Dave Canal's blog

Frank Thoughts: The Gift

If we could choose a genetic gift, most of us would probably choose to be a creative genius.   To be someone such as Elon Musk or Michelangelo would be perfect.   Or at least, we think it would be.   Who could not be happy creating something that didn’t exist before?   Unfortunately, this “gift “often comes with a heavy emotional price.  Creative people often experience addiction and depression issues.   But are these issues the cause of creativity or the result?  It’s not unlike the Alzheimer debate.

Frank Thoughts: The Speed of Light

My first experience with the speed of light was as a young caddy.   As I looked across a fairway I saw a golfer hit a tee shot some distance away.   The player hit the ball, finished his swing, and then – what seemed seconds later in the hot humid air – I heard a CRACK sound.   I was puzzled.   At the time, I didn’t know the speed of light traveled 671,000,000 MPH which was dramatically faster than the speed of sound (761 MPH).   But I did experience it.   It was my introduction to something that would occur much later in my life, high-frequency trading.

Frank Thoughts: The Alfred Dailey Experience

We like to believe we control our conscious thought.  But I believe our subconscious – the “hard drive” part of our brain – is far more powerful.  It not only records our experiences but is utterly ruthless in the recall of anything which impacts us negatively.  My first business encounter with that was the day I received a U.S. Treasury certificate having a stated face value of $50,000.  That was an immense amount of money in 1966.  At the time, it was a period of rising interest rates … much as it is now.

Frank Thoughts: The Active Manager

The active manager cannot control his own destiny in times of high market correlation, but when correlation is a normal 26% - or lower - he can “hammer” the market.  Correlation is the degree that different securities move together in tandem.  The norm of 26% goes back close to a hundred years.  Sudden increases in correlation are always related to macro events.  The crashes of 1929 and 2008 are examples.  Both happened because of too much debt; stocks at 10% margin houses at 5%.

Frank Thoughts: The Gunslinger

Today it might be hard to grasp, but when I was 21 there were clients who hired me because I was “a kid.” They hoped I would become “a gunslinger.”   Even in the 1960s, fear of the market still existed from the crash of 1929.  To be called a Gunslinger was an accolade applied only to the best money managers.   Of course, I wasn’t one of them.   But I did have two of the attributes; I was young and without fear.  Fortunately, for my new clients, I was under the spell of Robert F. “Pete” Lawson one of the first portfolio managers at Fidelity Investments.  

Frank Thoughts: The Cheesecake Factory

As I walked through a Baltimore hotel lobby, I heard someone call my name.  Startled, I turned toward the sound and saw a man coming toward me.   As I saw him, I remembered meeting him six months earlier in California.  His name was Bill Kling and he was the chief financial officer of The Cheesecake Factory.   As we shook hands, he introduced me to the man he was with, David Overton.  David was the C.E.O.

Contravisory Capital Markets Overview

In our attached Capital Markets Overview, we share with you some thoughts on the 1st quarter and our outlook for Q2 and beyond. 

Frank Thoughts: The Half Life

Like most people, I’ve heard the term "half-life" for years.  It always seemed to be used in reference to a prescription drug’s time of effectiveness.  So I was surprised when I heard it used by record executive Clive Davis about his business.  He had used the term to describe a song writer’s life span of creativity.  That reference got my attention.  I had always found it fascinating that creative people can excel at a particular craft and then suddenly they lose the gift.  Their journey is over.  They can’t write, sing, paint or act as well as before.  Ricky Nelson wrote about the experie

Frank Thoughts: Masters of Deception

The other day, I was sitting in a restaurant with a friend watching a basketball game.   My friend is also in the investment business.  The game must have become boring because we started talking about the business.    The change of topic caused my sub-conscious to activate.  I found myself saying, “Geoff, it has always bothered me how the entire financial sector hides whatever they charge a customer.  I can’t think of another profession where people do that.   Banks, brokerage firms, and insurance companies all do it.

Contravisory Capital Markets Overview

It's a new year, so we'd like to take a moment to share with you our Capital Markets Overview in which we recap 2017 and look ahead to 2018 and beyond for stocks and fixed income. 

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As I grow older, I pay less attention to what men say. I just watch what they do.

– Andrew Carnegie