February 8, 2018

…Gives You a Good Night’s Sleep!

Economists often discuss the wealth effect or the inclination for con-sumers to spend more when they have a higher investment balance. Seeing improved balances due to terrific gains in stock and bond portfolios makes consumers feel more confident in their wealth.  This comfort level often inspires above-average spending.

But when that fattened balance is tied to unrealized gains, you’d best put that credit card back in your wallet.  As this week’s trading illus-trates, swift gains can quickly revert to losses.  The best way to keep your retirement strategy on course is to tie your spending to a fixed budget, not an ever-changing brokerage balance.

While it might feel nice to splurge on a fancy vacation when the S&P 500 is soaring, it will feel doubly bad to stay home watching Netflix every night during a bear market.

As someone who follows the market for a living, I have a constant feed of stock prices lighting up my desktop.  I am hyper-aware of my invest-ment balances, for better or worse.  And while my mood might shift based on an extra bullish day or, as we’ve experienced recently wide-spread selling, it’s best to keep your spending steady.

Basing your spending or retirement decisions on monthly swings in the stock market is a poor plan.  Most financial advisers suggest a few buckets for investments based on spending forecasts.  Money is moved from a “most invested” bucket to a “least invested bucket” based on how soon you plan on spending that money.

The most invested bucket likely holds stocks, stock ETFs and mutual funds geared towards capital growth.  The less invested buckets hold more cash, bonds, and ETFs and mutual funds focused on income and capital preservation.  The long-term holding plan for this bucket allows you to weather market storms.

If your children are toddlers and you’re saving for college, most of this money should be fully invested in growth vehicles.  It is frightening and not prudent to dump all your savings into the market in one lump.  Add-ing a fixed dollar amount monthly will automatically help you average into stock prices over time.

The same goes for retirement savings.  A young person will likely have most of his savings in stocks and growth vehicles.  However, as the person ages, a portion of those savings will be moved to less risky buckets.

The goal is that as you creep towards retirement, your investment balance will be less volatile.  You don’t want to worry that a sum you plan on spending next month suddenly disappeared due to a market sell-off.

If you’ve slowly crept into bonds and dividend ETFs or mutual funds, your portfolio should generate a decent supply of steady income.  More importantly, an even-keeled spending plan will allow you to get a good night’s sleep in all those years before retirement.

[Learn more, and to check out.]

…other articles by Linda McDonough.

REW

February 7, 2018

An Even Spending Plan!

The age old saying “Don’t count your chickens before they’ve hatched” is certainly coming to roost this week.  After a rip-roaring start to the year, the stock market hit some serious turbulence in the first week of February.

The S&P 500 lost 4% last week and has had a rocky start to this week. Before the drop, investors enjoyed a 7.5% gain in less than twenty trading days.  Based on that pattern, the market was on track to jump 158% this year.

Anyone with any money invested in the stock market was probably feeling pretty good in January.  January 2018’s gain is the highest since January 1997 when it rose 6%.  Back then the market continued its upward trend, climbing 31% for the year.  We can only hope to replicate that performance.

REW

January 29, 2018

Learn, Invest and Prosper in Oil & Gas

  • Keith Schaefer

Industrial end-users of lithium are nervous about securing lithium supply — at any price — and they are buying into and buying out junior lithium companies.  Demand is ramping and new production is coming on very slowly.

Most recently, Toyota —  the first or second largest automaker in the world, depending on the day — bought a 15% stake in junior lithium producer Orocobre (ORL-TSX; ORA-ASE) for US$224 million.  Toyota said right in the press release this was to secure lithium supply.  Toyota is the first — and largest — non-Chinese company to move quickly in the face of rising lithium demand and prices.

Last November, Lithium X (LIX-TSXv) was bought out by a Chinese invest-ment company called NextView New Energy Lion Hong Kong Ltd.  Lithium X was in the public markets for less than two years, only raised $50 million and was purchased for $261 million.

There’s more:

  • Belgium-based Umicore, committed 460 million Euros in cathode capacity expansion.
  • Germany’s BASF signed an MOU with Norway’s Norilsk for 400 million Euros to expand battery cathode production in Europe
  • Great Walls Motors — China’s largest producer of SUVs — invested $28 million in Aussie-listed Pilbara Minerals and signed an off-take agreement

Looking at Lithium X, and the fact that Pilbara is not even in production (but will be later this year) is a clear example of Chinese interests locking in supply through the next decade.

China does most of the world’s lithium processing, so it’s no surprise to see a Chinese company be the first to do this — nobody knows how tight the lithium market will be in a few years better than them.

But this trend also speaks to — end users do not trust the major producers to ramp up production fast enough to meet demand — which is The Big Surprise.  There were many “smart” investors sneering when the lithium boom took off in early 2016 — saying that the major producers could increase production quickly and easily.

But that hasn’t been the case.

Lithium may be abundant, but getting permits  and technical expertise to bring it to market has proven to be exceedingly rare.  Albemarle (ALB-NYSE) has had a very difficult time bringing their new La Negra asset into production.  Orocobre, a junior producer, is just getting through two painful years of delays and under-performance at their Olaroz brine deposit.

Chilean lithium producer SQM (SQM-NYSE) rocked the lithium world recently when they got approval to increase production by 216,000 tons way up in the Atacama Desert.  But that production is YEARS away.  They still have to find the labour, get the permits, build the mines, wait two years for evaporation… this will have no impact for five years at least.

And that’s why investors are rewarding lithium stocks as they get to production.  Orocobre’s stock has doubled in just 4 months to $6.70 as they fixed their problems.  Albemarle was a triple in the last 2 years, hitting over $140/share.

Even the near term producers are seeing big stock runs, like Nemaska Lithium (NMX-TSX), saw their stock double in the last six months of 2017, as they develop a lithium production facility in Quebec, Canada.

Yes, the lithium supply chain — from top to bottom — is nervous about securing supply, both inside and outside China as the tightness in the lithium market continues.  In 2017, over US$1.3 Billion was committed to or invested in lithium development.

A new lithium mine costs roughly US$400 million (higher for brine, lower for hard rock).  Demand forecasts show at least one new mine is needed per year out to 2025 (around 35,000 tpy at a 14% CAGR), so this pace of funding needs to be maintained and could total as much as $3 to $4 billion USD just in mine development.

And all this investment is upstream, to source raw material supply — I’m not even counting the millions that needs to be spent on refining and processing.

HOW LITHIUM INVESTORS MAKE MONEY NOW:

The physical lithium market is really tight right now, with prices in China over $20,000 per ton, and $14,000-$16,000 outside of China.  SQM’s new production announcement will help lithium supplies in a few years — but the lithium market is, and will remain, hugely profitable in the short to medium term.

That’s why I think lithium stocks stay much stronger for much longer; the industry is now putting its money on the line to guarantee supply for the long term.

The industry majors actually have a poor track record in bringing new production online — hence the Big Home Run in new producers and near term producers like Nemaska (a double in six months) and Lithium Americas (LAC-TSX) which went from $4-$14 — a triple — in six months.

But I’m not interested in owning stocks that have ALREADY had The Big Home Run.   I want to find The Next One.

And I have found it.  I had to work hard to find this one, because this top management team has been very quietly building an incredible asset base — right in the USA.  And now I am so convinced  that this company can be in commercial production faster than anyone else I see out there.

There are so many angles here; they have so many big advantages over other companies:

  1. Permits in place
  2. They can produce lithium from brine in 48 hours vs. 18 months in evaporation ponds
  3. This will make them one of the lowest cost lithium producers in the world  (probably THE lowest but I don’t want to get too excited)
  4. They will be a home grown US producer — that’s right, this company’s big brine deposit is smack dab in the middle of the USA!!!  And lithium is on President Trump’s list of critical metals.

Being able to produce commercial lithium from brine in 48 hours is an absolute game changer.  The best part is… everything is off-the-shelf technology.  There’s no technological Holy Grail; the industry didn’t try to do this before because it didn’t need to.  But now it does.  Getting SQM’s new 350,000 tons of lithium by 2030 doesn’t help anybody now.

I think The Next One in lithium is a Game Changer.  The speed at which this company will be able to produce lithium will turn everyone’s head.  And they have the technical team and the finance team in place to do it — it’s about to start!

Plans for the pilot plant are already underway.  Their next few catalysts — all within weeks to months from now — will move the company forward so quickly, it will quickly move up the value chain.  And the Big Institutional Money (BIM) will flock to it.

I have never seen a team fast track production like this.  This is the single most impressive technical team I’ve come across in the junior lithium space.  And I’m going to introduce them to you in my next story.

Get yourself ready, as I give you the name, symbol and reasons why my lithium stock will be The Next One to hit The Big Home Run for investors.

In the next wave of Lithium Stock Home Runs — as Big Institutional Money bids up the next round of stocks — having permits, and fast-tracking production, will be key.  And this company has it all.

Keith Schaefer

January 15, 2018

A shared opinion  Why Your Portfolio Needs More Fiber

When I was young, I didn’t understand why old folks didn’t want to keep up with the times.

Back in the early ’90s, I was a voracious consumer of media.  And I assumed I would always be in touch with the latest trends.

Now that I’m in my early forties, I’m proudly ignorant of most pop culture.

In fact, my wife recently had a good laugh when I assumed Taylor Swift was a man.  Sorry, I just don’t care anymore!

I’ve also got a bad attitude about adapting to new technology.

Sure, I love my smartphone.  But I hate the never-ending upgrades-and the feeling of perpetual obsolescence.

But as an investor, I would love to profit from the trends I despise.

Unfortunately, the very companies that are foisting these changes upon us are having a hard time keeping up with what they’ve wrought.

While the stock market is up nearly 18% so far this year, the telecom sector has fallen 12%.  That’s a performance gap of around 30%!

Another great question: Marijuana

REW

January 10, 2018

I just haven’t been with it!
 
Over two months ago I got a Flu vaccine/shot and have never been quite the same since.  I’ve been to the doctor… with the usual flu symptoms… and sent home to rest.  I believe the flu is gone!
 
In its path of destruction through my body… I believe it has left me with a very uncomfortable gut… excessive bloating resulting in lot of burping and a very uncomfortable upset tummy after eating/drinking different things that I used to enjoy immensely and consume without incident.
 
In talking with others, I’ve been told they too experienced these things resulting in their doctors leaving them with names or tags such as “lactose intolerant” &/or to stay clear “gluten.”  One such person was told, “You are now IBS.”  That is definitely very unpleasant… Irritable Bowel Syndrome.
 
As I work through this, I’ve learned that what you eat now… will not travel through your system at a fixed speed… therefore, it might be an earlier food or drink item that caused the “problem” while its one you just consumed that you now falsely suspect or accuse.  Days can pass before “an item” flares up or causes you the pain.  I now begin to grasp how difficult this might be to unravel when dealing with children, or with individuals speaking different languages.  Please show patience toward us!

 

REW

October 14, 2018

Today Caryl and I celebrated the marriage … the uniting … of Jebelle Morales and Mark Fortich.  We’re very pleased for the both of them.  Congratulations!!!

We proudly introduce you to: Mr. & Mrs. Fortich.

REW

September 19, 2017

“All good things come to an end,” they say.

With deep regret I leave St. John’s to return home, vowing to return with my wife and any friends that wish to join us!  Some might say I miss most the beer!  Yes…

As we peer into the window of the QUIDI VIDI Brewery, EST. 1996 – rather than see the local cannery disappear, a transformation … a re-inventing occured.  Yes, when the fishing industry ended throughout the area … and the local cannery closed; all was not lost: Newfoundlanders love to fish … to have fun … and to share those good, and not-so-good-times with a beer in hand.  The water here is so pure, and that reminds me of the whales and icebergs just off the coast.

As you probably guessed … I’ve been geocaching in and around Quidi Vidi.  I drank just enough beer to have the energy, but not lose the focus to spot these two beauties … locked ‘n’ loaded.

REW

September 18, 2017

My #1 deep secret is HOW MUCH I HAD NO CHOICE IN COMING to NEWFOUNDLAND and Labrador, and how much I hated to leave.  Arnold Schwarzenegger, as ‘The Terminated’ said it best; “I’ll be back!

Now that a lot of our family has been out-West … the East-coast is a great destination to congregate. 

My NEXT BIG PLAN is to fly to Toronto; visit Niagara Falls, then fly to St. John’s [NFLD], where I plan to meet up with my wife; to then board a cruise ship that will take us down the Atlantic Coast, past New York, N.Y., to where we will disembark near VirginiaWOW … what a trip!

Here are just two more sights I captured in just a few short days!

Yes!  “I come from a ways.”

REW

September 17, 2017

Technically, this is the 17th, although just a few hours after “we left Halifax.”  By the pictures, you can assume I did not return to Calgary.  Everyone was invited!  We discussed much earlier adding NFLD to the trip … as … I was going to spend a few extra days in St. John’s.  Oh!  Boy … was I ever glad I did.  It was a real struggle, a few days later, to return to YYC.  I’m looking forward to picking up where “we left off” in Halifax, on September 16th, 2017.

Just had to include these two above and below pictures … to remind myself of the extremes summer & winter can bring to Newfoundland.

REW

September 16, 2017

On this day, we left “Our Million Dollar View” and drove towards Halifax.  Along the way we “reminisced” about the previous days and what was accomplished together.  One of the memorable spots along the way was Wolfville.

With a bit more food, a few more pictures, and some extra geocaching … we realized this was coming to a close very quickly.  Returning the KIA to Enterprise, we proceeded upstairs to check-in early!  This was the day we “return to the UK, or Calgary?”  Again, we were greeted again by Dione and Cameron.  What an EXTRA SPECIAL TREAT it was to also visit with Bryanna.  Bryanna is Dione’s daughter and Cameron’s mom…

For me … it was the icing on-the-cake that tied the family “bits ‘n’ bobs together!  It was great to complete our vacation-away on these images… I’ve enjoyed remembering these images and comments … and with all my/our love, Thanks!

REW