Category: Weekly Commentary

20 Jan 2020

Issue 3 – TFSA and the 72 Rule

I usually write about a company that our funds are invested in. This time, I’ve decided to write about something different yet important to all investors. The tax-free savings account (TFSA) was introduced in Canada in 2009. For the first year, any Canadian 18 years of age or older could make a TFSA contribution of 5,000. Yearly since 2009, contribution limits have been adjusted for inflation and rounded to the nearest $500. The only exception was 2015 when the amount was $10,000. For 2020, the maximum yearly amount stands at $6,000 and since you can go backwards in order to ‘catch up’, the accumulated contribution amount for anyone who was age 18 or older in 2009 is $69,500; a substantial amount of money.

 

By Charles Marleau, CIM

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By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

13 Jan 2020

Issue 2 – Important Reminder to Contribute to Your RRSP and TFSA

Dear Palos Friends,

The deadline for your 2019 RRSP contribution is quickly approaching and we would like to remind you of the importance of contributing for the future. The earlier you start contributing to an RRSP or TFSA, the more money you’ll have when it’s time to retire. There’s nothing like the power of tax-free compounding of returns.

Chers amis de Palos,

La date limite pour votre cotisation REER 2019 approche à grands pas et nous aimerions vous rappeler l’importance de cotiser pour l’avenir. Plus tôt vous cotisez à un REER ou à un CELI, mieux en sera pour vos avoirs au moment de votre retraite. Il n’y a rien de tel que l’avantage des types de comptes libres d’impôt (CELI) ou de report d’impôt (REER) pour faire fructifier votre argent.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

06 Jan 2020

Issue 1 – What Worked And What Didn’t In 2019 And How The Funds Are Positioned In Early 2020

2019 was a difficult year for active managers as headline news created many uncertainties. Active managers carried more cash than usual, held large short positions, or were long volatility. These protection trades were costly. The Palos Income Fund LP and Palos Equity Income Fund, which are active funds, fared well when compared to other actively managed funds. These funds were up 18.34% and 14.63%. The TSX Composite was up 22.88% for the same period. I’m pleased with our performance, especially because the Palos Income fund was holding up to 9% of cash at various times during the year. Similarly, the Palos Equity Income Fund held 10% in fixed income securities and 9% in cash. We managed the funds both cautiously and prudently.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

30 Dec 2019

Issue 54 – Happy New Year

Happy New Year!
Please note that the performance of Palos funds in the weekly commentary has been updated, as well as Hubert’s weekly note of the Macro View. We wish you and your family a joyful and festive holiday season.

Bonne Année!
Veuillez noter que le bulletin de performance des fonds Palos dans le commentaire hebdomadaire a été mise à jour ainsi que la note hebdomadaire macroéconomique de Hubert. Nous vous souhaitons, à vous et à votre famille, un joyeux temps des fêtes.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

23 Dec 2019

Issue 53 – Happy Holidays

Happy Holidays!
Please note that the performance of Palos funds in the weekly commentary has been updated, as well as Hubert’s weekly note of the Macro View. We wish you and your family a joyful and festive holiday season.

Joyeux Fêtes!
Veuillez noter que le bulletin de performance des fonds Palos dans le commentaire hebdomadaire a été mise à jour ainsi que la note hebdomadaire macroéconomique de Hubert. Nous vous souhaitons, à vous et à votre famille, un joyeux temps des fêtes.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

16 Dec 2019

Issue 52 – Happy Holiday & Thank You

As the holiday season approaches, I would like to extend my warmest wishes for happiness, health and a prosperous new year. I’d also like to express how grateful I am for having the privilege of serving your needs. Having your trust and loyalty are very much appreciated, and we never take your patronage for granted. ‘Client first’ is what we stand for and we continually emphasize this within our Palos team. We will always remain dedicated to serving your interests first.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

12 Dec 2019

Issue 51 – Restaurant Brands (too much of a good thing)

Restaurant Brands International (TSX/NYSE: QSR) operates fast food restaurants all over the world. They own iconic brands like Burger King (BK), Tim Hortons (TH), and Popeyes (POP). Combined, they have over 40,000 restaurants around the world; and growing. Most of this growth originates from BK and POP locations while TH appears to be slowing. Looking forward to 2020, I remain confident that the TH slowdown will prove temporary and that we’ll see better trends next year.

Disclaimer: Palos Funds are shareholders of QSR.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

09 Dec 2019

Issue 50 – Special Issue

Good morning dear clients,

Hubert has updated his “Macro View” on the weekend. As it is time sensitive, we decided to publish a special issue. Please also note that from next week, we will change the scheduled time for our weekly newsletter to every Monday around noon.

Bonjour chers clients,

Hubert a mis à jour sa revue macroéconomique ce week-end. Étant donné la pertinence du communiqué, nous avons décidé de publier un numéro spécial. Veuillez également noter qu’à partir de la semaine prochaine, nous changerons l’heure prévue pour notre newsletter hebdomadaire, soit à tous les lundis vers midi.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

05 Dec 2019

Issue 49 – Travel Message

Charles is on the road this week for meetings outside of the office. His weekly commentary will resume next week. However, please note that Hubert’s “Macro View” has been updated.

Charles est en déplacement par affaires cette semaine. Son commentaire hebdomadaire reprendra la semaine prochaine. Cependant, veuillez noter que la revue macroéconomique de Hubert a été publiée.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

28 Nov 2019

Issue 48 – Alimentation Couche-Tard is Taking Flight

On November 26th, Alimentation Couche-Tard Inc (ATD/B) announced an unsolicited CAD $8.9 billion offer to buy Australian convenience store chain Caltex. It’s notable that should this transaction be realized; Couche-Tard has the means to the finance the deal entirety with debt. However, under such a scenario we are cognizant that Couche-Tard’s balance sheet may become uncomfortably ‘stretched.’ Therefore, it should come as no surprise if the company announced their intention to raise between $1 to $2 billion in financing.

Disclaimer: Palos Funds are shareholders of ATD/B.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

21 Nov 2019

Issue 47 – Travel Message

Charles was unable to write their commentary this week as he has been in meetings outside of the office. Their column will resume next week. However, please note that Hubert’s “Macro View” has been updated.

Charles ne rédigera pas de commentaires cette semaine puisqu’il est en déplacement à l’extérieur. Vous pourrez les lire à leur retour la semaine prochaine. Veuillez noter la mise à jour de l’article “Macro View” de Hubert.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

14 Nov 2019

Issue 46 – Superior Surprises to The Upside

The 3rd quarter (3Q) has historically been a weak quarter, as a majority of the company’s business activity is seasonal in nature. However, Superior Plus (TSX:SPB) managed to report a strong Q3 with adjusted EBITDA of $48 million, well above the street’s consensus estimate of $35 million.

Disclaimer: Palos Funds are shareholders of SPB.

 

By Charles Marleau, CIM

Continue Reading in PDF

By Charles Marleau, CIM

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

07 Nov 2019

Issue 45 – Out of Favor, But Far from Out

It does not take a genius to know that the energy sector is out of favor. Oil & gas producers and midstream companies are currently bearing the brunt of it. Midstream companies usually have long term take-or-pay contracts with customers and provide product marketing.

Disclaimer: Palos Funds are shareholders of KEY.

 

By Charles Marleau, CIM & Joany Pagé, CFA

Continue Reading in PDF

By Charles Marleau, CIM & Joany Pagé, CFA

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

31 Oct 2019

Issue 44 – Happy Halloween!

Dear Clients,

Charles and Joany were unable to write their commentary this week as Charles has been travelling to Toronto. Their column will resume next week. However, please note that Hubert’s “Macro View” has been updated. We hope you have a fun Halloween!

Chers clients,

Charles et Joany ne publierons pas de commentaires cette semaine puisque Charles est en déplacement à Toronto. L’édition 45 reprendra la semaine prochaine. Veuillez noter la mise à jour de l’article “Macro View” de Hubert. Nous espérons que vous avez du plaisir en cette journée d’Halloween!

 

By Charles Marleau, CIM & Joany Pagé, CFA

Continue Reading in PDF

By Charles Marleau, CIM & Joany Pagé, CFA

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell

24 Oct 2019

Issue 43 – Canadian National Railway Strong as Nails

Earnings season is back at the forefront and one of the Canadian bellwether stocks reported on Tuesday night. Canadian National Railway (TSX: CNR) reported in-line 3Q 2019 results which were driven by cost cutting and lower taxes. However, they are reducing their guidance from low double digit to high single digit EPS growth. The company is being proactive and has started to put locomotives and railcars into storage and reducing their headcount in the markets where they are seeing some softness in volumes. This is why CNR has one of the best operating metrics in the industry. Management definitely has the tools and the expertise to move quickly and efficiently. I’m very pleased to see how quickly and proactively the company is acting ahead of anticipated slower growth. It seems that the long-term vision of the company is intact as they maintained their capex guidance for 2019. CNR seems committed to continue investing in capacity, efficiency, and long-term projects. However, the company is also being prudent as they pushed their 2020 budget to December to have better visibility.

Disclaimer: Palos Funds are shareholders of CNR.

 

By Charles Marleau, CIM & Joany Pagé, CFA

Continue Reading in PDF

By Charles Marleau, CIM & Joany Pagé, CFA

 

Click to Read Macro View

By Hubert Marleau

 

Click to Read Options Corner

By Robert Mendel

 

Click to Read Palos-Mitchell Report

By William Mitchell