Get Your Financial House in Order…NOW!

Subsequent to the US Presidential election in early November 2016, I have become “uber cautious”. My rationale for becoming this way is that:

  • Corporate debt levels are growing exponentially despite sputtering profit growth.
  • High-yield debt with “thin compensation” relative to increasing risk of default.
  • Political turmoil in various parts of the world appears to be escalating.
  • Subprime auto-loan default rates in the US now match those seen just before the 2007-2009 recession.
  • The number of retail outlets expected to close in 2017 will exceed that of 2008.
  • Almost half of certain emerging-market debt (the sovereign and quasi-sovereign variety) is below investment grade.
  • Canadians’ household debt (watch videos) at elevated levels.
  • Consumer debt levels in the US rivals those just prior to the Financial Crisis in 2008.
  • The quality of the leadership in Washington (not just at the Presidential level but his entire entourage). I suspect countless Americans who voted Trump into office held out hope that his “business prowess” would improve their lot. Had they read The Art of the Deal, a biography about Trump, they would have realized his “business prowess” is highly suspect. In my opinion, this man has few morals, is unethical, and is essentially a con artist. I recommend you listen to this 9 minute interview with The Art of the Deal ‘s “ghostwriter”.

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FFJ Portfolio – May 2017 Dividend Income Report

Time for a quick update on what transpired with the FFJ Portfolio during the month of May.

I have modified the report from the previously used format so as to provide more clarity about the holdings within the FFJ Portfolio with more clarity.

FFJ Portfolio May 31 2017

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Schedule I Canadian Banks – (part 6 of 6): National Bank of Canada Stock Analysis and Overall Ranking of the Big 6 Banks

Summary

  • This National Bank of Canada Stock Analysis is the sixth of a 6 part series covering the Big 6 Canadian Banks.
  • National Bank of Canada reported Q2 2017 results May 31st that were positively received by the market.
  • Liquidity Ratios continue to be strong thus providing investors with assurances that an investment in the bank is relatively safe.
  • Pockets of the Canadian real estate market are wildly overheated but NA’s real estate portfolio is significantly less exposed to these areas than its larger peers.
  • NA is not nearly as diversified as its largest competitors and I am not enamored with some of the regions in which it has expanded in the past few years.
  • A recap is provided in which I have ranked my take on the 6 Canadian Banks from a long-term investment perspective.

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Schedule I Canadian Banks – (part 5 of 6): The Bank of Nova Scotia Stock Analysis

Summary

  • This The Bank of Nova Scotia Stock Analysis is the fifth of a 6 part series covering the Big 6 Canadian Banks.
  • BNS reported Q2 2017 results May 30th and its Liquidity Ratios continue to be strong thus providing investors with assurances that an investment in the bank is relatively safe.
  • BNS is Canada’s most international bank and its geographical diversification provides it with a superior ability than some of its peers to weather a financial storm.
  • Pockets of the Canadian real estate market are wildly overheated but BNS is an extremely prudent lender and it actually started dialing back its new mortgage business in 2016.
  • BNS is an attractive long-term investment with a solid dividend payment history.
  • I suspect we will experience a major market correction within the next 12 months and urge caution.

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Schedule I Canadian Banks – (part 4 of 6): Canadian Imperial Bank of Commerce Stock Analysis

Summary

  • This Canadian Imperial Bank of Commerce Stock Analysis is the fourth of a 6 part series covering the Big 6 Canadian Banks.
  • CM reported Q2 2017 results May 25th and its Liquidity Ratios continue to improve thus providing investors with assurances that it remains a safe bank.
  • Growth in its residential real estate portfolio is outpacing that of its competition as a result of major changes it has made over the past few years in the manner in which it sources business.
  • Pockets of the Canadian real estate market are wildly overheated but CM’s results indicate its real estate related loan portfolio is of sound quality.
  • While CM is an attractive long-term investment with a history of having not missed a dividend payment since its first dividend payment in 1868, other Canadian FIs are better investments.
  • I suspect we will experience a major market correction within the next 12 months and urge caution.

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Schedule I Canadian Banks – (part 3 of 6): The Toronto-Dominion Bank Stock Analysis

Summary

  • This The Toronto-Dominion Bank Stock Analysis is the third of a 6 part series covering the Big 6 Canadian Banks.
  • TD reported strong Q2 2017 results May 25th and its Capital Measure Ratios continue to be acceptable and stable.
  • Pockets of the Canadian real estate market have been wildly overheated and a cooling appears to be taking hold.
  • Investors are questioning what will be the impact on bank earnings if there is a major correction in real estate values.
  • TD is an attractive long-term investment but I suspect we will experience a major market correction within the next 12 months and urge caution.

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Schedule I Canadian Banks – (part 2 of 6): Royal Bank of Canada Stock Analysis

Summary

  • This Royal Bank of Canada Stock Analysis is the second of a 6 part series covering the Big 6 Canadian Banks.
  • RY reported strong Q2 2017 results May 25th with earnings by business segment and by geography reflecting a marginally greater % from Wealth and the US relative to FYE2016.
  • RY’s Capital Measure Ratios are strong and the bank continues to be very well managed.
  • Pockets of the Canadian real estate market are wildly overheated but RY’s results indicate its real estate related loan portfolio is of sound quality.
  • RY is an attractive long-term investment but I suspect we will experience a major market correction within the next 12 months and urge caution.

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