Late Night Finance with Sacha – Episode 23

Date: Thursday January 5, 2023
Time: 7:00pm, Pacific Time
Duration: Projected 60 minutes.
Where: Zoom (Registration)

Frequently Asked Questions:

Q: What are you doing?
A: Year-end review, future projections and thoughts and time permitting, Q+A. Please feel free to ask them on the zoom registration if any questions.

Q: How do I register?
A: Zoom link is here. I’ll need your city/province or state and country, and if you have any questions in advance just add it to the “Questions and Comments” part of the form. You’ll instantly receive the login to the Zoom channel.

Q: Are you trying to spam me, try to sell me garbage, etc. if I register?
A: If you register for this, I will not harvest your email or send you any solicitations. Also I am not using this to pump and dump any securities to you, although I will certainly offer opinions on what I see.

Q: Why do I have to register? I just want to be anonymous.
A: I’m curious who you are as well.

Q: If I register and don’t show up, will you be mad at me?
A: No.

Q: Will you (Sacha) be on video (i.e. this isn’t just an audio-only stream)?
A: Yes. You’ll get to see me, but the majority will be on “screen share” mode with MS-Word / Browser / PDFs as I explain what’s going on in my mind as I present.

Q: Will I need to be on video?
A: I’d prefer it, dress code is pajamas and upwards.

Q: Can I be a silent participant?
A: Yes.

Q: Is there an archive of the video I can watch later if I can’t make it?
A: No.

Q: Will there be a summary of the video?
A: A short summary will get added to the comments of this posting after the video.

Q: Will there be some other video presentation in the future?
A: Most likely, yes.

Posted just over two years ago and still applies today

More media headline scares:

Notice the word “Kraken”. Sounds much more scary than XBB.1.5!

December 21, 2020 post: Mutant SARS-CoV-2 Viruses, Perceived Risk, Actual Risk

Here’s your Kraken virus! Run for the hills!

Many, many times in history people believe that they can control what is inherently the uncontrollable – whether it be conditions conducive to agriculture, or the spread of disease. Things have not changed, except now the ways of transmitting such information has reached a near-universal scale instead of localized sects.

Canadian monetary aggregates for the year

The last snapshot of money supply is at the beginning of October 2022, but the trend is fairly obvious:

In particular, M2++ (the broadest form of money supply measurement) has gone from $4.392 trillion at the beginning of the year to $4.467 trillion on October 1, 2022. The growth is still positive but definitely shrinking – 1.7% for the first 9 months of the year. Indeed, the September 1 to October 1 snapshot showed a mild contraction.

This chart should not be surprising. The expansion of credit is reversing and the last time the country was really in this sort of situation from a monetary perspective was back in 1995.

1995 was an interest year from Canadian economic history. Perhaps refreshing one’s memory via a 2001 speech of the Government of the Bank of Canada at the time will assist.

This is going to make 2023 quite an interesting year.

Reviewing major index sector performances in 2022

Not surprisingly, energy had a banner year in both Canadian and US indexes.

TSX:

The big two losers were health care (think: marijuana companies and biotechs dropping from grace), and information technology (think: Shopify and practically every technology IPO). Real estate was the third worst with a -24.3% performance (office REITs, in particular, were slammed more than the other sectors).

S&P 500:

The forward P/E on the S&P 500 of 16.8 still appears to be quite a rich valuation (5.95%) over the risk-free rate of interest (the one-year US treasury bond yields 4.7% at present).

Divestor Canadian Oil and Gas Index – Final Report

I will be terminating the Divestor Canadian Oil and Gas Index (DCOGI) effective today.  It took a bit too much effort to administrate (the dividends, in particular, were cumbersome) and also this might be a signal the fossil fuel trade is nearly over.

The DCOGI was created on February 5, 2021 with a hypothetical million dollars invested among 9 very well known Canadian oil and gas companies, with the larger companies having more weighting.

From an index level of 100 at February 5, 2021, the DCOGI ended 2022 at 283.9.

The comparators were the energy ETFs XEG.to, ZEO.to and the broad-based index ETF VCN.to.

XEG ended at 257.5;
ZEO ended at 209.6;
VCN ended at 113.2.

These values are all with one dividend reinvestment cycle at the end of 2021, otherwise for 2022 the cash from dividends accumulated yield-free.

In 2022, the DCOGI had an 11.9% cash yield based off of its initial cost, an indication of the incredible amounts of cash flow that have been spun off by this sector (the primary contributor to this was Tourlamine’s special dividends, with CNQ as a close second).

2023 should also feature, if indications suggest, that increased cash yields will be coming from ARX, BIR, CVE, PEY and WCP in relation to 2022.

I will leave the final spreadsheet here in case if anybody wants to continue the work, but otherwise it will be kept in an unmaintained state.