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JUL 24, 2023

Reflections On The Last Six Months


I'm even more delighted than usual to report to you at midyear on the events of the last six months, and on the further progress of our long-term plan. But first, as always, a brief recitation of our principles.

The Ideas That Guide Us

  • You and I are long-term, goal-focused, planning-driven owners of broadly diversified portfolios of enduringly successful companies. As such, we act continuously on our plan, as opposed to reacting episodically to current events and conditions.

  • We're convinced that the economy cannot be consistently forecast, nor the market consistently timed. We infer from this that our best chance to capture something close to the full long-term return of equities is to ride out their frequent, sometimes significant, but historically always temporary declines.

  • These will continue to be the bedrock convictions that inform our investment policy, as we pursue your most cherished financial goals together.

Current Commentary

  • After declining sharply for most of 2022, the S&P 500 ended the year at 3,840 or down 18%.

  • As the year turned, it seemed as if the North American economy might well be in a no-win situation. Either The Bank of Canada/Federal Reserve would tighten credit conditions enough to stamp out inflation, thereby plunging us into recession. Or it would relent, avoiding recession but permitting inflation to burn on. In either case, we were assured that corporate earnings must be about to decline significantly, boding ill for “the stock market.”


To this apparently intractable situation, the first half of 2023 added three new and potentially critical uncertainties: the specter of U.S. sovereign default due to the federal debt ceiling not being raised, a wave of bank failures that seemed to threaten the U.S. banking system itself, and a renewed outbreak of fear surrounding the U.S. dollar's status as the world's reserve currency.


Yet after enduring that relentless onslaught of crises, real and imagined, the S&P 500 closed out the first half of 2023 at 4,450, up 16%. I'm almost tempted to say, “You read that right,” and leave you to draw your own conclusions. Instead, I'll just repeat Peter Lynch's timeless maxim: “The real key to making money in stocks is not to get scared out of them.”

In that sense, these six months represent for me—and I devoutly hope for you—a successful investing career in microcosm. You and I did all that can be asked of us: amid well-nigh universal pessimism, we didn't get scared out.

Rather, we stayed focused on our goals and on our long-term plan, with confidence that the managements of the companies we own were husbanding our capital with diligence, while they sought out new and potentially greater opportunities amid the adversity.

In summary, everything that happened (and didn't happen) in the first half of 2023 turned out not to matter much. What mattered was that together we chose not to react. Is it possible that a lifetime of patient, disciplined investment success is just that simple? I certainly believe it can be, and I sincerely hope you do too.

Thank you, as always, for being my clients. It is a privilege to serve you.


Benign neglect is the secret to long-term investing success. If you change your investment policy, you are likely to be wrong; if you change it with a sense of urgency, you’re guaranteed to be wrong.

Charley Ellis


SEP 13, 2023



"Charities spend too much on overhead!” ... we all hear this phrase often. It’s also continuously reinforced by media and sometimes, so much so, that it is most likely the first thing individuals ask when they’re considering donating to those causes that are meaningful to them.
Dan Pallotta published the book, “UnCharitable” to specifically address a number of misconceptions that many donors labour under including overhead metrics that are often meaningless, and sometimes even fraudulent, ways to compare efficiencies between nonprofit organizations. Pallotta went on to give one of the most highly viewed TED Talks where he clearly articulated how charities are rewarded more for how little they spend … rather than for what they get done! As he says, “The next time you are looking at a charity, don’t ask about the rate of their overhead, ask about the scale of their dreams”.
On September 22nd the feature length documentary, “UnCharitable”, will be released at movie theatres across North America. (I was fortunate to have had the opportunity to watch a pre-screening earlier this month.) If you have ever donated to charity, or plan to do so in the future, I strongly recommend that you make the time to watch this hard hitting film. I guarantee it will change how you choose to invest your charitable dollars. For more information about the movie (and where to watch it), please go to the website. In the meantime, I encourage you to check out the trailer for the movie.

Thank you.


You want to make $50 million dollars selling violent video games to kids, go for it. We'll put you on the cover of ‘Wired’ magazine. But you want to make half a million dollars trying to cure kids of malaria, and you're considered a parasite yourself.

Dan Pallotta

JUL 2023

JUN 15, 2023

Is that it?


The S&P 500 index (made up of the 500 largest companies in the States) recently re-entered another bull market. Technically defined, that is a re-bound of 20% from its most recent lows from this past October. Keep in mind that there is absolutely no guarantee that the market will not re-test those market lows. However, based on history, the chance of this happening is statistically unlikely. 

Since markets around the world began their bear market decline in early 2022, it has been challenging, understandably, for the average investor to “hang in there” given the constant negative news … from the Russian invasion of the Ukraine, rising interest rates, to the most recent debt ceiling negotiations south of the border. However, if one steps back and takes the longer term view the facts are crystal clear (reflected in the chart below). There are many more bull markets compared to bear markets and they last a lot longer!


On average, it takes two years for the markets to fully recover to their previous highs. Based on this  “average”, this would mean your portfolio could be making new highs in early 2024. Two years may seem like an awfully long time to wait but, for an investor with a long term time horizon and a well diversified portfolio, patience has always been well rewarded.


Our capital markets are simply a relocation centre; they relocate the wealth from the impatient to the patient.

Warren Buffett

MAY 2023

MAY 16, 2023

My weekend with Warren and Charlie


Earlier this month I was able to finally check off one of the items on my life “bucket list”, specifically, attending the Berkshire Hathaway Annual Meeting.
Having to re-schedule my trip in 2020 owing to the Covid-19 outbreak my main concern was (somewhat morbidly), would I finally get to see Warren Buffet (age 92) and Charlie Munger (age 99). I am happy to share that they did not disappoint! 

For over five hours, Buffet and Munger addressed an audience of approximately 20,000 shareholders. What I found truly amazing was that these nonagenarians were able to answer dozens of questions in concentrated sound bites of wisdom … both investing and life in general.


This is as close as I got to Messrs. Buffet and Munger.


How close I actually got to Warren and Charlie.

These are a few of my favourite quotes from the two partners of Berkshire Hathaway during the Q&A session.

I thought Munger had the funniest line when he said, “Practising law today is like a pie eating contest where, if you succeed, you get to eat more pie!”.

Buffet on value investing, “Value investing will be fine; people will continue to do dumb things.” What I believe he meant is that human nature never changes. As individuals, especially when we engage in “group think” (i.e. stock market bubbles), there will always be investment opportunities. 

On a more personal note Buffet shared, “If you want to know how to live your life write your obituary and then reverse engineer it so that you can live up to it.”

And on a related subject, “If your kids are reading your Will for the first time after you have died, this is a mistake that you won’t be able to correct.”

Munger’s advice for the good life: "It’s so simple, spend less than you earn, avoid toxic people, toxic activities, keep learning all your life, defer gratification, because you prefer it that way, and if you do it all this way you will succeed. If not, you will need a lot of unusual luck.” Charlie emphasized the toxic people comment when he said, “Get them the hell out of your life!”

The line that has lingered with me since the Annual Meeting was again from Buffet. Specifically, “I don’t know anyone who is kind to die without friends. I know plenty people with money to die without friends.“

For more wisdom directly from Warren Buffet and Charlie Munger I encourage you to click thru to the following link:

Vitaliy Katsenelson 🇺🇦


If you're not confused, you don't understand things very well.

Charlie Munger


commenting on the state of the global economy

APR 2023

APR 15, 2023

Please… just tell me when it will be over!


The last time the market made an all-time high (as defined by the S&P 500) was on Monday, January 3rd, 2022. Put another way, we have now being waiting 458 long days for our portfolios to return also to their all-time dollar highs. As one of my more eloquent clients stated, “That sucks!”. Emotionally, I find myself agreeing with his pithy remark.

However, and this is the point, when it comes to making intelligent investment decisions there is always the danger that our “heart” will drive our “head”. This is especially true when the latest 12 month return of the S&P 500 through to the end of March is a loss of around 8%. For perspective, one-year losses of 8% or worse have only occurred in 15% of historical returns.

Perhaps surprisingly 458 days waiting for the market to return to its all-time high is, historically speaking, not a long period of time. As highlighted in the chart below, sometimes a complete recovery from a bear market takes considerably longer. Fortunately, over the long term, the market has 
always recovered. 


To conclude, and referencing Mr. Buffet’s quote that began this missive, “patience” is critical for one’s success in the stock market. For more on this topic I encourage you to click thru to Ben Carlson’s excellent blog, “Why the Stock Market Makes You Feel Bad All The Time”.


The stock market is a device for transferring money from the impatient to the patient.

Warren Buffett

MAR 3023

MAR 6, 2023

Time to feed the goose


Please find below two CI Private Wealth tax resources which may assist you in dealing with your 2022 and 2023 tax reporting.

CIPW 2023 Personal Tax Calendar

CIPW 2022 Personal Income Tax Organizer

As we prepare for this year’s “plucking” perhaps the article below will help minimize the “hissing”. The article, written by Ryan Holiday, is directed towards an American audience (with a Stoic bent). However, if you change the date to April 30th, the message is no different for us Canadians.​


The Taxes of Life
Daily Stoic - Ryan Holiday​

"April 17th is the day that Americans pay their taxes. It’s a day of mixed reactions depending on your outlook and politics. Some choose to focus on the good things their taxes pay for and have paid for since Roman times—the roads, the armies, services for the poor. Others focus on the waste (tax corruption and waste is also as old as Rome) or question the morality of the system altogether. Last year when we posted a note about taxes, a number of comments wrote angrily that “taxation is theft!” while others angrily responded to those commenters with defenses of their own. (All this anger being somewhat ironic for Stoics.)​​

In a way, this misses the point. What we should be doing is zooming out and looking at the larger picture: People have been complaining about their taxes since the beginning of civilization. And what has become of it? Taxes are higher than ever and they’re dead. Death and taxes. There is no escape. So let us waste no time and create no misery kicking and screaming about it. Let us not add to our tax bracket the cost of frustration and resentment.​

Taxes are an inevitable part of life. There is a cost to everything we do. As Seneca wrote to Lucilius, “All the things which cause complaint or dread are like the taxes of life—things from which, my dear Lucilius, you should never hope for exemption or seek escape.” Income taxes are not the only taxes you pay in life. They are just the financial form. Everything we do has a toll attached to it. Waiting around is a tax on traveling. Rumors and gossip are the taxes that come from acquiring a public persona. Disagreements and occasional frustration are taxes placed on even the happiest of relationships. Theft is a tax on abundance and having things that other people want. Stress and problems are tariffs that come attached to success. And on and on and on.​

There’s no reason or time to be angry about any of this. Instead, we should be grateful. Because taxes—literal or figurative—are impossible without wealth. So what are you going to focus on? That you owe something, or that you are lucky enough to own something that can be taxed."


Taxes are our way of feeding the goose that lays the golden eggs of freedom, democracy and enterprise. Someone says, 'Well, the goose eats too much!’. That’s probably true. But better a fat goose than no goose at all.

Jim Rohn

FEB 2023

FEB 22, 2023

The grand unifying theory for successful investing


Over the last few years I have found myself increasingly attracted to living a life based on the tenants of Stoicism. This school of philosophy was founded over 2,000 years ago and is currently enjoying a huge renaissance. One of Stoicism’s fundamental principles is the concept of control. Or as Epictetus, arguably the school’s most famous student, once wrote:

“To achieve freedom and happiness, you need to grasp this basic truth: some things are under your control, and others are not. Within our control are your own opinions, aspirations, desires, and the things that repel you. We always have a choice about the contents and character of our inner lives. Not within your control is literally everything else. You must remember these things are externals, and none of your concern.”

Delineating between what is “in your control” and “out of your control” is also critically important when it comes to the school of investing. To that end, I share with you below the Stoic influenced graphic which I refer, somewhat ambitiously, as … “The Grand Unifying Theory for Successful Investing".


With investing, as with most things in life, knowing what to ignore is more often than not the key to success. Ignoring the things you can not control (i.e. stock market, inflation, corporate earnings, interest rates, etc.) is the first step towards a lifetime of investment success. 
Step two is focusing on what you can control (i.e. your asset allocation, behaviour, media consumption, taxes, etc.). The good news is that only two of these “in my control” items (i.e. your behaviour and asset allocation) account for the overwhelming majority of your long term investment returns. Specifically, making sure your behaviour is governed by your head and not your heart and that your asset allocation is heavily weighted towards a diversified portfolio of profitable companies. 
And there you have it, “The Grand Unifying Theory for Successful Investing”. Easy to comprehend … but actually quite difficult to do. 

P.S. If you are interested in learning more about Stoicism I can not think of a better introduction than Marcus Aurelius’ book, “Meditations”.


The single most important variable in your quest for equity investment success is also the only variable that you ultimately control: your own behavior.

Nick Murray

JAN 2023

JAN 16, 2023

What we believe


If you are a client reading this, I trust you are a long-term, goal-focused, plan-driven equity investor. We believe that lifetime investment success comes from acting continuously on our plan. Likewise, we also believe substandard returns, and even lifetime investment failure, come from reacting to current events. The unforeseen and indeed unforeseeable economic, market, political and geopolitical chaos of the three years since the onset of the pandemic demonstrates conclusively that the economy can never be consistently forecast nor the market consistently timed. Therefore we continue to believe that the most reliable way to capture the full return of equities is to ride out their frequent, but historically always temporary, declines. These will always be the bedrock convictions that inform our investment policy, as we pursue your most important financial goals together.


Unrelieved chaos continued in 2022. The major drama of the year—and, it seems likely, of the coming year—were the central bank’s belated but very aggressive efforts to bring inflation under control. After rising seven times in the nearly 13 years between the trough of the Global Financial Crisis (March 9, 2009) and January 3, 2022 the U.S. equity market sold off sharply; at its most recent trough in October, the S&P 500 was down 27%. (Bond prices also swooned in response to sharply higher interest rates.)
It seems to me more than a little ironic that, after the serial nightmares through which it's suffered since the onset of the pandemic early in 2020, the mainstream equity market managed to close out 2022 somewhat higher than it was at the end of 2019 (3,840 versus 3,231 for a gain of 19%). Not great, but not at all bad for three years during which our entire economic, financial, political and geopolitical world blew up. If anything, this tends to validate our core investment strategy over these three years, which—simply stated—has been: stand fast, tune out the noise and continue to work your long-term plan. Needless to say, that continues to be my recommendation, and in the strongest possible terms.
The burning question of the hour seems to be whether and to what extent the U.S. Fed and the Bank of Canada in its inflation-fighting zeal, might tip the economy into recession at some point—if it hasn't already done so. Over the coming year, the way this plays out may determine the near-term trend of equity prices. My position continues to be that this outcome is quite simply unknowable, and that one cannot make rational investment policy out of an unknowable. That said, I continue to believe strongly that whatever it takes to put out the inflationary fire will be well worth it. Inflation is a cancer that affects everyone in our society; if recession proves to be the painful chemotherapy required to destroy that cancer … then so be it.
Although this may be hard to remember every time the market gyrates (and financial journalism shrieks) over some meaningless monthly economic datum or other, you and I are not investing in the macroeconomy. Our portfolios largely consist of the ownership of enduringly successful companies—businesses that are even now refining their strategies opportunistically to meet the needs and wants of an eight billion person world. I like what we own. As I always say—but can never say enough—thank you for being my clients. It is a genuine privilege to serve you.


Recessions and bear markets are very easy to predict, except for the timing, cause, magnitude, duration, location, and policy response.

Morgan Housel



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