Momentum, Margin, and the Discipline of Taking Small Wins
Freedom to Offend Investing Series - New!
Introduction — Who I Am and Why This Exists at All
Before getting into strategy, it’s worth knowing who this is coming from—and why I’m writing it.
I’m 61 years old. I’m not a professional investor, and I’ve never managed anyone’s money but my own.
At the moment, I’m essentially self-employed. My income comes from three places:
my Substack (which, realistically, pays about what a part-time job at McDonald’s would)
the trading I’m going to describe in this piece
and a farm I own, which produces crop income once a year
That’s it.
I’m not fabulously wealthy. You’re not going to see photos of me on a private jet, in a Lamborghini, or performing success in some tropical setting.
This is something else entirely:
becoming wealthy over time, not trying to become rich overnight
It’s about:
slow accumulation
discipline
avoiding large mistakes
and building something stable
I live in a normal five-bedroom house in a subdivision that looks like every other subdivision. My wife drives a minivan. I drive an overpriced Mercedes. My daughter drives a 16-year-old car.
We’re ordinary.
A note for my regular readers
If you follow me on Substack, this may feel like a strange detour.
I usually write about:
anti-Semitism
history
cultural analysis
political commentary
This is different.
Now I’m writing about momentum investing.
I’m not starting a separate Substack for it. If there’s no interest, I’ll stop. If people find it useful, I’ll continue.
A bit of background
Until late 2023, I was a sessional lecturer at the University of Guelph-Humber.
That ended after a controversy tied to comments I made online. I’m not going to relitigate that here.
What matters is this:
I came to this out of necessity—not curiosity.
I’m not under any illusion that I’m going to make millions doing this. But it is contributing meaningfully to my income and helping pay real-world expenses.
I have an MBA from Schulich and have passed my Canadian Securities Course 1 and 2. I just picked up the book on those and didn’t take a course. On investing, I am rather self-taught, and I have no credentials as a financial advisor.
A word on results (and expectations)
I’ve been doing this for over two years—this isn’t something I tried last month.
Using portfolio tracking tools like Wealthica, my results have generally shown:
low risk profiles
consistently strong performance ratings
In some comparisons, my portfolio has ranked in the top percentile relative to major managers and benchmarks.
That does not mean:
this will continue
this is repeatable for everyone
or that there is any guarantee going forward
But it does mean this:
I’m not guessing, and I’m not completely incompetent at this.
What this is—and what it isn’t
No one is paying me to say any of this.
I’m not sponsored. I’m not selling a course. I’m not managing money.
I started my Substack with 14 subscribers—mostly students, some of whom mocked it.
It’s now around 2,300.
This is simply an extension of that:
what I’ve been doing, plainly and honestly
A simple boundary
I’m not interested in debating this endlessly.
If you think the approach is flawed, that’s fine—don’t use it.
If you think it’s useful, take what you can from it.
If you’re subscribing to my Substack later, it’s about $8 a month. If you don’t think it’s worth it, save your money.
With that out of the way, the only thing that matters is the framework.
Some Definitions
What is Margin Investing?
Margin investing is simply borrowing money from your brokerage to invest beyond your own cash. Your portfolio acts as collateral, and the brokerage determines how much you can borrow based on what you own. Safer, more liquid stocks typically allow more borrowing; riskier ones allow less. The amount available to you is not fixed—it rises when your portfolio rises and contracts when it falls.
This is where the danger lies.
Margin amplifies risk in subtle yet unforgiving ways. When your investments decline, two things happen at once: your equity shrinks, and your borrowing capacity shrinks with it. If that decline crosses certain thresholds, you trigger a margin call—a demand from your brokerage to restore your account by either depositing cash or selling positions. If you don’t act, they will act for you. And they will do so without regard for timing, price, or your long-term view.
This is how losses become permanent. Not because you were wrong—but because you were forced to be wrong at exactly the wrong moment.
Add to this the cost of borrowing—typically 4–6% depending on currency—and margin introduces something most investors underestimate: pressure. It removes your ability to wait indefinitely. It introduces a clock.
Used carefully, however, margin can be a useful tool. It allows you to deploy more capital across diversified positions, increasing the number of opportunities for small, repeatable gains. In a system built on discipline—rather than prediction—it can enhance returns meaningfully. Dividends and realized gains can help offset borrowing costs, and over time, the additional exposure can compound results.
But only under one condition: restraint.
Margin works best when it is available but not fully used—when it acts as a buffer, not a bet. The moment it becomes central to your survival, you’ve crossed from investing into dependency.
What is Momentum Investing?
Momentum investing is the practice of buying stocks that are already moving upward and expecting that movement to continue, at least for a time.
One of the more counterintuitive lessons in investing is that the best opportunities are often not the stocks that look cheapest, but the ones that are already moving. Instinct—and a certain kind of intellectual pride—tells us to hunt for the most undervalued names, the ones that have fallen the furthest and “must” eventually rebound. But in practice, markets don’t behave that neatly. Weak stocks often stay weak. They lack catalysts, confidence, and capital flow. Meanwhile, the strongest performers—the stocks already rising—tend to keep rising, at least for a while. Momentum builds on itself: positive news attracts buyers, rising prices attract attention, and attention attracts more capital. What feels irrational is often just the market’s internal logic playing out. The result is that a basket of the fastest-moving stocks frequently outperforms a basket of the most beaten-down ones—not because they are cheaper or more “correct,” but because they are already being rewarded, and markets tend to reward what they are already rewarding.
It rests on a simple, observable fact: markets are not perfectly rational in the short term. Investor behaviour—confidence, momentum, fear of missing out—tends to push trends further than fundamentals alone would justify.
Rather than trying to predict reversals or find the “perfect” undervalued stock, momentum investing does something more modest: it joins existing movement.
You are not trying to be early.
You are trying to be aligned.
This is not day trading. Positions may last weeks or months. The edge comes not from prediction, but from discipline—entering without emotion and exiting without hesitation.
What are Limit Sell Orders?
A limit sell order is an instruction to automatically sell a stock when it reaches a predetermined price.
Example:
Buy at $100
Set sell orders at:
$108
$112
$118
When the stock hits those levels, portions of your position are sold automatically.
This is the core of a gain-harvesting strategy.
Limit sell orders:
remove emotion from selling
eliminate hesitation
ensure profits are taken when available
Instead of watching the market and deciding in the moment, you decide in advance. The market then executes for you.
You are not trying to catch the top.
You are trying to consistently capture gains.
What are Stop-Loss Orders?
A stop-loss order is the counterpart to a limit sell. It is designed to protect against losses by automatically selling a stock if its price falls to a certain level.
Example:
Buy at $100
Set stop-loss at $90
If the stock drops to $90, it sells.
In theory, this limits downside risk. In practice, it introduces trade-offs:
stocks can briefly dip, trigger the stop, and then recover
You can be forced out of positions prematurely
excessive use can reduce overall returns
Some investors rely on them heavily. Others, particularly those holding diversified, smaller positions, prefer to manage risk through position sizing and discipline.
The important thing is consistency:
Either use them deliberately, or accept the risk of not using them—but don’t drift between the two.
How It All Fits Together
The system, at its simplest, looks like this:
Use momentum to identify stocks already moving
Use margin carefully to increase exposure
Use limit sell orders to take profits automatically
Optionally use stop-loss orders to manage downside risk
Reinvest gains and dividends continuously
Over time, the goal is not perfection.
It is repetition.
Small gains, taken consistently.
Losses managed, not eliminated.
Emotion reduced, not indulged.
Final Thought
There is nothing magical in any of this.
Margin is not a shortcut.
Momentum is not a guarantee.
Orders are not protection from error.
What matters is the structure—and the discipline to follow it, especially when it becomes uncomfortable.
Because it will.
___________________________________________________
Chapter I — Structure Before Strategy
Let’s start with what most people ignore:
I am not a licensed financial advisor, and this is not financial advice.
It’s simply what I do.
Step one: get the structure right
Before buying a single stock:
Open a non-registered account
Not a TFSA
Not an RRSP
Enable margin (if appropriate)
This allows borrowing against your portfolio
It introduces real risk
Understand taxation
Capital gains are taxable
You will need to report them
Keep your costs at zero
You should not be paying:
per trade
for execution
Platforms like Wealthsimple make this easy in Canada.
Fees quietly erode returns.
One rule that overrides everything
If you don’t understand it, don’t buy it.
That’s why I avoid:
options
derivatives
complex structures
Where I do spend money
I don’t pay for advisors.
I do pay for research:
Morningstar (primary)
Seeking Alpha (secondary)
Roughly $150/month combined.
Wealth vs. getting rich
This is not about:
fast money
lucky timing
It’s about:
consistency
patience
accumulation
The principle that matters most
Day-to-day movements are noise.
What matters is the trend over time.
An addendum - do you have grandchildren or children, especially recent grads, and you want to start them investing? This is a plan called an Elevator - you can do it with Weathsimple or any broker. It’s an idea, a plan, it doesn’t cost anything.
The next post will be on Sunday, April 26 @ 6:00 AM. The schedule may switch to twice-weekly. I will be posting stock picks based on Morningstar and Chasing Alpha recommendations.
Interesting post. Hope you continue with this series
At the end of the day, if someone signs up and just takes the best picks from Morningstar and Chasing Alpha (about $150 a month), they can do okay and just ignore everything I say. It's silll cheaper