Monthly INsync Chit Chat March 2025
My Back Hurts... [by David Cox]
Once in a while, my back bothers me and I’m currently flirting with the possibility of collapse. For those of you with back trouble, you know that there isn’t anything pleasurable about collapsing in a heap on the ground and while it hasn’t happened (yet) this time, it feels close. Perhaps it’s due to the cough I’ve been unable to kick, or the squats that I last lifted, or the boxes I was carrying or maybe I should blame it on the stock market or the threat of tariffs, or. ..but in honesty, it first started after a football game, back in my high school teenage years.
Eloise got a glockenspiel (like a xylophone, but metal keys) for Christmas and we’ve taken to playing some music together. We make a rather interesting duo, as she plays, accompanied by dad (me) playing his bass. Our masterpieces include Hot Cross Buns, La Cucaracha, and one of dad’s favourites. The Muffin Man! Eloise (10) is quick to point out that the Muffin Man is not real and, although the song suggests he lives on Drury Lane, she also refuses to believe that my mom worked in Burlington, a couple of blocks off Drury Lane, which is where the Muffin Man was from. Eloise is crazy cute, and I love making her giggle.
News - Some That You’ve Heard, Most That You Haven’t | by David Cox]
Doug Ford's Progressive Conservatives win third majority government. Desperate preconstruction homebuyers try to get out of their contracts. China vows “all necessary measures” against new U.S, tariffs. Wisconsin governor defends inclusive language proposal to change ‘mother to Inseminated person' U.S, government workers asked to list their accomplishments from the past week and a huge backlash develops. Canadian consumers adopting a “made in Canada” approach to their buying plans. U.S, tariffs set to hit Canada on March 4th.
What Are We Buying? Selling? Holding... [by David Cox]
Silver bullion has been in a higher highs/higher lows weekly uptrend but it has indeed been a serial underperformer over the years against gold itself. Silver tends to have higher volatility and, as I always like to point out (and admit), if we assume higher risk and yet get lower rewards, we can’t say that makes sense (in hindsight, of course). With all the recent market volatility, I can only conclude that armed with the knowledge that it’s underperforming gold, what looks like a lower high in development, as risk assets remain under pressure, was taken as a reason to take profits this week. Yes, I know what the monthly chart looks like, but we don’t always have the luxury of zooming so far out because we still have to be prudent in our willingness to take risk in our investment portfolios. Silver was sold to someone willing to buy it. Best of luck to them.
AllINsync: How Are We Exposed? [by David Cox]
The first of what will be a monthly factsheet for the new "AllINsync" pool will be out in early March, but I figured I should continue to make an effort to share our positioning in one way or another, not only to demonstrate our open-minded approach to overweighting focus sectors in our portfolio but also the flexibility that markets demand when they shift against positioning. There are multiple costs (risks) to consider when making an investment (i.e., is a stock or ETF rising or falling) and then there is opportunity cost (i.e., is there something else: another stock, market or sector, when something is rising relatively).
Here's our current sector allocation in "AllINsync”:
Artificial Intelligence-> Human Wisdom? [by David Cox]
As I said last month, I’m going to use this section as a way to show you what I’m doing with ChatGPT these days and, while I still don’t always make enough use of my subscription (yes, I’m a paid user), it is useful for many things.
In the old days, I would have "googled" such a circumstance to look for ideas, but instead, I can ask ChatGPT and get a full answer, set of techniques and we went with solution #3. Use heat to loosen residual wax and place a paper towel over the wax residue, run a warm iron over the towel for a few seconds and sure enough, the wax transferred onto the paper. The kids and I got the dripped candle wax off the wood floor, easy as pie (full disclosure: I’ve never made a pie).
How’s the (Bigger Picture) Market? [by David Cox]
The market has been down for the past two weeks, but at this point, we are sitting pretty much at that horizontal line marking what was a breakout after the November U.S. election. A pullback to a breakout spot is normal (though doesn't always feel good day to day) behaviour and we shouldn't discredit the S&P 500 for doing so. We have talked at length about the bearish divergences that have been present over the past many months, and I will now point out that with the weekly chart RSI(5) sitting in the low 30s, we are not overbought. Bigger picture uptrend continues.
Market Summary and Trend of “All Assets” [by David Cox]
I always try to highlight the S&P 500 (stocks) in the table below and you can now see that the early gains experienced in ‘25 are gone and they’re negative on the year. It’s commodities, for the most part, showing strength. I talked about copper this week, in the #WhereDoWeStand webinar, and the big picture chart makes clear how important it is to ensure we still understand that short-term trends and performance do not have to mean long-term trends and performance. Anyways, the red increasing in short and intermediate-term (bearish/negative) bearish areas has grown in a number of assets, particularly growth areas but that does not mean the long-term trend has changed. Remember, we get the most value by observing data carefully, and looking at one column without the context of the next could be a costly oversight, especially when it comes to implementing your investment strategy.
What Are We Learning? “Always Beware of What They Tell Us” [by David Cox]
The mainstream media and/or the politicians can be great at leveraging headlines to their own favour and/or self-interest. Knowing this isn’t the first time I’ve made such points, I want you to know (and hear it here first, perhaps) that in the event you hear Canadian news and headlines telling you, in the coming months, that inflation is rising because of Trump or Elon Musk or some tariff threat (real or not), it isn’t true. Commodities just hit ALL-TIME highs in Canadian dollar terms and this is and was happening before the latest bru-ha-ha going down with all these trade and tariff wars. So, if someone at your cocktail party tries to explain that tariffs will lead to rising prices, you just make sure that they understand that rising input costs, and commodities, in general, have been driving up the cost of those that manufacture and produce all the products we buy. And this is, and was, happening long before the newest government or area (DOGE) arrived. Inflation was classically defined as an increase in the money supply, and those levers continue to be exercised, so inflation is not only expected but needed (remember, it’s cheaper to inflate away unmanageable debt burdens by using future money that has less value).
One UPtrend, One DOWNtrend [by David Cox]
I think it’s always important to know whether the stocks we own are going up or down, and I especially love it when we can use the "back of the room test" to gauge that. Let’s compare two health care stocks this month, and while some of you may be itching to tell me "why" Intuitive Surgical $ISRG (top chart) is rising and their latest headlines or "why" Biogen $BIIB is weak, I’ll just simply tell you that ultimately demand and supply, the balance between the two is the culprit. Remember, there is no shortage of exciting narratives and/or technologies in today’s world, but that doesn’t make them a smart use of investment capital. I’ll continue to favour deploying our client capital into uptrends. And when those uptrends end (which we can identify using the charts and the tools of technical analysis), we’ll sell, rotate and, otherwise, sell those same stocks to investors keen on whatever narrative they choose.
Chart of the Month [by David Cox]
I love to point out how the narrative and the headlines are so often unhelpful to investors, and yet, the readers of those headlines are being biased and influenced by those headlines (and tend to think they can help them make wise decisions). I will beg to differ and this month, we’ll use Germany as an example. Germany, the often looked at barometer for European temperature and/or economic condition or health, has had persistent negative headlines that can be fun to chat about at the water cooler, but I’ll demonstrate they have been completely useless (or worse) if you thought the headlines would mean what our minds believe they imply.
Here are just a few recent headlines:
"Germany’s economic sentiment darkens", "Factory levels slump in Germany", "Germany’s business climate at 4-year low" and "Germany could be sliding into recession."
Meanwhile, the Germany DAX stock market is in a strong uptrend and anyone who piled into equities in May 2023, when they announced recession, has done very well. To use a mainstream media effect, to imply causation: the German stock market shows impressive absolute and relative strength and surges in a strong uptrend because of Germany’s economic woes and broad-based weakness. Too funny.
Social Media and Our Website [by David Cox]
l admit it, I like to cause others to think outside the box. I don’t necessarily ever mean to push my views on others, but I do like us to all think for ourselves. I used to believe that universities in Canada taught the young generation how to think, and now, sadly, I think they’re teaching them what to think (and what not to think). It’s been increasingly clear that the biases of mainstream media (often funded by taxpayer dollars) are designed to pitch narratives and ideologies to meet the agendas of those at the helm.
I’ll be among the first to suggest that ultimately, we (as consumers) can vote with our wallets about what’s important. But I’ll also say that I don’t agree that companies should be taking political stances or driving campaigns for or against them. Tariffs (and the threat of them) are all the rage right now, and this recent article suggested that their polling was showing that many Canadians are shunning U.S. goods: food, alcohol, cars and so forth, and it can feel empowering if you’re among those doing that. Again, your choice. But how far are you willing to go?
I’ll bet you’re not getting rid of your computer, throwing away your phone, no longer surfing Facebook, Instagram or YouTube or watching movies made in the U.S., or streaming on Netflix, right?
Upcoming Dates, Seminars, and Announcements [by David Cox]
What: "Innovate and Caffeinate" for Tech founders, entrepreneurs and local KW businesses
Where: Accelerator Centre, Waterloo, ON
When: Tuesday, March 11th, 2025, 8am - 10am
Who: I’ll be speaking and on a panel...
How: Register here: https://www.tickettailor.com/events/acceleratorcentre/1596817
What: “Nomad Capitalist Live"
Where: Kuala Lumpur, Malaysia
When: September 17-20th, 2025
Who: I’m going again!
What: “CMT Global Summit”
Where: Dubai, UAE
When: October l-3rd, 2025
Who: Yours truly will make a second trip to this exciting part of the world!
Thanks for taking the time to read our “Monthly INsync Chit Chat” and as I play with formats, sections and content, I always appreciate your feedback! Thanks in advance!
Sincerely,
David Cox, CFA, CMT, FMA, FCSI, BMath
Senior Portfolio Manager, Wealth Advisor
Raymond James Ltd.
Phone: 519.883.6031
Unit 1 – 595 Parkside Drive I Waterloo, ON I N2L 0C7
www.financiallyinsync.com
@DavidCoxRJ
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