Animals, like deer in the wild, study patterns and memorize them. If they walk the same path each day, and things look different even if in a very small way, that change in pattern alerts them. It makes them more skittish or may make them bolt and run away altogether.

Patterns from history, and recognizing them, can be a survival strategy not only for wild animals but also for humans. Unfortunately, humans seem to have a short memory or deliberately avoid remembering the past for various reasons. If, in the spring of each year, your home floods because you built it on a floodplain, the pattern of spring flooding should be something you react to.

Credit card companies and banks use patterns to assess a potential borrower's repayment history. It is likely that a pattern of failed repayment, if frequent in the past, will repeat in the future. It’s the same on the positive side if you consistently show a pattern of meeting all your debt obligations.

In investing, humans seem more emotional than pattern-driven.

Currently, in Canada, we are seeing a pattern that I call the Slow Grind. Prices remain high; no one wants to lower them. People complain, cut back, but grind on. There is stagnant growth, productivity continues to stumble, and people are looking for security and cash flow.

House prices stay inflated, but no one buys them. The inflation spike from recent years is now locked in and compounding, though hidden, and is a pattern few identify. If inflation is 3% right now, that is 3% on top of the 20% or more of the past few years. Things are expensive to buy, unemployment is rising, and uncertainty is everywhere. Homeowners won’t reduce the price of their over-priced homes as they have nowhere to go that is less expensive. 

So, what do the patterns tell me?

Trust, security, cash flow, and value retention are key.

Companies that respond to basic human needs, very boring ones, will thrive during this prolonged grind.

REITs are a good example in the multi-residential category. They are underpriced but provide a solution to a natural human need of survival. This investment segment provides a store of value, capital appreciation with inflation and regular cash flow.

In previous letters, I’ve discussed small allocations of gold, and most recently, land banking. While neither produces cash flow, they are an excellent store of value if a small percentage of any portfolio.

The current grind, if we learn from the past, has resulted in a slow economic grind for Canada. Investors who work to restrain their emotions, focus on the long term and be sensitive to changing patterns learned from history will thrive. Coping with the boredom of this strategy may be the most challenging part of this investment reality for most investors.

Subscriber-Only Land Banking Opportunity (30 Days)

One parcel within a development I own is currently listed publicly at $89,000. For newsletter subscribers only, I’m making a separate, limited financing structure available for long-term land banking. I will only do this once per year.

Public Listing Here Price: $89,000

Standard market terms

Subscriber-Only Structure

$35,000 down

$54,000 vendor-financed mortgage

10-year term at 2%

Monthly payment approx. $497

This structure is intended for patient capital and long-term holders, not short-term speculation.

The financing option is available only to subscribers and only for 30 days (Until February 21, 12:00 p.m. EST. I offer this at the 2% rate for 10 years, once a year. The first qualified buyer within the timeline with an accepted offer is given this opportunity. After 30 days, the listing remains public only under standard terms.

If you’re interested, follow the listing link and work with your realtor, or make an offer directly to the agent on the listing. Under conditions, make sure you include the terms above. Do NOT share this offer with anyone, please; this is for newsletter subscribers only.