Peter Lynch isn’t a household name such as Warren Buffett, but he holds significant renown within investor circles. During his 13 years (1977-90) managing the Fidelity Magellan Mutual Fund, he achieved 29.2 per cent annual returns, almost doubling the 15.8 annual gains of the S&P 500. It was a good time to be in stocks and predates when I seriously started my own stock investing journey. A $10,000 investment at the start of his tenure would have become $280,000 by the end. He has authored numerous books.

Despite his extraordinary success managing the fund, many investors in the fund were known to have lost money, as they chased performance after years of big gains and sold during inevitable times of weakness. “With stock investing the stomach is a more important organ than the brain.”

Here is his list of his 10 most dangerous things people say (or think):

1

“It’s gone down so much already it can’t possibly go lower.” I addressed this common fallacy in my most recent article with data outlining median drawdowns of individual stocks, and how it is normal for a stock to experience a decline of 50 to 95 per cent. Some go to zero.

2

“It’s gone so high, how can it go higher?” While there is a limit on how low a stock can go (zero), there is no upside limit, as the current Magnificent Seven (Mag 7) demonstrate.

3

“Eventually they always come back.” The data in my last column showed that after a sell-off, approximately half of stocks never make their previous high.

4

“It’s three bucks, how much can I lose?” You can lose 100 per cent of whatever you invest. Question: If Investor A buys 200 shares of a $50 stock ($10,000), and the stock drops to $3, when Investor B buys 6,000 shares ($18,000) and the stock goes to zero, who loses the most money? The share price has nothing to do with how much you can gain or lose in totality.

5

“It’s always darkest before the dawn.” That is normally true, but it’s important to understand that it’s also “always darkest before it gets pitch black.”

6

“The business can’t possibly get worse.” As with share prices, business can always get better and can always get worse. Who would have thought oil could go to minus $30 — but it did during COVID.

7

“When it gets back to what I paid, I’ll sell.” I will admit having succumbed to this sentiment. It is always best to defer to current financials and business prospects. Mistakes happen in this business as in all businesses.

8

“I don’t have to worry; I own conservative stocks.” While generally true, specifically it can be very wrong, as the recent 50 per cent losses in Bell Canada and Telus illustrate.

9

“Look at all the money I lost NOT buying…” Opportunity cost is always present, but as illustrated a couple of columns ago, I have done very well while missing most of the Mag 7. Regret is one of the emotions we need to constantly fight.

10

“I missed [insert hot stock name here — Nvidia, for example], I’ll catch the next one.” Stocks promoted as “the next [insert same stock name here]” are often duds. Finding the next one is akin to the proverbial needle in a haystack. Avoid longshots, at least until they prove to be viable companies.

11 (bonus)

“The stock has gone up, I must have been right” or “the stock has gone down, I must have been wrong.” Short-term stock movement is random. Only after a couple-year period will you know whether the purchase decision was right or wrong. It is important to distinguish luck from skill.

It is fair to say that most investors will think or say these things frequently. They all have some logic to them, but as history has demonstrated, they can be dangerous thoughts.

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Firstly, however, as I write we have just crossed the halfway mark of 2025, and a quick recap of our two markets is in order. The U.S. S&P 500 cratered 21 per cent between Feb. 19 and April 7. It then staged a remarkable rebound, recovering all its losses and reaching a new all-time high. While a 21 per cent decline meets the classic definition of a bear market, this behaved more like a major correction, with a quick drop followed by a quick recovery. Bear markets tend to start slowly and build over time. Canada’s TSX, which generally exhibits more stability than the S&P 500, was down a modest 13 per cent before fully recovering.

From a year-to-date perspective, the TSX was up 8.6 per cent at the halfway point, with the S&P 500 up 5.5 per cent — remarkable performances, given the levels of uncertainty in trade and geopolitics. That said, I remain concerned from valuation, political and economic standpoints, bringing me back to the main focus of this article: other countries in the world.

I found a great website, Worldperatio.com, that lists many countries and the price/earnings (p/e) average for their publicly traded companies. As a refresher, the p/e is the price you pay for a dollar of earnings. Would you sooner pay $20 per dollar of earnings, or $10? The lower the number, the better the valuation. The website also shows the current p/e in relation to the historic average p/e. For example, New Zealand has the most expensive stocks in the world, with an average p/e of 31.3, but surprisingly that is only 2.0 higher than its 20-year average p/e of 29.3 (31.3 minus 2.0). I don’t know why this market is so expensive and I’m not interested in buying New Zealand at this valuation.

More than 95 per cent of my investments are in Canada and the U.S. From the table shown here, you can see they both have high valuations and are trading well above their long-term averages. While Canada has a lower p/e than the U.S., it has the highest p/e of any country relative to its long-term average, now trading with a p/e of 20.9 compared to its long-term average of 14.7 (20.9 minus 6.2).

The columns for GDP growth, inflation and central bank rate were pulled from another terrific website, Tradingeconomics.com, which I use regularly. We need to be cognizant of these factors when considering investments in other countries. I searched up the current population of each country to add to the overall picture and included a ticker symbol for a U.S.-based exchange-traded fund (ETF) on each country. I plan on doing a little more work on Canadian-based worldwide ETFs.

Areas of interest

Argentina is an interesting country. Milei has been in power for just 18 months and has wrestled inflation down from 300 per cent to 43.5 per cent over the past year. This annual rate overstates the rapidly decreasing month-over-month rate now in the two per cent range. Italy is also interesting as Meloni has provided leadership stability to the historic musical-chair aspect of Italian politics. Both politicians appear to be providing sane economic policies to countries that had been economic basket-cases. Interestingly, both were labelled “far-right” by legacy media.

Ireland is also interesting in that it has had one of the strongest economies in the world over the past 10 years, partly due to low corporate tax rates attracting corporate head offices. However, it appears to have a volatile economy, with its current supersized growth following a significant recession.

China has attractive stock valuations, but I have no interest investing in this autocratic regime for numerous reasons. India is considered the new world growth driver, but its stock valuations are as expensive as those in the U.S. I will also pass on it.

Norway has an energy-based economy like Canada’s, but stock valuations almost half of Canada’s, trading very close to its long-term averages. It has managed its energy wealth exceptionally well and has a sovereign wealth fund of about $1.8 trillion. It looks attractive.

Other areas that look interesting are the populous Asian nations of Vietnam, Thailand, Indonesia and the Philippines. They trade at reasonable valuations, have good growth, inflation and interest rates.

Lastly, Latin America looks interesting. Mexico, Argentina, Chile, Peru and Brazil have good valuations, trading in line with their long-term averages. They are resource-driven economies, like Canada. I recently purchased iShares Latin America 40 ETF (ILF) that holds the largest 40 companies in Latin America. I generally use ETFs when investing outside of Canada and the U.S.

Emerging economies are considered to have higher political risk than developed economies, but I might argue that point in the current environment. Political risk is evident everywhere.

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Pension funds, including the Canada Pension Plan, will have exposure to the equity markets. However, these funds are broadly diversified across many asset classes and investment decisions are out of control of the individual investors, so we will quickly move the discussion to areas where we have control.

Funds

Mutual funds have long been a mainstay of equity investing. Besides stocks, there are a wide array of bond mutual funds and balanced funds that hold both stocks and bonds. The earliest mutual funds date back a century, becoming popular in the 1970-1990 period. There are estimated to be 10,000 mutual funds available in the U.S. and 3,400 in Canada, with about $18 trillion of assets under management.

The advantages of mutual funds are their wide availability through banks and financial advisors, accessibility for small investors, and broad diversification of investments. For many people a relationship with a financial advisor is important, as they instil discipline in the investing process. The disadvantages are high fees, often representing 1.5 to two per cent of assets annually, and while portfolios’ holdings are disclosed, investors rarely know what they really own. Another negative is that less than 10 per cent of funds beat their respective benchmarks over the long term.

The data on mutual fund performance led many to believe beating the market was impossible — something that is taught in finance class. It also led to the development of exchange-traded funds or ETFs, which are structured to replicate the performance of an index. Because they mirror an index, management is simpler and fees are much lower, usually in the range of 0.05 to 0.5 per cent of assets, depending on the size of the ETF. They trade on stock exchanges just like stocks and, like mutual funds, offer broad diversification with one holding. A main disadvantage is once again, investors don’t really know what they own.

Popularity over the past two decades led to proliferation and there are now 3,600 ETFs in the U.S. and 800 in Canada, rivalling the number of stock listings. It is estimated they control 25 per cent of the total market cap and have more assets than mutual funds. While the original intent was to own the entire S&P 500 or other such broad index in one holding, they expanded to single-industry ETFs, such as gold, oil, health care et cetera. They further proliferated to the point where there are now single-stock leveraged ETFs, which seems to defeat the purpose of an ETF. A disadvantage of both mutual funds and ETFs is there is steady churn, where unsuccessful ones are shut down or merged.

Single stocks

The third way to own equities is through the purchase of individual company stocks. This is my preferred route, although I use single-industry and international ETFs somewhat. The advantage of owning individual stocks is you know what you own and can review each company’s financial performance. While many will suggest there are just too many companies to look at, I would similarly suggest there are also too many mutual funds or ETFs to look at. Owning individual stocks creates great learning opportunities and improves business and financial literacy.

In late 1992, I transferred my RRSP into a stock account when interest rates dropped into the six to eight per cent range, searching for higher return potential. I selected four mutual funds and four stocks. Over time the stocks did much better than the mutual funds, so I moved entirely into stocks. At the time you had to buy stocks through a broker. Neither internet investing accounts nor ETFs were available. Transaction fees were about $150 per trade so you had to make a substantial-sized purchase to justify the expense. It is so much easier these days, especially for small investors starting out. Whether investors choose mutual funds, ETFs or individual stocks, there is one important similarity. Investors tend to only achieve about half the return the market provides. Performance-chasing, over-trading, and attempting to time the market are the three main culprits for underperformance.

Mutual fund investors tend to sell funds that have performed poorly and buy those with better recent records, only to see the reverse happen. While ETFs were designed to be passively held, they have become actively traded, and most people think they know when the market, or a stock, will go up or down. While beating the market is possible, timing it is not.

The main antidote to these culprits is careful initial selection, portfolio design, and a long holding period. I still hold one of the four stocks purchased late in 1992. Following these antidotes helps you stay calm during periods of market and economic turbulence.

The post Let’s revisit the basics of investing in stocks appeared first on Grainews.

Production Lareault, based on just over 450 acres at Lavaltrie, Que. — about 40 km northeast of Montreal, in the province’s Lanaudiere region — has been acquired by investors Antoine Casimir and Andrea Borodenko for an undisclosed sum.

The Lareault business produces multiple varieties of early-, mid- and late-season strawberry plants for commercial-scale, greenhouse and U-pick growers and garden centres as well as for backyard and balcony use.

The company also sells various varieties of raspberry, high- and lowbush blueberry, blackberry, cherry, haskap and other berry plants as well as asparagus and rhubarb, among others.

Owner/operators Luc and Lyne Lareault plan to retire from the business that’s been in family hands since 1953.

Casimir and Borodenko are the husband-and-wife operators of Greenlore, a Montreal venture capital and private equity firm with a focus on businesses in the agriculture, food and e-commerce sectors that are seeking partnerships for their growth or succession-planning phases.

Casimir was also previously a principal in Quebec private equity firm Novacap, with a focus on companies seeking either growth or exit strategies, while Borodenko previously worked for Montreal digital marketing firm Mediative.

The acquisition was backed with loans from Quebec pension fund Fonds de solidarite FTQ, financial co-operative Desjardins Group and Farm Credit Canada (FCC).

“The support of our financial partners was crucial to the deal’s success and to keeping the head office in Quebec,” Casimir and Borodenko said jointly in Thursday’s release.

“We are also delighted that all the employees will remain and that we can count on the support of Luc and Lyne Lareault to facilitate the transition,” they said. “Lareault is an excellent platform for our future projects, which will leverage the company’s enviable reputation for quality and innovation.”

Business transfers are a “major challenge” for small- to medium-sized enterprises (SMEs), Fonds de solidarite FTQ CEO Janie C. Beique said in the same release, adding that “solutions exist for entrepreneurs who want to ensure the future of the company they’ve built and for buyers who want to contribute to our local economy.”

Desjardins vice-president Jean-Yves Bourgeois, in the same release, described the deal as
“excellent news for the agri-food sector,” adding that “a good plan, developed well in advance, helps owners anticipate how they will transfer the business to the next generation. But beyond purely financial matters, buyers and sellers need to be guided on a human level during this critical period.”

Luc Lareault, who will remain with the company through the transition, described the new owners as “dynamic Quebecers who know the market very well” and have “several meaningful projects in mind for the future.”

— Glacier FarmMedia Network

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Soybean futures also rose sharply, following gains in the crude oil market that also stemmed from major ructions to energy shipments related to the Russia-Ukraine conflict.

The benchmark Chicago Board of Trade May soft red winter wheat contract notched the biggest gain, surging 7.6 per cent and briefly touching its daily trading limit of 85 cents a bushel (all figures US$).

Traders also noted buying by investment funds after all three commodities notched losses last week. The losses in corn snapped a streak of five straight weekly gains.

“Money rotated out of the ag commodities at times last week as chatter of peace talk progress raised the prospect of a resolution,” Arlan Suderman, chief commodities economist at brokerage StoneX, said in a note to clients.

“But Wall Street is more skeptical of a peace agreement today, giving it reason to reinstate risk premium into both the energy and the ag markets.”

CBOT May wheat settled up 55-1/2 cents at $11.19-1/4 a bushel.

“Today’s action may be the market realizing that this is no longer a short-term deal, but rather a long-term problem,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a research note.

The World Food Programme said food supply chains in Ukraine were collapsing, with infrastructure destroyed.

CBOT May corn was up 14-1/2 cents at $7.56-1/4 a bushel, while CBOT May soybeans gained 23 cents to $16.91 a bushel.

The U.S. Agriculture Department said on Monday that weekly export inspections of corn totaled 1.466 million tonnes, up 28 per cent from a week earlier. Wheat export inspections rose to 330,632 tonnes from 307,218 tonnes.

— Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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