Rising rates can be bullish


Despite the recent turbulence, historically, “equities have gained significantly in periods of rising rates,” wrote Jodie Gunzberg, managing director and head of U.S. equities at S&P Dow Jones Indices, in an email. “Since 1971, the S&P 500 has gained about 20% on average in rising rate periods, has gained 8 of 9 times and has gained nearly 40% twice, with less than a 4% loss for its worst rising rate period.” Gunzberg’s analysis evaluated the benchmark U.S. index on a total-return basis.

rising rates

“Since the rising rates are happening in a profitable economy with strong growth forecasts and increasing dividend payouts (with an extra boost from the income tax reduction), the variables impacting the equity duration are moving to love stocks rather than hate them. This makes sense because interest rates may not drive equities but both can rise concurrently from the environment that lifts them.”

Per her analysis, for every 100 basis point increase in interest rates, every sector, investment strategy, and market-capitalization size category rises. Small stocks see the biggest gain, rising an average of 7.3% on every 100 basis-point rise, while mid-cap stocks gain 5.9% and large-cap stocks advance 2.5%, on average.

“The growth acceleration that cancels the negative equity duration is the same growth that propels small-caps so much, putting them in a leading spot to rise with interest rates – especially since monetary policy is not too tight so that rising interest rates don’t hinder the borrowing by small companies too much,” Gunzberg wrote.

Time will tell, but monetary expansion since 2009 could also add up to this possibility



Initiated position in BAM & BIP

bip stock


I have initiated a small position in  & BIP



Diversified asset base

The partnership owns a strong and diversified portfolio of assets, including utilities, transportation, energy, and communications infrastructure across North and South America, Asia Pacific, and Europe.

This portfolio of critical infrastructure assets globally provides long-term investors nice diversification and helps the company generate stable cash flows with minimal maintenance capital expenditures.

Its assets range from electricity and gas distribution businesses in Australia and the U.S., railroads in South America, and a portfolio of 36 ports in North America, Asia Pacific, the U.K., and across Europe.

As global customers use these critical assets, Brookfield gets paid a utilization fee, which generates stable cash flow. The company distributes the most of its cash flow among shareholders in dividends.

Strong capital gains

Investors who bought Brookfield Infrastructure units in 2009, when it started trading, have seen the value of their units surge more than three times — a return of 347%.

On a total-returns basis, the company has delivered a 27% return on annualized basis, far exceeding many of its peers. The company has been able to produce superior returns because its businesses generally operate under regulated or contractual frameworks that provide sustainable cash flows.

Because the company’s assets are diversified by sector and geography, its portfolio’s exposure to any single counterparty, regulatory regime, or market fluctuation is reduced.

In the recent quarter, the growth in the company’s cash flows has been led by a strong and growing utility segment. Funds from operations from utilities surged 68% from the same period a year ago to $168 million.

The current equity offering suggests that the company is still in growth mode, as the management indicated in its press release: “Brookfield Infrastructure intends to use the net proceeds … to fund a growing backlog of committed organic growth capital expenditure projects, an active pipeline of new investment opportunities and for general working capital purposes.”

Dividend growth

Brookfield Infrastructure has been a great dividend-growth stock. With a current dividend yield of 3.4%, Brookfield pays a quarterly payout of $0.435 a share.

The company targets annual growth of 5-9% in its dividend, but the actual growth of 12% has far exceeded its distribution target.


I have initiated a small position in BAM STOCK


diversification of assets

bam diversification


Dividend more than doubled since 2009 & stock is over 400% in capital appreciation, yes you can find better but with this type of stable business I am satisfied with the performance. Dividend growth at a healthy averaged 7.8% per annum.


stock chart bam



Initiated a position in CNR stock

This week I went shopping for some reasonably well priced stocks for the long run.

I have initiated a position in Canadian national railway.


1) wide moat you can’t just enter the industry and start building your own railroads…. it would cost a fortune

2) very good capital and cash flow management see below numbers

capital mgmt cnr

3) dividend growth for the next couples of years will easily be on or above 10% a year, that coupled with a 1.9% current yield is a long term total return of 11.9% annually, I am satisfied with that.




In Many areas in our economy machines have automated some of the once human tasks. The stock market operations is no different. I wanted to share this article about it.


The role of the investor is not to try to anticipate or beat those algorithms, it’s just not possible. The real investor generate ideas that can lead to long term very good total return.

In my case, when I saw the stock price of AAPL reaching very very low levels in terms of p/e ratio in 2013, coupled with the fact that the company was already cash rich, and having the strong belief that their customer base would stay loyal to the brand, I decided to initiate a large position. it since then generate double digit return until today and will probably do so going forward.

if you had the same type of thought process for Tesla, Amazon, visa, mastercard, you would also be averaging tremendous results in 2018.



ENB 2018I just went shopping for another 25 qty of ENB stock. When I looked at the 10 year chart I figured it is very unlikely that price would become a lot cheaper with a whopping 6.26 dividend yield while the company raised it another 10 % recently.



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