Perspective

FROLIC modified

Some days you never forget.

It was a Monday in mid-October twenty-nine years ago. Outside my office in the newsroom sat a state-of-the-art wire machine installed so I could have a direct connection to the stock markets, and pick up breaking financial news long before it would show up on the screen of my 84-pound IBM terminal with the loopy, flashing orange cursor.

The Dow machine came complete with a bell. Yes, a bell. Like a cow. When something major happened, it rang.

So the noise started in earnest around noon, and was pretty much constant by four in the afternoon. Markets were not swooning, crumbling or crashing. They were imploding. By the close of trade, the Dow had shed almost 22.61% of its value – the greatest loss in history. By a long shot. That compared with a declines of just 6% or 7% leading into the Great Depression of the 1930s, (or 2.3% today) and everyone was stunned.

As the Dow machine spewed out an endless ribbon of four-inch-wide newsprint covered with ALERTS and BULLETINS, a crowd formed around it – editors, reporters and newspaper execs who now expected me to tell them what it meant.

“I think we’re screwed,” I might have said. And I trotted off to the photo librarian to gather pictures of homeless, hopeless, unemployed wretched guys lined up at a soup kitchen in downtown Toronto in 1933.

To this day I regret publishing them in the mass-circulation paper the next morning. What an idiot. But then, I was just being human. And learning.

Ten years ago Dave died at 75 years of age. He was a salesguy and left Sue, ten years younger, a small house and a single $50,000 Canada Savings Bond in a metal box in the furnace room. She’d been at home for years and had but a modest monthly CPP cheque. So she sold the house and, as a neighbour, asked me what to do with the $350,000 she now had.

I set her up with a trusted, ethical, conservative advisor who put here into stable funds and arranged a monthly draw to pay her rent. Then 2008 happened. Markets tumbled. Sue’s funds lost about 25% of their value and the advisor told her to ignore things. They’d come back. Markets lay eggs sometime, but history showed they always recovered.

Sue freaked. She sold at the bottom. She moved what was left into her savings account at CIBC and for the next six years she made regular withdrawals – ever smaller – to live on. Without any growth in her money, she ran out of it about a year ago. Her situation now is appalling. And it was self-inflicted. She was just being human.

As you may know (or not), in 1987 markets roared back more than 10% in one session just two days after they had plunged. Within months, the loss was erased. Also in 2009 and 2010, as Sue’s money sat moulding in a bank vault, investors reaped a windfall return as confidence and equity values soared. Those who sold in the downdraft were creamed. Those who bought from the sellers prospered.

Remember these things as you read the idiot comments published on this blog by people you’ll hopefully never meet.

For example, with regard to the American market, consider history before you get too squirrely. Without over-complicating the matter, look simply at full, calendar-year returns. How often does the market trade higher? Over the past 75 years, more than 73% of the time. In other words, the odds are clearly in your favour that during any given year, you’re likely to make money.

If your holding period is longer—10 years for example—the odds of a positive return are even more stacked in your favour. The S&P 500 virtually never records an annualized loss over a rolling 10-year holding period. Historically, the odds of the S&P 500 recording an annualized positive gain over 10 years are 90%. Create a balanced portfolio with some bonds and fixed income exposure to offset the negative equity periods and your odds of recording a positive annual gain increase even more.

So if you have a portfolio like that, chill. Be objective, not emotional. Consider buying when others are moaning and whimpering. Never make big decisions when asset values are plunging or leaping, because the current situation will not last. Keep your eye on the day you need the money, not today. If you’re investing for a down payment in five years or retirement in ten or your kid’s education in twenty, why are you stressing now? Get some help. Turn off BNN. Stop reading pathetic financial blogs. Especially the damn comments.

Above all, recognize that fear is the dominant human emotion. Bigger than love. Anger. Hunger. Envy. Sex. Even fondling puppies. We fear loss more than we enjoy gain. We’re also victim to recency – we believe things that go up (Vancouver houses) will go up forever. Or that things going down (Chinese stocks) will go to zero.

We actually suck at investing. It’s why most people are financial failures. A few learn that early, and change. Others don’t, and become Sue. Your choice.

255 comments ↓

#1 Ryan on 01.07.16 at 5:39 pm

First!

#2 ARP on 01.07.16 at 5:42 pm

This sums up why we diversify out of Maple :)

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/01/20160107_EOD14.jpg

#3 P dog from AB on 01.07.16 at 5:43 pm

With the high dividends the big oil is paying are they worth a LT buy today?

#4 Herf on 01.07.16 at 5:44 pm

“Keep your eye on the day you need the money, not today.”

What if you happen to need the money today?

#5 calgaryPhantom on 01.07.16 at 5:49 pm

“Keep your eye on the day you need the money, not today.”
—————————————————————-
You never know when you will need that money. Life has funny plans for you.

#6 not 1st on 01.07.16 at 5:50 pm

Ahhh 1988. Its exactly like it was back then, except there wasnt even a chinese economy or stock market, world debt was a million times smaller and you could still find a pair of shoes actually made in your own country.

And sure black monday was just one day, but remember it rang in a 5 year recession that lasted until 1994 and destroyed Japan and toronto real estate in the process.

#7 Frank on 01.07.16 at 5:50 pm

It’s been gravy since 2009. Maybe this is the 2-3 year beating that happens now and then. That’s fine, is what makes dollar cost averaging great. Now if I also have money for a downplayment, where does that money go?

#8 Drunk Actuary on 01.07.16 at 5:50 pm

#4 Herf on 01.07.16 at 5:44 pm
“Keep your eye on the day you need the money, not today.”

What if you happen to need the money today?

If your investment horizon is shorter than 1 year your portfolio should be ultra conservative.

#9 selloff continues on 01.07.16 at 5:52 pm

But where is the money going and why are big investors pulling out of equities? Are they all that dumb? I’m not trying to be smarter than some of these big funds who are obviously liquidating their portfolios.

The buy signal came after the US election, after the FED announced they would turn on the taps, after China said they would stimulate and I remember this like it was yesterday.. President Obama in some appearance at a factory somewhere encouraged Americans to go out and buy stocks.

The rally started then and there.

I’m sorry, I don’t see any upside or catalysts at this juncture to entice me to hit the buy buttons just yet.

I’ve been out since 2012 and it felt often stupid to be just in cash or cash equivalent but another strategy I’ve learned over the years is to be patient and nimble.

Tempted oh yes, but waiting until I hear or see the big “buy signal”.

#10 Why Why Jay on 01.07.16 at 5:53 pm

And this is why I’m excited about the current markets. I’m now in a position to invest more money than previously. Every day I see values go down I get more excited. Every day I see the CAD drop more I’m happy (more buying power from my USD income.. glad I negotiated rates with US customers in USD).

The money I’m investing now will sit for a good 20-30 years. Rebalance periodically, add more money consistently and we’ll be good to go come retirement.

#11 Steven on 01.07.16 at 5:54 pm

Thank you for the calming words Mr. Turner

#12 A Canadian Abroad on 01.07.16 at 5:55 pm

Remember bottoms form when Fear turns to Panic turns to Opportunity…

See chart: http://image.minyanville.com/assets/FCK_Jan2011/Image/marissacarl/01-24saut2.jpg

Opportunity is coming again.

#13 JSS on 01.07.16 at 6:01 pm

Best article today by the best financial guy GT!

#14 Harbour on 01.07.16 at 6:03 pm

Worst start in the history of man kind

Dow has never been down 5% in first 4 trading days in history

#15 Imperial force on 01.07.16 at 6:03 pm

BAM you nailed it.
Along with my balanced Gartho portfolio I have about 10 percent high risk in my TSFSA and today my friends was a great day to capitalize on fear and emotion.
I loaded up on the one thing that no one wants any part of today ( solid, established, low debt canadian gold mining stocks )
These stocks and being way over punished by association, and the discounts make them juicy.
You see just like Garth I feel the canadian dollar will fall further and stay down for some time.
Having said that the Forex on canadian commodity stocks is not always taken into consideration.
As we know gold is priced in U.S dollars and when A canadian digger sells they get paid in U.S and convert to Canadian. The collapse of the gold price when including Forex is almost the same price as it was 3 years ago but only for a canadian gold company.
The key is to find the ones that are established and have no debt, they will prosper just like the readers of this blog.
The ones who have borrowed too much are in big trouble.

PIGS GET FAT< HOGS GET SLAUGHTERD

#16 H on 01.07.16 at 6:04 pm

“I predict a rip your face off rally coming”

courtesy CNBC, December 20th.

You sound identical Garth.
PS

SPXU

All you need. And some popcorn.

Never watch CNBC. — Garth

#17 David on 01.07.16 at 6:08 pm

Almost perfect timing for that TFSA contribution.

#18 pinstripe on 01.07.16 at 6:08 pm

QE was the biggest financial experiment that FAILED.

The global debt is mindboggling.

The wiggle room is bordering on NIL and the politicians will never admit to making a mistake.

The politicians have forced most people to lose ALL trust and confidence in their governing. Non savers are rewarded and savers are punished.

#19 canuck on 01.07.16 at 6:09 pm

Remember these things as you read the idiot comments published on this blog by people you’ll hopefully never meet.
______________________________________________

Incredibly astute… Right out of the ballpark.

#20 Felix on 01.07.16 at 6:10 pm

Nice pic. I know those dogs. They messed with me. Once.

I took care of things.

Cats always do.

#21 H on 01.07.16 at 6:11 pm

I watch CNBC to gage the logic. Like why Apple is worth more than Exxon or where “fang” is the futures of trading.

We are witnessing the unwinding. You should tune it at 7pm for the main even on CNBC. You can watch live what will happen to China in 3 hours

#22 Godth on 01.07.16 at 6:12 pm

The problem is that the next 75 yrs. will look nothing like the last 75 yrs. We’ve multiplied and digested this planet, nothing grows forever – not even cancer.

Down the Ratholes of the Future
http://thearchdruidreport.blogspot.ca/2016/01/down-ratholes-of-future.html

“This time it’s different.” The young are so cute and predictable. — Garth

#23 jim on 01.07.16 at 6:13 pm

May the odds be in your favor.

Can what was said about the stock market also be said about the real estate market?

Don’t house prices go up over the last 75 years like stocks have?

#24 paul a on 01.07.16 at 6:13 pm

curiously remember that day at 333 king st e

#25 Steerage Bilge on 01.07.16 at 6:13 pm

Hey Garth, did you give out free subscriptions over the holidays to doomers? Wow, you seem to have reeled in a whole new flock of them…..

#26 paul a on 01.07.16 at 6:14 pm

even though i was from the 11 Ontario street crew

#27 don on 01.07.16 at 6:14 pm

Garth, I dont think it is fair to compare 1987 to today. We are so much further down the rabbit hole than then. I think most people who are interested in economic history realize that we are headed for a major fall. It will happen when the future is absolutely out of money and not a day before.

#28 SquareNinja on 01.07.16 at 6:14 pm

#165 Mark on 01.05.16 at 8:14 am

Thank you so much for the detailed reply – didn’t see it until today (wasn’t back here for a few days). I can now be happy that I have debt in CAD and earn (some) USD.

“We actually suck at investing. It’s why most people are financial failures. A few learn that early, and change. Others don’t, and become Sue. Your choice.”

So basically, Garth and blog dogs, would you support a Guaranteed Basic Income for Canadians? What about even further into the future when things are all Star Trek-like and money doesn’t exist? (This could happen a lot sooner than we think, what with the astounding growth of Artificial Intelligence.)

#29 paul a on 01.07.16 at 6:17 pm

so whats your call ? does history repeat?

#30 JSS on 01.07.16 at 6:17 pm

YAHOO!

Canadian Utilities Limited Eligible Dividends: Common Share Dividend Increased 10 Per Cent

http://finance.yahoo.com/news/canadian-utilities-limited-eligible-dividends-221307597.html

#31 Love my Kia on 01.07.16 at 6:18 pm

I am one of those shameless gold bugs that a poster said last week I was hiding in the woodwork. I post here often so I don’t hide but yes am shameless.

That being said, there is something to be said for the rise in gold in these latest weeks. I think we are seeing a pivotal change right now in the markets to stagflation (high prices, low growth), which is ideal for gold stocks. Could gold be the reason why the TSX hasn’t lost as much as the DOW recently? I hold US investments (and a fair bit of USD I am going to cash in – tks Garth), but I also hold maple because of gold.

I am thinking long term so I am not worried. Its a good read today to keep the masses calm and puts me in emotional check.

#32 Godth on 01.07.16 at 6:22 pm

“This time it’s different.” The young are so cute and predictable. — Garth

No, this time it’s no different at all, except the scope and scale. The geezers that think they’ve seen it all, so learn nothing, are are so pathetic.
The result is the same every frickin time, every time in a repeating pattern.
http://www.amazon.com/Short-History-Progress-Ronald-Wright/dp/0786715472

#33 GsAmazon on 01.07.16 at 6:25 pm

soooo….we want MORE COWBELL?! ;)

#34 jimmy on 01.07.16 at 6:25 pm

Ya do know this was the dow worst start to the year ever…

Buy low sell high, and, may the odds be in your favor.

#35 Bby604 on 01.07.16 at 6:25 pm

http://www.cbc.ca/news/canada/toronto/5-reasons-toronto-house-prices-won-t-crash-in-2016-1.3393299

4. There is no ‘bubble’ to burst

You’ve heard it before: the bubble has got to burst. Investment expert Hilliard Macbeth predicted last spring that Canadian houses prices will crash by as much as 50%. David Madani, the Canadian chief economist of global forecasting firm Capital Economics, warned of a housing price slump back in 2011. He did it again in 2013. And he did it again last spring. Financial author Garth Turner has been predicting a crash steadily since 2009, when the market rebounded following the recession.

“Toronto’s not a bubble by any definition,” Pasalis said.

Wiebe described a bubble as “when people buy houses purely for speculative reasons, with the sole motive of making money.” He said that’s not what’s driving Toronto’s market now.

The time that Toronto’s bubble truly burst was in the early 1990s. That followed a crazy period when the average house price doubled in just three years. GTA house prices have not risen at anywhere near that pace anytime in the past two decades.

Ohhh snap Garths getting called out on the cbc

#36 Harlow on 01.07.16 at 6:26 pm

What a bunch of grade A baloney. This is just the start- This market is the most overpriced in HISTORY. The US economy is not ‘in recovery’. Dr. copper and Baltic dry index, manufacturers index, are just 3 accurate barometers of the real economy that are ALL near 30 year low’s. Dump while you can and get hard assets. I.E. Physical gold and silver in your posession. Why do you think they are both going up while everything else is going down??? Sound money. Safest assets in history. do not listen to those who profit off of the debt and death paradigm. “The big short” was a warm-up

#37 Freedom First on 01.07.16 at 6:29 pm

….We actually suck at investing. It’s why most people are financial failures. A few learn that early, and change.————Garth
…………………………………………………………

Yes. I learned early. I thought as a very young man that people were financially insane. Then I became educated in finances, in night school, though consider myself mostly self-taught simply by seeking more knowledge in every area of my life. So, what I thought as a young man barely out of my teens , that people were indeed financially insane and ruled by wants and emotions, proved to be very true. My Boomer peers proved it to me in my twenties. Although I already knew the theory and practical from study.

Yes. No one ever went broke underestimating the intelligence of the public. World wide housing busts and recessions, and Canadians missed it. I said here 2-3 years ago that Canadians were sleeping.

Sues are in the majority. Throughout history.

#38 robert on 01.07.16 at 6:29 pm

I always prefer to look a little stupid trade after trade and be in cash, than to be really stupid and still be long in names that may never comeback. I am sure you could name many that may even be sitting in your clients portfolios.

I do not buy individual stocks. Nor should you. — Garth

#39 Harbour on 01.07.16 at 6:30 pm

#30 JSS on 01.07.16 at 6:17 pm
YAHOO!

Canadian Utilities Limited Eligible Dividends: Common Share Dividend Increased 10 Per Cent

…………………………………………………………………..

When a company increases it’s dividend it’s a bad sign on the stock.

#40 Vancouver Troy on 01.07.16 at 6:31 pm

Anyone else picking up shares of AAPL at this price?

#41 Ray Skunk on 01.07.16 at 6:32 pm

#18 – couldn’t agree more with your assessment.

We’re all screwed. Ontarians more than others. I want out of the country entirely, but Sunny Days’ string-pullers have instructed Poloz to crumble our currency to imprison us to the tax, borrow and waste utopia we now find ourselves in.

I simply cannot see the CAD getting back up to par for the foreseeable future – and I should have acted months ago on that. Like in Ontario, Butts will ensure that a critical mass of voters, fed (mis)information by the backhander-paid, third-party union advertising machine (and combined with the new rig-the-game election proposals) will return a corrupt, wasteful, economically illiterate Liberal government for years to come. Ontario was the experiment now being forced upon the rest of the nation.

#42 Love my Kia on 01.07.16 at 6:34 pm

What’s wrong with CNBC?

#43 Vundo on 01.07.16 at 6:37 pm

Yes! This is precisely why I am keeping calm and investing with balance and diversity. I am neither neglecting nor doubling down on anything in particular, just sticking to the plan. It will be the same when things are going full steam ahead. Easy. The only reason I need to read this blog is that the whispers of financial irresponsibility are always there when I see an ad for a shiny condo that I might be able to afford. I know better, but it never goes away completely.

#44 OXI in GREECE on 01.07.16 at 6:37 pm

Sounds to me like its getting harder and harder to sell stocks.

Based on what? For every sellers there is a buyer. — Garth

#45 james on 01.07.16 at 6:39 pm

#28 SquareNinja

“What about even further into the future when things are all Star Trek-like and money doesn’t exist?”

One of the many reasons Star Trek is idiotic nonsense for children is that it assumes that removing resource scarcity will somehow transform humanity from the descendants of predatory tribal apes into a legion of altruistic do gooders.

“This could happen a lot sooner than we think, what with the astounding growth of Artificial Intelligence.”

Funny, as someone with advanced degrees in relevant fields who works on machine learning and constraint satisfaction for one of the world’s elite software companies, I have no idea what you are talking about. I have yet to see a prototype of a replicator machine described in a AAAI journal article.

Grand visions of a utopian future are easy. Human history does not provide much evidence that they will obtain.

For instance, do you truly think there are no consequences to your minimum income scheme? Do you really think that creatures who evolved in conditions of resource scarcity will experience no adverse effects when placed into a different environment?

#46 Retired Boomer WI on 01.07.16 at 6:40 pm

So, easy come, easy go……. Actually I am not THAT worried. Ok, lost about 9 large in three days is going out a lot faster than it accumulated mostly, but…

It all boils down to market manipulation.
Chinese market manipulation, that is. We have circuit breakers too, that shut things down for an hour or so, then they restart. China hits the breaker -the day is OVER!! If my money were trapped there, I would be peeved, and would get the hell out! Seems I would not be the only one with that sentiment.

Fortunately the bulk of mine is in US based stuff, some Europe and the far east, and then those bonds, and preferred in an ETF.

Stocks go down, the rest tends to go up.

China is no “Free Market” it is a manipulated market, and not allowed to find its comfort point easily, I believe aggravates sentiment, and emotional decisions by investors. I have no idea where this ends, and neither does anybody else.

I have seen 1973-74., 1987., 2000-2003, 2008… now this puke fest. The one constant in all of the above dates, we moved past them markets recovered and prospered!

Look at a dow chart from 1900 through right now. You will note the inevitable direction over time is UP! Yes, you can see the 1929-1932 loss of 90%. Yes, you will other zigs, zags when 30% 40% even 50% was lost. History now.

So today we have lost what 8% since the new year? Sure if this keeps up for a month it will be how you say, bloodier than the Beatles Butcher Cover album of yore.

I’m leaving my well balanced holdings alone. I’ll look to scrounge up a few more bucks to add to things when capitulation is nearer.

Yes, that IS how you make money buy, when others are selling!

Yes, owning brass noogies at times like this helps.

IF you are thinking about selling -please do NOT.
Give it a few months, not a few days. If you are still sleeping poorly, sell some stock stuff down to the ‘safe sleep’ level. Put the rest in safer things (NO GICS).

RB M64WI

#47 james on 01.07.16 at 6:43 pm

Back to relevant topics (and away from the ravings of futurists with no expertise in the topics they are prognosticating about), I’m all for a sustained drop in the markets. My portfolio is down significantly over the last few days. It was honestly creeping me out to look at a chart of the major indices over the last few years, and a pullback is healthy.

Will it decrease further?

Who knows. I’ve learned (probably through Garth and experience) not to try to time markets absent insider information.

Where I think he is a little out of date, however, is that he talks about markets and ‘investors’, as if human beings are making decisions. In fact, software makes 77%+ of the trades on exchanges. It is becoming increasingly difficult to sustain the old notion of efficient markets, prices as a reflection of investor valuation and all the rest when trading is increasingly a game of competing algorithms looking for profit on short-term time horizons.

#48 For those about to flop... on 01.07.16 at 6:44 pm

The hole in my portfolio goes all the way to China…

#49 Tinker Bell on 01.07.16 at 6:45 pm

The Kiss rule- keep it simple sheeple.
The purpose of government is to transfer the fruits of Your labour to
London. “More tea M‘Lord?”

#50 acdel on 01.07.16 at 6:45 pm

People, calm down! Sure we are going through a slump, but what we have here in Canada is what the world needs, resources! Last time I checked the worlds population is not going down. Live within your means, invest wisely and ignore “The American” which has some sort of fixation with barn animals (to each there own), by the way keep printing those imaginary dollars and see where it gets you, China is knocking at your door,ha,ha! Our provinces need to start acting like we are part of one great country as opposed to self interests.

#51 what bubble? on 01.07.16 at 6:46 pm

not to worry, our bankers always say: “we are richer than we think”. repeat it several times and it’ll make you feel better about your financial standing in life.

#52 Silent the people on 01.07.16 at 6:48 pm

Money is created, lost and nothing more! The markets will be unpredictable most of 2016. Smart investors will sit tight and watch. This is one time to avoid impulses and wait! Governments will show us how to screw things up!
T2 will be remembered for all the reasons he won’t like!
“We’re screwed” will occur again! Too bad! This won’t end well!

#53 steerage steward on 01.07.16 at 6:48 pm

Sage advice as ever. My automatic savings plan just ticks along, and I follow the markets for entertainment, not to constantly make adjustments to my financial goals.

Would recommend blog dogs follow the Canadian Couch Potato blog http://canadiancouchpotato.com/. Of particular interest are the archived posts on behavioral finance http://canadiancouchpotato.com/category/behavioral-finance/

#54 ROCK BEATS PAPER on 01.07.16 at 6:49 pm

Garth,

CBC news trolled you in this article:

http://www.cbc.ca/news/canada/toronto/5-reasons-toronto-house-prices-won-t-crash-in-2016-1.3393299

I doubt you have been calling for a housing crash since 2009!

BTW, are you buying the China stocks ETF? They seem to have had a move similar to the ’87 crash.

#55 BC Guy on 01.07.16 at 6:53 pm

Why isn’t Poloz defending the Canadian dollar?

Would it be too much to ask him to raise rates by a measly 1/4% to prop up the dollar? OK, I’m not looking for parity with the US right away, but at least support it up to 80 cents!

What does Poloz actually get paid to do? Probably half a mil/year to sit in an office and read the same charts and graphs Joe public does, then once every so often decides to raise, lower or keep rates the same. Most of the time, he does nothing.

Sheesh, fire the poor bastard, make me Governer of the Bank of Canada, I will work for HALF of what he’s earning, I will defend and support the Canadian dollar by raising rates by 1/4 percent as needed. This will also help pop the real estate bubble in TO and Vancity, and it will reward savers a tiny bit more than currently.

#56 Tinker Bell on 01.07.16 at 6:54 pm

A 1933 soup kitchen?
The 21st century eqivalent would be permanent food banks and the IKEA
Cafeteria, which takes credit cards.

#57 Dee on 01.07.16 at 6:58 pm

If you follow Garth’s advice, you’ve got $5,500 in fresh money in your TFSA account this week just waiting to buy from the sellers. And when the rebound comes, you won’t pay a cent of tax on the profits.

#58 Dan on 01.07.16 at 7:00 pm

What if the secular bull market uptrend in Western stock markets, in place since the early 80s, is ending? Or if the 30+ year bond bull market ends?

Naturally Garth will dismiss it outright. He’s a boomer who lived through the greatest economic expansion in history. Great Depression 2? Nah, that could never happen. All the people who suffered through it viscerally are all dead now. Of course. We’re only leveraged to the hilt at the government and individual level unlike anything before in history.

No monster crash fear mongering, gloom and doom or gold buggery. Nice try. But here’s a prediction to chew on:

The 60% growth/40% fixed income portfolio, supposedly the “sure path” to long term wealth creation, will be a perpetual loser for a generation.

You just made that up, right? — Garth

#59 jaybee on 01.07.16 at 7:01 pm

I love it when stocks go on sale!

I went shopping today. Bought some Apple, Mastercard, Disney, and some Telus here at home.

#60 Leo Trollstoy on 01.07.16 at 7:01 pm

I hugged my US rent cheques a bit tighter today.

#61 Dead Dog on 01.07.16 at 7:03 pm

“Be Brave, Stay Calm, Wait for the Signs” applies here.

Also, outside of our financial fears, love your neighbour, be overly generous, renounce injustice, and always listen to your spouse!

#62 Scumop on 01.07.16 at 7:04 pm

Fear.

I fear running out of money and living under a bridge far more than I fear a few % drop in a few ETFs. My irrational human nature tells me the ETFs are likely to rise in a time frame good enough to save me from living the under a bridge lifestyle.

Plus what I have went ex div so I blew that money on more. Call me crazy.

#63 Mark on 01.07.16 at 7:09 pm

“Why isn’t Poloz defending the Canadian dollar?”

Because there’s nothing wrong with the Canadian dollar. It only lost 1.4% last year against the basket of goods and services Canadians actually consume, and, as the Canadian economy continues to slow, probably will lose even less than this year. The official target for loss of value of the Canadian dollar is 2%/annum. This means that interest rates probably need to fall even further.

Besides, with the deflationary forces so strong in the Canadian economy, a reversal of the CADUSD pair is inevitable. Just as I predicted, the gold sector is starting to power up again in response to global deflationary forces. RE prices are falling across Canada. Retail/consumer lending spreads are widening. The only shoe to drop at this point is the CAD$ going much higher and truncating the dreams of CAD$-debtors who think they’ll be able to shirk their responsibility through devaluation.

Inflation does not equal currency devaluation or vice versa. The dollar lost 16% of its value last year against the global reserve currency. — Garth

#64 Leo Trollstoy on 01.07.16 at 7:11 pm

Here you go Garth, I heard you like these kinds of things.

http://i.imgur.com/aImFONh.gifv

You’re welcome.

#65 TRT on 01.07.16 at 7:11 pm

I have a different view. Pull your money when trouble is brewing. Shift asset classes. Dog eat Dog (sorry Garth) world out there.

Here is an interesting number. The TSX is at the same level in April 2006 as it is in Jan 2016. Stats= lies.

Moneywise, its how much cash and assets you have whether crystallized or not.

Best investment in Canada since the turn of the century (2000) has been YVR houses where you didnt need any money to buy yet got all the gains.

#66 Freedom First on 01.07.16 at 7:13 pm

#20 jim

jim, you sound unbalanced.

#67 For those about to flop... on 01.07.16 at 7:14 pm

#33 Dee on 01.07.16 at 6:58 pm
If you follow Garth’s advice, you’ve got $5,500 in fresh money in your TFSA account this week just waiting to buy from the sellers. And when the rebound comes, you won’t pay a cent of tax on the profits.

////////////////////////////////////

Hey Dee,yeah I never invested the extra$4500 that the Conservatives tacked on as things weren’t going that great last year so I’ve 10k of dry powder ready to go in my TFSA.
With things looking shaky my plan is to buy 5 different things to spread the risk.
I’m gonna wait til the the end of January to the most rotten fruit is off the trees…

M41BC

#68 TRT on 01.07.16 at 7:15 pm

#53 jaybee on 01.07.16 at 7:01 pm
I love it when stocks go on sale!

I went shopping today. Bought some Apple, Mastercard, Disney, and some Telus here at home.

——-
Good for you. I bought Euros 2 days ago….as i told you i would last week.

#69 The American on 01.07.16 at 7:16 pm

At #50: acdel, you mean the same China that shed over 7% last night, so the government stopped trading? Oh yeah, that China that’s “knocking” at the U.S.’s door. LMFAO. Get real. BTW, hows that loonie treating you?

#70 Godth on 01.07.16 at 7:16 pm

Memory holed my response to your pathetic retort eh? Sad, just pathetic. I guess that means you had no intelligent response so ….ignore. Enjoy your ignorance.

You sound like a troubled person. — Garth

#71 Godth on 01.07.16 at 7:18 pm

Woops, apologies – I see it now. My bad.

#72 Buy what others are selling? on 01.07.16 at 7:19 pm

You’ve said 20% in USD

But I’m wondering, with CAD at about 70 cents to the dollar, and TSX down below 13000… and based on all the “it will recover, don’t sell”

Would you recommend we buy in these dips more Canadian Equity? The downside seems low, the upside much higher. Or am I missing something?

#73 Harbour on 01.07.16 at 7:21 pm

#40 Vancouver Troy on 01.07.16 at 6:31 pm
Anyone else picking up shares of AAPL at this price?
……………………………………………………………………..

If you like AAPL at $95 you’ll like it even better at $75

#74 Shawn on 01.07.16 at 7:24 pm

Very very good advice!

What do you think of the TSX at these levels? Is XIU a buy or do we have a bit further to fall (5-10%)? I think we’re getting pretty close to the worst being priced in (i.e. a recession and housing bear market).

The recession we’re currently in is analogous to the 1980-82 recession for Canada. The chart of the TSX (1974-82) looks eerily similar to where we are today. Mid way through the recession, the TSX rocketed (along with ex-US markets) and outperformed the S&P 500 in the intermediate term until the crash in 1987.

I think most ex-US markets (i.e. VEU, VDU, VEE, VE) are a steal at these levels and the US (i.e. VUN) is still a buy also. I’m currently 100% US.

Your thoughts?

#75 Harbour on 01.07.16 at 7:25 pm

The Chinese removed their -7% market breaker today after hitting it twice this week.

Let it play out and quit interfearing

#76 Mark on 01.07.16 at 7:26 pm

“Would you recommend we buy in these dips more Canadian Equity? The downside seems low, the upside much higher. Or am I missing something?”

An investor with a balanced portfolio, and an asset allocation with a fixed percentage being Canadian would, on account of the underperformance of Canada and the CAD$, be rebalancing into more CAD$ assets.

The point Garth often tries to make is that those who just do things willy-nilly usually lose out, while those who engage in balance, with structured portfolios, algorithmic rules for rebalancing, and tax efficient asset allocation, usually do much better. And he has amassed a considerable client base through such advice. You won’t turn $100 into $1M by investing on Garth’s advice or under his guidance, but the chances of totally flaming out and having $0 are next to non-existent.

I happen to personally believe that the TSX is on the cusp of a bull market which will take it double or triple current levels over the next many years. As the cyclicals that heavily comprise the index have been so beaten down that eventually things are apt to reverse course violently. But timing is difficult, and even an 80% discount can turn to a 90% discount in the short term. That’s why being methodical is important.

#77 Goofy 2 Shoes on 01.07.16 at 7:30 pm

Was there a good understanding of this woman’s risk tolerance?
It’s not just by number of years to invest – but by how comfortable she was with the percentage invested in other that safe investments. Sitting with an advisor who gives them a temporary brave pill does nothing when sitting alone watching the bad news unfold on the news.

The greatest risk is the one she reaped – running out of money. — Garth

#78 acdel on 01.07.16 at 7:33 pm

#69 The American
Not so good now but let’s have this discussion after your election, we still have and always will have in Canada what your country will need in the future (resources). Keep printing those bucks, eventually (perhaps sooner as their markets are crashing) the Chinese will need the cash in on there American bonds that they have been buying for so many years. Have a great evening snuggling to your pals in the barn, little buddy!

#79 Rexx Rock on 01.07.16 at 7:33 pm

Like I said UVXY AND TVIX are for trading and take profits.Let them pull back and take small share size for risk control.I think the market will tank big time.Short over valued stocks and reap profits.

#80 Warren - the lagging indicator on 01.07.16 at 7:35 pm

No MP (or citizen) should be told what to believe, especially on an issue of morals and faith. — Garth

I think liberals believe that morals and faith can not be separated from policy decisions. They may be right. Of course, ideology trumps rational thought and they would have no problem with someone who supports and believes in Sharia law as an MP… just Catholics.

#81 Godth on 01.07.16 at 7:36 pm

You sound like a troubled person. — Garth

If you’re not troubled I can only suggest paying more attention. A sense of humour helps.

It’s not like posts don’t get memory holed around here, sometimes appropriately and other times for no good reason.

Your tolerance does amaze me though as I do enjoy pushing the limits and you still post my crap so…tip of hat.

#82 common sense on 01.07.16 at 7:38 pm

call me crazy the past few months but with the exception of CNBC and other mainstream media, all signs were calling for a correction of some sort. Add the fact oil is down with no end in sight, why would anyone have stayed in the market?

If a storm was forecast to be coming would you not take cover?

Do I know when to return? Not exactly but will wait a bit before I dip my toes back into the market pond and do so slowly.

This buy and hold mentality in the face of trouble always amazes me.

A wise investor once claimed “No one ever got hurt taking their gains.”

#83 Former Fool on 01.07.16 at 7:40 pm

#72 Buy what others are selling?

I bought more VCN today in my RRSP. Planning on holding for 30 years. Down 20% from its high and at an all time low right now (well, low in the 3 years the ETF has existed). Could it go down more? Yes. Could it skyrocket? Yes. Could it stay flat? Yes. Nobody honestly knows.

Garth discussed in a previous post how humans try to get cheap prices on every asset but stocks. We buy clothes on sale. We buy laptops on sale. We buy big screen TVs when they are $1000 off. Yet, when stocks go on sale, we run away rather than snatching up ownership in companies at cheap prices. Makes a lot of sense, right?

The adage – buy low, sell high – applies. Most retail investors buy high and sell low rather than buying more.

Control your emotions. Don’t let them control you.

#84 cheekybugger on 01.07.16 at 7:41 pm

“Over the past 75 years, more than 73% of the time. In other words, the odds are clearly in your favour …..”

be that as it may, whenever I hear anyone saying “the odds are clearly in your favour” – I run. Because somewhere down the straight line from my nose I sense a gambler, and I don’t want to gamble away my future with intangible derivatives (call them what you may everything is derivative that sells on Bay st.).

I did rather earn $1000 / PM from a brick and mortar rental unit then pin my hopes on a possible $2000 from balanced portfolio pedaled by an unbalanced mindset.

#85 Paul on 01.07.16 at 7:43 pm

I thought I would call Garth and meet up for a coffee years back when he worked at the Toronto Sun.
I was young then as well ,he insisted we go for a beer as it was rough day on the market.
So down to the bar we went I saw a different Garth that day he would not take no for an answer.
It did not end well?

https://m.youtube.com/watch?v=OnY88imrH78
https://m.youtube.com/watch?v=OnY88imrH78

#86 John Dimingo on 01.07.16 at 7:47 pm

I am glad there is currently economic pressures and tougher times ahead as the years go by Trudeau Liberals and Bill Morneau will have alot of trouble trying to fix anything.

Just like Obama and the U.S. Democrats and so called progressive left keep blaming George Bush and U.S. Republicans that have been out of office for 7 years now.

They own their decisions and can’t escape their crappy, destructive, economic policies as they fail over and over. Socialism and socialistic policies are a grand failure!

#87 johnny on 01.07.16 at 7:50 pm

You know Garth you have the big picture right. But you have woefully underestimated the risk of a major dislocation in the US market this year..the US economy is all smoke and mirrors. Take out QE and stock buybacks and other financial engineering and the US economy continues to such since 2008. But other countries suck more perhaps.
I am waiting for at least another 10 percent drop in the stock markets before buying anything.

#88 pwn3d on 01.07.16 at 8:01 pm

#23 jim on 01.07.16 at 6:13 pm
May the odds be in your favor.

Can what was said about the stock market also be said about the real estate market?

Don’t house prices go up over the last 75 years like stocks have?
————————-
In Toronto house prices gone up every year for 18 years straight. I’m predicting 2016 will be the 19th.

2016 for stocks, CAD, or taxpayers not off to a great start.

Toronto housing lost 32% of its vale between 1989 and 1994. — Garth

#89 Ponzius Pilatus on 01.07.16 at 8:02 pm

Personally, I think we should take our lumps and start over again. At the bottom.
We had a chance in 08/09, but we goofed around with the QEs.
Better an end with terror, than a terror without end.

#90 common sense on 01.07.16 at 8:03 pm

And in the words of Jim Leahy concerning the upcoming
year in the markets…”the shit storm as just begun.”

#91 Fred Netty on 01.07.16 at 8:03 pm

I disagree that Sues poverty is solely self inflicted. The ZIRP has forced starvation through forced selling on hundreds of thousands of seniors and millions more are running out of money within a few years. The senior poverty issue will be Canada’s next great public shaming. It has been our governments addiction to borrowing from itself at zero rates that is the cause of Sues trouble.

But look at the smiley face of the chief fool, Poloz, who parades for every camera he can find and makes light of the devastation and the 15 months of straight failures.

http://news.nationalpost.com/news/canada/canadian-politics/john-ivison-stephen-polozs-outlook-stays-sunny-while-canadian-economy-veers-close-to-the-rocks

Nobody can survive now, or if rates triple, on $300K put into interest-bearing assets. — Garth

#92 the Jaguar on 01.07.16 at 8:06 pm

The Jaguar was in Toronto on that same fateful day in October, 1987, Garth. Engaged in the business of underwriting advances to assist people who wanted to purchase investments, what we call leverage loans, especially those who needed to “catch up” after years of neglecting their nest eggs. It wasn’t small potatoes either. These weren’t IG portfolios. The referral source had a better class of clientele. High profile types. Imagine closing numerous mid figure advances in the week preceding black Monday, all on margin arrangements and then waking up Monday morning to that nightmare. What happened next is the stuff of legend, but can’t be told here on the blog. It’s in times of crisis where true leadership and clear thinking present themselves. Well at least if the right people are at the wheel. Enough said.

#93 Randy on 01.07.16 at 8:06 pm

Still waiting for the Santa Claus Rally !

#94 common sense on 01.07.16 at 8:07 pm

When this guy gets out of the markets….

http://www.bloombergview.com/articles/2016-01-07/market-beating-hedge-fund-capitulates-as-soros-sees-echoes-of-08

#95 NOTHING SURPRISES on 01.07.16 at 8:10 pm

Some food for thought below!

George Soros believes this is the beginning of a major crisis.

Soros is one of the greatest traders of all time. From 1969 to 2011, he generated an average annual return of 20%…nearly double the S&P’s average return of 11%. He’s famous for making $1 billion on a single trade that “broke” the Bank of England in 1992.

Soros warned today:

I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.

#96 Daisy Mae on 01.07.16 at 8:12 pm

#56: “A 1933 soup kitchen? The 21st century eqivalent would be permanent food banks….”

********************

They’ve always been around — food banks, as such. I remember in the forties, a truck driving slowly down the residential streets collecting canned goods. They’re nothing new. Nothing has changed.

#97 Karl hungus on 01.07.16 at 8:15 pm

Okay here’s one for you Garth, I’m going along, making my regular contributions, and then there is a crash. Let’s say 25%. Now, seeing as fortunes can be made in a crash, and I don’t have extra money, would it make sense to borrow money at say, 3%, to take advantage ?

#98 Advanced degrees, etc. on 01.07.16 at 8:15 pm

James, which one is it? Computers taking over trading or predatory tribal apes unable to change?

Pick one and stick to it.

Funny how “advanced degrees in relevant fields” can lead to irrevelant results.

#99 pwn3d on 01.07.16 at 8:15 pm

#54 ROCK BEATS PAPER on 01.07.16 at 6:49 pm
Garth,

CBC news trolled you in this article:

http://www.cbc.ca/news/canada/toronto/5-reasons-toronto-house-prices-won-t-crash-in-2016-1.3393299

I doubt you have been calling for a housing crash since 2009!
———————-
2008 actually, Greater Fool book was published and the blog started then. The archives are still available to read here on the site.

It made a lot of sense actually given what was happening in the US at the time. Markets are just not predictable, I suppose if they were we’d all be rich.

#100 Unhinged Loon on 01.07.16 at 8:17 pm

Guys, just wanted to report that the MK77 Inverse Mark77 Prediction Index is off to a great start with a 7% net increase since it started trading on Jan 4.

#101 Chris in Nanaimo on 01.07.16 at 8:18 pm

I love the smell of panic selling in the morning….

#102 Nagraj on 01.07.16 at 8:21 pm

Hi there.
How ya doin’ ?
Everything tickety-boo? Hunky dory?
How’s the wife ‘n’ kids?

I am of course appalled that no-one here has shown the slightest concern for the 5 DISAPPEARED HONG KONG BOOKSELLERS. (You can read all about it in the South China Morning Post.)
Evidently they was KIDNAPPED and spirited away under cover of darkness to re-education camps on the mainland. Because they was gonna sell this banned tell-all book about Xi Jinping’s love life.
(I myself don’t see what’s to tell since he’s married to Peng Liyuan, the most impressive woman on planet earth today.)

All of which makes me think of those Chinese ladies KNITTING while watching their stock screens.
Which makes me think of the TRICOTEUSES at the guillotine because GT started off a post with, yes, “It was the best of times. It was the worst of times.”

Well, China is such a big place . . . I read where some folks on Wall Street is runnin’ around bleary-eyed cuz they’s up watchin’ Shanghai doings. Long night’s journey into day. The devil never sleeps (and I recall the late great Sen Byrd sayin’ that about the White House on the floor, “The lamps are on all night long, that devil never sleeps”).

Good night, Irene. And good night Mrs. Calabash.

#103 Mark on 01.07.16 at 8:22 pm

“The ZIRP has forced starvation through forced selling on hundreds of thousands of seniors and millions more are running out of money within a few years.”

I disagree. ZIRP has been the best thing to ever happen to the fixed income and low income crowd. It has enabled governments to go on a massive spending binge on social programs to help them. It has suppressed inflation, keeping the value of their savings high. It has provided for capital gains on longer-term bonds and real estate owned by such investors. And it has suppressed the value of commodities by stimulating large amounts of investment in the production of commodities. Additionally, it has reduced the taxes paid by people who live off of fixed income. Real after-tax returns are significantly enhanced in ZIRP.

Its moving away from ZIRP that should terrify the fixed income/senior crowd. Long-term assets such as RE will lose substantial amounts of value. Rising inflation and rising interest rates will turn real after tax returns negative. And governments won’t have much money to spend on senior-focussed programs such as medicare and OAS/GIS welfare if the cost of government finance is higher.

Garth hit the nail right on the head — seniors who are ‘starving’ being invested entirely in short-term fixed income have only themselves to blame, probably because they didn’t invest in balanced portfolios, or simply didn’t accumulate enough assets in their accumulation phase. I do have sympathy for them, but they definitely will not be helped with a rise in interest rates.

#104 Relativism on 01.07.16 at 8:22 pm

Toronto housing lost 32% of its vale between 1989 and 1994. — Garth

—-

Not that bad, compared to “Dow had shed almost 22.61% of its value” in a single trading day.

They both did nice rebound.

The market recovered within days. Real estate took 14 years. This blog is starting to scare me again. — Garth

#105 dosouth on 01.07.16 at 8:22 pm

Here comes the HAM money according to the Vancouver Sun as the Chinese markets continue to slide…..

New wave of investment from the east….maybe?

#106 Mark on 01.07.16 at 8:24 pm

“Guys, just wanted to report that the MK77 Inverse Mark77 Prediction Index is off to a great start with a 7% net increase since it started trading on Jan 4.”

How so? The gold sector has been up dramatically over the past few trading days. Barrick up 10% today alone.

Additionally, my prediction of mortgage interest rate spreads going up has also come true, with recent RBC announcements.

So why don’t you take your troll elsewhere instead of bending the facts to reflect whatever misguided hatred of me that you hold?

#107 Linda on 01.07.16 at 8:24 pm

Gold, silver, gems – this is shiny metal & rocks. I’ve never understood the way people act regarding these things. You CAN actually eat gold, silver & even gems – in small quantities, anyway – but as far as I know they don’t actually have any value as a food. Some folks think they can cure disease by eating some combination of special ingredients wrapped in gold or silver leaf.

Anyhow, I just shake my head when people talk up the value of gold/silver/gems. They have useful commercial properties & yes they are pretty – but in post apocalypse world they really are not that valuable a commodity. Potable water, foodstuffs (especially seed stock to produce more), warm dry shelter, medicines – those are the essentials that truly have value.

#108 common sense on 01.07.16 at 8:25 pm

#79 Paul

Thanks for that clip out of the movie THE LAST DETAIL.

Perhaps one of my top 5 of all time. Especially the line from the black sailor about women when he is educating Randy Quiad after his first experience with a hooker.

Priceless.

#109 Smell on 01.07.16 at 8:25 pm

“I love the smell of panic selling in the morning….”

Doesn’t smell original.

#110 Perspective - Realties.ca on 01.07.16 at 8:39 pm

[…] Source: http://www.greaterfool.ca/2016/01/07/perspective-4/ […]

#111 It's always different this time on 01.07.16 at 8:41 pm

Blog dogs, the sky is falling! This is no time for calm. It’s time to run around in circles yelling into the phone: “Sell! Sell! Sell! It’s REALLY different this time! “.

Yep it’s so different now. There is no hope for the TSX and S&P. Just like the last time.

#112 earlybird on 01.07.16 at 8:45 pm

Too much ZIRP for too long caused this gong show….for the love of god, Polos should stop digging! Some people are not comfortable with risk no matter the reason….man I feel for fixed income folks…soon they will be getting nothing…We ALL know inflation is well above the BS amount of 1.4%. I bet housing reflects the true rate of inflation.

#113 Linda on 01.07.16 at 8:47 pm

#102 Mark: It is easy to say ‘only have themselves to blame’ but in the sad example given by Garth, here is a woman who only had modest CPP plus the $50,000 bond & the value of the house. As per dates given, she would have been born in 1940 or 1941 if she were 65 in 2006 (10 years ago). If she worked outside the house during her adult life, she was highly unlikely to have a high paid, professional career. She was more likely to be in a secretarial or clerical position & very low paid at that. Sure, she could have educated herself about finances but – there are plenty of well educated, financially literate & well paid people who did exactly what she did when the 2008 meltdown occurred. Her misfortune is that at her age, she had neither the time or the assets to recover from the mistakes she made.

#114 Arb Watson on 01.07.16 at 8:48 pm

Dollar Cost averaging is the key these days from selling some of the funds last year. Don’t know where the bottom is as no one does. Don’t really care where it will be, but will scoop some shares from the running for the door crowd.

#115 Relativism on 01.07.16 at 8:49 pm

Relativism

Toronto housing lost 32% of its vale between 1989 and 1994. — Garth
—-
Not that bad, compared to “Dow had shed almost 22.61% of its value” in a single trading day.

They both did nice rebound.

The market recovered within days. Real estate took 14 years. This blog is starting to scare me again. — Garth

========

Industrial Average on Black Monday and Black Tuesday[17]

Date Change % Change Close
October 28, 1929 −38.33 −12.82 260.64
October 29, 1929 −30.57 −11.73 230.07

After a one-day recovery on October 30, where the Dow regained an additional 28.40 points, or 12 percent, to close at 258.47, the market continued to fall, arriving at an interim bottom on November 13, 1929, with the Dow closing at 198.60. The market then recovered for several months, starting on November 14, with the Dow gaining 18.59 points to close at 217.28, and reaching a secondary closing peak (i.e., bear market rally) of 294.07 on April 17, 1930. The following year, the Dow embarked on another, much longer, steady slide from April 1931 to July 8, 1932 when it closed at 41.22—its lowest level of the 20th century, concluding an 89 percent loss rate for all of the market’s stocks. For most of the 1930s, the Dow began slowly to regain the ground it lost during the 1929 crash and the three years following it, beginning on March 15, 1933, with the largest percentage increase of 15.34 percent, with the Dow Jones closing at 62.10, with an 8.26 point increase. The largest percentage increases of the Dow Jones occurred during the early and mid-1930s. In late 1937, there was a sharp dip in the stock market, but prices held well above the 1932 lows. The market would not return to the peak closing of September 3, 1929 until November 23, 1954.

The market would not return to the peak closing of September 3, 1929 until November 23, 1954.

“Market Recovered next day”, eh?

The reference was to 1987, not 1929. There is no depression. Hate to break it to you. — Garth

#116 pwn3d on 01.07.16 at 8:53 pm

Toronto housing lost 32% of its vale between 1989 and 1994. — Garth
——————–
Yup, and that may be the fate of some cities in Alberta and Saskatchewan if resource prices stay low. But I don’t see it for the GTA, at least not 2016.

#117 Nanaimo Bar on 01.07.16 at 8:53 pm

Poloz said, “that fact suggests the divergence between U.S. and Canadian monetary policies will continue, and the loonie is likely to stay low for the foreseeable future.”

What does that mean? That he plans on doing nothing while the U.S. raises rates or that he is planning on a rate cut?

Ok, where is the guy is this blog who has a masters in English literature?

#118 Cory on 01.07.16 at 8:56 pm

I couldn’t agree more about NOT watching BNN and the like. I can’t believe people invest based on TV shows.

I also couldn’t agree more about not reading comments.

The markets are more about human behavior than rational thought.

#119 Arb Watson on 01.07.16 at 8:58 pm

Soros is probably short that is why he is talking about crisis. I don’t think we are even close to what was happening in 2008.

#120 GeniusMoney on 01.07.16 at 9:00 pm

LOL Garth… how many times do you need to be told that a diversified stock/bond portfolio doesn’t help you at all, when the route is not sector specific but rather across the board and across all boarders?

THIS AIN’T YOUR GRANDPA’S STOCK MARKET!
Hedge accordingly.

Y’all ready for another 20% downturn in stock markets? Cuz that’s what’s in store for 2016 — Book it!

#121 Nemesis on 01.07.16 at 9:04 pm

…”…Star Trek is idiotic nonsense for children…”… – james

#FightingWords….

[Forbes] – 8 Star Trek Technologies Moving From Science Fiction To Science Fact

http://www.forbes.com/sites/paulhsieh/2014/06/24/8-star-trek-technologies/

[NASA] – The Science of Star Trek

http://www.nasa.gov/topics/technology/features/star_trek.html

#ToBoldlyGo… #Beyond… #”WellThat’sJustTypical”…

https://youtu.be/GrMyXLWAgdk

#122 Mark on 01.07.16 at 9:04 pm

“What does that mean? That he plans on doing nothing while the U.S. raises rates or that he is planning on a rate cut? “

It means Poloz is committed to sticking to the BoC’s mandate of price stability. Namely, the 2% inflation target. And not worrying overly about what the speculators happen to be doing in the financial markets, or trying to pick domestic winners or losers by engaging in monetary policy action not dictated by the fundamentals.

This is exactly the sort of behaviour the BoC is mandated to per its agreement with the Government of Canada. They are not mandated to index the CAD$ to any particular asset class (such as the USD$) other than the basket of goods and services Canadians purchase as reflected by the CPI.

In the practical sense, as the CAD$ rises in the future on account of domestic deflation and an exhaustion of speculation against the CAD$, the BoC likely will be in the position of reducing policy rates further.

#123 Sheane Wallace on 01.07.16 at 9:06 pm

TSX lost 20 % from the top in 2014 and CAD in addition lost 16 % in a year against the USD.

In total investment on TSX = 32 % loss against USD in a single year!

Housing correction when done will cause houses to lose 80 % of its value in USD. Period.

cheers!

#124 Marcus on 01.07.16 at 9:07 pm

China down over 2% in early trading.

Asia generally up at the same time. The night is young. — Garth

#125 A Yank in BC on 01.07.16 at 9:14 pm

Already seeing some very interesting values in equities. No blood in the streets yet however.

#126 Mark on 01.07.16 at 9:15 pm

“I couldn’t agree more about NOT watching BNN and the like. I can’t believe people invest based on TV shows.”

Indeed. When I hear people talking about ‘baggers’ or other BNN-guest fomented jargon (which has no place in the professional finance community), its an almost sure-fire indication that they’ve been brainwashed into an exaggerated view of their investing prowess by that channel.

I paid a retired elderly mechanic around here a few years back to fix one of my cars, and he went on and on with the BNN-infused jargon. Turns out he commuted his solid pipeline pension and went all-in on the junior miners basically at the top in 2011 because all the BNN-sters were hyping resources. A pretty sad case indeed, and he doesn’t even open his brokerage statements anymore.

“Yup, and that may be the fate of some cities in Alberta and Saskatchewan if resource prices stay low. But I don’t see it for the GTA, at least not 2016.”

People in the midst of a bubble rarely acknowledge its deterioration until its well beyond the peak. Which, in Canada, occurred when the first time buyer was largely locked out on account of Flaherty’s Budget 2013 changes to the terms of CMHC subprime mortgage insurance.

LOL Garth… how many times do you need to be told that a diversified stock/bond portfolio doesn’t help you at all, when the route is not sector specific but rather across the board and across all boarders?

The gold mining stocks are providing the inverse correlation, as some have predicted they would. USD$ cash is proving to be a useful diversifier. The real problem is that most people aren’t truly and fully diversified.

#127 K W on 01.07.16 at 9:17 pm

An example of oil creep, from the Calgary Herald 1/6/2016:
(An article about the availability of accommodation in Ft Mac and Peace River)

“Our industry in Peace River is really, really suffering. Any business in Peace River is suffering, not just the hotel business.”

Sawridge Group, which also operates hotels in Edmonton and Jasper, has been forced to cut staff to survive – as much as 10 to 40 per cent, depending on the property, Hartz said. ”

It looks like the oil industry touches a large segment of the economy.
Garth is right, we’ve only begun to see its effects in our national economy.

#128 SW1976 on 01.07.16 at 9:19 pm

#90 common sense

And in the words of Jim Leahy concerning the upcoming year in the markets…”the shit storm as just begun.”

Oh how I do love me some TPB quotes… It’s like we got a hare trigger, double barrel, shit machine gun pointed straight at our heads.

As serious as I am about the reality of the situation we all face, I do love me a good laugh.

Really though. I’m glad that I am mentally prepared for what is to come.

Many are not.

The folly of empire

#129 Gregor Samsa on 01.07.16 at 9:20 pm

Here’s one of those comments Garth won’t like.

In my opinion, there is only one way to make a positive return in today’s markets, and that’s by active trading (and understanding what you are doing, which 99% of people don’t).

Many people, including Garth, are operating under an unexplained assumption: that today’s equity markets will operate in the exact same fashion that equity markets operated at in the 1980s, 1950s, and 1920s. Before listening to Garth, one would be well served to find out if this assumption is actually true. I don’t think it is.

Today, there are massive, fundamental problems with the global equities markets. Central banks are outright buying stocks. Central banks are manipulating interest rates, doing crazy things like negative rates. Central banks are basically out of control. A financial analyst described today’s situation as “just like 2008, except subprime homeowners are being replaced by central banks.”

In this environment, an individual “buy the index and hold it forever” ETF investor like Garth wants you to be could be absolutely crushed. In 2015, neither equities, nor bonds had positive returns in Canada. How Garth thinks most people got positive returns out of that is beyond me. The only people that got positive returns were actively trading – buying low and selling high at the right times.

For me, this year’s $5,500 is going to get a nice, positive 2% return in a GIC. Beats the heck out of taking a loss at the casino.

Actually I think you’re fully invested in tin foil. — Garth

#130 Arb Watson on 01.07.16 at 9:30 pm

Ok. All the papers bashing the Chinese stock market. Time to rally and show shorty who is the boss.

#131 Arb Watson on 01.07.16 at 9:36 pm

Futures are up nicely. Friday rally. Let it bounce like its 1929, 1987, 2009.

#132 Bilder on 01.07.16 at 9:42 pm

Feel bad for Sue, hopefully she doesn’t frequent the Fool. Nothing worse than being made an example of. Just saw the Big Short, and after reading the book a few times, felt the movie did the book justice. I bring this up because BC Assessment’s latest $100 billion ballooning of the property role is eerily similar to the ratings agencies placing ridiculous valuations on MBS. Unfortunately for Canadians, the banks have placed all the risk with Joe Mortgage and bypassed the middle man altogether. Freddie and Fannie held the bag in the US which was extended a credit facility to cover the loss, ‘Equity of Canada’ on CMHC’s balance sheet and Sub Prime lender’s here are on the hook. Shorting Canada here will be a giant human stain, collateral damage will be displaced families, broken marriages and suicides. Banks will keep paying their dividends to keep the pension funds happy, CEO’s overweight and the bank lobby fat. Assistant deputy ministers making over 200 large who don’t pay their contractors and deflate their property values to pay less tax will continue to thrive.

#133 BG on 01.07.16 at 9:44 pm

I really don’t care about today’s dip
I threw $5500 at my TFSA yesterday. US, Canada, and international indexes.
I will be throwing even more at the RRSP soon, hopefully the market will not have recovered yet.

When it comes to my (hopefully) balanced/diversified portfolio, I’m all in, all the time. The only emergency fund I have is between the moment I earn money and the moment I invest it.

Got a job, marketable skills, a cheap rental and a girlfriend with a job and the same attitude toward money (saving it!).

If at some point I happen to need the money really bad, well, I will crystallize some gains or losses.

These days, I’m way more worried about Europe entering dark ages than my portfolio.

#134 Gulf Breeze on 01.07.16 at 9:49 pm

#72 the time to be a contrarian investor and ‘buy the lows’ is after a sustained bear market. Read everything you can get your hands on about economy politics and how they interact.

Pay very close attention to alternative energy, climate change and implications for investing. A big buy in my mind is Tesla. And yes, they may not have turned much of a profit yet, but they are being awarded huge govt contracts. Google, too. Watch them. They are also becoming hand in glove with govt.

When you see a significant sustained uptick after a long downtrend–move on it. Avoid drawing too many conclusions based on sharp upswings, like gold, in the last few days. I held 10% of my wealth in good and sold it ALL recently. I may buy back in but have been reminded time and time again that gold doesn’t behave as it should…at least not for more than a few days.

#135 G on 01.07.16 at 9:52 pm

“What if you happen to need the money today?”

Then that money should not have been in the stock market or it should have been conservatively invested.

#136 G on 01.07.16 at 9:53 pm

‘You never know when you will need that money. Life has funny plans for you.”

That is why you need Insurance, Credit margins, …

#137 Smoking Man on 01.07.16 at 9:54 pm

Me and the wife, sad about aging did some acid.
You only live once…

Nothing happend.

#138 Ole Doberman on 01.07.16 at 9:58 pm

Nicely written Gartho.

I wish I heard pep talks like that in 2009 when the market bottomed instead of thinking I lost everything and will be living with my parents for the rest of my life.

#139 Ole Doberman on 01.07.16 at 10:00 pm

BTW do you see another 1987 going down?

#140 Millmech on 01.07.16 at 10:01 pm

Wow,just feeling the panic about a little pullback from unleveraged people,just wait and see what happens when real estate pulls back and the leveraged people all try to rush for the exits at once.
The best thing to do right now is avoid the media as they sell fear,you never see wall to wall coverage of big gains only the losses.If you got cash keep buying the downs and sell back into the ups,don’t crystallize your losses,not that hard realistically.

#141 JamesA on 01.07.16 at 10:01 pm

#98,

are you talking to me? There are multiple james’ i put the A on the end always.

#142 Lawrence on 01.07.16 at 10:04 pm

Retired in 2004. House paid, debt free; owe nothing to anyone. I keep a few years of cash in my bank account and cash in my home safe. My TFSA is maxed out, RRSP’s diversified as well as my non registered accounts. I have learned not to panic. Thanks Garth.

#143 BG on 01.07.16 at 10:06 pm

#47 james on 01.07.16 at 6:43 pm

[…] It is becoming increasingly difficult to sustain the old notion of efficient markets, prices as a reflection of investor valuation and all the rest when trading is increasingly a game of competing algorithms looking for profit on short-term time horizons.
—————————————————————

The strong version of the hypothesis of efficient markets states that all publicly or privately available information is accounted for at every instant.

It is obviously false, and there are weaker versions closer to reality.

However, computer assisted trading – sometimes arbitraging by sheer speed, other times processing immense amount of information – is in fact making markets more efficient.

#144 bubu on 01.07.16 at 10:11 pm

“If your holding period is longer—10 years for example—the odds of a positive return are even more stacked in your favour”

How is this different from buying a house and leaving in in it for 10-15 years…. Actually the house is better ….

Sigh. It’s not a contest. — Garth

#145 acdel on 01.07.16 at 10:12 pm

#137 Smoking Man
You win the best post of the night; I cannot stop laughing!
No, never tried the stuff, no flashback for me!

#146 Ronaldo on 01.07.16 at 10:13 pm

#35 Bby604 on 01.07.16 at 6:25 pm

”Ohhh snap Garths getting called out on the cbc”

The MSM were laughing at Peter Schiff when he was calling the bubble in the U.S. before it crashed. He got the last laugh.

Anyone who believes that things are different here is dellusional. This little thingy that is happening with the stock markets right now may be just the thing that will cause the great unwind in housing prices in the bubble cities. As well, we will see an end to the bank of Ma and Pa.

#147 Kreditanstalt on 01.07.16 at 10:16 pm

http://www.theglobeandmail.com/news/politics/promised-liberal-spending-will-help-economy-more-than-monetary-policy-poloz/article28050437/

Well, they’re about to BORROW AND SPEND.

Why? “Liberals face increasing pressure to spend…” says the headline.

Pressure from whom? Apparently themselves! They really do believe that, even in a no-growth future, they can borrow or print and spend enough to somehow fool any remaining investors – again! – into misallocating yet more capital…

#148 Pete on 01.07.16 at 10:16 pm

Pure poetry tonight, Garth.

#149 common sense on 01.07.16 at 10:17 pm

Where’s FREEDOM FIRST tonight?

Likely too busy investigating the Alberta housing market, licking his chops waiting for bargins, looking but not touching women, mooning over his Garth Glam photo and of course…keeping his FREEDOM FIRST always….

#150 Scooter on 01.07.16 at 10:19 pm

Interested in the dogs in the picture? Here’s a link to a video about them: https://www.youtube.com/watch?v=PX2F6_IuZgk

#151 jimbo on 01.07.16 at 10:20 pm

Garth, quick question about portion of US vs Canadian equities in a ‘balanced’ retirement portfolio. I’m targeting roughly 15 years until I retire and hold 15 vs 10 % growth Canadian and US funds respectively. Should I take the hit now on the Canadian dollar and switch over to a larger portion of US equities? Or just sit tight for the long haul?

You should have asked me two years ago. But if you have 15 years to go, it makes little difference. Equity values self-adjust for most forex changes. — Garth

#152 Doug in London on 01.07.16 at 10:29 pm

I’ve said it many, many, many, many, many times before, and will say it again. When stock drop in price, they are ON SALE!!!!! Now is the time to increase your exposure to equities if you are in cash. What if you’re fully invested? Relax and wait it out, it’s not like this has never happened before.
Only 2 weeks ago, it was Boxing Day and many people were flocking to shopping malls to scoop up the bargains. Here in the Forest City, there was actually a long line up of cars with people in them (probably getting frustrated and impatient) waiting for precious few parking spots at the White Oaks Mall so they could get to the bargains. So now I ask you all, why isn’t there the same level of enthusiasm for scooping up equities when they are on sale?

#153 cowtown cowboy on 01.07.16 at 10:29 pm

1988, still remember it, vaguely..

I was in my undergrad Econ degree at the time, and I distinctly remember walking into a class that afternoon and the prof was wondering what any of us were doing there as the market had just CRASHED!

Of course none of us had a pot to p!ss in, let alone a window to throw it out of, so what did it matter to us. We still had our student loans and plenty of $$ left over for those $5 pitchers of beer at the UofA so all was good. Now I’m older and arguably wealthier having just taken a major Sh!t kicking in the market last year, read: overweight oil and gas stocks… am I any happier now than then??? Live a little, love a lot, and get that Harley as soon as you can. Peace Out!

#154 Kreditanstalt on 01.07.16 at 10:42 pm

#152 Doug in London

Stocks are “on sale”???

There IS something called “value”, you know…! Just not much of it right now. MAYBE you can dip a toe in again when the TSX is down around 5000.

If supermarket “A” regularly sells a 250g box of “Chocolate Frosted Sugar Bombs” cereal for $7.99 and a week later claims the item is now “on sale” at $6.99, any buyer is the Greater Fool.

#155 For those about to flop... on 01.07.16 at 10:43 pm

#147 common sense on 01.07.16 at 10:17 pm
Where’s FREEDOM FIRST tonight?

Likely too busy investigating the Alberta housing market, licking his chops waiting for bargins, looking but not touching women, mooning over his Garth Glam photo and of course…keeping his FREEDOM FIRST always….

/////////////////////////////////
Hey Common ,I think the markets movements the last couple of days has given Freedom First some ” unintentional movements” of his own,
“I shit myself first ….always!”

M41BC

#156 Topsy-Turvy on 01.07.16 at 10:55 pm

>.. did some acid.
>…
>Nothing happend.

Was it acid, or just vinegar?

#157 Ponzius Pilatus on 01.07.16 at 10:58 pm

The Can has been kicked down the road once too often.
Dented and flat.
This is the end.

#158 IsleOfVanMan on 01.07.16 at 11:12 pm

#127 KW
I am staying at Sawridge Fort McMurray tonight and was shocking to hear the room rate is down to 135$ with free upgrade to business suite. I am a regular up here and have seen it firsthand with the rates declining over the past year. At the peak it was 230$ for the base room and sometimes there were no rooms available.

#159 cramar on 01.07.16 at 11:13 pm

I’m surprised that Garth missive today was not on Poloz’s comments.

“Low oil, bad economy, and low Loonie could be around for several years, so suck it up” (rough paraphrase)!

I can’t see housing NOT collapsing under these economic conditions.

#160 Trojan House on 01.07.16 at 11:15 pm

I think it is interesting to find out what things are worth in inflation adjusted terms. Here’s what I could find from June 2015 regarding equities markets:

http://inflationdata.com/Inflation/Inflation_Adjusted_Stock_Price/NYSE_Inflation_adjusted_stock_price.asp

Interesting that they have other markets they look at including mortgage rates. It would also be interesting to know what housing values would be adjusted for inflation.

#161 Nick on 01.07.16 at 11:27 pm

I completely disagree. We are witnessing the beginning of the next great recession.

Why? — Garth

#162 common sense on 01.07.16 at 11:31 pm

#155 Flopper

No I do not think he is down anything on his wise investments..you cannot change perfection and the word loss is not in his vocabulary.

#163 vic guy on 01.08.16 at 12:02 am

When in history have these crashes been global?
Every country, continent, province on the planet is done.
When in history has this happened?

This is too weird. Good night. — Garth

#164 For those about to flop... on 01.08.16 at 12:07 am

Common ,I guess your right look how much money he saves on Locksmiths by never giving anyone a key…genius move…save a few bucks and invest it back in your cabbage patch doll collection!

M41BC

#165 Leo Trollstoy on 01.08.16 at 12:12 am

Gold bugs wrong for 900 days, but ‘right’ for 4 days. Reality punishes the dumb.

#166 Philburt on 01.08.16 at 12:53 am

#161 Nick on 01.07.16 at 11:27 pm
I disagree…In the fullness of time we will look back and it will be the “D” word. Ok l’ll say it but with a twist. Inflationary depression. Inflation occurs in some things but ultimately it will be recognized as a depression.
What we have ahead is a good buying opp but you will need to be patient.
Cash has been king for some time.

#167 JimH on 01.08.16 at 1:01 am

#44 OXI in GREECE on 01.07.16 at 6:37 pm
“Sounds to me like its getting harder and harder to sell stocks.”
==================================

See? Told you weed wasn’t doing you any favours!

Look, sonny; The markets took a +2% to 3% haircut today for the very simple reason that it was extremely easy to sell stocks, which is what was going on.

To wit, there was a surplus of sellers over buyers. The sellers, rather than the buyers were in control.

Ignorance compounded by stupidity enhanced by dogmatism.

There are intelligent, knowledgeable, successful and articulate people advocating for decriminalization of weed.

You are not one of them!

#168 BG on 01.08.16 at 1:20 am

#163 vic guy on 01.08.16 at 12:02 am
When in history have these crashes been global?
Every country, continent, province on the planet is done.
When in history has this happened?
—————————————————————-

That must be similar to what some people thought in 1929 before jumping through the window.

#169 TRT on 01.08.16 at 1:22 am

Censorship in Canadian media.

http://www.bbc.com/news/world-europe-35239503

Just like there is ‘no data’ on the influence of foreign money on YVR housing.

Canada is not ‘Free’ anymore.

#170 David Lee on 01.08.16 at 1:24 am

Remember that radio show Garth was on the other night? Well, take a listen to Danielle Park on tonight:

https://www.youtube.com/watch?v=06zYUcV919k

Everything she says in this interview makes sense and the way she explains it (i.e. balanced, reasoned arguments) makes it all seem like common sense.

Listen to what she has to say about RE in YVR and YYZ (I won’t spoil it for you). The whole interview is definitely worth listening to several times.

Her last line in the interview is the best:

“I love it when truth comes out because then you’re actually dealing with math and things you can make some reasonable judgements about”.

#171 mike in kelowna on 01.08.16 at 1:42 am

@ LINDA # 107….I agree with you on gold and silver and emeralds and all other shiny stuff. Useless. Why have wheel covers? You can’t eat them. I agree with you Linda…You’re really on your game tonight..Seems Garth’s chronic ( no, I did not say psychotic ,Boss)revulsion of gold and silver been affecting the funny ol’ neural-transmittors of the many who love, live and lurk in the dark recesses of their minds and occasionally come out and post here. Not dangerous..just kinda cute and Cuddly

You’re not supposed to eat the frkkin Gold coins or swallow emeralds for aiding digestion for Goodness sakes Linda!!!! The value of the Gold Maple you bought a year ago has appreciated in canadian dollars by about 20%. Take one of these coins and buy your main squeeze a beautiful suit and you’ll have lots left over for some fine chinese dining and possibly other fun as well if you play your cards right..if you catch my drift?

There are many places where you can take coins in and exchange for fiat of the country of your choice to buy what you what, legal naturally..Some people figure you buy the metals and you are stuck with them forever . You’re not. It’s not like buying a book from Garth and finding the last page has been surgically removed. Then you’re stuck with it for good.

I just have a feeling Garth will turn with a little more fondness and enthusiasm towards the metals of the kings as we wend our way through this year which is certain to be very volatile..and will likely persist for many years. And I predict gold will bottom soon if it already hasn’t but nothing spectacular in price appreciation unless the wheels come flying off the global economies and Canada has to start conscripting the recent Syrian Rfugees T lite is bringing in to our country to fight along with our guys and gals..Perhaps if they really wanted to show their appreciation for being accepted to this country they might be pleased to volunteer for service….like immigrants did in previous wars. ( I’m going to start taking breathing lessons)

I also have a feeling and there’s no evidence to support it yet, but with all the devaluations in China, as well in Europe ,some of the speculators who years ago bought multiple properties in Vancouver area, Toronto, L.A. Miami, Dallas, as well as in London, Paris,etc may find they have their backs up against the wall ( Wall of China…sorry :) and have to put some of those absentee props in Richmond up for sale due to RE markets declining in Asia. But, perhaps just as important,it could be as a result of huge losses many have been sustaining in their stockmartets and other stock markets around the world. Even Rich people, particularly greedy rich people get margin calls and have to cover or be liquidated.

You see, I don’t believe the housing market bubble in Canada will be resolved in a cold deliberate manner by clear thinking people/politicians particularly when many of them have a vested interest in their property going up in value ,they’d like for ever. To me it will take an exogenous event but more likely several of them before the markets in Toronto and Vancouver area start to soften. One would be foreign selling (as mentioned) as they needed cash for whatever reason and the key here will be how many foreign holders here will be compelled to bail out? The other factor which will force RE prices to drop will be if oil falls to the level in price where kids graduate…12..That would be a killer. Unemployment and foreclosures will start to really ramp up . And much worse if we enter into a sever and protracted recession/depression and true 15-30% unemployment, not the usual BLSBS government numbers. THE WORST scenario if we get involved in a major war and I won’t go on painting possible consequences were that to occur. And personally, I feel it’s almost inevitable..

Cheers Garth and the rest of you rascals here. And you guys go easy on the host ok? He’s starting toshow some grey in the temple..

#172 Freeman on 01.08.16 at 2:06 am

Garth, you might be correct about not selling in ‘Panic’ times, but today’s economy is not like 1987, not even close.

In 87 the economy was healthy, booming in fact. So the stock market was ‘over-valued’. Now the economy in the U.S. is not healthy, there are way too many people unemployed and cannot find ‘good’ jobs. However, because of the massive amount of cash that has gone into the stock markets due to the ‘STIMULUS’ that the government there has created, the stock market is over-valued just like 1987 also.

Now lets look at the differences; then and now:

Then = Europe’s economy was healthy, NOW = it’s sick.

Then = South America’s economy was healthy, NOW = Brazil is entering the second year of a recession, the worst recession they have had in their entire HISTORY.

Then = America’s government debt wasn’t such a big deal, NOW = the debt bomb is a huge risk to not only the U.S. but the global financial system as well.

Then = China didn’t have massive debt, NOW = it does, and their debt bubble is imploding.

So for me the way I see it, the U.S. stock market will fall 40% in value in 2016, and the Chinese stock market will fall 60% in 2016, and the world will enter a form of ‘Depression’ that will last 2 decades.

The recession that will envelope the world will make the job market in Canada suck even more, and job losses in 2016 will take the air out of the Canadian housing bubble.

In 2017, once it becomes evident that there is no more money to be made in housing, that is when house prices will begin their 20 year decline in value, falling by approximately 80% from their current value.

#173 Tony on 01.08.16 at 2:11 am

Taking a shot at the U.S. jobs print. Up 271,000. DOW adds 486 points to end the day Friday. Then the U.S. stock market indexes collapse again late next week Thursday and Friday).

#174 I am the Babblemaster on 01.08.16 at 2:28 am

Soon Janet will backtrack and lower rates. That should settle the markets. Of course, any credibility the Fed has left will … wait, what credibility.

#175 jane 24 on 01.08.16 at 2:43 am

Now you see the English answer to Garth’s neighbour’s problem would have been to keep the house and take in a lodger, assuming that she had a three bed house. Govt here in Britain encourages this by exempting own home lodging income from income tax. House share and keep 100% of the money. You have an income, company in the evening and keep a roof over your head. Must have been other widows out there in the same situation 10 years ago.

I am a 1%er but still often have international students in my spare bedrroms for extra income. We have met some lovely people. We have friends, nice middle class folk, who do the same thing.

Answer now for this lady is to live with her children as in most of the world.

Alternately she can become paid companion to another older lady or one in poor health or a house sitter. I know folk who house and pet sit and have had some stunning accommodation. Hardly ever in their own home. Current gig is in the South of France and they have been there for two years. Think creatively and you can live very cheaply.

#176 Koshy Alex on 01.08.16 at 3:00 am

Asia generally up at the same time. The night is young. — Garth

This is how it goes up

China Stocks Extend Rebound as State Funds Said to Buy Equities

http://www.bloomberg.com/news/articles/2016-01-08/chinese-stocks-set-to-rally-after-circuit-breakers-scrapped

#177 nobody on 01.08.16 at 5:08 am

The counter argument to Garth’s historical point is that we’re all Japan now… at least in terms of debt, QE and interest rates. Japan’s Nikkei, of course, has never recovered from its 40,000 level over 20 years ago now.

#178 Future Expatriate on 01.08.16 at 5:15 am

The only thing that will keep an automatic rally from happening (driven by computers) is an electromagnetic pulse. And when that happens, you won’t be able to sell anyway.

#179 fancy_pants on 01.08.16 at 7:17 am

or you could just buy Vancouver RE … those who bought in ’08/09 have made a killing and perhaps the end is not in sight …

http://www.vancouversun.com/business/china+market+turmoil+likely+have+impact+real+estate+economists/11637481/story.html

#180 The real Kip on 01.08.16 at 7:30 am

Does anyone know how much money the PBOC had to pump in to prop up the Chinese market this time. The radio said they did intervene and juice it for the second time this week (first was $20-billion) but did not say how much juice they had to pour in.

#181 pbrasseur on 01.08.16 at 8:11 am

I suppose some need to be reassured when the markets act up like this.

Personally since going through the 2008-2009 debacle I’m immune, stuck to my guns and now I still work because I want to… 100% individual stocks (been that way for 25+ years), invested in what I consider to be some of the best companies in the world, mostly in the US because most of those companies happen to be in that market, also the best regulated market in the world.

Market will always fluctuate, in the short term they are irrational and there is really no point trying to understand them. But I understand that market fluctuations are opportunities for me to buy if I have money to invest at the time, or for the companies I own to make progress in their respective market in diverse ways, for example when Wells-Fargo acquired Wachovia for a dime… I couldn’t care less about rebalancing.

#182 ANON on 01.08.16 at 8:13 am

Why? — Garth

Take the pulse of your own comment section, Garth. It is highly elevated. Watch some other blogs, you can even smell it in the mass media. Even at work, there was a guy who heard about the Chinese market halt the first time it happened. He even paid attention and found out that it happened the second time. Now he’s not the only one paying attention.
I think the acceptable term which can still be used in these type of situations is “contagion”.

The only thing this blog comment section measures is the naivete of humanity. — Garth

#183 crowdedelevatorfartz on 01.08.16 at 8:26 am

@#171 nemesis
“[NASA] – The Science of Star Trek”
++++++++++++++++++++++++++++++++++++

Ladies and Gentlemen we have a Trekkie in our midst. Hide your Ferengie latinum!

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwiY6JysqJrKAhUE32MKHQasDfUQFggiMAI&url=http%3A%2F%2Fwww.sjtrek.com%2Ftrek%2Frules%2F&usg=AFQjCNEW-LOOqsW4lbLgdT_uh0pjF5nHfQ&sig2=NOS5EsC5NnUef1sQM07Lhw&bvm=bv.110151844,d.cGc

#184 waiting on the westcoast on 01.08.16 at 8:34 am

I owe there is a lot of carnage in the markets but all is still well on the ground in the US. Jobs up a massive 292k in December…

http://www.cnbc.com/2016/01/08/nonfarm-payrolls-december-2015.html

#185 gut check on 01.08.16 at 8:35 am

@ #137 Smoking Man on 01.07.16 at 9:54 pm
Me and the wife, sad about aging did some acid.
You only live once…

Nothing happend.

******************************

:)

#186 Apocalypse2016 on 01.08.16 at 8:42 am

This week foreshadows huge trouble in all our markets.

Central debt-fuelled markets are reaching their absolute limits from eight years of debt-stimulus.

Welcome to the Japanification of North America. Only worse.

US jobs report hits it out of the park. Better luck in 2017. — Garth

#187 Old Hippie Guy on 01.08.16 at 8:48 am

#137 Smoking Man on 01.07.16 at 9:54 pm

Me and the wife, sad about aging did some acid.
You only live once…

Nothing happend.
……………………………………………………………………
Was it Sulfuric acid, Chromic acid or Boric acid ? If so then your dead! More than likely knowing your intelligence level it was Citric acid and unfortunately for us your still alive.

#188 Doug in London on 01.08.16 at 9:00 am

@Kreditanstalt, post #154:
What you said is the exact reason that most people don’t take advantage of buying opportunities. Come to think of it, that’s what a lot of commenters here said when all equities were on sale in 2011, or when REITs were on sale in 2013.

#189 crossbordershopper on 01.08.16 at 9:02 am

i know many ladies like sue, some still have their home, living on next to nothing, a survivor pension, a gis supplement from the goverment and waiting for the gst rebate cheque.
their husband died, their kids moved out and they are alone, with no money. they truely live on nothing. for like 15 to 20 years before they die and their kids split the house. i can give you a page full of old ladies names and numbers i know.
garth and others ramble about diversified portfolio and glorious days in retirement where you are travelling. yes, there are some, had good jobs, have pension and savings, never got sick, others had reality hit them, sickness and death, job loss, kids with their hands out, etc etc, and mostly low paying jobs all their life. no savings, ever.
they are the old ladies in the reduced section of the grocery store. take a minute to look at them, for most of us, that is us in 25 years.

#190 Penny Henny on 01.08.16 at 9:15 am

I blame the crappy markets on MF (a frequent poster here). Ever since he jumped into the market last April it’s been all downhill.

#191 common sense on 01.08.16 at 9:20 am

#164 Flopper

Just think if FF starts a no key movement, we can go short metals and lock stocks…

#192 common sense on 01.08.16 at 9:21 am

Mr. Turner

See a US rate hike now a strong jobs number or a hold due to the markets?

I’m thinking a hold.

You’re thinking wrong. — Garth

#193 MF on 01.08.16 at 9:51 am

#190 Penny Henny on 01.08.16 at 9:15 am

Lol it’s true. Definitely seems like the world’s financial markets do not want anything to do with my money.

Maybe I should invest in some GTA condos? Maybe that will finally get this correction thing started!

MF

#194 BC Working Guy on 01.08.16 at 9:59 am

This is why it is important to check Zerohedge at least once per day. They report stories that you just won’t find in the Canadian mainstream media.

From Zerohedge:

“California Governor Jerry Brown finally declared a state of emergency on Wednesday, concerning the ongoing, currently unstoppable methane gas leak spewing from Aliso Canyon that has created a nightmare for residents of Porter Ranch.

“I will tell you, this goes well beyond Porter Ranch. We’ve had complaints from as far as Chatsworth, Northridge, and Granada Hills,” emphasized Los Angeles City Councilman Mitchell Englander during a Porter Ranch town hall meeting on December 28. “Apparently this plume of toxic chemicals and whatever it might be, doesn’t know zip codes […] This is the equivalent of the BP oil spill on land, in a populated community.”

http://www.zerohedge.com/news/2016-01-08/doctors-urge-california-residents-leave-nowwhile-you-can-gas-leak-fears-grow

That was reported by NBC two days ago. Zerohedge is one among the most inaccurate sources of ‘news’ in North America, certainly when it comes to Canadian issues. — Garth

#195 Leo Trollstoy on 01.08.16 at 10:10 am

US is booming baby.

http://www.businessinsider.com/jobs-report-december-2015-2016-1

#196 MF on 01.08.16 at 10:12 am

#173 Tony on 01.08.16 at 2:11 am

Isn’t that what traders like? Increased volatility means more profits no?

Us payrolls a big positive. Nice.

MF

#197 Noel on 01.08.16 at 10:21 am

“If your holding period is longer—10 years for example—the odds of a positive return are even more stacked in your favour. The S&P 500 virtually never records an annualized loss over a rolling 10-year holding period.”

The same applies to housing, and you can buy it 95% leveraged, unlike equities or fixed income products.

#198 Daisy Mae on 01.08.16 at 10:23 am

#135: “What if you happen to need the money today?”

“Then that money should not have been in the stock market or it should have been conservatively invested.”

******************

A LOC or some cash is helpful.

#199 Daisy Mae on 01.08.16 at 10:38 am

#174: “Soon Janet will backtrack and lower rates. That should settle the markets. Of course, any credibility the Fed has left will … wait, what credibility.”

*****************

The increments are so small, the feds are moving so cautiously — relax.

#200 Ole Doberman on 01.08.16 at 10:44 am

Wow Alberta oil down to $28

Does anyone know if any rigs out there stay profitable at these prices?

#201 fancy_pants on 01.08.16 at 10:48 am

#199 Daisy Mae on 01.08.16 at 10:38 am

nothing more calming than knowing they have to tiptoe around 1/4 point rate adjustments.

#202 Dean on 01.08.16 at 10:58 am

Love your insight Garth but why you punish yourself allowing this comments section is lost on me.

#203 Rates Up Up Up on 01.08.16 at 11:12 am

Realtors, House Pumpers, Etc. please read this twice…

http://business.financialpost.com/news/economy/why-homeowners-and-buyers-can-expect-more-mortgage-rate-hikes-from-the-big-banks

#204 I am the Babblemaster on 01.08.16 at 11:27 am

#199 Daisy Mae on 01.08.16 at 10:38 am

The increments are so small, the feds are moving so cautiously — relax.

————————————————————

The Fed is just part of the financial scam that is now the US economy: CEOs that are paid obscene amounts for failing companies, massive debts that can never be paid back, etc. The Fed is definitely moving cautiously. So as to not upset the applecart and keep the scam going.

‘Scam’? You mean ‘the economy’? This blog is a riot. — Garth

#205 Sean on 01.08.16 at 11:28 am

Garth,

How do you feel about ETFs that purchase US stocks but are hedged to the CAD? Like… XSP
If we want US exposure and were starting today, it’s a 40%+ discount to convert and buy. Are the hedges a good option?

#206 Mark on 01.08.16 at 11:28 am

TTh“Realtors, House Pumpers, Etc. please read this twice…”

Basically reflects that I’ve been saying all along — the cost of financing assets in decline is likely to rise, independent of any policy action of the Bank of Canada, simply on credit-worthiness concerns.

This is a perfectly natural part of the economy resetting itself and telling housing speculators that their services are no longer required to stimulate additional supply to meet what was, until the 2013 apex, a shortage of physical supply relative to demand.

The flip-side of this is that credit is likely to become cheaper to other quarters of the economy. Perhaps even those starved for the past 10-15 years for reasonable access to credit and capital.

#207 For those about to flop... on 01.08.16 at 11:31 am

Here’s one for all the Putin lovers out there…

M41BC

http://www.dailystar.co.uk/news/latest-news/486201/Powerful-smelling-Cologne-inspired-by-Russian-president-goes-on-sale

#208 Investorz on 01.08.16 at 11:37 am

With China devaluing money, it’s hard to believe no-one knew. That could explain people buying real-estate in Vancouver (even if it’s only 5% of it). I know I would!

Wow was I wrong about U.S banks and canadian insurers. Yields are back down bringing those from year highs to year lows: ZUB.TO and MFC.TO

#209 Mark on 01.08.16 at 11:54 am

“Wow was I wrong about U.S banks and canadian insurers. Yields are back down bringing those from year highs to year lows: ZUB.TO and MFC.TO”

Yields on non-government bonds are surging, damaging the balance sheets of insurers who are heavily invested in the stuff (who generally benefit from falling interest rates, not rising). Hence, the NPV of the insurers is predictably falling. Just a preview of a long-term trend for FIRE sector participants who are likely, for the next 20-30 years, to create minimal shareholder value with the weaker players requiring periodic recapitalization.

Excess returns to the FIRE sector provided by an era of falling long-term interest rates will give way to below-long-term average returns in a rising rate environment.

When all is said and done, I expect the charts of the financial/insurance/real estate sector to look a lot like the charts of the gold mining sector for the past 20-30 years. Periodic rallies here and there, as people get enthusiastic for better times, but mostly flat and value-destroying for a generation. The gold miners, OTOH, might actually start to look like the past 20-30 years of finance. Remember, every sector in the economy eventually has its proverbial “day in the sun”.

#210 Fine Wild Roasted Gonads on 01.08.16 at 11:57 am

#186 Apocalypse2016 on 01.08.16 at 8:42 am

This week foreshadows huge trouble in all our markets.

Central debt-fuelled markets are reaching their absolute limits from eight years of debt-stimulus.

Welcome to the Japanification of North America. Only worse.

US jobs report hits it out of the park. Better luck in 2017. — Garth
—–

Hey, it’s only 357 days til you get new name!!

#211 Daisy Mae on 01.08.16 at 12:00 pm

A few minutes of joy!

https://www.youtube.com/watch?feature=player_embedded&v=Pwe-pA6TaZk

#212 Smoking Man on 01.08.16 at 12:01 pm

Making one capitalist at a time.

Meet the worlds newest millionaire.

http://dyslexicsmokingman.blogspot.ca

People is all I`m saying, I told him not to trade real money for two years, he jumped the gun, after a few weeks of practice. And was lucky…

No guts no glory……

Congrats, you know who you are. Cash it out and never do this again is my advice.

#213 protea on 01.08.16 at 12:03 pm

Garth great post always provides so much value. I take exception with Poloz’s SUNNY OUTLOOK on the economy. Even though he is the BOC Gov its seems to me that he really can’t be independant and has to skillfully always agree with the Federal govt.

I really do feel that Poloz for his big job is ineffective in his strategy for our country.

Would make a great thought provoking post at this unpredicatable time of our economy. Could you also please let us know your thoughts in view of the current Chinese economic outlook and what possible effect it will have on housing in Toronto and Vancouver ? will make an interesting topic.many thanks again.

#214 Mike in Edm on 01.08.16 at 12:06 pm

I work for an O&G service provider just south of Edmonton. We used to have 270 operators working out at all the lease sites. We’re down to less than 70, and just heard from a couple of the main people here that hire and schedule guys to go work that previous employee/contractors are calling them daily/weekly literally crying and begging to be hired on somewhere. No exaggeration. Grown men crying on the phone because they’re so broke.

Don’t feel too sorry for them though, because 90% of them are crying because they’re about to lose their quad, boat, $100k truck, foreclose on their house, etc. The other 10% are legit just trying to feed their family or just get enough $ for a plane ticket back home (out east).

Either way, these guys were making huge money 12-24 months ago, so It’s hard to shed a tear for really any of them. Talk about financial illiterates.

On a related note, I quickly looked at kijiji for housing and room rentals in Fort McMurray today. WOW! An average house used to rent for $4k+ and single rooms for $800. Now most houses are ~ $2k and rooms are $500. There is absolutely no way (unless the landlord bought pre 2005) that even the ones lucky enough to have tenants are even close to covering their mortgage costs right now.

#215 Good news on jobs? on 01.08.16 at 12:07 pm

Canada added 22,800 jobs in December…good, was worried yesterday about economy.

However, gains mostly in Ontario.

A good chunk of overall gain was 40,300 more people classified as “self-employed”. I hope these are not recently laid off people on severence and/or EI since typically only 5% of workforce are self-employed.

Also, 6,400 full-time jobs overall were lost.

If self-employed numbers correct then excellent news!

If that number is what most quietly think it is…then we lost a lot of jobs in December…a lot.

Hope the former is true.

#216 Vundo on 01.08.16 at 12:08 pm

How much of your portfolio is in physical Lego?

http://time.com/money/4162059/lego-investment-compare-gold-return/

#217 Rational Optimist on 01.08.16 at 12:16 pm

6 not 1st on 01.07.16 at 5:50 pm

“…you could still find a pair of shoes actually made in your own country.”

I got a new pair of stylish Martino boots for Christmas, made in Quebec City.

#218 Gas Price Insanity on 01.08.16 at 12:19 pm

So oil per barrel is down but gas prices at the pump went up 3 cents a litre overnight!!! They said if price went to 80 a barrel no way companies could continue to produce but even with the surplus we aren’t getting any breaks at the pump. what the heck would the price be if it went to 80 bucks a barrel 4 dollars a litre?

#219 Lea, south of the border on 01.08.16 at 12:22 pm

#194 BC Working Guy

That story is all over the LA Times. Does that count as mainstream media?

#195 Leo Trollstoy

Feels more like recovery here in my corner of Los Angeles. 2008 is still a recent memory and the houses and cars reflect it. Feels very modest in comparison with Vancouver.

#220 Keith on 01.08.16 at 12:33 pm

Perversely, the case of Sue, actually shows why most people trust real estate (even if they shouldn’t). Real estate never drop 25% overnight. It’s that kind of volatility that actually scares people.

It’s easy to say Sue was ignorant. But from where I sit, she’s behaving like a perfectly rational, risk-averse human.

And this is also exactly why governments need to start expanding pension plans. Most people don’t have the stomach to stay invested themselves.

#221 Philburt on 01.08.16 at 12:50 pm

#171 mike in kelowna on 01.08.16 at 1:42 am
Excellent post. More for of these and less hot air pls.
Gold bugs are insane thats for sure. If you want to read a broken clock gold bug 321gold.com. He may ne right one day but i know a few that lost thier marbles listening to guys like these.
Anywho. I agree Mike. One day folls will wake up and wonder why they pushed it to the sky (Van TO ect)
In the meantime my hedgefund buddy who is aces has an excellent crystal ball. We saw the chinnese market heading for a blowout long ago. Whats next? The Yaun will crack big time. Guessing in about a year or 2. There are some issues that know one seems to see.
Garth. Overall dang good job.

#222 JimH on 01.08.16 at 12:50 pm

#194 BC Working Guy on 01.08.16 at 9:59 am
“This is why it is important to check Zerohedge at least once per day. They report stories that you just won’t find in the Canadian mainstream media.”
==================================
Garth’s reply is spot on, BC Working Guy:
“That was reported by NBC two days ago. Zerohedge is one among the most inaccurate sources of ‘news’ in North America, certainly when it comes to Canadian issues.” — Garth

Zerohedge is very often way behind the curve (the CA gas leak is a great example) on reporting news that has already been aired, often repeatedly, on MSNBC for example!

I used read Tyler all through the GFC and the ensuing rounds of QE, where it was plain that he lacked a basic understanding of modern banking and monetary systems, and appeared to only pursue articles that reinforced or falsely ‘substantiated’ his own doomsday and apocalyptic agenda.

If you had followed the general predictions, advice and recommendations of the Zero guy from the spring of 2009 through 2015, you would have lost a ton of money! Not as much as if you’d listened to Marc (Calamity Jane) Faber or Peter Schiff, but close!

There are many good sources of investing information and advice out there.

#223 JSS on 01.08.16 at 12:53 pm

#39 Harbour on 01.07.16 at 6:30 pm
#30 JSS on 01.07.16 at 6:17 pm
YAHOO!

Canadian Utilities Limited Eligible Dividends: Common Share Dividend Increased 10 Per Cent

…………………………………………………………………..

When a company increases it’s dividend it’s a bad sign on the stock.

……….

Really?

Canadian Utilities has had 44 years of consecutive dividend increases, with a 10-year dividend growth rate of 7.3%.

Regardless of current stock prices, i’ll take my chances, thank you very much :)

#224 Bram on 01.08.16 at 12:55 pm

#73 Harbour on 01.07.16 at 7:21 pm
If you like AAPL at $95 you’ll like it even better at $75

I don’t know about that: it looks like ‘Vancouver Troy’ managed to catch it at the bottom. Already +2% up today.

#225 Ponzius Pilatus on 01.08.16 at 1:04 pm

#202 Dean on 01.08.16 at 10:58 am
Love your insight Garth but why you punish yourself allowing this comments section is lost on me.
—————–
Living in a democracy is not always easy.
There a quite a few dictatorships around that you could try.

#226 JimH on 01.08.16 at 1:13 pm

#59 jaybee on 01.07.16 at 7:01 pm
“I love it when stocks go on sale!
I went shopping today. Bought some Apple, Mastercard, Disney, and some Telus here at home.”
============================
I have no interest in Telus, but I am sincerely curious to know your rationale for buying AAPL, MA and DIS?

I ask because all three of these stocks are trading well below declining 5, 15, 25 and 50 DMA’s and their daily, weekly and monthly charts are disasters.

Just wondering why they look attractive to you?

#227 Smoking Man on 01.08.16 at 1:15 pm

The definition of Dumb Down

On CTV The Social. Five woman talking and acting like 11 year olds.

The audience eating it up….Just as dumb.

That is a market ripe for exploration. Calling all Entrepreneurs.

#228 I just want to see how long I can get away with this on 01.08.16 at 1:26 pm

Well, after triggering their ‘circuit breaker’ several times in one week, the Communist Party has decided to stop using it. China has enough history that there must be examples aplenty of what happens when the state interferes in the markets too much or too little, but no doubt ‘this time it’s different’. The Chinese are so cute and predictable.

#229 Mark on 01.08.16 at 1:42 pm

“Meet the worlds newest millionaire. “

Crazy stuff Smoking Man. Only wish I could have done quite as well on that (made enough to buy a new car on that trade which I only reluctantly entered, but $1M is craziness).

And to think, your friend will probably get another chance to do the same trade, but in reverse as the other side of the volatility reveals itself.

#230 Mark on 01.08.16 at 1:49 pm

BTW, for anyone looking at Smoking Man’s link, that guy had to sling ~$45M USD around to ‘make’ $1M. Balls of steel I must say, because the probability of ending up as a smoking hole in the ground was/is extremely high.

#231 Nagraj on 01.08.16 at 1:58 pm

About those 5 DISAPPEARED HONG KONG BOOKSELLERS:
Turns out the book they was gonna sell says that the President of China got it on with at least six beauties, and was not even faithful to Peng Liyuan!

That’s just terrible. How could anybody not be faithful to Peng Liyuan?!

Context: One fine day Tsar Nicky was holidaying with his family in Livadia, and along comes Stolypin and shows him this awful underground press stuff about how Alexandra Feodorovna and the four daughters was havin’ orgies with Rasputin. (Actually, Alexandra Feodorovna was probably the most prudish Czarina in all of Russian history.) So of course Nicky freaked out and next thing you know the Okrana smashes a lotta presses and heads.

More context: Versailles NEVER was able to stop the mess of leaflets making Marie A. out to be a greedy and subversive whore. (She was, truth to tell, a rather prissy sort.)

Under a dictatorial regime it’s hard to voice serious political grievances; a charge of moral turpitude flies over political considerations and smears leadership effectively.

So: is Xi Jinping facing serious opposition in China?
The Chinese stock mkt is a humongous mess and with tens of millions of new retail mom&pop investors, the stock mkt is also a grass roots political issue in China.
I wonder if Red Capitalism has rendered China politically unstable.

(Hong Kong isn’t legally supposed to be subject to mainland censorship.)

#232 Toronto_CA on 01.08.16 at 1:58 pm

Re that jobs report – Companies don’t layoff in December. They layoff in the new year. I’m expecting January to be some really bad news, even if the December report was all quantity over quality. So much volatility with job numbers in Canada.

#233 conan on 01.08.16 at 2:14 pm

Another perspective:

https://www.youtube.com/watch?v=Vogp-n1-JPA

#234 Godth on 01.08.16 at 2:23 pm

#227 I just want to see how long I can get away with this on 01.08.16 at 1:26 pm

“By our calculations it will require additional debt formation of $39 trillion over the next decade to keep petroleum production operating. Where that funding will originate from, when it is very unlikely to ever be repaid, will be of tantamount importance. It will take very strong-willed societies to make such sacrifices. If those sacrifices are not made, the integrated global production system will have disappeared by 2026. 2016 will be witness to the beginning of this event with dramatically increasing closures and bankruptcies throughout the world’s petroleum industry.”
The Hill’s Group — “an association of consulting petroleum engineers and professional project managers”
http://www.resilience.org/print/2016-01-04/peak-oil-review-jan-4=2016

…about that long.

#235 Milla on 01.08.16 at 2:45 pm

#214 Mike. Yes, they probably got into heavy debts to have big houses, boats, trailers, trucks. I having quite a decent engineering salary in Edmonton (not O&G) for a decade never could get how it is possible to pay for all these stuff. Not that I am stingy.

#236 Leo Trollstoy on 01.08.16 at 2:46 pm

#212 Smoking Man on 01.08.16 at 12:01 pm

that’s awesome. you da man. your calls on the usd > cad have always been spot on. gratzzz

#237 For those about to flop... on 01.08.16 at 2:57 pm

#235 Leo Trollstoy on 01.08.16 at 2:46 pm
#212 Smoking Man on 01.08.16 at 12:01 pm

that’s awesome. you da man. your calls on the usd > cad have always been spot on. gratzzz

//////////////////////////////
Is that why he is called Smoking Man?
Because guys like you are always blowing smoke up his bum?

M41BC

#238 James2 on 01.08.16 at 2:59 pm

#229 Mark on 01.08.16 at 1:49 pm

BTW, for anyone looking at Smoking Man’s link, that guy had to sling ~$45M USD around to ‘make’ $1M. Balls of steel I must say, because the probability of ending up as a smoking hole in the ground was/is extremely high.
…………………………………………………………………..
So Smoking Man must have slung $45M USD as well as he so states he is also a millionaire. Or was it his acid trip.

#239 OXI in GREECE on 01.08.16 at 3:19 pm

As usual…..the phony jobs report – now if you include people that are not counted – over 100 million in the USSA…….

http://www.shadowstats.com/alternate_data/unemployment-charts

But keep believing those “Govt” numbers folks…..

Yet another month proving you are on the margins. — Garth

#240 Dups on 01.08.16 at 3:24 pm

Market was still good to buy today.
The laid egg was extended by one more day.
I bet it will be all green on Monday.

#241 Dups on 01.08.16 at 3:26 pm

When the barrel of gas goes low, but the price does not change at the pump, the refineries make more profit.

#242 Leo Trollstoy on 01.08.16 at 3:49 pm

SM (and life) demonstrates once again that success depends on the individual. reality always punishes the dumb.

#243 TurnerNation on 01.08.16 at 3:56 pm

Next Black Monday? ; 11/01/2016. That’s in three days. I will be buying.

#244 Leo Trollstoy on 01.08.16 at 4:07 pm

Companies don’t layoff in December. They layoff in the new year.

orly?

http://rabble.ca/blogs/bloggers/nora-loreto/2016/01/december-layoffs-are-holiday-tradition-corporations-across-canada

#245 Mark on 01.08.16 at 4:11 pm

“So Smoking Man must have slung $45M USD as well as he so states he is also a millionaire. Or was it his acid trip.”

No, $45M was referring to the notional value of derivatives (ie: usdcad futures contracts) held in that man’s account to ‘earn’ $1M.

As Smoking Man pointed out, there are almost no words he can say that are strong enough in caution against what could happen if such a trade turned against him. If, tomorrow, suddenly the guy woke up and the CADUSD pair was 5 cents higher (or usdcad was 5 cents lower), the guy could be in the hole for a million.

Personally I have no idea about Smoking Man or if he is what he claims to be.

#246 TRT on 01.08.16 at 4:23 pm

Stay short the Canadian Dollar guys…

Hearing the MSM trying to downplay how much further loonies can fall.

Every day that passes by, I’m more convinced we will soon see a 59 cent loonie.

#247 TRT on 01.08.16 at 4:26 pm

Mark:

You have no idea how forex works so refrain from giving advice. Smoking man’s profit only possible via adding to positions as the trend unfolds. Otherwise, no bozo would risk getting wiped out in a single trade. Unbelievable.

#248 OXI in GREECE on 01.08.16 at 4:29 pm

#238 OXI in GREECE on 01.08.16 at 3:19 pm
As usual…..the phony jobs report – now if you include people that are not counted – over 100 million in the USSA…….

http://www.shadowstats.com/alternate_data/unemployment-charts

But keep believing those “Govt” numbers folks…..

Yet another month proving you are on the margins. — Garth
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

hahaha…..if you only knew the truth…..

#249 Nemesis on 01.08.16 at 4:38 pm

“Reality always punishes the dumb.” – LeoT

#NeverGoFull******…

https://youtu.be/X6WHBO_Qc-Q

#250 waiting on the westcoast on 01.08.16 at 4:42 pm

#224 Ponzius Pilatus on 01.08.16 at 1:04 pm
“#202 Dean on 01.08.16 at 10:58 am
Love your insight Garth but why you punish yourself allowing this comments section is lost on me.
—————–
Living in a democracy is not always easy. There a quite a few dictatorships around that you could try”.

Greaterfool is at best a benign dictatorship. Fortunately, it is benign. ;-)

Got my figures for December and last year. Will post on the next blog…

#251 Mike in Edm on 01.08.16 at 4:44 pm

#234 Milla on 01.08.16 at 2:45 pm
#214 Mike. Yes, they probably got into heavy debts to have big houses, boats, trailers, trucks. I having quite a decent engineering salary in Edmonton (not O&G) for a decade never could get how it is possible to pay for all these stuff. Not that I am stingy.
*******************************
I’m the exact same. Got a pretty decent white collared job and housing (rent) is half my salary per month, and I don’t have any toys, and zero debt. I’m convinced most people are up to their eyeballs in debt, and that doesn’t take into consideration their mortgages

#252 Mark on 01.08.16 at 5:02 pm

“You have no idea how forex works so refrain from giving advice. “

I didn’t, and don’t give advice. I was just making an observation that the notional value of the contracts that Smoking Man’s “friend” entered into were approximately $45M.

Smoking man’s profit only possible via adding to positions as the trend unfolds. Otherwise, no bozo would risk getting wiped out in a single trade. Unbelievable.”

Yes, he pyramided earlier gains into buying even more contracts. And it worked out for him, at least for the moment. Smoking Man’s words were quite apt there — take your chips off the table while you still got the chance!!!

#253 SoggyShorts on 01.08.16 at 5:53 pm

#200 Ole Doberman on 01.08.16 at 10:44 am
Wow Alberta oil down to $28

Does anyone know if any rigs out there stay profitable at these prices?

Correct me if I’m wrong, but doesn’t our low dollar keep these rigs alive? I mean they’re getting paid $28 USD, and their expenses are in CAD, right?

#254 Centurion on 01.09.16 at 1:04 am

“Turn off BNN.”

You mean I can’t watch Catherine Murray?!

#255 UncleFester on 01.09.16 at 11:26 am

Never mind Catherine Murray, I tune in for Amber Kanwar.

Shivers.