Optimism #85 - March 24, 2025
Dear clients and friendsI’m proud to be married to my lovely bride Tamara for 26 years today.
She is the best investment I have made so far.
Five years ago yesterday was during Covid and the stock market bottomed out.
Stocks were cheap, opportunity was everywhere and pessimism was at an all time high, inspiring this blurb of a newsletter.
That too did pass.
Since markets have somewhere between doubled and tripled in that timeframe, be leery of anyone selling investment products based on five-year performance.
Five years ago, covid hit, markets plummeted and the Canadian stock market was under 13,000. Today it is over 25,000.
You doubled your money in five years just owning the index. Dividends are on top of that, so a 5% yield means another 25% return. (27.63% with compounding)
We were rewarded for our patience and those who invested more at the bottom have nearly tripled theirs.
I follow Scott Galloway, an NYU professor on Instagram. He eloquently suggests, and I agree fully…
“The goal is to become wealthy, not rich. Rich is what you see. Wealth is ‘the rich’ you don’t see.”
He compares his friend who earns 3 to 11 million per year but lives big and saves little, with his father who lives well, earns $52,000 per year and saves regularly.
The friend is rich, dad is wealthy.
Our Canadian stocks have done well, much better than Canada as a whole. This is a chart comparing us to the top fifty nations in the world.
I asked Perplexity, an AI app I use to explain, like I am a five-year-old, what GDP is.
It says GDP is “… a report card for the country, to see how well everyone is doing as individuals, measured together.”
If you find travelling to other countries expensive, this is why:
Our Fortis natural gas bill arrived again. Our house is on the small side. We used $36.13 of gas and paid $279.42. $65.77 of it is carbon tax.
As shareholders we win by not losing.
Here is an article written by Warren Buffet over 20 years ago about the perils of governments borrowing and printing money. It’s a delightful read, written in his usual understated folksy style.
If you call CRA during these busy times, I suggest you press 2 for French speaking.
The line up is much shorter and they speak English as well.
Have a terrific week.
Derek Moran
