FIRE'd Up - Year One

The Prologue

The location: Rome, Italy. It's January 27, 2020. I'm standing alone looking at the Alter of the Fatherland. The sunrise lights up the monument with a golden hue. My body freezes to admire its beauty. A strong, free-wheeling surge of emotions runs through my veins. I'm celebrating my 35th birthday devoid of stress and responsbilities. There is a calm in my mind that becomes addictive. I have travelled almost every year for my birthday for a decade, but this moment inspires me differently. There is a new addiction I seek called living and I need more.

Ten days later, my vacation would end and I would head back home to Edmonton, Canada where I worked six days a week, feeling tired and trapped. While I was in Rome, the coronavirus was spreading, and the first cases hit northern Italy. I would arrive in Canada thinking this virus was minor, but four weeks later, Canada closed its borders. The world shut down. By April, both my part-time jobs decided to close up, and for the first time in over a decade, I had no work. Fortunately, I qualified for CERB, Canada's stimulus program as part of their traditional unemployment insurance. I saved every dollar from CERB knowing I might not have work for a while. I also used the time to think about my future and what actions to take going forward. I reminisced about gazing at the Alter of the Fatherland and the positive emotions that accompanied that memory; I firmly decided to 'alter' the trajectory of my life.

The location: Edmonton, Canada. It's June 29, 2020. I love travelling, seeing the world, and experiencing culture, and having that capability at 45 opens more doors than at 65. I needed to re-route my life so that I could expand how often I travelled and how I would come up with those funds, to reduce my work hours so that I could continue actually living. The generation of people before me retired in their 60's; I did not want that. I wanted to retire at 43, which happens to be my lucky number. I knew of an investment strategy that was low maintenance, generated passive income, and can be monitored from anywhere in the world. It was a strategy that I had done for years, but without the urgency nor commitment. I was allured by more risky, aggressive strategies that could be more lucrative. Nah, it didn't work. I had to do it the relatively slow and steady way. I had to focus solely on writing options.

December 31, 2020: My portfolio doubled in value through a combination of investment returns and continuous deposits of disposable income from CERB and my part-time job. It seemed like I was on my way to a better life altered by a job loss and a focus on generating income through other means. I don't often tell people, but 2020 was a major blessing for me, but how do I show excitement and pride when people around you are suffering through job loss and mental illness? You don't. You can't. It is insensitive. I truck along and wait for them to be in a better position, cheering for them on the sidelines while I continue to improve my life.

I decided to share how I got to this point through a series of short blogs offering insight into the strategies and summary of results which I aim to post every year on June 29. There will be three parts to each blog: the process, the progress, and the product. The process will include the thought process of what strategy or structures I must execute for the time period. The progress will show some of the primary trades in the account. The product will be a short summary of any growth I obtained during the calendar year. Can I retire at 43?

I must inform readers that I am a former licensed investment representative in Canada, but left the industry in 2009. I continued trading while holding jobs in the hospitality industry. I also came back to one job and qualified for CERB for several months after due to reduced hours and income. This helped me cover my expenses without needing to access my investment capital.

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The Process

Developing a concrete plan requires knowledge and experience, but even more importantly, understanding your weaknesses or limitations. In the world of trading, these limitations can include lack of capital, lack of knowledge, lack of confidence, and susceptibility to emotions. Fortunately, I have been trading options for my entire adult life (2004 to present) and have become well-experienced in how they perform and react during all kinds of market conditions, but my primary limitation at this juncture was starting-capital - a mere $10,000 CDN in the trading account (excludes assets held in other accounts).

Looking back at my trading history, I could see that my most constitent, profitable trades were covered calls on blue-chip and medium-risk growth stocks. In fact, in 2016, I wrote covered calls on Netflix for eight consecutive weeks which I used to fund my 10-day trip to Tokyo, Japan. It should have been a clue to continue that strategy, but I was allured by other higher payout trades that did not pan out such as credit spreads and buying options. Now, I've also been writing covered calls in my other accounts for a while with very little progress, and the primary reason was because of the stock choices (non-blue chips) and panic-selling to preserve capital during market corrections instead of just holding for the dividend. Silly me. I knew going forward, covered calls and extracting extrinsic value on blue chips was the best route to take. It was easy and less-time consuming (great for when I travel). And when markets fall, hold through, especially if it's a blue-chip. The saying "Time in the market, not timing the market" is vital here.

When I write a covered call, I always choose the weekly ATM (at-the-money) strike, which generally has a return of 1% per calendar week. This is an acceptable return during low-volatile markets. The downside with covered calls is the capped gains, however, if we think about it mathematically, it makes sense to take an expected 52% return a year versus the 10% average through simple buy-and-hold. I can access more income through a hybrid portfolio using both a buy-and-hold mindset with theta decay on the option.

For those that do not know, a covered call trade has an identical risk-to-reward structure as writing a put with all things being equal (strike price, expiry, no dividends, etc.). The benefit of writing a put is that it has fewer trades up-front, thus less fees. I also planned to leverage the capital and a covered call strategy would require borrowed funds, which charges interest. Writing puts eliminated these expenses, automatically enhancing my returns. Therefore, going forward, it was more beneficial to write puts instead of covered calls.

If I forecast that a 50-delta put option has a 50% chance of expiring OTM (out-of-the-money) and 50% ITM (in-the-money), and then assume 50% of the ITM trades will still be profitable by capturing the extrinsic value, then we can conclude that 75% of the trades would generate a realized profit. The 25% of losing trades could be rolled out to capture additional theta and as long as the stock price is consistently around the same range, I can still access about 0.50% weekly theta extraction. In some instances, I could roll down the strike for a small credit. This allows me to have a lower break-even strike on the new contract which means my back-end closing costs are reduced. Choosing quality companies is important because I want a stock that won't suddenly plummet under normal market conditions. If a stock dramatically falls, the credit for rolling out options on puts becomes smaller and that ties up significant capital.

The next step is finding the right stocks. Most people online will suggest high-beta stocks. These are companies that are more volatile than the index and offer higher premiums when writing options. However, the primary issue I have in that concept is that high-beta stocks perform poorly and do not actually offer enough in premium to justify the volatility. As I mentioned earlier, I have sold covered calls for years on high-volatile stocks without any progress but I've made a lot of money writing calls on blue-chips. These companies include financials like Bank of America, Citigroup, etc, or quality tech like Apple, Microsoft, etc., or retail giants like Costco, Wal-mart, etc. I cannot stress enough how important it was to consider only blue-chip and medium-risk growth stocks.

On June 29, 2020, the equity value of the trading account was approximately $10,800 CDN or $8,000 US. I aggressively leverage the portfolio across multiple sectors for some diversification. Since I am writing puts, I must calculate the estimate market value of the account based on the presumption of assignment. That is, if I actually own the shares with a covered call, what is the market value? I would never exceed triple my equity value, that is, at inception, the maximum market value of my strikes would be $8,000 x 3. This was my risk management portion. I could easily absorb a max loss of $24,000 US (minus $8,000 starting capital means I would owe $16,000 US).

I allocated a maximum of $10,000 US to each company in July, and primarily traded two stocks. I chose Square and one financial stock, often rotating between Citgroup, Morgan Stanley, and JPMorgan, as all three were under $100 a share at the time. The reason for the rotation was because as stocks moved up and down, I wanted to be as close to $10,000 as possible so that I did not have idle capital.

Now, the world just survived a market correction in March 2020, but the US Fed intervened. My experience from the 2008 financial crisis taught me that the government intervention would calm markets, and in a low-interest world, with people seeking returns, the money would continue to flow into the stock market. I felt confident and comfortable with the leverage as well. And for readers, risk management is more important than anything else when trading, even more important than returns and ability. You must be prepared for the unpredictable.

With $24,000 US market value, I should expect $240 in extrinsic value each week. Over one month with 2 trades per week, I should expect 4 trades to expire worthless, 2 trades to be closed for any gain, and 2 trades to be rolled out due to a drawdown. I also open all contracts in the final hour of the day on Monday. This is near the closing price and we can compare it to the closing price for the end of the week. So, how did I do?

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The Progress

By the end of the third quarter (September 30), my account value was over $17,700 CDN. This is a combination of gains and depositing disposable income. My equity has grown about 70% quarter-to-quarter. This also allows me to increase the amount of companies I trade, still capping each stock at $10,000 US each. However, shares of Square went from below $110 to $150 in this time, so I decided to maintain Citigroup (primarily) and Square in my account until it grew. My average account allocation starting September is Square ($15,000 US) and Citigroup ($11,000 US).

In early December, I start adding a medium-risk stock, Snapchat, which was around $52 at the time and did 2 contracts. I also add Apple at $123 to the rotation, swapping it with Snapchat if it went too high. I also add Starbucks at $100. My account now is weighted across financials, tech, retail tech, and retail food. By December 31, the account is $23,700 CDN or $19,000 US. This is a gain of 33% quarter-to-quarter. My average account allocation in December is Square ($18,000 US), Citigroup ($11,000 US), Starbucks ($10,000 US), and Apple/Snapchat ($12,000 US) for a total of about $51,000 US. My max leverage is $19,000 x 3 or $57,000, so I am still within my risk management parameters. I would eventually drop Square in January 2021 due to its price.

Below are tables of the progress of Citigroup and Square, which were my two most actively traded. For simplicity, I only included the short strike and net credit on each expiration date. I've also included two different expiring outcomes because when writing puts, our goal is to out perform the stock for that time period, the best outcome being the net credit received was greater than the stock's gain. If I write options that underperform the stock, then we can conclude it is better to buy the stock on margin for that time period and hold until the end of the week. I also assume I have no temptation to take gains early.

Those on mobile may need to rotate their phone to landscape, due to a table error that appears in portrait mode. I apologize for this inconvenience.

Results Table Legend

Expired 1 - Option expired worthless; option outperformed stock - optimal outcome

Expired 2 - Option expired worthless; option underperformed stock

Gain or Loss - Option expired ITM; closed for a net gain

Rolled Out - Option expired ITM; closed for a net loss, included credit for rolling

Assigned - Shares were bought

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Citigroup (C) - 2 contracts - July 20 to Aug 7

Expiration |	Strike	| Credit	| Entry Prc	| Closing Prc	Result
JUL 24, 2020 |	50.00 P	$0.80	$50.14	$51.67	Expired 2
JUL 31, 2020 |	51.00 P	$0.70	$51.29	$50.01	Rolled out - Closed for $1.31
AUG 07, 2020 |	51.00 P	$1.78	$52.12	$50.01	Expired 2

From July 20 to August 7, Citigroup shares gain $1.98 and paid $0.51 dividends; total option premiums received in $1.97. Therefore, during this time period, assuming no early sale of the shares, it was better to own the stock, excluding possible interest charges.

Citigroup (C) - 2 contracts - Aug 17 to Nov 27 - includes short strangles and put assignment

Expiration |	Strike	| Credit	| Entry Prc	| Closing Prc	Result
AUG 28, 2020 |	51.00 P	$0.83	$51.42	$52.28	Expired 2
SEP 04, 2020 |	52.00 C	$0.46	$51.12	$52.52	Rolled Out - Closed for $0.72
SEP 04, 2020 |	51.00 P	$0.56	$51.12	$52.52	Expired 2
SEP 11, 2020 |	51.00 P	$0.80	$51.04	$51.00	Gain - Closed for $0.06
SEP 18, 2020 |	52.00 C	$0.58	$48.15	$44.86	Expired 1
SEP 18, 2020 |	51.00 P	$1.00	$48.15	$44.86	Assigned
SEP 25, 2020 |	44.00 C	$0.55		$42.02	Expired 1
OCT 02, 2020 |	42.00 C	$0.78		$43.70	Rolled Out - Closed for $1.70
OCT 16, 2020 |	43.00 C	$1.97		$43.24	Rolled Out - Closed for $0.24
OCT 23, 2020 |	43.50 C	$0.58		$43.70	Rolled Out - Closed for $0.49
OCT 30, 2020 |	44.00 C	$0.75		$41.42	Expired 1
NOV 06, 2020 |	43.00 C	$0.75		$42.71	Closed for $0.02
NOV 13, 2020 |	46.00 C	$2.20		$48.66	Closed for $3.00
NOV 20, 2020 |	49.00 C	$1.12		$51.65	Closed for $2.55
NOV 27, 2020 |	51.00 C	$1.13		$56.67	Assignment

From August 24 to November 27, I opened up short strangles because the shares were sideways. On Monday September 14, the banking sector fell on news, which triggered an assignment at $51.00. In that time period, Citigroup shares gained $5.25. The total premium recieved opening the strangle and covered call was $5.28. I also wrote covered calls below my book value in exchange for theta. In the end, owning the shares was almost equal to writing options during this phase assuming shares were held to the same date and prices.

Citigroup (C) - 2 contracts - Dec 8 to Dec 31

Expiration |	Strike	| Credit	| Entry Prc	| Closing Prc	Result
DEC 11, 2020 |	57.00 P	$0.28	$58.13	$58.93	Expired 2
DEC 18, 2020 |	59.00 P	$0.78	$58.74	$59.06	Expired 1
DEC 24, 2020 |	61.50 P	$0.76	$61.23	$60.57	Rolled Out - Closed at $1.35
DEC 31, 2020 |	61.50 P	$1.57	$61.66	$61.66	Expired 1

From Dec 8 to Dec 31, Citigroup shares rose $3.53; total option premiums were $2.04. Therefore, it was better to own the stock over writing OTM options. However, if we remove the first trade in this subset of trades, expired 1 was the most common outcome in the final three weeks.

Square (SQ) - 1 contract - June 29 to November 27

Expiration |	Strike	| Credit	| Entry Prc	| Closing Prc	Result
JUL 02, 2020 |	101.00 P	$1.65	$103.68	$113.39	Expired 2
AUG 21, 2020 |	147.00 P	$1.25	$152.48	$155.10	Expired 2
AUG 28, 2020 |	147.00 P	$1.50	$151.79	$155.93	Expired 2
SEP 04, 2020 |	157.50 P	$2.68	$159.56	$146.39	Closed Loss $11.22
Bought shares at net cost $143.80 (manually took assignemnt to capture extra theta)
SEP 18, 2020 |	157.50 C	$3.90		$145.01	Expired 1
SEP 25, 2020 |	147.00 C	$2.07		$147.20	Rolled up; buy at $10.85
SEP 25, 2020 |	157.50 C	$5.60		$157.72	Closed at $0.70
OCT 02, 2020 |	160.00 C	$6.50		$169.61	Closed at $9.10
OCT 09, 2020 |	160.00 C	$10.95		$183.50	Assigned
OCT 09, 2020 |	177.50 P	$1.65	$180.18	$187.28	Expired 2
OCT 16, 2020 |	185.00 P	$1.56	$190.47	$186.35	Expired 1
OCT 23, 2020 |	182.50 P	$2.70	$186.96	$176.77	Assigned
OCT 30, 2020 |	182.50 C	$2.30		$154.58	Expired 1
NOV 06, 2020 |	175.00 C	$1.15		$198.08	Rolled up; buy at $6.00
NOV 13, 2020 |	182.50 C	$5.50		$177.19	Expired 1
NOV 20, 2020 |	182.50 C	$2.42		$195.97	Assigned
NOV 27, 2020 |	200.00 P	$2.35	$207.78	$212.52	Expired 2
DEC 04, 2020 |	200.00 P	$3.65	$210.96	$208.15	Expired 1
DEC 11, 2020 |	200.00 P	$3.65	$210.96	$208.15	Expired 1

During this time, Square shares grew from $103.68 to $208.15. The shares actually doubled. The option premiums received by writing OTM puts never came close to the stock's performance. As you can see, expired 2 is the most common outcome when writing the puts, and buying to close/rolling was the most common outcome when writing calls . Therefore, Square in this period outperformed the theta strategy.

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The Product

The first six months of a strictly theta-collecting strategy has shown positive results. Due to a declining USD/CDN rate from 1.34 to 1.21, the US dollar gains had a smaller positive impact on my net worth/equity. I also own shares of BCE strictly for dividends (which pay off my cell phone bill) which also has a minor impact on net worth.

Month End |	Equity (CDN)	| Return (USD)
June	$10,800
July	$10,126	$892
August	$10,472	$907
September	$17,749	-$1,358
October	$17,030	$2,763
November	$19,841	$2,571
December	$23,773	$1,224

The Epilogue

FIRE (Financial Independence, Retire Early) is a movement by millennials because we value experiences over a lot of other things in life. And in aiming for these goals, we learn a lot about ourselves as individuals. My focus on financial independence has made me more confident, healthier, and mentally stronger. But aside from personal growth, we are also shaped by major events.

The summer of 2020 became one of the best summers in my life. I explored my home province at a new level. I went to Jasper in the Rocky Mountains, headed south to Waterton National Park, visited Drumheller, discovered random waterfalls and lakes including Abraham Lake, and realized how important time is to me.

However, I lost a close friend from covid; he departed our circle in November. This moment weighed heavily as I entered the new year. My goals to retire early and experience the world became more concrete because I realized I could go at any time. I'm an atheist, which means I don't believe in an after life, therefore, the moments between birth and death have to be positive and worthwhile. I knew I could not be idle for too long. As the calendar flipped, I entered with a new sense of pride and energy to keep moving forward with one less comrad on my path, who now journeys with me in my heart.

I hope to post a new blog next year at the same time to show it can be done. If it motivates you to find yourself or seek a new goal or spend more time with those you love, it will be worth it for me to share my story.

Social Similes: Alberta Open For Business

Hi, I'm Jason Kenney, and Alberta is open for business! The grand re-opening of Alberta Co., now under new management, will be featuring new products to fulfil your needs. Our store is easily accessible and located in the heart of downtown Edmonton on 109 street and 97 avenue. Can't make it into Edmonton? We have got you covered. Call our toll free number at 1-800-382-5827 and a sales associate will be available to answer your needs.

In aisle one, we have over 160 public parks to choose from and we're confident we can find one suitable for you. We have a diverse line of parks including campgrounds, rural parks, and some along river valleys. Are you part of a First Nations group? Well, take advantage of the new buyback program. Your entity can buy back land that was previously sold* to the government. Alberta parks now allow the consumption of alcohol, meaning you can turn a quiet and empty park into a mega-fun festival everyday of the year.

In aisle two, we have Alberta Health. Are you in search of a product with an endless client base? Well search no more. We forecast a doctor shortage in the province in the year 2022. This is an opportunity for your business to enter the market with a reformed healthcare brand which is perfect for those providing high-end, luxury medical care.

And that's just the start of our grand opening sale. Over the coming months, we will be offering more products to our line including provincial highways, education, and politicians. Come in now before it's all sold out.

How the Bank of Canada's Rate Hike Affects Canadians

Photo courtesy Chris Wattie of Reuters

On July 12, The Bank of Canada (BOC) raised lending rates for the first time in 7 years; the overnight rate rose 25 basis points to 0.75 per cent. It was a highly anticipated move as futures predicted a greater than 90% chance the hike was coming. Tightening monetary policy has immediate and medium-term effects that touch many aspects of regular life, and we're here to discuss just a few of the impacts it may have on yours.

Foreign Exchange

All things being equal, higher interest rates in Canada would raise the value of the Loonie. This is due to the increased demand from foreign investors purchasing Canadian investments, such as government bonds (debt). Since Canada is a net exporting country, this would reduce the overall demand for Canadian products or make it more expensive for our trading partners to buy our resources. A reduction in demand therefore would reduce economic output. However, it is beneficial for residents that flock to the US for vacations. Needless to say, a higher Canadian dollar increases purchasing power for Canadians travelling aboard, but reduces tourism into Canada. Many argue that a low currency is a more effective economic stimulant than government policy.

Better Bank Profitability

If you are an employed in Canada, then you have a direct interest in the profitability of the financial industry. Other than the fact that banks are one of the largest employers in Canada and we rely on their sustainability as a nation, all working Canadians contribute to some form of pension plan, whether it be privately-held at work or through CPP. Most pension plans invest their funds into mutual funds and in Canada, all mutual funds focused on growth, income, blue chip, or index-matching, possess all five big banks in their portfolio. The reduction in profitability for banks hinders share price and dividend growth.

When interest rates rise, it gives banks larger margins on their lending rates. Banks make money by borrowing short and lending long. Borrowing short means they borrow money from their customers and investors through chequeing accounts and GIC's. The interest rate on these are under 1%. Banks then lend long buy purchasing long term bonds in the market or offering mortgages which are typically 5 years. Rates on 5-year bonds and mortgages have an interest rate about 2.5%. This is the yield curve and is the spread that banks attempt to profit off. This dance exists as long as there is demand for short term investment vehicles and use of chequeing accounts.

Inflation

Most people view inflation as the rise in prices of goods, however, it is not the true definition. Inflation is the reduced value of money and as more money is printed, each unit is fractionally reduced increasing the amount of money needed to buy the same good. Rising interest rates slow down the efficiency of an economy and therefore reduces the demand for money and speed at which money decays. For the average person, this means a decelerating pace of inflation. This may be viewed as positive or negative, depending on your needs. If you have investments, you would seek inflation. This increases the value of the investment. Many however seek slow inflation to combat stagnant wages and increase their personal buying power.

Mortgages

We didn't start off with mortgages as our first topic because it was important to understand how mortgage rates are priced. Some people believe that interest rates on mortgages are aligned with lending rates, however, historically speaking, this is actually untrue. Mortgages move in line with longer-term government bonds. This is often why variable rates move prior to central bank decisions, as was the case last week, when RBC raised variable rates 20 basis points. The longer-term bonds were already moving in anticipation of the Bank of Canada's decision. With that said, although there is no direct impact, mortgage rates should theoretically rise if the Bank of Canada implements one more rate hike in 2017, which is highly expected because longer-term bonds will drop in value.

If inflation declines, then this also leads to a reduction in the long-term bond yields of 10 and 30 year notes. Typically, these long-term debentures are in tandem with inflation expectations. If inflation rates do start to decelerate, then it is highly possible for the value of these bonds to rise and their yields to drop. This could potentially reduce variable mortgage rates without intervention from the central bank.

Consumer Spending

If you're a small business owner, then you should expect to see a reduction in consumer spending. However, the Bank of Canada revised their GDP growth from 2.6% to 2.8% which is an encouraging sign. Historically, the idea of raising rates increases the cost of debt. The average Canadian has over $20,000 of debt, excluding mortgages. Now that rates have risen or may start to rise, more people may start to funnel their cash from expenditures to debt. The direction from money out of the economy into savings and vice versa is the true nature and intent of interest rate decisions and monetary policy.

Amazon Effect and Urban Sprawl Killing Retail

Amazon (AMZN) has always been known as a market disruptor. Its unique model two decades ago was unseen by the world and as the Internet expanded across the globe, the ability to shop from one's home went from a luxury to a norm. In 2016, nearly 20% of all retail was done online. The evolution of retail has rapidly changed within a generation and brick and mortar retail outlets are being tormented.

Malls are more vacant and retailers are closing up shop. Stock prices of retailer are down and margins are thinning. There are more self-made millionaires opening up businesses in their homes and using their garages as a warehouse than millionaires making money through traditional retail. 2017 is proving to be the threshold for many companies that find ways to either survive or fade away in history like ESPIRIT.

In the US, Bebe Stores (BEBE) announced in the spring of 2017 that they would be shutting down all worldwide stores and focus solely on providing retail businesses online. It was the first international brand to make the switch. Other American companies are on the brink of bankruptcy or being bought out by private firms who will no doubt alter business models to maintain profitability. American Eagle Outfitters (AEO) recently sparked rumours it would be bought out. Nike shares have come under pressure as sales show lacklustre growth. Foot Locker (FL), Nordstrom (JWN), Michael Kors (KORS), and Target (TGT), just to name a few, have seen shares tumble this calendar year.

In Canada, long-time standing retailers like Sears, Ben Moss, and HMV went through major overhauls. Target's attempt to expand in Canada failed to penetrate market share from Wal-Mart.

But, most of the pain is only coming from American and Canadian stores. LVMH, better known as Louis Vuitton, has seen its shares rise almost double in the last 52 weeks, a stark contrast to its peer. And European retailer are showing little negative effects to online shopping. So, what's the reason?

Canada and the US, with exception to a few pockets of high-density urban areas such as Manhattan, have one major luxury that most nations do not offer: land, a lot of land. During the rise of retail, it was obvious that companies built large shopping centres which offered hundreds upon hundreds of products. The American (and Canadian) market is over-served and ready to correct. Forbes reports that organic growth in retail averages 3% annually, but during retail's expansion in North America, land for retail surged significantly more than 3%. In fact, the USA has more retail space per 1,000 people than any other country.

The US has more than twice as much retail space per capita than Norway, which is second on the list. Yet most people in Europe and Asia do not feel under-served by their choices. Businesses needed to built upwards instead of outwards. Urban sprawl is not as significant a problem in Asia and Europe as it is in North America.

Imagine a 7-Eleven situated underneath a 20-storey condo unit. If each floor contains 25 residents, the 7-Eleven has access to 500 residents living above it alone. However, if this 7-Eleven is located in a suburb or a low-density city such as Edmonton (my home town), 500 residents would take up over 4 square kilometres. That is 40 times more than the average 125 square metres per city block. For many people, a 30-minute walk to the convenience store might not be convenient enough.

Amazon offers something that malls do not and that is the ability to shop for multiple types of brands and products from our couch while also offering discounts on all the total cart and free shipping. Shopping online is so convenient. It has caused such large problems in Canada that inbound items from China sit at the border for months as security needs to screen items. Backlogged by huge shift in consumer spending, Canada Post and Canada Border Services are falling behind.

A correction or collapse in retail is highly needed in North America to find equilibrium. If Norway can maintain a strong retail sector with current space, that means that the US could expect to see a reduction of 60% of stores closing. However, if the happy medium in a post-Amazon ruled world is closer to Germany's size, that would mean 90% of retail space would need to close up in North America.

The love for urban sprawl coupled with online shopping means that most malls may start to look like warehouses for FedEx and UPS. Amazon has done something magical for the world at the cost of brick and mortar retailers, but the gains have been seen by delivery and courier companies. Over the next decade, it is apparent that major consolidation will come about. Amazon's recent purchase of Whole Foods (WFM) indicates that perhaps Jeff Bezos sees the same potential in food as he did with tools, books, and teddy bears.

Why Jordan Eberle Should Remain

A strong sample size of Edmonton Oilers armchair general managers want Jordan Eberle gone. A poor regular season performance coupled with zero goals in 13 playoffs games cannot justify his $6 million salary. He's the whipping boy of the current season. It was formerly Justin Schultz, Shawn Horcoff, and Devan Dubnyk. It is an annual tradition in Edmonton, and probably most major hockey markets, to find the weakest link and trade him. But, he's useless, according to Oilers fans, so what team would want him? In this man's opinion, if the Oilers decide to offer him up at the expansion draft or trade Eberle, there would be a strong list of teams that would be willing to acquire the 6-million dollar man but the list of teams willing to offer fair value for Eberle would be short, extremely short.

In finance, herd mentality offers up big opportunities. When the market is selling, long-term investors can find discounts on strong assets, and this is similar in sports. From the Oilers perspective, Jordan's stock value is low, at least in this city's eye, but what is our junk is going to be another city's treasure. And other GMs know this and will give the team as little as possible because they know everything outlined below.

Jordan Eberle completed his 7th season in the NHL with 51 points in a full campaign. Compared to his professional career, this is definitely below his average. He has 3 seasons with more than 51 points and 3 seasons with fewer than 51 points, but in the worse seasons, Eberle played just 69 games twice and the other season was the NHL lockout. So, on a points-per-game basis, this was his worst.

Jordan Eberle finished 94th in the NHL in points, 88th by forwards, 21st by right wings, and 3rd on the team. There were a total of 888 skaters that recorded one game played in the year. 94th puts him in the top 11% of the league in points-production. And players that finished with 53-49 points include Corey Perry, Taylor Hall, Anze Kopitar, Henrik Sedin, Joe Thornton, and Jason Spezza. Are you surprised to see a list of elite players (subjective) that surround Eberle's name in the standings? Or were you expecting to see the likes of Alex Chiasson, Mike Fisher, and Max Domi? No offense to these players either.

That list of elite players also have one thing in common. They are all paid at least 6 million USD. If Jordan Eberle's poor results do not justify his salary, then that is your opinion. Businesses and NHL GMs need more than just an opinion before making any decision and the facts do not support how poorly a season fans claim.

Here is the fact: if we look at it on a point-production basis, Jordan Eberle would be a first line right-winger on at least ten teams and a guaranteed second liner on all. Although there are players that make less money and produced more, there is a longer list of players that make more money and produced less.

If Oiler fans feel the need to blame the Oilers failures on Jordan Eberle or criticize his season, go ahead, you have every right. But replacing Jordan Eberle holds very little merit when we consider the data from around the league. In fact, compared to Thornton, Kopitar, and Spezza, Eberle's salary is a steal. If you want him gone and replaced with another right winger, try to find one on the market that has an opportunity to come to Edmonton for cheaper and produce more points. Because right now, the only noise I'm hearing are complaints that do not come with any solutions.