Dollars and Sense
Volume 5, Number 1 │Oct. 2013
Market Update
September 2013
Month in review
Month YTD
5.3%
S&P TSX Index 1.4%
17.6%
Dow Jones Ind. 2.3%
3.1%
19.8%
S&P 500
26.1%
NASDAQ Comp 5.1%
5.0%
17.8%
MSCI World
S&PTSX Materials
2.5%
1.9%
2.2%
-0.8%
-5.0%
12.4%
7.5%
-7.0%
27.9%
-27.7%
US Dollar
Euro
British Pound
-2.2%
0.1%
2.1%
3.9%
6.5%
3.5%
Crude Oil (WTI)
Natural Gas
Gold
Copper
Aluminum
Zinc
-4.9%
0.6%
-4.7%
3.0%
1.8%
0.7%
11.4%
6.2%
-20.7%
-7.8%
-11.9%
-7.8%
S&PTSX Financials
S&PTSX Energy
S&PTSX Utilities
S&PTSX Info Tech
Income
Brookfield Renewable
Energy (BEP.un)
Can-Energy Covered
Call ETF (OXF)
Money Market Rates
Current Highest GIC rates
on the market (Oct 10th)
1 yr
1.96%
2 yr
2.22%
3 yr
2.36%
4 yr
2.65%
5 yr
2.91%
“Short Horizon, Long Horizon”
by John P. Hussman, Ph.D., Hussman Funds
In the midst of the debt ceiling talks, the nomination of Janet Yellen to succeed
Ben Bernanke, a coming flurry of third quarter earnings, a government
shutdown, and other features of the current situation, there are really only two
considerations that we view as essential: one is the big picture from a full-cycle
standpoint, and the other is the immediate return/risk profile that we estimate
on the basis of prevailing, observable evidence.
As always, our approach is to align our outlook with the expected market
return/risk profile that we estimate at each point in time (on a blended horizon
between about 2 weeks and 18 months), while also remaining aware of the
long-horizon expected returns that are embedded into market valuations.
Over history, and including the past decade, properly normalized valuations
have remained a powerful guidepost for full-cycle and long-term returns,
particularly on the horizon of 7-10 years. On that front, the current
price/revenue multiple of the S&P 500 of 1.54 is now nearly double the
historical norm prior to the late-1990’s bubble. The same is true for other useful
metrics such as the market value of nonfinancial stocks to nominal GDP
(based on Z.1 flow of funds data). With our broadest estimate of prospective
S&P 500 10-year nominal total returns down to just 2.9% annually, 10-year
Treasury bond yields at 2.7%, Treasury bill yields pinned at zero, and state and
corporate pension assumptions still in the range of 7-8% annually, it appears
quite likely that the coming decade will produce a widespread pension funding
crisis in the U.S.
Fllc.ca - sasdfsasdf
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Dollars and Sense
October 2013
While this may seem negligible in the broad sweep of
history, it has actually been a substantial percentage
move. Along with a moderate additional amount of
missed returns since 2010 where our estimates were
zero rather than strictly negative (see The Lesson of The
Coming Decade), and compounded by missed returns
as we stress-tested our methods against Depression-era
outcomes (despite their success in navigating the credit
crisis), the extraordinary half-cycle since 2009 has
caused us a great deal of frustration and a substantial
fall from grace.
Meanwhile, the current Shiller P/E (S&P 500 divided by
the 10-year average of inflation-adjusted earnings) of
24.2 is closer to 65% above its pre-bubble median.
Despite the 10-year averaging, Shiller earnings – the
denominator of the Shiller P/E – are currently 6.4% of
S&P 500 revenues, compared to a pre-bubble norm of
only about 5.4%. So contrary to the assertion that Shiller
earnings are somehow understated due to the brief
plunge in earnings during the credit crisis, the opposite is
actually true. If anything, Shiller earnings have benefited
from recently elevated margins, and the Shiller P/E
presently understates the extent of market overvaluation.
On historically normal profit margins, the Shiller P/E
would be about 29 here. In any event, on the basis of
valuation measures that are actually well-correlated with
subsequent market returns, current valuations are now at
or beyond the most extreme points in a century of
market history, save for the final approach to the 2000
peak.
Of course, valuations exert far more effect on long-term
returns than on short-term outcomes, where a much
larger set of considerations generally apply.
Unfortunately, on shorter horizons, the past few years
have been unusual. Market conditions that have
historically resulted in awful losses over the intermediateterm have instead been associated with positive returns.
The chart below shows the cumulative return of the S&P
500, restricted to periods with strictly negative estimated
market return/risk profiles, based on our approach.
These periods are typically associated with extreme
“overvalued, overbought, overbullish” syndromes in
which we take a hard-negative view of market risk.
Strikingly, the majority of these losses have occurred in
periods when the Fed was in an easing mode (see
Following the Fed to 50% Flops). Notice the little
advance in the red line at the right side of the chart.
I expect the completion of this cycle to make this whole
episode far less memorable, much as the 2000-2002
and the 2007-2009 collapses helped to clarify the basis
for our defensiveness approaching those market peaks.
Suffice it to say that I consider the stock market to be
near the highs of a decidedly unfinished cycle.
The upshot is fairly simple. We presently observe both a
hostile long-term outlook from a valuation standpoint,
and a hostile intermediate-term outlook from an
estimated return/risk standpoint. The simple fact is that
the market has advanced despite very negative
return/risk estimates, particularly in the period since late2011. While we constantly look for enhancements to our
approach, we require them not only to be effective in
recent data, but also to prove valid in numerous cycles
across history. On all evidence, we’re far more inclined to
view the position of stock prices as a temporary
overextension of already extreme conditions than some
durable change in the workings of the financial markets.
So while the novelty and scale of monetary interventions
in recent years have weakened the relationship between
historically reliable measures and subsequent outcomes,
even the Fed’s own research suggests that the effects of
quantitative easing are progressively diminishing toward
zero, as investors increasingly perceive “an unexpected
announcement of a more accommodative policy path as
coming due to a weaker economic outlook.”
• Page 2 •
Dollars and Sense
I continue to believe that much of the impact of QE is
based on superstition – the result of investors
misattributing the 2009 market rebound to monetary
policy. It’s certainly true that replacing $3.6 trillion of
interest-bearing securities with zero-interest cash
encourages investors to reach for yield in riskier
securities, but that’s not what ended the crisis. In
hindsight, the risk of widespread bank insolvency ended
the instant the Financial Accounting Standards Board
relieved banks of any need for balance-sheet
transparency, deciding in early-2009 to abandon markto-market accounting. Of course, it seems more heroic to
attribute the recovery to courageous monetary policy
than to applaud a handful of bureaucrats with green
eyeshades for caving in to Congressional pressure and
moving the banking system that much closer to a Ponzi
scheme.
The following chart places current market action in its
larger context. Importantly, even assuming that the stock
market is completing the upward phase of the present
cycle, it may assist both patience and discipline to
recognize that top formations can be drawn-out affairs
involving months or even quarters of churning and
apparent resilience. Given the potential for fiscal and
monetary surprises, we can’t entirely rule out a final
speculative “blowoff,” but we view that as a small risk
warranting a correspondingly small amount of insurance
against it. More importantly, we would view any such
blowoff as a prelude to more rapid and severe market
losses than might otherwise occur.
October 2013
GDP and real final sales, where year-over-year growth is
already below the levels at which recessions have
typically started. Given the predictive breakdown in a
whole host of measures, it’s not clear that we should
draw strong predictive conclusions from this evidence
either. Still, it should be evident that the U.S. economy
remains at levels of activity that have historically
bordered recession. Doug Short always offers useful
perspective on a wide range of data. The chart below is
no exception.
Our over-arching perspective is that market conditions
remain hostile, particularly from the standpoint of the
complete market cycle. That perspective comes with the
full recognition that the recent advance has occurred
largely contrary to our more negative intermediate-term
estimates of market return/risk. Our view remains that
this is more likely to represent an extreme extension of
already speculative and overvalued conditions, rather
than a durable change in market dynamics. Frankly, that
was also our perspective at the 2000 and 2007 market
peaks, despite seemingly unique features of those
instances.
In any event, trust that we have no intention of
abandoning the lessons of history in the belief that they
no longer apply. That in itself is one of the lessons of
history – every market collapse ultimately comes as a
surprise to investors, because something always
convinces them that this time should have been different.
As a final note, we continue to view economic activity as
much closer to the border of recession than is widely
appreciated. New unemployment claims tend to reach
their lows at bull market highs, and are not useful as
forward-looking indicators. Moreover, we’ve observed a
collapse in the correlation between historically more
reliable leading measures (purchasing managers indices,
Fed surveys) and subsequent economic outcomes over
the past few years (see When Economic Data is Worse
than Useless). Probably the most straightforward
approach is to cut straight to key measures such as real
• Page 3 •
Dollars and Sense
Bill and TED’s Excellent Adventure
October 2013
The “Greatest Rotation”: From Capex To Dividends
(JPMorgan)
by Paul Moroz, Mawer Investment Management
Political differences in Washington have managed to
create an anomaly in financial markets, effectively pricing
in the technical default, or at least temporary deferral, of
short term U.S. government debt.
Historically, T-Bills have been thought to be risk free.
This is reflected in their use of the so-called TED spread
(Treasury to Euro Deposits). The spread in 1 month U.S.
T-Bills and 1 month USD LIBOR reflects financial credit
risk over the “risk free rate.” It is a good indicator of
strain in the financial system. (Yes, I know TED is
ancient and LIBOR is rigged, but I think the point
remains valid.) The higher the spread, the greater
financial risk and vice versa. Usually, at least.
The TED spread just went negative, and it’s not a good
thing. Why? Because it is a result of higher short term
U.S. T-Bill rates due to the politics concerning the debt
ceiling. What complicates matters is the use of T-Bills as
collateral in the financial system. Imagine getting notified
from your bank that they no longer consider your house
collateral for your mortgage.
“Mr. Smith, please provide us with another good asset…
it could be cash… and, oh… we don’t accept equities.”
What do you have to sell to appease the bank? Your
house? Your equities? Your vehicle? If Washington can’t
get their act together and the U.S. defaults, there is a
possibility of a significant domino effect impacting all
parts of the financial system.
While short term T-Bills rates are easing this morning on
news of political progress, the lesson is clear: Treasury
Bills are low risk, not no risk. We hope that Bill and
TED’s excellent adventure normalizes shortly.
The latest Q2 US Flow of Funds data revealed that the
corporate financing surplus declined to zero, for the
first time since the Lehman crisis. The financing
surplus is a measure of corporate savings, and in
principle the lower this financing surplus the more
expansionary the corporate sector is. Typically the
corporate sector is dis-saving, i.e. capex typically
exceeds cash flows from operations. However, the sharp
decline in the US corporate surplus is less positive than it
appears at first glance because it was driven by a rise in
dividend payments rather than a rise in capex. As we
have pointed out time and again, with the Fed’s ZIRP,
the only thing that matters is the share price and with
firms increasingly focused on dividends rather than
capex, to the extent that it continues, points to lower
productivity and potential growth going forward.
In other words – as we warned 18 months ago,
the most insidious way in which the Fed’s ZIRP
policy is now bleeding not only the middle class dry,
is forcing companies to reallocate cash in ways that
benefit corporate shareholders at the present, at the
expense of investing prudently for growth 2 or 3
years down the road.
The latest release of US Flow of Funds for the second
quarter of 2013 revealed that the corporate financing
surplus, i.e. the gap between available cash flows from
operations (net of taxes and dividends) minus capex
declined to zero for the first time since the Lehman crisis
(Figure 1). The financing surplus is a measure of
corporate savings, and in principle the lower this
financing surplus the more expansionary the corporate
sector is.
Paul Moroz
• Page 4 •
Dollars and Sense
October 2013
Figure 2 shows that this decline was driven by a fall in
available cash flows, i.e. undistributed profits net of
taxes. Capex increased only marginally in Q2. In turn,
the decline in available cash flows was caused by a
sharp rise in dividend payments in Q2. Dividends
payments jumped to a record high of $163bn in Q2, 35%
above the pace of the previous four quarters. Relative to
nominal GDP, dividend payments returned to the record
highs last seen at the end of 2006.
Typically the corporate sector is dis-saving, i.e. capex
typically exceeds cash flows from operations. Since
1952, when US Flow of Funds data begin, it has been
only during US economic recessions when this
financing surplus was positive. So although a decline
in the corporate surplus to zero is an encouraging sign,
its level remains above the typical negative levels seen
during mid phases of economic expansions.
Also it remains to be seen whether the US surplus
decline will be followed by the rest of G4 countries
which are set to release Q2 Flow of Funds by the end
of this month. As shown in Figure 1, the corporate
financing surplus for the whole of the G4 had been rising
during 2012 up until the first quarter of this year.
We see two implications from the above flows:
1) the sharp decline in the US corporate surplus is less
positive as it appears at first glance because it is driven
by a rise in dividend payments rather than a rise in
capex, and
2) these flows reinforce a long term shift of the US
corporate sector away from capex towards
dividends. Figure 3 shows this long term trend over
time.
What drove the decline in the US corporate surplus
to zero?
• Page 5 •
Dollars and Sense
October 2013
The problem is that as David Rosenberg pointed out
earlier, companies are now forced to spend the bulk
of their cash on dividend payouts, courtesy of ZIRP
which has collapsed interest income.
It also means far, far less cash for CapEx spending.
Which ultimately means a plunging profit margin due to
decrepit assets no longer performing at their peak levels,
and in many cases far worse.
Reiterating what we said above, the most insidious
way in which the Fed’s ZIRP policy is now bleeding
not only the middle class dry, is forcing companies
to reallocate cash in ways that benefit corporate
shareholders at the present, at the expense of
investing prudently for growth 2 or 3 years down the
road.
Dividends have started rising vs. capex since early
1980s. The Q2 reading matches the record high seen in
2004. A focus on dividends rather than capex, to the
extent that it continues, points to lower productivity
and potential growth going forward.
This latest update from JPMorgan merely confirms what
we foresaw,
The conclusion of all this is quite simple: the longer the
“recovery” continues, without an actual recovery
being coincident, and all is merely a game of optics
and smoke and mirrors, corporate margins will start
collapsing in a toxic spiral, whereby companies
generate less cash, and have less cash to spend on
CapEx, etc, until the next sector needing a Fed bailout is
the corporate one, all the while the Fed’s forced
misallocation of resources forces companies to expend
every available penny into dividend payouts.
…
Not accounting for accumulating and rising depreciation,
or as we said, “we get back to what we have dubbed the
primary cause of all of modern capitalism’s
problems: a dilapidated, aging, increasingly less
cash flow generating asset base! Because absent
massive Capital Expenditure reinvestment, the existing
asset base has been amortized to the point of no return,
and beyond.
• Page 6 •
Dollars and Sense
October 2013
Chart of the Month
2010, although it remains roughly double the average of
the prior economic cycle."
This Chart Says Janet Yellen Will Keep
Monetary Policy Easy For A Long Time
Riccadonna appears to be referring to this excerpt from
a speech she gave in February to the AFL-CIO:
Earlier this week, President Obama nominated Federal
Reserve Vice Chair Janet Yellen for Chair of the Fed.
Already, economists are combing through her old
speeches to figure out what she may or may not push in
terms of monetary policy.
For now, the consensus is that she will keep monetary
policy easy, largely due to the painfully high
unemployment rate.
At least two top Wall Street economists have circulated
this chart of the long-term unemployment rate.
"She focuses on long-term unemployment and its
associated risks, including skill atrophy and the potential
for household credit problems," said Deutsche Bank's
Carl Riccadonna. "The ranks of individuals out of work
for more than half a year has steadily declined since mid-
Individuals out of work for an extended period can
become less employable as they lose the specific skills
acquired in their previous jobs and also lose the habits
needed to hold down any job. Those out of work for a
long time also tend to lose touch with former co-workers
in their previous industry or occupation--contacts that can
often help an unemployed worker find a job. Long-term
unemployment can make any worker progressively less
employable, even after the economy strengthens.
“With employment so far from its maximum level and
with inflation currently running, and expected to continue
to run, at or below the Committee's 2 percent longerterm objective, it is entirely appropriate for progress in
attaining maximum employment to take center stage in
determining the Committee's policy stance," said Credit
Suisse's Neal Soss.
• Page 7 •
Dollars and Sense
Company Snapshot –
October 2013
Sept. 2013
Major Drilling Group (MDI)
MDI - (Oct. 10th) $6.98/share
Summary –
Major Drilling Group International Inc. is a drilling service
company primarily serving the mining industry. The
Company is engaged in contract drilling for companies
primarily involved in mining and mineral exploration. The
Company maintains field operations and offices in
Canada, the United States, South and Central America,
Australia, Asia, and Africa. It provides types of drilling
services, including surface and underground coring,
directional, reverse circulation, sonic, geotechnical,
environmental, water-well, and coal-bed methane and
shallow gas. The Company categorizes its mineral
drilling services into three types: specialized drilling,
conventional drilling and underground drilling. The
Company’s operations are divided into three geographic
segments: Canada -the United Sates, South and Central
America, and Australia, Asia and Africa. On September
30, 2011, the Company acquired Bradley Group Limited.
On March 24, 2011, the Company acquired Resource
Drilling..
Technical Analysis
Longer term – quadrant 1 – Buy
Intermediate term – quadrant 3 – Turning
down
Fundamental Analysis
Market Cap
Distribution
Yield
P/E ratio
Price/BV
$581 million
$0.10
2.70%
26x
1.18x
• Page 8 •
Dollars and Sense
October 2013
FLLC Portfolio Tracker
Current
Company
Symbol
52 Week
Sell
Brookfield
Intrastructure
Partners LP
BIP.un
Hi
19.50
Low
15.50
SELL
Gold Participation
and Income Fund
GPF.un
12.25
10.12
Sell
PMT
5.90
3.31
SELL
Perpetual Energy
(formerly Paramount
Energy Resources)
New Flyer
NFI.un
11.76
7.32
SELL
Labrador Iron Ore
LIF.un
55.80
30.03
SELL
Maple Leaf Foods
MFI
12.06
8.47
SELL
UIL Holdings Corp
UIL
30.33
23.79
Sell
PXX
3.98
1.94
Sell
Black Pearl
(speculative stock with,
NOT Blue chip)
AGF Management Ltd
AGF.b
19.25
13.36
SELL
Canadian Oil Sands
COS.un
33.05
24.24
Sell
Pfizer
PFE
20.36
14
Home Equity Bank
HEQ
8.33
China Security and
Surveillance
CSR
SELL
Proshares Ultrashort
Euro
SELL
Initially
Added
Date
Feb 26, 2010
Sell date
Apr 20, 2011
Recent
Price
Price
17.30
22.05
Sold
P/E
19x
Yield
5.3%
Mar 26, 2010
Sell date
Nov 3, 2010
April 27, 2010
Sell date
Aug 24, 2011
10.75
12.65
Sold
6.4%
5.03
2.84
Sold
8.7%
May 31, 2010
Sell date
Nov 3, 2010
June 29, 2010
Sell date
Nov 3, 2010
July 30, 2010
Sell date
Mar 5, 2011
Aug. 30, 2010
Sell date
Feb. 5, 2011
Oct 7, 2010
Sell date
Aug 24, 2011
9.65
11.48
Sold
11.8%
41.60
64.25
Sold
8.7x
10.8%
9.21
12.21
Sold
12x
1.4%
25.90
30.53
Sold
19x
5.6%
3.90
5.02
Sold
16.45
11.63
Sold
12x
5.68%
26.69
31.78
Sold
17x
8.07%
16.70
26.89
Sold
22X
4.25%
6.12
Oct 28, 2010
Sell date
Jan 30, 2013
Oct 28, 2010
Sell date
Mar 5, 2011
Dec 3, 2010
Sell date
Jan 12, 2013
Jan 3, 2011
6.55
8.89
4.09
Feb 3, 2011
4.90
EUO
26.40
17.64
17.45
Nuvista Energy
NVA
12.51
8.55
Apr 6, 2011
Sell date
Sept 12, 2011
May 6, 2011
9.50
Taken
over
6.50
Taken
over
18.87
Sold
9.30
6.01
Sold
SELL
Crescent Point Energy
CPG
48.61
35.30
June 8, 2011
45.03
43.30
Sold
28x
6.28%
SELL
Westshore Terminals
WTE.un
25.85
17.57
July 28, 2011
22
24.75
Sold
16x
5.9%
Buy
Capital Power
CPX
28
22.26
July 28, 2011
23.85
20.86
22x
5.1%
*current buyout offer of $6.50
• Page 9 •
4.27%
6.5x
Dollars and Sense
Current
Company
October 2013
Symbol
52 Week
Hi
24.60
Low
17.21
TBT
41.54
21.86
Duke Energy
DUK
71.13
50.61
SELL
WisdomTree Europe
SmallCap dividend
DFE
48.15
31.04
Buy
Canadian Oil Sands
COS
33.94
Buy
Telefonica SA
TEF
Buy
Canadian Natural
Resources
SELL
Buy
France Telecom
doubled up on shares
Orange
FTE
ORAN
SELL
Proshares Ultrashort
20+ year treasuries
Sell
Initially
Added
Date
Aug 26, 2011
Apr 5, 2013
$14.23 avg.
cost
Sept 12, 2011
Recent
Price
Price
18.50
9.95
13.62
P/E
Yield
7.6
9.0%
12x
5.2%
22.10
19.50
SOLD
57.75
64.85
SOLD
33.90
37.55
SOLD
18.17
Oct 6, 2011
Sell date
Nov 5, 2012
Nov 10, 2011
Sell date
Nov 5, 2012
Dec 14, 2011
20.75
20.30
10x
6.9%
27.31
16.53
Feb 7, 2012
17.40
16.93
8.5x
7.5%
CNQ
50.50
27.25
Mar 7, 2012
34.70
33.91
15x
1.0%
Repsol
REPYY
34.84
14.41
15.50
19.90
SOLD
9.5x
6.8%
SELL
Eni
E
49.65
32.44
39.50
45.30
SOLD
8.0x
4.6%
Sell
Phoenix
PHX
11.70
7.75
7.85
10.10
SOLD
9.9
9.14%
Sell
CME Group Inc
CME
60.92
44.94
55.10
60.42
SOLD
12.1
3.10%
Buy
TOT S.A.
TOT
57.06
41.75
June 5, 2012
Sell date
Nov 5, 2012
June 29, 2012
Sell date
Nov 5, 2012
Aug 7, 2012
Sell date
June 6, 2013
Sept 5, 2012
Sell date
Mar 3, 2013
Oct 10, 2012
48
59.68
8.01
5.91%
Buy
Cliffs Natural
Resources
CLF
78.85
28.05
Dec 4, 2012
29.40
22.83
5.8
7.1%
Sell
Fiat SPA
FIATY
6.47
4.19
5.19
8.07
SOLD
24
1.6%
Sell
Goldcorp
G
50.17
32.34
36.07
31.04
SOLD
17x
1.65%
Sell
Intel
INTC
29.27
19.23
21.30
24.60
SOLD
10x
4.25%
Buy
Corning
GLW
14.58
10.62
Jan 4, 2013
Sell date
June 6, 2013
Feb 8, 2013
Sell date
June 6, 2013
Mar 8, 2013
Sell date
June 6, 2013
Apr 5, 2013
13.05
14.44
11x
2.7%
Buy
BHP Billiton
BHP
80.54
59.87
May 2, 2013
65.80
68.00
11.6x
3.4%
Buy
Freeport McMoran
Copper & Gold
FCX
43.65
27.24
June 6, 2013
31.03
34.13
10x
4.03%
• Page 10 •
5.58%
Dollars and Sense
Current
Company
October 2013
Symbol
52 Week
Hi
Low
Initially
Added
Date
Price
Recent
Price
P/E
Yield
July 9, 2013
27.10
25.42
8.0x
5.13%
29.67
August 6, 2013
29.95
33.07
11x
4.7%
23.86
17.40
Sept 9, 2013
17.93
18.47
16x
4.6%
12.20
6.41
Oct 10, 2013
6.98
6.98
26x
2.7%
Buy
Newmont Mining
Corp
NEM
57.93
26.97
Buy
Potash Corporation of
Saskatchewan
POT
45.13
Buy
Encana
ECA
Buy
Major Drilling Group
MDI
These stocks are chosen using the same techniques
taught in the CIC course.
FLLC is not an investment advisor and is not setting any target prices or financial projections. Never invest based on anything FLLC says. Always do
your own research and make your own investment decisions. FLLC never recommends to buy or sell any stock. This email is not a solicitation or
recommendation to buy, sell, or hold securities. This email is meant for informational and educational purposes only and does not provide investment
advice.
• Page 11 •
Dollars and Sense
October 2013
Technical Analytic View
Date:
October 10, 2013
TSX 60:
Long Term:
(6-18 mths)

MidTerm:
(5-10 wks)

Dow Jones Industrials:


• rally may begin to correct here
90 Day Interest
Rates:


• governments determined to keep short term rates low for now
• some symbolic increases (0.5% to 1.0%)
5 Yr Interest
Rates:
30 Yr Interest
Rates
Gold:


• rates have flattened


• rates should trade sideways for a long time


Canadian
Dollar:
LEGEND


• longer term trend may have formed
• bottom may be forming this fall
• Cdn $ seems to be range bound between $0.95 to 1.05 US

bottom forming
Comments:
• long term BUY signal has occurred, use the next intermediate
correction this summer to buy

buy

top forming

Sell
Upcoming Course offerings
Please check our website for updates
Oakville S.
Oakville N.
Oakville
Please visit our website
www.canadianinvestorscourse.ca
Burlington
www.fllc.ca
Mississauga
or
Contact us at:
905-901-5120
- Wednesdays
Sept 25, Oct 2, 9, 16, 23, 30
Oakville Central Library
- Tuesdays
Oct 1, 8, 15, 22, 29, Nov 5
Sylvan Learning Centre
- Saturdays
Sept 28, Oct 12, Oct 26
Sylvan Learning Centre
- Thursdays
Sept 26, Oct 3, 10, 17, 24, Nov 7
Tansley Woods Community Centre
- Tuesdays
Sept 24, Oct 1, 8, 15, 22, 29
Mississauga Central Library
Portfolio Building Workshops
Saturday Sept. 14th, 9am – 1pm
Saturday Oct 19th,
9am – 1pm - No longer booking
Sylvan Learning Centre (481 North Service Road W., Oakville)
The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither the Financial Literacy Learning Centre Inc.
(FLLC) nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed
as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither FLLC nor its employees,
agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof.
• Page 12 •