We're Teaching a Generation to Gamble, Not Invest

I love to bet on sports.  Baseball and football primarily.  I’ve been doing it for years and know what happens to brain dopamine when the game starts.  I also work to understand the probability of winning.  It helps me in my other investment life.  But betting is not INVESTING.

Before you wonder, I bet in the range of 20 cents to one dollar a game or event.  I only bet occasionally, usually on the Toronto Blue Jays in baseball, and selected NFL games.

For the brain, dopamine is the same as if I bet hundreds of dollars on a game.  It’s entertainment.  Twenty cents is the lowest I can bet, or I would drop that too.

Occasionally, the odds look great, and I may up that to $1.

This exercise helps me understand that most things are random or designed to have me lose.

On a very rare occasion, when the odds makers have it wrong in my opinion, I’ll get up to a buck.

The Rise of the Everything Bet

The strange thing that is happening elsewhere, however, is the idea that betting on things is somehow investing.

It’s plain nuts.

In the Globe and Mail today, there was an article titled “Prediction markets are coming to Canada and young ' investors' are already betting on them.

Seriously, “investors”.

The prediction market is a way to make a bet on anything.  How many times Donald Trump scratches during a speech, or how many times Canadian Prime Minister Carney says “Uh…” in a press conference.

Will Alberta vote to separate and so on?

You can bet all day, every minute of every day on something.

Most of the customers for these stupid ideas are young people.  They state in the Globe article that they don’t want to wait to be traditional investors.

The Million Dollar Boring Plan

So, if you work a part-time job or work and save $1,000 a month, in 30 years you will have 1.48 million dollars.  An 18-year-old could retire at 48.  If you up the return by working hard on learning to invest to just 9%, you would have 1.8 million dollars. Wait until you are 55 years of age, and you have 3.5 million dollars.

Compounding is the lesson.  Something that daily “investing” in random chance events won’t teach you.

Shame on the Globe and Mail for even having this in the investment section, and the government of Canada for making this type of gambling legal.

To add to the fire, the recent listing of SpaceX confirms again why most people should buy bonds or GIC’s in Canada.  Investing is very boring and will take you a long time to become good at a specific area.  Took me over 10 years to begin to understand real estate.  Retail investors may make a bit on the upswing, but what losses when reality hits?

SpaceX sends things up into space.  What happens when that stuff gets everywhere?  Do satellites drop to Earth?  What if things start running into each other?  Does SpaceX even make a buck in profit?  Or is it a government grant machine?  I’d never invest in SpaceX because I don’t understand it.  Servers circling Earth?  Mining asteroids? 

Sure, maybe someday.

Dopamine is better generated from a 20-cent bet on the Jays and less so on a mortgage or line of credit on SpaceX.  Hoping I’m totally wrong on this one because many regular “investors” are going to get hurt.

Five Things that Haven’t Changed

While I’m often asked, nothing has changed about how to get to a point where you don’t have to worry about money or resources.

Here they are in summary form, according to moi.

1. Spend less than you earn.  If you take out your wants from needs and still spend more on needs, increase your income until you have a surplus.

2. Invest the difference in something you know or something you don’t need to know too much about.  If you don’t want to work on it for 10 years, cancel this newsletter subscription, buy a bond or GIC and just keep earning.

3. Wait for compounding and wait some more.  Don’t be in a hurry.

4. The key to investing is having your wins, earning more than your losses.  You will lose.  But if those losses don’t take you out, you will win if your wins are greater.  In my angel fund, out of 10, some 3-4 of the companies go to zero.  2-3 break even.  The remainder do well, and some even kill it.  To date, about 14% return annually because the winners are much greater than the losers.

5. Investing for me is a lot like beekeeping.  Find an interest that mirrors successful investing and pursue it as well.  It will help train your brain.

 I started following Next Living Communities (NXLV) long before its name changed.  I didn’t buy any stock, as in doing my due diligence long before AskHank.money, I was still suspicious.  It’s an apartment rental company, small REIT, with a defined tenant base.

The problem for me is share dilution.  I’m not a fan.  The summary is in the Appendix.

Back to Boring

Next, I looked at the Canadian Banks to check on what could be great long-term investments.  Banks are at an all-time high now, so I’m patiently waiting to buy any.

Royal Bank, with a Hank score of 89, and CIBC, with a score of 83, are the top picks.  I use the Kelly formula to allocate $100,000, which is based on the Hank analysis.  There is no guarantee that this will matter other than as a way to pick the Canadian banks, allocate funds and look again in about 20 years.  Prices will fluctuate significantly over time, but Canadian Banks are about as boring as you can get.

One REIT Still Interests Me

I’m looking more at Boardwalk REIT as a great long-term hold.  It’s highly undervalued and is only one of two in my REIT ETF I created.  Will be picking up some on weakness again. 

 Looking Ahead

Over the past few months, I've been thinking about a different kind of investment publication.

Not another newsletter full of buy and sell ideas, but a place to study businesses that have the potential to become long-term compounders.

I've been calling it Compounder Hunter.

It will launch in September as a premium companion to this newsletter. The focus will be on understanding exceptional businesses, why they compound over time, and how to think about them with patience rather than prediction.

I'll share more over the next couple of months. As a subscriber to this newsletter, you'll be among the first to hear about it.

Meanwhile, back at the Hive

Other than that, playing with the bees and planning some stream fishing. A swarm moved into the farm, and that’s been great fun to watch.  In Nova Scotia, the Bee House is rocking as well.  The ocean is calming, the wildflowers mellowing, an amazing time to be alive.   Bee well and talk in August.

Appendix

ASK HANK™ ONE-PAGE SUMMARY

Date: May 28, 2026

Company: NexLiving Communities (NXLV)

Share Price: $2.00 CAD

Hank Score: 72/100

NexLiving owns apartments in secondary Canadian markets and has grown very quickly through acquisitions.

Revenue, NOI, and FFO are all rising strongly. The company now owns roughly $450 million of apartment assets.

The big positive:

Shares trade around 47% of stated book value ($4.23 NAV/share). The current FFO yield is about 11.5%, which is attractive.

The concerns:

Debt remains high and management heavily diluted shareholders during the Devcore acquisition. Governance and capital allocation need monitoring.

This is not a simple “buy and forget” situation. It is more of a discounted asset play where future shareholder returns depend heavily on whether management stops excessive dilution and focuses on per-share compounding.

Good apartment assets.

Strong housing tailwinds.

Cheap valuation.

But governance risk prevents elite status.

Classification:

Interesting small-cap apartment value situation with moderate-to-high risk.

ASK HANK™ ONE-PAGE SUMMARY

Date: May 28, 2026

Company: Bank of Montreal (BMO)

Share Price Used: $225 CAD

Hank Score: 79.5 / 100

BMO remains a strong Canadian banking franchise with durable dividends, solid capital ratios, and long-term compounding characteristics. Book value and dividends have grown well over the past three years, though earnings growth has slowed due to integration costs and rising credit provisions.

The biggest concern is valuation. At roughly 2.2x book value, BMO is no longer trading like a cheap bank. Investors are paying a premium for quality and stability.

Strengths:

- Strong Canadian banking moat

- Durable dividend

- Large deposit base

- Wealth management growth

- Good long-term survivability

Risks:

- Commercial real estate exposure

- Consumer debt stress

- U.S. acquisition integration risk

- Credit-cycle sensitivity

Hank View:

This looks more like a “good business at a fair price” than a bargain. Long-term holders may still do fine, but future returns may be more moderate from this valuation level.

The hive remains healthy.

The honey simply may not be cheap today.

ASK HANK™ ONE-PAGE SUMMARY

Date: May 28, 2026

Company: Scotiabank (BNS)

Share Price Used: $111.57 CAD

Hank Score: 76.5 / 100

Scotiabank remains a durable Canadian banking franchise with strong capital ratios, a reliable dividend, and improving operational discipline. Management has shifted focus away from pure loan growth toward higher-quality client relationships, wealth management, and North American expansion.

Strengths:

- Strong CET1 capital ratios

- Attractive dividend yield (~3.9%)

- Improving deposit growth

- Growing fee-based businesses

- Reasonable valuation versus peers

Risks:

- Commercial real estate exposure

- Consumer credit deterioration

- International banking volatility

- Slower earnings growth

- Banking remains cyclical

Valuation:

At roughly 1.47x book value, BNS appears more reasonably priced than some Canadian peers. It is not deeply undervalued, but the pricing is more balanced than premium-priced banks.

Hank View:

This looks like a “fair business at a fair price.” The dividend and survivability remain attractive, but meaningful upside likely depends on improving return on equity and cleaner earnings growth over the next several years.

The hive is stabilizing.

Now management must prove the turnaround can compound.

ASK HANK™ ONE-PAGE SUMMARY

Date: May 28, 2026

Company: CIBC (CM)

Share Price Used: $159 CAD

Hank Score: 83 / 100

CIBC has transformed itself into a stronger, more diversified and more efficiently operated bank than many investors remember. The bank has improved earnings quality, expanded wealth management, strengthened its U.S. operations and invested heavily in AI and digital banking infrastructure.

Strengths:

- Strong earnings growth

- Excellent capital ratios

- Growing wealth management platform

- Improving ROE

- Strong operating leverage

- Healthy dividend coverage

Risks:

- Canadian consumer debt exposure

- Housing market sensitivity

- Banking remains cyclical

- Commercial real estate risks

- Valuation no longer cheap

Valuation:

At roughly 2.6x book value, CIBC trades above where traditional value investors would historically prefer. However, the premium reflects improved execution, stronger profitability and rising investor confidence.

Hank View:

This no longer looks like a “problem bank.” It now resembles a stronger compounding franchise with better leadership execution and improving long-term economics. The market is rewarding that improvement.

The hive is stronger.

The execution is cleaner.

Now investors are paying up for quality.

ASK HANK™ ONE-PAGE SUMMARY

Date: May 28, 2026

TD Bank Group (TD)

Share Price: $155.13

Hank Score: 74/100

TD is still one of the strongest banking franchises in North America despite the major AML compliance failure disclosed in 2024–2025.

The important thing:

the bank survived the scandal with strong capital, stable deposits, safe dividends and continued profitability. Weak banks usually crack under that kind of pressure. TD didn’t.

Strengths:

- dominant Canadian retail banking franchise

- strong U.S. banking footprint

- wealth + insurance diversification

- fortress balance sheet

- aggressive buybacks after Schwab sale

- growing AI and digital leadership

- safe dividend

Weaknesses:

- AML governance failure

- regulatory oversight risk

- expensive valuation versus history

- recession and housing exposure

Hank Cap Rate:

~5.4%

Dividend:

Safe.

Valuation:

Fair to slightly expensive.

This no longer looks like a bargain bank.

It looks like a quality long-term compounder with a governance scar.

Main question:

Can management fully repair trust and execute through the next credit cycle?

Educational purposes only.

Not financial advice.

ASK HANK™ ONE-PAGE SUMMARY

Date: May 28, 2026

Royal Bank of Canada (RY)

Share Price: $261.64

Hank Score: 89/100

RBC increasingly looks less like a traditional Canadian bank and more like a global financial compounder.

The bank now combines:

- dominant Canadian retail banking

- elite wealth management

- major capital markets scale

- growing global operations

- strong AI leadership

- fortress balance sheet

- disciplined capital allocation

2025 was a major breakout year:

record earnings, strong ROE, aggressive shareholder returns and successful HSBC Canada integration.

Strengths:

- safest large-bank profile in Canada

- excellent management execution

- strong dividend safety

- durable moat

- growing AI advantage

- global diversification

Weaknesses:

- expensive valuation

- economic sensitivity

- housing exposure

- acquisition integration risk

Hank Cap Rate:

~5.4%

Dividend:

Very safe.

Valuation:

Premium.

This is not a bargain bank.

It is a premium-quality compounder trading at a premium-quality price.

RBC currently looks like one of the strongest banking franchises in the world.

Educational purposes only.

Not financial advice.

ASK HANK™ CORRECTED BANK RANKINGS

Date: May 28, 2026

1. RBC — 89

2. CIBC — 83

3. BMO — 79.5

4. Scotia — 76.5

5. TD — 74

Corrected because National Bank was not formally analyzed under full Hank protocol.

Suggested Kelly-style allocation for $100,000:

RBC: $40,000

CIBC: $20,000

BMO: $15,000

Scotia: $15,000

TD: $5,000

Cash: $5,000

Main takeaway:

RBC currently appears to be the strongest long-term compounder among the analyzed Canadian banks.

TD’s governance issues materially reduced its ranking despite strong underlying franchise quality.

CIBC surprised positively due to operational improvements and stronger execution quality.

Educational purposes only.

Not financial advice.