Timing

DOUG By Guest Blogger Doug Rowat

Warren Buffett once famously said that he “made more money when snoring than when active.” Buffett, of course, is well aware that most investors are terrible at predicting short-term market swings and that the best plan is to simply be boring and stay invested. Yet we mostly can’t help ourselves. As proof, the comment section of this blog will shortly be filled with individuals making short-term market predictions with many suggesting that the market is rigged, the economy doomed and that hiding in cash is the best option.

However, JP Morgan research clearly shows the difficulty of trying to time markets. Staying fully invested in the S&P 500 from 1994 to 2014 would’ve generated a 9.9% annualized return, but missing just 10 of the best trading days would have dropped the return to only 6.1%. Ten days over 20 years. Don’t tell me that you would have known when those 10 days would have occurred?

But note that, historically, the best days tend to arrive fairly near to the worst days. However, what’s the most likely scenario? The worst days would likely prompt a retail investor to move to cash with an almost zero likelihood that they would then shortly after re-enter the market in time for the strongest market days. What my nearly two decades in the investment industry has taught me is that once a defensive cash position is taken, it’s a position that remains, often for years.

Performance of US$10,000 over 20 Years: Missing Just a Few Days Cripples Performance

Source: Business Insider. JP Morgan Asset Management. Data as of Dec. 1, 2014. Measures return of S&P 500.

A favourite pastime of Canadian investors is also attempting to market time the loonie. We simply love doing this. It’s as Canadian as Tim Hortons’ coffee. However, market timing currencies is even worse than timing equities. This is because equity markets are much more forgiving—over time, they move higher. Not so with our Canadian dollar/US dollar exchange rate. Our loonie, for instance, currently sits at roughly the same level that it was at 30 years ago! Currencies tend to move in giant M or W patterns and timing each peak and valley is exceedingly difficult. An article in the Wall Street Journal a few years ago highlighted some of these issues:

Only about 30% of all retail forex trades are profitable, according to Aite Group [an independent financial market researcher], largely because of traders’ lack of education and experience in dealing with a market dominated by institutions.

Eventually, as you attempt to repeatedly time all the tops and bottoms, you’ll be wrong, and the incorrect timing could create permanent losses. With equity markets, an incorrect entry point will, of course, cost you time, but it’s very likely that, if you’re patient, you’ll eventually profit, most often within a year or two. But with a poorly timed currency trade, you could easily go a decade or more in a loss position. For instance, if you’d bought US dollars in 2002 when the Canadian dollar was at about 62 cents, you’d still be waiting for your ‘trade’ to be in-the-money.

In Roughly 30 years, CAD/USD FX Rate has Gone Nowhere…

…While the Canadians Equity Market has Advanced almost 600%.

Source: Bloomberg, S&P/TSX Composite return includes dividends

Forecasting the loonie is a fun pastime, but the best strategy is simply to convert currency on a consistent and routine basis, perhaps quarterly, to hedge risk.

Another timing-related question we get asked constantly: what percentage will XYZ market go up this year? Blunt answer: I have no idea. According to Vanguard, 13.7 percentage points was the average annual forecast error among leading market strategists from 1998 to 2016. In fact, if strategists had just given the historical average return for the market they would have been more accurate. And interestingly, no strategist predicted negative returns for years with the greatest losses (2001, 2002 and 2008).

What we aim to do is create a low-cost, balanced and globally diversified portfolio and then gradually shift asset mix and geographic weightings based on our longer-term economic forecasts and changes in broad fundamentals such as corporate profitability. With any luck, we’ll minimize volatility and generate a reasonably predictable long-term rate of return. But we’ll never be able to tell you the exact percentage return of any particular market in any given year. We’ll almost certainly be wrong.

And that’s a prediction I guarantee to be accurate.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.

128 comments ↓

#1 Lost..but not leased on 09.23.17 at 4:00 pm

You snooze you lose

#2 Prophecy on 09.23.17 at 4:00 pm

Why is it a co-incidence that when a Liberal pro-SJW government is elected into office, as in the 1990s and from 2015, our Loonie collapses? Is that God’s way of saying that if a country strays with their degeneracy, they will face a 62 cent Loonie?

#3 Stone on 09.23.17 at 4:18 pm

Hi Doug,

You guys had talked about using hedging on some of the international component of your portfolio. Is this still something you are doing? Just curious since none of you have brought it up lately.

Thanks in advance.

#4 Shawn on 09.23.17 at 4:22 pm

Great post as usual Doug. Even if you don’t realize, your writing skills have improvement dramatically since your first post. Keep up the great work.

Now on to a quick question. What is the reasonable prediction of long-term returns these days? Back in ‘the day’ 7% in a balanced and globally diversified portfolio was the norm.

Now that bonds had their Bull run what type of asset allocation is required to earn a 7% return these days? I don’t think 60:40 is required for long term investors with their behavioral finance in check, but for the average 30 year old in a 90:10 equity to bond split ( I know, I know, crazy volatility) what do you and your team predict going forward over the next two decades?

#5 For those about to flop... on 09.23.17 at 4:27 pm

Pink Pumpkins being carved in Burnaby.

This house was picked up for 1.45 in March 2016,just dropped 100k off the price roughly 200k above assessment.

I have another long term case in the street,let’s see if this reduction gets the job done and they can pass the expenses on to the next guy…

M43BC

4895 Carson Place, Burnaby

May 8:$1,699,000
Sep 21: $1,599,000
Change: – 100000.00 -6%

https://www.zolo.ca/index.php?sarea=4895%20Carson%20Place,%20Burnaby&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV0Y3Rg==

#6 Lost..but not leased on 09.23.17 at 4:37 pm

A rising Loonie is simply another nail in the coffin for Canadian economy.

Seems like T2 and company are leaving no stones unturned in the death knell of Canada?

#7 Gasbag Boomer on 09.23.17 at 4:42 pm

Great post Doug, thanks.

#8 Smoking Man on 09.23.17 at 4:43 pm

I do ok with Forex. I only trade one pair. USDCAD
My system is pretty simple. Follow the trend for crude pay attention to the FED and BOC.

Pick a direction add to your postion every 0.025 watch it grow. If it goes against you flip your bet.

You lose alot of trades and loot but when you get a runner 5 cent to 10 sent over a few months. You make a fortune.

Takes disipline and balls of steel.

I don’t recommend anyone trying this with real money without trading everyday for two years in a paper account.

And them when you think you have it figured out. Once you have real skin in the game. That’s when emotion and bias kicks in.

Not easy

#9 For those about to flop... on 09.23.17 at 4:44 pm

Pink Pumpkins being carved in Vancouver.

When I saw this listing this morning I was thinking about putting it up regardless of whether they were carving Pink Pumpkins or not but when I looked at the history it did not disappoint.

Picked up for 2.95 in June 2016 with an assessment number that falls in between the buy and ask at 3.01

Like I said I was thinking about putting it up anyway just to showcase to continued speculation ,but it is not every day you see someone take the best part of 4 million off their ask or reduce it by about half.

Gourd have mercy…

M43BC

3720 W 49th Avenue, Vancouver

Jun 12:$6,998,000
Sep 21: $3,280,000
Change: – 3718000.00 -53%

https://www.zolo.ca/index.php?sarea=3720%20W%2049th%20Avenue,%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMFU3VA==

#10 NoName on 09.23.17 at 4:44 pm

#2 Prophecy on 09.23.17 at 4:00 pm
Why is it a co-incidence that when a Liberal pro-SJW government is elected into office, as in the 1990s and from 2015, our Loonie collapses? Is that God’s way of saying that if a country strays with their degeneracy, they will face a 62 cent Loonie?

—-

So tell us what do you extrapolate from 2nd chart? God’s telling you to refresh on Romans 13.6?

#11 crowdedelevatorfartz on 09.23.17 at 4:47 pm

Another well timed reminder to “stay the course” with an investment portfolio.
Interesting stat about the 10 key days over 20 years…..

#12 crowdedelevatorfartz on 09.23.17 at 4:49 pm

@#9 Flop.

Unbelievable! A 53% drop in the asking price? What kind of Pumpkin flavoured drugs were these people smoking?

#13 Stan Broock on 09.23.17 at 4:52 pm

This article is misleading.

To miss these 10 best trading days you should have sold you portfolio the day before and buy it back at the end of the ‘winning’ day.

While passive portfolio management is good, active when knowing what you are doing could be better.

Combination of both based on risk appetite is what hedge funds do.

Value investing as proposed by Buffet is rentier’s paradigm which is easy as far as you have the right connections and access to credit.

Bill Gates is arguably a better Businessman who actually did run his own Business.
Buffet is just buying other people Businesses.

Holding IBM stocks proves it.

#14 Stan Broock on 09.23.17 at 5:00 pm

BTW stocks can not go up consistently 10 % yearly while economy grows up 3-4 % including inflation.

It is the magic money trick when you make the cost of money/interest lower than average to support higher asset valuations.

Having said that:
1. Would I sell my stock portfolio?
No. Stocks are investment in real productive economy.

2. Would I buy real fixed assets, i.e farmland, commodities in long run?
Absolutely.

3. Would I non-leverage short the Canadian economy in Euro? Absolutely!
It is 2-3 times overvalued.

#15 Trumpocalypse2017 on 09.23.17 at 5:03 pm

Seismic explosion in North Korea!

US bombers off the NK coast!

Doug is right – forget day trading.

Try day counting……………

#16 AK on 09.23.17 at 5:03 pm

“Warren Buffett once famously said that he “made more money when snoring than when active.” ”
——————————————————————–
Indeed, Warren Buffett collects $1.5 Million in dividends from his Coca Cola shares, every single day.

#17 For those about to flop... on 09.23.17 at 5:04 pm

Pink Pumpkins being carved in Coquitlam.

This house was picked up for 1.25 in May 2016.

It is a 56 build and the assessment comes in much lower at 1.17.

The realtor has their work cut out for them on this one ,but if you call in the next 20 minutes they will throw in a set of steak knives so in a years time you too can be carving Pink Pumpkins…

M43BC

927 smith Avenue, Coquitlam

May 20:$1,500,000
Sep 21: $1,338,000
Change: – 162000.00 -11%

https://www.zolo.ca/index.php?sarea=927%20Smith%20Avenue,%20Coquitlam&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzWE1QVQ==

#18 Stan Broock on 09.23.17 at 5:08 pm

when you have the authority to change the definition and functions of (credit) money, the nominal price of assets can be anything you like.

However maintaining that in long run can be a challenge.

The rise of stock markets above the growth of economy indicates the following:
1. Significant expected inflation on the horizon
2. Inflation will outpace growth going forward
3. Very bumpy road ahead

At the end it seems passive investment is the best strategy for the uneducated investor.

#19 FOUR FINGERS WATSON on 09.23.17 at 5:25 pm

Buy the Big 6 Canadian banks when u are 25. Re invest the dividends in same till u are 65. You will do very well.

#20 Ian on 09.23.17 at 5:29 pm

#9 Flop

Holy henshit 53%!!! That is bananas.

#21 Ian on 09.23.17 at 5:31 pm

Will be fascinating to see how high the CAD rises here. No slowdown on chart visible. BoC quickly running into a problem.

#22 Bankish on 09.23.17 at 5:46 pm

I just want to add my experience with the buy and hold strategy using Canadian Bank stocks. In the last 18 months I’m up $ 319,000.00 and my annual dividend has increased $ 5000.00 dollars. Lived through the great recession collecting drip and never sold a share and came out ahead. Try it it really works!

#23 Doug Rowat on 09.23.17 at 5:51 pm

#4 Shawn on 09.23.17 at 4:22 pm

I don’t think 60:40 is required for long term investors with their behavioral finance in check, but for the average 30 year old in a 90:10 equity to bond split ( I know, I know, crazy volatility) what do you and your team predict going forward over the next two decades?

You don’t know how much ‘behavioural finance’ fortitude you have until you’ve lived through a true bear market. A globally balanced 60-40 portfolio is still the best positioning for most investors.

And two decades? How about I go with a divided America, unrest in the Middle East and global economic disparity. Let’s check in in 2037 to see how I did.

–Doug

#24 For those about to flop... on 09.23.17 at 5:51 pm

CONFIRMED PINK SNOW.

As you can see by the below asking prices these guys tried to make a quick profit but it just didn’t work out for them.

The details…

Paid 1.6

Sold 1.6

So they got back the same number but after expenses and opportunity costs likely around a 130k loss…

5013 1 Avenue, Delta paid 1.6

Mar 14:$1,828,000
May 14: $1,728,000
Change: – 100000.00 -5%

https://www.zolo.ca/index.php?sarea=5013%201%20Avenue,%20Delta&ptype_condo=1&ptype_house=1&ptype_townhouse=1&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA1VkxEQg==

P.s ,the house I was asking about at 4368 Cambridge St ,Burnaby that I was asking about last night as a recent sale ,well I must have got the dates wrong as it was sold back in June.

The details…

Paid 1.41 June 2016

Sold 1.54 June 2017

And so they did just enough to stay out of trouble but all this mean is this is a CONFIRMED PINK DRAW…

M43BC

#25 SoggyShorts on 09.23.17 at 6:16 pm

Great article Doug.
I’ve got a nice risk-free market timing game for you and the blog dogs.
Almost every day I drive by the gas station closest to where I live, and often have to decide if I should fill up now at 1/3 tank, or wait until tomorrow. As often as possible I try to remember the price, and make the call.

My fail rate(where the other call would have been cheaper gas/liter) is about 75%.

You can make the game as simple or as complex as you want. No information(just gut calls) or research the crap out of anything that may effect gas prices- I’m sure it won’t matter.

#26 BobC on 09.23.17 at 6:22 pm

Heard this today. If you cash out of the market a year early you stand to lose as much as 6-7%. If you cash out a day late you stand to lose 10-15% plus.
The best, safest and highest ROI is in buying a small business even as an investor with hired management.
Can you help me with a rebuttal?

#27 Screwed Canadian Millenial on 09.23.17 at 6:23 pm

#2 Prophecy on 09.23.17 at 4:00 pm

Why is it a co-incidence that when a Liberal pro-SJW government is elected into office, as in the 1990s and from 2015, our Loonie collapses?

—————–

The Loonie collapsed under Harper.

https://imgur.com/MxVWZ2M

The Loonie is up under Trudeau.

https://imgur.com/GdtMp3c

Seriously what is wrong with you boomers? Are you losing your marbles? It’s like you live in a delusional alternate reality. You weirdos have no clue what you’re talking about. You don’t even live in reality. Just admit you’re wrong and move on. I don’t wanna hear your bs and excuses.

#28 For those about to flop... on 09.23.17 at 6:32 pm

CONFIRMED PINK SNOW.

Below are the details of a house in Vancouver that someone under the handle of Sour Lemonade passed onto me a few months back.

It is official now and so up she goes.

The numbers are in the post and so all I can add is it was probably a 130 k mistake but I have friends on here to sharpen numbers

I’m just the coffee boy…

M43BC

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


#105 Sour Lemonade on 06.27.17 at 2:38 am
2447 E21st Vancouver

Sold May 2016 1472000

Sold June 2017 1468000

And they renovated somewhat.”

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMllZTA==

#29 Lost...but not leased on 09.23.17 at 6:37 pm

What does an stronger Loonie achieve ?

More cross border shopping that subsequently impacts Canadians businesses….who will be impacted by T2 and Moroneau’s domestic policies.

Then we’ll see if they continue to raise rates or not….T2 and Moroneau are in a real tightrope act.

#30 Realist on 09.23.17 at 6:38 pm

So much globalist stuff from this blog. It’s about time Garth brnds the knee and takes Trump in while dropping (((them))). Don’t be a sellout like T2 and our new isreali leader in the Conservative party

#31 Ace Goodheart on 09.23.17 at 6:48 pm

Sitting here working on my old snow blower. It’s a four stroke with a dynamo which makes it into the equivalent of your prom date on pms. Very sensitive and delicate. And surprisingly bloated.

I like the discussion on market timing. Only because it is nuts.

In Star Wars episode 7 Han Solo successfully approaches a planet at multiples of the speed of light and then lands, just before going off a cliff.

I would suggest that trying to time a market is equivalent to approaching a planet at multiples of the speed of light and then attempting to land at multiples of the speed of light.

A market is the sum total of the enterprises that are seeking to own the means of production of the products consumed by the masses.

These folks are hard core. Apple (which is about to crash and burn due to hubris), Amazon, Bell, Rogers. The successful controllers of the planet. Run a business and watch how Google interacts with you. They are IT. There is no other. The purity and purpose of cause is almost religious.

You cannot time these folks. You cannot even see what they are doing.

All you can do is own the means of production of the products consumed by the masses.

#32 Doghouse Dweller on 09.23.17 at 6:59 pm

Finally in the MSN !
The T2 government of Canada at some point became a wholly-owned subsidiary of Bombardier-Beaudoin family.

http://nationalpost.com/opinion/andrew-coyne-the-odd-merger-of-bombardier-and-the-canadian-government#comments-area

#33 kommykim on 09.23.17 at 7:23 pm

RE:Why is it a co-incidence that when a Liberal pro-SJW government is elected into office, as in the 1990s and from 2015, our Loonie collapses?
REF: http://www.greaterfool.ca/2017/09/23/timing/#comment-543127

It’s a delayed reaction. Basically what happens is when the economy is going great, usually due to a Liberal government, people throw caution to the wind and elect a CONservative government. I mean who needs EI and social programs when the economy is booming right?
Then things inevitably go in the crapper after the CONs have ruined the economy. People now need EI, welfare, etc so they elect a government that promises to spend more on social programs and infrastructure which are sorely needed. The extra spending helps boost the economy, things recover, people forget what the CONs did, believe in change for the sake of change, and the cycle repeats.

You’re welcome!

#34 Lost...but not leased on 09.23.17 at 7:25 pm

Another thought…courtesy of T2 and Moroneau

If we assume the younger generation millenials etc…maintains a debt load for most of their working lives…the majority will never be able to save and invest to the same degree of the older generations. They will be dependent of the Bank Of Mom and Dad…and/or mostly reliant on inheritance.

That said, I predict that in many of our lifetimes, our Gov’ts will attack these last gasps of hope..moreso inheritance…thus assuring the millenials do get screwed.

HOWEVER T2 and Moroneau will have first lathered up the crowds into classic “divide and conquer” chronological warrior tribes which will get the younger crowd cheering this on…till they wake up and see it was a backhanded attack on them as well..perhaps morseo.

Then T2 and Moroneau have achieved the classic equality…99% SOL versus the Trust Fund crowd.

Careful what you tax -slave peons vote for…

#35 mark on 09.23.17 at 7:30 pm

@BobC go find out how many 10-15% daily falls the market has ever had (very few) then factor in your asset allocation with fixed interest and reits and you’ll find the chance of losing 10-15% in a day with a properly built portfolio is about 0%.

#36 Dolce Vita on 09.23.17 at 7:41 pm

#27 Screwed Canadian Millenial

For someone that cannot even spell Millennial correctly, you have reached new and higher levels of superficial pronouncements.

Here are factors that affect the exchange rate (5 sec Google Search that even the Ritalin snorfling Millennial crowd can appreciate):

-Inflation Rates. Changes in market inflation cause changes in currency exchange rates.
-Interest Rates. Changes in interest rate affect currency value and dollar exchange rate.
-Country’s Current Account / Balance of Payments.
-Government Debt.
-Terms of Trade.
-Political Stability & Performance.
-Recession.
-Speculation.

Post 2007/2008 came the Great Recession, that was when pablum was as your main dietary food source.

After that, interest rates fell, we had a recession, inflation was double what it is today (except for a short deflationary period in 2009), add in Government stimulus to get the economy rolling again, etc., etc.

The above ALL affect an exchange rate NEGATIVELY. Harper did not create the Great Recession but since our economy is tied to America’s, we suffered for it as well.

If anything Harper’s and Flaherty’s stewardship made Canada the least affected by the Great Depression.

And Trudeau is the net benefactor of their hard work and stewardship happily spending Canada into larger deficits with money it does not have.

#37 espressobob on 09.23.17 at 7:46 pm

#26 BobC

Buying a small business? One of the quickest ways to say goodbye to all your coin, unless you really know business.

#38 n1tro on 09.23.17 at 7:46 pm

Forex trading is the best. 24/5 of instant gratification with minimal manipulation. Gives me something to do while diverse portfolio grows. Catch the right event (Japan earthquake, Trump election win, surprise rate hike, etc) and profit huge. Waiting for the next event.

#39 Smoking Man on 09.23.17 at 7:48 pm

Justin Trudeau Says All Men Should Be Feminists, Calls For End to ‘Bro Culture’
…..

Complete moron. This is biologicaly impossible.
It’s all about turning boys to girls. To make them aggreable so we give up our wealth to globalists without a struggle.

Deplorables Rule.

#40 Jungle on 09.23.17 at 7:51 pm

Great post, well said.

#41 Doug Rowat on 09.23.17 at 7:58 pm

#31 Ace Goodheart on 09.23.17 at 6:48 pm

I like the discussion on market timing. Only because it is nuts.

In Star Wars episode 7 Han Solo successfully approaches a planet at multiples of the speed of light and then lands, just before going off a cliff.

I would suggest that trying to time a market is equivalent.

True. Dalbar research shows that over the past 30 years ended 2015, the S&P 500 index produced an annual return of 10.4%, while the average retail investor earned only 3.7%. Market timing is tough.

But Solo’s different. He did the Kessel Run in less than 12 parsecs.

–Doug

#42 Kommykilled on 09.23.17 at 7:59 pm

Kommies killed 250,000,000 people in the last century.

Seven things every child needs to hear…

1) “I love you.”
2) “I’m proud of you.”
3) “Be honest.”
4) “Believe in yourself.”
5) “I’m listening.”
6) “Communism has failed every time it was tried.”
7) “You’ve got what it takes.”

#43 Just wondering on 09.23.17 at 8:05 pm

Kommykilled where did you obtain that random number of 250,000,000 from?
Also what do you (or does anyone here) think of the potential free trade deal with China?

#44 Javier Landaeta on 09.23.17 at 8:26 pm

A few days ago Mr. Turner critiqued the Canadian Couch Potato. If anything, CCP has been THE champion of passive investing. Here we’ve seen changes to the asset allocation (ie heavier weight to Europe lately). What gives? Is changing the allocations not considered active?

#45 Karl Hungus on 09.23.17 at 8:27 pm

I dont understand this “missing days of performance” maybe someone smarter then me can explain it to me. So you are out of the market when the tsx hits 16k for example. Big deal, nothings been locked in. You get in at another time and the tsx rises to 16k later. You havent missed anything.

#46 mike from mtl on 09.23.17 at 8:30 pm

Agreed. Trying to guess USDCAN pair is essentially a guess.

Personally I am of the opinion to never hedge on ca$. Long term this is proven to be the best option. So what of the recent 180, that can reverse and also represents a buying opportunity. I’ve recently been buying prior out of reach UK£ goods!

Suppose I am a ‘bad’ consumer in that I buy nothing ‘local’, apart from raw groceries, rent and booze – even that is imported from EU.

#47 Screwed Canadian Millenial on 09.23.17 at 8:31 pm

#36 Dolce Vita on 09.23.17 at 7:41 pm

Dumbass why don’t you read what I replied to.

http://www.greaterfool.ca/2017/09/23/timing/#comment-543127

Why is it a co-incidence that when a Liberal pro-SJW government is elected into office, as in the 1990s and from 2015, our Loonie collapses?

———–

Do you have any reading comprehension at all? Can you not follow a conversation thread?

———-

What did I say that was incorrect? Oh that’s right nothing.

Smarten up.

If you boomers seriously haven’t figured out yet that I deliberately misspell “millenial” to trigger you, then you’re even more blind and senile than I thought. Find me another word I’ve misspelled across my hundreds of posts, many of them pretty lengthy. Come on guys do you have brains?

#48 mike from mtl on 09.23.17 at 8:33 pm

Continued,

Thank goodness SAQ imports so much great quality French wine! As an aside ‘new-world’ stuff is not of my taste.

#49 Linda on 09.23.17 at 8:38 pm

Doug, of course we would have picked the 10 best days – we’d just jump in our handy time machine & place our bets once we arrived the day before the ‘best’ days:)

A more serious question now: while the Canadian housing market is too small to precipitate the world wide financial meltdown that the American housing crash did, would it not be prudent to set aside some cash so that should the TSX make a precipitous drop due to our own home grown housing meltdown, we would then be in a position to purchase ‘good’ stocks at bargain prices? Though having just watched ‘The Big Short’ I do wonder whether another worldwide financial crisis will occur in the near future, since apparently some of the old tricks are being marketed under new names.

#50 Wrk.dover on 09.23.17 at 8:39 pm

The first chart really drove the point home.

How about the chart you must also have, showing where I would be if I missed the sixty worst days?

#51 tccontrarian on 09.23.17 at 8:40 pm

I’m a market timer, of the longer term cycles – not too different than farmers are.
I tend buy into weakness and sell into strength, of high-beta sectors (like precious metals, energy); I expect an average return of 20-25%/year.
I’m willing to have down years, just so I can harness all of the upside when it comes (it always does!)

I’ve tried very hard to NOT be ‘the average’ investor. As Stanley Drukenmiller has said: “be a pig”! :-)

TCC

#52 Ronaldo on 09.23.17 at 8:43 pm

#9 Flop

I see that house was purchased for $2,952,000 in June/16 and now asking 3,280,000. That is 328,000 greater than they paid. Not a bad return if they get it. Couldn’t see where it was $6,998,000 in June though. Seems a bit outrageous. Anyway, keep up the good work. Once this thing starts to unwind it ain’t going to be pretty. I recall very well the crashes of the 70s, 80s, 90s. This next one is going to be a doozy.

#53 Victor V on 09.23.17 at 8:44 pm

Warren Buffett is about to win ‘The Bet’ — and there’s a lesson there

http://business.financialpost.com/investing/investing-pro/better-to-bet-with-buffett-than-against-him-barry-ritholtz

By now, you have surely heard about “The Bet,” especially if you work in money management. A decade ago, Buffett endorsed inexpensive passive-index investing over expensive and active hedge-fund management. He put up a million dollars to prove it, and challenged all comers:

Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.

#54 espressobob on 09.23.17 at 8:51 pm

#13 Stan Brock

The point of passive investing is to maintain core positions regardless of market gyrations. Timing is futile.

Hedge fund managers are another short term way to separate a fool from their money. You need at least 150k or 25k if your an accredited investor. The fees alone are deadly.

Do some research.

#55 Smoking Man on 09.23.17 at 8:55 pm

What is the back bone behind any nation.

The triditional family. Boy friend and girl friend incorporate a company collect dividens. No problem.

A married couple dose this under the new rules. Not allowed.

This isen’t about fairness. It’s about destroying families. Now that real estate is about to get crushed so to will familys crushed under the strain.

These basterd globalists have it all figured out.
The goal is destroy families and lively hoods of independent people. They want to make the only option is to work as a slave for big companies or govt.

#56 Spectacle on 09.23.17 at 9:05 pm

Kommykilled on 09.23.17 at 7:59 pm
Kommies killed 250,000,000 people in the last century.

Seven things every child needs to hear…

1) “I love you.”
2) “I’m proud of you.”
3) “Be honest.”
4) “Believe in yourself.”
5) “I’m listening.”
6) “Communism has failed every time it was tried.”
7) “You’ve got what it takes.”

———– Actually it’s 8 things they need to know to survive the next 30 years. Physical, Financial, Psychological.

8). The destructive effects to Canadians and Western Civilization , of Agenda 30 ! Also Agenda21.

The United Nations 2030 Agenda decoded: It’s a blueprint for the global enslavement of humanity under the boot of corporate masters – …

http://www.naturalnews.com › 051058_2030_…

http://www.naturalnews.com › 051058_2030_…

Agenda 21 converted into 2030 – The Final Wakeup Call
finalwakeupcall.info › 2015/10/21 › age…

#57 For those about to flop... on 09.23.17 at 9:19 pm

Ronaldo on 09.23.17 at 8:43 pm
#9 Flop

I see that house was purchased for $2,952,000 in June/16 and now asking 3,280,000. That is 328,000 greater than they paid. Not a bad return if they get it. Couldn’t see where it was $6,998,000 in June though. Seems a bit outrageous. Anyway, keep up the good work. Once this thing starts to unwind it ain’t going to be pretty. I recall very well the crashes of the 70s, 80s, 90s. This next one is going to be a doozy.

Ronaldo on 09.23.17 at 8:43 pm
#9 Flop

I see that house was purchased for $2,952,000 in June/16 and now asking 3,280,000. That is 328,000 greater than they paid. Not a bad return if they get it. Couldn’t see where it was $6,998,000 in June though. Seems a bit outrageous. Anyway, keep up the good work. Once this thing starts to unwind it ain’t going to be pretty. I recall very well the crashes of the 70s, 80s, 90s. This next one is going to be a doozy.

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

Ronnie,once you take into account expenses there is no meat left on the bone and all they will have left in their hands is some tendons and ligaments.

Hopefully not theirs…

M43BC

#58 AsiaKid on 09.23.17 at 9:22 pm

Give both sides.

1) how about show performance if you had missed the worst days?
2) if staying in is so great at any point in time, why use the chart from 2004 to 2014,its now 2017,why not just take a snapshot up until today?

I happened to do that for fun. Just Google 10 yr chart for sp 500.. Its about 2400 now I think and 1600 10 yrs ago.
That means cumulative annual growth rate of LESS than 5 percent.

I like this blog because it’s meant to show how stupid and misleading media and others are towards sheeple, but you guys tend to do the same it seems.

#59 Mark on 09.23.17 at 9:33 pm

“BTW stocks can not go up consistently 10 % yearly while economy grows up 3-4 % including inflation.”

Actually stocks most certainly can go up 10% yearly, if not more, while the economy grows at 3-4% nominal. The TSX’s P/E is currently around 15, which gives an earnings yield of 6.7%. Long-term earnings growth at the rate of economic growth (which is a reasonable assumption, although earnings growth cannot sustainably exceed that of economic growth) would add on another 3-4%, for a total return of 9.7-10.7%.

Incidentially if you look at the long-term total return of the TSE, this is what you get — around 10-11%/annum.

The past 37 years haven’t been very kind to the TSE/TSX, relatively speaking, because of the high exposure of gold mining companies in the index. Gold mining being in a giant bubble in 1980 which took a good 20 years to reach a bottom.

#60 Kool Aid on 09.23.17 at 9:38 pm

20 years X 250 trading days per year = 5000 Trading days.

Miss the best 50 trading days equals -2.2% return, hmm.

So buy the extreme dips, in technically bear markets, got it.

#61 Mark on 09.23.17 at 9:38 pm

“The best, safest and highest ROI is in buying a small business even as an investor with hired management.
Can you help me with a rebuttal?”

Many, many small business fail because they are concentrated small cap sector bets, in essence, highly sensitive to management quality, local economic conditions, etc. But index funds never go to zero.

Not to disparage small businesspeople, but a very large number of them would’ve been better off, in hindsight, simply working at a paid job, hourly or salaried, and sticking their money into index funds. Even with a bit of leverage if they wanted to take advantage of the tax breaks associated with that.

One of the biggest tragedies is that the young don’t take enough risk when its appropriate, especially calculated risks. Lack of good mentorship and guidance is often at the root of such.

#62 conan on 09.23.17 at 9:55 pm

#15 Trumpocalypse2017 on 09.23.17 at 5:03 pm

“US bombers off the NK coast!”

Would not surprise me if these bombers are mission ready. Meaning, they have the immediate option of going for Kim.

We are about as close as we can get to war, without it being war. The eclipse of peace, so to speak.

https://www.bbc.co.uk/news/amp/world-asia-41375302

#63 crowdedelevatorfartz on 09.23.17 at 9:59 pm

@#47 Totally Screwed Canadian Millenial

Did you say something?

#64 Gravy Train on 09.23.17 at 10:08 pm

#61 Mark on 09.23.17 at 9:38 pm

Uh-oh! I think I agree with everything Mark wrote in his comment! Am I now a cult member? Have I drunk the Kool-Aid? Am I now a goner?

Just teasing, Mark. Don’t be mad! :)

#65 JSS on 09.23.17 at 10:10 pm

#61 Mark

Agreed…very true, not to mention the significant financial risks involved in owning a small business in Canada.

Just buy a dividend growth ETF or a series of blue chip dividend growth stocks, and forget about it

#66 Smoking Man on 09.23.17 at 10:20 pm

My poor puppies. Suffering post vacation depression.

They were so good on the savage road trip. Excited in every town we visited. On the road between long naps they were alert and look out the windows.

Sophie was no problem with blader control. But Wyatt the cowboy would stand up and wimper for a bathroom break. Usally when we were trapped on the Highway behind a wreck. Shit load of Drunk drivers in the deep south.

But man they were so happy to be with mom and dad.

I just took em out for a walk, they made a beeline for the suv. They wanted the fun to continue.

Sorry dogs. Me and mom are to old for this shit.
….

Next book the savage road trip narated by Wyatt would not autistic like mom and dad think but is actually an alpha male. When he lifts his back foot to relieve himself on the bed. It’s not cause he’s retarded. It’s because he give no shit.

4 chapters done.

#67 Russ on 09.23.17 at 10:25 pm

and D. R. said,

… dropped the return to only 6.1%. Ten days over 20 years. Don’t tell me that you would have known when those 10 days would have occurred?
=======================

Don’t tell me you know a statement cannot include a question?

English is hard enough to grasped if you’ve had an education…

#68 For those about to flop... on 09.23.17 at 10:26 pm

Pink Pumpkins being carved in Vancouver.

This one was in my Possible Pinkies Folder and has just had a reduction and been re-listed.

It is one of a handful of flips having trouble within a few blocks of the Ol’ Flophouse.

Picked up for 1.63 in March 2016 and then renovated they could well be at break even level already.

As Tracy Chapman once sang…

Don’t you know
They’re talkin’ ’bout a renovation
It sounds like a whisper
Don’t you know…

M43BC

https://m.youtube.com/watch?v=Q2wneBVssPc

775 39TH AVE E VANCOUVER paid 1.63 asking 1.74 March 2016

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMjlSNw==

https://www.zolo.ca/vancouver-real-estate/775-e-39th-avenue

#69 Doug Rowat on 09.23.17 at 10:27 pm

#49 Linda on 09.23.17 at 8:38 pm

A more serious question now: while the Canadian housing market is too small to precipitate the world wide financial meltdown that the American housing crash did, would it not be prudent to set aside some cash so that should the TSX make a precipitous drop due to our own home grown housing meltdown…

When assigning a geographic weighting there is always risk, but we try and measure it vs. reward. Right now we like Canada due to a variety of factors including our country’s strong GDP growth, impressive bank profitability and relatively more attractive valuations.

–Doug

#70 Doug Rowat on 09.23.17 at 10:36 pm

#58 AsiaKid on 09.23.17 at 9:22 pm

Give both sides.

Yep, if you missed the 10 worst days you lucked out. Pity the guy who hits them all.

–Doug

#71 Doug Rowat on 09.23.17 at 10:40 pm

#67 Russ on 09.23.17 at 10:25 pm

English is hard enough to grasped if you’ve had an education…

Indeed.

–Doug

#72 Leo Trollstoy on 09.23.17 at 10:55 pm

Inflation healthy!

Deflation still dead!

http://www.macleans.ca/economy/inflation-continues-to-accelerate-new-statscan-data-shows/

Just like I called it!

#73 The Technical Analyst, CSTA, CPD on 09.23.17 at 11:05 pm

If you can’t time the market, can’t time ForEX, then you need to hire someone who can.

#74 Dups on 09.23.17 at 11:11 pm

Great post, maybe one of the most valuable ones to us as investors. Keep them comming Doug.

#75 acdel on 09.23.17 at 11:37 pm

Good post Doug, the markets have proven itself many times over the years and Buffet is no idiot.

But, there is that little nagging sensation that I have about the incredible debt out there, unprecedented; what is your take on people like me that have an uneasy feeling about this???

How do all of you incorporate the debts, failing businesses due to technology, lack of money to spend etc?

#76 Ace Goodheart on 09.23.17 at 11:57 pm

RE# 41 Doug Rowat:

Solo may or may have not done the Kessel run in less than 12 parsecs.

The Millenium Falcon did the Kessel run in less than 12 parsecs.

Han may or may not have been piloting it at the time…

#77 Ian on 09.24.17 at 12:02 am

#72 Leo

But that’s not what Mark told us!!!

LMFAO

Happy weekend everyone.

#78 Lost..but not leased on 09.24.17 at 12:07 am

Re Warren Buffet..

I would submit he is currently in a position that he can make his own economic weather.

He had good vision and insight in the past….many of his earlier picks were based on established companies entering previously untapped markets (ie Coca Cola, Gillette etc.)…..no need to take much risk anymore.

#79 Ian on 09.24.17 at 12:07 am

Doug – do you guys not use any precious metals exposire in your passive allocation?

#80 DG on 09.24.17 at 12:18 am

Hi Doug,
Are there any circumstances under which you will recommend someone to invest in a mutual fund?
Thanks…

#81 Ian on 09.24.17 at 12:20 am

I’m developing a new climate model, dogs.

Very warm in the GTA this weekend! Which means driving range tomorrow!! My new theory is the temperature variance from norm is inversely related to GTA housing prices.

I’m hoping Al Gore can put this in the third edition of his movie.

#82 [email protected] on 09.24.17 at 12:31 am

Great article ! You can’t time the markets

#83 John Smith on 09.24.17 at 12:56 am

“what percentage will XYZ market go up this year? Blunt answer: I have no idea.”

A more useful blunt answer to the client is: It is more likely to fall, because the question you posed contained only a bullish potential outcome.

There is nothing new under the sun in either herd behaviour or investor complacency.

#84 Tony on 09.24.17 at 1:15 am

A blind man could tell the Bank of Canada is selling Canadian dollars above the 80 cent U.S. mark. The present trade seems to be long the Aussie dollar and short the U.S. dollar. The DXY index is at the inflection point with the next resistance level at 80. The morons buying Canadian bank stocks and insurance company stocks better look at interest rates first.

#85 SWL1976 on 09.24.17 at 1:38 am

#56 Spectacle

Actually it’s 8 things they need to know to survive the next 30 years. Physical, Financial, Psychological.

8). The destructive effects to Canadians and Western Civilization , of Agenda 30 ! Also Agenda21.

The United Nations 2030 Agenda decoded: It’s a blueprint for the global enslavement of humanity under the boot of corporate masters – …

————————-

Good point Spectacle

Perhaps SCM should spend some time researching this topic, as it may help him/her further understand what their beloved T2 really has in store for them. I fear for where we are heading, but still have hope we can avoid it.

I did notice SCM’s comment in yesterday’s thread which did show just how self centered they really are. I don’t think Garth needs any help with getting the numbers up, but go ahead pat yourself on the back there SCM. I know that sort of thing is important to you.

Anyways SCM, rather than duke it out with the boomers here, why not try to learn a thing or two from them.

Wisdom’s a gift, but you trade it for youth, age is a honor, but it’s still not the truth

Also, anyone who thinks that the government confiscating more wealth from the middle class is the answer to all our woes really needs to deprogram from their government sponsored indoctrination and learn to think and do for themselves

#86 Nonplused on 09.24.17 at 1:50 am

Hey Doug, Garth, I’m back! Just did a 2 week stint in the US. I won’t go in to too much detail about what I was doing but look at Toys R Us. There is a 10 year cycle now in business. Leveraged buy out followed by stripping the company followed by bankruptcy. We are now in the cycle where they all go chapter 11. Folks, if you own shares of something going leveraged buy out sell now, not later. The stock holders always get left with nothing. Ya I am not working Toys R Us, but something different and i can tell you the bond holders and activist share holders are going to leave nothing. We are in the down cycle most every stock is going to be converted to bond holder equity over the next 2 years. If you have an equity stock, sell it, it’s worth zero. Only bond holders come out with anything for the next 2 years. I think that is why Apple is worth so much they have enough cash they can’t be taken down. But the media is already saying meh, the new phone isn’t great. Well that’s probably true but it’s still the best. Why are they dissing it? A planed take down.

Expect a leveraged take out of Apple soon, and a bankruptcy soon thereafter. The only thing that prevents it is that Apple has enough money to fight back against the corporate raiders.

#87 Mark on 09.24.17 at 2:38 am

“If you can’t time the market, can’t time ForEX, then you need to hire someone who can.”

And where might someone who has these characteristics be found?

Money managers who are so darn successful at timing the markets almost certainly don’t have time for small fry. They’re out making money for themselves. Even if you sniff beneath most of the outperforming money manager’s performance records, most of them are unsustainable. Warren Buffet has done a good job, as an example, but he bet on basically one secular theme (the rise of the US financial sector in the long-term falling rate environment) and has a very significant overweight on the sector which will be his Achilles’ heel (if he lives long enough) when the secular trend ends.

#88 NEVER GIVE UP on 09.24.17 at 2:58 am

#43 Just wondering on 09.23.17 at 8:05 pm
Kommykilled where did you obtain that random number of 250,000,000 from?
Also what do you (or does anyone here) think of the potential free trade deal with China?
=================================

We will need a pit bull at the table to negotiate with China.

Any Deal with them will have rules.

Chinese and Asian Culture dictates that all rules are to be ignored with a work around.

Just look at the people who are dodging the 15% Vancouver tax on real estate. Laughable!

We will likely never win with them. They will Eat (cheat) us alive!

Why do I say this?
I do business with China every day.

It is a win win with my suppliers but I have been shafted in every conceivable way over the years.

I met plenty of suckers going for the “Joint Venture” Scam. I doubt if even 5% of all joint ventures got out with a Break even.

Canadians are soft, tender suckers. Better watch TV instead of playing that game!

#89 Stan Broock on 09.24.17 at 5:32 am

When assigning a geographic weighting there is always risk, but we try and measure it vs. reward. Right now we like Canada due to a variety of factors including our country’s strong GDP growth, impressive bank profitability and relatively more attractive valuations.

–Doug
——————————

You are technically (looking at technical measures ) correct.
And fundamentally wrong.

The GDP ‘growth’ is due to record credit. We grow our credit including external at 350 + billion yearly.
GDP ‘Growth’ from that is 100-150 billion.

Major part of the economy – banks, financial sector, real estate is credit driven.

When (not if) credit contracts there will be very bad inflationary depression environment which will be lethal for stocks.

The very fact that TSX does not grow while our economy ‘grows’ is significant, it shows complete lack of trust by foreign investors in our economy.

There is no foreign investments in our economy, there are capital outflows, contrary to what the economic illiterate fools (the likes of wild Bill and T2) would like you to believe.

And propping the TSX to internal buyers does not make any sense as they don’t have any money to invest,up to their eyeballs in debt.

The only light is the commodities and wheat sector unfortunately in a down cycle for many more years it seems.

Investing in Canada based on fundamentals at the moment when the lie-berals are killing the economy with their tax assault on small Businesses is not a wise decision.

It is like picking up pennies in the front of a steamroller accelerating downhill.

So thank you very much, I will sleep much better by reducing my Canadian markets exposure to minimum – commodities and Pizza Pizza (impoverishment play which will grow).

#90 Stan Broock on 09.24.17 at 5:33 am

When (not if) credit contracts there will be very bad inflationary depression environment which will be lethal for stocks.

Lethal in real valuations, not in nominal ‘loonie’ valuations.

#91 Gravy Train on 09.24.17 at 6:39 am

A quarterly newsletter sent to me by my bank about three decades ago, Doug, contained a similar bar chart—that chart had more impact on my subsequent investment decisions than any other graph, chart or piece of advice. Thanks for sharing—good advice is timeless!
https://en.m.wikipedia.org/wiki/Random_walk
https://en.m.wikipedia.org/wiki/Random_walk_hypothesis
https://en.m.wikipedia.org/wiki/Efficient-market_hypothesis
https://en.m.wikipedia.org/wiki/Markov_chain
https://en.m.wikipedia.org/wiki/Markov_chain#Economics_and_finance

#92 funny Doug on 09.24.17 at 8:40 am

What we aim to do is create a low-cost, balanced and globally diversified portfolio and then gradually shift asset mix and geographic weightings based on our longer-term economic forecasts and changes in broad fundamentals such as corporate profitability. With any luck,

………..
a rant against active management ends with the above?

in other words, you’re an ACTIVE manager- ‘tactically balanced.. love your last three words……:)

#93 Victor V on 09.24.17 at 9:03 am

Tory’s fall into Trudeau’s tax trap: Watt

https://www.thestar.com/opinion/commentary/2017/09/24/torys-fall-into-trudeaus-tax-trap-watt.html

Canadians believe the system is rigged just as much as Americans do. They believe rich Canadians don’t pay their fair share of tax, and they believe that the system delivers advantages to the privileged that are simply not available to them.

Canadians of all political stripes, of all demographic groups and from all over the country believe this. No amount of campaigning by doctors and lawyers will convince them the wealthy will be unduly hurt under a new tax regime; in fact, these campaigns may be more likely to push Canadians toward the Liberals.

The Conservatives have fallen into the trap of defending a group of privileged Canadians and allowing themselves to be boxed in against the middle class.

It seems that Justin Trudeau has adopted a lesson Donald Trump taught us all in 2016: conventional commentators, more often than not, are drastically out of touch — and leaders should trust their instincts.

#94 Dharma Bum on 09.24.17 at 9:23 am

#47 Screwed Canadian Millenial

“If you boomers seriously haven’t figured out yet that I deliberately misspell “millenial” to trigger you, then you’re even more blind and senile than I thought. Find me another word I’ve misspelled across my hundreds of posts, many of them pretty lengthy. Come on guys do you have brains?”
——————————————————————-

Ha-ha. Yah. We have some brains.

We just love it that, regardless of the fact that you may be right about many things (i.e., boomers were luckier than millennials for being born at a more economically advantageous time), you are such a squirmy, hyped up, angry, bitter, jealous punk.

As we clip our coupons, collect our dividends, re-invest our pensions, enjoy our low-taxed capital gains, spend our non-taxed residential real estate capital gains, and generally just exponentially increase our net worth simply by breathing, we laugh at you.

Even though we are old, we still have decades to go. Thanks to the miracle of modern medicine, and wine, we will continue to passively exist while holding onto our massive assets and controlling everything, including you.

Keep squirming punk. You really are screwed.

#95 FLHTK on 09.24.17 at 9:31 am

#4 Shawn-
Now that bonds had their Bull run what type of asset allocation is required to earn a 7% return these days? I don’t think 60:40 is required for long term investors with their behavioral finance in check, but for the average 30 year old in a 90:10 equity to bond split ( I know, I know, crazy volatility) what do you and your team predict going forward over the next two decades?
____________________________________________

Great question, I want to know this as well.

Can you talk about this in your next blog Garth?
Thanks

#96 Gravy Train on 09.24.17 at 9:48 am

#76 Ace Goodheart on 09.23.17 at 11:57 pm
#41 Doug Rowat on 09.23.17 at 7:58 pm

But Solo’s different. He did the Kessel Run in less than 12 parsecs. — Doug

“…The Millenium Falcon did the Kessel run in less than 12 parsecs….”

Is this an actual line of dialogue from the Star Wars movie? Since a parsec is a unit of length, not of time, the only way that I can make sense of it is that Hans Solo did the Kessel Run by taking a shortcut, not by speeding up! Has George Lucas been queried? :)

#97 NoName on 09.24.17 at 10:22 am

#91 Gravy Train on 09.24.17 at 6:39 am
A quarterly newsletter sent to me by my bank about three decades ago, Doug, contained a similar bar chart—that chart had more impact on my subsequent investment decisions than any other graph, chart or piece of advice. Thanks for sharing—good advice is timeless!
https://en.m.wikipedia.org/wiki/Random_walk
https://en.m.wikipedia.org/wiki/Random_walk_hypothesis
https://en.m.wikipedia.org/wiki/Efficient-market_hypothesis
https://en.m.wikipedia.org/wiki/Markov_chain
https://en.m.wikipedia.org/wiki/Markov_chain#Economics_and_finance

I would take out that efficient market thingy, they are anything but efficient.

Just think of brexit, two possible outcomes but no one siriusly considered exit option, so when wote was collected and counted market went nose dive. I can’t remember correct definition of efficient market but it’s something like, price reflect value, based on a current known variable,s and possible future variables. Now think of brexit again, stay – exit so basically if market was efficient it wouldn’t move after vote was counted, or if market aficionados would price exit well before.
Market is like me very impulsive.

#98 Renter's Revenge! on 09.24.17 at 10:39 am

#96 Gravy Train on 09.24.17 at 9:48 am
#76 Ace Goodheart on 09.23.17 at 11:57 pm
#41 Doug Rowat on 09.23.17 at 7:58 pm

But Solo’s different. He did the Kessel Run in less than 12 parsecs. — Doug

“…The Millenium Falcon did the Kessel run in less than 12 parsecs….”

Is this an actual line of dialogue from the Star Wars movie? Since a parsec is a unit of length, not of time, the only way that I can make sense of it is that Hans Solo did the Kessel Run by taking a shortcut, not by speeding up! Has George Lucas been queried? :)”

http://starwars.wikia.com/wiki/Kessel_Run

tl;dr: they were trying to minimize distance, not time.

#99 Ronaldo on 09.24.17 at 10:39 am

#94 Dharma Bum on 09.24.17 at 9:23 am

Good one Dharma. The best way to deal with trolls though is to ignore them completely. Eventually they will slink away back into their hole. They suffer from a need for attention having being ignored most of their life and especially as a child. Likely bullied as a child. Sad bunch.

#100 Ian on 09.24.17 at 10:40 am

#93 Victor

I don’t think that will prove to be correct at all.

Once medical wait times increase and small business hiring is hurt, it will be well understood that this will affect everyone.

Of course The Star is trying to find something positive to say about it.

#101 agreed on 09.24.17 at 10:51 am

This article is misleading.

To miss these 10 best trading days you should have sold you portfolio the day before and buy it back at the end of the ‘winning’ day.

While passive portfolio management is good, active when knowing what you are doing could be better.

…………

i find the financial industry dubious at best.

Also amusing how they attack each other. And lastly, you’ll find VERY few advisors that have their OWN historical data (alpah/beta/sharp ratio/returns) for clients to assess. That’s obviously a good thing for the industry, but not the clients

#102 Doug Rowat on 09.24.17 at 11:16 am

#92 funny Doug on 09.24.17 at 8:40 am

a rant against active management…

It’s an argument against short-term market timing and the ridiculous precision attempted by strategists.

I’m not suggesting that professional money management and financial planning have no value. An advisor may have failed to anticipate the financial crisis, but they earn their money if they convince a client not to bail out at the lows because their emotions are overwhelming them. Experience counts when you’re facing difficult markets.

–Doug

#103 crowdedelevatorfartz on 09.24.17 at 11:22 am

@#97 funny Doug
“in other words, you’re an ACTIVE manager- ‘tactically balanced.. love your last three words……:)”
++++++

As opposed to what?
An INACTIVE manager? A manager that sells you crap for the commission fee and then lets it rot?

Active trading usually refers to a day trader or at the very least, multiple trades in a week/ month.

Not most long term investors cup of tea for a retirement plan years in the making. They want stability and growth. Not commission dippers shuffling investments to and fro.

A rebalance at least a few times a year due to political and economic changes makes sense.

Stop splitting hairs

#104 Smoking Man on 09.24.17 at 11:25 am

Sucks to be a Millionaire NFL player today.

Your drop the knee your fans will hate you.

You stand you are going to end up on a shit list like deplorable IT contractors and comics who apposed globalism.

Civil War soon.

#105 crowdedelevatorfartz on 09.24.17 at 11:38 am

@#62 Conan
“We are about as close as we can get to war, without it being war…..”
++++++

hair splitting time.

Since the U.S. and North Korea never signed a Peace Agreement after the 1950- 1953 conflict……They are…still….technically……. at war.

https://www.google.ca/url?url=https://en.wikipedia.org/wiki/Korean_Armistice_Agreement&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjZ2rTGkr7WAhVEw2MKHcdZBh8QFggWMAA&usg=AFQjCNF5HSWQGEBcMbk3CDjxZwYdqby7Cg

Neither side could claim “victory”…….. on and on it goes….64 years , 3 dictators, and 13 Presidents later….we arrive at ICBM’s, Nukes and an escalating war of worlds between two of the biggest egos in more than half a century of diplomatic relations……

The longest conflict in US history soon to be over? One way or another?

#106 Fuzzy Camel on 09.24.17 at 11:46 am

The trap is set. The Bank of International Settlements just released a rather unsettling report. Canadian banks have $14 Trillion US in notional derivatives.

The kicker? Any spike in the USD or interest rates would cause our banks to become insolvent.

This isn’t some conspiracy doomer site, this was on the front page of the National Post, Financial Post and so on.

The article hinted, that Trumps tax proposal could propel the USD much higher, while at the same time causing US interest rates to rapidly rise.

Canadians have been set up!

Garth, warn the people please! Look up the article, just google $14 Trillion Canadian Banks. This from the highest power in the financial world, the BIS.

Alan Greenspan already warned rates would rise rapidly soon.

#107 crowdedelevatorfartz on 09.24.17 at 11:48 am

Hmmmm

The Globe and Mail biting the hand that feeds it?
OR
The Flopster is moonlighting as a G&M journalist

https://www.theglobeandmail.com/real-estate/real-estate-video/done-deals-toronto-mansion-sells-for-400000-under-asking-as-market-dips/article36363907/

#108 crowdedelevatorfartz on 09.24.17 at 11:54 am

Delusional Millenials that drank kool-aid at the Real Estate altar?

https://www.theglobeandmail.com/globe-investor/personal-finance/genymoney/couple-with-growing-family-hope-to-get-on-track-to-retire-at-60/article36371254/

#109 NoName on 09.24.17 at 12:09 pm

Just press play

https://www.youtube.com/watch?v=fumYdO9XknE

#110 For those about to flop... on 09.24.17 at 12:23 pm

#102 crowdedelevatorfartz on 09.24.17 at 11:48 am
Hmmmm

The Globe and Mail biting the hand that feeds it?
OR
The Flopster is moonlighting as a G&M journalist

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

The answer to that one is fairly obvious as I have no journalistic skills whatsoever ,as you guys bear witness to each day.

I try to get the facts/ numbers right and provide evidence which is the main thing ,and then it’s all downhill from there.

The bunion on Garth Thor Turner’s toe from wearing cowboy boots has better writing ability than me…

M43BC

#111 Oft deleted much maligned stock.picker on 09.24.17 at 12:56 pm

Let’s not forget that Buffets best days are far behind him and his businesses have taken big losses which he’s managed to smooth out by siding with Obama and aquiring massive subsidies in the billions by selling his reputation as a PR gimmick for the cause and building dark windmills which produce no power. It’s questionable how green Warren’s support really is now that Obama’s subsidies aren’t coming in.

#112 Buffett is a has been... on 09.24.17 at 1:04 pm

Berkshire shares have averaged a 9-10% pa growth rate over the last 17-18 years (in USD). that’s ok, but nothing spectacular.

That’s slightly LESS than holding some rocks (gold) during the same time frame, which returned 10.5% pa …

#113 Stan Broock on 09.24.17 at 1:16 pm

#106 Fuzzy Camel on 09.24.17 at 11:46 am

Canadian banks exposure is not the problem.
Banks will be just fine.

———————————

The problem it seems for us (not the banks) is that most of the mortgages originated in the big credit orgy of the last decade and a half where borrowed effectively on the International markets through the sales of MBS in the form of government/CMHC backed government bonds.

Over trillion of additional external debt in USD priced variable rate securities.

In addition to the external debt that is part of provincial and federal debt we have a situation when the CAD can not go much lower as we can not pay debt.
Hence the emergency increase in rates.

So while our genius economists thought that they can inflate the CAD the debt markets might force them not to.

Still at some point inflation will prevail but before that all borrowers will be squeezed between higher payments in temporary appreciating currency while in declining economy.

BOC is already looking at alternatives, including assets purchases to prop markets. and confidence.

#114 Karma on 09.24.17 at 1:38 pm

Interesting

https://www.wsj.com/amp/articles/higher-eds-latest-taboo-is-bourgeois-norms-1505774818

#115 T on 09.24.17 at 1:54 pm

#47 Screwed Canadian Millenial on 09.23.17 at 8:31 pm

Still trolling I see. How very sad.

Oh how I would love to smack some sense and respect into you and others like you from our generation.

Want to meet up?

#116 For those about to flop... on 09.24.17 at 1:57 pm

Pink Pumpkins being carved in Coquitlam.

These guys are already staring at a solid loss after paying 1.27 for this one in March of 2016.

The assessment comes in at a much lower 1.09.

Will do well just to break even.

Probably not the holy Trinity they were looking for…

M43BC

415 Trinity Street, Coquitlam

Aug 9:$1,298,000
Sep 21: $1,199,900
Change: – 98100.00 -8%

https://www.zolo.ca/index.php?sarea=415%20Trinity%20Street,%20Coquitlam&ptype_house=1&max_price=1300000&min_price=800000&filter=1

https://evaluebc.bcassessment.ca/property.aspx?_oa=QTAwMDAzWEZKRQ==

#117 Stone on 09.24.17 at 2:03 pm

#108 crowdedelevatorfartz on 09.24.17 at 11:54 am

————-

That was such a funny article. That couple is deluded. Worse, the Globe and Mail article is so full of errors (math calculations). Does nothing get editted before publication? The financial expert they refer to in it should not be providing financial advice. Wow! Even worse, this couple invested some of their savings into syndicated mortgages. They own a rental property that is cashflow negative as well. Gaaaahhhh!!! Unbelievable.

Thanks for sharing that. I’m still wiping away the tears from the uncontrolled laughter.

#118 Victor V on 09.24.17 at 2:13 pm

#100 Ian on 09.24.17 at 10:40 am
#93 Victor

I don’t think that will prove to be correct at all.

Once medical wait times increase and small business hiring is hurt, it will be well understood that this will affect everyone.

Of course The Star is trying to find something positive to say about it.

===================

Trudeau will win the next election. Legalizing weed, fighting for “tax fairness” a la Robin Hood and leveraging gender identity politics all ingratiate him with millennials who form a formidable voting block.

#119 For those about to flop... on 09.24.17 at 2:31 pm

Pink Pumpkins being carved in Vancouver.

These guys decision to speculate on the low end of the Westside as recently as April 2017 does not seem to be going to plan.

Picked up for 2.87 earlier this year with an assessment that comes in at 2.99 they will be hoping a developer bails them out of this predicament.

The assessment states that it is 1912 build and the listing states 1928 which for a bulldozer is kind of irrelevant but it is still a 16 year discrepancy.

40k for the house might be a bit generous as well…

M43BC

3640 W 2nd Avenue, Vancouver

Jun 19:$3,388,000
Sep 20: $2,988,800
Change: – 399200.00 -12%.

https://www.zolo.ca/index.php?sarea=3640%20W%202nd%20Avenue,%20Vancouver&ptype_house=1&max_price=1300000&min_price=800000&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMDZUTA==

#120 Doug Rowat on 09.24.17 at 2:39 pm

#112 Buffett is a has been… on 09.24.17 at 1:04 pm

Berkshire shares have averaged a 9-10% pa growth rate over the last 17-18 years (in USD). that’s ok, but nothing spectacular.

Yeah, what a loser.

–Doug

#121 Dan.t on 09.24.17 at 2:51 pm

#86 Nonplused on 09.24.17 at 1:50 am
” The stock holders always get left with nothing. Ya I am not working Toys R Us, but something different and i can tell you the bond holders and activist share holders are going to leave nothing. We are in the down cycle most every stock is going to be converted to bond holder equity over the next 2 years. If you have an equity stock, sell it, it’s worth zero.

“Expect a leveraged take out of Apple soon, and a bankruptcy soon thereafter. The only thing that prevents it is that Apple has enough money to fight back against the corporate raiders.”
———————-

Settle down. Normally I would agree with you but there is simply too much money sloshing around the world thanks to QE1- QE2- QE 8…QE 12 etc…and it will find it’s way out of RE and into stocks in a year or two…if that wasn’t the case, I would say stay away from the market until a repeat of 2008 but won’t be the case.

A simple 20-30% correction (public will scream and run for the exits) and then up and up and up as millennial go online…meaning they start spending and spending. But who the F++’ knows.

Anyhow the troll Screwed Cad Millenidiot, leave him alone. It is painful to see such a troll get such attention. Ja, everyone is pissed at the boomers. All you did is buy a house (which is a Canadian right- it seems) and now you are worth 1.5 mil (in YVR anyhow), and have sick pensions, government pensions, had raises every few years, low competition (yes, compete with india and china now- see how you like it) . Anyhow, Ignore that moron.

#122 SoggyShorts on 09.24.17 at 3:28 pm

#108 crowdedelevatorfartz on 09.24.17 at 11:54 am

Monthly outlays: Mortgage $1,676; property tax $360; utilities $210; maintenance and reserve $200; home insurance $90; new vehicle fund $400; auto insurance $360; fuel $300; other transportation $220; groceries $750; clothing $200; appliance, home improvement fund $450; vacation, travel $450; dining, drinks, entertainment $480; personal care $130; other personal $200; life, disability insurance $380; cellphones, Internet $150; TFSAs $917; other savings $950; rental loss $685. Total: $9,558

Yikes.
Aside from the obvious ones, 5K on vacations, 15K on cars, and 6K on entertainment are not a recipe for early retirement.

#123 Lost..but not leased on 09.24.17 at 3:44 pm

Re: Millennials…

A bit of history..
We’ve labelled various Post WW2 generations…ie Boomers, GenX, Millennials, etc.

Call it conspiracy …whatever.

Where did this l start?
I recommend late Dave McGowan and his works,particularly “Weird Scenes Inside the Canyon”..it is actually available on line for free. The premise seems like absurd..but he did fascinating research that supports his thesis of a ” master plan.”

The basic premise is that the early Boomer generation is born in the mid 1940’s was a large demographic force than needed to be controlled early…as they had not experienced war or Depression.

Someone born in 1945 would be 18 in 1963 soon into adulthood…about the time of the rock scene ie British Invasion. McGowan, based on inspiration, determined a disproportionate number of the rock stars were children of military parents…many of whom couldn’t sing or play instruments….(a group of ace studio musician called the Wrecking Crew played most of the music of these 60’s groups who were artificial constructs)

Example: Jim Morrison dad was an Admiral in charge of Gulf of Tonkin(lead to Vietnam war)..Jim Morrison admitted he had no talent ot interest in music early on…

The elites agenda was to take the boomers and direct them into “sex drugs rock and roll”…..effectively self indulgence. The Elites fear was an actual legit Vietnam War protest by Boomers would hurt business.

These boomers are now retiring and dying…legacy?
Question: Dump all over them…or were they unwitting parts of a master plan for all subsequent generations by the elites and their gov’t stooges. ?

I would submit that each subsequent generation has had a “takedown” plan in place to ratchet them into increasingly compromising situations. I agree millennials are screwed..but by design hatched decades ago. Alan Greenspans PhD thesis was kept secret for years..but its main premise was the creation of a housing bubble..interesting his crystal ball???

#124 FearThe Beard on 09.24.17 at 6:10 pm

Your little chart looks great …..”…While the Canadians Equity Market has Advanced almost 600%.”

But please tell by looking at the trend line that it will not be pulling back to 10k or below in the not too distant future.

Just Sayin

#125 Foggy on 09.24.17 at 8:33 pm

Just one question, what’s the rate of return if you ‘missed the 10 worst days’?

#126 Sean on 09.24.17 at 9:23 pm

That “10 worst days” chart is fantastic. Thanks for that! I mean that may seriously be the single best argument I have ever seen for just staying invested.

#127 Where's The Money Guido? on 09.25.17 at 1:29 am

Re:
#123 Lost..but not leased on 09.24.17 at 3:44 pm

Someone who gets it!!!!!
Bang On!

#128 Shadow on 09.25.17 at 12:51 pm

Good article, you’re getting better at this!