A sincere thank you to all of you who bought memberships in the Monday Morning program as gifts. If you have not done so, consider it.

Yesterday’s Wall Street Journal had an article on the current inflation rate. At 6.7% for November, it is the highest in nearly 40 years for that month!

Not guilty. The annual membership fee for the Monday Morning program went from $300.00 to $12.00! Further, membership shows only how not to be hurt by inflation but how to prosper in such an environment.

At a growth rate of 6.9%, the largest monthly gain for 2021, the S&P 500 rose at a rate comparable to the inflation rate. Inflation taxed the gain for the month at nearly 100%!

For the month. What about for the year?

The S&P 500 is up 22% – way ahead of the inflation rate.

History shows that stock market real returns, that is returns minus inflation, have averaged above 5% annually for over 100 years. No other investment can match that, generally.

Invest as the Monday Morning program recommends, and you will prosper. Introduce friends and relatives to the program with a gift membership.

With the habits of the Monday Morning program, luck hardly matters.

Good luck!

________________________________________________________________________

We have designed the Monday Morning Millionaire Program to offer abstracted investment education. Over the last two decades, the program has outperformed over 90% of portfolios, including professionally managed ones.

The program does not provide any investment advice or endorsements.

Members can read our posts in less than five minutes. Following and studying the links embedded in these posts would take longer. How members manage a post depends on their level of interest and investing knowledge.

First, I want to thank all those who gave gift subscriptions to the Monday Morning program. Consider it yourself. At $12 for an annual membership, the price is right.

From one of our members: “I used an investment advisor for over 30 years and did well over the years. But in my few years with your program I am seeing how I could have done much much better using your advice.” Please call me (705-441-4566) if you want to talk to this member.

The Rate of Return on Everything, 1870–2015*

Monday Morning Millionaire Program members put their savings into equities because of good returns, constantly quoted prices, low transaction costs, absolute liquidity and the excellent record keeping provided by brokers.

Since 1900, equities have provided investors with an inflation-adjusted return of 5.2%. It is the best-performing asset class. There are no guarantees in this performance will continue but the absolute liquidity is as certain as can be in this uncertain life. That would allow investors easily to shift assets to better performing classes if they are able to find them.

Follow https://www.frbsf.org/economic-research/files/wp2017-25.pdf to read the academic paper on which this blog is based. The paper uses an enormous data set which, for the first time, includes housing.

Unlike Monday Morning Millionaire members, most investors do not equal the market’s returns. How do Monday Morning Members do it?

* Jordà, Òscar, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, Alan M. Taylor. 2017. “The Rate of Return on Everything, 1870–2015” Federal Reserve Bank of San Francisco Working Paper 2017-25. https://doi.org/10.24148/wp2017-25

We are experiencing the longest bull market in history. Why is the market so strong? Will it continue to rise?

Following the long-standing tradition of gift-giving at this time of year, one of our members just bought eight memberships for his adult grandchildren. Our annual December 1 survey shows that over 90% of you would consider recommending the Monday Morning Millionaire Program to others.

His son drew attention to the article below. Follow it for evidence-based details, but the bottom line is that the Monday Morning Millionaire Program approach to investing is spot on.

Writing in the Advisor Channel on  October 21, 2021, Jenna Ross published an article titled Buy the Dip, Buy the Rise, or Follow a Plan: Which Had the Best Return?

In November 2021, our fearless, intrepid investor earned $14,069.23 writing (selling) covered calls on NVAX each Monday, expiry date on Friday of the same week, far enough out-of-the-money to allow between $7.50 to $10.00 for growth. Her NVAX covered call earnings include a loss of $7,910.69 in the week ending on Friday, November 5.

Her winnings are entirely due to luck. Good luck.

Her luck in the first week of December was not so good.

As usual, she wrote covered calls on NVAX on the last Monday of November (the 29th) expiry date on Friday of the first week in December (the 3rd).  Her 1,000 shares having been assigned, she bought them back at $222.50 for a total of $222,500.00.

She then sold 10 covered call contracts, strike price $235.00 allowing $15,00 for NVAX growth. She received $8,136.00 immediate premium income.

Isn’t that great?

Well, no growth took place – quite the opposite. On Friday, December 3, NVAX closed at $160.48, giving her a loss of $62.02 per share for a total loss of $62,000.00 that week.

Not so great!

What are her plans when the market opens today at 9:30 AM? What choices is she looking at?

The S&P 500 total return since 2019 is nearly 100%. A correction (a drop of 10% or more) will certainly take place, date unknown.

Intelligent investors like Monday Morning Program members always have cash available to buy the market at bargain prices that are sure to develop. Many members keep 50% of their assets in cash and re-balance to that asset allocation anytime it changes by market movements up or down.

For a review of evidence-based timing, it would be useful to to go to our website and do a search for “rebalance”(not case sensitive).

Rebalancing at a 5% drop makes sense.

With the habits of the Monday Morning program, luck hardly matters.

Good luck!

________________________________________________________________________

We have designed the Monday Morning Millionaire Program to offer abstracted investment education. Over the last two decades, the program has outperformed over 90% of portfolios, including professionally managed ones.

The program does not provide any investment advice or endorsements.

Members can read our posts in less than five minutes. Following and studying the links embedded in these posts would take longer. How members manage a post depends on their level of interest and investing knowledge.

The Wall Street Journal recently had an article titled Some Professional Degrees Leave Students With High Debt but Without High Salaries.

Professional degree graduates in the United States and Canada often carry a crippling university debt burden. In many countries, most not nearly as wealthy, the taxpayer funds higher education. Those countries quickly get their investment back through the higher income taxes that the educated pay.

My classmates and I (U. Toronto, Dents, 1965) were able to cover the cost of our education from the earnings of a summer job while at school. That is no longer possible. Over the last few decades, the cost of higher education has exceeded the rate of inflation significantly.

I recently sold my practice to a colleague whose son works in the office. The young man, an NYU grad, carries a debt load of over half a million.

What a shameful indictment on the US and Canada, among the wealthiest countries in history!

The high education debt is a cause for concern. In order to keep the revenue which they would lose by referring, heavily indebted young professionals are tempted to perform procedures for which they are not qualified. They are also tempted to overtreat.

How difficult is it for a veterinarian to say that your cat should stay overnight? Who would refuse?

Society is the loser.

Obama’s proposal for free higher education went nowhere because those who control the money, control the political process.

Will Biden’s similar proposal fare better?

US News ranks careers. Dentistry is rated among the best, the high debt load of education notwithstanding. The cost of a dental education compares to the cost of buying a McDonald’s franchise, the number one franchise in the world. On average, dentists earn more net income than McDonald’s franchisees. Dentists’ life/work balance is unmatched.

And COVID!

There are industries that are benefitting from COVID but the health care professions are not among them.

We live with the common cold for which we have no vaccine, we live with the flu for which many but not all, get vaccinated annually. We will likely need to live with COVID and it’s a variants forever.  The need to use Personal Protective Equipment is here to stay. Our increased expenses are here to stay.

So, what can we do about it?

On Dec. 1, 2020 we surveyed our members about the usefulness of the Monday Morning program.

You can see the results below.

Our SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) of these results suggested that we need to concentrate on providing better, personally useful support to our members. We stated that we would repeat the survey on December 2021. We are grateful to all members and subscribers who take the time to respond.

Exactly one year later, on Dec. 1, 2021 we again surveyed our members about the usefulness of the Monday Morning program.

You can see this year’s results below.

While it is encouraging to see that (slightly) more members would refer our program to others, It is particularly discouraging to see an increased number of our members feel that we are not providing useful support when they need it.

In addition to providing abstracted investment education, providing such support is one of our important objectives.

We are here to provide actionable support and we will try harder. One year from now, we will repeat this survey.

Below, you can you see several worthwhile comments in response to our December 2021, survey.

Is it different this time?

How can we position our portfolios to protect us against a drawdown (peak to trough market drop)? Join the Monday Morning Millionaire Program and read Protecting Against Market Drawdown.

Investors should have “core and explore” portfolios in proportion to their risk tolerance while conservative investors only need the “core”.

The chart below shows our actual “explore” portfolio performance for the month of November 2017.

The straight-line represents 4 per cent growth, the top line shows our actual explore portfolio, the middle line is the S&P 500 and the bottom blue dashes line shows Toronto Stock Exchange Index.  For details, join the Monday Morning Millionaire Program and read Selling Puts in and upcoming issue.

Next week, we will discuss how investors can assess their risk tolerance.