Optimism #46 - May 31, 2022

Dear clients and friends,

In spite of all of the negativity in the news, there is much good happening to mention.

Most major banks increased quarterly dividends last week.  That’s the second time this year and handily exceeds inflationary increases.  We are protected.
Scotiabank up 3 cents per share, per quarter.  It doesn’t sound like much, but that’s 3% on top of the large increase in February. 
CIBC from 80.5 cents to 83 cents (after the 2:1 split)
BMO up 6¢ to $1.39
RBC dividend up 8¢ or 7.0% to $1.28.  We now get 4 quarterly dividends of $1.28 = $5.12 per year per share we own.
Last year it was $4.32. 
Allowing for splits, my dear mother paid about $4.50 for her RBC shares. Today they are about $132 and pay $5.12 a year.
Time does amazing things to good companies.  If I did not see it regularly, I would not believe it.
National Bank up 5¢ to 92 cents or 6% per share.
Dividend growth drives share price growth.  Its like a rental property.  The higher the rent, the higher the value of the property.

Insiders are buying shares of their own companies – this is always a promising sign: 
MDA Ltd:  they are involved in international space missions, satellite systems, robotics and geo-intelligence – I had no idea so had to look it up
Stephen Smith is buying shares of Equitable Group
(he is also the co-founder of First National Mortgages and gifted Queen’s University 50 million dollars a few years ago)
AG Growth international – Chairman of the Board, Bill Lambert is buying.
Rick Pozzebon and Eric Larouche of Interfor Corp (lumber)
Mike Rose at Tourmaline Energy has 600 million worth of shares of his company and is buying more.
Eddy Leon of Leon’s Furniture is buying. He added 20,000 shares and now has over 46,000.
More buying at Suncor, Power Corp, Great West Life, Slate office REIT, Minto REIT, Bonterra Resources
Interesting that Russ Girling, former President and CEO of TransCanada Pipeline is buying Suncor shares.
Michael Wilson, former President and CEO of Agrium Fertilizer is buying Suncor as well.

When Harry Markowitz, a famous founder of Modern Portfolio Theory, was interviewed, he admitted he should have had more stocks in his portfolio over the long term.  (his theory is completely wrong in my opinion so the investment error does not surprise me, but we can learn from his experience.)

It looks a lot like 1973 out there. The ‘nifty fifty’ stocks are collapsing. 
Commodities are rising along with geopolitical concerns and interest rates.
As long as we remain focussed on quality stocks and rising dividends, we will be fine, better actually.
It’s like democracy. Not perfect, but the best process we have.

I predict, in five or ten years, most of us won’t even remember the current market downturn.

Your money is safe. Have a great week.
Derek Moran