Optimism #63 - May 25, 2023

Dear clients and friends,

In spite of what seems like eternal negativity, upon search there are green shoots of positivity.

Tough headlines about bank earnings this week, but I noticed BMO, CIBC, Scotia and Royal all increased their dividends by about 3 percent.  It can’t be that bad if they are increasing dividends.  There is often a second increase in the fall season.  No mention about TD. We got a pay raise!

Many insiders continue buying, notably at CN Rail, Celestica, True North Commercial REIT, Westshore Terminals and many more.

I have been receiving many questions about indexed-linked GICs.
Judging by the amount of small print, these are complicated securities and I suggest avoiding them in favour of the pure GIC if that is the suitable product for your situation.  Small print is key. The worst food in the grocery store has the most on it’s label.  Investments are similar.
I have included an article from the Globe that digs into the details.
Investors should take a pass on this market-linked GIC - The Globe and Mail  (word copy attached as well for non-subscribers.)

Inflation and high interest rates affect us all. If you are feeling sorry for yourself, be glad you don’t live in Argentina where they just raised rates to 97% to cool off the economy. I feel better already.  Can you imagine?
Argentina raises interest rate to 97% as it struggles to tackle inflation | CNN Business

Further, I have attached a photo of some money that Jim, a dear friend gave me years ago. Its from Germany in late 1922 and 1923, over a century ago.  You will see the fifty-thousand German Mark bill, with wonderful size and detail, printed on both sides. Beside is a one million Mark bill printed eight months later, much smaller, less detailed, printed on one side only, yet twenty times the former’s value. 
Quite a description of times when one needed a wheelbarrow full of cash to purchase a loaf of bread. 

There was a coffee shop in Toronto called the ‘Anti-Capitalist’.  It went out of business recently. You can’t make this stuff up.

“I think you will all agree that we are living in most interesting times.  I never remember myself a time in which our history was so full, in which day by day brought us new objects of interest, and, let me say also, now objects for anxiety.”
Joseph Chamberlain, British Statesman, 1898

Derek Moran