Time is an irreplaceable resource. Our sincere gratitude to all members who took the time to respond to our Friday, February 25th survey about COVID and Omicron effect on income.

You can see our results below.

You can you see some worthwhile comments below.

Our fearless, intrepid investor lost $65,700 in  2021, writing (selling) covered calls on Novavax (NVAX) in her “fun” portfolio. Attempting to outperform the market, “fun” portfolios ignore one or more of the six habits promoted by the Monday Morning Program. Most of the time, they are not much fun; they underperform the market.

In fact, every investment mistake, past or future, was or will be the result of departing from one or more of the six habits of the Monday Morning Program.

Last Friday, February 25, NVAX closed at $81.63. Morningstar now states that NVAX is undervalued at a 48% discount so she will hold the stock and not write covered calls on it but wait for the market to realize that this security is undervalued.

At $81.63, NVAX is down 2.17% for the week. The S&P 500 is up 0.17%.

That vindicates the validity of habit number 3, which is to buy the US economy as a whole and not to pick individual stocks. (Investors can do that by buying an exchange-traded fund which tracks the S&P 500. SPY is an excellent example.)

What does she plan to do with NVAX when the market opens at 9:30 AM today?  Does she plan any further derivatives selling?

Our fearless, intrepid investor lost $65,700 in  2021, writing (selling) covered calls on Novavax (NVAX) in her “fun” portfolio. Attempting to outperform the market, “fun” portfolios ignore one or more of the six habits promoted by the Monday Morning Program. Most of the time, they are not much fun; they underperform the market.

Last Friday, February 18, NVAX closed at $81.89. Morningstar now states that NVAX is undervalued at a 50% discount so she will hold the stock and not write covered calls on it but wait for the market to realize that this security is undervalued.

In February to date, NVAX dropped 3.26% while the S&P 500 dropped 1.12%!

That vindicates the validity of habit number 3, which is to buy the US economy as a whole and not to pick individual stocks. (Investors can do that by buying an exchange-traded fund which tracks the S&P 500. SPY is an excellent example.)

What does she plan to do with NVAX when the market opens at 9:30 AM today? (Canadian markets are closed today for Family Day. US markets are open.) Does she plan any further derivatives selling?

Continue reading “Mon. Feb. 21, 2022. How our fearless, intrepid investor made out last week and her plans for today”

Goldman Sachs headquarters in New York City. It owns several other similar buildings around the world.

Yesterday’s Wall Street Journal had an article titled Wall Street Turns to Goldman for Banking’s Outlook Beyond Covid-19.  Studying the article will not improve your investment results.

The last of the Goldman Sachs 14 Business Principles states, “Integrity and honesty are at the heart of our business.” Comforting, right?

In 2020, the US Securities and Exchange Commission (SEC) fined Goldman Sachs one billion dollars (billion, not million) for misbehaving (violating the Foreign Corrupt Practices Act). Over the years, the SEC has fined Goldman Sachs regularly for investor protection violations, mortgage abuses, banking violations, toxic securities abuses and on and on. Not so comforting, is it? By the way, the SEC fines all Wall Street and Bay Street banks regularly.

The Goldman Sachs CEO David Solomon was paid $35 million in 2021. Well deserved, right?

Most Monday Morning Program members don’t understand the Wall Street/Bay Street world.

Nevertheless, without cherry-picking examples in real estate, art, individual stocks, and so on, we know that done correctly, investing in the stock market will give investors the best returns.

And how is it done correctly?

About 40% of Swiss citizens own their homes. About sixty percent rent.

About 60% of Americans and Canadians own their homes. About forty percent rent.

The average net worth per Swiss adult is about double that of the average US adult and more than double of the average Canadian adult.

Swiss per capita GDP is $US86,601.56  (2020)

American per capita GDP is $US63,543.58 (2020)

Canadian per capita GDP IS $US43,241.62 (2020)

Do the Swiss know something that we don’t?

The risk/reward relationship is inescapable. The greater the risk that investors take, the greater their possible reward. Note the word “possible” and not “likely”.

We have frequently shown the chart above which demonstrates that investing in equities has had the best return for over 100 years. That requires that investors have a long-run mindset. In the short run, they risk losing much of their money.

Stated another way, the high long-run returns compensate for the risk of losing a lot of invested money in the short run.

As we stated previously, over the last three years, US market returns averaged over 25% annually, not adjusted for inflation. Over the last two hundred  years, US market returns averaged about 10% annually, not adjusted for inflation.

Clearly, we are looking at what Alan Greenspan called irrational exuberance.

Warren Buffett’s mentor Benjamin Graham stated in 1963: “In my nearly 50 years of experience in Wall Street, I’ve found that I know less and less about what the stock market is going to do, but I know more and more about what investors ought to do.”

So, what ought we to do?

Time is an irreplaceable resource. Our sincere gratitude to all members who took the time to respond to our Friday, February 11.  survey about working from home.

Several members pointed out that the question was poorly written. It asked: “Do you think they’re working from home, If possible, should be mandatory?”

It should have asked: “Do you think that working from home, if possible, should be mandatory?”

I pay for and use an online editing program. We missed this mistake. My apologies!

You can see our results below.

You can you see comments below.

If you recall, in  2021, our fearless, intrepid investor lost $65,700 writing (selling) covered calls on Novavax (NVAX). She did in her “fun” portfolio, so while the dollar amount is significant, it is not a significant percentage of her stock market holdings overall.

Since Morningstar has stated that NVAX is undervalued and continues to be undervalued, she decided to simply hold the stock and not write covered calls on it but wait for the market to realize that this security is undervalued.

That has proved to be the correct strategy in February, almost entirely due to luck.  NVAX went from $70.00 to close at $90.44 on Friday, February 11, for a gain of $20.44 per share. Since she owns 1,000 shares, she made $20,444 in total.

What does she plan to do with NVAX when the market opens at 9:30 AM today? Does she plan any further derivatives selling?