Progress!

This morning I heard on the news that an American short seller had given Shopify, a large Canadian company, a negative review. That caused Shopify’s stock to drop 7-11% over two days.

It was glorious. Not the news itself – the fact that I understood what they were talking about!

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Shopify is based in Ottawa and has technology that helps people set up and run online stores, for a monthly subscription fee. It’s been doing really well on the Toronto Stock Exchange and the New York Stock Exchange, so this news is rather shocking. Right now, it means people looking to get in can take advantage of a slight sale on the stocks. (But if it goes on long term, people at the company may lose their jobs.)

The short seller is saying, basically, that the stock isn’t worth its price. (Click here if you want to hear why.) That means that if you own Shopify stock, it’s not worth as much as you thought, and could drop once everyone realizes it, wiping out some of your money-on-paper. (To me it’s all just money on paper until you need to cash it in for something. Like paying your nursing home bills in retirement.)

You may have heard the phrase, “buy low, sell high.” Well, a short seller does that too – but in reverse order. It’s complicated, but they’re betting on stocks going down, not up. They sell first, when it’s high, then to fulfill the order they buy when it’s low. So if they sell for $10 today and buy for $5 tomorrow, they’ve made $5. (If they’re wrong and it goes up to $15, they’re out $5.)

So after all these months of studying and sticking with the Canadian Securities Course I feel like I’ve actually learned something. It’s almost like conversational Spanish – I’ve finally moved a bit beyond “Una cerveza por favor.” ¡Olé!

(In other news, I’ve finally finished the course work for CSC. Now a month or so of studying, then I’ll book the final exam. Progress!)

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For Love or Money

What fascinates me about money is the personal side — how people feel about it, what they do with it or without it. Nothing gets more personal than romantic relationships. Do you consider a potential partner’s income or earning potential while dating? What about debt levels, or spending and saving habits? Sure, we can say money doesn’t matter – but apparently it still does.

Darcy Pond 2
My favourite Mr Darcy, who had 10,000 pounds a year, and was obviously in want of a wife.

I say “still does” because for a long time (pre-Pill, but especially pre-1900s), for a large part of society (middle- and upper-class women), their sole job in life was to marry well. Mainly because they weren’t allowed any other job. Jane Austen, who never married herself, knew this very well and wrote several novels about the situation in a time when female writers were rare. According to the article What Jane Austen Tells Us About Dating Today (which has a fabulous example of a Lizzy Bennet & Mark Darcy Tinder exchange):

“For a woman, accepting the wrong proposal (and it always was a case of accepting, rather than initiating) could prove still more devastating. Forbidden from inheriting and faced with towering obstacles if they sought to earn their own living, middle-class Regency women — even those blessed with large dowries — had to hand control of their financial, social and emotional wellbeing over to their husbands. They had few legal rights as singletons. But once married, in the eyes of the law they ceased to exist altogether, becoming possessions instead of individuals. A spinster, meanwhile, was forever dependent upon the goodwill of (male) relatives.”

Now, we’ve come a long way but let’s face it — women still make less than men. Except when they don’t. The economic crash in 2008/2009 changed things for many families in North America. When a lot of men lost their jobs, their female partners became the main breadwinner. That, added to more women getting more education and higher paying jobs, caused a shift.

Women have more control over their futures and more choice – and they’re getting more picky about those choices. In the article Why American Men are Getting Less Marriageable, economics and social dynamics are hitched: “employability and marriageability are deeply intertwined.”

“Either men don’t like their female partners earning more than they do,” Dorn says, or women feel like “if the man doesn’t bring in more money, then he’s an underachiever.”

I’ve joked that when it comes to dating in my 40s (I’m divorced), I want a guy’s bank statement, a criminal record check and three references (and his mother doesn’t count). We can pretend these things don’t matter, that when it comes to true love something as crass as money makes no difference, but until we recognize that it still does, we can’t deal with it honestly and openly. There’s a reason most couples fight over money more than anything else – it’s an unavoidable part of our lives and it’s so emotionally charged.

I’m not saying it’s right, I’m saying it’s real. So what it comes down to is —

What would Lizzy Bennet do?

My day job — 12 years of working for myself

I’m a communications consultant (writer and editor) and I take on different contracts. Not only do I have a steady gig but I also take on side projects, which means I’m often working evenings and weekends. And you know what? I love it. But it means sometimes I have to take time away from this blog to focus on things like relaunching my website!

I’m celebrating 12 years of being in business with Dossier Communications. Twelve years ago I walked away from yet another bad job and went at it on my own. To celebrate, I revised my website. If you want to know about my writing, editing and marketing communications services, check it out: http://dossiercommunications.ca/services/

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I promise to get back to this blog soon. I miss you too.

What I’m learning

It’s been a while, I know. I took a break for the holidays, then I went on holiday. Now I’m here with no excuses to put off the second part of the Canadian Securities Course. It occurs to me though that an outline of the topics covered might be of interest, if only so you have an idea of what I’m learning about.

Volume 1 and the first exam covered:

The Capital Market
The Canadian Securities Industry
The Canadian Regulatory Environment
Economic Principles
Economic Policy
Fixed-Income Securities: Features and Types
Fixed-Income Securities: Pricing and Trading
Equity Securities: Common and Preferred Shares
Equity Securities: Equity Transactions
Derivatives
Financing and Listing Securities
Corporations and Their Financial Statements

Not a whole lot of everyday practical tips here, or anything I’d really consider personal finance. Volume 2 covers:

Fundamental and Technical Analysis
Company Analysis
Introduction to the Portfolio Approach
The Portfolio Management Process
Fundamentals of Managed and Structured Products
Mutual Funds: Structure and Regulations
Mutual Funds: Types and Features
Segregated Funds and Other Insurance Products
Hedge Funds
Exchange-Listed Managed Products
Fee-Based Accounts
Structured Products
Canadian Taxation
Working with the Retail Client
Working with the Institutional Client

Hedge funds – that sounds sexy. There are exchange-traded funds (ETFs) in my future too. I’m up to Chapter 15 and I’ve actually found some practical tips! But that’s a story for another post – I’m off for a study break to watch another episode of the TV show Bitten (based on a really good book series by Canadian author Kelley Armstrong).

Brave enough to fail

I can’t do math (specifically algebra). Have I told you that lately? As sure as I am that I have blue eyes, I know I can’t do math. So I was understandably stressed while preparing to take the first exam for the Canadian Securities Course. Even one of the easier formulas like this:

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Made my brain look like that:

brain-on-math

But I can do words and study and memory. I decided to tackle the formulas a different way. Instead of the mathematical shorthand seen above, I broke it down into words I could study and memorize:

Yield to maturity equals interest income plus or minus price change, divided by, face value plus price divided by two.

Once I wrote it out enough times I could add a little shorthand of my own:

YTM = interest income +/- price change, divided by, FV + price divided by 2.

I was getting somewhere.

But still – if there were too many math questions I was in for a hard time. Seven months and it came down to this. I needed at least 60% to pass and while many people were cheering me on, I never take anything for granted and my concern was real (there is nothing false about my modesty). I was just going to have to suck it up and ride the fall. I went into the exam prepared to be brave enough to fail.

The time came, the proctor handed me the exam booklet and I took a look. There, of the 100 questions, only 10 even had numbers in them. I only used one formula I had memorized and there was one calculation I could do IN MY HEAD.

Results were swift – three days later I emitted an “Eep!” when I checked online and found I had passed. I didn’t ace it but I didn’t squeak by either.  I did something that scared me, did it successfully and lived to tell the tale. If there’s hope for me, there’s hope for just about anyone.

Halfway there.

Politics, markets & other animal spirits

I haven’t been on here in a while because I just don’t know what to say. I haven’t known what to say since the American election on Nov. 8.** As soon as the winner was officially declared people started asking me questions about what to do with their money. But the market response was unexpected, to say the least. (Great article here about experts and economic uncertainty.)

A few months ago when Brexit hit, stocks tumbled a bit and I went shopping. I was expecting the same to happen after Nov. 8, but instead, aside from an initial stumble by the overseas markets, they started climbing and stayed strong for days. (The Dow Jones set an all-time high on Nov. 9.)

It seems people are hoping that Trump will make good on all his economic promises, and that we’re at the start of a growth period. I’m also guessing that after such a long, drawn out affair, everyone was happy a decision was finally made and we could get on with it.

Yes, I’m guessing. As is everyone who tries to anticipate the markets, don’t let them fool ya. In a recent seminar, Larry Berman revealed that a 10-year analysis of his predictions showed he was right about 62% of the time. (Love his honesty.)

There’s more to come, with other elections imminent across Europe. It seems nationalism and protectionism are in fashion, again.  (Can I just say that Coco Chanel would be my hero if she hadn’t shacked up with a Nazi? Sigh.) Here in Canada there’s the old joke that every time the US sneezes we catch a cold, so we’re right to pay attention to our neighbour’s business.

It’s going to be an interesting four years.

** I don’t know what to say about money, I mean. I have a lot to say about the election, and here’s a fun clip from Saturday Night Live.

 

In the news

Here’s a quick roundup of a few interesting things.

US Banks Finally Getting Sued for the Great Recession Crash

Remember back in 2008/2009 when the US banks lent people money to buy homes they couldn’t afford, then raised interest rates and foreclosed? Miami nearly went bankrupt — if people lose their homes they’re not paying property taxes. But no one went to jail because for years before the crisis the banks and other financial institutions changed the rules in their favour (deregulation). Now Miami is trying to sue the banks. This will be interesting. Read all about it in the Washington Post

Canadian Banks Overcharging Customers

Meanwhile here in Canada the big banks are turning themselves in, admitting they overcharge customers and paying them back. Here’s the key point in this article – it is just too hard for average people to figure out what’s going on with their money. Most of our financial information comes from people trying to sell us something, which makes unbiased decisions much more difficult. Read all about it on CBC

Hillary & Donald: It’s Almost Over

Finally, is anyone else out there waiting to see if election anxiety affects the markets? When people get nervous they start pulling their money out by selling off their stocks, which sends prices lower. That’s what I love about the whole financial and economic scene – it’s not about numbers, it’s about people, and whether they have hope or fear for the future. I won’t direct you to any article about the American election though; I think we’ve all had enough over the past 18 months.