Optimism #87 - May 13 2025
Dear clients and friends,
You survived the recent downturn and stocks are on their way back up.
Some of you bought through the dip and are being rewarded handsomely.
I was speaking with TH from Vancouver Island this last week and she was afraid to look at her statement. The media is so negative. Freshly retired, TH is in that scary new time when she must rely completely on savings. The paycheques and savings habits are done, replaced by accounts that end if “IF”.
And then the market corrected. Timing could not be worse. She had not looked at her statements for a month or two and wanted to know if I thought it was a good idea to log in and see. I said “… it’s not as bad as the news would suggest and not quite what it was at the peak a few months ago, but likely much better than you are expecting.” And she did… and it was. And so it goes. In a few short years we won’t even remember.
Where we go from here, I do not know exactly, but with top quality companies that have a competitive advantage, time is our friend.
Telus raised its dividend last week and BCE cut theirs. Both stocks are up on the news. ( I saw telecoms cut dividends nearly 25 years ago and the stock prices were murdered, going from about $45 to 5$ or so. It was a bloodbath, especially for employees who had higher than normal concentrations of the shares) We will see, as Mark Twain said, if history rhymes. I was young and inexperienced, and of course did not buy any shares at that depressed price but will try not to repeat the mistake if the opportunity arises once again.
We have seen dividend increases from Boardwalk Reit, Brookfield, Canadian Apartment REIT, CCL industries, CN Rail, Gildan, Intact Financial, Manulife, Nutrien and TC Energy to name a few.
Warren Buffet announced his retirement at age 94. I admire this humble man. At the recent shareholder meeting for Berkshire Hathaway, he said “… I am somewhat embarrassed to say that Tim Cook (CEO of Apple) has made Berkshire more money than I have made Berkshire”.
There is usually something on your statement that shows the returns accumulated over time, net of fees and withdrawals. On some accounts the growth is quite astonishing. I reviewed one recently where they have taken more money out that they put in, and the account is still worth more than originally invested. It almost seems impossible.
Here is an enjoyable read from the NY Times about happiness and another about how the 4% rule is likely too conservative with respect to how much income your portfolio can sustain. And Mr. Vettese is very conservative by nature.
Thanks for hanging in there through these tumultuous times. Have a super week.
Derek Moran
