Stocks have done well regardless of the party in power
Stocks have performed best when Congress is split
Market performance during different government combinations
Companies ranked by eCommerce sales
79% of lost jobs have been recovered in Canada
US is still 10 million jobs behind where it started in February
Do stocks always outperform bonds over the long run? Not in this 150 year example.
Sitting on cash because you’re scared to invest? Your advisor might recommend Dollar Cost Averaging (DCA) into the market, by investing a proportion of your wealth each month. However, research shows that it’s you’re almost always better off simply investing the lump sum.
In this article, I look back at the post-2000 dot com collapse that sent the Nasdaq down almost 80%. There are many similarities to today, unfortunately. Remember Nortel? Once a symbol of progress, it eventually landed in the dustbin of stock market history.
This article includes an excerpt from Warren Buffett’s 2000 investor letter and comments from Sun Microsystem’s former CEO on investor irrational exuberance.
We’ve seen this show before. In 2000, unrealistic expectations eventually burst, sending the Nasdaq down almost 80%.
While growth scarcity and lower discount rates justify higher prices, many stocks currently trade at huge valuations.
The recent 30% drop caused by Fastly’s 5-6% revenue guidance hints at the risks growth investors are taking.
History repeats itself. While money can be made riding a bubble, investors should remain humble and take actions to mitigate downside risk.
It’s a stock picker’s market, right? Investment manager earn their keep during down markets, right? Actively managed mutual funds can take advantage of market dispersion and volatility to pick outperforming stocks, right?
Yet again – through up markets, down markets, calm markets and volatile markets – Standard and Poors (S&P) proves that the myth of active investment management is pure bullshit.
S&P periodically releases the SPIVA Scorecard, which compares the performance of active mutual funds against their benchmarks. Whether looking at Canada, US or UK, this report has repeatedly shown that active managers underperform.
The SPIVA report is probably the most accurate of all mutual fund evaluations because of what it doesn’t leave out. The SPIVA Scorecard accounts for mutual fund survivorship bias. This adjustment is critical to understanding the true extent of manager underperformance over time.
Here’s how S&P explains this important adjustment:
Many funds might be liquidated or merged during a period of study. However, for a market participant making a decision at the beginning of the period, these funds are part of the opportunity set. Unlike other commonly available comparison reports, SPIVA Canada Scorecards remove this survivorship bias.
Standard & Poors SPIVA Canada Scorecard
Facts (from the SPIVA Canada Scorecard- ending June 30, 2020):
88% of Canadian equity funds underperformed their benchmarks over the past year, in line with the 90% that did so over the past decade
On an asset-weighted basis, Canadian Equity funds returned a dismal 7.9% below the S&P/TSX Composite over the past year.
U.S. Equity funds posted the highest returns over the past year, with a 6.7% gain on an equal-weighted basis and 10.8% on an asset-weighted basis. Both of these metrics fell short of the 12.1% gain of the S&P 500 (CAD), with 84% of funds failing to clear this hurdle over the past year.
U.S. equities offered the best returns over the past decade, with the S&P 500 (CAD) gaining 16.9% per year, but active funds were unable to keep up: 95% fell short, by an average of 4.1% per year on an equal-weighted basis.
53% of all funds in the eligible universe 10 years ago have since been liquidated or merged.
The performance tables below compare mutual fund categories (e.g. ‘Canadian Equity’) against their benchmarks (e.g. ‘S&P/TSX Composite’). The first table shows equal weighted returns (average fund return) and the second shows asset weighted returns (average fund returns weighted by size of assets in a fund). As you can see, there is significant underperformance across all time periods and categories.
This is not just an issue with the Canadian mutual funds industry. Here are some facts about the performance of mutual funds sold in the US:
Facts (from the SPIVA US Scorecard- ending June 30, 2020):
In 11 out of the 18 categories of domestic equity funds, the majority of funds continued to underperform their benchmarks.
67% of domestic equity funds lagged the S&P Composite 1500® during the one-year period ending June 30, 2020.
In 13 out of the 14 fixed income categories, the majority of funds failed to keep up with their benchmarks.
Fund liquidation numbers across segments regularly reached into the 60% range over a 15-year horizon.
The equal and asset-weighted performance comparisons for US mutual funds are equally bad and just as significant as fund underperformance in Canada.
Why do most mutual funds underperform?
1) Mutual funds charge a fee that can be as high as 3% in some cases (most are probably closer to 2%). Just to perform in line with the benchmark a fund manager has to outperform by the fee charged. They are starting from behind.
2) Mutual fund managers are trying to outperform against millions of other professional investors, all with the same public information. By the very nature of the market, there will be people who are wrong and people who are right. It is very difficult to be repeatedly right about something impacted by an infinite number of variables. Hence, the chance about being right about a particular portfolio (relative to a benchmark) at any point in time is about 50/50. Those odds are reduced over longer periods of time (the odds of flipping heads once is 50%, the odds of flipping heads twice in a row is 25%).
In that it provides no value added, investment fund management is therefore a commodity. An allocation to diversified portfolio of stocks has value, but the overlay of ‘active investment management’ provides no additional value (actually, it subtracts value as shown above). Investors should not pay for something that isn’t delivered. Therefore, investors should not pay active management fees, which are significantly higher than passive fees. This difference in fees could mean the difference between retiring well or retiring broke.
What is your approach to portfolio management, adding or closing particular investments, and evaluating particular companies when you are looking to add one?
There is quite a wide range of things I consider when constructing my portfolio and adding or removing particular holdings. My aim is to build a portfolio that doesn’t require a lot of tending to over time.
My first overall consideration is the overall allocation to various asset classes and sectors within those asset classes. As my time horizon is fairly long, my portfolio is more heavily weighted to risk assets, like stocks and high yield bonds. I do own some investment grade bonds too. And from time to time I will have an allocation to gold. Since I have a long time horizon, it makes sense to hold assets that will grow over long periods of time. Stocks tend to fit that description.
I consider my job and sources of retirement income when choosing how much risk I can take. I currently work in a cyclical industry that is directly impacted by the markets. This reduces my risk tolerance because my income would be at risk at the same time as my portfolio. In contrast, I have a small defined benefit pension plus standard government retirement benefits (i.e. a guaranteed source of income at retirement), allowing me to take on more portfolio risk. On balance, I think these variables offset each other.
When selecting stocks to hold, I take the lazy route. I don’t want to trade in and out of holdings. Instead, I prefer to buy companies that I hope to own forever. I want to own well-run survivors. Good companies with sustainable, inimitable competitive advantages in industries that can’t easily be displaced by new competitors.
Many investors refer to these sustainable, inimitable competitive advantages as ‘wide moats’. Essentially, these advantages protect companies from the advancing army of competition. Wide moats can take several forms. The following examples are provided by Morningstar:
Network Effect. The network effect occurs when the value of a company’s service increases for both new and existing users as more people use the service. For example, millions of buyers and sellers on eBay EBAY give the company an advantage over other online marketplaces. The more sellers there are on eBay, the more likely buyers are to find what they’re looking for at a decent price. The more buyers there are, the easier it is to sell things.
Intangible Assets. Patents, brands, regulatory licenses, and other intangible assets can prevent competitors from duplicating a company’s products, or allow the company to charge a significant price premium. For example, patents protect the excess returns of pharmaceutical manufacturers such as Novartis NVS. When patents expire, generic competition can quickly push the prices of drugs down 80% or more.
Cost Advantage. Firms with a structural cost advantage can either undercut competitors on price while earning similar margins, or they can charge market-level prices while earning relatively high margins. For example, Express Scripts ESRX controls such a large percentage of U.S. pharmaceutical spending that it can negotiate favorable terms with suppliers like drug manufacturers and retail pharmacies.
Switching Costs. When it would be too expensive or troublesome to stop using a company’s products, the company often has pricing power. Architects, engineers, and designers spend entire careers mastering Autodesk’s ADSK software packages, creating very high switching costs.
Efficient Scale. When a niche market is effectively served by one or a small handful of companies, efficient scale may be present. For example, midstream energy companies such as Enterprise Products Partners EPD enjoy a natural geographic monopoly. It would be too expensive to build a second set of pipes to serve the same routes; if a competitor tried this, it would cause returns for all participants to fall well below the cost of capital.
What you’ll notice about these characteristics is that they can’t easily be summed up by a single number. Data points like standard deviation, Beta, p/e ratios serve their purpose but they don’t tell you about the long term prospects for a business. Before diving into the plethora of data points, it is critical to first have a qualitative understanding of what the business does, what sets it apart and how it is insulated from competitive forces.
Once I’ve done this there are some data points I pay attention to:
Revenue: If a company isn’t growing revenues over time then something is fundamentally wrong with the business or industry. Revenue flows through to earnings and cash flows, so a company with declining revenues can only engineer good shareholder returns for so long. If a company can’t grow its customer base and earn more from each customer over time, I don’t really want to own the stock.
Growing Dividends: I don’t chase yield. Instead, I prefer to invest in companies that pay consistently growing dividends. I like companies that can grow dividends above the rate of long-run average nominal GDP so that my income stream grows faster than inflation. (This, of course, requires growing revenues.) Many of my holdings have dividend growth rates closer to 7%+, doubling my dividend income every ten years. While I agree that technically it’s total returns that matter, a consistent and growing dividend payout overlays a level of discipline on management. It also implies that company executives – i.e. those who know the most about their business – are confident in the company’s ability to generate cash. Some research has shown that companies that pay growing dividends outperform companies that don’t pay dividends over the long run. Of course, there are great examples of the opposite. But as a lazy investor, I want to buy good companies at fair prices and that often means investing in proven businesses that are able to pay dividends. Moreover, the psychological benefit of seeing dividends paid into my account regardless of the daily, weekly, monthly stock price fluctuations keeps me from making irrational sell decisions.
Sustainable dividends: Not all dividends are equal. This is important if one is to avoid value traps. Sometimes a yield is high because investors expect dividends to be cut. The classic measure investors use to evaluate dividend sustainability is the payout ratio – the proportion of earnings paid as dividends. Over the long run, a company cannot pay more than it earns. Personally, I prefer to look at the dividend as a proportion of free cash flow, since earnings can often include various non-cash items. Dividends are paid with real cash, so ultimately it’s the cash flows that matters.
P/E and P/S: These valuation metrics provide a good snapshot of whether a stock is expensive or not. While P/E is often the first valuation metric people use (share price per dollar of earnings), I also look at P/S (price to sales). Again, because earnings can include non-cash items, one-time items, etc. I feel it is helpful to have a valuation metric that compares against a more stable accounting measure (revenues). When looking at valuation metrics, it’s important to recognize what you’re paying for. A fast growing company will cost more…and that’s OK. In contrast, a dying company might have a single-digit P/E ratio and 5%+ dividend yield, but over the long run it might be a losing proposition. I would rather pay a fair price to own a slice of a company I know will outrun its competitors and have a viable market (via its wide moat) for decades to come.
Today I came across this Twitter thread by @soloprosperity explaining the pros and cons of dividend king Altria (MO). I thought it was a great summary so I’ve included it below:
Some quick notes.
1.Addictive Product: Pretty steady ~2% Rev Gr Last 10 Yrs 2.Extremely Profitable: ~28% CFROCE 3.Low Reinvestment Requirement: FCF = 96% of OCF Last 10 Yrs 4.Margin Expansion Last 10 Yrs: Gross 53% -> 61% & CF 33% -> 48% 5.Dividend Seems Fairly Safe: Dividend Coverage is at 84% Last 5 Yrs 6.Regulations: Essentially no new competition. It is a wonderful business unless you have moral issues re: the product, but there are some ?s and reasonable reasons why multiples have compressed back to ~2011/2012 levels despite a very strong overall market during that ensuing period…
1.Organic Growth: # of smokers continues to decline. 2.Accrual Build-Up: Net Income > Cash Flow for a decade. 3. Capital Allocation: JUUL & Buybacks. Largest buyback year in the last decade was the year the stock was trading at it’s most expensive. 4. Future Shareholder Yield: Dividend is safe, but when you factor in buybacks, Total Shareholder Yield has outstripped Free-Cash Flow over the last 5 years (Taken on Debt). Indicates buybacks could slow moving forward. 5. Valuation: Yes, today’s levels bring it back to the 2011/2012 levels on various metrics, but the firm has traded at much cheaper valuations in the past (99’ 02’ 08-10’ etc.) and so lower is always a possibility.
Again, wonderful business, but there are some legitimate questions about the company and the accrual build-up, JUUL acquisitions & capital allocation in general (Poorly timed buy-backs), cyclical topic re: # of smokers in the U.S. and so the price today is valid IMO.
I do own the stock despite the concerns because the core business is so easy. At a cyclically-adjusted FCF Yield of around 8.7% today, plus 1-2% in growth, that alone gives me comfort in earning ~10% over the next 5 years. A possible re-rate could add to that.
Lastly, I think there is a low-potential right-tail event in terms of marijuana federal legalization. Not something I am betting on happening with certainty, but I think Altria’s distribution network is a potential valuable asset if that happens.
The coronavirus crash was fast and sharp. It recovered within months – the best recovery when compared to past bear markets.
The speed of the recovery is likely due to the speed and volume of Federal Reserve support, which exceeded all previous monetary stimulus programs.
Some argue that the massive volume of support indicates we are approaching the end game for the credit based system. Others suggest the Fed has learned from previous policy mistakes – namely, underestimating the required magnitude of stimulus. Perhaps if the Fed were more decisive in 2008/2009, the post-GFC recovery wouldn’t have taken so long.
Honestly, there are great arguments either way. I don’t know. But what I do know is the US dollar remains the reserve currency by a wide margin and its status has not been compromised by the recent monetary stimulus. This tells me that the demand for dollars more than makes up for the additional supply.
Some suggest we are in the middle innings of a secular bull market that began around 2014 or so, led by emerging technologies in cloud computing, automation, artificial intelligence and machine learning. Looking at previous market cycles, this is quite possible. In hindsight, we can see that the 2000-2012 period was essentially a sideways market. During that time the S&P 500 price level went nowhere, and it is exceedingly rare that a 12yr consolidation would be followed by another one. It’s more likely a 12yr consolidation would be followed by a secular bull market.
Of course, on a total returns basis the post-2000 experience wasn’t as bad. When including reinvested dividends, the S&P 500 broke even by 2006.
Maybe we’re in a secular bull market. Maybe we’re not. As a dumb and lazy investor I’d rather not try to time the market. Instead, I feel more comfortable, regardless of the market environment, if I own a diversified assortment of businesses that are 1) reasonably valued, 2) will survive the test of time, and 3) reward shareholders with growing dividends and share buybacks.
In theory, the companies that provide the best return are the ones with projects that produce the best ROIC (return on invested capital). Let’s say a retailer (Company X) has discovered a new format of store that generates an ROIC well above what investors could get elsewhere. For this company it would make sense to retain all earnings to reinvest in more stores. It wouldn’t make sense to distribute cash back to investors.
Company X can generate better returns for investors by reinvesting in its own growth prospects. Therefore, Company X stock price should outperform other companies with less favourable growth prospects.
I get the theory and it makes sense. A stock with high growth prospects will tend to have a higher total return than a stock with lower growth prospects. (Of course, not all growth prospects become real so many growth companies eventually fall behind expectations. In fact, there is some research that suggests dividend growers outperform non-dividend stocks over the long run. But for this article, let’s use the simplistic assumption that growth stocks outperform dividend growth stocks.)
The assumption that growth stocks outperform dividend-paying stocks fails to consider investor behaviour and what actually happens at the account level. At the account level, a big segment of investors will perform better by investing in slower growing companies that pay regular and growing dividends.
Stock prices frequently experience corrections and bear markets. Investors have a tendency to ‘buy high, sell low’ – the opposite of what they’re supposed to do – because when stock prices are falling it often feels like the world is crumbling. The news is bad and investors have no idea how much the decline will be. So they see that their holdings are down 10, 20% and they sell. These emotional buy/sell decisions made at the wrong time have a huge negative impact to long-term returns. Indeed, investors tend to drastically underperform the S&P 500.
One of the critical components to becoming a decent investor is to control emotions. We need to fight millions of years of evolution telling us to run when things start to look bad.
My view is that dividend streams help to do that. An investor that holds a portfolio of dividend paying stocks will still receive a stream of cashflow into their account, regardless of stock price performance. I believe these payments are a form of positive reinforcement that rewards good investor behaviour – namely, doing nothing or investing more when stocks are down.
Taking this a step further, many dividend investors view their capital as the price of entry to receive a perpetual and growing dividend stream. You’re trading a lump sum for a stream of income. Investors who look at their portfolios this way will be even less inclined to sell when markets correct, for that would cut their stream of income.
In summary, dividend growth stocks might not produce higher total returns than growth stocks. However, dividend growth investing might because of the positive effects on investor behaviour.
In my opinion, BCE benefits from the insulating properties of Canada’s telecom oligopoly, and therefore should benefit from long term pricing power and customer retention. The stock trades at a reasonable valuation and has a good dividend track record. As a dividend growth investor, BCE is part of my portfolio.
Please consult a registered professional before making any investment decisions for your own portfolio.
Companies in Oligopolies Are Insulated From Competitive Forces
Canada has a relatively small population that is spread across a vast geography. This has profound implications for the structure of the Canadian economy and the companies that dominate.
Simply, Canada doesn’t have the population size or density for many industries to support multiple companies operating at efficient scale. For this reason, many industries in Canada operate as oligopolies, with a handful of dominant players with little to no threat from new entrants. This is especially true in industries with high entry costs like telecommunications, media and financial services.
Since it is difficult to create scale in these industries, there is the constant threat to the Canadian economy that the number of players in these oligopolies shrinks. Many would agree when I say executives in these industries are usually closely tied with government, receiving implicit support for profitability. (If the Canadian government wasn’t trying to insulate these industries they’d make it easier for foreign competition to enter the marketplace!)
These industries provide core infrastructure to the Canadian economy, so to balance access with profitability the Canadian government must turn a blind eye to obscene pricing.
This sucks for Canadian consumers, but it’s great for investors.
Let’s look at Canada’s mobile phone industry as an example. The following chart compares mobile phone plans in Canada with those in the United States. As you can see, Canadians pay a 15-40% premium for the same service.
Despite higher prices, there remains little choice and consumers aren’t deterred from buying. Consequently, the big 3 carriers (BCE, Rogers and Telus) in Canada – which have a 90% market share – continue to grow mobile revenues.
Of course, these big 3 telecom companies provide more than just mobile phone services. They are telecom and media conglomerates that control Canadian wireless, wireline, internet, media and professional sports franchises. Essentially, these companies control a huge portion of everything seen and heard in Canada. Not all business segments are shooting the lights out, but they retain tight control and strong pricing power. Moreover, the bundling effect of packaging several related products and services provides a strong customer retention incentive and helps drive out pure-play competition.
BCE is Canada’s largest telecommunications company with a customer base of over 22 million subscribers. This is approximately 60% of the entire Canadian population. With its wireless infrastructure reaching 99% of the Canadian population and wireline infrastructure reaching about 75% of the population, BCE is well positioned for continued subscriber growth.
Canadians love to complain about BCE (aka Bell) and its main competitor Rogers. (I’d love to read your stories in the comments below.) However, given its infrastructure and network quality – and with few alternatives – Canadians continue to fork over money to the many brands that BCE controls.
For those not familiar, BCE owns the following (which I copied from BCE’s website):
Canada’s broadband leader providing advanced wireless, Internet, TV, smart home and business services over our world-class LTE and fibre networks.
Atlantic Canada’s leading name in residential Internet, TV, and home phone services, and a trusted partner to business and public sector clients.
Canada’s leading content creation company with premier assets in television, radio, out-of-home advertising, and digital media.
Manitoba’s top name in home and business communications, and a leader in managed data and professional services through our Epic subsidiary.
Low-cost prepaid wireless featuring convenient account management app and flexible add-ons for data, international calling and more.
Leading investor in communications infrastructure in Canada’s north, providing Internet, TV and phone services over a vast territory.
Canada’s largest tech retailer, offering the latest products from top brands and knowledgeable associates at stores across the country.
National provider of pre- and post-paid wireless services with award-winning customer service and innovative Member Benefits.
Source: BCE Website
The Bell brand is currently the top non-financial brand in Canada, as rated by Brand Finance’s list of the Top 100 Canadian brands for 2018. So it appears that a vocal minority of complainers is out-weighed by a silent majority of BCE customers (or at least by the committee that ranks these brands).
While BCE’s oligopolistic power helps retain customers, it actually does provide a valuable, high quality service. So it’s not hard to understand why many people are fine with BCE’s products and services.
As a lead company within the Canadian telecom oligopoly, I expect BCE to retain this market power, as it continues to own, control and invest in critical infrastructure, including 5G. This gives BCE a market position that is unlikely to erode anytime soon, in my opinion.
BCE stock currently has a dividend yield just under 6% and has a solid track record of dividend growth. Since 2008, its dividend has grown by 128%, with each increase at 5% or more. BCE dividend policy aims to grow dividends while maintaining a payout ratio (based on free cash flow) of 65-75%, and has done so over most of the past 12 years.
Throughout the 2020 Covid-19 crisis, BCE’s dividend has remained well-covered by free cash flows, with YTD coverage at about 66%. Moreover, according to BCE:
“Our strong liquidity position, underpinned by a healthy balance sheet, substantial free cash flow generation and access to the debt and bank capital markets, is expected to provide significant financial flexibility to execute on our planned capital expenditures for 2020 and to sustain BCE’s common share dividend payments for the foreseeable future.”
BCE Q2 2020 Shareholder Report
As a ‘boring’ telecom provider, BCE has weathered the Covid-19 economic crisis remarkably well, as highlighted during its Q2 2020 presentation. Operating revenues declined by 9.1% year-over-year, but the business saw growth in other metrics. This adds to my confidence that BCE will be able to continue to pay its dividend throughout the ongoing crisis and beyond.
The biggest immediate risks to BCE is the unpredictability of the pandemic and capital markets. However, as Q2 performance suggests BCE is hurting less than other companies.
Over the long run, I think the biggest structural risks to BCE are the following:
1. Changing viewer habits: Specifically, people ‘cutting the cord’ and moving away from traditional TV distribution. This is especially prevalent with younger generations.
2. Rising content costs: With the growing need for proprietary content – Netflix, Disney+, Crave, etc. – there is increased competition, driving prices upwards.
3. Market saturation: With such deep penetration, there are limits to new subscriber growth. However, the ability to continuously increase prices helps offset this risk. Continued population growth (once immigration picks up again post-Covid) will also help offset this risk.
Currently, BCE is neither cheap nor expensive. It trades at 17x forward earnings – reasonable and far below many other alternatives in this effervescent market.
In my opinion, BCE is fairly insulated from game-changing competition. As part of an oligopoly, BCE should retain pricing power and a strong hold of its customer base for a long time.
Over the long run I believe BCE revenue should be able to keep up with nominal GDP growth (at least) and will likely continue to grow dividends in parallel. While I’m not expecting massive BCE stock price appreciation, I would be happy with a slow grind upwards supported by a growing dividend stream.
For these reasons, BCE is one of my ‘buy-hold-and-forget’ holdings.
With Q3 earnings for the Canadian banks behind us, you might be considering investing in the banks using BMO Equal Weight Banks Index ETF (ZEB). This ETF exclusively holds an equal weight of each of the big 6 Canadian banks. While the convenience of this one-ticket solution is enticing, I believe using this ETF is a bad financial decision for long-term buy-and-hold investors.
I wouldn’t blame you for wanting to invest in the Canadian banks. I believe the banks have provisioned adequately for significant loan losses and are well prepared for the current economic disaster. Furthermore, Royal Bank, TD, CIBC, Scotia and Bank of Montreal respectively pay a 4.2%, 4.8%, 5.6%, 6.3% and 5.1% dividend yield (as at August 28, 2020). Many investors view these companies as interesting long-term holdings.
While ZEB can simplify the investment into Canadian banks into a single transaction, investing in a highly concentrated ETF like ZEB can be a bad idea. Anyone interested in buying-and-holding the Canadian banks for a long time might be better off simply buying the individual stocks.
Forget BMO Equal Weight Banks Index ETF (ZEB)…Buy the Stocks Instead
For example, let’s say you have $20,000 you want to invest. With an MER of 0.61%, ZEB ETF will cost you $122 per year to own plus any trading commissions. That cost (excluding the trading commission) is repeated each year in perpetuity and will rise as your holdings appreciate in value.
In contrast, you can buy 5 of the banks for a total one-time trading commission of between $0 and $50 (depending on your online broker). Let’s be generous and say you could pay $100 in commissions for the round trip. If you plan to hold your investment for a decade ZEB would cost you at least $1220 while owning the individual stocks would cost a maximum of $100.
While it’s true that ZEB rebalances between its holdings, one could easily replicate this at minimal cost annually using the dividend income spit off from these stocks.
Overall, the value proposition for ZEB is fairly weak for long-term investors. Of course, the story is different for people using ZEB for short term trading or hedging purposes. But I would guess that a significant number of people who hold ZEB don’t realize this.
If you’re a buy-and-hold investor I just saved you $1120. Don’t spend it all in one place.