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(B)(N) What’s A Girl To Do?

July 21, 2016
Born to do it

Is our money safe in the banks?

Drama. Canadians are complaining about high bank fees – if it can be charged, it will be charged – and at the same time, the banks are not paying us any interest on our checking account and they’re paying next to nothing on our savings account and, of course, if interest rates turn negative, as they are in Europe, we might have to pay the banks to keep our money “safe” and not just in our pocket or under the mattress.

But is our money safe in the banks? The answer is no, our money is not “safe” in the banks; they won’t take it all at once (like a thief) but over time, they will take a lot of it and, of course, we’re not earning any money in their handy “savings accounts” and that won’t offset the ravages of inflation against the day that we need to retire.

Safe On The Banks, But Not In The Banks

That’s a harsh reality for small savers, which are most of us, who are not used to “investing” because they think and they know that it’s a “risky business” and that it’s much safer to have a bird in the hand than two in the bush, so says our grandfather who also didn’t have any money for most of his life.

But we can do much better than nothing, or less, by investing “on” the banks by buying their stocks and never selling them (unless we have to) and by doing that, we’re getting 12% per year on average with no risk to speak of (please see below) and it’s tax-free because it’s just accumulating in our “Tax Favored Savings Plan” (TFSA) and although we put $46,500 into this plan since 2012 (the limit to date of what we can put into it under the regulations) and we did nothing but that in all of that time, we can draw out $58,000 today and put it in our checking account with no tax consequences; or we can collect $225 per month, tax-free and rising forever even if we do nothing else.

Notwithstanding what we have just said, we know that there are many people, possibly most people, who will never be investors because either they will never have any money to invest; or their money is tied-up in their house which they also call “home” (and which is sort of an “investment”); or they just buy some mutual funds (usually from the bank) and hope that somebody else will do it for them.

In the exhibit below, we’ve run the (B)-class portfolio in the Canadian banks (which are really popular right now with foreign investors) with the restriction that we will buy into and any of them all and never sell our stocks in the banks although we will go to cash if the stop/loss prices are triggered (safety first) and only buy them back if, somehow, their prices recover to at least their last stop/loss price; please see Exhibit 1 below (and click on it and again to make it larger as required).

Exhibit 1: The RiskWerk Company Tax-Free Real Bank Perpetual Savings Plan

Exhibit 1 The RiskWerk Company Tax-Free Real Bank Perpetual Savings Plan

For more examples of the (B)-class portfolio in difficult markets, please see our recent Posts on”The “W” Syndrome“, Steel,  Green Energy and The Coal War; and the Canadian Mines have also taken-off – please see our recent Post “(B)(N) Extreme Economics – The (New) Canadian Mines” for a heads-up on that.

And 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.


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
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


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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