Portfolio Update Report
Mirador Corporation Q1 Report 2024
May 01, 2024
Dear Friends and Clients,
What a joy to see all the Crocuses blooming and all the birds returning. And now calving has started out here on the toy ranch southwest of Longview. Although fall is my favorite season, calving is my favorite aspect of our little ranching hobby. It’s simply delightful to see these cute little animals. And the instincts of both the cow and calves are miraculous.
So far all is going smoothly, and everyone is healthy. There is more moisture here than the last two Aprils and there is more on the way the next few days. Hopefully that will give us a much-needed good growing start for the pastures. In Calgary all is well – Jessica and Emily are doing excellent in high school. Joyce is busy keeping the Mirador ship sailing smoothly and starting to get the yard ready for spring.
It’s been an extraordinarily busy quarter for Mirador. The Triopay programs have a had a great run starting back in late October of last year. Part of this success is the markets improving (especially in Canada), but we have actively and continually optimized the holdings along the way which has contributed significantly to the results.
Of note is our shift away from covered call write ETFs and back to our own covered call writing programs. The results are simply amazing.
The stocks underlying the covered write program have provided us capital gain exposure to sectors that do not provide much in the way of dividends. And the call premium from them has been much greater than one would expect from dividends. So, better diversification while maintaining excellent income.
Also of note in this quarter is the official launch of the U.S. Triopay program. This is a great way for our U.S. clients to obtain excellent yield with decent capital gain potential. It’s also a perfect vehicle for snowbirds needing to cover their winter U.S. dollar requirements. Once we see more of the first quarter earnings results we will complete the U.S. launch by starting the U.S. covered write program.
The launch of our website has gone well. We are getting greater than expected site visits and inquiries and we are continuing with search engine and Google Ad optimizing. We will continue with two or three blog posts a month. Please let us know if there are topics you would like to see us cover. Please feel free to share the website with friends and family. For this website project to make a difference we need as many visits as possible.
There have been substantial changes in the markets since the year end, but they are not surprising to us at all. A year ago, the pundits’ consensus was for rates to start dropping last autumn. At the beginning of 2024 the consensus was a drop of rates starting in March. But, if one just focused on the data such as the fed funds probability curves, PCE, GDP, and employment numbers, it becomes clear that businesses and the economy continue to do well and hence inflation has been “stickier” than expected.
Dropping rates too soon and/or too quickly would risk a repeat of the late 1970s and 1980s when they dropped rates and inflation became completely out of control. Everyone seems to like being critical of everything and everyone. But, I think that Powell has done a great job in orchestrating a slow-down to get inflation under control and I believe he will not drop rates until there are more signs that price pressures are subsiding. The data currently suggests a minor rate drop mid-to-late summer, and again in early winter. But it is very dependent on weekly data updates and it’s a very fluid situation.
Meanwhile the yield curve remains severely inverted but the inversion is slowly easing, which is good news for the equity markets and the economy.
This postponement in interest rate declines does mean a likely delay in what I mentioned was the historical next phase of the cycle – the strength in income security prices and a rebound in real asset sectors like base metals, oil and gas, and other materials subsectors. But we are not yet overweight in this area, and our initial positions are doing just fine.
As of today, around half of the U.S. S & P 500 has reported Q1 numbers. Only utilities have a negative sales surprise, and all sectors have positive earnings surprises. This is a great result. In Canada, only 15% have reported, so there are not enough results for me to comment, but I expect similarly positive results as the U.S. market.
Due to the launch of the covered call writing programs and the substantial changes in the markets since year end, I have not been able to take time away from the portfolios to produce the graphic reports. If things settle down in the markets, I will do a mid-quarter graphic report of the Triopay programs. For now, here is a summary of the Q1 2024 results as of March 28th:
% Change for Q1
Canadian Triopay Unit Trust
Canadian Benchmark
U.S. Triopay
U.S. Benchmark
6.1%
3.8%
4.4%
7.7%
All programs exceeded their high-water marks in the first quarter, so from here its onward and upward we hope. I plan to write a blog post soon about investing at all time highs that I think you will find interesting.
We are working on having a link on our website that will allow you to securely access your Mirador quarterly and annual reports. This is in addition to the current link for access to your RBC IS reports found in the footer of all the website pages. This will be more convenient and efficient than the current email system. We will announce and provide instructions for use when it is built and from then on, we will simply send you a notice when your reports are ready for viewing via the Mirador website link.
We wish you a wonderful springtime! As always, feel free to call us at anytime about anything.
Sincerely,
Stan 403-608-4664
Joyce 403-978-6798