Canada’s Railway Profile: Infographic

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Canada is the second largest country in the world in terms of land after Russia. It is interesting to note that Canada is also slightly larger than the US. Canada’s economy is about one-tenth the size of the US economy. However one major difference between the economies is unlike the US economy, Canada is a resource-based economy. Most of the country is uninhabited but rich in natural resources like timber, gold, diamond, nickel, etc.

To move all the natural resources across vast land it is necessary to have an efficient rail network. Though the country has passenger rail systems the Canadian railway system is dominated by freight railways. This is not surprising since the vast majority of the population lives closer to the coasts and closer to the US border. So much of the resources from up north and west are transported thru railroads. Two major Class I railroads – Canadian National(CNI) and Canadian Pacific(CP) – cover the entire country with some smaller routes supported by short line networks. Both CN and CP are also publicly traded and transcontinental. In fact, the recent acquisition of Kansas City Southern(KSU) in the US by Canadian Pacific will provide CP an amazing network connecting Canada all the way to Mexico.

From an investment standpoint, CN and CP are some of the best ways to profit from not only the growth of the Canadian economy but also also the US economy since both railroads are highly interconnected with the US rail network. With that brief intro, below is an interesting infographic I recently came across at the Railcan website.

Click to enlarge

Source: Railway Association of Canada

Disclosure: Long CNI

Bancolombia S.A. to Raise Dividends Next Year

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Bancolombia S.A. (CIB) is the largest financial institution in Colombia. The bank is also the largest in the country based on assets. CIB was the first Colombian company that listed its ADR in the NYSE bank in the 1990s and has operations in other countries as well including Panama, El Salvador, Puerto Rico, the Cayman Islands, Peru and Guatemala.

In 2020, the bank slashed its dividend payouts significantly and the current yield is just 0.80%. In 2019, ADR holders received around $0.30 per quarter excluding fees and taxes. This was cut to $0.06 per quarter. Year-to-date the stock is down about 21%. However the bank plans to increase the dividends for 2022 when the decision is in February/March. Below is the press release:

BANCOLOMBIA S.A. ANNOUNCES REVISION OF PROFIT DISTRIBUTION POLICY
The Board of Directors of Bancolombia S.A., taking into account the current capital and results of
operations and businesses of Grupo Bancolombia, recommended that management revise the
dividend policy to increase the percentage of profit distributions to be proposed to shareholders at
the next ordinary meeting.

Source: Bancolombia

The chart below shows the year-to-date returns of the stock:

Click to enlarge

Source: BNY Mellon

Investors looking for income and growth can consider adding CIB at current levels or under $30 per share. Dividend withholding taxes are not charged if held for qualified retirement accounts. Per BNY Mellon, the DSF fees for dividend is up to $0.05 per share but this was not this year.

Bancolombia Headquarters, Medellin, Colombia

Disclosure: Long CIB

Knowledge is Power: Green Color, Emerging Markets, Top Global Risks 2022 Edition

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The S&P 500 has had another run this year. The index is up by nearly 26% on price basis. Sectors such as tech, banking and transports have done well. Utilities have lagged. Overseas most developed markets have performed as well. Among emerging markets, Chile has performed poorly due to political change there. Brazil is in the negative territory also while Mexico has had a nice run due to its tighter coupling with the US economy. With that said, below are a few interesting articles for the long weekend:

Family wagon from the 1800s

There Will Always Be Reasons NOT To Invest

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One of the questions that many investors often wonder is when is the right time to invest. Or to put it another way, is it really a good idea to invest when there are so many reasons not to go anywhere near the equity market. For example, during the pandemic panic of early 2020 some investors not only pulled out of the market but also avoided investing any money after that. We all know what happened after that. Similarly in the past there have been many instances almost every to NOT invest in stocks. From Brexit to Interest Rates to Valuation Concerns and everything in between were reasons to ignore stocks like a plague. More recently we are worried about inflation, rising interest rates, the never-ending pandemic, etc.

However none of those reasons should matter for investors focused on the long-term. On a daily basis there will be something that makes buying stocks a dumb idea. But the key trick to ignore all the constant noises and keep the long-term goal in perspective. One should not be swayed by emotions or what the crowd is doing.

The below chart shows the growth of C$10,000 from 2001 thru the end of 2020. All through this period there have were a multitude of reasons to not invest some of which are hi-lighted. The multiple European debt crises drama being one example. An investor that simply ignored all the noises would have more than tripled his investment by 2020.

Click to enlarge

Source: ​INVESTING FOR THE LONG TERM – How to avoid emotional investing. RBC Global Asset Management

The chart below shows the growth of S&P 500 during the same period:

Source: Yahoo Finance

Similar to the TSX index, the S&P 500 also had a strong run especially after the Global Financial Crisis (GFC) of 2008-2009.

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • iShares MSCI Canada Index Fund (EWC)

Disclosure: No positions