Wind turbine visual by Agrotech

Agrotech Ventures Inc.

A little over a year ago, Cape Cove Financial Management started to distribute its first bond with a basket of private companies as its underlying assets. Agrotech Ventures Inc. invested in these companies, 6 in total, in the form of venture capital.

Consult this one-pager or the complete presentation on Agrotech.

The bond, which can be subscribed in cash or through a registered plan, provides the investor with an interest return of 10% per year for 3 years, interest paid quarterly. Eventually, the manager will liquidate all those positions and there will be profit sharing, 75% of which are intended for investors.

The maximum amount allowed, originally, was set at $5 million, which has been completed. The money was invested in 6 companies that at that time had no or little income. These companies are related to the field of agriculture, food or beverages. Here is an update of the portfolio.

  • LiveWell: Agrotech had an exposure of about 1 million shares of LiveWell. The company became public on June 21, 2018. As a result of the merger with Vitality Health CBD Products, the company changed its name to Eureka 93. I invite you to read a previous blog on this topic;
  • Pharma Cielo, a marijuana and hemp company, has also become public lately. Agrotech sold its 60,000 shares at an average price of $ 9. It had acquired them at a cost of approximately $ 3.30 per share;
  • Y Kombucha is a company that produces a variety of teas with probiotics. It has just experienced her first profitable month. Growing very fast,you can buy them at the Bell Center or in grocery stores;
  • Green CBD specializes in the extraction of oil from hemp, ginger, eucalyptus or others. The land, located in the Democratic Republic of Congo, rented $ 1 by the firm, was to be cleaned to allow the cultivation of hemp. The rosewood trees have been cut and a company is extracting the oil. The perfume industry is looking for this oil. There is a letter of intent for the purchase of all the production of this rose oil. The machinery for the extraction of hemp oil is on order and should be delivered shortly. It takes 3 months for a first harvest of hemp.
  • Gigrow builds vertical farms that can be used for growing vegetables and possibly cannabis (currently being tested). Fresh vegetables, 12 months a year. In addition, an exclusive contract will allow several farms to be established in France by the end of 2019;
  • Reiva is a company that exploits the root of organic beets in the field of health and sport. It now exports to China and the United States. We also find its products on Amazon.

Some of these companies required a small additional capital to know the current level of growth. To this end, an additional capital of $ 1,000,000 has been authorized for subscription purposes.Only about $ 300,000 remains available for investors.

So why talk about a product that is essentially complete and closed. It is to tell you that a new bond is coming up at Cape Cove, Capital Malina Inc. The same principle will be used. A basket of several companies specializing in the field of technology this time. An interest of 10% per year will be paid to investors with a profit sharing at the end of the bond, in 3 years. What a great opportunity to get a fixed income investment with a potential for capital growth.

Consult this product summary page or the complete presentation on Capital Malina Inc.

To learn more on this bond, here’s an overview of the products already covered by the fund, to date:

I am available to meet you and discuss the various opportunities that will help you achieve your goals.

Luc Chartrand

Calculateur de prêt

A decade with no probable returns

All the following information is taken from Steve Blumenthal’s newsletter, “On My Radar: Balancing Offense and Defense, Equity Market Valuations and What They Tell Us About Coming Returns,” dated March 8, 2019.

According to Blumenthal, the goal of any investment portfolio is to capture growth while preserving capital, although these two may conflict with each other. Taking more risk can suggest better returns with the risk of losses in the event of a market downturn, while being more conservative in order to preserve capital could mean missing out on growth opportunities, no matter if in mutual funds, ETF (Exchange Traded Funds) or other investment tools.

Markets have periods of Bullish growth and Bearish decline. Depending on where we are in time, considering inflation, interest rates and other factors, experts give opinions on the development of the future trend of the stock market.

Mr. Blumenthal suggests a dozen graphs and charts highlighting the fact that according to experts consulted, the returns we should get from traditional markets over the next TEN YEARS should be minimal or even nil. In this document, we will focus on two of those charts, because a picture is worth a thousand words

The first chart shows: “The Household Equities Percentage vs Subsequent Rolling 10-Year of the S & P 500 Index Total Return” (SP500 is widely regarded as the best single gauge of large-cap U.S. equities).

This chart looks at equity ownership percentage. It has a high correlation (0.9, or 90%) to what future annualized returns turned out to be.

-The solid line represents the household exposure to equities, as a percentage, including mutual funds and pension funds. We are around 52.5%.

-The dotted line represents the average subsequent return that happened for the subsequent 10 years and is plotted on a rolling basis.

Here’s an example: In 2000, household exposure to equities was around 62% (scale on the left side of the chart). Referring to the right side of the graph, if it is true, the average return for the next 10 years could have been be expected to be about -3% per year on average. This prediction proved more or less accurate, the reality giving -2% on average between the years 2000 and 2010. So, today, we could foresee that the return on US equities for the next 10 years would be on average 3% per year before inflation, including dividends.

In summary, the more households are exposed to equity ownership, the lower will be the return of the next ten years.

The second chart deals with:Jeremy Grantham-GMO’S & Year Asset Class Real Return”.

Each month since the early 90’s, the Global Investment Financial firm – GMO publishes their forward return forecasts. This firm has a high correlation over time, 0.97 (1.0 being a perfect correlation).

For the next 7 years, GMO anticipates that US equity returns will average -3.7% and the US bonds expected return will be of -0.8%.

These forecasts issued by GMO are based on the reasonable beliefs of the firm and do not guarantee the future performance of the market

All those who have met me in the past 4 years know that I have integrated exempt market products into my service offering. I believe so much in this market because at the end of the day I can offer my clients an investment category that is not correlated with traditional markets, while suggesting quite respectable returns, considering the risk associated with this type of investment. What a nice tool to offer my clients to diversify their portfolio and reduce volatility. In addition, for the last year and a half, I have joined the firm Cape Cove Financial Management for the vision of the managers and for the opportunities that I could offer my clients so that they can enjoy the pleasant retirement they desire and deserve.

I am also, in addition to be a representative with an exempt market broker, a referral agent to our portfolio management department. Within the customer service offering, there are several investment opportunities that have no or little correlation with traditional markets (option portfolios, private real estate investment trusts, alternative or algorithmic products, tax efficient products, pre-IPO private equity shares). My objective is that, even if traditional markets do not provide the desired returns in the short term, I can offer you solutions that will help you achieve your goals.

 

Do not hesitate to contact me so that we discuss the present and your personal situation always in order to satisfy you fully

Luc Chartrand

lchartrand@capecove.ca

www.lucchartrand.ca

514-995-4584

 

WARNING. This announcement does not constitute an offer of securities on which you can rely to make your investment decision. The offer is qualified in its entirety by the offering memorandum of the issuer. Please read the Offering Memorandum before making any investment decision. The graphics and several comments are from Steve Blumenthal’s publication, On My Radar, March 8, 2019.