Sometimes the greatest investing advantage is recognizing what everyone else takes for granted.
Welcome to this week’s MP Market Review, where we put our dividend growth investing (DGI) process into practice with real money, real positions, and real results.
Some of the most memorable words of wisdom come from commencement speeches delivered by successful entrepreneurs, business leaders, writers, and other influential thinkers. Though intended to inspire graduating students as they begin the next chapter of their lives, these speeches often offer timeless lessons about perspective, patience, perseverance, and challenging conventional wisdom. The best ones simplify complex ideas into stories and observations that stay with us long after the applause fades.
These speeches are particularly valuable because their lessons extend far beyond the graduating class. Whether it’s Steve Jobs on the importance of thinking independently or David Foster Wallace reminding us to question the world around us, their messages offer insights that apply just as well to investing. Sometimes, a fresh perspective is all it takes to challenge our assumptions, sharpen our thinking, and become better long-term investors.
IN THIS ISSUE: DGI Clipboard • DGI Scorecard • DGI News • DGI Updates • Earnings Releases
DGI Clipboard
“There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?”
-David Foster Wallace’s famous 2005 commencement speech at Kenyon College, titled This Is Water.
What Most Investors Never See (But Should)
What Does the Quote Mean?
The young fish have spent their entire lives surrounded by water. It is so fundamental to their existence that they don’t even recognize it.
Wallace’s message is simple but profound: The most important realities are often the hardest to recognize because we are completely immersed in them.
He wasn’t talking about fish. He was challenging us to question the assumptions, habits, and conventional wisdom that shape how we see the world.
And nowhere is this more relevant than investing.
The Water Most Investors Swim In
1. The Obsession with Stock Prices
Investors are surrounded by daily market commentary, price movements, analyst predictions, and quarterly expectations.
Eventually, they begin to believe successful investing requires predicting where stock prices will go next.
We see it differently.
Over time, growing earnings support growing dividends, and growing dividends help drive share prices higher.
2. The Obsession with Portfolio Value
Most investors measure success by what their portfolio is worth today.
Dividend growth investors ask another important question:
How much sustainable, growing income is my portfolio generating?
A portfolio’s market value can decline while its dividend income continues to grow.
Understanding that distinction changes how we experience market volatility.
3. The Inability to Think Long Term
This connects directly with last week’s Jeff Bezos quote about thinking seven years ahead.
Most investors are conditioned to judge success over months or quarters.
Dividend growth investors think in decades, allowing earnings and dividends time to compound.
Sometimes the competitive advantage isn’t better information. It’s simply a longer time horizon.
Recognizing the Water Changes Everything
The lesson isn’t to ignore the market. It’s to recognize how the market influences our decisions.
Even dividend growth investors must continually challenge assumptions about business quality, dividend sustainability, valuations, and future growth.
That’s why our Magic Pants three-step process matters:
Quality First: Own businesses capable of growing earnings and dividends.
Valuation Second: Buy quality companies at sensible prices.
Monitor: Ensure the investment thesis and dividend growth remain intact.
This discipline helps us think independently rather than react to the noise surrounding us.
The Takeaway
Most investors spend their lives swimming in a sea of stock prices, market predictions, and short-term performance. They’re so immersed in the daily noise that they often overlook what really drives long-term wealth.
Dividend growth investing offers a different perspective.
Rather than obsessing over what our portfolios are worth today, we focus on what the businesses we own can earn, how much cash they can return to shareholders, and how those dividends might grow over the next decade.
Stock prices are the noise. Growing earnings and dividends are the signal.
Our approach is built around owning quality businesses with growing earnings, sustainable dividends, and sensible valuations. We let time and compounding do the heavy lifting.
Sometimes the greatest investing advantage isn’t knowing something others don’t. It’s recognizing the importance of something everyone else overlooks.
Consider what happened last week when Waste Connections announced a 10% dividend increase. Investors responded enthusiastically, sending its share price sharply higher.
That’s the relationship we look for. Growing earnings support growing dividends, and over time, both help drive share prices higher.
The magic is in the dividend. As the dividend grows, so does the price.
DGI Scorecard
MP Wealth-Builder Model Portfolio (Canada)
Annualized Total Return: +17.19% since inception
Total Return (includes dividends): +16.83 % year-to-date
Dividend Growth: 7.0% year-to-date
Growth Yield: 3.2%
(Inception May 1, 2022, to July 31, 2026. Returns are actual results of our model portfolio in CAD with dividends reinvested.)
This Week’s Highlights
The List (Canada)
Dividend Income Growth: +6.6% year-to-date
Capital Appreciation: +7.3% year-to-date
Dividend Announcements Last Week: One
Earnings Reports Last Week: One
Earnings Reports This Week: Three
Top Performers from The List Last Week:
Thomson Reuters (TRI-Q), up +12.99%.
Waste Connections (WCN-N), up +11.14%.
Intact Financial (IFC-T), up +4.38%.
Worst Performer Last Week:
Toromont Industries (TIH-T), down -6.11%.
Watchlists
The Magic Pants 2026 list (The List) includes 26 Canadian dividend-growth stocks, and our new American watchlist (The List-USA) includes 28 companies. Here are the criteria to be considered a candidate on our watchlists:
Dividend growth streak: 10 years or more.
Market cap: At least $1 billion.
Diversification: Limit of five companies per sector, preferably two per industry.
Cyclicality: Exclude REITs and pure-play energy companies due to high cyclicality.
Based on these criteria, we add or remove companies from The List annually on January 1. Prices and dividends are updated weekly.
The watchlists are not a portfolio but a coaching tool that helps us think about ideas and manage risk in our model portfolio. We own some, but not all, of the companies on these watchlists. In other words, we might want to buy these companies when valuation looks attractive.
Our newsletter provides readers with a comprehensive insight into the implementation and advantages of our dividend growth investing strategy. This evidence-based, unbiased approach has empowered DIY investors to outperform both actively managed dividend funds and passively managed indexes and dividend ETFs over longer-term horizons.
Each month, in the last week, I will share the updated watchlist for our American dividend growers (The List-USA). I will show the watchlist after the Canadian watchlist above.
New to Magic Pants?
Magic Pants Dividend Growth Investing is a behind-the-scenes look at how we build, maintain, and improve a dividend growth portfolio using real money, real positions, and real results.
Our objective is to grow dividend income by 7-10%+ annually while achieving long-term capital appreciation that matches or exceeds the broader market over a full investing cycle.
The name comes from a simple idea: when a quality company pays a dividend, cash moves from the company’s pocket to yours while your ownership stake remains intact. As earnings and dividends grow, the compounding cycle can accelerate. That’s the magic.
Build Your Own Growing Income Machine
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The Magic Pants model portfolios (Canadian and American) are real-money, dividend-growth portfolios funded with actual capital and executed in live accounts. We own, size, and track every position in real time using our disciplined DGI process.
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From relevant news and quarterly earnings to the latest dividend announcements, we highlight what matters most and explain what it means for dividend growth investors.
