Patience

BISCUITS modified

Let’s clean up a few items.

A few mutts on this blog joshed yesterday about buying Bombardier stocks at 89 cents, since it was so damn cheap. After all, this company’s shareholders saw 90% of their investment evaporate over the past five years as Canada’s aerospace giant sank further into the red.

Well, anyone who did act on Tuesday made a 23% profit on Wednesday, as the stock soared to well over a buck. (Hope in your TFSA.) Of course all it took for that to happen was news Bombardier is laying off 7,000 people – which means less cash flow sucked off for useless employees and more for stockholders in potential dividends. Isn’t commerce great?

You might remember Montreal-based Bombo scored a $1.3 billion handout from the Quebec government only three months ago, and is now going chapeau-in-hand to the T2 gang for a matching pile of loot (despite the big Air Canada deal oddly announced at the same time). Will they get it? The federal NDP is lobbying hard for the handout, but I’m not sure that counts for much. Mulcair is so 2015.

The key point here is the loss of seven thousand highly-skilled, highly-paid manufacturing jobs, most of them in Canada – in a company which should be benefiting directly from a collapsed dollar, and is subsidized by taxpayers. I guess when your employees pay some of the world’s highest taxes and live in expensive houses, you should expect to be uncompetitive.

By the way, remember last year I told you about a major industrial collapse on the way? Uh-huh. Still want that stock?

$   $   $

So far this fun year, Bay Street has handed investors a 1% loss while the S&P in New York is down almost 6%. In fact, the TSX has been on a major rebound now for a while, outperforming major American markets and just a winning session or two from breaking into the green numbers.

Credit oil, of course. The black stuff jumped more than 5% on Wednesday and has been strong on the back of the Russia-Saudi deal to freeze production. This may not hold since the world is swimming in surplus crude and no producer seems ready to blink. Goldman Sachs is still saying prices will plunge from this level (by ten bucks), but nobody should have any illusions it will rise again. Not to a hundred dollars (for a long time), but maybe half that.

Commodity prices in general are at 1990s levels. Nuts. This is worse than the 2008-9 financial crisis when the world was contracting and deflation/depression was just around the corner. But today the global economy continues to expand, albeit slowly. The US recovery’s on track as it moves to statistical full employment and Chinese expansion will be just under 7%. Meanwhile the world still runs on oil. So, don’t bet against it.

Some weeks ago I suggested equities might be getting to the oversold point, just as residential real estate is overbought. And while I wouldn’t be backing the Silverado up to shovel in Suncor stock, every investor should maintain a sane exposure to Canadian assets. The recommendation here sticks. Keep the maple at around 17% of your growth assets (which should total 60% of the overall balanced portfolio) with the other two thirds buried in ETFs providing US and international exposure. (The exchange-traded fund XIU, which paces the TSX 60, has gained about 10% in the past month.)

The important thing to remember is that investing’s a long-term gig. Over decades, markets advance more than 70% of the time. Over 90% of all corrections never result in a bear market, and yet 100% of the time people react to declines the same way – moaning, lamenting, foaming and knee-jerking off in another direction after selling at a loss. The only thing most people lack more than foresight is patience.

CLARK modified

Ever wanted to screw up something significant? Then you might be a perfect fit for the BC provincial cabinet, which this week sucked and blew so much that weather patterns changed.

Reacting to the cry to ‘do something’ about insane real estate valuations in Vancouver, the Lower Mainland and saucy bits of the Island, the Christy Clark government embarked on two opposite paths, both of which will result in higher prices. Duh.

First, it guaranteed expensive properties (over $2 million) will become more expansive by increasing the land transfer tax by a withering 50%. Thus, there’s a new built-in cost which won’t deter anyone in that segment of the market, and will be added to the long-term value of the assets being traded.

Then, worse, the pols rolled back the tax on new houses costing $750,000 or less. They’re now exempt, in the name of ‘increased affordability’ for first-time buyers plus the hope a moribund construction industry can be rescued. Yes, you’re right. Encouraging kids to bid on houses will generate more demand, and push prices higher. This move also neuters the federal move (effective on Monday) to raise downpayments to 10% on houses costing over half a million – designed to dampen demand and holster debt.

Brilliant. Tax people who don’t care and inflate top-end properties while detaxing people at the bottom, goosing demand and prices.

The nimrods in Victoria need to understand something: Chinese dudes did not do this to Vancouver. Nor did realtors, their registrar, assignment clauses nor hundreds of flips. Those are interesting and probably contributory factors. Not the cause, though.

This is a classic lesson in speculation. The market has been fueled by cheap rates, idiot policy-makers and human greed. Once the train bolted out of the station, everybody wanted to pile on. BCers have been willing to eat mountains of debt and assume epic risk to be part of what’s now seen as a sure thing.

This is your Nortel moment. Google it.

214 comments ↓

#1 Keep the comedy coming on 02.17.16 at 5:45 pm

Of course Bombardier landing a $3.8 billion contract with Air Canada had nothing to do with the pop in their share price today…

http://business.financialpost.com/news/transportation/air-canada-announces-plans-to-buy-75-bombardier-cseries-planes-worth-3-8-billion

#2 Lannice Bertram Jr. on 02.17.16 at 5:45 pm

First!!

#3 Courtenay Cowboy on 02.17.16 at 5:45 pm

BC is just nuts. I read in the local rag that the City of Courtenay is getting $3 million to build bike lanes and plant flower gardens in a 3 block stretch of downtown. The Feds figure that this will cut emissions and stop climate change.

Meanwhile we get boil water advisories after every heavy rainstorm and my kids are looking a massive cutbacks in school programs, and the Bernie Sanders-esque experiment of not grading kids anymore because it’s bad for their self-esteem.

And Christy Clark is grinning ear to ear announcing an imaginary $100 billion fund, to be paid for by the imaginary LNG industry. Has anyone told her that LNG prices in Asia have been cut in half due to the US shipping LNG from Louisiana. The mythical and mystical BC LNG dream never got out of the starting blocks. While Clark et. al were screwing around, The Yanks ate our lunch, drank our milkshake, burped and stole our next weeks lunch money.

BC is so screwed up it is unbelievable. No money for kids, schools, hospitals, or even clean water. But lots of cash to build some flower pots and bike lanes that NOBODY USES!!!!!

#4 potato on 02.17.16 at 5:49 pm

potato

#5 Silent the people on 02.17.16 at 5:49 pm

First, it guaranteed expensive properties (over $2 million) will become more expansive by increasing the land transfer tax by a withering 50%.

I think the BC Liberals will pocket the money!

Thank you very much!

They won’t be one of the seniors in poverty thanks to the great pensions for them!!!!

#6 matt on 02.17.16 at 5:49 pm

Keep going Garth. We almost have my fiancee willing to Rent instead of buying in the 416/905

#7 Debtfree on 02.17.16 at 5:53 pm

I wonder if Harper has reached heroic stature at Airbus ? I think his iron fist hit bombo right in the noggin .

#8 mellyschu on 02.17.16 at 5:54 pm

That dog has got the idea! Patience and self-control!

#9 Rick on 02.17.16 at 5:54 pm

Oh Yeah!!! First!

#10 Retired Boomer WI on 02.17.16 at 5:56 pm

Another good day for the US markets. Got lost of my “buy” orders filled when the panic stricken were running amok! (Was a bit too cheap on a few that have now moved far far away (oh well., win some, lose some).

Overall recovering nicely, and feel more diversified, with a decent cash reserve. MF, see it wasn’t “forever”

Tomorrow we head for Memphis, then down toward the sunshine state. Defrost time is SO anticipated by us badgers… Expect to see the usual flush of snowbird plates plying the interstates this time of year. Stay Well, all.

#11 Irish Stew on 02.17.16 at 5:58 pm

Seems the harder I work the more I pay – soon I may as well stop working hard for the commission. Half of it is gone before I get home.

I think if I get old w/ money I will be lesser off than those who have none and get govt assistance.

#12 Penny Henny on 02.17.16 at 6:00 pm

Then, worse, the pols rolled back the tax on new houses costing $750,000 or less.-GT

Yesterday you commented to a blog dog that this was a non event????

In terms of making houses more affordable, absolutely, — Garth

#13 hurtin on 02.17.16 at 6:03 pm

money to be made out there!

#14 Fed-up on 02.17.16 at 6:05 pm

Hey, I too could be Canada’s aerospace giant if the federal and provincial governments would cut me cheques for $2 or $3 billion whenever I needed it.

Disgraceful.

#15 pricedoutfornow on 02.17.16 at 6:08 pm

Thanks Garth. While everyone in BC is crying about the poor affordability of the Vancouver housing market, I think we all need to take a deep breath and consider history. Booms just don’t last (look at oil, and yes, Nortel), and the market will eventually make housing affordable again. Just wait. And watch. Then we’ll see who is crying into their beer.

#16 crossbordershopper on 02.17.16 at 6:10 pm

go to saskatchewan and live in a house that costs 100K. spend six months in the warm south.

#17 Victoria Real Estate Update on 02.17.16 at 6:11 pm

PLENTY OF DENIAL

Just before house prices began to fall in the US in 2006, statements from housing “experts” denying the existence of a housing bubble became more frequent. For example: Alan Reynolds, Senior Fellow, Cato Institute (US):

“’Housing bubble’ worrywarts have long been hopelessly confused. It would have been financially foolhardy to listen to them in 2002. It still is.” (January 8, 2005)

Sound familiar?

OUR DOT-COM BUBBLE FIZZLED AND DEFLATED – LET’S MAKE HOUSING BUBBLES!

Starting in 2000, mortgage lending standards in Canada and the US were lowered dramatically and this brought about the formation of housing bubbles in both countries. By 2006, housing bubbles of equal size existed in Canada and the US.

PROOF THAT HOUSING BUBBLES IN CANADA AND THE US WERE EQUAL IN SIZE IN 2006

From 2000 to 2006, house prices in Canada increased slightly more than in the US (see first chart).

From 2000 to 2006, Canada’s household debt-to-income ratio increased by the same amount as in the US (see third chart).

From 2006 to 2006, the increase in Canada’s price-to-income ratio equalled that of the US (see first chart).

MORE BUBBLE-BLOWING POLICY CHANGES IN CANADA AFTER 2006 – THE PARTY CONTINUED

This didn‘t happen in the US after 2006.

After 2006, Canada brought in zero-down mortgages, 40-year amortizations, etc. and, in 2015, 100% of rental income was allowed to be used on mortgage applications.

(continued)

#18 Brett on 02.17.16 at 6:11 pm

My brother in-law who is one of the few remaining superintendents for a large Calgary house builder said to me on the weekend, “where has all the world’s money gone”? I didn’t have the heart to tell him, there was no money, it was all just borrowed fluff…

#19 Be careful what you ask for... on 02.17.16 at 6:12 pm

Clark self serving. As Higher Ed minister, a take it or leave it, my way or the highway individual.

She is adding fuel to the fire, fanning it in the interim and hoping a recovery in Canada happens whilst YVR RE provides growth in the interim for the province.

High risk, unlike her…seems the last election results emboldened her.

I agree, a Nortel moment in the making.

If so, she may well pay for her “give the people what they want at all costs” policy.

Time will tell but I do believe May/June will be that time if you look at where GDP and Jobs are headed. BC is not a separate country unto its own and soon enough will be subjected to what is happening in the rest of the country.

#20 Victoria Real Estate Update on 02.17.16 at 6:13 pm

ILLEGAL LIAR LOANS, MORTGAGE FRAUD AS WELL AS SUBPRIME LOANS, TEASER RATES, ETC. NOT JUST A US THING

Among other things, these were some of the big contributors to the US housing meltdown. We definitely have these things in Canada.

All Canadian CMHC-backed loans are subprime loans.

Plenty of illegal mortgage fraud is happening in our country. Canadian mortgage finance “professionals” are assisting and not much is being done about it.

Is this the kind of “prudent” and “conservative” mortgage lending that Canadian policy makers have bragged about to the rest of the world?

AT MAXIMUM SIZE, THE 2006 US HOUSING BUBBLE WAS TINY COMPARED TO WHAT WE SEE IN CANADA TODAY

By 2011, the Canadian housing market was more overvalued than the US at its peak – The Economist (2011). Canada’s bubble has grown significantly since then.

From 2000 to 2013, house prices in Canada had increased by 124% compared to an increase of only 53% from 2000 to the peak in the US (see first chart).

CALIFORNIA, NEVADA, ARIZONA AND FLORIDA SAW HOUSE PRICES GO BACK TO PRE_BUBBLE (2000) LEVELS OR LOWER (second chart)

These states experienced the biggest housing price run-ups. They also experienced the biggest price plunges. (source: Case-Shiller index)

Think BC and Ontario.

#21 MSM-Free Zone on 02.17.16 at 6:22 pm

Bill Vander Zalm, Mike Harcourt, Glen Clark, Gordon Campbell, Christy Clark….

There’s a time and place for weed…voting day isn’t one them.

#22 I'm stupid on 02.17.16 at 6:27 pm

Hi Garth

You wrote about a couple a while back, saying their portfolio reached 1million. I’m curious to know if they pulled their money after seeing it lose 6-8%. You know as well as I do that true investors ride the downturns and I remember you saying they had 12% growth for a time.

Why would any sane person cash in assets over a 6% loss? — Garth

#23 Caught In The Grip on 02.17.16 at 6:27 pm

Why 17% Canadian assets? Isn’t this high considering that Canada represents only ~3.5% of the MSCI World Index & 3% of the FTSE World Index?

#24 AxeHead on 02.17.16 at 6:29 pm

B.ring C.ash

#25 Julie K. on 02.17.16 at 6:29 pm

Sucks to have had to grow up.

#26 Rick on 02.17.16 at 6:30 pm

BC Real Estate Update. The US population is 10X that of Canada; therefore about 10X as many homes. I don’t agree that any housing bubble in Canada; could be anywhere near as bad, as what happened in the USA. Our population just doesn’t support that. TO and Van are over priced; I agree. They are just two cities; not massive states:)

#27 Herethere on 02.17.16 at 6:31 pm

Nothing new about Bombardier. As you could remember, from your days at The Sun newspaper, the mistake of the Toronto Star’s that was allowed to grow. There were often press releases of this company announcing to have so many new orders for their planes, creating a huge back-up on deliveries, moving forward. However, they seem always being on difficulties. Hard to rationalize while they are unable to delivery new streetcars to the TTC, they still get ride of highly skilled people. Guess with taxpayers’ money in play, who cares. Privatize gains, socialize losses.

#28 Penny Henny on 02.17.16 at 6:34 pm

VREU is simply a landlord, slumlord at that, who loves that people rent instead of buy (so that she can make more money and pay off the mortgages at historically low rates).

#29 Fred on 02.17.16 at 6:35 pm

…..so you’really saying I should buy Northland now? ;/

#30 S.Bby on 02.17.16 at 6:36 pm

White Rock BC has arsenic in their drinking water. I’m glad I don’t live there.

Anybody here take my advice earlier last month to buy TCK.B at $4.00 ???

#31 Love My Kia on 02.17.16 at 6:39 pm

Looks like that dog is in the trunk of a KIA. That helps save $ too.

#32 TRT on 02.17.16 at 6:40 pm

Christy Clark, De Jong, Jim Pattison (plus his puppet Hepner) are all behind the mess in Vancouver. This is what happens when a criminal gang runs a province.

People are buying like crazy because of who is in power. If things go south, many loopholes to privatize profits and socialize losses.

#33 TRT on 02.17.16 at 6:43 pm

You are going to see a mass exodus of working healthcare professionals from the Vancouver area.

Buddy starting up a consulting business matching US healthcare providers with young workers willing to relocate to the USA.

#34 Josh in Calgary on 02.17.16 at 6:44 pm

Garth,
I continue to struggle with your “long always” advice. Build a balanced portfolio and don’t try to avoid capital losses by stepping out when things look bad.

However another blog that I read, http://www.jugglingdynamite, suggests the opposite and has some compelling reasons. Today they are suggesting that the percent price oscillator on the S&P is dropping to levels not seen since 2001 and 2008. This isn’t their only piece of analysis, but the common theme is there is a major price drop coming and there is more to be gained by keeping your powder dry (cash instead of investments).

I already think you will refute this, but would you ever cash out 10 or 20% to try to play such a rebound?

BTW I jumped out of maple for a month and then got back in and managed to avoid a chunk of losses … lucky I know, and luck is not an investment strategy.

#35 Snowboid on 02.17.16 at 6:45 pm

19 Be careful what you ask for… on 02.17.16 at 6:12 pm…

I agree wholeheartedly, and IMHO the government under Christy is the most vile, sleazy group I’ve ever seen.

I used to think Campbell was bad, but our current crew puts organizations like the Hells Angels and Mafia to shame.

When I’m in a good mood I like to read the latest at this blog:

http://northerninsights.blogspot.ca/

I find that the research Mr. Farrell does is spot on, and exposes the flim-flam techniques the Clark government uses.

Of course I’m usually in a crappy mood after reading the latest in BC political scams.

BTW, the MSM hates this guy with a passion.

#36 ARP on 02.17.16 at 6:45 pm

This is your Nortel moment. Google it.

$ $ $

So easy, even a mortgage snorfling Canadian can do it!

#37 MF on 02.17.16 at 6:52 pm

I had the pleasure of talking with some of the upper and mid guys at Bombardier during the Christmas holidays last December. A large group of them came into our work and I dealt with them.

They were a class act and friendly. Super easy to talk to. You could tell there was a comradery there, and that many of them had been working together for years.

I asked one of the more upper guys about the future of the company and he was under no illusions. Said he expected many of the lower level guys would be laid off. He said those lower level jobs were still higher paying engineering type jobs and it was a shame what was happening. There was not a lot in the way of optimism.

You hear a lot about these layoffs these days on the news, but this one has a face to me. Anyone getting laid off is awful, but I hope those guys were okay.

MF

#38 Mark on 02.17.16 at 6:54 pm

“I wonder if Harper has reached heroic stature at Airbus ? I think his iron fist hit bombo right in the noggin “

Why would a non-competitor to Bombardier care about what happens to Bombardier?

While Clark et. al were screwing around, The Yanks ate our lunch, drank our milkshake, burped and stole our next weeks lunch money.

LNG exports promised to be an economic disaster for BC and Canada. So not sure what the harm is in the Yanks doing it. They’re only driving up the cost of gas to their own domestic consumers. The gas isn’t disappearing — there’s no harm in simply leaving it in the ground where its value over the long term will at probably keep up with inflation. LNG is a terribly inefficient way of using natural gas.

#39 lala on 02.17.16 at 6:54 pm

Ill translate Garth for you kids. Load up on Canadian stocks and energy stocks. Time to unload some US stocks.

#40 MF on 02.17.16 at 6:55 pm

So are we investing in XIU like Garth recommends or individual maple stocks?

MF

I do not recommend individual securities. To do so on a site read by so many would be irresponsible and unethical. — Garth

#41 NoName on 02.17.16 at 6:55 pm

BOOMERS MUST READ !!!

http://m.phys.org/news/2015-05-ten-early-pension-payout.html

#42 Babbler on 02.17.16 at 6:56 pm

“Those are interesting and probably contributory factors.” – Garth

———————————————

Finally! So now it’s just a question of how much they have contributed to the insanity.

Garth, verily the truth shall set yee free.

#43 West Coast on 02.17.16 at 6:58 pm

…let’s face it’s not what you know, it’s who you know…..especially when it comes to landlords……
http://www.theglobeandmail.com/life/facts-and-arguments/the-trials-and-tribulations-of-my-low-rent-life/article28785874/

#44 steerage steward on 02.17.16 at 6:58 pm

Wouldn’t count on the low dollar to increase trade..

Canada’s Share Of U.S. Imports The Lowest Since Free Trade Began

http://www.huffingtonpost.ca/2016/02/17/canada-share-us-imports-lowest-record_n_9253914.html

#45 MF on 02.17.16 at 7:03 pm

“I do not recommend individual securities. To do so on a site read by so many would be irresponsible and unethical. — Garth”

No I know, just wondering what ideas the blog dogs have.

MF

#46 Leo Trollstoy on 02.17.16 at 7:04 pm

hopefully engineers laid off in the 7000 will go into IT where the money is. bumbardier is junk. wasn’t it at $25 a share a decade ago? lol

#47 Mike in Edm on 02.17.16 at 7:05 pm

It’s been 2 weeks since I was laid off (again) in an oil-supporting industry. Still ZERO phone calls from HR people or head hunters. There are well under half the jobs in my white collared field that there was back in spring/summer 2015 when I was laid off the first time.

If you don’t believe me, go have a look at Alberta’s top 70 employers (google it), and look at their career sections. Several of them aren’t hiring ANYONE, and it’s not just the O&G companies on the list. It’s ugly here folks. Not sure how much oil creep has affected the rest of Canada yet, but here in Alberta it’s huge.

For all those people saying “screw them Albertan’s! They had plenty of years to save when they were making huge cash in the patch”…. I completely agree with you, but you need to realize most people aren’t working in the ‘patch’. I make the same amount in my last 2 O&G related jobs as I did in non -O&G companies. I’ve got a degree and a professional designation and I was only making $85k/yr. Good money, but not insane money. I make the same as my counterparts across the country. Lucky for me, I’ve got savings, but most of us Albertan’s have never made $150k or $200k per year while being covered in oil every day. I don’t think many people realize that. And it’s not just those patch workers that are suffering. It’s people in every industry. I personally know people in recruitment, welding, semi-truck sales, supply chain, etc that have all been affected at least by seeing their co-workers being laid off.

#48 Blacksheep on 02.17.16 at 7:08 pm

“Brilliant. Tax people who don’t care and inflate top-end properties while detaxing people at the bottom, goosing demand and prices.”
—————————————————
Tow da so… Systemic support, BAM!
—————————————————
“(ethnicity irrelevant) dudes did not do this to Vancouver. Nor did realtors, their registrar, assignment clauses nor hundreds of flips. Those are interesting and probably contributory factors. Not the cause, though.”
—————————————————
I have to disagree, re: Occam’s Razor.

https://en.wikipedia.org/wiki/Occam%27s_razor

“The principle can be interpreted as stating Among competing hypotheses, the one with the fewest assumptions should be selected.”

So, since we KNOW, the gang Garth listed above is already PROVEN to be in play, the only question that remains is: At what % of the market?

If these professionals are not the primary force massively inflating Van RE, who is?

Are we to assume the working Cattle of Van with median family income of 67K are the big $ players, behind these ever inflating, multimillion $ RE transactions?

I believe that assumption would major stretch, bordering on faith and simply mathematically impossible.

#49 Cici on 02.17.16 at 7:09 pm

Ah Beautiful British Columbia…but so glad I don’t live there anymore.

House prices are so out of sync with reality (i.e., salaries), that one day this stormy house-lust fest is really going to bite them BCers in the butt.

Forget a soft landing, those idiot policy makers are going to need to engineer a continued sharp increase in house prices-whereby the average price continues to soar to the $8-million mark- in order to save them down the road.

I mean seriously, my parent’s generation struggled even with $50,000 to $60,000 dollar starter homes in Victoria (if they were even that much) and the rule in their day (which was strictly upheld by their bank regulators) was that you could only borrow 3.5 times your annual income (remember reading that in my early teens in one of my mom’s magazine subscriptions…probably a Gail Vaz-Oxlade column in a Chatelaine)…yet many of these boomers are sitting in homes valued at $1M or over, but forced to live off of a pittance or borrow against their homes to survive.

So what’s going to happen in 20 years, when the moisters still have huge mortgages to pay, kids going off to university, no savings, no retirement savings, potentially lackluster job prospects and the prospect of much higher interest rates and inflation?

The impact that this could have on society could be devastating. And who, if anyone, will have the last laugh?

#50 Frank Stigleze on 02.17.16 at 7:18 pm

Bombardier was $50 a share in 2000.

And in 2011 it was seven bucks. — Garth

#51 H on 02.17.16 at 7:21 pm

“Statistical full employment”

Clever

For the record the “statistical” unemployment in mid 2008 was around 5%

Sound familiar? It should. But driving looking in a rear view mirror is just as dangerous.

btw the fed had about a 5% cushion in rates to start dropping from. Today as the predicted “4 rate hikes” vanish they have what?

Its coming. The last 3 days in markets was fuel to break through the bottom support which was oversold.

#52 Shawn on 02.17.16 at 7:25 pm

Allocation to Canada

#23 Caught In The Grip on 02.17.16 at 6:27 pm asked:

Why 17% Canadian assets? Isn’t this high considering that Canada represents only ~3.5% of the MSCI World Index & 3% of the FTSE World Index?

******************************************
No, it is not high. It would be silly to allocate only 3.5% of growth assets to Canada considering:

You would then be taking currency risk on 96.5% of your growth portfolio

You would be failing to invest in those Canadian companies that you know and have confidence in and some personal knowledge of in favor of investing in foreign companies which you would usually be less familiar with and in legal jurisdictions unfamiliar.

The notion that equity investments in Canada should be in proportion to the country’s market proportion to the world is completely silly just given the currency risk.

(Well it might a make a bit of sense for non-Canadians)

A 3.5% allocation to Canada for Canadians is preposterous.

I don’t know if 17% of growth assets in Canada is the right number, I would go much higher than that. But 3.5% is clearly too low.

I have essentially never bothered with anything outside of Canada and the U.S. since I do individual stocks and since those are not as easy to buy outside of the North America exchanges. I don’t even bother with those that trade as ADRs on the American exchanges since I would not be familiar with most of those companies. But I might look into some of those at some point.

#53 Cici on 02.17.16 at 7:26 pm

Forget to mention…if the average price goes to $8M, my sister won’t move, she’ll just be POD and blame me for encouraging her not to buy in 2015.

Saskatchewan honey, Saskatchewan…you’re always indoors working anyways!

#54 Freank Herd on 02.17.16 at 7:27 pm

Sure, buy the Bomber, as it goes down in flames. Meanwhile Trudeau Liberals are ransacking the energy industry to the tune of lost hundreds of billions, to please Obama?

http://business.financialpost.com/fp-comment/how-trudeau-helps-the-saudis-scheme-to-sideline-canadian-oil

Tell that to the hundreds of thousands of laid off energy workers and millions of starving seniors and children Justin

#55 Victoria Real Estate Update on 02.17.16 at 7:29 pm

#26 Rick

I proved that Canada’s housing bubble is much bigger than the US bible was.

The important metrics used to determine the size of a housing bubble are not population dependent like you seem to think.

Your comment offers nothing to refute any of the facts I presented in my posts.

All Canadian cities have housing bubbles. No exceptions.

Try again.

#56 Prairieboy43 on 02.17.16 at 7:30 pm

@#47, Mike in Edmonton. Mike are you a Mechanical Engineer. Enerkem in Sherwood Pk needs experience.

PB43

#57 Victoria Real Estate Update on 02.17.16 at 7:30 pm

Correction: US housing bubble

#58 Caught In The Grip on 02.17.16 at 7:31 pm

Hilliard MacBeth makes a compelling argument for a Great Canadian Housing Crash. The recent BMO housing market scorecard is disquieting. The crash has started in Calgary as he predicted in 2014.

A crash is illogical. A protracted declining market is the lesson Calgary suggests. — Garth

#59 jaybee on 02.17.16 at 7:38 pm

Why would anyone buy stock in Bombardier? It’s a howling dog, and has been forever. Head out to your local casino, and play some black jack. At least you have a chance. Some people allocate a bit of money in their portfolio for “fun”, play money. Maybe it belongs there, but for the love of god, be prepared to lose that money.

#60 ALBERTASTROPHE on 02.17.16 at 7:39 pm

It may help to understand the self-inflicted plight of this province to see a story like this:

http://edmontonjournal.com/news/national/fluoridation-puts-edmonton-ahead-of-calgary-in-child-dental-health-study-finds

Years of lobbying by idiot, conspiracy nutjob conservatards who finally got their way in 2011, in spite of all good science, and eliminated fluoride from Calgary’s tap water, and now we sadly get to see the oh-so-predictable destructive results.

Calgarians lose their homes, their economy, and now their kids teeth, with no money or benefits left to cover proper dental care.

You can bet this is not happening in Norway, with actually educated citizens and governments who know how to save for the lean years.

Sorry Rachel, but the Rest of Canada owes us very little in all this.

Our politics have been of the mentally defective conservative variety for far too long. We have been the most inbred, the most truly stupid and inward-looking bunch of hillbillies in all of Canada’s history.

And now our kids’ teeth are falling out, so they’ll look like hillbillies, too.

How sadly fitting.

#61 Caught In The Grip on 02.17.16 at 7:40 pm

I tend to agree with the protracted declining market view also. However, it depends how you define “crash”. It’s simply a matter of time frame. A rapid 25% initial decline (i.e. within 2 years) followed by a slower subsequent 25% decline over many more years is possible.

#62 jaybee on 02.17.16 at 7:42 pm

I liquidated 10 percent of my stock portfolio today, and took some decent profits. I feel I can get in at lower prices in the next few weeks. If not, I have a long shopping list of US stocks that I am looking to buy and hold long term.

I”m hoping for some panic!

#63 Tony on 02.17.16 at 7:43 pm

NVIDIA Corporation up about 8 percent in after market trading. I was looking for a jump of about 25 percent on the earnings report. They came in lower than I expected.

#64 Panhead on 02.17.16 at 7:43 pm

#47 Mike in Edm on 02.17.16 at 7:05 pm
It’s been 2 weeks since I was laid off (again) in an oil-supporting industry.

I feel for you Mike. Things have sure changed. I still remember going over to Grande Prairie (under contract) to help out a railway there a few years ago. Stayed for a couple of weeks. Expenses picked up by the company. Could not believe the “grandiose” I witnessed. There were parking lot attendants at the “Keg” telling you how long it would take you just to get inside. Once inside and seated we witnessed 2 young couples next to us (guy’s dressed in mackinaws) get served and one girl took one bite out of her steak and just left it.
One young fellow working with us just up and quit one day and we ran into him by chance that night in a bar. He had gone out for lunch after quitting and had another better paying job by the end of the day. Could go on and on … just glad I actually saw it with my own eyes. I’ll never see that again. Good luck in finding work …

#65 Cory on 02.17.16 at 7:45 pm

As I said yesterday, the whole real estate is almost embarrassing now….totally stupid.

I have been buying oil and banks during the volatility. Suncor is the only one, always buy fully integrated not upstream. As I said a few posts ago, the Saudi/Russia rumors will materialize to reality. Saudi is at peak production and will have a hard time moving their production upward and they need money to do so as well. With oil at these levels, they will have a hard time doing so unless they dip more in to reserves which they are now to fund defecits. They realize the civil unrest that will come with oil at these unsustainable levels. Goldman is obviously on the sell/short side of things.

Like oil at $150, oil at $30 is also unsustainable and very dangerous. It is obviously breeding complacency among many who think the world is “awash” in oil…..maybe today, due to a man made surplus. The over production is not much in the big scheme of things and will diminish quickly as production naturally declines.

Again, it is all very dangerous. Development can be stopped quickly but takes a very long time to re-start. In that time, oil (and nat gas) will shock to the upside. When that will be is anyone’s guess. I just hope it isn’t during the dead of winter when the shortages hit.

#66 Doug t on 02.17.16 at 7:46 pm

BTFD – but the bottom is not yet – perhaps end of year or 2017 – hard to say – patience – watch – chill out. Besides there is nothing to do when the world is upside down but sit back and ponder on where this is headed and be ready.

#67 dr talc on 02.17.16 at 7:50 pm

Reminds me of my toronto hydro bill, surcharge the majority to credit lower income energy users. Marxism. The mantra of affordability is as good a con as sustainability
100% BS

#68 Mark on 02.17.16 at 7:56 pm

Bombardier was $50 a share in 2000.

If I may ask, where did you get that number?

My sources say ~$26.

The crash has started in Calgary as he predicted in 2014.

The information I have is that Calgary started declining the earliest of most major Canadian centres, around 2011, received a temporary boost from the flooding, and has been stagnant to down ever since.

An EPC hiring slowdown/collapse in Calgary showed up in ~2011/early 2012. And since engineering is done up-front before tradespeople are turned loose to build stuff, its actually a fairly decent predictive tool of where the economy is going to be a few years down the road.

Extending similar logic to the US, a recovery or growth of any meaningful kind that involves significantly engineered outputs has largely been elusive. The ‘recovery’ narrative certainly isn’t supported by anything meaningful happening in manufacturing, that’s for sure. Engineer hiring will probably preceded significant gains there, much as the cessation of engineering hiring preceeded Alberta’s economic slowdown by roughly the length of the design cycle.

#69 Tony on 02.17.16 at 7:56 pm

Re: #10 Retired Boomer WI on 02.17.16 at 5:56 pm

The only stock I hold had a very good day but not as good as I had hoped for in after hours trading.

#70 dr talc on 02.17.16 at 7:59 pm

PS, all land transfer tax is a fraud, its just a wealth transfer from your pocket to others elsewhere

#71 AB Boxster on 02.17.16 at 8:01 pm

#60 ALBERTASTROPHE on 02.17.16 at 7:39 pm

—————————-
Yeah because the study showed that the rate of inrease in cavities in Calgary vs Edmonton was about 2% difference, and statistically insignificant.
And if the government told you that putting arsenic in the water was good for you, would you beleive this too?

#72 jaybee on 02.17.16 at 8:07 pm

Hey Garth,

The Halifax market is really strange over the last couple of years. It was heated up for five or so years, and then it just froze. Realtors seem to be happy to let things sit on the market.

I’ve tried to make a couple of “stink bids” on some revenue properties, and I’ve had nary a response.

#73 ALTERNATIVE TO TURNER on 02.17.16 at 8:08 pm

Jörg Guido Hülsmann, a senior fellow at the Mises Institute:

In no period of human history has paper money spontaneously emerged on the free market. In all known historical cases, paper money has come into existence through government-sponsored breach of contract and other violations of private property rights.

#74 Retired Boomer WI on 02.17.16 at 8:10 pm

#45 MF

…brain fart there…

Like I said, owning any single equity name can be more hazardous than a group as in a broad based ETF.

Unless you have a LARGE portfolio, I would not suggest it.

Best bet is select a nice broad based ETF, like the Total Stock Market Index, or even the S&P. Feed it regularly, don’t fret when it dips 30-40-50% because there will come that moment it will. FEED IT MORE then, they’re sale!

Yes, it can seem that other things outpace the markets like property etc. As I never owned property other than a single

#75 ALTERNATIVE TO TURNER on 02.17.16 at 8:10 pm

CONTINUING….

Austrian School economist Ludwig von Mises said:

The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation — which, as in all other cases of unlimited inflation, ends in a “crackup boom” and in a collapse of the money and credit system.

Or the banks stop before this point is reached, voluntarily renounce further credit expansion, and thus bring about the crisis. The depression follows in both instances.

#76 Kreditanstalt on 02.17.16 at 8:11 pm

Governments everywhere will BEND OVER BACKWARDS to “save” high-wage, big-spending, net taxpaying jobs…even if those jobs are zombie misallocations of capital.

Our Leaders know that once the buy-only-cabbage-and-potatoes, no disposable income masses are all that is left, they will face only downsizing and austerity.

And they’ll do anything to avoid that.

#77 Retired Boomer WI on 02.17.16 at 8:15 pm

45 MF…. brain fart 2

…family home I am no expert there. I CAN tell you that 39 years in the market has treated me wonderfully!

Mostly 80% equity 20% bonds until nearing retirement and now in retirement, closer to 60/40% balance.

Now, I do own a few names of blue chip stocks, but a small part of the total. (bought after after age 50 on sale).

Be governed accordingly.

#78 I'm stupid on 02.17.16 at 8:16 pm

Why would any sane person cash in assets over a 6% loss? — Garth

Fear… I’m only asking because I remember the story and how you commented about how cheap they were. Usually really cheap people fear losses and tend to bail at the first drop in their portfolio.

#79 TCContrarian on 02.17.16 at 8:18 pm

Garth — The black stuff jumped more than 5% on Wednesday and has been strong on the back of the Russia-Saudi deal to freeze production. This may not hold since the world is swimming in surplus crude and no producer seems ready to blink. Goldman Sachs is still saying prices will plunge from this level (by ten bucks), but nobody should have any illusions it will rise again. Not to a hundred dollars (for a long time), but maybe half that. –
**********************************************

Well, well, well….let me remind you (and everyone else), that in mid-2008, when oil was >$135-145/bbl. Goldman Sachs was predicting $200/bbl oil. Most analysts were agreeing in this camp, or the other camp who simply stated “forget about 2-digit oil” (ie. we’d never again see prices <$100).
For those that missed it, the price of oil dropped from a high of $147/bbl. in June/July 2008, to BELOW $35/bbl BY DECEMBER 2008 (yes, in 6 months!)

This a perfect case of 'recency bias'! I'm a bit surprised that you're also falling for it, Garth. You know it works for both the bullish case (ie. Real-Estate), or the bearish case (oil, commodities).

Food for thought: how is it that all these 'experts' never saw the plunge in oil from $70-90 range? But now we're supposed to trust their abilities to forecast?

By the way, the Russia-Saudi deal is just noise. The media is always fishing up 'causes' to explain moves in prices (which the Sheeple lap up). In fact, I've caught them using the SAME 'causes' for opposite moves in price.
Logically, that's impossible! Wouldn't you say so?

Enjoy your blog – but I don't necessarily agree with some of your 'explanations'. I hope you don't mind…

TCC

#80 Smoking Man on 02.17.16 at 8:20 pm

So tax payers are bailing out Bombardier.

Why not expand Billy bishop and let Porter and Air Canada buy a shit load of planes.

No that’s not how lefties do it.

#81 IKnow on 02.17.16 at 8:23 pm

Garth

Often when trying to deflect blames on HAN aka Chinese dudes for high house prices, I find your reasoning not too sound.

Like you are trying to distinguish between first cause vs contributory factor, won’t that be just splitting hair?

For example cold weather can weaken a person’s immune system and allow virus to attack and cause a cold.
Do is cold weather a cause or a contributory factor to the Cold disease?
To me for this example, cause is the same as contributory.

And you like to describe the insane house prices in vancouver as like a Nortel moment.
But often you would say Vancouver house price would just correct, no crash.
So what do you really mean when you call something a Nortel moment?
Just a mild 10% correction at worst?

Anyway I take your comment that Vancouver house prices not likely to crash to be your soft acknowledgment if the overseas effect on Vancouver house prices.
Because if just subject to Canadian fundamentals, price would be crashed by half by now.

#82 the Jaguar on 02.17.16 at 8:24 pm

I did google Nortel. The details were a little distant after so many years, but my goodness what a fall.
Sobering. A de-railed high speed train. And it could certainly happen in the lower mainland of BC. All the planets seem to be lined up for it. There will be a few more scandals that will break out before the final slide, but it seems a certainty. Wonder if 7000 layoffs in the Quebec will change the optics of pipelines for the mayor of Montreal?

#83 Nemesis on 02.17.16 at 8:25 pm

#MeanwhileBackAt… #CityOfCalgaryWaterServices…

https://youtu.be/J67wKhddWu4

#84 poundingsand in Peachland on 02.17.16 at 8:25 pm

Those are interesting and probably contributory factors. Not the cause, though….so what is the cause oh grate one

Trouble reading?: “This is a classic lesson in speculation. The market has been fueled by cheap rates, idiot policy-makers and human greed. Once the train bolted out of the station, everybody wanted to pile on. BCers have been willing to eat mountains of debt and assume epic risk to be part of what’s now seen as a sure thing.” — Garth

#85 Nemesis on 02.17.16 at 8:38 pm

#Oooops,Or… #”It’sProbablyNothing…”…

[VancouverSun] – Chinese investors snag Vancouver’s biggest real estate prize: All four Bentall Centre towers

…”Chinese investors have won one of the most important commercial real estate auctions in Vancouver history, swooping in to grab a controlling interest in all four towers of the Bentall Centre.

Sources confirmed to the Financial Post that Anbang Insurance Group Co. Ltd., a Beijing-based company with a reported US$114 billion in assets, is buying what amounts to a 66 per cent stake in Bentall I, II, III and IV — a sprawling commercial 1.5-million-square-foot office complex, with some retail, in the heart of Vancouver.”…

http://www.vancouversun.com/business/commercial-real-estate/chinese+investors+snag+vancouver+biggest/11726003/story.html?__lsa=1d0b-05d2

#BonusBeatIt… #OrBarney&TheLegendaryHearts… #AreJustRentersNow…

https://youtu.be/MDz8jtMrm9s

#86 Patience - Realties.ca on 02.17.16 at 8:40 pm

[…] Source: http://www.greaterfool.ca/2016/02/17/patience-3/ […]

#87 MF on 02.17.16 at 8:52 pm

#74 Retired Boomer WI on 02.17.16 at

Slow, steady and boring I guess. It can make you feel impatient and anxious during corrections, but the dividends definitely help!

MF

#88 cramar on 02.17.16 at 8:56 pm

#10 Retired Boomer WI on 02.17.16 at 5:56 pm

Tomorrow we head for Memphis, then down toward the sunshine state. Defrost time is SO anticipated by us badgers… Expect to see the usual flush of snowbird plates plying the interstates this time of year. Stay Well, all.

——–

Wife told me yesterday that she saw on the news that snowbirds migrating to FL this year are down 50% over last. This is Canadian snowbirds of course. Some venues accepting Loonie at par! Desperation. American snowbirds, because of cheap gas should be more numerous I would guess.

#89 Sabrina on 02.17.16 at 9:05 pm

Things are so good stateside that Garth all but guarantees 4 rate hikes this year and a fed funds rate “north of 3% in 2017.”

Prepare accordingly blog dogs.

There are no guarantees on rate events since they are (as I made clear) data-dependant. But, yes, up she goes. — Garth

#90 acdel on 02.17.16 at 9:05 pm

Quebec 7000 laid off, Alberta 70,000 laid off!!

I guess down East Nortel comes’ to mind, for me out West this sounds more like a Bre-X going down on the West Coast, this cannot end well!!

#91 45north on 02.17.16 at 9:06 pm

First, it guaranteed expensive properties (over $2 million) will become more expansive by increasing the land transfer tax by a withering 50%.

Then, worse, the politicians rolled back the tax on new houses costing $750,000 or less.

Here’s Madeline Ashby writing in the Ottawa Citizen advocating for more regulations : It’s that there are almost no regulations on over-valuing or “flipping” homes via third party realtors, and those practises drive up the costs of an area, rendering it uninhabitable for local residents.

http://ottawacitizen.com/opinion/columnists/ashby-mortgage-rules-too-little-too-late-to-solve-crisis

the BC Government is adding rules to the housing market. Madeline Ashby lives in Toronto and may not be aware of the new rules in BC but she does want new rules.

They are both missing the most obvious thing which is we do not have the most basic market information. Such as days on the market and selling price! Like the US has.

#92 Leo Trollstoy on 02.17.16 at 9:13 pm

Usually really cheap people fear losses and tend to bail at the first drop in their portfolio.

like buffett? cheap ppl buy when prices are cheap. stupid ppl bail. that’s the difference

#93 hope & ruin on 02.17.16 at 9:14 pm

@ MF

I’m not really an experienced investor but I have an appetite for some risk. Mostly, I’ve stuck to Garth’s advice. But this past year I placed some long term bets. Focused on industries and companies I know well.

If you’re going to take risks I think you should focus on areas you know. Helps you sleep at night. Not sure if blog dog advice will help with that.

#94 Retired Boomer WI on 02.17.16 at 9:14 pm

#87 MF

Slow, steady, and boring… sounds like my life these days!

Yes, at times slow, depreciating, panicky, and you think the end of the world is nigh!!

Get a grip! This WILL BE THE REALITY!! Should OIL actually hit $20 a barrel and sit there awhile, it will create a fantastic buying opportunity!

Whether we like it, or not… the world runs on OIL, and and oil goes, so goes our economies.

While I would prefer not to see the panic it will cause, and some financial destruction to be sure, we are flatly running out of places to store it presently.

Well, if they run out of good steak, brandy, or bourbon then I’ll have a dam good reason to panic!

Feed it, don’t look at it.

#95 Leo Trollstoy on 02.17.16 at 9:14 pm

Bumbardier was $50 a share in 2000.

either way bumbardier is junk

#96 Tiger1960 on 02.17.16 at 9:18 pm

60 albertastof <
Metro Vancouver does not floridate there water for good reasons
You are a dumb 99%er
Maybe your kind should brush and floss !
Stupid idiot ass well!
That is as well if you diddent get it dummy

#97 Leo Trollstoy on 02.17.16 at 9:19 pm

$50 to $1 or $25 to $1 whatever. bumbardier, nortel, barrick gold, breX, whatever. all losers. forget these loser businesses. don’t take investing advice from a person who can’t even sell the idea of getting an interview to be a wage slave. stick with a balanced diversified portfolio.

#98 Retired Boomer WI on 02.17.16 at 9:22 pm

#88 Cramar

Canadian snowbirds might be down this year with the loonie off so much. A lot of tourist destinations in FL rely on tourist $$ for their survival.

Despite the MSM news, I don’t think the US economy has recovered for the guys on Main St. that well…. No US business is so arrogant that they can afford to ignore customers, and do what they can do to lure them in.
(except a few of our banks…)

Some will succeed and be remembered by those Canadian customers in a year or so, when the loonie is at par, or above. Things change all the time.

#99 Grantmi on 02.17.16 at 9:26 pm

#46 Leo Trollstoy on 02.17.16 at 7:04 pm
hopefully engineers laid off in the 7000 will go into IT where the money is. bumbardier is junk. wasn’t it at $25 a share a decade ago? lol

NO! Almost 2 decades ago.

https://ca.finance.yahoo.com/q/bc?s=BBD-B.TO&t=my&l=on&z=l&q=l&c=

#100 simon garfinkle on 02.17.16 at 9:33 pm

DELETED

#101 simon garfinkle on 02.17.16 at 9:36 pm

#98 Retired Boomer WI

Loonie at par? With 50 US cents.

#102 Investorz on 02.17.16 at 9:44 pm

For you fellows looking for income and diversification outside of Canada, two discoveries:

– ZWA: DowJones with less upside but a 5% dividend

– ZEQ: 50% European staples and healthcare which Canada has little of. 2.5% dividend.

#103 Smoking Man on 02.17.16 at 9:53 pm

#54 Freank Herd on 02.17.16 at 7:27 pm
Sure, buy the Bomber, as it goes down in flames. Meanwhile Trudeau Liberals are ransacking the energy industry to the tune of lost hundreds of billions, to please Obama?

http://business.financialpost.com/fp-comment/how-trudeau-helps-the-saudis-scheme-to-sideline-canadian-oil

Tell that to the hundreds of thousands of laid off energy workers and millions of starving seniors and children Justin
….
Justin is a little school boy idiot.

His master mind calls the shots.

Gerarld Butts is the architect of this mess Ontario and soon the rest of Canada . He’s got a twitter account let him have it.

I do.

This radical tree hugger is on record calling for 100% reduction in carbon.

He’s an idiolog nutter.

Translation he will be happy when we are back to cave man days.

#104 James on 02.17.16 at 9:53 pm

#68 Mark
I don’t normally comment but your statement on the EPC “collapse” in Calgary in 2011/2012 are absolutely false, EPC employment started to be impacted only in 2014 with capital project cancellation/deferment. Engineering is not only front end but also runs through construction and commissioning. Yes, I’m an engineer in Calgary.

#105 Big Dipper on 02.17.16 at 10:01 pm

Q: What is the definition of a long term investor?

A: A speculator who is down!

#106 Mark on 02.17.16 at 10:03 pm

“Why not expand Billy bishop and let Porter and Air Canada buy a shit load of planes.”

Because YTZ is redundant when you have Pearson just a stone’s throw away from downtown on the TTC or the new Express train. There are significant safety issues for both water and air navigation. The runways, even if extended as proposed, will not allow the operators to use their assets most efficiently (ie: weights will be restricted to beneath maximums). The air cargo infrastructure is at Pearson, not downtown. And expansion at the Island airport bleeds off connecting flight opportunities, particularly to the US northeast that many of us in western Canada rely upon.

The attempt of a certain airline to link its order of the C-Series to the Toronto Island airport is blackmail at its best. And the new Liberal government basically, and rightly so, told the company where to go.

Fifty minutes in traffic or a $28 one-way train ride is a ‘stone’s throw’? — Garth

#107 ILoveCharts on 02.17.16 at 10:03 pm

“Then, worse, the pols rolled back the tax on new houses costing $750,000 or less.-GT
Yesterday you commented to a blog dog that this was a non event????
In terms of making houses more affordable, absolutely, — Garth”

That’s what I meant when I posted it – that it was ill informed policy that would have no impact at best but more than likely would drive up prices. I greatly appreciate your review of the budget today – I only wish our politicians would be blog dogs too.

#108 Joe2.0 on 02.17.16 at 10:06 pm

Triple top coming our way.
Unbearable consequences ahead.

You mean you’ll be posting three times? — Garth

#109 MF on 02.17.16 at 10:07 pm

#94 Retired Boomer WI on 02.17.16 at 9:14 pm

Lots of areas to store brandy in people’s cellars so that won’t be a problem moving forward :)

“feed it, don’t look at it” is great advice. Since rebalancing in December I still have a fair chunk of money that I need to invest. I just can’t seem to pull the trigger out of fear to be honest. It’s irrational but understandable I guess.

I think oil will hover around $30-40 for a while. I also this “deal” between countries that are fighting against each other in Syria (Russia/SA) is not worth the paper it is written on. Soon it will become clear that no one has cut production despite lying to each others faces, and oil will fall to around $25 where it will stay for a period. I will buy in a fund like XEG at that point..I mean I will force myself to.

MF

#110 X on 02.17.16 at 10:11 pm

‘The market has been fueled by cheap rates, idiot policy-makers and human greed.’ GT

Tru dat!

re #1 – BBD hasn’t landed the contract. They used the media to blow up a letter of intent. As I heard it reported today ‘it is like your boyfriend saying he wants to marry you, but you still don’t have a ring yet’. How many jobs you think will be lost in Quebec after their gov’t coughed up that money for BBD….

#111 AfterTheHouseSold on 02.17.16 at 10:12 pm

#88 cramar
“…snowbirds migrating to FL this year are down 50% over last.”

We headed south from Ontario at the beginning of January and only saw two Canadian plates all the way down. During the rest of the month we only saw another two plates.

We are on the Atlantic side, Treasure Coast area, only a dozen more plates since beginning of February, most from Quebec. Yes, far fewer Canadians this year.

Lots of road/bridge infrastructure projects on the way down, eating places busy, lots of ‘hiring’ signs.

#112 NS in Calgary on 02.17.16 at 10:29 pm

#60 ALBERTASTROPHE on 02.17.16 at 7:39 pm

Perhaps you need to do some research on water fluoridation versus blindly quoting a news article.

#113 eddy on 02.17.16 at 10:29 pm

power ball fans? think twice

https://www.youtube.com/watch?v=J-Z10P2f4Pg

and that’s why we need more government
to run the casinos and numbers rackets

#114 cramar on 02.17.16 at 10:36 pm

#22 I’m stupid on 02.17.16 at 6:27 pm

Hi Garth

You wrote about a couple a while back, saying their portfolio reached 1million. I’m curious to know if they pulled their money after seeing it lose 6-8%. You know as well as I do that true investors ride the downturns and I remember you saying they had 12% growth for a time.

Why would any sane person cash in assets over a 6% loss? — Garth

—————-

Seems that a lot of people are confused over what an investment portfolio is for. They want to throw out the baby with the bathwater. Perhaps Garth has more explaining to do. In the mean time . . .

It is clear that many blog dawgs equate a portfolio with absolute paper value. I.e. Someone has a $1 million portfolio last year.

What is a portfolio for? For younger people, maybe yearly capital appreciation is their goal. But for many others, especially the wrinkles, it is monthly income. So if someone has a $1 million portfolio that is structured to provide a monthly income, it doesn’t matter in the short term if the paper value of the portfolio drops 10% to $900k, it will still crank out the same monthly/yearly income.

#115 JamesA on 02.17.16 at 10:38 pm

I did a tiny bit of googling for “Airbus vs Boeing vs Bombardier” and found a few comparison sites. The two leaders (hint: not our tax dollar boondoggle frères et sœurs) seem to have a 15-18 year reliability track record in the new big (for Bombardier) ish planes dept.. Question is: are there any pilots or airplane mechanics here? Is that mainly what it is? New plane, no track record. I am sure Ottawa will do the loans for anyone reasonable. Or, are they known for being lemons and/or hard to fix? The price is the lowest given the loonie.

Canada has discovered a new “two solitudes” Toronto and Vancouver. The original is lovely read. The new is nothing short of a nightmare.

#116 DON on 02.17.16 at 10:50 pm

#35 Snowboid on 02.17.16 at 6:45 pm

19 Be careful what you ask for… on 02.17.16 at 6:12 pm…

I agree wholeheartedly, and IMHO the government under Christy is the most vile, sleazy group I’ve ever seen.

I used to think Campbell was bad, but our current crew puts organizations like the Hells Angels and Mafia to shame.

When I’m in a good mood I like to read the latest at this blog:

http://northerninsights.blogspot.ca/

I find that the research Mr. Farrell does is spot on, and exposes the flim-flam techniques the Clark government uses.

Of course I’m usually in a crappy mood after reading the latest in BC political scams.

BTW, the MSM hates this guy with a passion.
– See more at: http://www.greaterfool.ca/2016/02/17/patience-3/#comments

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

I read Norm as well – daily. Honest research – good old school journalism.

#117 zudnic on 02.17.16 at 10:53 pm

I watch several area’s of Vancouver. One because I grew up there Tsawwassen, well neither the province or the fed cooled the market. Out of the 54 houses listed in Tsawwassen only two are below one million. The rest of the lower mainland is pretty much the same. Now even Langley and as far away as Abbotsford are closing in on the majority of listings over one million dollars. There is no reasonable explanation for this, it Tulip mania! Langley is surrounded by farm land, they are not running out of land, so is Tsawwassen. My prediction the market will be dead by spring. Trudeau is plunging this country into a recession, the worst we have ever seen. Cheap money wont save us. In fact that’s what is killing us.

#118 crowdedelevatorfartz on 02.17.16 at 10:53 pm

@#84 pounding sand in Peachland

Speaking of self “flagellation”……

Hows Ponderosa Estates doin’ ?

#119 DON on 02.17.16 at 10:54 pm

#38 Mark on 02.17.16 at 6:54 pm

“I wonder if Harper has reached heroic stature at Airbus ? I think his iron fist hit bombo right in the noggin “

Why would a non-competitor to Bombardier care about what happens to Bombardier?

While Clark et. al were screwing around, The Yanks ate our lunch, drank our milkshake, burped and stole our next weeks lunch money.

LNG exports promised to be an economic disaster for BC and Canada. So not sure what the harm is in the Yanks doing it. They’re only driving up the cost of gas to their own domestic consumers. The gas isn’t disappearing — there’s no harm in simply leaving it in the ground where its value over the long term will at probably keep up with inflation. LNG is a terribly inefficient way of using natural gas.
– See more at: http://www.greaterfool.ca/2016/02/17/patience-3/comment-page-1/#comment-433092
************************************
I agree…leave it in the ground or sell it cheap to residents and businesses to lower costs and enhance our competitiveness.

#120 WUL on 02.17.16 at 11:29 pm

So B.C.’s gov’t is going to gather data on the land rush in the Lower Mainland.

For how long? Six months, two years, four years?

And then arrive at the conclusion that the data is inconclusive.

The market will play itself out in the meantime.

RET. BOOMER – WI:

You old Badger! Enjoy the warmth in FLA. Use sunscreen. See you in a month.

#121 family beagle on 02.18.16 at 12:03 am

A house sold today in a 604 burb (20 kms from Vancouver). Listed high for $780k, went for $200k over asking. Tax free. 25 bidders, no subjects. Destined as a teardown. That’s way, way out of line with wages here. This town is full shelter challenges and the only new housing are high priced condos and big new mansions up the road. I bought and paid for that infrastructure. Fifty % of my rent goes to government. All the new houses do is fill up landfills. Half sit empty.

Tax equity. Tax equity on shelter.

Dare ya, Christie, you smugly sell-out.

#122 Exurban on 02.18.16 at 12:09 am

If the B.C. Liberals rose to the level of a snake’s belly they’d become dizzy from the altitude. That said, increasing the land transfer tax on properties over $2 million will move Chinese capital flight money directly into the B.C. treasury. I wouldn’t trust the Christy show to spend it very wisely, but right now the beleaguered B.C. taxpayer receives no benefit whatsoever from the hot money flows. It’s a start.

#123 Investx on 02.18.16 at 12:13 am

“A crash is illogical. A protracted declining market is the lesson Calgary suggests. — Garth”

Why no crash considering the similar debt levels and subprime mortgages you’ve written about?

Guess it’s different here, eh?

#124 kommykim on 02.18.16 at 12:17 am

RE:

#30 S.Bby on 02.17.16 at 6:36 pm
Anybody here take my advice earlier last month to buy TCK.B at $4.00 ???

Only a fool would buy a stock based solely on advice from an anonymous guy on a blog.

#125 ozy - when are u going to understand on 02.18.16 at 12:28 am

when are u going to understand…?!?!?!

there are not enough houses for the hordes of immigration in poor HOG TOWN!!!

let me repeat

there are not enough houses for the hordes of immigration in poor HOG TOWN!!!

take a break

#126 Colleen McDermit on 02.18.16 at 12:31 am

Senior Homelessness, a Trudeau Liberal secret shame,

http://www.vancouversun.com/life/north+vancouver+senior+forced+check+into+homeless+shelter/11726331/story.htmlshame on them.

Trudeau lives in splendor while the people who paid for his parents to indulgence him are rotting in their cars and fighting bedbugs in their old age.

This is the end product of ZIRP and a policy of hyper inflation where people have to decide whether to eat or pay rent but can’t do both.

Sure, give the big unions big raises, give the Green Blob billions, but seniors and starving kids, a big fat Trudeau Zero.

#127 sockeye sam on 02.18.16 at 12:42 am

#48 blacksheep.

I have to agree. I live in the thick of it over here on the west side of Vancouver. (Dunbar) , Been here for 42 years. I drive around my neighborhood everyday and see first hand what’s going on.All these tear downs are not being bought by locals. These lots are being bought up by Communist China. The builders are Chinese the sub trades are Chinese the music coming from their blasters is Chinese and the style of the houses are Chinese. If you don’t believe me I’d be happy to take you for a tour of the hood. And while were driving around I’ll point out all the brand new vacant houses including the four on my street. I’ll also show you a house that has a revolving door of pregnant women coming and going.If this keeps up this town is going to be vacant. I have a view of downtown. I can see the hotel/condo Shangra La. and all the lights are off on the upper half. Don’t believe for a minute that the local population are driving these prices up. I live here and you don’t. And don’t tell me I’m racist I have lots of Chinese friends. I work with Chinese, my renter is Chinese. Even my old Chinese friends are complaining on what’s happening. Speculators, tax shelter, money laundering you name it.

#128 Entrepreneur on 02.18.16 at 12:47 am

“Mulcair is so 2015” but at least he is human and listens to the people. Conservative and Liberals are so socialist but instead of helping people they eliminate the parts of the service and up the payments. Our resources belong to the people; therefore, the people should be benefitting from them.

The main requirements for living is only asking for a simple lifestyle (the basic needs, job, family, home). After that is simple greed. Can earth support that greed anymore? No an we lost total control when debt replaced cash.

I agree with #155 Q2 Class 4-4-6-4 “but between the public sector and the private sector” the private sector worked their butts off their whole life but are happy with any government pension money, even the GIS. We did not become rich and famous but we did support the community by hiring and buying. Don’t put us down.

Now mostly we have big box stores, big fast foods, casinos, etc. which the government likes for revenue but do these big anything help the community in the long-run. We all go there for cheaper this and that but products are made in other countries, so how can a average crafty person make a living in Canada when we have unions up the you know where. They can’t and their crafts are worth next to nothing.

Now we have foreign money coming into our housing market making it so overheated for the average Canadian. It never ends, the greed, the sham leadership, and everything that goes with it.

#129 Tony on 02.18.16 at 12:51 am

Re: #30 S.Bby on 02.17.16 at 6:36 pm

I bought it at $3.68 as it double bottomed at the 2009 low. After that it was overpriced as it rallied 8 percent the next day as the stock market sunk. I sold it at 5 dollars. I did mention it to Smoking Man (not that I like the stock I don’t) I figured the pension funds might buy it the same way they pushed up Canadian Tire to at least a 1,000 percent overvaluation when they dumped all the Nortel shares.

#130 Billybob on 02.18.16 at 12:54 am

On Oil
If you owned ZERO like I the last couple years. I don’t buy and mold on markets…Back up the truck. Risk reward is excellent.
When it was way up there 2 years ago my research said its going way lower when 99% missed it.
NOW 99% are all bearish…Their wrong….again.
$50 by years end will provide a nice boost to beating up companies.
Steer clear of the crowd. They always on the wrong side of the boat.
Stocks have been stablizing and moving up while oil continued to tank.
These are signs to look for if you have any experience in TA and market psychology.

#131 Tony on 02.18.16 at 12:57 am

Re: #109 MF on 02.17.16 at 10:07 pm

Technically (long term graph chart) oil should bottom at 20 U.S. but the U.S. dollar will probably weaken as the U.S. election nears. So 25 dollars might be a good level to be a buyer at.

#132 james on 02.18.16 at 1:52 am

Back in Toronto for a 3 day visit. Arrived in evening, and what is immediately apparent (when driving across your lovely Gardiner expressway at about 10pm) is how few lights are on in the big condo towers. Really quite different from what I am (now) used to.

The cab driver was complaining about condos and their contribution to traffic issues in the downtown core.

#133 Greg on 02.18.16 at 2:21 am

#3 Courteney Cowboy, Clark’s fantasy fund is $100 million… not billion. Roughly the same amount our MSP premiums went up.

#134 family beagle on 02.18.16 at 4:06 am

Garth,

You have a lot of influential readers and hopfully you’ll pass on this message for animal well being. The big horn sheep in BC (on our provincial coat of arms and often targeted by hunters) are now facing a biological threat from domestic sheep in the Interior. It’s a form of pneumonia and 2/3 of one indigenous herd are lost. Most ranchers are helping, but the wild herd needs intervention to prevent disease transmission. Hopefully, wildlife vets can get the support they need and ‘encourage’ cooperation from domestic sheep farmers before it spreads. Thanks.

http://www.vancouversun.com/health/government+urged+stop+spread+deadly+diseases+wild+bighorns/11721218/story.html
http://www.cbc.ca/beta/news/canada/british-columbia/bighorn-sheep-in-b-c-dying-from-domestic-sheep-pneumonia-1.3436291
Honourables to pester: Mary Polak, Environment; Norm Letnick, Agriculture; maybe the forests guy too. http://www2.gov.bc.ca/gov/content/governments/organizational-structure/cabinet/cabinet-ministers

#135 #35 Snowboid - Ditto on 02.18.16 at 4:10 am

I posted “Be careful…” and ditto back to you #35 Snowboid.

Read your blog link…typical of the so called “Libs”. At least NDP were trying to get something out of economic activity for British Columbian’s and repair the aging electricity infrastructure. Clark the exact opposite…

Makes you wonder how soon the day of reckoning will come especially now that Clark is goosing real estate to hopefully tide over BC GDP until the rest of Canada (save 416) turns around?

High stakes indeed and Garth is so correct when he says “…idiot policy-makers…BCers have been willing to eat mountains of debt and assume epic risk…”.

Painfully correct Garth and good you said it in public…but alas and typical of human greed…your comments will fall upon deaf ears until that day of reckoning comes and it will be too late then.

#136 debtified on 02.18.16 at 5:16 am

Garth, did you just say I am screwed? I gambled on BBD.B when it was a falling knife. Still holding them on my bleeding hands. :(

Smokie, dude, what’s up?

#137 Brian on 02.18.16 at 6:29 am

Mr. Turner

You (correctly) point out that investing is a long term gig, and expressly remind people that trying to time the markets is wrong headed.

Then you mention how xiu etc has gain 10% this month, which implies that we missed the boat by not speculating on xiu (and apparently bombardier).

Which is it? Invest for long term or “play” the markets seeking speculative gains?

Speculation is not investing. The reference to XIU was an example of how Canadian markets have improved even as investors have been shedding maple when they should maintain the correct weightings at all times. Seemed obvious to me. — Garth

#138 maxx on 02.18.16 at 7:13 am

#27 Herethere on 02.17.16 at 6:31 pm

During yesterday’s televised press release re BBD’s new contract with AC, Mr. Rovinescu smiling like the Cheshire cat…..

#139 ALBERTASTROPHE on 02.18.16 at 7:38 am

NS in Calgary, you said:

#60 ALBERTASTROPHE on 02.17.16 at 7:39 pm

Perhaps you need to do some research on water fluoridation versus blindly quoting a news article.

————————————————————

OMG, they are here!

NS in Calgary, I realize you are probably as deeply committed to your conspiracy nutjob, anti-fluoridation beliefs as you are to your beloved sister-wife, but give it a rest, okay……

But thanks, I guess, for underscoring the rampant stupidity and illiteracy that underlies so much of this province’s political and economic reality.

Your kind is a big part of the reasons Alberta is circling the toilet bowl.

#140 TurnerNation on 02.18.16 at 7:51 am

#3 Courtnay Cowboy. Yea. Google agenda 21 or whatever ‘sustainable’ project its known as. Earth worship. Rolling us back to 2nd world standards. Re-education and control over media. Seen this before? You know where it’s going toward.
Everything has been computer simulated first.

#141 Mike in Toronto on 02.18.16 at 8:00 am

I bought some BBD a few months back in the cynical belief that it’s so corrupt and so Quebec, that all the corruption in the world will be used to keep it afloat.

It remains to be seen if it can reach its former heights… of earlier last year.

#142 pbrasseur on 02.18.16 at 8:04 am

You might remember Montreal-based Bombo scored a $1.3 billion handout from the Quebec government only three months ago, and is now going chapeau-in-hand to the T2 gang for a matching pile of loot (despite the big Air Canada deal oddly announced at the same time). – Garth

Make no mistake about it, it’s your tax dollars buying those Air Canada planes…

How sustainable is this?

#143 Randy on 02.18.16 at 8:26 am

Creating a Huge Bubble is a great way for Elites to make money and then get your investments out of the country. It’s worked in the U.S. and Canada. Buy a Politician Today.

#144 CJBob on 02.18.16 at 8:39 am

#52 Shawn on 02.17.16 at 7:25 pm

No, it is not high. It would be silly to allocate only 3.5% of growth assets to Canada considering: You would then be taking currency risk on 96.5% of your growth portfolio
________________________
Ummm, no, little currency risk if you used hedged ETF’s (the matching isn’t always perfect). Have a look at VSP and XIN as examples.

#145 Hope & Change (Canada) on 02.18.16 at 8:47 am

#141 pbrasseur on 02.18.16 at 8:04 am
You might remember Montreal-based Bombo scored a $1.3 billion handout from the Quebec government only three months ago, and is now going chapeau-in-hand to the T2 gang for a matching pile of loot (despite the big Air Canada deal oddly announced at the same time). – Garth

Make no mistake about it, it’s your tax dollars buying those Air Canada planes…

How sustainable is this?

What do you mean? The taxpayer pays for the planes, the taxpayer pays for inflated ticket prices and protectionist regulations.

What can be more sustainable than milking the taxpayer from all possible sides of a business transaction.

So all’s good. but I hope these planes fly on solar power, considering the commitments that our 400 person delegation made in Paris. Shouldn’t be looking into social licenses for these planes just about now?

#146 ole Doberman on 02.18.16 at 9:01 am

London and HK real estate burst

https://www.armstrongeconomics.com/markets-by-sector/real_estate/real-estate-in-decline/

#147 Julia on 02.18.16 at 9:01 am

#106 Mark
My family flies out of Billy Bishop anytime we have the choice over Pearson. Costs next to nothing to get there and very easy to get to. Once you are there security is a breeze.

The UP Union-Pearson is nice, shinny and reliable – and also empty – but is too expensive for a family. Drive or take a taxi? Could take 30 minutes to 1 hour (or more) as traffic is a crapshoot. Then you have security – took me over 1 hour to get through in early February on a Monday morning for a domestic flight – had no option out of BB. Then depending where your gate is you could walk another 15 minutes inside the airport. No thanks

#148 James on 02.18.16 at 9:06 am

#145 Hope & Change (Canada) on 02.18.16 at 8:47 am

#141 pbrasseur on 02.18.16 at 8:04 am
You might remember Montreal-based Bombo scored a $1.3 billion handout from the Quebec government only three months ago, and is now going chapeau-in-hand to the T2 gang for a matching pile of loot (despite the big Air Canada deal oddly announced at the same time). – Garth

Make no mistake about it, it’s your tax dollars buying those Air Canada planes…

How sustainable is this?

What do you mean? The taxpayer pays for the planes, the taxpayer pays for inflated ticket prices and protectionist regulations.

What can be more sustainable than milking the taxpayer from all possible sides of a business transaction.

So all’s good. but I hope these planes fly on solar power, considering the commitments that our 400 person delegation made in Paris. Shouldn’t be looking into social licenses for these planes just about now?
………………………………………………………………….

Note to self, Do not take any night-flights!

#149 hope & ruin on 02.18.16 at 9:34 am

I wonder how many oil patch guys were also heavily exposed to energy stocks + alberta real estate. That’s a lot of exposure to one risky asset.

I’m thinking my long-term bets will act as a hedge against losing my job lol.

#150 Smoking Man on 02.18.16 at 10:01 am

#136 debtified on 02.18.16 at 5:16 am
Garth, did you just say I am screwed? I gambled on BBD.B when it was a falling knife. Still holding them on my bleeding hands. :(

Smokie, dude, what’s up?
………………..

Nothing we got creamed on that one. Can’t win them all.

#151 Brian on 02.18.16 at 10:03 am

Garth says:”Speculation is not gambling.”

What’s the difference?

Seriously!

Speculation is not investing. — Garth

#152 CJBob on 02.18.16 at 10:08 am

#106 Mark on 02.17.16 “Because YTZ is redundant when you have Pearson just a stone’s throw away from downtown on the TTC”…
________________
Given the size of Toronto these days we need at least 2 airports. There are 3 in New York similarly a stone’s throw away from each other. :-)

Mark next time you have something to post consider posting the exact opposite and chances are you’ll be correct. You remind me of this episode of Seinfeld:

https://en.wikipedia.org/wiki/The_Opposite

#153 Grantmi on 02.18.16 at 10:11 am

WallyMart coughed one up…… oh oh!!

http://schrts.co/Ir1Vfy

#154 AB Boxster on 02.18.16 at 10:19 am

#139 ALBERTASTROPHE on 02.18.16 at 7:38 am

——————————————
Yes, all of the challenges that Alberta is having today, with one of the most educated and intelligent working populations and citizenry in the world, are due to the lack of fluoride in the water.

Thank goodness.
Lets fluoridate the water and make Alberta great again!
Because its 2015 , whoops 2016.

#155 moola moola on 02.18.16 at 10:37 am

Re: #47 Mike in Edm on 02.17.16 at 7:05 pm

Not sure how much oil creep has affected the rest of Canada yet, but here in Alberta it’s huge.

I work as a secretary in a large firm on bay street. deals have dried up due to market instability. we’ve been having rounds of layoffs every month for the past 4 months. work is very slow. it’s effecting us.

#156 brian on 02.18.16 at 10:46 am

Speculation is not investing. — Garth

Glad to see you fixed that mistake!

In a similar vein I have noticed when the tax tanks you point it out, when xiu goes up, you point that out too.

As a long term advocate daily, even monthly swings either way don’t mean squat to me.

That’s the point. — Garth

#157 Chris on 02.18.16 at 10:55 am

“The key point here is the loss of seven thousand highly-skilled, highly-paid manufacturing jobs, most of them in Canada”

Actually, about 2800 of the cuts are in Canada, the rest in Europe or the US, so in fact, most of the cuts are not in Canada. Accuracy is important Garth.

My words were accurate when written. Subsequent information: “It was not immediately clear where the job cuts will be, though 2,830 will be in Canada, with 430 in Ontario and 2,400 in Quebec. In all, 400 jobs will be axed in the train division and 2,430 in the aerospace division in Canada.” Your comment will be comforting to the almost 3,000 affected families. — Garth

#158 amos811 on 02.18.16 at 11:21 am

I hope one day the 5-year-morgate rate will be 8%

#159 Vamanos Pest on 02.18.16 at 11:29 am

Garth,
not really sure how or why you’re not calling for a crash. You recognized the same fundamentals I do that clearly show residential real estate abandoned sanity years ago, yet you inexplicably predict the outcome of this is a protracted decline.
The problem with this prediction is that it’s never happened before. Ever. In any asset class. (Correct me if I’m wrong). To the contrary, history tells us that asset bubbles simply do not correct by going sideways. Examples to the contrary are so conspicuously lacking, that I would find it a more defensible position to argue that a bubble does not exist, than to argue a bubble does exist, particularly to the extent you frequently argue, but will somehow not end in a crash.

Pest

#160 Nobody on 02.18.16 at 11:29 am

@ moola moola hopefully secretaries that can tell the difference between effect and affect will be retained.

Ever notice how an auto-correct feature will change words from correct spellings? Or how self-lubricating peckerheads will seize upon such things to debase others? Two modern wonders. — Garth

#161 Smoking Man on 02.18.16 at 11:30 am

Trump is brilliant, he just put on a Huge Tin Foil Fedora. Basically declared war on the RNC Neocon base. Look for Bolton, Graham, McCain, Karl Row, and Dick Chaney to go absolutely bat shit crazy over this.

Why? he wants to draw Bloomberg into the mix insuring a presidential victory after he wins the GOP nomination.

Bet his next move is to go with Jesse Ventura as a running mate ensuring if he gets assassinated it will be much worse for the cons if that happens.

He has amazing instinct reading the Herd. Knowing that 80% of Americans don’t buy the official story on 911.

MSM is going to go nuts over this. Insuring more free airtime.

Got to hand it to him, He’s a Gambler.

http://www.prisonplanet.com/trump-vows-elect-me-and-youll-find-out-who-really-knocked-down-the-twin-towers.html

#162 pbrasseur on 02.18.16 at 11:38 am

Speculation is not investing Garth

You bet!

Speculation = trying to guess what others are going to do in the future (e.g.: a house (or an ounce of metal) does not become more valuable with time because it does not produces wealth)

Investing = buying assets which intrinsic value rises (e.g.: a company is a productive entity that creates wealth acquires value when it grows, regardless of its current market price).

Of course you can make money speculating, it’s just much riskier.

#163 Mike in Edm on 02.18.16 at 11:56 am

#56 Prairieboy43 on 02.17.16 at 7:30 pm

Thanks, but I’m not an engineer. I’m in supply chain as well. We’re always some of the first to go because we’re seen as a cost, even though we can (and usually do) save the company much more than what they pay for us.

#164 Shawn on 02.18.16 at 12:03 pm

INFLATED AIR FARES? HARDLY!

A “Victim” at called Hope and Change at 145 said

The taxpayer pays for the planes, the taxpayer pays for inflated ticket prices and protectionist regulations.

***************************************
Nice unsubstantiated opinions about inflated ticket prices.

Now for some facts form Stats Canada released today:

Released: 2016-02-18

Air fares—domestic and international combined—averaged $233.90 in the second quarter, down 1.8% from the same quarter of 2014. This was the lowest level since the fourth quarter of 2009, when air fares averaged $229.20.

The average domestic fare was $173.90, down 4.8% from the same quarter a year earlier, while the average international fare fell 1.3% to $303.40.

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

Air fares in my experience are very cheap. A bit cheaper than they were about 25 to 30 years ago when I first was flying annually.

In many Cities a one-way taxi ride from down town to the Airport costs maybe half what your one-way flight is going to cost .

Some people will always feel like victims.

Could fares be even cheaper with completely open skies. Probably yes. But now much and you’d have to worry that your discount airline would be out of business by the time your flight comes up. It happens.

But are they inflated now? No, in most cases airlines do not make a reasonable profit, so no.

#165 New Garth Fan on 02.18.16 at 12:09 pm

I’ve been reading your blog daily for 3 months. One question. Where/how do you start investing when you only have a small amount — $3000? I’ll be adding to it regularly, but that’s where I start.
Love the blog!

Inside the TFSA, in three growth ETFs. One Canadian, one US and one world. — Garth

#166 GenX on 02.18.16 at 12:11 pm

There are two ways of paying for a house:

1. Direct – one goes and buys a house, then the bust comes and one has to miserably look at its value going down.

2. Indirect – be patient and responsible, put your money in RRSP/TFSA. Then the bust comes, banks get into trouble and government will use your money (through taxation, inflation and capital controls) to pay for other peoples failures (it’s called bailing out). You will then live miserably telling everyone how you were right, but the government took everything from you.

There is no exit for nobody. We’re surrounded by sheeple and ruled by crooks.

My own retirement plan is to work as hard as possible and hopefully, when getting older, it will give me a nice hearth attack and I will be out of this world in 5 minutes.

#167 pinstripe on 02.18.16 at 12:20 pm

effects of the business cycle in alberta.

http://www.cbc.ca/news/canada/calgary/auto-loan-delinquency-rates-spike-1.3453199

#168 Fine wild roasted gonads on 02.18.16 at 12:30 pm

Shakespeare would have been in awe…!!!

” self-lubricating peckerheads

#169 Bottoms_Up on 02.18.16 at 12:31 pm

#159 Vamanos Pest on 02.18.16 at 11:29 am
———————————————————
As detailed on here by Garth, there was a slow melt from 1989 to 2001. Home owners lost on absolute price, as well as to inflation.

Even if a market is ‘flat’, the house price is losing to inflation.

So, slow melts have, can and do happen.

#170 Bottoms_Up on 02.18.16 at 12:37 pm

#154 AB Boxster on 02.18.16 at 10:19 am
————————————————–
You’re joking right? Fluoridation of water, much like vaccines and western medicine, has been developed and studied extensively and is used to promote good health in Canada. Top doctors and scientists have studied the issue, and know the risk/benefits inside out.

Do you even know what the first ‘bad’ outcome of water fluoridation is, if you happen to get too much? Stained teeth. That’s right. Stained teeth. And this is why kids are told to use non-fluoride toothpaste, to allow their adult teeth to come in so that they don’t get stained.

#171 pinstripe on 02.18.16 at 12:37 pm

The coffee shop this morning was all focused on an oil engineer who has been in the oil patch for over 40 years. the oil sands in AB and SK is competing with the oil sands in Venezuela. Venezuela did learn that nationalizing the oil industry does not work that well and now are shifting to capitalism. Their location and access to tide water puts them in the drivers seat. Big money will able to move the advanced technology with no problem whatsoever. The refiners on the gulf coast are will be comfy with the outcome.

AB and SK will need to use the crumbs.

http://www.cbc.ca/news/business/employment-insurance-1.3453249

#172 Big Dipper on 02.18.16 at 12:42 pm

I’ve noticed that some of the more mentally challenged comments refer to a “rebel” website. Now I know why – it’s Ezra Levant!

http://www.cbc.ca/news/politics/ezra-levant-neil-macdonald-1.3452671

Anybody associated with Ezra should be shunned from public places. The risk of contracting rabies is significant.

#173 Sam the Sham on 02.18.16 at 12:58 pm

Bombardier’s management are the worlds most incompetent bozos. However, they are protected by their dual voting shares from ever being fired. Canadian tax payers have sunk billions of dollars in grants, loans, tax subsidies, etc. into this finical black hole. Every tax payer in the country should get a free ski-doo snowmobile from these clowns in payment.

#174 Ponzius Pilatus on 02.18.16 at 1:03 pm

#103 SM

Translation he will be happy when we are back to cave man days.
——————
Will you call yourself Smoking Cave Man then.
Wait, I think Smoking Neanderthal Man is better.

#175 zudnic on 02.18.16 at 1:24 pm

My father was a successful stock broker in Vancouver, during the 1970’s and 1980’s. I basically grew up around the stock market in Vancouver. I was 18 during Bre-X. I remember people not normally in the stock market, telling me to buy it. Back of my head, thinking I don’t need lousy stock picks from people not in the market, when my Dad is one of the top brokers around. In fact he was the highest earner in commissions at his firm! If he didn’t know about Bre-X before you, its not worth buying. In fact if I owned Bre-X Id be selling.

I’m now hearing why and where I should buy real estate from people that have never invested in real estate. When the non pros give advice its time to sell. Especially in a market that is supposed to be driven by foreign investors. The reality the foreign investor driven market is a myth, its the same as salting gold results!

The majority of the foreign buyers was mainland Chinese. China is still basically a third world country and could get very bad quickly. Like most wealthy, they like to park money offshore. They bought as an escape, not an investment.

Secondly, the investor in real estate is not looking for the home to rise in value. They are looking for a safe place to sit on cash and earn a return. As the market has risen across the lower mainland. At current rental rates, investors can’t earn a return on their money. The pros are out of the market, foreign investors are long gone. Like the stock market the pros will leave the general public holding the bag.

Example: This house http://www.rew.ca/properties/R2028850/515-tralee-crescent-delta why would an investor put up $1.2million in cash and then rent it for less then the interest they could earn in a savings account at any big Canadian bank?

#176 saskatoon on 02.18.16 at 1:24 pm

#124 kommykim
#172 Big Dipper
#170 Bottoms_Up

these ones got hit HARD…

by the softkill bioweapons.

#177 ElisabethParsons on 02.18.16 at 1:41 pm

Okay, alternative to investing in real estate, and oil..what about investing in green power…surely that kind of investment should be up and coming? Example: new green bond issue from CoPower…what say, Garth?

#178 AB Boxster on 02.18.16 at 1:45 pm

#170 Bottoms_Up on 02.18.16 at 12:37 pm


Do you even know what the first ‘bad’ outcome of water fluoridation is’

——————————————–
Actually, the first bad outcome is the actual freedom from having our water supply being medicated by those who think its a great idea.

In the times of poor hygiene, crappy dentists, and lack of other options, a weak case could be made for fluoride.

Just as cases were made for a number of public policy or health initiatives that once were commonplace.

I suspect 50% of the problems with children’s teeth has to do with poor personal dental hygiene, and the other 50 % has to do with the amount of sugar related juice and soda drinks that they consume. (eg. diet)

What do you want next?
Massive doses of vitamin D added to the water supply because everyone is vitamin D deficient?

How about mass flu vaccines being added to the water supply to ensure everyone gets the flu vaccine?

Or how about just providing clean, fresh water, and people taking individual responsibility for their own health? (Shudder that thought!)

If vaccines make sense (and they do) then get vaccinated.

If fluoride makes sense (and it does) then make sure you get some fluoride in your diet.

If your kids drink massive amounts of sugared beverages and never brush their teeth, guess what, they will have cavities.

The world needs less of the ‘regressive’ left forcing everyone to adhere to their special vision of the world.

Everyone has every opportunity to get enough fluoride, vitamin D, vaccines, healthy food, toothpaste.

If you need more fluoride in your life feel free to dose up you and your kids.

But the rest of us don’t need your special medicated water, thanks.

#179 MF on 02.18.16 at 1:49 pm

#169 Bottoms_Up on 02.18.16 at 12:31 pm

Don’t forget that maintenance costs like property tax, utilities and fixing clogged toilets only go up, meaning housing at a flatline is a losing investment.

Housing absolutely has to increase in value to be worthwhile ever, which after going up for years and years cannot continue forever. Nothing continues forever.

MF

#180 CJBob on 02.18.16 at 1:55 pm

#165 New Garth Fan …Where/how do you start investing when you only have a small amount — $3000? I’ll be adding to it regularly, but that’s where I start…
_______________
For that amount of money I would suggest you look at the Tangerine funds to start, although it is fair to point out that they contain too much maple. Still they are easy to set up, easy and free to contribute to and you can take it out and set up a self-directed account in the future when it makes sense for you.

#181 Daisy Mae on 02.18.16 at 2:17 pm

“Credit oil, of course. The black stuff jumped more than 5% on Wednesday and has been strong on the back of the Russia-Saudi deal to freeze production…”

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

And our gas at the pumps in the sunny Okanagan immediately jumped from 86.9 to 99.00 — a 13 cent increase. *sigh*

#182 acdel on 02.18.16 at 2:30 pm

#178 AB Boxster

Couldn’t of said it better myself!

—————————————————————-

I do not want that crap in my drinking water; take responsibility as a parent to educate your children on how to brush properly, a good healthy diet away from sugary drinks and foods will do wonders. What a lazy society many have become.

#183 S.Bby on 02.18.16 at 2:45 pm

#124 Kommykim
Buying TCK.B at $4.00 was a no-brainer.
Just like buying XIU was three weeks ago.
It’s called making money when the obvious is staring you in the face.

#184 S.Bby on 02.18.16 at 3:03 pm

Finning cuts another 500 workers. 9% of their workforce.

http://www.vancouversun.com/business/alberta+oilpatch+cuts+bite+finning+other+based+suppliers/10827623/story.html?__lsa=a4f9-da95

Also in the article:
“We’ve laid off (five to six) people in (our) factory already,” said Martin Moore, president of Burnaby-based glove manufacturer Watson Gloves. “And bookings for spring are very weak from the oilpatch.”

The first sign of stress, Moore added, was customers looking for price reductions at the same time Watson is being squeezed by the lower Canadian dollar, which as of Thursday had fallen to just over 80 cents US.

“We import (materials) in U.S. dollars, we’re going in with price increases in March,” Moore said, and his worry is that customers will turn to cheaper offshore suppliers forcing his hand to move more of Watson’s production as well.

The company’s 140-employee operation in Canada, with a factory in Burnaby, still produces about 13 to 14 per cent of its total sales.

“Those buyers don’t have an appetite for a $34 to $40 glove when they can get it for $15 to $20,” Moore said. “They don’t care where it’s made anymore.”

#185 MF on 02.18.16 at 3:10 pm

#183 S.Bby on 02.18.16 at 2:45 pm

I go on a few forums to lurk and I was eyeing tck.b.

A few months ago everyone was worried about commodities staying down as the FED increased rates and made the USD even stronger. Teck was eyed as having high levels of debt that might be unmanageable if commodities stayed down for too long. Many people were saying the stock would drop to very low levels and then be “diluted” with new shares offered at even lower prices to dupe people into buying (and giving them capital).

Now that the FED path is less clear the USD is falling and commodities are rising. TCK is just riding this I believe.

MF

#186 Big Dipper on 02.18.16 at 3:13 pm

#178 AB Boxster on 02.18.16 at 1:45 pm #170

Bottoms_Up on 02.18.16 at 12:37 pm Do you even know what the first ‘bad’ outcome of water fluoridation is’

………………………..If you need more fluoride in your life feel free to dose up you and your kids. But the rest of us don’t need your special medicated water,

————————————————–

Ah yes, the rugged individualist with a good dose of conspiracy theory mixed in. Lets take those evil chemicals out of our pristine drinking water!

Ever heard of Chlorine? Don’t want that, right? Take a good sniff of chlorine and you die a horrible dead. No Chlorine!!! Good move, but see how soon you and your family die of dysentery. But that’s all commie propaganda.

How about adding anti-corrosion inhibitors? Stabilizers, filtration, clarification flocculants? When the natural water supply is high on fluoride, will you lobby to have it lowered?

Ignorance is bliss, but in your case it is just plain BS.

#187 Hmmnia on 02.18.16 at 3:13 pm

I was referred to your website by somebody I enjoy speaking about investments with. I had heard of you, but only as somebody who wasn’t keen on real estate. I find your blog very entertaining, even if I don’t agree with all of your opinions. The blog comments are even more entertaining!

#188 James on 02.18.16 at 3:22 pm

#161 Smoking Man on 02.18.16 at 11:30 am
Trump is brilliant, he just put on a Huge Tin Foil Fedora. Basically declared war on the RNC Neocon base. Look for Bolton, Graham, McCain, Karl Row, and Dick Chaney to go absolutely bat shit crazy over this.
Why? he wants to draw Bloomberg into the mix insuring a presidential victory after he wins the GOP nomination.
Bet his next move is to go with Jesse Ventura as a running mate ensuring if he gets assassinated it will be much worse for the cons if that happens.
He has amazing instinct reading the Herd. Knowing that 80% of Americans don’t buy the official story on 911.
MSM is going to go nuts over this. Insuring more free airtime.
Got to hand it to him, He’s a Gambler.

http://www.prisonplanet.com/trump-vows-elect-me-and-youll-find-out-who-really-knocked-down-the-twin-towers.html
_____________________________________________
Really? Donald Trump and Prison planet, hell no wonder your wearing a fedora. It doesn’t take you long to sneak the old conspiracy theory in to the mash up here. I suppose you will be telling us we never made it to the moon either? You need to stick to the conspiracy theory websites, most of your kind are attracted to them.

#189 Big Dipper on 02.18.16 at 3:25 pm

Meanwhile, back in Calgary (sans fluoride) the house prices are collapsing as predicted. Panic in the market, dump and run city….

But wait…Calgary house prices are actually increasing! And before someone cries “realtor trick”, these are year to year comparisons of houses sold regardless of re-listings or days on market

http://www.creb.com/Seller_Resources/Housing_Statistics/

#190 YVR on 02.18.16 at 3:28 pm

https://www.realtor.ca/Residential/Single-Family/16605562/4609-W-8TH-AVENUE-Vancouver-British-Columbia-V6R2A6

Sold $700,000 over asking on same day it was posted. Priced a little below to incite bidding war. All cash offer, no conditions so probably offshore money.

#191 Keith on 02.18.16 at 3:37 pm

Garth,

I don’t see the issue with raising the land transfer tax on the $2 million homes. Why complain about that? If people are going to speculate, then let the taxpayers get a cut. It helps out all the plebes who are paying taxes and don’t have $2 million homes.

#192 B riding dirty on 02.18.16 at 3:38 pm

Theres talk of putting a 1.5% tax yearly on all vacant home/condo’s that are sitting empty by over sea buyers. Reason is to promote and increase rentals. Since it not easy or cheap to even rent in or around Vancouver. Supply is low.

#193 espressobob on 02.18.16 at 4:04 pm

Not sure exactly how to explain this, but here goes.
Individual stocks take on excess risk unlike their benchmark index.

The problem with nailing say TCK.B is the exit strategy.
This is one volatile puppy. How much of ones portfolio should be in a single stock to really make a difference on the upside overall and over time? A lot actually. There-in lies the risk.

Some sell too soon and miss out on further gains, others panic usually when they get whipsawed.

Meanwhile global index investors sit back and enjoy the ride.

#194 Josh in Calgary on 02.18.16 at 4:23 pm

#193 espressobob on 02.18.16 at 4:04 pm,
Aint that the truth. I’ve hit it out of the park on a few stock picks … and I’ve taken it on the chin a few times too (I only stock pick with a small percentage). I’d wager it averages out to the index, but with a lot more hand wringing and grief in between.

#195 Et tu, Brute on 02.18.16 at 4:27 pm

#150 Smoking Man on 02.18.16 at 10:01 am

#136 debtified on 02.18.16 at 5:16 am
Garth, did you just say I am screwed? I gambled on BBD.B when it was a falling knife. Still holding them on my bleeding hands. :(

Smokie, dude, what’s up?
………………..

Nothing we got creamed on that one. Can’t win them all.
_____________________________________________
Whateth happened to thy UCC?, thy Machine?, thy Tin foil Hat? Me thinketh thou arst getting royally creamed at the USD/CND FX trade as well Brute.

#196 Josh in Calgary on 02.18.16 at 4:30 pm

#178 AB Boxster on 02.18.16 at 1:45 pm,
I agree 100%. And CBC put out a good follow up piece today showing that there is fluoride naturally in the water. 0.4 mg/L (changes through the year, but this is an average). The target recommended by medical professionals is 0.7 mg/L. So it’s not that we’re not getting fluoride from our water … just not the optimal amount. So like you said, is it up to our city to force us to get the optimal amount (and that amount changes with each new study), or like you said is it up to the individual to brush their teeth or rinse with a fluoride wash if they feel they need more. Plus everyone has different needs. I take mediocre care of my teeth and very rarely get a cavity (lucky mouth chemistry?). My wife takes excellent care of her teeth and gets lots.

Then there’s the equally important issue. Cost. Why spend MILLIONS a year putting fluoride in our water when most of it doesn’t end up in our mouths?

#197 Landlord Upper Hand? on 02.18.16 at 4:51 pm

A simple question for blog dogs:

Is it true that rental deductions can pretty much offset rental income when in Canada you can deduct home insurance, mortgage interest, utilities, maintenance and repairs, landscaping, advertising, travel regarding the property, etc?

I have landlords that combined make 200k with a 600k house. They charge 2300 for the house (all in, utilities, cable, landscaping).

On an ROI calculator, it looks like a crappy return. But since all of the bove expenses are deductible, aren’t they making our like bandits – even with high marginal tax rates?

#198 Ronaldo on 02.18.16 at 4:51 pm

#190 YVR on 02.18.16 at 3:28 pm

https://www.realtor.ca/Residential/Single-Family/16605562/4609-W-8TH-AVENUE-Vancouver-British-Columbia-V6R2A6

”Sold $700,000 over asking on same day it was posted. Priced a little below to incite bidding war. All cash offer, no conditions so probably offshore money.”
—————————————————————

So that would make it being sold for 3.58 million or 1.116 million over assessed value of $2.464 Million. Hell of a deal.

#199 Einstürzende Neubauten on 02.18.16 at 4:54 pm

#189 Big Dipper on 02.18.16 at 3:25 pm

yes, prices have increased in few selected neighborhoods (and will continue to do so).

#200 acdel on 02.18.16 at 5:02 pm

#196 Josh in Calgary

I know Garth it’s off topic but a passionate subject for some.
——————————————————————-
I totally agree with you; sorry for what your wife has to go through but there are alternatives. I am not a dentist or a doctor but there are fluoride pills that one can add to a glass of water; not that I would recommend that but perhaps that would help your little lady. As mentioned by you, the intakes of fluoride affects all individuals differently, for me personally the side affects are awful, but for others there are alternatives. It should not be rammed down the throats on everybody, after all, it is a carcinogen!

#201 Josh in Calgary on 02.18.16 at 5:06 pm

#137 Brian on 02.18.16 at 6:29 am ,
Actually that is the case for REBALANCING. Once or twice a year you should look at your portfolio and determine if it’s still in balance. If your equity weighting is 1/3 maple, 1/3 US, 1/3 international then if maple has fallen to 20% and US / international have gone up to 40% and 40% you should sell off a bit of US and international (sell high) to top Maple back up to 33% (buy low).

#202 salonist on 02.18.16 at 5:10 pm

China’s Foreign Exchange Reserves Dwindling Rapidly

http://www.nytimes.com/2016/02/19/business/dealbook/china-foreign-exchange-reserves.html?&moduleDetail=section-news-5&action=click&contentCollection=Business%20Day&region=Footer&module=MoreInSection&version=WhatsNext&contentID=WhatsNext&pgtype=article

China’s Exodus of Capital

http://www.nytimes.com/interactive/2016/02/13/business/dealbook/china-exodus-flows-currency.html

#203 Ronaldo on 02.18.16 at 5:13 pm

This is what is happening with Teck at the moment. A repeat of 08/09 when their stock went from $52.00 in May of 08 to $3.42 in March of 09. Currently trading at .28 of book, anyone who is patient with this one and fortunate enough to have bought at current lows will do very well going forward.

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/teck-cutting-1000-jobs-and-lowering-dividend-to-reduce-expenses/article27330607/

#204 Shawn on 02.18.16 at 5:20 pm

Gas Price Victims

Interesting dynamics in gas prices in Edmonton. A day or so ago most stations jumped from 57.4 to 77.4.

This morning I saw one station still at 57.4. A couple hours later I notice one station that had gone to 77.4 was back to 57.4 and then saw others were back as well. A Petro Canada at 57.4 right next to a Husky at 77.4.

The free market is working.

Gasoline is much higher in Vancouver but there are reasons for it. Their are may be higher provincial taxes. They source from different refineries and their may be different supply and demand factors at work up and down the production chain.

But ultimately competition tends to work.

If you really hate high gas prices then you can try to reduce your consumption. Life is all about choices.

In Economics 101 years ago I was taught that gasoline moved as a commodity oligopoly. Due to its commodity nature all stations would pretty much move together because if you were higher you would get no business. Prices were set not by collusion but by a sort of gamesmanship and tended to be as low as possible while still allowing a reasonable profit.

Perhaps things have changed. People are more loyal to their brand due to points collection. Or they are too rich or too busy to care.

A lot of people slam the government all day long but would then call for regulation of gasoline prices by, you know, government.

In any case competition is working for me when it comes to gasoline. I try to watch the price. Our cars both call for Premium gas but I read the manuals closely and it said regular would not hurt the car but performance would not be as good. So I use regular. (Except of course on the nights I go out Street racing)

#205 turn of the tide on 02.18.16 at 5:29 pm

@#183 S.Bby

Out of curiosity, are you going long or short? What is your target price to sell?

Cheers.

#206 Shawn on 02.18.16 at 5:30 pm

Benefiting From Oil Prices

It’s probably not popular to say so but to many Canadians low gasoline and heating cost savings far outweigh any negative impacts from low oil prices.

Retail workers save on gasoline but they are not losing their jobs due to low oil prices and their taxes are not going to go up either. A total win.

Same for almost all government workers except their taxes (as higher income earners) might go up a little but not likely enough to offset the gasoline and home heating savings. And their pensions especially if they are near retirement will not be affected.

Most people, let us remember are not investors.

The point is a LOT of people can smile about low oil prices. They might not say it out loud but they benefit from low oil prices and they really don’t give a crap about those who are hurt by it.

I am hurt by low oil prices basically only because I am an investor. Had no oil stocks but got caught in some related companies.

Do I expect the secretary or the retail worker or the teacher to give a crap about my investment troubles? No, I don’t.

#207 Bytor the Snow Dog on 02.18.16 at 5:31 pm

@ moola moola hopefully secretaries that can tell the difference between effect and affect will be retained.

Ever notice how an auto-correct feature will change words from correct spellings? Or how self-lubricating peckerheads will seize upon such things to debase others? Two modern wonders. — Garth

@Garth- Smert sekreteries proovread there (haha) coments.

#208 westcdn on 02.18.16 at 5:36 pm

In the nighties, Canada was broke. Paul and John instituted an austerity program to cut government spending to avoid asking the IMF for a bailout. To say it can’t happen again…

I remember those days well – say Klein. I have still been buying preferred shares; I even bought perpetuals. God help me.

#209 Shawn on 02.18.16 at 5:36 pm

Stock Picking Versus the Index

#194 Josh in Calgary on 02.18.16 at 4:23 pm said:
#193 espressobob on 02.18.16 at 4:04 pm,
Aint that the truth. I’ve hit it out of the park on a few stock picks … and I’ve taken it on the chin a few times too (I only stock pick with a small percentage). I’d wager it averages out to the index, but with a lot more hand wringing and grief in between.

*****************************************
Josh is correct. A proper index is by definition the average of how all investors do. All indexers make the index. mathematically the average of all stock pickers must be the index as well.

And stock pickers on average trail the index after costs.

But SOME stock pickers win. A few may even win consistently.

Also stock pickers have more fun and lead a more exciting life and in fact tend to be better looking, more intelligent and taller as well. This, of course, has all been proven scientifically.

#210 zudnic on 02.18.16 at 5:41 pm

One thing I’ve noticed about stock mentions on the internet, the advice is only after the stock has done well and is known by the general public. Rarely do we get short recommends, only ZYZ is doing well, it can only go up from here. Its either I should have bought, glad I bought last week. Its never before the big move, nine times out of ten, there is no meat left on the bone.

We have the same people telling us to buy Vancouver real estate, the lower mainland is running out of land and houses. Victoria could cool the market over night and release all the land to Langley out of the farmland reserve.

The government is caught between a rock and hard place, they don’t want the cost of living out of control, but at the same time a collapse in real estate will kill the banks.

I’ve moved all cash to a credit union, money is 100% insured. Second they pay higher interest on accounts over $100k. Sold all real estate three years ago. Took my small gains and ran. Real estate, like stocks, the masses want home run profits. Now they need to sell for more money, to get more money.

Oh the listings in Tsawwassen are now at 123, very few below $1.2million. Now the sellers, if they tapped the equity via loans when houses there last month where $860k on average. They need to sell for over a million, to pay off the loans and give the sellers a 10% down payment. The current prices are greed, not demand.

#211 espressobob on 02.18.16 at 6:20 pm

#209 Shawn

You have my deepest sympathy.

#212 zudnic on 02.18.16 at 7:37 pm

Its interesting how people on the internet give stock tips on stocks that have already moved. Its also interesting people believe the Vancouver and lower mainland real estate has no end. House prices always go up long term. Stocks and real estate are not about homeruns, sure people get lucky on a trade here and there. Someone talks about how great XYZ is, its always after its made its move! If XYZ does go up more, its usually very little meat on the bone.

Real estate as an investment, there is no meat on the bone.

#213 westcn on 02.19.16 at 3:05 am

Yeah, I get lucky now and again. I have been fortunate enough to hit a few home runs – pays for my mistakes.

Redknee Solutions (rkn) is killing me right now. Everything else is flying except for this turkey. I would be on the moon, Alice, if…

#214 Ret on 02.19.16 at 12:25 pm

We got more tax slips today. We’re special. We’re seniors. We can income split. Yipppeeeeeee!

My tax program shows that I broke the next higher tax tier by $468 which was split over to my wife’s form. However, the tax summary shows a benefit from tax splitting with my spouse of minus 4 dollars. How did that happen?

Granted a split of $4680 would have looked a lot different and hopefully have yielded a positive benefit.

I suspect that some taxpayers get very little benefit from tax splitting with their spouse at the end of the day while others benefit to a much greater degree.