Peanut Convertible Debentures Index™ (August 2019 Review)

Hockey night in Sweden. Brynäs IF vs. Djurgårdens IF, at the Hovet in Stockholm, Sweden.  Copyright © 2007 Felix Choo / dingobear photography.  Photo may not be reproduced without permission. 

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We introduced the Peanut Convertible Debentures Index™ back in January, and now you know it as the benchmark convertible debentures index in Canada! ☺️ For more background on the index, please click here. 

Important disclaimers: Like everything else on this website, content here is provided as information and opinions only and not intended to be a provision of investment advice or a recommendation of any investment action in any form. There is no guarantee, warranty, representation, or other assurance whatsoever on any of the information provided.  Information and opinions reflect our views as of the date provided, but may change without notice.  Investments made in convertible debentures are exposed to the risk of financial losses, and as with all disseminated information concerning investments, it is highly recommended that an individual consult with a qualified investment professional before making any investment decisions.



Peanut Convertible Debentures Index™ (August 2019 Review)

Another month, and another month of positive returns for Canadian convertible debentures.  In August, the Peanut Convertible Debentures Index™ went up 1.64%.  Year-to-date to August 31, 2019, the Peanut Index is up 10.47%, exceeding the return of the FTSE TMX Canada Convertible Bond Index™ by 336(!) basis points.

Bond yields plummeted in August, which pulled up bond prices, convertible debentures included.  Geopolitical and economic risks remain elevated, and central banks look fairly firmly in an easing cycle now.  Trade worries between the US and China still linger in the background, but stock markets, for now, are still scaling the wall of worry.  None of us have a crystal ball as to how long this will continue, but in the event of a serious adverse market event, convertible debentures won't be immune from the damage.  As per usual, stay diversified out there and focus on the long-term.

Please click on the table below to also see how performance for the Peanut Convertible Debentures Index™ compared with two exchange-listed Canadian convertible debenture ETFs, the iShares Convertible Bond Index (ticker: CVD) and the CI First Asset Convertible Bond Index (CXF), as well as the FTSE TMX Canada Universe Bond Index™ and the S&P/TSX Capped Composite Index.  Pro tip: if you still find the table below too small to read after clicking on it, please simply download the PNG file, which then can be zoomed to a size that you prefer.

If you're a regular reader of this blog, you are probably already aware that we update the Peanut Convertible Debentures Index™ levels and daily percentage changes on a frequent basis in the dedicated widget on the right sidebar for desktop users and the Peanut Convertible Debentures Index™ page for both desktop and mobile users.

We will return to do another performance update post in about a month's time. Until then, good luck with your convertible debenture (and other) investing.
 

Drop Us a Line, Drop Us a Dime

Thank you for reading The Canadian Convertible Debentures Project.  As always, if you have any comments, questions, or feedback about convertible debentures and/or this blog, please leave us a comment at the bottom of the page or email us at convertibledebs@gmail.com. Note it may take us a few days to get back to you depending on our schedules. 

In addition, for media, sponsoring, and/or financial institution inquiries, please email us at convertibledebs@gmail.com.  We appreciate your interest!

If you enjoy reading this blog and have found it useful and valuable in your own investing in convertible debentures, we'd be humbled if you'd like to make a contribution to support us in our mission of making quality, independent, Canadian convertible debentures content freely available to all investors out there, big or small.

If you're interested in contributing, please click on the "donate" button below and follow the instructions.  Donations to this blog may be made by credit card or PayPal, and are processed by PayPal as a third-party on a secure platform; we don't ever see or access your credit card number.  We thank you for your continued support - we really appreciate it!

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Peanut Convertible Debentures Power Rankings (as at August 30, 2019)

City faces. Crown Fountain, Millennium Park, Chicago, Illinois.  Copyright © 2014 Felix Choo / dingobear photography.  Picture available for licensing at Alamy Images. Photo may not be reproduced without permission. 

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Happy Labour Day!  This is the 45th update of the Peanut Power Rankings, which takes into account data current to August 30, 2019.  Thank you for continuing to read and support the Canadian Convertible Debentures Project.    

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First, a quick summary of what the Peanut Power Rankings are all about. In a nutshell, the rankings are based on two main considerations: (1) a proprietary quantitative model I developed to help myself determine the "fair value" of a particular convertible debenture issue and (2) a qualitative judgment (based solely on my own humble opinion) on the particular issue, issuer, economic environment, interest rates, and other factors.

For this version of the Peanut Power Rankings, please click on the table below to read it larger.  If you still find it too small to read, please download the PNG file, which then can be zoomed to a size that you prefer.  For those who are looking to obtain a PDF or Excel version, please email us for more information; they can be made available for a small fee ($5). 

For more background information on the Peanut Power Rankings, please see our FAQs by clicking here.

Important!: Like everything else on this website, content here is provided as information and opinions only and not intended to be a provision of investment advice or a recommendation of any investment action in any form. There is no guarantee, warranty, representation, or other assurance whatsoever on any of the information provided.  Information and opinions reflect our views as of the date provided, but may change without notice.  Investments made in convertible debentures are exposed to the risk of financial losses, and as with all disseminated information concerning investments, it is highly recommended that an individual consult with a qualified investment professional before making any investment decisions.



Market Commentary - Super Quick Points (August 30, 2019)

• Hope you've had a nice summer.
• As you ought to be aware, global trade concerns and terrible politically driven trade policies have thrown uncertainty into the global economy, and central banks are on a dovish stance in response.
• I expect at least two more rate cuts from the US Fed before Christmas, and maybe one cut from the Bank of Canada (which has an overheated housing problem in Vancouver and Toronto to worry about).
• Yield curve inversion (i.e., yield on a 10-year bond is less than the yield on 2-year bond or, if you prefer, yield on a 10-year bond is less than the yield on a 3-month treasury bill) in both the US and Canada is now clearly a thing. Note that sustained yield curve inversion (based on the the 10-year and 3-month yields) in the US has successfully predicted an economic recession in each of the last seven (7) US recessions.  Historically, the lead time from signal to recession is around 18 months.  We will see if this predictor makes it 8 for 8 sometime around early 2021. 
• Stock markets are around record highs, even with a bit of volatility in August.  Note, however, we are getting to that spooky time of year in September and October where severe adverse market events or tripping hazard.  Also note that stock markets tend to lead economic cycles, so if the bond market is right about recession in 18 months ... 
• Not to fear-monger, but there are risks in the system.  A Canadian federal election in October and, more significantly, a US presidential election next November will both be acrimonious in nature with unpredictable effects on markets.  
• That said, with rates heading lower and a still (somehow) buoyant stock market, convertible debentures have exceeded all expectations so far in 2019.  As measured by the Peanut Convertible Debentures Index™, convertible debentures are up 10.47% year-to-date to August 30, 2019. 
• It would be unreasonable to expect this type of continued performance in the near-future, however, not with the kind of risks we are facing.  
• As per usual, stay diversified out there, and focus on quality issues and returns for the long-term. 

Drop Us a Line, Drop Us a Dime

Thank you for reading The Canadian Convertible Debentures Project.  As always, if you have any comments, questions, or feedback about convertible debentures and/or this blog, please leave us a comment at the bottom of the page or email us at convertibledebs@gmail.com. Note it may take us a few days to get back to you depending on our schedules. 

In addition, for media, sponsoring, and/or financial institution inquiries, please email us at convertibledebs@gmail.com.  We appreciate your interest!

If you enjoy reading this blog and find it useful and valuable in your own investing in convertible debentures, we'd be humbled if you'd like to make a contribution to support us in our mission of making quality, independent, Canadian convertible debentures content freely available to all investors, big or small, out there.  We thank you for your continued support!

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