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(B)(N) Extreme Economics – A Stock Chart, a Ruler, and a Good Eye

November 21, 2015

Wall StreetDrama. We invest in the stock market for only one reason – we want to have a better chance to earn an income from our money that we don’t have to work for and these companies that we own a piece of, however small, will work for us 24/7 and they’re good at it for the most part.

But investors are, for the most part, not very good at investing and they tend to lose their money or can’t get a reliable return that might exceed the rate of inflation no matter how much expertise they have or don’t have even though (believe it or not) the solution to that problem is simple and a school child can do it – we promise – with just a stock chart, a ruler, and a good eye.

You're born to do it.

You’re born to do it.

And if they start now, they will be investors in the stock market and earn an income from their money and not just their life’s labor.

And that’s important – we’re born to do it but nobody told us that in grade school when we might have learned it with our reading, writing and arithmetic, and investing – because most of us in forty years of labor will earn about $2 million in today’s dollars and spend about 1/3rd of it on taxes and the rest of it on living and we won’t have anything but our government pensions and maybe our house which provided such a good living for the bank all those years, when we can’t work anymore.

Just the facts, man.

Just the facts, man.

Investing is also a social good because the proceeds of the alternative to investing are crime and terror if not labor and they are a pittance compared to the proceeds of investing, and criminals are, for the most part, just very, very, bad investors and they could do better with a little tutorial and thereafter, despise their life of crime as uneconomic – it just doesn’t pay.

And if you learn these rules and have a little money to invest, there isn’t anybody on Wall Street who can beat you anymore.

A Stock Chart, a Ruler, and a Good Eye

Figure 1: The World Class Action

Figure 1: The World Class Action

Hopefully, what we’ve just said is trivial, but we’re going to prove it anyway by buying into the World’s Worst Stocks and guaranteeing 100% capital safety and a hopeful but not necessarily guaranteed return above the rate of inflation and we’re going to do it now because the World financial markets are in a turmoil and destined to fall pending a reason that has none; please see Figure 1 on the right for the World Class Action which is like 2012 now and might be exactly like 2012 next year.

But because we’re interested in “Kid-sized Portfolios” that are child-proof in the Canadian market (please see our recent Post “(B)(N) Extreme Economics – Plan Zero (Buy Canadian)“), we selected portfolios of twenty companies at random in the (N)-class in June 2012 and ran them forward pro forma (no edits or hands on the cash management or margin account) as (B)-class portfolios to today (Exhibit 1 below) and then we’re going to look at the World’s Worst Stocks in Canada today (Exhibit 2 below) knowing what we might expect tomorrow or in a few years time, 2018, and how we might all become millionaires with just a few dollars to spare and some stock charts, a ruler, and a good eye.

And, of course, there’s a tutorial (Exhibit 3) and a final examination (Exhibit 4) and click on them and again to make them larger as required.

Exhibit 1: (B)(N) The World’s Worst Stocks in Canada June 2012

Exhibit 1.1: (B)(N) The World's Worst Stocks in Canada June 2012

Exhibit 1.1: (B)(N) The World’s Worst Stocks in Canada June 2012

Exhibit 2: (B)(N) The World’s Worst Stocks in Canada Today

Figure 2.1: (B)(N) The World's Worst Stocks in Canada November 2015

Figure 2.1: (B)(N) The World’s Worst Stocks in Canada November 2015

Exhibit 3: (B)(N) The World’s Worst Stocks in Canada Today (Tutorial)

ATH Athabasca Oil Corporation

ATH Athabasca Oil Corporation (N)(B)(N)

BTE Baytex Energy Corporation

BTE Baytex Energy Corporation (N)(B)(N)

CCO Cameco Corporation (N)(B)(N)

CCO Cameco Corporation (N)(B)(N)

CFW Calfrac Well Services Limited (N)(B)(N)

CFW Calfrac Well Services Limited (N)(B)(N)

DII-B Dorel Industries Incorporated (N)(B)(N)

DII-B Dorel Industries Incorporated (N)(B)(N)

FTT Finning International Incorporated (N)(B)(N)

FTT Finning International Incorporated (N)(B)(N)

MTL Mullen Group (N)(B)(N)

MTL Mullen Group (N)(B)(N)

OTC Open Text Corporation (N)(B)(N)

OTC Open Text Corporation (N)(B)(N)

PPL Pembina Pipeline Corporation (N)(B)(N)

PPL Pembina Pipeline Corporation (N)(B)(N)

PD Precision Drilling Corporation (N)(B)(N)

PD Precision Drilling Corporation (N)(B)(N)

PGF Pengrowth Energy Corporation (N)(B)(N)

PGF Pengrowth Energy Corporation (N)(B)(N)

POT Potash Corporation of Saskatchewan Incorporated (N)(B)(N)

POT Potash Corporation of Saskatchewan Incorporated (N)(B)(N)

POU Paramount Resources Limited (N)(B)(N)

POU Paramount Resources Limited (N)(B)(N)

SPB Superior Plus Corporation (N)(B)(N)

SPB Superior Plus Corporation (N)(B)(N)

AC Air Canada (N)(B)(B-)

AC Air Canada (N)(B)(B-)

CHR-B Chorus Aviation Incorporated (N)(B)(B-)

CHR-B Chorus Aviation Incorporated (N)(B)(B-)

CLS Celestica Incorporated (N)(B)(B-)

CLS Celestica Incorporated (N)(B)(B-)

EFN Element Financial Corporation (N)(B)(B-)

EFN Element Financial Corporation (N)(B)(B-)

RBA Ritchie Brothers Auctioneers Incorporated (N)(B)(B-)

RBA Ritchie Brothers Auctioneers Incorporated (N)(B)(B-)

RON Rona Incorporated (N)(B)(B-)

RON Rona Incorporated (N)(B)(B-)

STN Stantec Incorporated (N)(B)(B-)

STN Stantec Incorporated (N)(B)(B-)

Exhibit 4: (B)(N) The World’s Worst Stocks in Canada Today (The Final Examination)

Figure 4.1: (B)(N) The World's Worst Stocks in Canada - The Final Examination

Figure 4.1: (B)(N) The World’s Worst Stocks in Canada – The Final Examination

For more information and examples of the Free Market Yield and the terms that we have used above, please see our Posts “(P&I) The Dismal Equation (Ecclesiastes 9:1)” and “(B)(N) S&P 100 Volatility Risk and The Full Moon” and “(B)(N) NASDAQ 100 Volatility and The Stone Bunnies“ and for an introduction to The Barometer “(B)(N) What’s A Girl To Do” or “(P&I) The Swiss Franc Debacle“.

And for more information on real “risk management” in modern times and additional references to the theory and how to read the charts and tables, please see our Post, The RiskWerk Company Glossary and “(P&I) Dividend Risk and Dividend Yield“, and our recent Posts “(P&I) The Profit Box” and “(P&I) The Process – In The Beginning“; and we’ve also profiled hundreds of companies in these Posts and the Search Box (upper right) might help you to find what you’re looking for, such as “(B)(N) TLM Talisman Energy Incorporated” or “(B)(N) ATHN AthenaHealth Incorporated” or “(B)(N) PETM PetSmart Incorporated“, to name just a few.

And for more applications of these concepts please see our Posts which rely on the Theory of the Firm developed by the author (Goetze 2006) which calibrates The Process to the units of the balance sheet and demonstrates the price of risk as the solution to a Nash Equilibrium between “risk-seeking” and “risk-averse” investors within the demonstrated societal norms of risk aversion and bargaining practice. And for more on The Process, please see our Posts The Food Chain and The Process End-Of-Process.

And for more on what risk averse investing has done for us this year, please see our recent Posts on “(P&I) The Easy (EC) Theory of the Capital Markets” or “(B)(N) The Easy (EC) Theory of the S&P 500“, and the past, The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”). The Canada Pension Bond®™, The Medina Bond®™, The Barometer®™, the Free Market Yield®™ and Extreme Economics®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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