Tuesday, November 21, 2017

Hillsdale Investment Management

Last month my investment club held a meeting with Hillsdale Investment Management. We were treated to a very nice lunch at Ki Restaurant at Bay and Wellington.

Particular attention was paid to their Canadian Micro Cap Equity Fund. At that time the Hillsdale Canadian Micro Cap was up 10% in 2017, after all fees and expenses. This is 9% outperformance against the benchmark TSX Small Cap Total Return Index, which is up by only 1%.

I think that the thing is in an ETF world, an active fund manager could be a better choice. There is nothing wrong with passive investing. However, we may have problems if everyone is doing it. This may not show up until the next bear market. The thing with EFTs is that they buy everything. They buy the good, the bad and the indifferent. I would hope that an actively managed fund would avoid most of worst stocks and therefore do better.

Hillsdale uses computer algorithms (AI) to initially pick out stocks for investments. A human makes the final decision on what stocks to actually invest in. Computers are very fast but very dumb. They can crunch an incredible amount of data in a very short time. But, they are never going to have an "aha moment". When they get something wrong they get it very wrong. For example, an insurance policy should pay out $10M and the computer says $0.40. There is a problem with an algorithm.

On my other blog I wrote yesterday about Johnson and Johnson (NYSE-JNJ)... learn more. Next, I will write about IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more on Wednesday, November 22, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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