My December 2017 annual portfolio review is now posted

Our portfolio beat it’s own target return objective in 2017: 7.82% vs. 7.00%, (or about 12% better than planned), and our asset allocations ended up mostly in line with what I expected.

We also beat our benchmark: 7.82% vs. 6.37% (or about 23% better than our benchmark).

See how it worked out in more detail here.

The deck reviewing 2017’s performance of the OSC fantasy growth and income portfolios is available

Visit my OSC member page to obtain a PDF copy of my deck presented January 9, 2017 at the OSC meeting. It features the second annual review of the Ottawa Share Club fantasy and income portfolios.

Topics include:

  • —Performance vs. portfolios’ own objectives and benchmarks
  • —Asset allocation review
    • —Asset type
    • —Geography
    • —Sector
    • —Single security
  • —Best and worst performers
  • —Trades made to date and how they’ve worked out
  • Conclusion and discussion

The OSC fantasy growth and income reports as of December 31, 2017 are now posted

The OSC fantasy growth portfolio had a total return of 16.0% in 2017, and features a two-year total return of 26.8%. The 2017 performance beat the portolio’s stated total return objective of 9.1% (as it has for two years).

The OSC fantasy income portfolio had a total return of 9.7% in 2017, and returned 15.4% over the last two years. The 2017 total return exceeded the portfolio’s stated return objective of 5.5% (as it has for two years).

The OSC fantasy growth portfolio report for 2017 can be viewed here.

The OSC fantasy income portfolio report for 2017 can be viewed here.

I’ve updated our household investment plan with some refined objectives

My latest version of our household investment plan is now published (as of December 31, 2017).

As I describe it: “For the first time, this investment plan update includes refining our objectives based on explicitly creating portfolio “buckets” that will guide our target asset allocations and serve to fund our retirement.”

It is not a radical change from previous plans. My rationale for choosing asset allocation targets is evolving though.

This plan and previous versions are all available here.

June’s OSC fantasy growth portfolio trade was recorded in the trade log

I recorded the trade as voted on by OSC members at the December 12, 2017 meeting.

The trade was proposed by June. It was accepted by the Share Club.

Please note the fantasy growth and income portfolios (PDFs) will next be updated as of December 31, 2017 and will be presented at the January 2018 OSC meeting.

More here.

Is Wal-Mart starting to make a dent in Amazon’s juggernaut?

This month, Forbes featured an article about how Wal-Mart is fairing in the e-commerce space. Well worth a read and shows that Wal-Mart is starting to grow its online business.

When I wrote about investing in the e-commerce secular trend for Canadian MoneySaver last January, I mentioned Wal-Mart as a potential value play in the e-commerce space.

“Although Wal-Mart is …not at core an e-commerce company… it remains interesting. It is making a big bet on e-commerce and indications are that its online sales are growing considerably faster than its off-line sales, notwithstanding some hiccups along the way. It sells about one-sixth as much online as Amazon does, at $14B per year, but those sales are starting to grow fairly rapidly. With its purchase of, Wal-Mart’s online presence should grow even faster. As a bonus, Wal-Mart pays a 2.86% dividend, has a much lower P/E ratio (about 16) than most “pure plays” and fared better than most businesses during the financial crisis. This could be a good value play.”

Here is Wal-Mart’s chart showing year-to-date total return and stock price performance. Pretty impressive:

My full article from Canadian MoneySaver is available for free here. (Note: below the article link I’ve provided some information about an e-commerce ETF for emerging markets that might be worth a further look.  I also wrote another blog post that discusses a second ETF that lets investors invest in e-commerce called IBUY.)




Jan’s research on ETFs for robotics, artificial intelligence and other disruptive technologies

After the last Share Club meeting featuring the topic of driverless cars, Jan, a Share Club Exec, has kindly provided his research into ETFs following robotics and artificial intelligence and other disruptive technologies.

His material is posted here on his Ottawa Share Club member page.

Don’t forget, much more OSC member and guest content is available here.


December 15, 2017 – It’s my quarterly trading day and what did I do?

As is my practice I only trade securities four times a year after reviewing our household portfolio performance, asset allocations, and any new ideas that I wish to act upon.

This quarter was a bit of a watershed. Today was my trading day and guess what? I did not make a single trade. 

Performance is ahead of our targeted 7% annual rate of return. Asset allocations are all close to plan. No new ideas emerged that seemed any better than those I have had before.

As I said before, it may sound boring, but I am pretty excited to be doing what I set out to do and, at least for now, being rewarded for it.

I do think sometimes the best move is no move at all.

I will do a full update on the quarter and year and post it here at in early January. Some of my ideas regarding asset allocation are evolving as we get closer to the distribution stage of our portfolio (i.e., retiring from full-time employment in the next couple of years).


June’s December 12, 2017 proposal for the OSC growth portfolio was accepted

At the December 12 OSC meeting June proposed selling all of Emera and replacing it with PNC Financial services on the OSC fantasy growth portfolio. The change was accepted by vote of the membership.

Trades will be effective at close of business, per portfolio rules, five business days after the vote was taken.

Her presentation is here.

OSC December 12, 2017 presentations are posted

The presentations from the December 12 OSC meeting are posted.

See John Gosson’s autonomous driving material here. My notes with a few possible ETFs to consider are here.

See June’s OSC fantasy growth portfolio trade material here.

All available OSC member and guest content is posted here.

My article on investing in the water secular trend – now available for free

With permission from Canadian MoneySaver, I am happy to provide a free copy of my article on investing in the water secular trend that was published in June 2017.

The article explores the long-term trend in water-related businesses and some investment opportunities and risks.

Here is my article: Water_Patenaude

The OSC fantasy income portfolio trade from November 21, 2017 has been logged

I recorded the trade as voted on by OSC members at the November 21, 2017 meeting.

The trade was proposed by Dave. It was accepted by the Share Club.

Please note the fantasy growth and income portfolios (PDFs) will next be updated as of December 31, 2017 and will be presented at the January 2018 OSC meeting.

More here.

Jan’s OSC presentation from November 21, 2017 on Foot Locker and his sell strategy is posted

Please see Jan’s member page for his deck on the case of Foot Locker (FL) and his sell strategy considerations from the November Ottawa Share Club meeting.

Foot Locker was in the OSC fantasy income portfolio until members agreed it should be sold on November 21.

Dave’s OSC fantasy income portfolio change proposal was accepted November 21, 2017

At the November 21, 2017 Share Club meeting, Dave proposed replacing Footlocker with Diversified Royalty in the OSC fantasy income portfolio.

The members voted in favour of his proposal. See Dave’s page for the presentation deck.

Shopify’s 2017 real-time Black Friday / Cyber Monday sales platform data

Shopify announced record-breaking sales on it’s merchant platform on Black Friday (November 24). At the peak almost $1,000,000 in sales per minute were reportedly being transacted on the Shopify platform, nearly double last year’s numbers.

This is reflexive of the trend this year where for the first time ever in the US, online sales have surpassed in-store sales on Black Friday. This suggests the e-commerce secular trend continues to strengthen.

This is good news for Shopify shareholders.

It is also good news for Amazon shareholders, as it reportedly saw a 24% increase in online sales year-over-year on Thanksgiving and Black Friday.

What intrigued me as well as the e-commerce sales data was Shopify’s ability to publish in real-time the sales volumes on its platform using pretty cool graphics. I don’t know if this link will be active past Cyber Monday (November 27) but if you have a chance it is well worth looking at, even if you don’t own Shopify stock.

I will be curious to see how the e-commerce companies and ETFs perform as Q4 numbers roll in.

Disclaimer: I/we hold shares in Shopify (SHOP).

Here comes the US debt ceiling again, and the possibility of a government shutdown

I have mentioned a white swan event here before. But it was avoided for the time being.

We may see one or more again.

December 2017 will be a busy month legislatively for the US federal government. Along with tax cut legislation, Congress and the president must deal with the debt ceiling and the possibility of a government shutdown due to lack of funds.

December 8 is an important date to resolve the funding issues. The end of the year is the president’s imposed deadline for tax cut legislation.

Failure on any of these major initiatives will be embarrassing at best and potentially be very damaging to the US economy and market confidence at worst.

US markets are near or at all time highs and volatility is very low.

One could argue market sentiment is a bit too complacent right now.

If stocks go down, what’s your plan?

My thoughts from early 2016, when markets were pretty soft are here. While early 2016’s pullback seems like a long time ago, my perspective hasn’t changed all that much since.

Has yours?


The OSC fantasy portfolio trades from October 17, 2017 have been logged

I recorded the trades as voted on by OSC members at the October 17, 2017 meeting.

These trades were proposed by Peter #1. All but one was accepted.

Please note the fantasy growth and income portfolios (PDFs) will next be updated as of December 31, 2017 and likely presented at the January 2018 OSC meeting.

More here.

Exciting(?!) changes I’m contemplating for my trades in December 2017

You may know that I limit my security trading activities to once per quarter, or four times per year. This helps me with my discipline when managing my portfolio.

My next trade date is on or about December 15. I have been thinking about what, if any, trades to make at that time.

I’ve come up with two very exciting(?!) changes for my portfolio:

  • re-balancing bonds by purchasing more
  • topping up our holding in OpenText due to its present valuation and to invest some idle cash in one of our TFSAs

Isn’t that exciting?

Well, although I’m being facetious, it actually is kind of exciting for me. The reason: I finally feel like I am in true maintenance mode for our household retirement portfolio. I like the holdings we have (although I continue to look for improvements) and am mostly focusing on keeping our asset allocations in balance with targets.

For many investors I suspect this sounds terribly boring. What, no chasing outsized gains in the latest momentum stock? No short selling or short-term trading. LOL. Not for me.

But, boring can be good. We’re on track, at today’s pace, to exceed our target 7% return this year (at 7.4% as of Sept. 30 and currently forecasting an 8.8% total return by year end if the trend continues). That’s beating the TSX’s return to date of 4.7% (or 2.27% as of Sept. 30) and is being achieved with relatively low risk (less than 50% exposure to equities).

Yep, boring can be good.


e-Commerce ETF comes of age

Last January Canadian MoneySaver published my article on investing in the e-commerce secular trend. That article has since been posted here for free on as you may know.

In that article I mentioned in the footnotes a newer ETF called Amplify Online Retail ETF (IBUY) that trades on the NASDAQ. The fund was started in April 2016 and holds online retail stocks. At the time of publication of my article in CMS, I considered the fund too small for average investors to consider (it had a market cap of only $4.23 million and 150,000 shares were trading).

According to YCharts, the ETF today has a market value of $120.25M US and its 30-day average trading volume is just over 41,000 shares. So it is still not overly liquid, but is starting to get a bit more interesting given its growing market value.

The fund is interesting in a few ways:

  • while it is about 80% American focused, it also has about 8% and 10% invested in European and Asian holdings respectively
  • its composition is about 70% consumer discretionary (as expected), but also has exposure to technology (~21%), consumer defensive (~5%) and financial services (~4%)
  • the vast majority of the fund’s style is mid to small cap (~75%) and either small, mid or large cap growth (~72%)
  • it has 41 holdings in total with the top holding consisting of about ~7% of the fund’s value
  • IBUY pays no dividend and has a weighted average P/E of about 30, so is not cheap
  • as of October 31, 2017, its top ten holdings include:
Symbol Name % Weight Price % Chg
OSTK Inc 7.28% 44.55 +1.95%
STMP Inc 5.51% 171.25 -22.60%
CVNA Carvana Co A 4.41% 14.06 +0.43%
ETSY Etsy Inc 4.31% 16.59 +0.55%
PETS PetMed Express Inc 4.07% 36.56 -2.12%
PYPL PayPal Holdings Inc 4.01% 73.39 +1.58%
W Wayfair Inc Class A 3.92% 67.50 +7.42%
GRUB GrubHub Inc 3.71% 62.19 +2.24%
IAC IAC/InterActiveCorp 3.65% 129.15 -0.27%
NFLX Netflix Inc 3.45% 200.01 +0.35%

This is by no means an endorsement of the fund, but it is worth noting how quickly it is growing, and it may be on the cusp of becoming a viable pure-play holding in the e-commerce space for average, if high risk, investors.


Disclaimer: I/we do not hold shares in IBUY nor do we intend to purchase them in the foreseeable future.

Ben Carlson has some tips on investing in highly-valued equity markets

Those who read this blog know I follow and respect Ben Carlson from A Wealth of Common Sense. He’s just posted a re-print of an article he had published in Bloomberg about how to invest when markets are “high.”

Key take-aways:

  • Rebalance from relatively high-priced equities to relatively lower-priced assets
  • Over-rebalance into equities that have performed relatively poorly in the past
  • Don’t get too complicated and try to chase sophisticated hedging or leveraged products
  • Raise cash to avoid selling equities during a correction
  • Diversify and dollar-cost average
  • Buy quality companies and hold for the long haul, even during a correction
  • Buy on momentum

Ben Carlson’s rationale for these points pretty much makes good sense to me. Read his article here.

The October 17, 2017 OSC member presentations are available

Three presentations from OSC members made at the October 2107 meeting are now posted:

  • Peter McMurtry’s presentation on Understanding Financial Statements
  • Peter #1’s presentation (in collaboration with myself, Michael Patenaude) on the third quarter review of the OSC fantasy growth and income portfolios
  • Peter #1’s OSC fantasy portfolio trade proposals

These presentations and other OSC member content can be found here.