[cannadian]

Hey CMF! It's been a long time since I regularly posted here and I intend on changing that.

Some of you may remember my old journal that I started over 2 years ago: http://canadianmoneyforum.com/showthread.php/9957-A-20-year-old-s-journey-out-of-the-rat-race

Now that I have a handle on my investment strategy I decided to start a new blog and a new journal that are hopefully more well-defined and refined than the previous ones.

The new blog: http://contrarianville.com/

My strategy is this: I look to contrarian situations where I believe the people selling stocks to me are motivated more by panic and fear than by fundamental business reasoning. In these situations it becomes possible to find Phil Fisher growth stocks selling at Ben Graham prices, and that's what I try to do.

2013 was a great year for me in the stock market. My investing returns were 43.1%. My total portfolio value is now around 34k, and I'm 22 years old.

Right now I'm invested in Egypt and AAPL (with a cost average of around $400 - when I purchased it, it was certainly contrarian!). I also made investments in natural gas when it dipped below $2/MCF, Bank of America after it had been fully recapitalized (~$7.50/share), Europe at the peak of the debt crisis, and more.

Unfortunately 2013 wasn't such a great year for me personally. There was a death in the family and I'm not enjoying business school very much. I find I'm taking a lot of classes from guys with illustrious backgrounds in mathematics who preach the Efficient Market Hypothesis, but they have no background in human psychology or history and lack that incredible understanding of business fundamentals that my role models (Buffett, Munger, Klarman, Fisher, Graham, Lynch etc etc) have preached. I'm also finding a huge disconnect between my classmates who want to become financial advisors and accounts, and myself. I just want to take value investing as far as I can possibly take it. I could read about and study it all day every day and never come close to getting bored. I'd love to be able to figure out a way to go at it alone (possibly providing resources to other aspiring value investors through my blog?) and not have to take crappy jobs in the finance industry shoveling bad stocks down people's throats for commissions.

So I think in the not-too-distant future (perhaps right after this next semester is over) I'm going to take a year or so off from school and go on a crazy adventure. I'm thinking of backpacking around South and South East Asia while working on my investing blog and attempt to get it to the point where it brings in $10 to $20 a day (roughly what my living costs would be). This would give me the freedom to live simply and focus on exactly what I want to focus on. And of course if it doesn't work out I can always go back to school.

There's a lot more to say but this post is already long enough so I'll leave it at that for the moment.

Feels good to be back!

 

[maxandrelax]

Sounds like a great plan. You have got a great website domain name that can gain traction with some strong writing. I have read many Canadian financial blogs that appear to get some good passive income with an average understanding of finance in a good niche. Your education and obvious enthusiasm will go a long way!

 

[cannadian]

Sounds like a great plan. You have got a great website domain name that can gain traction with some strong writing. I have read many Canadian financial blogs that appear to get some good passive income with an average understanding of finance in a good niche. Your education and obvious enthusiasm will go a long way!

Thanks Max!

I figure since I spend such a large amount of time studying the stuff and finding great content online, why not share it with people? It'll help me because I'll be able to go back and re-read/re-watch a lot of things, and it'll help others who don't have as much time on their hands as I do. And if I can post very valuable content that people find useful, I just might be able to pull off $10 a day within a year or so.

My ultimate goal would be to leave my investment portfolio alone and live in/travel around SE Asia on blog income after the first 6 months or so. I have a bunch of friends who have been over there for 6 months so far and they've been keeping their costs closer to $5 a day (they don't drink much or do tourist things - just live humbly and explore).

If I could pull this off it would combine my two biggest passions - traveling and investing (and I'll get a small acoustic guitar to travel with). Would be awesome!

 

[lonewolf]

Hi, Canadian

If you want to become a real contrarian investor get out of investing the education bubble. Dont walk away from school run as fast as you can.

You have some good ideas

 

[Nemo2]

Good luck with the investing in Egypt....it's certainly not something I'd ever consider.

 

[cannadian]

Hi, Canadian

If you want to become a real contrarian investor get out of investing the education bubble. Dont walk away from school run as fast as you can.

You have some good ideas

Thank you lone!

And I find myself agreeing with you more and more every day on the education front.

Now I don't want to discourage everyone from pursuing post-secondary because clearly everyone has a different path to follow and for many that path includes post-secondary. I have a bunch of friends who recently graduated with engineering degrees from good schools, with good GPAs, with good internship experience, and they were all signed immediately by the big Albertan companies. They are all making VERY good money right out of school.

The reason I don't think post-secondary makes sense for me is: if you gave me $1 billion today and told me I could do whatever I want to do for the rest of my life because money would never be a concern ever again. How would I live my life?

Well, I'm a very minimalist/frugal person so I wouldn't want a lot of material items. What I would want to do, if I could do ANYTHING, is to live humbly, invest, create internet projects/businesses, and travel the world every step of the way.

But the thing is, I don't need $1 billion to do this. I don't need to slave away and wait until retirement to do this. I'm young, I'm healthy, I'm in great shape, and I have the ability to make the $5-10 a day online that it'll cost me in the early days to survive overseas. So why not go live my dream life? Of course I'm not expecting to make 5-10 bucks a day for the rest of my life, I would imagine that as my skills and abilities and experience increase that I will be able to earn more online.

For someone like me who seeks constant adventure and likes to go out on their own I think post-secondary can be a trap... At the end of the day I just want to live a meaningful and fulfilling life.

Good luck with the investing in Egypt....it's certainly not something I'd ever consider.

Thanks Nemo! I think for most people it's a country they shouldn't consider investing in. I became obsessed with Egypt a few years ago and read about it day and night for quite some time. I became extremely familiar with how the country operates (both written and unwritten) the geopolitical importance of the country for numerous reasons (in particular the Suez Canal is one of the most important waterways on the planet for trade/war), the culture, modern history, power structures, etc etc.

I'm more familiar with Egyptian politics than I am with Canadian haha!

With my "background" obsession of Egypt I feel comfortable investing in very limited circumstances in the country.

 

[Nemo2]

I became obsessed with Egypt a few years ago..............//..........(in particular the Suez Canal is one of the most important waterways on the planet for trade/war).

You're not alone....my late wife loved it there...................Suez Canal...I've been through it three times, (but not for 48 years), and imagine the shipping traffic is enormous nowadays, (as an aside, we passed Gibraltar on our way back from Rome last November, and if the number of ships we saw there is any indication then Suez must be 'bumper to bumper').........and it wouldn't take much of an attack to render it inoperable.

 

[none]

I took a quick look at your blog. I find the writing a little shallow.

 

[cannadian]

You're not alone....my late wife loved it there...................Suez Canal...I've been through it three times, (but not for 48 years), and imagine the shipping traffic is enormous nowadays, (as an aside, we passed Gibraltar on our way back from Rome last November, and if the number of ships we saw there is any indication then Suez must be 'bumper to bumper').........and it wouldn't take much of an attack to render it inoperable.

Fascinating! I've always wanted to visit Egypt.

Egypt makes a killing off tolls for shipping - but the Suez Canal is also the most efficient means of moving warships from the Mediterranean to the Persian Gulf (another extremely crucial waterway), so they get countries like the USA giving them huge amounts of foreign aid in order to have priority access (among other things) to the canal for their warships. Especially because the ME always seems to have a war or 2 going on, and especially because Iran is right there, the Suez and Persian Gulf are of vital national interest.

Not a bad asset for a country to have eh!

I took a quick look at your blog. I find the writing a little shallow.

So far I'm mainly posting videos and clippings from books/letters as I set up the website and all that (I'm still a noob so it takes a lot of work trying to figure out how to do even basic things sometimes!).

My own writing will improve when I shift the focus from building the website to creating the content, which is just about to happen (right now it's really placeholder content). I'm about to publish an article on behavioral finance/reflexivity that I put a lot of effort into and I would love you to read it and let me know if you think it's an improvement/less shallow.

Could you elaborate a little bit on what you mean by shallow? I haven't actually written much on the site yet. I hope you found the clippings from Berkshire's letters useful as they're by far my favourite value investing resource.

For instance this quote here by Buffett is pure gold in my opinion:

Common stocks, of course, are the most fun. When conditions
are right that is, when companies with good economics and good
management sell well below intrinsic business value – stocks
sometimes provide grand-slam home runs. But we currently find no
equities that come close to meeting our tests. This statement in
no way translates into a stock market prediction: we have no idea
- and never have had – whether the market is going to go up,
down, or sideways in the near- or intermediate term future.

What we do know, however, is that occasional outbreaks of
those two super-contagious diseases, fear and greed, will forever
occur in the investment community. The timing of these epidemics
will be unpredictable. And the market aberrations produced by
them will be equally unpredictable, both as to duration and
degree. Therefore, we never try to anticipate the arrival or
departure of either disease. Our goal is more modest: we simply
attempt to be fearful when others are greedy and to be greedy
only when others are fearful.

As this is written, little fear is visible in Wall Street.
Instead, euphoria prevails – and why not? What could be more
exhilarating than to participate in a bull market in which the
rewards to owners of businesses become gloriously uncoupled from
the plodding performances of the businesses themselves.
Unfortunately, however, stocks can’t outperform businesses
indefinitely.

Indeed, because of the heavy transaction and investment
management costs they bear, stockholders as a whole and over the
long term must inevitably underperform the companies they own.
If American business, in aggregate, earns about 12% on equity
annually, investors must end up earning significantly less. Bull
markets can obscure mathematical laws, but they cannot repeal
them.

 

[Nemo2]

Persian Gulf

During my time in Saudi I had to reconcile to calling it the Arabian Gulf. :chuncky:

 

[james4beach]

Best of luck in business school.

Don't take the course content too seriously... it relates very little to actually making money or becoming "successful" in the financial industry. The key is to network and, ultimately, acquire control of Other Peoples Money (OPM). This means things like assets under management or client funds. This way you can skim fees and take your cut without exposing your own capital to risk. That's the key to all of this.

More ambitious, but higher risk, pursuits following business school can be starting a public company. You can aggressively market it, slightly misrepresent the financials, and convince stupid investors to buy up worthless shares. Cash out on your scheme and you can be as successful as Kevin O'Leary (even though his company failed, he made a killing on the severance package while investors lost everything). The best thing about the business world is that even with a spectacular failure like Kevin's, you can easily brand yourself as a genius and success story... and nobody bothers looking into it!

It's admirable to pursue actual investment strategies, and I agree it's interesting stuff, but you should just keep in mind that this is not the way to be successful or wealthy in the financial industry. But get a pension fund to hand over $1 billion in assets to your firm so you can rip off commissions and forex spreads and, man, you've got it made. Pension and retiree assets are the bread and butter.

Now, while doing these activities with Other Peoples Money, you're bound to give some really bad advice or cause someone to lose a lot of money. Generally that's OK as retail investors, retirees, and even pension funds are generally too stupid or too complacent to hold you to account or to even be critical of you. But be careful that you don't screw up accounts belonging to mafia customers as they will not tolerate these things.

 

[OnlyMyOpinion]

"Best of luck in business school."
Or you could just tell the OP what you really think.:rolleyes2:

 

[cannadian]

I took a quick look at your blog. I find the writing a little shallow.

I'm curious what you think about this article: http://contrarianville.com/could-ev...-about-investing-in-business-school-be-wrong/

During my time in Saudi I had to reconcile to calling it the Arabian Gulf. :chuncky:

I could imagine the Saudis wouldn't be too pleased if you referred to it as the Persian Gulf ha!

Best of luck in business school.

Don't take the course content too seriously... it relates very little to actually making money or becoming "successful" in the financial industry. The key is to network and, ultimately, acquire control of Other Peoples Money (OPM). This means things like assets under management or client funds. This way you can skim fees and take your cut without exposing your own capital to risk. That's the key to all of this.

More ambitious, but higher risk, pursuits following business school can be starting a public company. You can aggressively market it, slightly misrepresent the financials, and convince stupid investors to buy up worthless shares. Cash out on your scheme and you can be as successful as Kevin O'Leary (even though his company failed, he made a killing on the severance package while investors lost everything). The best thing about the business world is that even with a spectacular failure like Kevin's, you can easily brand yourself as a genius and success story... and nobody bothers looking into it!

It's admirable to pursue actual investment strategies, and I agree it's interesting stuff, but you should just keep in mind that this is not the way to be successful or wealthy in the financial industry. But get a pension fund to hand over $1 billion in assets to your firm so you can rip off commissions and forex spreads and, man, you've got it made. Pension and retiree assets are the bread and butter.

Now, while doing these activities with Other Peoples Money, you're bound to give some really bad advice or cause someone to lose a lot of money. Generally that's OK as retail investors, retirees, and even pension funds are generally too stupid or too complacent to hold you to account or to even be critical of you. But be careful that you don't screw up accounts belonging to mafia customers as they will not tolerate these things.

No wolf of wall street?

"Best of luck in business school."
Or you could just tell the OP what you really think.:rolleyes2:

?

 

[james4beach]

OK I'll admit I was being facetious above

I really do wish you best of luck, but I think the "business world" is full of a lot of bad characters. I feel like it attracts bad characters so, seriously, watch out.

 

[cannadian]

OK I'll admit I was being facetious above

I really do wish you best of luck, but I think the "business world" is full of a lot of bad characters. I feel like it attracts bad characters so, seriously, watch out.

Thank you james.

But I have to say, there are "bad characters" everywhere -> are there no bad characters in hollywood? In the music business? In government? In charities (with rampant salary abuses)?

I think that by and large business is a force for good in this world. After all, besides a (relatively) small number of corrupt bankers and whatnot, most businesses only survive if they improve people's lives in some way. That is to say, businesses tend to only survive in the long run if they provide a product or service that people value above the cost of the business to produce it.

I think that in times like these, right after large financial panics, people become very pessimistic and tend to look at all the negatives of the market and capitalism.

But every time I hear that capitalism has done nothing for the common person in the last 30 years I look down at my hand and realize that I'm walking around with a supercomputer more powerful than the one they landed people on the moon with and would've cost tens of millions of $$ and filled up multiple rooms worth of space only 10-15 years ago and has instantaneous access to all of humanities knowledge wherever I am and it fits in my pocket and costs $250 (i.e., 3 shifts at McDonalds).

It really is pretty incredible when you zoom-out of the day-to-day problems and politics we face and look at the bigger picture of what's bubbling just beneath the surface: 3D printing, transporting drones, cars that drive themselves, biotech revolution on an unimaginable scale right now, shale gas revolution, solar power and battery storage etc.

Just my personal bias!

 

[fatcat]

Good luck with the blog. They require a lot of work. I will follow you on Twitter.

 

[humble_pie]

cannadian i've been meaning to write back to you since i got your cheery pmm but here's what i would have said, more or less:

the good news. Your new website is fine imho. So far it's a bit like a library product, something whipped up by a smitten reference librarian, but you're saying you're in the process of creating all the personal content right now? that's great! you're a good writer with valuable things to say.

can you really earn $5-10 per day from this website? i could turn this question inside out & ask can you really travel on $5-10 per day? won't just plane, train, boat & ferry tickets run much more, if you amortize their prices out on a daily basis?

you could also earn $$ while travelling from waitering, busboying, labouring, harvesting crops & woofdying. Woofdy? stands for something like Willing Workers on Organic Farms.

it's an international organic farmers' network that hosts travelling youths who work the farms a few hours a day in return for free room & board. Reportedly some farms are hell to stay on while others treat their one or 2 student guests like the duke & duchess of cambridge. I know a good link if her videos are still up ... she woofdied all over great britain a few years ago.

it seems to me you want to go travelling truly, madly, deeply. The career in finance has been set aside. That seems fine. Go travelling! you're the exact right age.

but the bad news. Re the education in finance. We've been through all this with argonaut. Argo thought he could build a career in finance without the creds. It was obvious that he could have, should have, a first-rate career in finance. So could you, so should you. The problem is that, in this strictly regulated field, success comes mostly via the straight & narrow, to those who Have the Creds.

argo went off & worked on the oil rigs for a year or 2. Now he's back, saying he's ready to buckle down for the MBA & the CFA. I have the same message for you ... you're too talented in the finance sector to plan to spend your life under the banyan tree or by the bayou, pecking away at a blog which - without the big creds - is not really going to generate a lifetime living for you.

i sincerely hope you will get all this travelling out of your system but please don't forget the dream of getting back to school some day. To the inevitably straight & narrow. The boring, the frustrating, the disappointing. The BA in finance, the CFA. Getting the Creds is the only way to pass through the eye of the needle, imho. After that the sky's the limit.

btw a talented broker i know - he's a great investor - also has transglobe. Has held it for at least a few years i think. He heard about it from his girlfriend.

 

[richard]

OK I'll admit I was being facetious above

I really do wish you best of luck, but I think the "business world" is full of a lot of bad characters. I feel like it attracts bad characters so, seriously, watch out.

It attracts people. In other words, watch out.

 

[cannadian]

Good luck with the blog. They require a lot of work. I will follow you on Twitter.

Thanks my friend! And they do indeed, I've started probably 5 or so blogs in the past that have all completely failed. I was lacking patience, consistency, dedication and a whole lot of basic knowledge.

This time I'm not going to make the same mistakes - the biggest difference is that the kind of topics that are going to be occupying my new blog are topics I'm really passionate about and interested in. I've tried making a blog about a topic I had no natural interest in, but looked like a profitable niche and it just doesn't work for someone like me. If I'm not passionate about something I won't become obsessive about it and it seems like you need to be borderline obsessed (or what I call extremely dedicated!) to your subject to make it in the blogging world!

I wish you all the best with your goals and your travel plans.

Here's a suggestion for your travel guitar - acoustics are bulky and too loud, they will disturb others in close-quarter accommodations. Myself, I have one of these portable travel electric guitars. It uses earbuds and collapses into a much smaller case (like a pool cue case). The sound is quite good surprisingly.

Anyhow, enjoy your travels!

Cheers!

Really appreciate the music advice! I'm one of those guys who needs to play at least an hour or two of music each day to unwind. I was thinking either some sort of travel guitar or portable electric like you pointed out or a harmonica or something.

cannadian i've been meaning to write back to you since i got your cheery pmm but here's what i would have said, more or less:

the good news. Your new website is fine imho. So far it's a bit like a library product, something whipped up by a smitten reference librarian, but you're saying you're in the process of creating all the personal content right now? that's great! you're a good writer with valuable things to say.

can you really earn $5-10 per day from this website? i could turn this question inside out & ask can you really travel on $5-10 per day? won't just plane, train, boat & ferry tickets run much more, if you amortize their prices out on a daily basis?

you could also earn $$ while travelling from waitering, busboying, labouring, harvesting crops & woofdying. Woofdy? stands for something like Willing Workers on Organic Farms.

it's an international organic farmers' network that hosts travelling youths who work the farms a few hours a day in return for free room & board. Reportedly some farms are hell to stay on while others treat their one or 2 student guests like the duke & duchess of cambridge. I know a good link if her videos are still up ... she woofdied all over great britain a few years ago.

it seems to me you want to go travelling truly, madly, deeply. The career in finance has been set aside. That seems fine. Go travelling! you're the exact right age.

but the bad news. Re the education in finance. We've been through all this with argonaut. Argo thought he could build a career in finance without the creds. It was obvious that he could have, should have, a first-rate career in finance. So could you, so should you. The problem is that, in this strictly regulated field, success comes mostly via the straight & narrow, to those who Have the Creds.

argo went off & worked on the oil rigs for a year or 2. Now he's back, saying he's ready to buckle down for the MBA & the CFA. I have the same message for you ... you're too talented in the finance sector to plan to spend your life under the banyan tree or by the bayou, pecking away at a blog which - without the big creds - is not really going to generate a lifetime living for you.

i sincerely hope you will get all this travelling out of your system but please don't forget the dream of getting back to school some day. To the inevitably straight & narrow. The boring, the frustrating, the disappointing. The BA in finance, the CFA. Getting the Creds is the only way to pass through the eye of the needle, imho. After that the sky's the limit.

btw a talented broker i know - he's a great investor - also has transglobe. Has held it for at least a few years i think. He heard about it from his girlfriend.

Humble you are like a mountain of wisdom!

I agree that the site is a little too library-referency right now. Going forward I'd like at least one post per week to be "referency" because I'd like to share the various videos/podcasts/articles I check out because other value investors may be interested in them.

But the last couple of articles I wrote are more the direction I aim to take things. I'd like to do more in-depth analysis kind of posts and maybe some brief thoughts on different aspects of investing and the markets.

The $5-10 a day is not necessarily just from my website, but from freelance writing for other bloggers as well (and possibly Seeking Alpha articles eventually?). I agree it will be hard to live off of $5-10 a day, but I don't intend on travelling all the time. I'm looking to move to a new place for 2-3 months and actually live there and then every 2-3 months pick up and find someplace new. I know in India you can travel the entire country on their transit system for $1-2, good meals in restaurants cost $1-2, you can find hostels with internet for below $5-10. So it's definitely not impossible - and in theory I would be raising my standard of living as I earn more online. So if a year from now I'm earning closer to $15-20 a day I may stay at a nicer hostel with a better internet connection or something.

The WOOFing and odd jobs idea is great and I will look more into it. I have a friend that has done WOOFing but she didn't have a very positive experience with it (though she only visited 1 out of however many thousand farms there are so it might've been one of the poor ones as you pointed out).

What you said about Argo makes a ton of sense and I will try getting in touch with him as it does sound like he was in a very similar position to where I'm now in.

For now I want to take 1-2 years off to explore the world and work on this project and see if I can make it work - but you've made a very good argument for eventually getting my BCom and CFA. I know we need to take the world how it is and now how we would like it to be, but I just wish that, especially with the unlimited free knowledge the internet gives us, people would be less concerned about credentials and more concerned about the content that comes out of a person.

You're right that you could know everything that is contained within a BCOM degree but if you don't have that degree itself it's almost impossible to make it in the finance world.

That's good to hear about TransGlobe as well! Though it's the one stock that hasn't yet treated me very well, haha. I'm a big fan of the scenario/management/company I think I will write an in-depth article on Egypt and TransGlobe in the near future.

It attracts people. In other words, watch out.

That is fair. I guess I got a little defensive there didn't I?

I guess my view on things is that if you want to build a lasting successful business the best way to do it is to provide real value for people. If all of your income comes from scamming things and shady marketing you may make a quick buck in the short-run, but you'll be SOL in the long-run.

But I will certainly keep my eye out for the shady types.

 

[hboy43]

Hi:

I like the idea of travel on the cheap while young. I did some tooling about by bicycle half way across Canada and wish I'd done more. I was stunning the number of times I was invited into complete stranger's homes for a shower, meal, bed or all three. That was 30 some years ago, so in this age of hyper fear, the world now might not be quite as hospitable.

Another idea for young travelers on the cheap would be to crew on a sailboat doing an ocean passage. Many 50s and 60s (the demographic that tends to have the time and money to do this) couples would appreciate a fit young low PITA 3rd to share the load. Everyone has to be low PITA though, you are all living in 100 square feet for 3 or 4 weeks.

hboy43