OPTIMISM #26 - April 13th, 2021

Hello clients and friends,

Dividend increases are mainly slow but steady these days.

Companies are cautiously making increases, but wary of future risks as well as consumer optics of doing ‘too well’ in Covid times.

John Heinzl’s Yield Hog article in the weekend Globe was interesting.

Especially how a portfolio of dividend growers has beaten the overall index, even missing out on huge performers such as Shopify. (On October 1st, 2017 (the his model portfolio started), Shopify closed at $123, today its $1,508.  That’s about 89% a year growth on a company that was for a short time larger than the Royal Bank.  It has enormous influence on the index. 

Heinzl’s boring portfolio missed that, yet still beat the market.)

Why I’m reinvesting dividends in this Big Five bank - The Globe and Mail


Jared Dillian’s interesting description of bitcoin is below.  I like how he thinks.  He writes “the daily dirtnap”.  You can get it free if interested.   Get it here.


Bitcoin is somewhat of a special case because the supply is constrained. This is by design.

Bitcoin has no intrinsic value, except its scarcity. People use a lot of fancy mathematics to predict future Bitcoin prices, but it all comes down to supply and demand. The supply is mostly fixed, and the demand keeps going up.

The interesting thing about watching Bitcoin trade is that, well, there are sellers.

You have a lot of folks on Twitter who "HODL" and say that they will never sell. But someone is out there selling; you see it all day long. (10th Man readers know that I sold my bitcoin.) 

Higher prices bring out sellers. In the case of Bitcoin—which is a confidence asset, not a security—higher prices also bring out buyers.

My guess is that this dynamic will continue until there is an event that decreases the attractiveness of Bitcoin and brings out the sellers, like what is happening in India. (They banned crypto.)

Until that happens, Bitcoin keeps going.


As investors we have to continually manage our behavior and expectations.  Even in the first class seats, there will be turbulence.

There was a great article in the National Post recently by Jason Heath, Canadian Inheritances could hit 1 trillion over the next decade and both bequeathers and beneficiaries need to be ready.

The great generational wealth transfer is fuelling the luxury property market | Financial Post

It cites a survey that 47% of respondents over age 55 think leaving an inheritance was “the right thing to do”.  And that 55% of millennials think “it’s a parent’s obligation”.

If my kids get an inheritance, it will be a budgeting error. 

“Stocks are violent, dividends are steady”.  (thank you Greg for that one)

Spring is finally here.  Have a great week.