Humans

apple

Imagine a hot new technology spreading Gangnam-style across the globe. One company jumps into the lead, rolling out must-have innovative products that consumers go ape for. Sales and profits explode as the corp and its stock achieve cult-like status. Investors fall in love and drive shares skyward. Then competitors flock in, and the tech stock implodes.

Ninety years ago that was RCA. Now it’s Apple. Then it was radio, now it’s web-enabled devices. The name and the technology changes. The humans don’t.

So on Thursday Apple investors lost $175 billion as the stock dropped by 12%, continuing a slide which has taken it from $700 a share to $450 in just four months. The means the company is worth 36% less than it was in September. Anyone who bought the stock as it bloated last autumn, as so many did, now faces a tough choice. Buy more to dilute the dumb mistake? Or bail and avoid a train wreck?

By the way, RCA stock crashed and burned, in part because it was swept away by the market crash of 1929. But it sure makes ya wonder

RCA

Apple groupies are like metalheads or house-pumpers, one-trick ponies who think they know more than the mortals around them, convinced gains of the past will soon repeat. Hubris drives them, sometimes over a cliff. The hardest thing they face is admitting a mistake or selling at a loss. Human nature makes it impossible for most people to dump an asset that’s jumped in value (‘why sell when there’s more coming?’) or bail when it plops (‘I’m just waiting ‘til this baby comes back’).

Some say Apple is cooked as the world’s most valuable company. No, it won’t fail. Far from it. But it’ll never again see seven bills a share. A year from now, without inventing something new and sexy, analysts say shares could be $300, or less. It’s all about momentum, and AAPL is losing it. Sales fall off too fast after product launches, while Android interlopers suck off market share.

At $700 the market said Apple was cool and sustained, and rapid growth was expected. This month it’s all about Samsung, where profits have increased 76%.

I bring this up for a good reason. On Thursday, while Apple stock was being slaughtered, most major US stock markets went up. In fact the S&P 500 is ahead 4.81% in the last three weeks, and 13.7% in the past year. It’s at a level last seen five years ago, and 4% below its all-time peak. The Dow is even closer, dangling just 2% under its best-ever showing in the autumn of 2007.

This advance has come because of corporate profits and economic growth. Of companies reporting Q4 earnings, like Google and IBM, 73% of them have beat expectations. The latest jobless claims numbers shocked because they were so positive, dropping to a five-year low. In Washington the debt ceiling debate’s turned into the non-event it was always destined to be. In China, manufacturing is growing at the fastest rate in two years. American real estate has bounced off the bottom three years sooner than expected with almost all major markets showing higher sales, rising prices and surging construction. Unemployment across the US is now lower than it is in Toronto, and people in Chicago or Boston can actually afford to buy detached houses in a major city.

In short, smart people want to own this growth. It’s what I told you to expect a year ago when I sent the metalheads, doomers and Depends set into gales of laughter with my ‘don’t bet against America’ routine. Despite its debt and deficit challenges, the US will only augment each month in terms of GDP, jobs created, corporate profits and consumer spending. There will certainly be volatility for investors, but the road ahead seems clear.

So what of Apple? So don’t buy individual stocks. How could there be a more relevant example of investment myopia?

Dumping a hunk of your net worth in one company, or three or twelve, is courting risk. Mr. Market is easily aroused and as quick to vengeance. Disappointment can bring a brutal wave of selling and punishing losses, even when a corporation is massive, popular and profitable. Unless you have seven figures to invest, better to own thousands of companies through something like an ETF. For example, the major Canadian exchange-traded fund replicating the performance of the S&P is ahead 14% in the past year, and has a management fee of just 0.25%.

But that’s just one aspect of successful investing. Owning the S&P should come with owning the whole TSX60, international markets, plus a basket of REITs, preferred shares and certain bonds. You need three things, besides sex and water, my mom always told me: diversity among asset classes, balance between growth and safety, and liquidity to move as fast as the times do.

No one asset gives you all that.

It’s something gold nuts, the house horny and cowboys with junior mining stocks will never understand. And perhaps will never recover from.

So if you are reading this on a shiny new iPad, let us pray.

213 comments ↓

#1 TurnerNation on 01.24.13 at 9:24 pm

Hammering the truth? Tax dollars at work. A good portion of TTC’s private police peace officer squad is alleged to be corrupted and fraud prone!

Most are on the Sunshine gravy-trainer’s list.

That sound you hear? Of wrists being slapped. I’d like to see them sued for the wages and benefits squandered away, and for sworn peace officers held to higher standard. I’m talking automatic doubled jail terms and penalities for bad peace officers/police. That sworn oath should mean something more.

http://torontoist.com/2013/01/five-ttc-enforcement-officers-face-charges-for-falsifying-offence-tickets/

Five TTC Enforcement Officers Face Charges for Falsifying Offence Tickets

Charges of falsifying provincial offence tickets and obstructing justice in a practice that allowed enforcement officers to skip out on work

#2 dosouth on 01.24.13 at 9:25 pm

RIM – let us pray

#3 give it time on 01.24.13 at 9:26 pm

best line is the last :) always look forward to reading your post!

#4 Pat on 01.24.13 at 9:26 pm

Give me control over a nations currency and i care not who makes its laws 1716 John Law

#5 shanks on 01.24.13 at 9:27 pm

wa first?
nah… gonna write too much

SM, school is for the misses.. apparently there is some kind of correlation between paper with writing and stamps and more money when you work for someone else, so she is motivated to become a doctor. What can I say but how can I move my money out of my RRSP into an LLP without getting taxed to pay for it?
oh right, google is my “friend”… somehow i keep forgetting that these days :)

#6 give it time on 01.24.13 at 9:29 pm

Step 1. Read Blog.
Step 2. Calm down crazy thoughts like buying stocks or houses without a logical plan.
Step 3. Diversify Diversify Diversify.
Step 4. Sit back with popcorn and watch how tomorrow unfolds.
FYI it’s going to be quite a weekend for open houses, realtors are busy busy and more busy. Spring is starting early.

#7 Andrewski on 01.24.13 at 9:30 pm

OK, so how many readers will ask for specific investment ideas from Garth?
Please stop asking, look up Garth’s contact info, and pay the man to advise you personally & confidentially.
Quit trolling for free advise.

#8 Bob on 01.24.13 at 9:32 pm

One thing I don’t like about a number of S & P 500 ETF’s is it seems like a number of them have apple as their number one holding at about 4% of the fund.

Not for long. ETFs mirror market cap. — Garth

#9 Dr. Wanker on 01.24.13 at 9:32 pm

I guess we will hear from SM/Smith about how he saw this in a drug induced vision? And how he made a killing in the market of course. Baahaha!!

#10 Sheila on 01.24.13 at 9:36 pm

Here’s some prime US real estate for those of you making the big bucks. Is the Great One (not Garth)contemplating a move north?

http://www.nbcnews.com/business/wayne-gretzkys-14-9-million-estate-market-1B8038218

#11 Nodebt on 01.24.13 at 9:44 pm

#7 Andrewski
I Concurr!!!!

#12 Paul on 01.24.13 at 9:44 pm

Well this chart shows we’re right on track. Or so we hope.
Giddy up!

http://www.globalspeculator.com.au/mining-life-cycle.html

That is sales puff. — Garth

#13 Freedom First on 01.24.13 at 9:44 pm

Garth, this post is music to my ears. How sweet it is to be debtfree, balanced, diversified, and liquid. Yes, if one single asset can possibly cause me great pain, I am doing it wrong. Always seemed like a no-brainer to me.

Garth, you are a brave man to put your expertise on display for constant public scrutiny. Certainly, you have helped many people, which makes it all worthwhile. Meanwhile, the people who, for various reasons, hate the truth, would like to go to your funeral tomorrow. May you live another 50 years:)

#14 johnnny on 01.24.13 at 9:46 pm

I’m not sure if I’m the only one in Canada who didn’t know this,but I’ll pass it on anyway.I opened a TFSA a few years ago,and was asked who I would like to put as beneficiary.
I put my wife.
I recently read that if I put her as a “successor account holder” instead,she could put the money from my TFSA into her TFSA and keep it going,but could not do this as my beneficiary.
Is this correct?

The rules are here. — Garth

#15 sanddancer on 01.24.13 at 9:48 pm

Interesting point of view/ take on things ???

http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10750

#16 Smoking Mans Great GreaT Granpa on 01.24.13 at 9:49 pm

Sonny….

I know this guy named Tom..Tom Edison…
A bit odd…but seems to have good ideas…like this sound emitting device …electricity….and this shiny pear shaped thingy that gives off light

PS Future Joke: how many a$$holes does it take to screw one in ?

#17 johnnny on 01.24.13 at 9:53 pm

Thanks Garth.

#18 Hoof-Hearted on 01.24.13 at 9:56 pm

Nahhh…stock market is the next ponzi scheme to crash.

Seen the same Yo Yo for decades…

Tech sector has no more room for growth, except maybe cannibalism.

Microsoft will get whacked….

Contraction and shrinkage=carnage baby..cash out…

This is a great blog, except for the readers. — Garth

#19 Fortunate Fool on 01.24.13 at 9:57 pm

For an alternative view of the state of the (real) economy, here is a good article…
http://www.zerohedge.com/news/2013-01-24/its-official-worst-recovery-ever

#20 Thinking of buying for the first time in Victoria? on 01.24.13 at 9:58 pm

Now is not the time to buy. House prices across Canada have started to drop and this trend will continue for years. The Teranet house price index for November shows price declines in 10 out of 11 major cities, something that has not happened since the last housing crash in Canada in 08-09. The crash of 08-09 was stopped by a major government intervention, otherwise prices would have continued down. December results show that prices have declined in 8 of 11 major cities.

Much lower prices are on the way. Many economists around the world are predicting a major, multi-year housing price correction in Canada.

The Internation Monetary Fund (IMF) sees a bubble in the Canadian housing market.

Robert Shiller, the famous Yale professor who correctly predicted the US housing meltdown, has recently talked about the Canadian housing bubble.

“I worry that what is happening in Canada is kind of a slow-motion version of what happened in the U.S.” – Robert Shiller

David Rosenberg, a well-known Canadian economist, recently said that “Canadian housing prices are not sustainable.”

Renting while the housing market corrects is a no-brainer.

Recently in Victoria , there have been houses listed on the MLS for 34% and 36% below assessment. The correction is happening right now in Victoria.

2013 property assessments in Victoria were lower compared to last year. Remember that these assessments were done in the summer, which was 6 months ago. Prices in Victoria have continued to decline since the summer.

Hold off from buying right now. Keep your down payment and let it grow while you watch house prices decline. Most people who bought in Victoria in the last 3 years with a small down payment already owe more on their mortgage than their property is worth. You do not want to be in that postion.

#21 Smoking Man on 01.24.13 at 10:01 pm

On Humans

They are smart till about 6 but then school dumbs them down.

Got a call not 5 min ago, a survey for 150 bucks cash. Ok I’m listening.

Sr do you own a Mercedes or BMW.(Nope, Vegas trip for my mechanic with every oil change) I said yes……

What year, I say 2006,, Sorry Sr we are looking for people that have a 2010 or higher.

I said, my BMW is 2011. Oh she gets excited.

I said when is the survey, she says Feb 6…(Damn I’m in Florida) I said sure where. She gives me the details. Ask what I make, I said i’m in the 250+ range. Perfect she says. What do you do,,,(knowing I cant make it, I say door to door alarm sales..your age she asks. I said born in 85.

Thanks and see you at the survey…..

My son is going to show up, 150 cash, and he needs to bull shit a bit……….

That’s how I roll…..Nerve let an opportunity slip.

Me I hate cars, the deprecation sucks. I own a ford basic ranger, with roll down windows. I can pull a boat, only reason I bought it……….

Don’t need a car during the week, week end rent from enterprise for 9.99 a day, why would any one buy a car…

I’m cheap, make big bets, dont look at money as money. I look at it as poker chips, and if you gamble, you never have enough…

Thats how the rich get rich

#22 Axxman on 01.24.13 at 10:02 pm

$2.8 million houses in Mineola – let us pray.

#23 not 1st on 01.24.13 at 10:03 pm

Yeah, ever ETF mutual fund, hedge fund, pension fund etc was holding apple and now look what they have brought on themselves. I mean, what was apple going to do for a new batch of products? Iphone 2 does basically the same thing as Iphone 5. Same as the ipads, they aren’t changing much and no need to upgrade every six months. Technology is a throwaway venture and its stock prices reflect that reality.

Truth is, many business cycles are being extended out because our efficiency is increase faster than our creativity. That Mr. Garth is where the profits are coming from, not from this “economic renaissance” you keep talking about. Look to the auto sector for example. Look how long vehicles last now. You can easily put a few hundred thousand miles on something and it will keep going. My 2008 dell computer is working fine and will serve me for another 5 years I am sure.

#24 Paully on 01.24.13 at 10:04 pm

There is a nice newly built McMansion on the corner down the block from me in Willowdale. Was for sale in May 2012 when we moved onto the street. Asking price was $1,749,000. It finally sold yesterday, for $1,548,000. The total reduction is $201,000, or about 12% from original list. It probably cost the owner a huge pile to carry it for the past nine months. Still a stupid amount for a house, but at least it is a little less stupid.

#25 jess on 01.24.13 at 10:04 pm

UK Supreme Court Blocks Tax Advisers’ Legal Privilege Tax-News
tax advisors legal privilege
UK Supreme Court Blocks Tax Advisers’ Legal Privilege Tax-News

=
the three t’s tax trade transparency
Prime Minister David Cameron’s speech to the World Economic Forum in DavosThursday 24 January 2013
David Cameron sets out the main priorities for the UK’s Presidency of the G8: trade, tax and transparency

http://www.number10.gov.uk/news/prime-minister-david-camerons-speech-to-the-world-economic-forum-in-davos/

U.S.: Court Holds IRS Can Get Key Tax Records Even Held by Your Lawyer Forbes
http://www.forbes.com/sites/robertwood/2013/01/21/court-holds-irs-can-get-key-tax-records-even-held-by-your-lawyer/

#26 Bottoms_Up on 01.24.13 at 10:07 pm

On apple I think you’re wrong, I think it’s more likely to see $700 again than $300.

They have record sales and earnings but miss (lofty?) estimates.

If we are indeed in for a nice bull run there is no way apple is going to a P/E of 7 from a P/E of 10. More likely to go to a P/E of 15.

http://finance.yahoo.com/news/apple-reports-record-results-213000877.html

#27 Smoking Man on 01.24.13 at 10:07 pm

#9 Dr. Wanker on 01.24.13 at 9:32 pm

My bets are well documented in the archives here, no need to brag…………………..

I just got to say……….ahhhhhhhhhhhhhhhhhhhhhhh

More poker chips to play with…………….

#28 Paul on 01.24.13 at 10:12 pm

#12 Paul on 01.24.13 at 9:44 pm
Well this chart shows we’re right on track. Or so we hope.
Giddy up!

http://www.globalspeculator.com.au/mining-life-cycle.html

That is sales puff. — Garth

Yes maybe so. But there’s more to look at.

http://www2.mpmo-bggp.gc.ca/MPTracker/project-projet-03.aspx?pid=92&psid=0

If you are looking to justify buying mining juniors, forget it. — Garth

#29 Canadian Watchdog on 01.24.13 at 10:12 pm

Buy S&P right here right? Once, twice… you know the rest, unless you believe it really is different this time again.

As part of a diversified portfolio, absolutely. — Garth

#30 DaleFromCalgary on 01.24.13 at 10:14 pm

Okay, so it’s January 2008 and you bought a diversified basket of stocks when the TSX was at 15,000 and the DJIA was 14,000. Today you have never recovered your losses as the TSX struggles to stay in the 12,000 range and the DJIA meanders in the 13,000 range.

Bad example? Well then, before the Panic of 2008, financial paper such as bonds and term deposits paid 5% to 10%. We all know what paper funds pay today.

Before the Panic, gold was said to be in a bubble at $950 and silver at $7. Today they are in the $1,600 range and $31 respectively.

When oil went past $50 in 2007, newspapers erupted with end-of-the-world headlines. Now it is stable in the $80 to $95 range and people say it is cheap.

Typed on my Samsung Galaxy by

…a guy who never heard of rebalancing. — Garth

#31 give it time on 01.24.13 at 10:15 pm

#22 I think mineola might be one of the priciest areas around… eek… everyone has just jacked up prices for fun. Who is going to absorb the costs of these 2 million dollar homes everywhere… there are 179 of them in Mississauga alone and it’s only January.

#32 Smoking Man on 01.24.13 at 10:16 pm

300 on aapl, I’m thinking 220…

When I sorted it in Sept, I saw my kids trade there ipone4 for Galaxy 3,

Before that they traded black berry’s for iphone4

I only need to ride track 6 once to realize track 5 is better…….

I see the obvious……so schooled, study Fibonacci, stochastic, me I watch the herd……………….

#33 Mr Buyer on 01.24.13 at 10:16 pm

It still befuddles me no end as to how we got convinced to turn in our laptops for devices with the power of 12 year old computers all be it with good video cards but my wife, daughter and sons absolutely love their ipads and kindle fire hds. I have finally grown accustomed to reading on them but I prefer my laptop and desktop hands down.

#34 Mr Buyer on 01.24.13 at 10:18 pm

#29 Canadian Watchdog on 01.24.13 at 10:12 pm
…………………………………………………………………
I have to say a big thank you for all the data. I always take a second look at your comments

#35 T.O. Bubble Boy on 01.24.13 at 10:19 pm

@ #133 dave b on 01.24.13 at 3:39 pm

#57 T.O. Bubble Boy on 01.24.13 at 12:16 am
$1.4M skinny McMansion near Yonge&Lawrence sells in days (in the snow and -15C temperatures)… who is buying in such a rush?

Please let us know
________________________

Here is the listing from the realtor site:
http://www.chestnutpark.com/properties/listing/C2537069

I drove by this last week and saw the sign… then noticed the “SOLD” sticker this week.

Someone was in a rush to blow $1.4M.

maybe it was Smoking Man?

#36 T.O. Bubble Boy on 01.24.13 at 10:21 pm

@ #26 Bottoms_Up on 01.24.13 at 10:07 pm

On apple I think you’re wrong, I think it’s more likely to see $700 again than $300.

They have record sales and earnings but miss (lofty?) estimates.

If we are indeed in for a nice bull run there is no way apple is going to a P/E of 7 from a P/E of 10. More likely to go to a P/E of 15.

You are assuming that earning stay flat or better… with margins decreasing, earnings could easily fall.

#37 mortgagebrokeront on 01.24.13 at 10:21 pm

bre x , nortel, rim, apple, ….. what goes up must come down.

Oh yeah, Real Estate is coming down,

#38 Mr Buyer on 01.24.13 at 10:26 pm

#32 Smoking Man on 01.24.13 at 10:16 pm
I see the obvious……
………………………………………………………..
You took the words right out of my mouth

#39 AK on 01.24.13 at 10:28 pm

#28 Canadian Watchdog on 01.24.13 at 10:12 pm

“Buy S&P right here right? Once, twice… you know the rest, unless you believe it really is different this time again.”

The S&P 500 today is cheaper than it was back in 2007.

http://www.baskinfinancial.com/main/stocks-are-cheap/

Buying and holding only succeeds with continual rebalancing. In the case of the S&P, this has yielded very substantial gains over this period of time. — Garth

#40 Humans — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 01.24.13 at 10:32 pm

[…] via Humans — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#41 Smoking Man on 01.24.13 at 10:33 pm

#35 T.O. Bubble Boy on 01.24.13 at 10:19 pm

1.4 million on a house when you can get one for 600k in long branch, 15 min to union station, mortgage house to the the 9s on a HELOC for 3 points and get 10 percent returns with commercial mortgages
take the 800k and double it ever year….gambling in the markets

I think not……..1.4 million dollar house

#42 Chickenlittle on 01.24.13 at 10:33 pm

“If you choose to live…on a large lot in a large home where you have to commute by car, you should have to pay.” Ray Tomalty, The Toronto Star, today in the business section.

I found that statement to be extremely insulting. So this guy thinks living in a $750k lean-to in T.O. is ok, but if you want to get more bang for your buck and commute, you should be punished.
Thats why people move to the suburbs, genius, because it is cheaper. And this guy works at McGill…It just shows that you don’t need to be smart to work at a school.

#43 Tim on 01.24.13 at 10:33 pm

You’re sighting a bad example. Apple is a tech stock. With very few exceptions tech stocks are risky. For the most part Buffet won’t even touch them. If you own pipelines, utilities, banks, rails, big consumer companies, which all pay dividends, you will do just fine.

Apple is the biggest company in the world by market cap. You citing of diverse stocks simply underscores the wisdom of an ETF. By the way, it’s ‘citing.’ — Garth

#44 The American on 01.24.13 at 10:36 pm

Lest we forget the renaissance and rethinking of Microsoft, it’s brand, the hardware, the software, and the land of Microsoft? :-)

http://www.windermere.com/search#!/geo:seattle%2C-w/lat:47.6089869810397/lon:-122.26628038308877/zoom:11/location_search_field:seattle,%20w/context:map/buffer_miles:0.25/pagination_index:0/geospatial:false/pricemin:$2,000,000/pagination_size:100/status:active/pstatus:1/sold_days:180/ls_conversion:acres/sort_by:1/ptyp:1|2|4/

#45 CalgaryRocks on 01.24.13 at 10:37 pm

#175 The American on 01.24.13 at 9:53 pm
At #138: AMEN! Thank you. You totally get it. It does seem to me that many Canadians live in a bubble of fear, though, and many are totally clueless as to what is fact vs. fiction in the U.S.

Actually nobody cares. But what about that waitress that you know that makes six figures? Is that fact, fiction or just out of sample data.

Your own government says that 90% of waiters make less than 30Gs a year. With the Median being 18.5K.

So maybe, your ‘friend’ the six figure waitress has a sideline she forgot to tell you about?

Percentile 10% 25% 50%
(Median) 75% 90%
Hourly Wage $7.73 $8.25 $8.93 $10.61 $14.34
Annual Wage (2) $16,070 $17,160 $18,570 $22,070 $29,82

#46 Montrealer on 01.24.13 at 10:40 pm

I finally took the plunge today and bought my ETFs after having cash sitting on wuestrade for too long..
65% in USD (US REIT 10%, US Construction 10%, US Equity 25% and Global Equity20%) and 45% in CAD (CAN REIT 10%, CAN Equity 10%, CAN Real Return Bonds 5% and CAN Bonds 10%).
Now I will try not to check for 6 months and rebalance once a year.
VIT is my US Equity ETF and it’s only 0.06% management.. GLobal equity is SCHF at 0.09% management. Much better than my previous Standard Life funds.

#47 The Prophet Elijah on 01.24.13 at 10:43 pm

Garth in your analysis of the US you keep overlooking the OTC derivatives. I found this very clear and logic case for what has happened and must take place on jsmineset, thoughts? When everyone was bearish on the Euro he said it would trade up on the USD and this is exactly what is taking place, please read, I beg you:

DELETED. Next time you want us to read a 1,000-word article, use a link. — Garth

#48 The Prophet Elijah on 01.24.13 at 10:45 pm

Garth the US Fed’s balance sheet is now a mind blowing 3+ trillion of toxic assets, won’t this destroy confidence in the USD??:

http://www.bloomberg.com/news/2013-01-24/fed-pushes-balance-sheet-to-record-3-trillion-on-bond-buying.html

No. The dollar reflects the economy. What are you a prophet of, anyway? Protective underwear? — Garth

#49 Danforth on 01.24.13 at 10:45 pm

I am reading this on my iPad!

…and there is never, ever, a reason to pray. For prayer is for the superstitious…

#50 Mr Buyer on 01.24.13 at 10:45 pm

I am completely disheartened by the state of Canada’s internet sector. I have had $80 to $100 a month fiber optic to the home since 2005 here in Japan (100mb up and down but really 30mb up and 80 down with phone and tv in the package as well). I need to get fiber optic to the home. Does anybody know of any areas in Ontario that have it? We are heading back to Canada for an extended stay and I absolutely must have access to a good connection. I am seeing some dsl connections with good transfer speeds and no caps but my last experience with dsl in Canada was all about dropped connections. I simply must have a high quality connection to the net with superlative transfer speed and preferably no caps. I am willing to move to the connection.

#51 Smoking Man on 01.24.13 at 10:46 pm

#38 Mr Buyer on 01.24.13 at 10:26 pm

You have been chirping me here for quite a while, why I ask……………….

I’m me, I call it like I see it, no agenda, sorry for being right 98 percent of the time…………….

So I brag a bit………What makes that a crime…..oh ya I remember, when the teachers where training us to be slaves, Boasting was a no no………

Silly me…….

#52 Mr Buyer on 01.24.13 at 10:47 pm

BTW my internet connection has no caps as well

#53 The Prophet Elijah on 01.24.13 at 10:48 pm

Garth why is China backing their currency with gold, what do they know that we don’t, and why are the British buying up all those yuan instead of the USD:

http://uk.reuters.com/article/2013/01/24/uk-britain-yuan-idUKBRE90N11520130124

The Chinese aren’t. — Garth

#54 Innumeracy chick...No more on 01.24.13 at 10:49 pm

What I have learned from this site in one day…ETF’s are a good investment that follow index’s and rebalance periodically. One should buy ETF’s with a low MER that are diversified in US and Can. With the US market growing I would invest in a higher percentage of US ETF’s. REIT’s pay great yields but follow the real estate market trends they are great as a long hold but no so good when the housing market drops. There are special tax considerations for these as well. You can invest into stocks in a very small portion of your portfolio but should diversify as well so as not to be one stock heavy. You need to rebalance your portfolio with the market trends? Am I on track I am new to this and haven’t picked up the books that were suggested to me yet but I did some reading on the sites discussing the books. I agree Apple will fall, Real Estate will fall and this is the best time to invest since 2007!

#55 Innumeracy chick...No more on 01.24.13 at 10:52 pm

@Smoking Man you crack me up!

#56 Nikola Tesla on 01.24.13 at 10:58 pm

“Sonny….

I know this guy named Tom..Tom Edison…
A bit odd…but seems to have good ideas…like this sound emitting device …electricity….and this shiny pear shaped thingy that gives off light”

BULLSHIPPER!

#57 The Prophet Elijah on 01.24.13 at 10:58 pm

Garth why is China backing their currency with gold, what do they know that we don’t, and why are the British buying up all those yuan instead of the USD:

http://uk.reuters.com/article/2013/01/24/uk-britain-yuan-idUKBRE90N11520130124

The Chinese aren’t. — Garth
———————————————————

no?

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/23_Massive_Squeeze_Coming_As_WGC_Confirms_Gold-Backed_Yuan.html

You read that crap? No wonder. — Garth

#58 Mr Buyer on 01.24.13 at 10:59 pm

#51 Smoking Man on 01.24.13 at 10:46 pm
#38 Mr Buyer on 01.24.13 at 10:26 pm
You are right. You just teed that one up and I could not resist. That coupled with the fact that I was thinking that exact thought when I was reading about your insights regarding Apple. You can trust me when I tell you that there is nothing about me that qualifies my sniping at you. I am entirely unexceptional and my drivel can be safely disregarded. I try my best to ignore your posts but I get tired when working a great deal and fall victim to my inherent bad judgement. GROUP HUG man!!!

#59 The Prophet Elijah on 01.24.13 at 11:00 pm

Garth the US Fed’s balance sheet is now a mind blowing 3+ trillion of toxic assets, won’t this destroy confidence in the USD??:

http://www.bloomberg.com/news/2013-01-24/fed-pushes-balance-sheet-to-record-3-trillion-on-bond-buying.html

No. The dollar reflects the economy. What are you a prophet of, anyway? Protective underwear? — Garth

———————————————————
But if the economy is so strong why is the Fed not raising interest rates and spending a staggering 90 billion a month on stimulus??
Thx for your input

#60 Mountain Guy on 01.24.13 at 11:04 pm

#50 re fibre to the home. Wrong country. Japan or Korea, yes. Hi-tech countries with plans to be competitive. Canada, not so much.

#61 Renter's Revenge! on 01.24.13 at 11:09 pm

#6 give it time:

I think you mean

Step 1: Skip blog entry and scroll down to Smoking Man’s comments.
Step 2: ???
Step 3: PROFIT

There, fixed it for you.

#62 Smoking Man on 01.24.13 at 11:13 pm

Nice Garth

I’ve been shorting apple since $705

…go to go, my driver is waiting with a nice bottle of sctoch

#63 David on 01.24.13 at 11:14 pm

Thanks for the article.
Blurb in the paper yesterday saying on an affordability basis (av income : av house), Vancouver is again second only to Hong Kong in the world fir being unaffordable. How long can that last?

#64 CalgaryRocks on 01.24.13 at 11:16 pm

#50 Mr Buyer on 01.24.13 at 10:45 pm
I am completely disheartened by the state of Canada’s internet sector. I have had $80 to $100 a month fiber optic to the home since 2005 here in Japan (100mb up and down but really 30mb up and 80 down with phone and tv in the package as well)

Shaw has 250MBS down / 15MBS up supposedly.

http://www.shaw.ca/internet/packages/

#65 Smoking Man on 01.24.13 at 11:16 pm

Gartho a bit looped right now, feeling good. had a few dudes chirp you on my blog…..You know the one you always delete the link too.

Don’t know what their beef is, other that you’re a bit moody, you delete stuff when PMSing.,

But me I like you. You have my respect Sr

You flipped the bird to fat bastard when in a good spot in life , when you had a choice between follow dumb orders from the king. you chose uncertainty, principle and freedom.

How can anyone not admire you for that…..so your real estate crash is a bit premature. Only I can time shit like that. Near death experience thing….

any way looped and loving this PATHETIC blog….

Thanks for letting me play

#66 Mr Buyer on 01.24.13 at 11:16 pm

#60 Mountain Guy on 01.24.13 at 11:04 pm
#50 re fibre to the home. Wrong country. Japan or Korea, yes. Hi-tech countries with plans to be competitive. Canada, not so much.
………………………………………………………
You are not kidding. Just let an entire new sector of the economy slip by so that monopolies can squeeze every last cent they can out of every possible packet of data while protecting their traditional businesses from progress and evolution that fiber optic internet brings. Free markets my eye. When has there EVER been a free market. Protectionism. The CRTC should issue licences to an INTERNET company to provide fiber optic service to the home across the country and municipalities should do all they can to get the network up (ie keep their hands in their pockets or even throw some cash in). This is sad man. I mean come on. DSL, give me a break.

#67 Elmer on 01.24.13 at 11:19 pm

What a bad time for the market to be up, I just put $5500 in my TFSA and can’t buy anything because almost every stock and ETF is at a 12 month high. And it looks like that dip that was supposed to happen in Feb due to that US debt thing will not happen either cause Obama signed some thing yesterday. What to do?

#68 Smoking Man on 01.24.13 at 11:19 pm

62 Smoking Man on 01.24.13 at 11:13 pm

is a fake

#69 Mr Buyer on 01.24.13 at 11:20 pm

You connect any community to the net through fiber optics and leave the connection wide open and you have in effect moved your community into silicon valley. Throw in a few coding courses at your local community college and you may get lucky.

#70 Canadian Watchdog on 01.24.13 at 11:20 pm

#39 AK

The S&P 500 today is cheaper than it was back in 2007.

And ten times more fragile, more concentrated and dominated by high-frequency traders that will suck your profits in nanoseconds when the time comes.

You said that last year. — Garth

#71 Smoking Man on 01.24.13 at 11:24 pm

#58 Mr Buyer on 01.24.13 at 10:59 pm

No problem dude. I can’t hate even when I try

Hug back

#72 Mr Buyer on 01.24.13 at 11:28 pm

#71 Smoking Man on 01.24.13 at 11:24 pm
#58 Mr Buyer on 01.24.13 at 10:59 pm

No problem dude. I can’t hate even when I try

Hug back
………………………………………………..
Okay that’s enough of this touchy feely stuff. I like you better the other way.

#73 HogtownIndebted on 01.24.13 at 11:30 pm

#42 Chickenlittle

Well I just had to take the bait (chickenfeed?) after your last post here. So take my rejoinder in stride or just tell me to cluck off, however you will…

Suburbs are in fact heavily subsidized by the rest of us for well-documented reasons. The sprawling suburban home with two cars and a couple commuting to a real city somewhere are in fact pretty close to being a special breed of welfare bums when you look at the public dollars involved.

http://www.canada.com/vancouversun/news/business/story.html?id=186543e6-149d-46dc-85e8-316559a172e1&k=83730

Few politicians have had the balls to ask suburban commuters to pay their fair share, alas. And then you have complete idiots like Hazel McCallion preaching to Toronto about how ‘businesslike’ Mississauga with its ‘balanced budget’ is compared to hogtown – mostly, of course, due to development charges feeding the trough as acres of land are sold cheap over the years. But now, the chickens come home to roost (had to add that, just for you) and Mississauga has to increase taxes, adding a worse land transfer tax than Toronto, because the cheap land to pawn to developers is disappearing fast. Oh, and they send their homeless into the real city too. Swell.

It’s the equivalent of being a trust fund baby and trying to preach to people living in financial reality how to behave with a dollar. Suburbs are excessively dependent on roads and other infrastructure costs, which are largely supported by provincial taxes paid for, mostly, by people in cities disproportionately. This is even worse in the US, since mortgage interest deductability further subsidizes all those McMansions built on previously viable farmland.

http://www.mndaily.com/2011/10/10/stop-subsidizing-suburbs

In Ontario and Canada, it’s no surprise that neocon nitwit politicans try to gerrymander riding boundaries to capture more and more suburban votes. Neocons love to preach fiscal responsibility while getting others to pay their bills, as in the case of highway construction to the burbs.

Twits like Hudak love talking about ‘the GTA’ when it comes to transportation. NEWS FLASH!! There is no such thing as the GTA, no such political entity. It is a construct used once again simply to find more ways to subsidize the 905ers who want to stay in cars and have the rest of us pay for it. Our idiot mayor is basically a suburban drone who ‘loves subways’ only because they are underground and keep the roads free for cars. Hence the political divide we now have (and hopefully his demise tomorrow)

You want to live in Milton? Knock yourself out.(I hear there’s a great Tim’s there btw) But pay your fair share if you’re a commuter, and don’t expect me in the inner city to coddle you. This absolutely does mean things like road tolls for 905ers coming in to Toronto, vehicle taxes, parking tolls etc… It’s only fair.

If we stopped subsidizing people in suburbia, they might make different choices about where to live and we might not have the impending real estate deflation in those wastelands. (I know, I have lived there)

It’s not just government subsidies that prop up the suburbs, either. I work in the city with a bunch of suburbanite commuters. They all commute at least 125 km daily on average, some much more. Without exception, they all lie on their insurance forms and claim only the typical “18-25 km each way” commute. Me – if I move even a few blocks in the city, the insurance co’s say they have to re-evaluate my premiums because of my new “car insurance risk profile”…”due diligence, blah blah blah.” But there seems to be little due diligence about all the suburban fraudsters who are actually at risk driving their cars so much more than they claim. |I’d be paying less for my insurance if suburban liars just paid their fare shares.

So Chickenlittle…..no fowl intended, but let’s talk turkey when you guys in the suburbs actually come close to paying your fair share. You’ve got a long way to go. Those of us in the cities are not your mommies. Get out of the basement and start paying your way.

#74 Gladiator on 01.24.13 at 11:32 pm

@26bottoms_up:
In 2003, when I ordered an iPod for my wife and learned that there’s a backlog of 2 months for them, I researched what percentage iPods are of the overall Apple’s business – it was around 10%,so I said it’s a buy. recently, when it got to 700 bucks, I said it’s a sell and too bad I didn’t short it. Now, although it will see-saw, Apple is not going to reach 800 in the next several years. Steve is gone, and Apple now became a copy cat itself. Kinda too late to short it now, but Samsung looks like a winner to me. I use the investment philosophy of Peter Lynch – read his books, they’re very easy to read and have a lot of common sense. Based on them I made my buy and sell calls for Apple. Toob bad I didn’t act on them. Will open a TFSA and play with my 20 k sanbox. Thinking of trading options.

#75 Smoking Man on 01.24.13 at 11:32 pm

#72 Mr Buyer on 01.24.13 at 11:28 pm

Sorry man I had some real smoke tonight, very green…

It dose that to me……..:) ok pink Floyd time bye

#76 Speller on 01.24.13 at 11:33 pm

Garth, you finally made a mistake, and I was there to catch it!
It’s Gangnam, with two n.
Keep up the good work.

#77 Sebee on 01.24.13 at 11:35 pm

Wait a darn minute!

Just read the Canadian Business article.

“According to a Euro Pacific Capital report, high risk mortgages makeup more than $500B of Canada’s $1.1T housing market.

What???

#78 Ken R on 01.24.13 at 11:36 pm

#28 Paul on 01.24.13 at 10:12 pm

Junior mining stocks as a retirement investment? Go to Vegas and try your luck; the odds are better.

#79 Innumeracy chick...No more on 01.24.13 at 11:37 pm

@ Elmer I am looking too do some research ETF’s pay dividends too. You don’t have to make it overnight. I am hoping the market is still trending up. Rome wasn’t built in a day.

#80 T.O. Bubble Boy on 01.24.13 at 11:40 pm

I called the Apple fail on Sept 28th:
http://www.greaterfool.ca/2012/09/28/days-of-denial/#comment-198251
(high was $681 that day)

FB is still a fail, even if it bounced off the lows. Devry is flat since then, but annual revenues and margins are falling.

#81 Evil Magpie on 01.24.13 at 11:41 pm

#50
Bell Aliant in eastern Canada offers fibre to the home. 80/30 is $100 a month, and you can even get to 250/30.
Telus offers 50/10 DSL in BC and AB if you’re not out in the sticks.
Novus (in some condo buildings in BC) offers 300/15 for $103 a month.
Sasktel in some parts of Regina and Saskatoon offers 260/60 for ~$140.

#82 Canadian Watchdog on 01.24.13 at 11:42 pm

You said that last year. — Garth

It happens unexpectedly; then the 80//20 rule takes over. And is has nothing to do with central banks accommodative policy. It's just greedy human nature to arbitrage the little guy.

Same old story again and again. Yawn.

#83 T.O. Bubble Boy on 01.24.13 at 11:44 pm

(gold was $1776 on sept 28th)

#84 Vangrrl on 01.24.13 at 11:55 pm

#23:
My 2002 Dell Inspiron still works great!
I thought it was busted at one pt, gave it to a friend who tinkered around with it, in the meantime bought a new Gateway (which got stolen after I’d had it for two yrs) and then the friend returned my Dell.
I’ve been putting off buying a Tablet (Google Nexus7) because this thing still rocks on…!

#85 Snowboid on 01.24.13 at 11:57 pm

#45 CalgaryRocks on 01.24.13 at 10:37 pm…

Chill, methinks someone is missing their Florida sun/heat fix.

You are the one that started things by claiming $2+tips as if that was the ‘norm’ – then stating the US love their ‘slaves’. Or did you mean the US loves their ‘slaves’ more than Canadians love theirs?

As a rule the service in restaurants (and all retail stores) is a few levels above our Canadian counterparts. Is it because of fear as you suggest?
I think not.

BTW, we generally tip 20-25% as a result of the good service.

The bottom line is that the cost of living in most US cities is substantially less than Canada equivalents.

Can you try to make a point without ‘insults’ – or are you just stuck in ‘tongue-in-cheek’ mode?

#86 furst on 01.25.13 at 12:05 am

Bidding war this weekend on a house near Yonge/Lawrence. Listed around 1.05MM, sold for ~1.125MM. What say you Garth about the crash?

I said (a) no crash, but a correction and (b) demand areas in 416 would be act uniquely. Better work on that reading thing. — Garth

#87 Christopher Lackey on 01.25.13 at 12:07 am

If only we followed Prem Watsa and bought RIM at 6 bucks! I was waiting for it to go down to 3. Better off for avoiding speculation – at 17$, it’s all dumb money flying in there now.

#88 renters rule on 01.25.13 at 12:07 am

@#26 Bottoms Up

You are backing 2 of absolutely wrong horses: Cdn residential RE and Apple. Apple – their Ipads are too big and their phones are too small (screwed up on both of those) and their fascist closed applications environment restricts customers’ options and pisses them off because the licensing is too greedy.

I worked in Finance at EA back in the day — look at THEIR stock price today. Technology changes so quickly now, that even the best laid plans cannot hold back the next wave. When your phone costs $500 and is inferior, you will always lose to the free phone (with plan) that actually works better.

#89 AK on 01.25.13 at 12:10 am

#70 Canadian Watchdog on 01.24.13 at 11:20 pm
“And ten times more fragile, more concentrated and dominated by high-frequency traders that will suck your profits in nanoseconds when the time comes.”

I am not afraid of them. I survived the crash of 1987, which scarier.

#90 :) :( Ying Yang on 01.25.13 at 12:13 am

Also reading on iPad, with links to Apple notebook, that links to my iPhone 5, which I might add beams my info direct to my HDTV! So it’s a big Apple everything out there, what the hell will they invent, aquire, takeover or diversify into next! I guarantee it won’t be the toilet.

#91 Blacksheep on 01.25.13 at 12:13 am

“It’s at a level last seen five years ago, and 4% below its all-time peak. The Dow is even closer, dangling just 2% under its best-ever showing in the autumn of 2007 “- Garth
—————————————————–
Wow, alert the cheerleaders. Some Cattle’s holdings are almost back to were they were, five years ago….Almost….I’m sure they’re trilled.

I can think of an ‘unnamed’ investment that did very well over the same time frame.
If one bought anytime in 2008 and sold anytime in 2012 one would have done, very well.

If one was smart enough, to do such a thing :)

PS: RIM will tank, 6 months max.

take care
Blacksheep

Just admit it. The doomer meme of three years ago was wrong. — Garth

#92 Ogopogo on 01.25.13 at 12:22 am

Awesome post on my fave topic: investing! Sold my last individual stock today. Rather, my stop loss triggered BBD.B at 4.075 for a modest profit of 14.56%. I resisted the urge to sell at a massive loss a few months ago when it bottomed at 2.97 and today I reaped the jackpot. Who cares if it goes to 4.65? Too much volatility and risk. ETFs are the way to go.

The only non-ETF holding I have now is BMO preferred shares (BMO.PR.O), as per Garth’s suggestion that it may not be worth to buy preferred ETFs and pay the MER, however low.

As for #30 DaleFromCalgary: dude, Garth is right: learn about rebalancing or you’ll continue to make a fool of yourself among the financially literate.

#93 squidly77 on 01.25.13 at 12:23 am

AAPL crashes, who could have known.

Next up, Facebook (FB), there’s no value there, none at all. Same as AAPL, money that doesn’t realize its already dead.

#94 Bill Gable on 01.25.13 at 12:23 am

“Trendy neighbourhoods and cityscapes nestled against a backdrop of snow-capped mountains are among the things that draw people to Vancouver, but it comes at a price and it’s not just a lot of rain: Vancouver is one of the world’s least affordable when it comes to housing.

Lotusland was ranked the second least affordable among 337 metropolitan markets, according to a housing affordability survey from Demographia released this week. Hong Kong is the most unaffordable.
On the flip side, the survey found Detroit, the most affordable major market.
Demographia, a U.S.-based urban policy consulting firm that argues government policies to contain urban sprawl leads to higher house prices and speculation in markets, rates affordability using a method they refer to as the median multiple.”

http://tinyurl.com/bj7udgb

#95 Andrea on 01.25.13 at 12:26 am

#14 and link from Garth – thank you.

#96 jan on 01.25.13 at 12:26 am

Looks like the canadian dollars is crushing and so will the canadian empty pride.
I never understood one thing about most canadians.
They always insult and berate our amerian neighbours,come on people. I if was not for the us as our neighbour almost any country could invade us in no time and there would be no Canada !

#97 CalgaryRocks on 01.25.13 at 12:33 am

So Chickenlittle…..no fowl intended, but let’s talk turkey when you guys in the suburbs actually come close to paying your fair share. You’ve got a long way to go. Those of us in the cities are not your mommies. Get out of the basement and start paying your way.

There’s no reason for 80% of people that commute downtown to actually be there. Technology is killing this outdated concept. Also, some companies are moving out of DT and into more sane environments located in the suburbs.

The downtown area should be reserved for hipsters, the bums that relieve themselves on their stamp sized front lawn and the odd gang war.

#98 Deliverator on 01.25.13 at 12:44 am

I’m not sure if cash and assets should be counted against market cap for P/E calculations, but the guy in this article does. What say you Garth?

To say that investors are idiots, really is an unfair dig at idiots.

Apple now has $137 billion of cash and cash equivalents which, added to its other assets, gives it almost $200 billion in assets. Take that $200 billion off the market capitalization, and you’re left with an Apple stock market value of just $230 billion. That’s for a company that made $41 billion in profit last year, and $13.1 billion in profit just this last quarter. And a company that has not just one but six multi-billion dollar product lines
For some comparables, that $230 billion valuation is similar to Google, which had just a bit more revenue for 2012 — $50 billion — than Apple had profit. It’s also in the neighborhood of WalMart, the low-price commodity sales retailer. And it’s just slightly more than Microsoft, whose main profit pillars in desktop operating systems and office productivity software are much more at risk in the current mobile revolution than Apple’s.
At a price-earnings ratio of under ten, Apple is insanely cheaper than Amazon, which sports an ridiculous P/E of 3,583, believe it or not. And cheaper than Microsoft, which at least is sane at about 15, and Google, with a slightly higher 23. None of which, when it’s all stacked up, seems to make any sense at all.

http://venturebeat.com/2013/01/23/apple-and-the-stock-market-to-say-that-investors-are-idiots-really-is-an-unfair-dig-at-idiots/#V10DufqIPIygWLt3.99

#99 Jordy on 01.25.13 at 12:53 am

Right on the money Garth. Apple cult is folding, never understood why anyone would line up for commodity consumer electronics. Samsung products have been better for at years.
Praying on my Samsung galaxy tab :-)

#100 n1tro on 01.25.13 at 1:02 am

Garth, I think you discount Apple (and its marketing department) too much. The marketing folks know their customer base are idiots. Pretentious idiots at that. This is why when Apple makes the iphone 5 2 cm taller, they are heralded as “innovative” and millions are sold at launch. Its stupidity like this that allows Apple to keep making billions in profit and always having over 100 billion in cash on hand. For the reasons above, Apple shares are will soon find its bottom and hover around $500/share or more (similar to Google or any other company that is in the cash position).

Thursday drop is because hedge fund managers started to unload what they have been holding for over a year now. Majority of Apple investors have Apple in a fund of some sort. So unless Joe Public took all his money and bought at $700/share, Apple investors did not “lose” money, they just missed the opportunity to cash out at the high.

#101 Mainlander on 01.25.13 at 1:05 am

Funny how human nature really is. If the apple store had a 40% off sale people would be phoning friends and planning to stand all night in line just to get in line. I haven’t bought individual stock in years but I know a sale when I see one. Three years from now apple will be just fine. Bought some for my kids RESP”s and with a ten year time horizon this should do well.
Yes I wrote this on my iPad.

#102 Humpty Dumpty on 01.25.13 at 1:14 am

If your looking at this chart, you better start praying.

https://www.google.com/finance?q=INDEXDJX%3A.DJI&ei=qwgCUejmCqOciAKoTg

Something gullible people will never understand is, history always repeats itself….

I’ll stick with my pm for protection… Or I can always borrow Elijiahs underwear if things really get out of hand

Oh the humanity…..

#103 Jounce on 01.25.13 at 1:16 am

Southern guys broke, Mexicans in civil war. Were still in the financial toaster … soon to be burnt.

“The financial liabilities on the U.S. federal government’s official balance sheet are already five times the amount of its financial assets, not counting its future commitments on entitlements (Social Security, Medicare, etc.). This government is technically bankrupt. When investors realize this, a fiscal crisis will develop.”

RE: Financial Post/ Pierre Lemieux is an economist in the Department of Management Sciences of the Université du Québec en Outaouais.

Cripes… were already there Garthgrams not withstanding.

#104 OkanaganInvestor on 01.25.13 at 1:26 am

For all the metalbugs watching, apparently Apple has had to delay production over an industrial silver shortage in China:

“Silver expert Ted Butler has long predicted and awaited an eventual industrial shortage of physical silver, and a resulting panic silver buying that terminates the bullion bank cartel’s manipulation of the silver market.

Butler may be about to be finally proven correct, if an Apple contractor is right that Apple has delayed production on the new 27” iMacs over an industrial silver shortage in China.

With the US Mint sold out of Silver Eagles and production shut down for the 2nd time in 2 weeks, and shortages of nearly all retail silver products rapidly developing along with spiking physical premiums, it appears that a widespread retail, and perhaps industrial physical silver shortage is developing and escalating by the hour.”

http://www.silverdoctors.com/is-ted-butlers-silver-panic-imminent-apple-contractor-claims-new-imac-production-delayed-over-silver-shortage/#more-20185

#105 kreditanstalt on 01.25.13 at 1:35 am

“This advance has come because of corporate profits and economic growth.”

Rubbish. Volume is dismal – and has been all through this “recovery”.

This advance comes from “Permanent Open Market Operations” – POMOs – otherwise known as money-printing. Prop traders are the first to get their hands on the new “money” ~ and guess where it’s been going…?

#106 Nostradamus Le Mad Vlad on 01.25.13 at 1:47 am

-
Good post, but that is one of the funniest pix I have ever seen, and is an indication of how sheeple can be trained in Letterman’s Stupid Human Tricks. Most of us would be successful!

“By the way, RCA stock crashed and burned, in part because it was swept away by the market crash of 1929.” — This is all fine and well, taking economic fundamentals into account.

But has anyone figured out what would happen if Bibi pulled a fast one on the west, and nuked Iran? Bibi wants Iran wiped off the map, but China and Russia would retaliate, and probably level Israel (and Dimona). It may set up a showdown with the west, so what consequences would there be on stock markets? What roles would HK and Singapore, plus the rest of Asia take up, as wel as Oz nad NZ? Curious. Not sure what to make of this.

“At $700 the market said Apple was cool and sustained, rapid growth was expected.” — To a large extent, the market was right, except it grew in the opposite direction. Nonetheless, it was an accurately wrong prediction!

#37 mortgagebrokeront — Straight to the point truth. Although markets do go up over the long term, there are always sharp drops (re-balancing). Then there are losers, like the ones mentioned.
*
US Mint and Cdn. Mint A previous link noted that the Cdn. mint had slowed silver coins, now the US Mint has too; Superstate Is David Cameron having second thoughts about joining up? Along with German groveling; 19 Problems solved with baking soda, beer etc.; Myanmar Natural resources; Gold and HyperI. Think again; Buffett vs. Hedge Funders; Soros Japan and Germany; Next Stop for Commodities; Wall St. writes laws, so almost none go to jail; Bond Bubble? Super Bowl Sinkhole; Obomba, a.k.a. Big Dick Cheney; Lloyds Bank hires entire ExCel centre; Economy drive Not recommended for people like me; Beer It’s a great breakfast drink.
*
Bacon Bowl and how to make it (short clip); Stem Cell Therapy If this child sees again, that would apark another debate about SCT; New Phone Unlike anything anyone has ever seen before; Apocalypse to come The drugs of today won’t work soon; Dark Chocolate double dipped in Blood Oranges, Ten Disgusting Delicacies, but Haggis is nice and flavorful, and Food of the Future Yuck! Flying Gorilla Butterflies swarming a gorilla is more like it; Tractor Beam Star Trek exists; Floody Hell Crocs. by the thousand, in all the wrong places; 0:08 clip Small shark can take out nuke sub; Pakistan More trouble brewing? Poland Land theft for Monsanto? Icy UK Mini ice-age starting; Joe Biden Pro gun control, but . . .; New Jet Interesting design; Social Disintegration on rise in Japan and US.

#107 Hoof-Hearted on 01.25.13 at 1:51 am

#68 Smoking Man on 01.24.13 at 11:19 pm

62 Smoking Man on 01.24.13 at 11:13 pm

is a fake
=====================================

Definition of redundant…

#108 Hoof-Hearted on 01.25.13 at 1:55 am

18 Hoof-Hearted on 01.24.13 at 9:56 pm

Nahhh…stock market is the next ponzi scheme to crash.

Seen the same Yo Yo for decades…

Tech sector has no more room for growth, except maybe cannibalism.

Microsoft will get whacked….

Contraction and shrinkage=carnage baby..cash out…

This is a great blog, except for the readers. — Garth
================================

Tag you’re it !!!!

BTW ….study the Great Depression?..

(i)engineered ?
or
(ii) random irrational exuberance?

#109 Hoof-Hearted on 01.25.13 at 1:57 am

Smoking Man…

You rock !

I see how you paid your way through to kindergarten. at least to November..

…….and aged well too

http://www.youtube.com/watch?v=FQgxS-R8TzA

#110 Dan7 on 01.25.13 at 2:17 am

Why not cherry pick single stocks etfs are okay if you lazy and have Under $50k to invest but if you have $100K + you should invest in individual companies.

EG why own APPL when its hot one day and dead the next like RIM. You cant predict the hottest phone but i know that they will need a service provider like BCE or RCI.B. Same with pipelines ENB, Ipl.un

#111 JuliaS on 01.25.13 at 2:21 am

Employment recovery, Chinese recovery, stock recovery, US recovery, European recovery. Garth’s got more recovery stories on this blog than than a dozen CBC news anchors!

And they call him doomer? Sheesh! He’s got more optimism than the seal in that picture!

#112 JimH on 01.25.13 at 2:30 am

#48 The Prophet Elijah

I must be mystifying to many who are busy following the ZeroHedge crowd busily lighting their hair on fire over the Fed’s balance sheet.

Funny how gold is tanking while the US$ has bounced off its May 2011 bottom to trend into increasing strength.

The US has avoided the deflation/depression now beckoning much of Europe precisely because it has opted for stimulus and budget deficits in order to foster slow growth.

In the current environment, I’m very glad that we have a Bernanke at the helm of the Federal Reserve.

Cullen Roche sums it up very well:
http://pragcap.com/the-continual-failure-to-understand-the-balance-sheet-recession

http://pragcap.com/why-the-usa-isnt-going-bankrupt

Together, these 2 articles help explain why the US is not and cannot (at the present time) go bankrupt; why the dollar remains robust; and why the gold bugs are for now looking forward to year or more of treading water.

Enjoy the reads!

#113 JimH on 01.25.13 at 2:33 am

This is also helpful for those interested in learning more about the modern monetary system!

http://pragcap.com/understanding-modern-monetary-system

#114 Devore on 01.25.13 at 2:33 am

#48 The Prophet Elijah

Garth the US Fed’s balance sheet is now a mind blowing 3+ trillion of toxic assets, won’t this destroy confidence in the USD??:

Just like $1 trillion was record, and so was $2 trillion, and both were going to shatter confidence in the dollar.

BTW, I looked into this jsmineset business you speak of, and this is today’s missive:

http://www.jsmineset.com/2013/01/24/defend-yourself-by-not-giving-in/

That’s just sad. Replace gold with real estate, and you’d be boiling with rage at the author at his amateurish attempt at emotional manipulation.

#115 Soylent Green is People on 01.25.13 at 2:40 am

Bloody old iPad

#116 CalgaryBoy on 01.25.13 at 2:48 am

http://news.nationalpost.com/2013/01/24/bitumen-bubble-redford-warns-of-austere-times-to-come-amid-soaring-alberta-deficits/

Sounds like there will be some tough times ahead in Alberta. I guess we will hear more on March 7th. This should impact the housing market, among other things.

#117 hobbygirl on 01.25.13 at 2:56 am

Been about a year since I last posted here but I would say with climate change and bad crops leading to food shortages that commodities trading is the next big thing.

Remember way back in the 70’s when coffee was wiped out sending prices sky high? Helps to pay attention to the weather network and buy into what there is a shortage of. I would rather buy commodities than stock up my freezer with beef that is projected to escalate in price.

Just my humble opinion.

#118 Don on 01.25.13 at 3:00 am

#20 Thinking of buying for the first time in Victoria?

To add to the drama in Victoria, rental houses are flooding the market with average $1600 – $1800 to $2400 in the high demand areas, but it’s a huge house. Apartment and condo rentals exploded everywhere. Some owners are trying the rent to own way out – even offering the down payment. Youth are leaving for jobs in Alberta, and the the older among us our passing on, not so good for a large retirement community. Nanaimo is now advertising cheaper house prices $200 K + – $294 for a newly built house. They still have room to fall, trust me.

Most likely some potential sellers will play the wait game and rent their extra houses for a while, thinking the market will stabilize and increase resume the endless march to new unsustainable horizons. Feels like the 80’s all over again. Less we forget!

#119 futureexpatriate on 01.25.13 at 3:03 am

Apple’s demise was inevitable. The day Jobs turned his back on the high end cutting edge tech crowd that made Apple what it was, and started chasing the lowest common denominator kiddie gadget market, first reviving the transistor radio fad (with free music to boot!) and then the walkie talkie fad.

Every major US organ manufacturer, flush in the 70’s, went into the toilet chasing cheap Casio crap keyboards from Japan. The ONLY ones that survived increased their market share of the high end market, and killed their cheaper entry and even mid-priced lines completely. The only survivors today have products that START at five figures and only produce for the high end market.

Yes, Apple chased quantity rather than quality, making the same mistake, and relied on lawsuits rather than wise market share choice to keep cheaper, better, and finally, hipper competition at bay. They also, in the process, dumbed down flagship products like FCP and then, the entire OS making it iOS-stupid.

Will Apple survive? As Crappel, a cheap toymaker, a long shot possibly. Will it ever be the high end tech computer maker that had Hollywood movies and TV shows edited and hit music recorded on its machines?

Never. That ship has long sailed, and it wasn’t just Jobs’ Willie Wonka fixation either.

One cannot serve two masters. Apple chose fickle kids over lifelong professional users, and the latter, leaving the platform in irritated droves, have been predicting this for a very long time coming. Say what you want about Jobs; he knew the perfect time to make an exit.

#120 dave on 01.25.13 at 3:07 am

Garth, I enjoy your commentary on stock market and finance. I think you have a level head on your shoulders.

I have some excellent stock market stories.

Around Nov or Dec of 1999 I bought 20,000 shares of a company GONT: Go Online Networks @ 17 cents. This company manufactured internet kiosks that were used at malls, gas staions etc. Remember it was 1999 the internet hadn’t really taken off yet….A rumor came out that these machines were going to be used for the US election and the stock took off – I sold half my position at 68 cents on the way up and the rest at 1.35. Internet voting is still not allowed in the USA and GONT went back to ling on the pink sheets for eternity.

After I hear everyone’s big winner I ask about their losers. Mine was taking a large short position on SIRI: Sirius Satellite when news came out that they had signed Howard Stern. Stock popped around 40 or 50% the next day and I was under water big time.

Garth, who are you taking in the Super Bowl?

#121 Rob aka Captian and Mrs slow on 01.25.13 at 3:10 am

Great Post Garth, btw Andrew Hallam says same thing ETFs rebalance once a year. so folks shut up and read his book.

Also decent market returns ahead

http://assetbuilder.com/andrew_hallam/why_we’re_headed_for_decent_market_returns_ahead

#122 Smoking Man's Old Man on 01.25.13 at 3:16 am

Sometimes this blog reminds me of a financial version of that Abbott and Costello “who’s on first”… I admire your patience Garth.

#123 m on 01.25.13 at 3:17 am

To Montrealer,
Thanks for sharing your investment strategy. I’m thinking about doing the same and then we can compare notes at the end of the year.

To Smoking Man,
The hugging post is obviously a fake.

To Apple People,
My cat said sell Apple, buy tuna…still looking for that stock. Sold Apple in $300’s. Just way too wild for me.

To Spelling Guy,
What is your reference: gangnahm: asian, pop, tech…yes, all spelled differently. Tough to be a spelling cop these days. Keep flogging it though. Keeps the brain cells active.

To Van West watchers,
What is going on? Hardly any listings under $1.5 for detached…53 last time I checked. This seems to be a historic low.

#124 Buy? Curious? on 01.25.13 at 4:02 am

Garth, I’ve got a quick little story for you. It’s about DEmographics. Yesterday, while I was sitting at home, eating my peeled grapes, I hear a knock at the door. I put on my burgundy, valour housecoat and go to answer but find and old woman standing in my house. She’s a neighbour a few doors down, (not like the groupies I’m used to) so nothing to feel threatened about. She claims that there’s a stranger living her house, spiking her drinks, taking her money etc. Long story, short, this woman is suffering from Alzheimer’s disease.

Sad story but when we bought our house on this street, the agent said it was a quiet street, mostly seniors. She was right. It’s mostly old people shuffling along with their terriers, getting some 500 ml of milk that lasts a week, or whatever errands they have to do. But the now that I see how many old people there are living on this street, it makes me wonder if this is just a portion of the demographic tsunami about to crash down. These old people and their ailments are going to cost the country trillions! Most of these people don’t have any savings to carry them through their “sunset years”. Do you know how much it costs to put old people in old age homes? It’s at least $60k, trust me, I’ve checked! How is a handsome guy with 17% body fat, 185lbs, who spent years paying off a student loan, has a mortgage, with parents who’s only real savings is their house, going to pay to put a pair of old folks in a home until they die? Where’s the money going to come from?

The more I think of Boomers, the more I dislike them. They hoarded on they way up, they’re hoarded on the way down and inbetween, I’ve had to listen to classic rock until my ears bled. If I hear the Rolling Stones one more time, I’m not wearing clothes to go grocery shopping.

http://www.youtube.com/watch?v=BYOE_b4aYD0

#125 Canuck Abroad on 01.25.13 at 4:29 am

$300 Apple lines up with this comparison to Microsoft too.

http://www.zerohedge.com/news/2013-01-24/good-news-apple-bulls-todays-60-billion-market-cap-loss-not-biggest-one-day-drop-his

Scroll down to the final chart and give it a half a year+

#126 Rob now in Nova Scotia on 01.25.13 at 4:43 am

Garth, I can’t speak for all metalheads but for me, I hold silver not to sell for a huge capital gain one day but to protect my finances from the coming inflation. You see, by studying monetary history, we learn that the printing of money causes inflation. There are no exceptions throughout history and even though there is no across the board inflation, we are already seeing inflation in things like food and energy. Knowing that the future will bring more and not less inflation, I choose to protect my finances buy investing in an inflation hedge. I prefer silver for that instead of gold but either metal will do. I do not trade my silver and buy more at regular intervals so what the public does is irrelevant to me. I’m protecting me and my family…

#127 Michael F on 01.25.13 at 6:07 am

Upgraded my IPAD the other month and it turned into a heap of sh-t. Slow and constantly seizes up during searches.
My Samsung is much better.

#128 Tim S on 01.25.13 at 7:06 am

Its not a blog about gold Garth says even though he salts the horse every chance he gets saying what a poor investment it is.
For the record I buy PMs as long term inflation hedge so I don’t care if it goes up OR down 500 bucks an ounce, I’m in it for decades.

#129 amazona girl on 01.25.13 at 7:25 am

I am on Samsung right now… love and diversify .

#130 neo on 01.25.13 at 8:26 am

#59The Prophet Elijah

That is because the economy is on the equivalent of a dialysis machine and Garth is trying to convince us it is sustainable without printing massive annual deficits and Fed intervention. Leveraging your future isn’t a long term growth strategy anymore more than Canadian household doing the same with housing and overall debt even though the price of that asset looks impressive at the moment.

#131 neo on 01.25.13 at 8:32 am

#80T.O. Bubble Boy

So what? Many did including myself on here. Did you short it and profit from it? If not, don’t brag about your clairvoyance.

#132 EIT on 01.25.13 at 9:11 am

Investors lost 175 billion? I guess 500 mil isn’t that much really, what does 500 mil look like? It looks like a room of ~250 financially sound retiring boomers, with suits, gowns and all. Suck it up UK, you own the bank, time to pay the piper (US)

http://www.independent.co.uk/news/uk/politics/taxpayers-face-500m-bill-for-rbs-libor-fraud-8452959.html

#133 EIT on 01.25.13 at 9:12 am

Looks like everybody piled into netflix lol.

#134 Montrealer on 01.25.13 at 9:12 am

#122 m : well I have been scared to jump in for like 6 months. it’s really daunting the first time you invest yourself, there are so many choices… so I used a base of couch potato investing but changed the splits since I have a 30 year horizon (more equity, less bonds) and also more US. Then I took 10% for shorter term investments like the US construction ETF…
Now the though part is not looking at the performance/volatility for 6 months, like I used to do with the mutual funds.

#135 Westcdn on 01.25.13 at 9:17 am

Derivatives, dark pools, algorithms, and malfeasance. In the summer of 2008, I had no idea how prevalent they were. I usually write about my mistakes rather than my successes. There are a number of reasons, foremost in my mind are: being a contrarian, learning more from failure than success and avoiding giving people bad advice. I can live with my mistakes but I don’t want others caught up in them.
I refer to the 2008 equity meltdown a near death experience because during September through November I could not do anything right and watched as my net worth melted away. I wasn’t totally blind in the summer of 2008. I could sense a correction was coming and I culled my portfolio for a rough ride. I sold my speculative holdings and kept my strongest corporations. These were the ponies I was going to ride into what I thought was going to be a 20% correction. Afterward, I would deploy my cash when I thought the bottom was reached.
The meltdown was far worse than I thought possible. I could not believe the level of fear after the 20% mark was passed. Everyday seemed to bring on new waves of selling. In November I thought equities were grossly oversold and began redeploying my cash. A tad early as it turned out. In December 2008, things began to turn for me. There were plenty of mistakes to mull over. The main lesson was recognizing how much the markets had changed in such a short time.
It is now a game of big money, vested interests and powerful players. I can’t compete with them as they control prices and if they fail, they will drag me under too. Hence my recent interest in fixed income EFT’s. I have little interest in bonds. They go up with interest rates fall and vice versa to produce a rate of return equal to market rates. And then there is the matter of handicapping them for risk – not my expertise. I have no faith in offshore sovereign debt as I speculate that is where the next black swan will emerge. America will not default on its debt unless they want, since being the world reserve currency and the world’s largest economy; they can monetize debt (through QE) for a long time until they can’t. So I have begun a program of buying no more than 3 short term bond EFT’s that exclude offshore sovereign debt.
There is a fellow named Martin Armstrong who I pay attention. He may be another Alex Jones but there are things he writes that ring true with me. One of his major themes is that governments protect themselves first and eventually consume too much through taxation to pay its bills before the empire/country fails. He points out that, historically, civil disobedience is put down in the hard times before failure.
It makes me wonder if all those presidential executive orders that Obama has created to fight terrorism would be used to put down civil disobedience. This is why I find this video clip provocative yet amusing – http://www.youtube.com/watch?v=rI8INgw0xq0
Speculation, it is in my DNA.

#136 Dr. WAYNE on 01.25.13 at 9:28 am

Up to 130 posts and no FIRSTs … warms the heart …

#137 Pr on 01.25.13 at 9:49 am

…but the road ahead seems clear.

Just a reminder, the federal government want to take the guns from they Americans and the Sheriffs (who are the real boss) say: No

This may be very bumpy and Smokey, not clear.

#138 hangfire on 01.25.13 at 10:14 am

There isn’t much corelation between Apple and Gold…..one is a micro the latter a macro….apples and apples please…pardon the material metaphor. Invesying is less about idle hopes and flash in the pan….the entire success of your portfolio revolves around micro management……aka ….stock picking….otherwise you’re just ‘wishin and hopin’ that things wil go your way.

If you can’t pick gold stocks then why not try the excellent Sentry Selct PM fund…..active mgmt….ytd returned 27%.

ETF’s are for the brain dead…as every index will suffer the mean reversion……the fact is that there are always more losers than winners in every index and the opportunity cost is lost on the laggards.

Example…..12 month performance on well picked stocks……like…CP…..bought in Nov @ 86…..$114 today..( don’t annualize that or you’ll puke all over your ETF statement……..howz about Agrium…..70’s last fall….$113 today…..yikes…….Tim Hortons….18 to 50 like a rocket…..and on and on it goes. Best spend a couple of years not investing and save your money while you become a fixture in the financial education center of your local library….take some courses in basic accounting analysis…..then wade into the market with some smarts……otherwise you’ll be douched with paltry returns that don’t exceed inflation…and you know what that means……cat food retirement.

The fund you reference does not have a yield, it has a return. The one you cite is historic, which is nothing to base future performance upon. — Garth

#139 VJG on 01.25.13 at 10:17 am

I think the Apple stock price is a good example of why you’re so right about emotion ruling the day.

Given Apple’s profits, the enormous pile of cash that they have (that they’re almost certainly investing at a rate that beats inflation) and the market segment they cater to, their stock price shouldn’t be seeing these huge fluctuations.

I think (and I’m no pro, I’m just some guy) that a lot of the drop is because stock analysts finally started making up insanely huge estimates to compensate for the fact that they don’t know anything. When the the so-called ‘experts’ were consistently guessing too low, the stock price shot up. Now that they’re way over, the stock price is down.

If you consider how investing is supposed to work, on paper, you should be putting your money in companies that you think are going to be able to do well in the long term, that consistently profit, and seem to have a sense of how their market works. Apple hasn’t done anything wildly revolutionary in the time since Jobs’ death, but they make more money now than before. It’s just hard to raise profits by 100% when you’re already making $18b in profits a quarter.

Apple could fail, it’s true. They could see the bottom drop out from underneath them. But they’ve got a lot of room to make mistakes. Meanwhile, you’ve got stocks like Amazon that somehow trade well beyond Amazon’s ability to actually make any money at all. I guess people are just hoping that one day Amazon actually hits on the magic formula that causes them to turn into the next Apple? I dunno.

Full disclosure: I own a whole THREE Apple shares, and I stand to make a whopping $7.95 on the next dividend payout. I bought at $300-something, and I’ll hold on for a little while longer. I wish I’d sold at $700, but I think (maybe wrongly…time will tell) it’ll pick up a bit. But I haven’t bet the farm on it, so I’m okay with that.

Oh, and the stocks are in my TFSA, so whenever I do decide to sell, I get to keep all that sweet profit. That’s thanks to you, Garth.

#140 The Prophet Elijah on 01.25.13 at 10:33 am

Garth in your analysis of the US you keep overlooking the OTC derivatives. I found this very clear and logic case for what has happened and must take place on jsmineset, thoughts? When everyone was bearish on the Euro he said it would trade up on the USD and this is exactly what is taking place, please read, I beg you:

DELETED. Next time you want us to read a 1,000-word article, use a link. — Garth
———————————————————-
Here is the link:

Let’s keep things very simple:
1. The future of gold will not be determined by the USA.
2. The present manipulation in gold is purely Western, and any other thought is rank nonsense. This event is both short term and very short sighted in terms of people’s published analysis.

con’t….

http://www.jsmineset.com/2012/12/28/the-bright-future-of-gold-the-final-solution-of-the-2008-monetary-crisis/

#141 The Prophet Elijah on 01.25.13 at 10:34 am

Redfords speech last night says 6 billion shortfall for Alberta, wonder what implications this will have on Calgary RE?

#142 Bigrider on 01.25.13 at 10:41 am

The mantra for real estate continues unabated in the GTA.

I fear you waste your time here Garth.

The deeply held ,culturally motivated and other biases toward ownership and the “no fail” security that real estate ownership seems to engender is simply not going away…ever.

What is amazing is that independent financial planners encourage indirectly as well.

Has anyone noticed the various money expert articles in the major newspapers whereby a couple will expose there finances and balance sheet as well as their financial goals. Those goals invariably include the purchase of a home with negligible earnings and savings.

The kicker is that the planner “expert” in the article who is consulted by the writer always drafts his advice on the premise that the couple can and should buy said property. Not a moment , not a hint of possible admonishment, not even a pause, for the goal of home ownership when affordability for said couple is obviously a stretch or a downright impossibility. Renting, while couple continues to lay financial groundwork for a better life, never a proposed option by expert planner .

Ownership in RE here in T.O is as deeply ingrained as the total belief that God must exist. Questioning either, unquestionable.

If this blog was evangelical then I’d care. It isn’t, and I don’t. People who come here can decide if they want to be like the couple next door, or set their own course. Most Canadians make abysmal choices. So what? — Garth

#143 sciencemonkey on 01.25.13 at 10:41 am

The Demographia report is interesting even just for its affordability data, but we should discuss its thesis of how land use restrictions drive up prices. Is the report advocating unending urban sprawl?

We have a problem of ever-expanding population. The simplest idea is to stop growing in numbers, which we in Canada could easily do by limiting immigration, since our birth rate is low. Hopefully the world will also stop growing in population as more countries undergo demographic transition. If we stop population growth now, ballooning prices and the need for urban sprawl stop.

Failing that, we need to use our oft-discussed huge land area a lot more intelligently. In a nutshell, the problem is too high a concentration of jobs in a geographical area. This drives up prices, and leads to longer commutes. The jobs need to be spread out, both out of downtown cores into the suburbs, and indeed into entirely new areas, new towns!

#144 TheBigLebowski on 01.25.13 at 10:52 am

Its one giant incestuous criminal syndicate at the top. Mainstream media, Government, Finance, all major corporations. They’re all reeling around in bed together but its us that gets screwed. Goldman comes out with a bearish stock price on Apple because they are now shorting it and driving it lower as they do with all markets through the President’s Working Group On Financial Markets . The Casino is a gold mine for insiders but its the retail funds and investors who get left holding the bag. Corporate profits are up because of slashing expenses, jobs and inflation elevating the bottom line. This is all unsustainable long term. The tipping point will come where QE hurts more than it helps and profits will fall due to rising oil and input costs. To think this is any kind of sustainable recovery is like saying to your friends, “hey, look at how rich we are,” As you buy a new car, boat, cottage, motorcycle. But you omit the fact that you have put it all on your visa. Simple as that but this pseudo recovery is on a much larger global scale. Wait til the debt has to be paid, the bond market will just love this fact down the road, hardly.

#145 Ronaldo on 01.25.13 at 10:55 am

#117 Don –

”Feels like the 80′s all over again. Less we forget!”

Except we have the lowest interest rates in history with price of housing the highest in history, which in my opinion makes the end game much worse. Back then, if you recall when rates hit 22% or so, people were still running to the bank to get mortgages thinking that the rates would go higher. It was bizzare. Below is a link to a speech by Mark Carney on June 15/11 where he gives his take on the housing situation in Canada. A good read. Mark is definately bailing at the right time.

http://www.bankofcanada.ca/wp-content/uploads/2011/06/sp150611.pdf

#146 Bigrider on 01.25.13 at 11:03 am

#142 Garth to Bigrider- ” Most Canadians make abysmal choices. So what?”

I too have to learn and am learning to ‘let it go’ as you have.

Good advice.

#147 The American on 01.25.13 at 11:04 am

At #45: calgary Rocks, here is a little forum for you to read. You’ll see several servers are earning at least $100K/year in Seattle. Remember, we don’t tip like a Canadian. :-)

http://forumserver.twoplustwo.com/30/business-finance-investing/how-much-do-waiters-make-tips-high-end-restaurants-587525/

#148 Ronaldo on 01.25.13 at 11:07 am

#111 Julia S – I have a feeling this was one of Garths teachers.

http://en.wikipedia.org/wiki/Louis_Rukeyser

#149 The American on 01.25.13 at 11:13 am

At #45: calgary Rocks, also you fail to understand that the U.S. Bureau of Labor Statistics relies on those servers reporting their tips in order to compile the B.S. data. Servers will report anywhere from 17%-20% of what they’re actually getting in tips – it is way too difficult for the IRS to track. Use your noggin.

#150 Inglorious Investor on 01.25.13 at 11:13 am

#112 JimH on 01.25.13 at 2:30 am

Don’t put too much faith in the Modern Monetary Mongers. All that MMT, or Cullen Roche’s variant of it, offer is a sad rationale for currency debasement.

#151 sciencemonkey on 01.25.13 at 11:20 am

At Garth 141, who said:

If this blog was evangelical then I’d care. It isn’t, and I don’t. People who come here can decide if they want to be like the couple next door, or set their own course. Most Canadians make abysmal choices. So what? — Garth

—-

When these people make abysmal choices, like buy a townhouse in Stouffville for $470k, it sets the demand and supply curve of housing. When the irresponsible drive up prices, the responsible cannot responsibly afford.

#152 Vangrrl on 01.25.13 at 11:22 am

Tonight on CBC’s Marketplace: Busting the Banks
Revealing how little info bank advisors give Canadians about MER fees, how we pay the highest fees in the world, complain but do nothing about it.

#153 fancy_pants on 01.25.13 at 11:26 am

I’m surprised Steve Jobs didn’t take it with him…
what? oh. wow. enlightening. That’s very intuitive children; you’re right, everyone leaves with nothing.

relax. pursue life, not $

#154 Smoking Man on 01.25.13 at 11:35 am

Yes!!!!!!!

Bad day for pink shirt tree huggers.. FORD, WINS…..

Sensibility in our courts…….

Congrats Doug

#155 rosie "moving forward" on 01.25.13 at 11:40 am

#73

An interesting analysis of the disproportionate burden placed on city dwellers by sub-urbanites. Moving forward, however, statistics are helpful when evaluating the validity of any conclusion made in an argument.

#156 Pr on 01.25.13 at 11:41 am

Apple groupies are like metalheads…who think they know more than the mortals around them…

You are absolutely right, i been caught my self. Some will learn the hard way. Some will cool down before its to late.

#157 Ronaldo on 01.25.13 at 11:44 am

H u m a n s. View on large screen. Awesome.

http://www.youtube.com/watch_popup?v=2HiUMlOz4UQ&vq=large

#158 squidly77 on 01.25.13 at 11:45 am

RE Redford’s speech last night.

Alberta is not and has never been an energy super power, we are a very small player in a large game.
What we import
What we export

Most people with an IQ of over 100 understood that the commodity boom that occurred during 2007-2008 would not last. Peak Oil nuts excluded.

Nat gas has crashed from $15.50 GGJ to around $3 GGJ for a price crash of 80%, Oil from $147 BBL to $90 BBL, minus 40%.

Alberta politicians, peak energy nut-balls and realtors don’t know the difference between what Oil is and what Bitumen is. two completely different entities, yet they conveniently will use both terms in the same sentence.

Bitumen is Asphalt Its not Oil.

Asphalt has never been and can never receive the same selling price of Oil.

So according to Alberta PC,s, Alberta now has a bitumen bubble.

Perhaps, just maybe, just maybe, they should upgrade the Asphalt to Oil in Alberta before selling it priced as Asphalt. Might even create 50-60,000 jobs in the meantime.

Forget about pipelines like Keystone XL and Gateway, no one minds Oil pipelines, but no one wants Asphalt pipelines.

#159 Doug in London on 01.25.13 at 11:57 am

It goes to show you that when a lot of people are raving about how great a company is and the share price has had a good run up (deja vu here, anyone remember Nortel?) it’s time to take some profits if you own that company. If you don’t own any, then stay away and look for something that’s under appreciated by investors instead. Right now that would be the uranium, natural gas, or potash sectors.

#160 Blacksheep on 01.25.13 at 11:58 am

“Just admit it. The doomer meme of three years ago was wrong. — Garth”
——————————————————
Garth, your Achilles heel is presenting, again. How could one have the insight to make an independent, (prescient?) advisor less ‘investment,’ pre housing / Lehman crash?

It’s about math, not emotion.

Problem is once one realizes, MMT is not a theory, all bets are off.

“The market (and sovereign in control) can stay irrational (and liquid) longer than you can stay solvent.”

Since no rope will be pushed, shite growth and deflation, is the current name of the game.

PS: Using labels, weakens your position.

take care
Blacksheep

Care to translate that? — Garth

#161 Holy Crap Wheres the Tylenol on 01.25.13 at 11:59 am

Really people, really, this is not the end of the “Apple World” just as the end of our own world came and went in December of 2012 this will pass as well. The idea of the sudden end of the world by any cause is absurd. The Earth has been here for more than 4 billion years, and it will be several more billion years before the gradual brightening of the Sun makes our planet unlivable. Meanwhile there is no known astronomical or geological threat that could destroy the Earth or Apple. Apple has made some bad decisions by chasing the competitors now that they have caught up to them. I recall many years ago when the American Car industry was in the dumps. Who wanted to purchase an American car, issues, issues, issues, problematic, quirky, quality that was miserable to say the least. When you complained to your dealer they gave you a glazed look as if you where from Mars. The Japanese had lost the War 30 years previously but they came back and started winning battles by re-inventing themselves. What did the American car companies learn? They learned that they made major mistakes primary by building crap, then by taking advantage of their loyal customers and treating them as if they were idiots. The carmakers also learned to start manufacturing what the market needed, not what they thought the market needed. Investments in American car companies suffered as clients moved away from made in USA to made in Japan. Market share losses were huge. The American car companies took a punch in the nose and perhaps a fed good jabs in the stomach. So what did they do? They reinvented themselves and came back. American car quality is as good as any other manufacturer today, they are not as arrogant and know that a loyal clientele is hard to preserve unless you provide exceptional service. Apple is getting cut to the core, (pardon the pun) right now as they need to step back quickly and reinvent themselves again as the market leader. They absolutely have the funding to do it!

http://www.apple.com/pr/library/2013/01/23Apple-Reports-Record-Results.html

#162 HD on 01.25.13 at 12:01 pm

#46 Montrealer on 01.24.13 at 10:40 pm

Great job.

That looks like a decent portfolio mix.

Good of luck in your venture.

Best,

HD

#163 Inglorious Investor on 01.25.13 at 12:02 pm

#144 squidly77 on 01.25.13 at 11:45 am

I just call it ‘tar.’ And they already do upgrade it in Alberta. At least Suncor does so in Fort McMurry.

And thanks for the link. I thought that asphalt was the combination of bitumen and aggregate. I now know the technically correct term is ‘asphalt concrete.’ ;)

#164 HD on 01.25.13 at 12:04 pm

Good luck rather….

#165 rosie "moving forward" on 01.25.13 at 12:08 pm

#124

The largest single demographic in Canada, ie. boomers, is made up of many in any number of situations, both fiscally and physically. Moving forward, a proper analysis, prior to a conclusion, would aid in your argument.

#166 Van guy on 01.25.13 at 12:10 pm

Is The little effer gonna take over for Carney?

#167 coastal on 01.25.13 at 12:15 pm

“how we pay the highest fees in the world, complain but do nothing about it.”

Didn’t you know, it’s our Canadian roots to not complain, but we are supposed to be the most conservative savers of all cause we have to pay the highest for everything. It’s about time we wake the hell up and start forcing the greed to cough up and start low balling the crap out of this market. But then again Canadians wouldn’t want to offend anyone would they, even the thieves and scamsters selling this over-priced moldy junk.

While I do not agree with fund MERs, and do not buy any, it is facile to compare management fees here with those in the US, where there’s a pool of investors ten times larger with far more efficiencies. In any case, ETFs are superior vehicles, but should not be owned in isolation. — Garth

#168 squidly77 on 01.25.13 at 12:20 pm

Syncrude, Suncor, CNRL Horizon, Shell Albian via Scotford all get the same price as SSB, Syncrude synthetic blend. SSB receives WTI price minus about .5% transportation costs.

Stat Oil, Cernovous, Japan Oil, Meg energy and a ton of other SAGD producers that DO NOT upgrade their bitumen receive, well bitumen prices. Scroll down this link and look on the right hand side. All prices are there. http://www.dailyoilbulletin.com/

#169 Doug in London on 01.25.13 at 12:22 pm

@Calgary Boy, post #116:
Look on the bright side. For about the last 8 years we’ve heard all this raving about a MASSIVE labour shortage occuring with the coming expansion of the oil sands projects. Just today I read in The Globe that Talisman Energy is cutting their expenses 20%, which will of course include job cuts. If some other energy companies also cut back, then it looks like the labour shortage problem has been solved once and for all.

My personal experience has been whenever you hear talk of labour shortages the economy has peaked. I heard the same talk in 1989, 1999 for people with IT skills, and 2007. Say, I wonder if Apple also recently experienced shortages of people with IT skills?

#170 squidly77 on 01.25.13 at 12:29 pm

If it wasn’t so sad it would be funny, apparently Alberta PC,s gave the OK to Oil companies to export a raw product for upgrading elsewhere, they are then shocked that it sells at a discount.

Kinda like exporting a raw log and expecting it to sell at the same price that finished print paper demands.

The sheer shock and horror of it all!!

#171 Dr. WAYNE on 01.25.13 at 12:31 pm

“Most Canadians make abysmal choices.” – Garth

Most ‘humans’ make abysmal choices.

#172 Hoof - Hearted on 01.25.13 at 12:35 pm

Crystal Ball ?

Study Communism and Cultural Marxism.

Look at these stupid products. Built in sweat shops……..sent overseas for huge mark-up.

People stare at them all day…low attention span if you try to socially engage them. Very anti -social.

Lots of people are realizing this and UNplugging. Not even getting into the health concerns .

These products are reaching a plateau level of actual practical need versus bells and whistles.

#173 squidly77 on 01.25.13 at 12:43 pm

The Keystone XL and Gateway pipelines that Bitumen producers are demanding are IMO nasty business. Mixing Bitumen with condensate AKA paint thinner to make it flow is risky.

Oil spills are bad enough but if you should get a Dilbit (diluted bitumen) rupture it could be a disaster, the diluent would vaporize and the bitumen would solidify.

So cleaning it up would be akin to peeling the 401 or the 407 off of the rupture location.

#174 Old Man on 01.25.13 at 12:48 pm

What, is it possible that Real Estate in Alberta might be in for a downfall? Imagine my utter shock by it all :)

#175 squidly77 on 01.25.13 at 12:49 pm

I’m a pipefitter/engineer, and I know that Bitumen sells for less than Oil, but Alberta PC,s and analyst on BNN are shocked, just listen to how many times our glorious leader inter-mixes the words Bitumen and Oil. Shes shocked she says, no one could have seen it coming. No one.
http://www.youtube.com/watch?feature=player_embedded&v=ryD5DXuBwg0

#176 Stoopid Idiot on 01.25.13 at 12:52 pm

#4 Pat

Incorrect… Baron M.A. Rothschild

#177 Mister Obvious on 01.25.13 at 1:06 pm

#124 Buy? Curious?

“The more I think of Boomers, the more I dislike them. They hoarded on they way up, they’re hoarded on the way down and in between, I’ve had to listen to classic rock until my ears bled. If I hear the Rolling Stones one more time, I’m not wearing clothes to go grocery shopping.”

Thank you for another installment of anti-boomer sentiment. It gives us old timers something to chew on every once in a while.

Look son, we’re really sorry we bollixed up the perfect world we inherited and will be leaving behind a steaming dump for all the upcoming Einsteins.

The great depression, World War II, and the ensuing 45-year cold war were all minor nuisances compared to the minefields we’ve intentionally planted on your road ahead.

Truth be told (which I always do), I am sick to death of classic rock too. And I have probably been listening to (and performing) it much longer than you have. I am a musician who played professionally in so-called ‘classic rock’ bands all through the seventies. Only then it wasn’t called ‘classic’. It was just rock.

I have no idea why it’s taking so long to die. I suspect modern young program managers, perhaps about your own age, care more about money than art. There’s still more cash to be made flogging re-factored 60’s 70’s and 80’s music to people with disposable cash (and proper systems to play it on) than there is creating a new, risky untested music for the fickle ITunes set with the attention span of a gnat..

I am a boomer who now produces my own new and unusual music at my own (considerable) expense. I can guarantee you this: very few boomers and even fewer Gen X/Y/Millennials are showing the least interest in my output.

That’s art for you. You have to suffer for it.

#178 squidly77 on 01.25.13 at 1:07 pm

Alberta, once home to hardworking, red necked (I know Ill get it for that) ambitious and enterprising people, has now turned into a Pinko nanny state.

Alberta for better or worse, was a truly blue province at one time. Now I hardly recognize the place.

We have turned into Pinkos

Yeah I know that this post will rile some people. But blogs are about debate and opinion, right ?

#179 Mark on 01.25.13 at 1:15 pm

“ETF’s are for the brain dead…as every index will suffer the mean reversion……the fact is that there are always more losers than winners in every index and the opportunity cost is lost on the laggards.”

So you figure that you can always out-manoeuvre and out-perform the index despite nearly 90% of professional money managers being unable to? What makes you smarter than the army of analysts employed by the fund companies?

#180 Vamanos Pest on 01.25.13 at 1:17 pm

Garth, another good post, and I realize that you discussed this mostly to highlight your longstanding advice not to invest in individual stocks, but there is a counter point on apple. I won’t bore you and everyone else with a full analysis but:

-apples 2012 q4 earnings were a record

-sales in q4 2012 of iPhones were up 25% while sales of iPads up 50% yoy

-at nadir of yesterdays trading (about $455) fully 1/3 of apples market cap was held in cash, with no debt

You did mention the momentum thing, and that’s what’s going on, but I disagree with selling at a loss at this point, the company is simply more valuable than the price you’ll get right now.

#181 White Rock Mom on 01.25.13 at 1:47 pm

Ah the memories, do you remember this?

The Day the NASDAQ Died
Humble Pie (sung to the tune of American Pie)

A long, long week ago
I can still remember how the market used to make me smile
What I’d do when I had the chance
Is get myself a cash advance
And add another tech stock to the pile.

But Alan Greenspan made me shiver
With every speech that he delivered
Bad news on the rate front
Still I’d take one more punt

I can’t remember if I cried
When I heard about the CPI
I lost my fortune and my pride
The day the NASDAQ died

So bye-bye to my piece of the pie
I poured my paycheck into Datek
Now my cash account’s dry
It’s just two weeks from a new all-time high
And now we’re right back where we were in July
We’re right back where we were in July

#182 TorontoBull on 01.25.13 at 1:52 pm

@SM
well they actually gave Ford more rope! I thought you knew how the machine works…next -financial audit

#183 Ronaldo on 01.25.13 at 2:36 pm

#168 Doug In London – re: Alberta jobs

Remember this:

http://m.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/oil-sands-firms-look-at-outsourcing/article1321304/?service=mobile

#184 Ronaldo on 01.25.13 at 2:40 pm

#16i Doug In London – and this:

http://mountainvision.blogspot.ca/2011/06/more-robots-for-australia-mines.html

The wonders of technology.

Teachers beware. You may be next. Careful what you ask for.

#185 Dan on 01.25.13 at 2:49 pm

TRT on 01.25.13 at 12:32 pm
CND $$ STILL Falling!

Almost down 2 cents since announcement that rates are not going up anytime soon, including bond yields.

Money talks and BS walks!

$$$ says rates low for a very long time!
—————————————————————–

Realtor TNT you are such a clueless realtor. The bond market will be making interest rate go through the ROOF…no pun

#186 Patiently Waiting on 01.25.13 at 2:58 pm

Fraser Valley Real Estate Board stats posted this morning show a decline in year over years sales of 28%. Month over month decline is 30%. As Garth always says, first sales decline then prices follow … there was a price reduction on one home in South Surrey of close to $200,000 yesterday … I would more price declines in the valley to begin in the near future …

FVREB STATS – as of January 25, 2013
17 of 22 Working Days
JANUARY 2013 Listings 2049 Sales 430
DECEMBER 2012 Listings 857 Sales 619
JANUARY 2012 Listings 2289 Sales 598

Hope this information is helpful.

pw

#187 Patiently Waiting on 01.25.13 at 3:04 pm

Further to my last post, after almost 4 months on the market I see MLS # F1224159 just sold at $950,000 which is $350,000 below it’s asking price … it seems buyers are starting to clue in that they are in the driver seat …

pw

#188 Pr on 01.25.13 at 3:12 pm

Human, from one bubble to a other!

First Venezuela, after,Ecuador,Germany,
Now the Swiss want their Gold back ….Here we go folks !! GOLDGATE !

This is gonna be epic !!

Much more that the real estate folly of Canada.

#189 The Prophet Elijah on 01.25.13 at 3:13 pm

#178 squidly77 on 01.25.13 at 1:07 pm Alberta, once home to hardworking, red necked (I know Ill get it for that) ambitious and enterprising people, has now turned into a Pinko nanny state.

Alberta for better or worse, was a truly blue province at one time. Now I hardly recognize the place.

We have turned into Pinkos

Yeah I know that this post will rile some people. But blogs are about debate and opinion, right ?
———————————————————
Is pinko like a metrosexual? Or someone limp wristed?

#190 Ronaldo on 01.25.13 at 3:35 pm

Question for HD.

HD, as a retired boomer over 65 and having been a DIY for many years I would like to get your opinion on the makeup of this portfolio for RSP, TFSA or non-registered accounts. All are tradeable on the TSX, however I deal directly with the institution that provides these funds. I deal with one of their advisors directly for advice and review purposes. Otherwise, I do the transactions on line via an account I have with them.

For estate planning I have other individuals I deal with.

I do not rely on any of these funds for income as have sufficient pension income. Your thoughts on this would be greatly appreciated as I believe you have a good handle on investing. Thanks.

PHN160 7.5% U.S.Equity 2012 return 10.17%
PHN410 7.5% Overseas Equity 18.43%
PHN150 15% Dividend Income 9.59%
RBF9596 20% High Yield Bond 10.84%
PHN340 50% Total Return Bond 4.52%

Last year this mix returned 7.7% net of fees. The mer worked out to around .88 for the above.

#191 Herb on 01.25.13 at 3:35 pm

#177 Mister Obvious,

right with you, except that I didn’t like rock in the ’60s either.

#192 Holy Crap Wheres the Tylenol on 01.25.13 at 4:18 pm

Wow Samsung stock appears to be highly coveted by everyone. I wonder how much electronics they will be be able to ship after Kim Jon-un has his hissy fit and causes WWIII. Sure wish Samsung was based in South America or even Poland. A lot safer than in Samsung City Seoul.

http://worldnews.nbcnews.com/_news/2013/01/25/16693367-north-korea-sanctions-by-south-would-be-declaration-of-war

http://www.thespec.com/news/ontario/article/875250–north-korea-s-aggressive-rhetoric-draws-stern-responses-from-china-u-s

#193 DM in C on 01.25.13 at 4:28 pm

Alberta, now home to a $4Billion deficit (as much as they spend on Education in the province). Have, soon to be a have-not. Where did all the $$ go? Blown like a drunken sailor on shore leave. Thanks Klein, Thanks Special Ed, Thanks Redford.

Now people in the media are floating the idea of a sales tax. Not whispering it either. I see it within 2 years. And whatever is left of the ‘Alberta advantage’ will be toast.

#194 HD on 01.25.13 at 4:36 pm

@ #190Ronaldo on 01.25.13 at 3:35 pm

I am 28 yrs old and just got into DYI about 2 years ago. Things are doing good but if anything, I should be getting advice from you.

All this to say that I am no expert but I know 1 thing or 2.

I am not familiar with the funds you presented but your asset mix/allocation sounds about right given your age and situation:

70% Bonds
30% Equity

As long as the MER is low and the Funds are ligit (low tracking error, not issued recently, etc) you should be fine.

Although your MER is low, you could build up a similar portfolio at a lower cost; 0.27% MER ballpark. See the Complete Couch Potato example here: http://canadiancouchpotato.com/model-portfolios/

You would have to decide if it’s worth it or/and cost effective to switch.

If you don’t need this portfolio because your pension income is enough to support you, I would say that you are doing very well. ;)

Perhaps the other blog dogs have a different opinion on the matter. They won’t hesitate to jump in and throw in their 2 cents.

Review whatever they have to say and take it from there.

Hope that helps.

Best,

HD

#195 panhead on 01.25.13 at 4:51 pm

#135 Dr. WAYNE on 01.25.13 at 9:28 am
Up to 130 posts and no FIRSTs … warms the heart …

………………………………………………………………..

Sorry Dr. Wayne, but I just couldn’t help myself….

LAST…

#196 Ronaldo on 01.25.13 at 4:52 pm

#195 HD – Thanks very much for your input. I was about 10 years older than you when started into this stuff. Busy raising a couple sons and building a home plus paying for education for the boys so wasn’t a whole lot left to invest at the time. Still, lived well and very much enjoying retirement. Keep up the good work. You’re on the right track. I goofed on my numbers, the Tot Ret Bond did 6.3% so average total return was 8.92% net of expenses. Not too bad for an amateur I guess. Thanks again.

#197 Canadian Watchdog on 01.25.13 at 5:22 pm

Royal Canadian Mint limits sales of Silver Maple Leaf coins on high demand Link

Big money is moving in silver. See silver net longs here.

This is not a PM blog. Last time. — Garth

#198 hangfire on 01.25.13 at 5:26 pm

“The fund you reference does not have a yield, it has a return. The one you cite is historic, which is nothing to base future performance upon. — Garth”

So…we begin a discussion of risk reward and risk management? The fund I referanced pays no dividend….however..careful analysis of the macro for PM’s and an insight into the long history of successful mgmt implies a yield….that is risk management…..and of course I was right and recieved a higher than average return…simple homework schools the ETF every time.

Lets take another example….one we all know…..risk reward this time….TD Bank….yoy…12.06% inc the 3.68% dividend…….why risk this one?….EPS $6.77 p/s…..PE 12x’s….EPS Growth 4.29%…a good bet right? This is not rocket science.

Lets take a flyer…..CGI Group…..65% yoy….$15 to 25….why? High PE….45x’s…..scary right…not really…..you really had to read the P&L on this one…the order book was heavy….in spite of a resect burdensome aquisition…..required the investor to look deeper….into the prospects of the aquired….and strike gold.

Hey…did you follow the expansion strategy in the Gulf States of Tim Hortons over the past two years?…..why not you fool…..up from $18 to 50.60 today……but if you were atrickly yield investor you’d have passed on this gem….it only pays 1.66%……to have lost a 88% gain yoy.

Mark…#179…….I say this is all due reverance…..99% of mutual fund managers are flunkies…..clueless….the mantra in the business is to meet the benchmark…you must do your own due diligence.

If you think it’s a game of always being safe ….you’d be wrong…….that’s called risk management……you must learn this skill before any other consideration regarding your investments….you must accept mistakes to reduce your losses…never digging in for a recovery…as do the ‘professional managers’ you mention.

Being right more often than you’re wrong is the name of the game…..and anything short of that is why ETF’s will have you eating catfood in your old age. And for pity sakes …do your homework!

Heres a simple fact….the government is lieing about inflation…..it’s five times higher than they state….by printing 15% more paper currency every year you are looking a pay cut each and every year your savings don’t exceed the rate of inflation……don’t be fooled….or it cat chow for you.

Dividends produce yield. Capital gains are just that – gains in the capital value of the underlying security which produces the yield. Together they constitute total return. Just admit you were wrong. Won’t kill you. — Garth

#199 Derek R on 01.25.13 at 5:31 pm

#194 DM in C on 01.25.13 at 4:28 pm wrote:
Now people in the media are floating the idea of a sales tax. Not whispering it either. I see it within 2 years. And whatever is left of the ‘Alberta advantage’ will be toast.

You’re so right. Sales taxes are a really, really bad idea. They’d be far better to raise property taxes.

Although that’s not going to win any popularity contests, the average resident would end up paying less in extra property tax than they would in extra sales tax because the evasion rate is so low. Not to mention that sales tax has a much bigger effect on business than property tax. So introducing a sales tax would indeed squander the ‘Alberta advantage’.

#200 Humpty Dumpty on 01.25.13 at 5:34 pm

Davos 2013: Kissinger says Iran nuclear crisis close

“The danger is that we could be reaching a point where nuclear weapons would become almost conventional, and there will be the possibility of a nuclear conflict at some point… that would be a turning point in human history,” he said.

http://www.bbc.co.uk/news/business-21177535

Humans making history….

Hopefully your mama also taught how to pray G….

#201 jess on 01.25.13 at 5:39 pm

Calgary judge has approved the biggest fine ever to a Canadian company involved in foreign bribery, calling the crime an “embarrassment to all Canadians.”

Chicago Mayor Rahm Emanuel wants banks to stop lending to gunmakers.
http://money.cnn.com/2013/01/25/news/companies/chicago-banks-guns/index.html?iid=HP_LN
…TD Bank gives Smith & Wesson (SWHC) a $60 million line of credit, according to the letter. ”

===========

Cool job posting: Earn $20 pretending to hate wind energy
By Philip Bump

fronting astroturf groups and paying fake protesters
http://grist.org/news/cool-job-posting-earn-20-pretending-to-hate-wind-energy/#.UQFwpeQabQQ.twitter

…”Needing 100 anti-wind protesters by next week and apparently unable to find them, a mysterious firm advertised a “quick and easy $20″ on Craigslist. According to the ad, the only thing the “volunteers” would need to do for their pay is “stand next to or behind the speakers and elected officials/celebrities” at a rally against a wind turbine project in the UK.

http://thinkprogress.org/
http://www.guardian.co.uk/environment/interactive/2012/may/09/wind-power-memo

#202 Grim Reaper/Crypt Speculator on 01.25.13 at 5:42 pm

Yeah uh..I’ve developed this directional drilling device capable of reaching any spot on earth from any other spot on earth.

We can uh…..grab any deposit from the BOTTOM of the given hydrocarbon zone.

As you know..there is no law, international or domestic that could stop this Back Door approach which we have deemed the “DR WANKER PROTOCOLS”.

Uh yeah uh I will send out an IPO soon uh…

#203 AK on 01.25.13 at 6:05 pm

#196 panhead on 01.25.13 at 4:51 pm
“#135 Dr. WAYNE on 01.25.13 at 9:28 am
Up to 130 posts and no FIRSTs … warms the heart …

………………………………………………………………..

Sorry Dr. Wayne, but I just couldn’t help myself….

LAST…”

That’s more like it. Welcome to the back of the classroom. :-)

#204 Cid on 01.25.13 at 6:08 pm

Garth…buddy, pal…don’t you think all this loose monetary policy is going to eventually rear its ugly head as inflation? What do you think the houseing bubble was caused by, or the tech buble before that? I’d be buying some gold while it’s still cheap…

We are closer to deflation. Good luck. — Garth

#205 Suede on 01.25.13 at 6:19 pm

Garth, F will be announcing a new BoC head in April. I don’t see it up in the career section yet on the website, but you may still have a chance.

The main skill required, it seems to me, is to be able to say a lot of words without really saying much at all: people will just interpret what you say in many different ways.

.

Reading this makes me happy i did my colleagues english homework and she did my math proofs. I call it “The Balance of Trade”

http://www.ijcb.org/journal/ijcb07q1a2.pdf

If it looks Greek to any of you, that’s because it is.

#206 Mr. Gold on 01.25.13 at 7:05 pm

I wonder if this will fly?

#207 maria on 01.25.13 at 7:08 pm

#127

Crystal Ball ?

Study Communism and Cultural Marxism.

Look at these stupid products. Built in sweat shops……..sent overseas for huge mark-up.

People stare at them all day…low attention span if you try to socially engage them. Very anti -social.

Lots of people are realizing this and UNplugging. Not even getting into the health concerns .

These products are reaching a plateau level of actual practical need versus bells and whistles.

You should see the idiots who make this technology. I worked for a start up and the developers are in their own world. Worked for a shopping app. It was successful during christmas then the usership dropped off. everyone was panicking about why? Well who is using this other than the odd sheeple shopaholic dingbat? They expect people to walk around in a mall, staring at their phone?

Then when I brought this up to them, they fired me.

#208 Nostradamus Le Mad Vlad on 01.25.13 at 7:11 pm

#108 Hoof-Hearted — “BTW ….study the Great Depression?.. (i)engineered ?” — Yes, then Prescott Bush, dubya’s granpappy financed Hitler and the Third Reich. Hitler’s 1,000 year reign last approx. 12 years.

#152 fancy_pants — “relax. pursue life, not $” — Good reminder!

#194 DM in C — “Now people in the media are floating the idea of a sales tax.” — Interesting that Gordon Campbell dumped HST on BCers with one announcement, yet because it is so complicated it’s taken 18 months or so to scrap it.

Perhaps people don’t see a world wide trend here — taxes are being raised or introduced all over. Why? Because it turns the former middle class into serfs — Paychecks are taxed, food and other necessities are taxed, Toronto has a multi-zillion dollar land transfer tax, the new trillion dollar world wide carbonazi tax to help stop GW (fraudulent lie) among them.

TPTB are taxing us into oblivion.

#201 Humpty Dumpty — Bingo! Except Iran doesn’t have any nukes, Israel does (and plenty of them). What Iran has, like Libya, is a public central bank. Libya’s has now been privatized, their gold taken and the fresh water, from deep below the Sahara is flowing freely to others.

#209 Smoking Man on 01.25.13 at 7:33 pm

Good riddance Dolt McGoof, hated him since day one.

Board jobs coming up, insurance, energy, green.

#210 DM in C on 01.25.13 at 8:27 pm

. It was successful during christmas then the usership dropped off. everyone was panicking about why? Well who is using this other than the odd sheeple shopaholic dingbat? They expect people to walk around in a mall, staring at their phone?

Then when I brought this up to them, they fired me.

+++

Maria — that’s typical of a startup — I’ve spent 10+ years working in technology marketing, and unless it’s a super progressive CEO — the developers come up with the idea without thinking “who would use this” it’s “this is cool” and then you’re expected to find a market for it. Progressive CEO’s do the market testing and analysis first — but then, that’s anathema to what a ‘startup’ is.

#211 cantbuymoneywithhappiness on 01.25.13 at 11:04 pm

My son wanted to buy a share of Apple when it was $320 (summer of 2011); he was 15 at the time. I said how much do you have…he said $400. I said if you earn some money this summer I’ll match it and you can buy a few shares. Deal. Bought him an electric mower with a couple of extra batteries for $400 bucks ( I needed one anyway) he used it all summer long in our neighbourhood and made $1600 by the end of summer. I said let’s buy that Apple stock now (it was about $375 by then but he earned it). He thought the lawn mower was a better idea. I really love my son!

#212 EIT on 01.26.13 at 12:46 am

Comon guys, this isn’t a gold blog, i’m being super serial.

#213 Westcdn on 01.26.13 at 6:42 pm

Double Irish with a Dutch Sandwich
When people value Apple stock, they often point out the cash on the balance sheet as the positive it is. This is money that could be used to pay dividends and invest in new innovations that people will buy. Trouble is that most of this cash is trying to avoid taxation. As things stand, this cash will not be repatriated to the US domestic economy unless a major change occurs. I would not count on a reasonable dividend from Apple for a long time, if ever.
Here is a simple explanation of the tax scheme: http://thebeerbarrel.net/threads/double-irish-with-a-dutch-sandwich.16982/
I am sure a large portion of the cash would go to the right people if it could be brought home with little or tax implications. Other companies which employ variations of the scheme wrote the following letter to Congress and the White House outlining their plight. http://www.winamericacampaign.org/
As an investor, I would discount Apple’s cash hoard as a reason to own until a tax deal is cut to bring the money home. It will be a sad day for ordinary taxpayers.