Issue #17 - The Good, The Bad and The Ugly of Social Media

Read time: 3 minutes

Hola friends, hope everyone is having a great week.

Let's get to it.  

1. Personal Finance

I struggle internally with social media.

For one side - it's great - connecting with old friends and new - family, too - and often some much needed comic relief.

But I’m disturbed by the algorithm and how it can alter a young persons mind.

Visions of rich (poor in real life) people travelling around in fancy yachts and fast cars and high end tech.

Influencing you so much to a point where your desires are replaced by someone else's. (Honey we bought a boat! Ya? How'd you pay for it? On the Credit Card of course!")

And research shows that it can lead to low self esteem and depression particularly in young girls. This is scary and we need to be eyes wide open on what/how/when we consume content online.

Nevertheless, I’m on social for a reason, primarily to educate and grow a business at the same time. 

And what I’m selling is a service worth sharing. Well, at least I think it is...teaching people how to invest, what stocks, bonds and ETFs are, compound interest, budgeting, personal finance, and portfolio construction, to name a few.

So just a friendly message to readers of this Journal: if you are on social, curate your feed, unfollow accounts that don’t add real value to your life, consume good content, stuff that makes you laugh or teaches you something worth learning.

Speaking of social media, one of the reasons I like it is the comment section.

I did a post on my Instagram last week about how billionaires and millionaires alike use ETFs.

Some dude commented: “stocks are great but they won’t get you out of your demographic”.

To which I responded: "I understand 99% start behind the one percent but believe you me those that make up the 1% changes over time - family dynasties fail - businesses go extinct - and global economic positioning changes. The the point is, if you have that attitude of "I'll never be able to change or improve" or "life is so unfair", well then you've written you're own destiny Mister Tommy Two Time."

No ETF strategy will change a bad attitude.

Sorry but life is difficult and upward mobility is only achievable with hard work, a good attitude, and investing your positive cash flow.

And don’t forget to look up and smile. 

2. Stock Markets

Warren Buffett eyes Canadian investment as cash pile hits fresh record.

Excerpt from the Financial Post:

The company hopes for an “occasional big opportunity,” he added, later noting that it’s looking at an investment in Canada.

“We do not feel uncomfortable in any shape or form putting our money into Canada,” he said. “In fact, we’re actually looking at one thing now.” 

For all the negativity within Canada, it was refreshing to hear the Oracle's positive outlook on the country as he tools up for potential investment.

The cynical answer of course is that Canada is doing so poorly that stock values are low and therefore sufficiently attractive for Warren Buffet to take notice.

Be that as it may, it's fun to see the legend speculate up north. There's a lot of guesses as to what he might buy, but my guess is something in the resource/energy sector. Let's see.

3. Real Estate 

Was at the Edmonton Real Estate conference this week. A couple notes I took below, in no particular order.

• Edmonton industrial market becoming a more diverse tenant base.
• Vast range of users vs historical economy.
• Affordability is bringing a lot of young families to the province, economic opportunity, the jobs are there, and upward mobility is possible. This trend has years to run.
• Average house price is $402,000. Calgary is $600,000. Compare that to astronomical Vancouver at about $1.2 Million.
• Immigration to Edmonton is happening. This supports infrastructure works and industrial sector.
• Transportation network through Edmonton is astounding.
• Shorter to get a rail car to Edmonton from Vancouver than Vancouver to Calgary.
• Small to medium bay industrial is more active than mid/large bay.
• Industrial rents are moving up. Developing small bay for smaller tenants is challenging. 
• Therefore will continue to see positive absorption.
• No question commercial real estate transaction activity is slow. Interest rate volatility and construction cost inflation making it challenging.
• Have to build margin of safety when underwriting debt.
• Results in wide bid ask spreads.
• Capital is tight across all markets. Institutional and private.
• True performers stick out in this environment. It's all about relationship capital. 

To sum up, a lot of positives for the Province and it will be exciting to see how things play out.

1 Quote

"I am convinced that life is 10% what happens to me and 90% how l react to it.

And so it is with you...we are in charge of our attitudes."

-Charles Swindoll

A Question

What's a good quote you know? Why do you like it?

Charles Swindoll's Attitude is a quote my Dad put on the bathroom walls when we were kids. I'm glad he did, to this day it has to be the best quote I've ever heard. And I like to think I live by that mantra every day.

The full quote can be found here.

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Thank you

Eddie Gudewill, CFA

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