Dave Canal's blog

Frank Thoughts: The High Wall

Gentlemen, we must leap over the high wall.”  Hearing that, I thought to myself “Huh?  What is he talking about?”  I was too young (21) – and too poor-- to have an understanding of what this seeming allegory was about.  The words were spoken with strong conviction in a heavy Boston Brahmin accent.  To me, an Irish kid from public housing, he sounded like Winston Churchill.  But then he did have a famous name and undoubtedly lived on an estate … with high walls.  The man, I thought, probably assumed everyone else in the room did as well.  But leap over one?

Frank Thoughts: The "Retailing Genius"

To recall a lunch from 38 years ago, it had to have an emotional impact.  This one certainly did.  I felt despondent as the lunch began. The guest speaker was the Chief Financial Officer, Norman Rifkin, of Toys R Us.  At that time, the toy retailing industry was an eight billion dollar business.  Toys R Us was the largest company in the industry at just $250 million.  I had bought the stock for ten dollars and as I sat at the lunch it had fallen to five dollars.  Such a reality would have made anyone despondent!

Frank Thoughts: The Long Wave

As I sat in the faculty club dining room with Professor John Sterman I thought, “My God, it’s going to be miserable to go through a long-wave downturn.” Our lunch was 25 years ago.  Judging by the current economic and presidential activity, my foreboding was totally justified.  Professor Sterman is a professor at M.I.T.’s Sloan School and an expert on the early 20th century Russian economist Nicolai Kondratieff, the man who originated the long-wave concept.

Frank Thoughts: The Rolling Bear Market

The investment world is experiencing something it has never seen before … a “rolling” bear market.  Sector by sector, industry by industry, the market has been declining for a year and a half.  Yet, overall the market has not declined!  It is a situation that has confused everyone.

Frank Thoughts: The Brokerage Business

“How would you like your business card to read?” the office receptionist asked.   “Francis Patrick Boland,” I answered.  It was an outlandish statement on my part.  Everyone around me had a nick name.  I did not.  But then I wasn’t an upper-class Boston Brahmin. “Might as well put my Irish heritage up front,” I thought.  It was the spring of 1965 and I was a new stockbroker at Estabrook & Co.

Frank Thoughts: The Sell Discipline

How often have you heard an investment management firm discuss or write about their sell discipline?  Probably never!  Most firms don’t have one.  I was, in fact, in the investment business for 35 years before I fully realized its importance.   Even then, it wasn’t my epiphany.  The realization was forced on me by a client who became a friend.

Frank Thoughts: The Really Big Picture

An economic paradigm shift occurs over a long period of time.  As a consequence, it is often not recognized by most people as it is happening.  This seems to be the present situation with China.   It is not until a new paradigm reaches an inflection point of change that it becomes obvious ... at least to some.   My belief is that we in the United States have reached an inflection point in our transition from an Industrial Economy to a Knowledge/Service-based economy.  This will have a major impact on economies all over the world … especially China.

Contravisory Current Market Thinking

Market Update

January 14, 2016

We are sending this note to give you our perspective on the recent global market turmoil and volatility.  We realize these periods can be very unsettling and stressful.  It’s difficult to keep your cool when the 24/7 news cycle is on high alert as these events unfold.  While there are legitimate concerns about the global economy, we believe the pessimism is significantly overdone.

Frank Thoughts: The Entrepeneur/ Investment Manager

The investment world offers a choice between two different investment approaches.   However, one has to be aware of what the choices are.  Each has a time when it is the appropriate style.  The first is a “top down” process based on macro events.  It is the process virtually every professional money manager uses. The second is micro.  Micro --- as the word suggests --- is based on company specifics.  It works best in a period of rising interest rates … something that hasn’t happened for 35 years.

Frank Thoughts: The Active Manager's Role

Today it is difficult to imagine an active portfolio manager having the aura of a rock star.  But in a period of rising interest rates (1945-1982) it did happen and will happen again.  After all, who wouldn’t regard someone with respect who could make them money by outperforming the stock market?  Today the common wisdom is that it can’t be done and one should buy ETFs (exchange traded funds).  Not appreciated is that rising interest rates can reflect prosperity while declining interest rates often reflect economic difficulty.  


There is only one side of the market and it is not the bull side or the bear side, but the right side.

– Jesse Livermore