Since my last post I’ve been studying like mad. Last Saturday I wrote the final exam for the Canadian Securities Course and yesterday I found out I passed. That’s it, it’s over – the brilliant idea I had in Spring 2016, started working on that May, wrote the first exam last December – tout fini.
(I really need better hobbies . Say, crystal meth. )
Just kidding. Actually, I learned stuff. I worked my brain in different ways. Studying during my lunch breaks and on weekends kept me off the streets and out of trouble, which is important for a punk like me.
(Obviously I’m giddy from the Christmas sugar cookies. Bear with me.)
I’ve already started putting the knowledge to good use. I do a lot of volunteering, and this year for the first time I joined a finance committee for one of the organizations. Not only do I understand everything at the meetings, but I was able to productively participate in a discussion that led to a better asset allocation for its contingency funds – the money the organization depends on in emergencies.
That’s right – by learning about money, I was able to help people who really need it. I know it’s just a start, but it got real.
(Aside 1: Speaking of good causes, Interval House of Ottawa is building an animal housing area so that women and children can bring their pets when they flee. We know that many abusers also hurt the animals. We know that many women stay behind because they don’t want to leave their pets. We know there’s a strong connection between pets and mental health. Click here to find out more.)
(Aside 2: Also this year, my Breakfast Club Retro Dance raised $3500, bringing the three-year total to $10,700 to help kids start their school day with a nutritious meal through the school breakfast program. And the Food Bank drive I organized at the office brought in $425, which the organization can turn into $2125 worth of food through its partnerships with food industry donors. This raising money is pretty addictive – maybe I don’t need crystal meth after all!)
After the holidays (anyone else find it the season of obligation, stress and debt?) I’ll start thinking of other ways to use my new money powers for good.
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!
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!)
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.
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.
There I was, making slow but steady progress, then wham! Life happened, as it does. My last post was about the Breakfast Club Retro Dance, which I’m happy to say was a success. More than 100 people came out and we raised $3300, so in two years the event has raised $7100 for the Ottawa School Breakfast Program. That’s a whole lot of tummys we’re filling, many futures we’re helping.
Delivering the cheque to Alison Sheepway at the Ottawa Network for Education
Back to the Canadian Securities Course. For people who are working full time while studying it does usually take an entire year to complete. Over the summer I got bogged down by Chapter 7 – Fixed-Income Securities: Pricing and Trading. Or more specifically, by the mathematical formulas in the chapter. I took the math tutorial and thought I had it figured out, then took the online quiz, which explained everything differently, and just got confused. Math panic swelled up in my gut.
Then Adult Me kicked in. (I didn’t even know my brain had an Adult Me function.) I realized that if I were to use this information in daily practice, I could always pull out the book again to refer back to the formulas. This was wonderful, especially since I still have math nightmares. (Seriously. It’s a day before the final exam, I’ve spent the entire year doing nothing but English and history, and if I don’t get my math credit I don’t graduate. Shudder.)
So I moved on, knowing that I wasn’t going to do well on one particular part and that was ok. I sped through Chapter 8 – Equity Securities: Common and Preferred Shares and Chapter 9 – Equity Securities: Equity Transactions, both in one weekend. I took a little more time with Chapter 10 – Derivatives and Chapter 11 – Financing and Listing Securities.
Now I’m on Chapter 12 – Corporations and their Financial Statements. Apparently all the terms I learned in Grade 13 Accounting have changed. (The bastards! How dare they!) Once I’m done, I’ll study Chapters 1-12 and sign up for the first exam.
Any group that has specialized knowledge or works in a specific industry tends to have its own language. That language makes it easier for group insiders to communicate, and by making it harder for outsiders to understand, it also helps secure the group’s status as experts.
What does that mean? It means that as I’m working my way through the Canadian Securities Course materials, half the time I don’t know what the hell they’re talking about. The financial industry is in dreadful need of a plain language makeover.
Here’s an example. The book says the national debt is “the sum of past deficits minus the sum of past surpluses.” Seriously, was that necessary? No wonder financial literacy is so low, with language like that! (My version: the national debt is how much Canada owes.)
Chapter 4: Economic Principles was not as much fun as I’d hoped. (Shocking, I know.) Finally, after three chapters on rules and regulations, we were getting to the good stuff. Interest rates, inflation rates, business cycles, oh my! I could see how it all affected actual people.
High interest rates are good for savers but make it more expensive to borrow money for a couple buying a home or a company expanding its manufacturing plant. High inflation is bad for people on fixed income like pensions, like the little old lady I’m going to be one day, because rising prices means your money doesn’t go as far and you can’t buy as much. Business cycles ebb and flow, affecting labour relations and unemployment – and who hasn’t had to hit the pavement to look for a job at some point.
Then I took the quizzes – and spent most of my time trying to figure out what the questions were asking, never mind what the answers could be!
This is going to take some work. I’m onto you, financial industry, and I will learn your secrets. I refuse to be an outsider with my own money. I’m coming for you – and this time it’s personal.
When the global economy collapsed in 2009 (and the world’s biggest capitalist society needed government bailouts – wow!) we all discovered we really didn’t know much about how or why. We recognized that our financial literacy is lacking. As a current Facebook meme says, I’m sure glad I learned about parallelograms in school instead of taxes…
Money is a funny thing. I like learning about it and talking about it. It comes from growing up without it. Over the years I’ve collected a little library of books on the topic, I subscribe to a magazine about it (MoneySense), I even have a monthly meeting with a group of women to discuss it. But even with all this, I know there’s still so much I don’t know.
Sure I know how to budget and save and invest – to a certain extent. I know there’s a whole other world out there and, despite having some math fears (seriously, I have recurring nightmares about high school math class), I took a big step.
I signed up for the Canadian Securities Course (CSC), the foundation you need to work in the financial industry here. The plan is to take the course over its suggested 135 to 200 hours of study, and to write about what I’m learning along the way. I’m hoping it’ll help me find new clients to write and edit for in the financial industry. At the very least I’ll learn more about how to make the most of my money so that one day, I won’t have to work so hard for it.
Will I be spending my summer Sunday afternoons on my balcony in studying bliss? Or will I have to replace my new financial calculator multiple times from throwing it in frustration?
Let’s find out. Let’s improve our financial literacy and do some book learnin’ about this money stuff. Most importantly, let’s find out how to avoid eating cat food in our old age.