About Us

Dear Investors,

My name is Michael G. Clements, MBA (Finance, Dean's Honor List), and I am the Founder and Managing Director of Cynergy Research Services. I also act as the Editor and Head of Research for the Cynergy Research Quarterly Reports, Special Reports, and the "Global Growth Model Portfolio".

 The short version of "About Us" (for those who want a quick summary) is as follows:

The Model Portfolio companies that subscribers can invest in worldwide have the following attributes:

Beginning in 2011, our Family Portfolio (which is based on the Model Portfolio) has beaten the TSX Total Return Index in 9 of the last 13 years plus YTD 2024. Our 13-year compound annual growth rate (CAGR) for the Family Portfolio is 11.3% versus only 6.7% for the TSX TR Index, therefore $1 invested in the Family Portfolio at the start of 2011 turned into CDN$4.04 versus only CDN$2.33 for the TSX TR Index: a sizable gap. 

CDN$1 invested in our Model Portfolio companies on  January 1st, 2018, would have turned into CDN$1.99 by December 31, 2023. Conversely, the same dollar invested in the TSX Total Return Index companies would have returned only CDN$1.56, a gap of 28% in just 6 years. 

We own 100% of the Model Portfolio companies, but are not equally-weighted among the various holdings. As such, our interests are aligned with subscribers because we are fully invested in all of the same companies we recommend.

The Model Portfolio is designed for investors with a long-term investment horizon who are seeking a widely-diversified global equity portfolio with an emphasis on generating superior income primarily in the form of steady and growing dividends, coupled with moderate or better capital gains.

Feel free to email us at sales@cynergyresearch.com with any preliminary questions that you might have, and we look forward to you becoming a subscriber. Your annual subscription rate will remain at the same level for as long as you decide to remain a subscriber.

 

The long version of "About Us" (for those who would like more details) is as follows:

Since early 2018 I've been running a financial research service for subscribers that tightly focuses on identifying only the biggest, best, most resilient, profitable and growing publicly-traded companies in the world, which builds on the work I've been doing for the past 13 years for the Family Portfolio that we own, which has substantial amounts invested in many companies.

I also leverage off the knowledge I gained via working in the stock market for about 10 years in the late 70's and most of the 80's and early 90's as a Trader and a Discount Broker, plus my MBA from the University of Western Ontario with a specialization in Finance.

The companies we invest in worldwide have exceptional growth characteristics, driven by sustainable competitive advantages, superior financial strength, proven management teams and powerful products or services. Investing in only what we believe to be the best companies with long-term staying power supports our ability to deliver out-sized returns and minimize risk. We believe consistent growth is the primary driver of intrinsic value and long-term stock price appreciation.

Accordingly, I provide subscribers with an online "Global Growth Model Portfolio" of about 50 carefully researched and selected premium companies plus a "Secondary Optional List" of about 15 companies that they can choose between: some pick all 50 Model Portfolio companies, some a lesser amount, and some also choose a few Secondary Optionals. My general opinion that I provide to investors is to spread their money as widely as they can and thus largely insulate themselves via diversification from any one, two, or three companies under-performing, or worse. The Model Portfolio is also negatively-correlated to an extent, and as such when some companies may be under-performing for some reason (such as rising interest rates), other companies in the Model Portfolio will benefit from, or be unaffected by, that situation, and vice versa - another benefit of wide diversification. 

And the Model Portfolio and Secondary Optionals are not static: they are constantly being scrutinized to ensure that they are living up to their promise, and other prospective companies are also being scrutinized which may be worthy of inclusion in preference to those existing companies, so each year there are several additions and deletions to the extent that in 10 years time there may have been a 20-30% change in both lists. I follow an "Active Passive" approach, whereby I am very Active in the selection and ongoing monitoring processes, but then I let the magic of compounding occur over a long period of time which is the "Passive" aspect.

The Model Portfolio and Secondary Optional companies are essentially collectively put under the microscope all year long via ongoing reviews of: Quarterly and Annual Reports (about 240 each year); news releases (several thousand each year); multiple AGM's and Investor Days; various economic data websites; and various daily/weekly print and TV news sources (Wall Street Journal, Globe&Mail, Financial Times, CNBC, Bloomberg, the Economist Magazine, etc.). Detailed discussions are also held throughout the year with numerous individuals to get their independent views on various companies and specific economic developments, both short and long term.

As a result, each company is graded based on each of its top 3 criteria of interest to investors. In addition, the ability of each Model Portfolio and Secondary Optional company is regularly reviewed regarding its ability to pay for dividends, share buybacks, debt reductions, and other uses.

As a consequence of all the foregoing activities, the Model Portfolio is constantly updated regarding letter grades assigned, dividend increases, share buyback rates, GAAP and non-GAAP Earnings, and other developments. And in terms of Prospects, an additional several hundred Quarterly or Annual Reports are reviewed each year.

As such, a tremendous amount of analytical activity occurs behind the scenes and is only indirectly shown via occasional changes in the Model Portfolio and Secondary Optional company listings, which collectively provide the value-add that makes it worthwhile to subscribe to Cynergy Research Services: we do all the work so our subscribers don't have to.

I also provide subscribers with a comprehensive Weekly Summary on the various companies and general economic conditions, plus other value-added information such as an Excel-based Asset Tracking Workbook, both in complex multi-tab and simple one-page versions. Occasional Special or Flash Reports are also issued during the year regarding time-sensitive developments of interest to subscribers.

The Global Growth Model Portfolio is based on our existing family holdings, and its overall Strategy is "long-term dividend growth coupled with capital preservation and appreciation". We own 100% of the Model Portfolio companies, but are not equally-weighted among the various holdings. As such, our interests are aligned with subscribers because we are fully invested in all of the same companies we recommend.

The Model Portfolio that has been developed has quite low volatility ("Beta") overall, and after any market turmoil the companies in the Model Portfolio are usually the fastest to rebound, which was certainly the case for 2020, 2021, and 2023. I believe, and have proven, that superior earnings stability and financial strength serve as a “Margin of Safety” that typically results in less volatility during declining markets.

With regard to the Margin of Safety, the Model Portfolio was battle-tested in 2020 and came through with flying colors. The proof was in the 2020 Total Return of 13.4% and the fact that we experienced zero bankruptcies or permanent capital impairments amongst the ~50 companies. A few companies were hammered pretty hard, but even those are making a comeback. All of the Secondary Optionals also survived.

Some familiar Model Portfolio names include: Apple, Microsoft, Mastercard, CN Rail, TELUS, TD Bank, SAP, Accenture, etc.

One of the benefits of a Dividend Growth Strategy is modest to good capital gains over the long term, as the individual share prices tend to rise in line with the dividend increases. It's not a 1:1 correlation, but it's fairly close: 80% over a 10-12 year period, and 90% over 25 years, per a study done by Ned Davis Research.

And with regard to dividends, as mentioned in the short summary above, the Model Portfolio holdings provide an average dividend yield of 2.2% and increase them by an average of 7.6% per year (as of December 31, 2023), which is quite good given that a number of the companies do not pay any dividends. Note that this annual rate of increase greatly exceeds inflation, and as such provides a buffer against that hidden wealth destroyer. In 5 years time the dividend "yield on cost" would rise to 3.3%, and in 10 years investors would be receiving 4.85% on their original investment, assuming a constant 8% average annual increase, ceteris paribus.

Furthermore, and again in stark contrast to the Model Portfolio, the "BlackRock iShares Canadian Select Dividend Index ETF", which contains Canada's biggest dividend-paying companies, significantly lagged behind the Model Portfolio in 2020 by 14%, and 13.8% in 2023, which again graphically illustrates the need to diversify outside of Canada. And the Model Portfolio beat the iShares ETF by 17.9% in 2018, a significant margin, and was tied with it in 2019. It was only in 2021 that the ETF finally exceeded the Model Portfolio with a 30.7% Total Return, and another 1.7% net gain in 2022, which still does not make up for the prior poor performance, especially when its severely lagging 2023 performance is factored in.

Best regards,

Michael G. Clements, MBA (Finance)

Managing Director

Cynergy Research Services

Global Equity Analysis, Investment Opinions, and Model Portfolio

"Focused on the biggest, best, most resilient, profitable and growing publicly-traded companies in the world"