Weekend this and that

Economy is a great insight into human nature. Given a set of conditions, the majority of human population will act in certain way while a percentage act in another and in the end, a small group of pioneers will take some radical actions.

I get to analyze a quote from Warren Buffet (He’s the person I quoted the most in my blog posts, for the simple fact that I sincerely believe I can never outdo him in my life. Until I can achieve something close to what he achieved, I won’t even dream about it), from his Toronto visit this week. Warren Buffet said: “The Canadian dollar will continue to climb.” A conclusion that is going to change my economic strategy for the near future.

No, this is not simple Canadian pride, but the result of a look at the big picture. The majority of Canadian economy lies in exporting its products to the US. Because CDN dollar is considered by investors to be a resource/banking based currency. So when a resource crunch occurs, the CDN dollar goes up. It’s the same as buying gold. This should be good news for Canadians right? In a consumer’s view yes, but in my world, NO.

The rest of the industries are in shit, why? Because the price of all Canadian products are now 1/4 times higher than a year ago. The tech sector is hardest hit because people expect hi tech products to go down in price over time due to improvements in process and cheaper components. The tech sector has only seen about one year of good times after the 2000 collapse, this is too soon to be seeing hiring freezes.

Soaring tech stock prices, big companies buying random startup e-businesses, credit crunch, and hiring freezes? Does it sound familiar?

On another side, my stock trading is benefiting from this knowledge greatly. My bet in the tech sector has paid off greatly, which also brought my attention to something else. I am earning more in investment than the maximum pay raise they are allowed to give me for great performance (If they ever do a performance review). Which, by my automatic valuation filter means that I should put the minimum effort into my job so I can keep it and maximize my researches in investing.

I also decided to waste 2% of the money gained on anything I feel like. Which, at this early point in my experiments, isn’t much. I believe that it is very important to have fun while learning about investing. It also brought on another question that I have to think about later. If I multiply the investment capital by 10 (~10 years) and pull off this mediocre performance, I will then earn the same thing investing part time (~1 hour per day) than I am making working full time. No more working for a boss in 10 years!!!

I’ve reached my 1 year of investment as well. Meaning that I am done stretching my wings and is ready to fly and take on more risk. Mind you, my current portfolio is pretty risky already, but they are mostly based on large firms with huge capitals and great fundamental products. The next stage, is to move on to a more frequent trading interval (currently only moving each quarter), focusing on smaller percentage gains (~5% per trade).

So that’s a wrap, for my weekend rambling.