported in the Times Colonist, 23 February 2018)

Rising bond yields turn up the heat (competition) on stocks.

But, that pressure may be ameliorated by stronger corporate profits.

(Info via Ian McGugan, as reported in The Globe and Mail, 25 January 2018)  

Rising interest rates push bond yields higher, making such fixed-income investment vehicles more attractive and corporate dividends and earnings less attractive.

(Info via David Hodges, The Canadian Press, as reported in the Times-Colonist, 7 February 2018)

As bond yields rise, bonds begin to look more appealing to investors desperate for yield than stocks that generate steady dividends.

(Info via David Berman, as reported in The Globe and Mail, 15 January 2018)

As a result of rising rates, investors are no longer guaranteed to lose purchasing power when they entrust their money to a fixed-income investments.

Bonds are once again a decent alternative for people who crave stability.

This translates into new competition for stocks, which are trading at unusually high valuations.

An ever-growing population of senior citizens results in more demand for safe havens for wealth, such as bonds.

As a result, this tends to keep the lid on interest rates.

Other factors include the gig economy, new tech, and a globalized work force, according to Megan Greene, chief economist at Manulife Asset Management.

She does not expect a late-cycle surge in inflation.

According to Eric Lascelles, chief economist at RBC Global Asset Management, we are in the late stage of the business cycle, which means that the next downturn would normally occur in the next couple years – but not now!

(Info via Ian McGugan, as reported in The Globe and Mail, 7 February 2018)

According to Allan Small, a senior investment adviser at HollisWealth, “You start putting tariffs on stuff you’re importing into your country, the prices are going up and obviously you have higher inflation, you have higher interest rates.”

(Info via David Hodges, The Canadian Press, as reported in The Globe and Mail, 2 March 2018)

“We’re a long way from normal interest rates.”  (James Gorman, Morgan Stanley Chairman & CEO, CNBC, 7 March 2018)

Interest rates have a definite impact on any decision related to coming to grips with the whole discussion on how to invest money to make money.

Tracking the Yield Curve

Why Bond Yields Rise

Inflation is a bond’s worst enemy.

When inflation expectations rise, bond prices fall, bond yields rise, and interest rates rise.

Accordingly, bond prices/yields, or the prices/yields of bonds with different maturities, are excellent predictors of future economic activity.

(Info via Barry Nielsen, as reported at, 7 September 2016)

Boo on Bonds

The age-old methods of preservation – namely owning long-term government bonds – are passé.

That’s because the low-yield environment puts future purchasing power at risk, as returns on fixed income can’t keep pace with inflation.

(Info via Joel Schlesinger, as reported in The Globe and Mail, 23 February 2018)

Boo on Banks

Not all mutual funds include trailer fees, but the ones sold through banks and full-service advisers often do, and can constitute a sizable portion of a portfolio investment and adversely affect return on investment.

(Info via David Hodges, as reported in The Globe and Mail, 5 March 2018)

I reported on the egregious behaviour of banks in this blog post:

Retail Sales

When retail sales growth turns south, it’s time for caution, because it’s a sign that consumers are weary, and a recession might be around the corner.

Retail sales can be tracked by using the Federal Reserve Bank of St. Louis’ free FRED service (

If retail sales have climbed over the past year, stay with stocks.

If they fell, then consider the market’s trend.

If the market is higher than its 10-month moving average (based on monthly total return data), stick with stocks; otherwise, migrate to a safe haven like T-bills.

The only time to make such a move is when retail sales are down, and the market is below its 10-month average (based on monthly data).

Considering the U.S. market, retail sales are up over the past year, and the market is well above its monthly moving average.

(Info via Norman Rothery, as reported in The Globe and Mail, 15 February 2018)

Timing Measure

Each month, the current level of a stock market index, including dividend reinvestment, is compared with the average of its 10 prior month readings.

If the current reading is higher than the average, it’s time to buy stocks.

Otherwise, it’s wise to go to cash or some other safe haven.

(Info via Norman Rothery, as reported in The Globe and Mail, 1 February 2018)

Be a Market Timing Genius

Today’s towering stock prices can be easily explained away by today’s steady-as-she-goes growth, stubbornly low inflation, and strong profit margins.

In theory, low unemployment should eventually be followed by a burst of inflation, which could prick the balloon.

So, if you’re looking for an early warning of when the party will be over, just keep an eye out for inflation, and you will become an instant hero.

(Info via Jeremy Grantham, co-founder of money manager GMO LLC in Boston, as reported by Ian McGugan in the February 2018 edition of Report on Business)

Being able to time the markets, based on the normal ebb and flow of the inherent cycles, will go a long way to helping you make decisions about how to invest money to make money.

Growing Cash Flow

A key metric for finding winning stocks is growth in free cash flow (think Boeing).

See Boeing section of this blog post for more details on this big winner in this category.

If a company can keep on generating money after paying for capital expenditures, then it’s on the right track.

Management should be deploying this money judiciously in the form of stock buybacks, dividends, or mergers.

There should also be evidence of strong earnings growth.

Opportunities abound in health care and technology.

(Info via Larry Puglia, as reported in the March 2018 edition of Report on Business)

Mr. Puglia likes Alibaba and Salesforce.

For more info on those companies, please go to those sections in this blog post.

Being able to uncover winning stocks is one of the keys to achieving success in your quest to better understand how to invest money to make money.

The Biblical Number 666

Feb 2, 2018 – Major stock indexes swooned Friday, with the Dow Jones industrial average plunging 666 points, amid signs of wage growth finally picking up.

Friday’s 666-point drop was the sixth-worst ever, with the Dow closing at 25,520.96.

In Chapter 13 of the Book of Revelation, it reads: “Let the one with understanding reckon the meaning of the number of the beast, for it is the number of a man.  His number is 666.”

A Rising Star

Nancy Davis is an options advisor at Quadratic Capital, which is an advisory firm that primarily uses derivatives to invest in its global macro strategies.

She predicted that the popular low volatility trade would implode, and now says that the market will remain turbulent for some time.

She had indicated in October that so many investors were shorting CBOE’s Volatility index (VIX) that a mild uptick in market uncertainty could lead to an exaggerated spike in volatility.

Since that time, volatility has gone through the roof on fears of an overheating economy, causing stocks to swoon.

Ms. Davis now espouses owning volatility, as there still is an appetite for risk-on trades in the market.

She also prefers other asset classes that are linked to inflation, and which are actually very attractively priced, like agriculture commodities.

As the cycle peaks, commodity sectors tend to outperform.  (Info via Scott Barlow, as reported in The Globe and Mail, 15 February 2018)

Back in October, the VIX closed at an all-time low of 9.19.

Fast forward to today (13 February 2018), and you will see that volatility has indeed spiked (26 as at this writing – down from highs over 50 last week), as worries of an overheating economy caused both the Dow Jones industrial average and the S&P 500 to tumble more than 10 percent in early February.

Ms. Davis had sold short XIV Velocity Shares Daily Inverse VIX Short Term ETN Nasdaq.

It has now effectively lost all of its value, having fallen more than 95 percent over the past eight days (from 13 February 2018).

(Info via Thomas Franck and Leslie Picker, as reported at, 13 Februrary 2018)

Paying attention to market cycles and volatility will give you a definite edge in dealing with any questions you have about how to invest money to make money.

Beaver Pelts, Gold, & Salt

Many of the gold pundits argue that gold is a currency, and that it’s vastly superior to any government-backed paper bill as a store of value, because nobody can play with its inherent worth.

Yeah, gold has been around for a long time, but so to have beaver pelts and salt, both of which have been used as money at times.

It’s interesting that chief executives of gold firms still insist on being paid in dollars, not bullion.

Over the past five years, gold has traded between $1,900 (all currency in U.S. dollars) an ounce and $1,051 an ounce.

You call that store of value?


“Gold really is not a proxy for money.  I dare anyone to go into a grocery store with an ounce of gold in his hot little fist.”  Stephen Jarislowsky, Montreal investing sage 

Bottom line… gold is just another metal, and not a very useful one at that.

(Info via Stephen Jarislowsky, as reported in Report on Business, May 2016)

Stay focussed on quality investments and safe stores of value so that you won’t regret any decision you make regarding how to invest money to make money.

The Future of Trading

The AI Revolution is ramping upRBC Capital Markets is the biggest investment bank on Bay Street in Canada.

It is building an electronic trading platform that will vault RBC well beyond the next frontier – artificial intelligence.

When provided with reams of Big Data from within the bank and public markets, the algos will trade and alter themselves without any human intervention whatsoever.

In the push to AI, RBC (it’s building its own) wants to corral orders from institutional and retail clients across all the divisions of the bank – plus the trades on its own account – onto one platform.

Ideally, RBC wants to develop a system that will allow it to match as many of the buy or sell orders placed through the bank as possible.

Goldman Sachs, the second-largest investment bank on Wall Street, has thinned the number of equity traders it employs from 600 in 2000 to only a few today.

Trading at Goldman now is in the hands of hundreds of engineers instead.

Now that computers can learn and think for themselves, the end of human traders is nigh.

Trading bots have taken over the market.

The bots will put up 100-share orders now and then to test the market, and try to nudge prices.

Algos and AI are great at recognizing and responding to historical patterns, but news events can pose a challenge.

(Info via John Daly and Christina Pellegrini, as reported in the March 2018 edition of Report on Business)

Inspiration and Quotes

“Life is 10 percent what happens to you and 90 percent how you respond.”  Anon

“There’s no education in the second kick of a mule.”  GOP head McConnell

“I never attempt to make money on the stock market.  I buy on the assumption that they could close the market the next day, and not open it for five years.”  Warren Buffett

“Imagination is more important than knowledge.”  Einstein

“People need to know you care about what you know before they care about what you know.”  Surgeon General of the U.S.

“In order to be a success financially, you have to be willing to take risks, and be so confident in what you are doing that you’re prepared to put it all on the line.”  Tom Harris of Harris auto fame in Victoria, B.C., Canada (passed in his late 60s)

“The enemy of my enemy is my friend.”  Anon

“Without a vision, the people perish.”  Book of Proverbs

“The more still you are, the further you can go.”  Inspiration from India

“There is no such thing as impossible.  Everything is possible, if you are committed, focussed, and honest.  Those are the ingredients for success.”  Perminder Chohan, Lifewise Financial CEO

“Never cry over spilled milk (missed opportunities).”  Kevin O’Leary’s mother

“Keep the dream.”  Tilman Fertitta


“Just wanted to say superb blog (Market Forecast Indicator: Market Forecasting Secrets)”  Shaina Lafleur

“Thanks to my father, who informed me regarding this weblog; this Web page is really remarkable (Portfolio Investment: Best Investing Return on Investment).”  Francesco Mcmullin

“Yeah, bookmarking this wasn’t a bad decision; excellent post (MACD Divergence: Number 1 Forex Divergence Indicator).”  Lance Cadwell

“There is definitely a lot to know about this issue (Return on Investment: Best Personal Finance Advice).  I love all the points you made.”  Jamaal Garzon

“Awesome post (Portfolio Investment: Best Investing Return on Investment).  I am a regular visitor of your Web site, and appreciate you taking the time to maintain the excellent site.  I will be a frequent visitor for a long time.”  Judi Wolfgang


Equity Risk Premium:

A measure of how much extra return investors are demanding for holding stocks rather than safe government bonds.

(Info via Ian McGugan, as reported in The Globe and Mail, 19 January 2018)

Cash Flow

The more excess cash a company has available, the better its ability to undertake projects to grow the business, pay off debt, and/or increase dividends to shareholders.

Any one of these activities is a positive indication that a company may be a good investment.

Annual Cash Flow Momentum:

Measures the rate of change of annual cash flow per share; high values best.

High values for five-year cash flow growth are best.

High values for latest four quarters’ cash flow per share are best.

Companies should have five-year cash flow growth, annual cash flow momentum, and their latest four quarters of cash flow should have positive values.

They should have a five-year beta (measure of a company’s sensitivity relative to changes in the benchmark) of less than 1.0

Also, for each company’s stock, the gap between the current price and its 200-day moving average should be greater than three percent.

(Info via Emily Halverson-Duncan, as reported in The Globe and Mail, 23 January 2018)


The rate of change in an option’s delta per one-point move in the underlying asset’s price.

Gamma is an important measure of the convexity of a derivative’s value in relation to the underlying.

A delta hedge strategy seeks to reduce gamma in an attempt to maintain a hedge over a wider price range.

(Info via Investopedia)


Short for carried interest, it is a share of the profit of an investment that is paid to the managers of the investment.

In a VC fund, the limited partners of the fund ‘pay carry’ to the general partners, if the entire fund is profitable.

This is called fund carry or net carry.

(Info via

Credit Spread:

This is the difference in yield between two bonds of similar maturity but different credit quality.

As an example, if the 10-year Treasury note is trading at a yield of six percent, and a 10-year corporate bond is trading at a yield of eight percent, the corporate bond is said to offer a 200-basis-point spread over the Treasury.

(Info via

Supply and Demand:

In microeconomics, supply and demand is an economic model of price determination in a market.

It posits that, in a competitive market, the unit price of a particular good, or other traded item, such as labor or liquid financial assets, varies until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.

(Info via Wikipedia)

Michigan Consumer Sentiment Index (MCSI):

A survey of consumer confidence sponsored by the University of Michigan.

This index uses telephone surveys to obtain information on consumer expectations about the overall economy.

(Info via Investopedia)

Bond Vigilante:

A bond vigilante is a bond market investor who protests fiscal or monetary policies that he/she considers to be inflationary by selling bonds, thereby increasing yields.

Prices move inversely to yields in the bond market.

(Info via Wikipedia)

Treasury Yields:

Treasury yields are the total amount of money earned by owning U.S. Treasury bonds or notes, which are sold by the U.S. Treasury Department to pay for the U.S. debt.

It should be noted that yields go down when there is big demand for the bonds.

That explains why yields move opposite to bond values.

(Info via Kimberly Amadeo, as reported at, 25 July 2017)

Why Bond Prices Go Up and Down:

In bond investing, prices move up and down in response to two factors:  changes in credit quality and changes in interest rates.

Bond investors worry a lot about the safety of their money in their quest to deal with the unknowns about how to invest money to make money.

However, they generally tie safety to credit considerations.

Bond investors, for the most part, do not fully comprehend how interest rate changes affect price, and hence run the risk of not knowing how to invest money to make money.

Since the late 1970s, changes in interest rates have become the single most important factor in determining the return on bond investments.

Accordingly, managing interest rate risk has become the most critical consideration in the management of bond portfolios. 

(Info via Annette Thau, as reported at


The number of shares actually available for trading.

Calculated by subtracting closely held shares – owned by employees, insiders, the company’s Employee Stock Ownership Plan or other major long-term shareholders – from the total shares outstanding.

(Info via

Minsky Moment:

A sudden collapse of asset prices after a long period of growth, instigated by debt or currency pressures.

The theory is named after economist Hyman Minsky.

(Info via, 18 October 2017)

CRSP U.S. Large Cap Value Index:

The Center for Research in Security Prices (CRSP) is the recognized leading provider of research-quality historical market data and returns.

Founded to develop the first definitive measurement of long-run market returns, CRSP has long been an integral part of the academic and commercial world of financial and economic research.

Since its inception in 1960, CRSP has partnered with the investment industry to develop and maintain databases and market indexes that are widely used by academics and commercial practitioners.

(Info via

Positive Carry:

This is a strategy of holding two offsetting positions, one of which creates an incoming cash flow that is greater than the obligations of the other.

Similar to arbitrage, positive carry generally occurs in the currency market where interest paid in one currency is more than what would be required to pay to borrow in another currency.

Another example would be borrowing $1000 from a bank at five percent, and then investing it in a bond paying six percent.

The net effect is the coupon on the bond would pay more than the interest owing on the bank loan, resulting in a one percent difference.

(Info via Investopedia)

One heckuva smart way to deal with not knowing how to invest money to make money.

NYSE Cumulative Advance-Decline Line:  

Measures the number of daily gains minus declines.

(Info via Lu Wang, as reported in The Globe and Mail, 22 February 2018)

Dividend Yield:

The projected annualized dividend divided by the share price.

Earnings Momentum:

The change in annualized earnings over the past quarter.

A positive number signals growing earnings, while the opposite holds true for a negative number.

Earnings increases should lead to long-term dividend hikes; vice versa for earnings decreases.


This is a safety measure – the lower the ratio, the lower the leverage or debt levels.

It’s difficult to go bankrupt, if there aren’t any any debt obligations.

Price-to-Earnings (P/E):

This is the share price divided by the projected earnings per share.

It is a valuation metric – the lower the number, the better the value.

All companies on your screen should have positive earnings, and therefore a positive P/E ratio.

(Info on Dividend Yield to P/E via Sean Pugliese, as reported in The Globe and Mail, 22 February 2018)


With rising rates, it is possible that investors may just get sucked into higher bond yields by moving their money out of stocks.

Higher bond yields could shatter ‘TINA’ (‘There Is No Alternative’ to buying stocks) – referred to by traders.

Ben Inker of GMO LLC prefers instead TIAQA – ‘There Is An Okay Alternative.’

Phillips Curve:

A supposed inverse relationship between the level of unemployment and the rate of inflation.

Underlying Inflation Gauge (UIG):

Developed by the Federal Reserve of New York, it claims that the inflationary trend is rising rapidly, and now running as high as three percent a year.

It looks at factors beyond prices, such as financial and industrial gauges.

It is supposed to “provide a more timely and accurate signal of turning points in inflation” than conventional measures, according to the New York Fed.

(Info via Ian McGugan, as reported in The Globe and Mail, 17 February 2018)

F-Series Funds:

No embedded commissions for advisers (I-series for institutional investors).

F-series funds are available for advisers to use in fee-based accounts, where clients typically pay their advisory firms one percent to one and a half percent of the value of their account a year.

(Info via Rob Carrick, as reported in The Globe and Mail, 23 February 2018)

Shiller Price-to Earnings Ratio:

Compares share prices to the long-run ability of companies to produce profits.

(Info via Ian McGugan, as reported in the March 2018 edition of Report on Business)

The cyclically-adjusted price-to-earnings ratio (CAPE) has been a reasonable guide over the past century to the returns that investors can expect in ensuing years – one of the metrics that an investor can employ to deal with the concern about how to invest money to make money.

A high CAPE suggests that stocks are expensive and likely to produce anaemic gains, while a low reading is suggestive of the opposite.

(Info via Ian McGugan, as reported in The Globe and Mail 25 January 2018)

Citi Economic Surprise Index:

Measures how actual readings stack up against analysts’ forecasts.

(Info via Ian McGugan, as reported in The Globe and Mail 25 January 2018)

Total Return on Capital:

A measure of a company’s profitability that relates the firm’s pre-tax earnings to all the capital involved in the firm, including common stock, debt, and preferred stock.

Quarterly Earnings Momentum:

Latest four quarters of reported earnings compared with the same figure one quarter ago.

Five-Year Average Return on Equity:

Return on equity is a profitability metric, measuring the net income or ‘bottom line’ of a company against shareholder equity.

(Info on above three items via Ian Tam, CFA, a relationship manager for CPMS at Morningstar Research Inc., as reported in The Globe and Mail, 18 January 2018)

Future-Growth-Value-to-Market-Value Ratio (FGV/MV):

Represents, in percentage, the portion of the market value that exceeds the company’s current operating value.

The higher the number, the higher the risk and the higher the baked-in premium for expected growth.

A negative number equates to a discount.

As an example, a future growth value of minus 50 percent means that the market value needs to increase by 50 percent in order to equal what the company is worth if its operating profit remains flat forever.

Economic Performance Index (EPI):

Return on capital divided by cost of capital.

An EPI ratio of one or more reflects a company’s capacity to create wealth for its shareholders – and satisfies one of the factors an investor takes into consideration in his/her quest to surmount the dilemma of how to invest money to make money.

A higher EPI is synonymous with a greater rate of wealth creation.

A value lower than one means the company destroys shareholders’ wealth.

Free-Cash-Flow-to-Capital Ratio:

Gives a reading as to how well a company uses the invested capital to generate free cash flows, which could be used to reduce debt, pay and/or increase dividends, stimulate growth, etc.

A positive number is good, give percent and above excellent.

(Info from FGV/MV to the last item via Jean-Didier Lapointe, financial analyst at Inovestor Inc., as reported in The Globe and Mail, 16 January 2018)

High-Beta Stocks:

They go up or down more than the stock market.

(Info via Richard Marzouka, hedge fund consultant, as reported by Larry MacDonald, author, economist, and writer in the Globe and Mail, 3 March 2018)

Five-Year Beta:

Measures a company’s sensitivity relative to changes in a benchmark – must be equal to or less than one.

Momentum Strategies:

Typically quite short in nature regarding the selection of their underlying securities, they will often buy/sell stocks based purely on rapidly changing metrics focussed on earnings report dates or fluctuations in price, causing their volatility to be considerably higher than most other strategy types.

Growth Strategies:

These strategies often have a longer-term horizon when selecting stocks, looking at metrics such as a consistent return on equity or long-term sales growth, which can facilitate these strategies having a relatively smoother return pattern.

Both growth and momentum strategies should be evaluated when wrestling with the challenge of how to invest money to make money. 

Return on Equity:

Measures how much a company is earning for each individual share.

Quarterly Earnings Surprise:

Measure of the difference between actual and expected quarterly earnings – a higher value being best.

Quarterly Earnings Momentum:

Measured as the growth in most recent trailing four quarters’ earnings compared with the trailing four quarters’ earnings lagged by one quarter – higher value being best.

(Info on Five-Year Beta through Quarterly Earnings Momentum via Emily Halverson-Duncan, as reported in The Globe and Mail, 6 February 2018)

Five-Year Historical Price Beta:

Companies with a beta lower than one have historically moved less than the index in trending markets.

Lower beta is preferred to lower risk and turnover.

(Info via Ian Tam, as reported in The Globe and Mail, 1 February 2018)

Consumer Price Index (CPI):

Measures changes in the price level of a market basket of consumer goods and services purchased by households.

It is a statistical estimate constructed by using the prices of a sample of representative items whose prices are collected periodically.

(Info via Wikipedia)

Producer Price Index (PPI):

This is a price index that measures the average changes in prices received by domestic producers for their output.

Its significance is being undermined by the steady decline in manufactured goods as a share of spending.


In economics, this is a sustained increase in the general price level of goods and services in an economy over a period of time.

West Texas Intermediate (WTI):

Also known as Texas light sweet, WTI is a grade of crude oil used as a benchmark in oil pricing.

It is described as light because of its relatively low density and sweet because of its low sulphur content.

(Info via Wikipedia)

You can track WTI here:

CBOE Volatility Index:

Known by its ticker symbol VIX, it is a popular measure of the stock market’s expectation of volatility, as implied by S&P 500 index options.

It is calculated and published by the Chicago Board Options Exchange (CBOE).

It is colloquially referred to as the fear gauge or the fear index.

(Info via Wikipedia)

I covered the VIX here:

Citi Economic Surprise Index:

Citi tracks a measure referred to as the ‘economic surprise index’ for various locales, which depicts how economic data is actually transpiring relative to the consensus forecasts of market economists.

From Bloomberg:

Calculated daily in a rolling three-month window, the Citigroup Economic Surprise Indices are objective and quantitative measures of economic news.

They are referred to as weighted historical standard deviations of data surprises (actual releases vs. Bloomberg survey median).

A positive reading suggests that economic releases have, on balance, (been) beating consensus estimates.

The weights of economic indicators are arrived at from relative high-frequency spot FX impacts of 1 standard deviation data surprises.

The indices incorporate a time decay function to replicate the limited memory of markets.

(Info via Matthew Boesler, as reported at, Dec. 24, 2013, 1:09 PM)

Island Reversal:

This is a candlestick pattern with compact trading activity within a range of prices, separated from the move preceding it.

An exhaustion gap is said to cause such separation, and the ensuing move in the opposite direction occurs as a result of a breakaway gap.

Price chart showing what an Island Reversal pattern looks like.

(Info via Wikipedia)

Small-Firm Effect:

The idea that, over the long run, smaller firms, which perhaps fewer people are focussed on or actively trading, are able to outperform larger companies.

(Info via Ian Tam, CFA, relationship manager for CPMS at Morningstar Research Inc., as reported in The Globe and Mail, 1 March 2018)

Master Limited Partnership (MLP):

Also known as a publicly traded partnership, a master limited partnership (MLP) in the U.S. is a limited partnership that is publicly traded.

It combines the tax benefits of a limited partnership with the liquidity of publicly traded securities.

To qualify for the tax benefits of a pass through, MLPs must generate at least 90 percent or more of their income from qualifying sources, such as processing, production, storage, and transportation of depletable natural resources and minerals.

Real property rents also qualify.

(Info via Wikipedia)

Segregated Funds:

Similar to a mutual fund, they generate a return with an insurance policy that covers the risk.

(Info via David Hodges, as reported in The Globe and Mail, 5 March 2018)

One Month 25-Delta Risk Reversal:

A barometer of sentiment and directional risk.

(Info via Alexandria Arnold, as reported in The Globe and Mail, 6 March 2018)

Large Institutional Investors:

Dominating trading activity in the markets, they incorporate analysts’ forecasts, among other metrics, into sophisticated valuation models to derive the ‘correct’ price for any given security.

Sell-Side Equity Research Analysts:

They usually cover only bigger companies, because these are what their clients, the same institutional buy-side investors, are focussed on.


This invariably involves forward ratios or the current price compared with the analysts’ average forecast.

Trailing Ratios:

The current price compared with the past 12 months.


This is an important consideration, in that a company with rock-bottom valuations that is about to endure default on a debt obligation or financial hardship will more than likely not make for a good investment.

And, companies where there is no investor demand for analyst coverage also generally have a lack of investor appetite for credit ratings.


In this regard, you should look for a daily average of 80,000 shares traded over the past five trading days.

(Info on Large Institutional Investors through Liquidity via Hugh Smith, CFA, MBA, financial and risk unit of Thomson Reuters, specializing in asset and wealth management, as reported in The Globe and Mail, 7 February 2018)

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References  (opening image courtesy Pixabay)


I hope you liked this How to Invest Money to Make Money blog post, and that you are raring to go with your investing and trading decisions.

If you still have any lingering questions, please give me a shout.

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Please feel free to let me about yourself here, so that I can better understand your investing and trading goals.

If you haven’t yet taken the time to go through my previous blog posts, here they are: 


After Hours Trading

Trading Volume

Stock Trading Stops

Currency Trading Strategy

How to Pick Stocks

Stock Trading Rules

Three Winning Stock Trading Strategies

Forex Trading Techniques

Forex Pivot Points

MACD Divergence,

ADR Indicator

Best Forex Indicator

The HNW Club


Market Update

Margin and Leverage

Support and Resistance 

Stock Market Forecast Next Five Years

Trading Forex News

SimpleFX Trading Tool

Stocks to Buy Today

Investment Strategies

Portfolio Investment

Return on Investment 

And, don’t forget to check me out here.

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Peter R. Bain
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About Peter R. Bain

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Peter R. Bain

I am a speaker, trader, writer, aviator, car nut, Harley enthusiast but, above all else, I am here for you at TradingSmarts, which I founded some 15 years ago.

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