Myopic

DOUG By Guest Blogger Doug Rowat

We’re all familiar with the overused trope, “it’s quiet…too quiet”, which may or may not have originated from an old 1930s western. In fact, the idea of an ‘eerie calm’ is so effective at inducing suspense that it’s reused constantly. Ridley Scott just adopted the convention in his latest Alien movie (https://www.youtube.com/watch?v=cmB03i8X3Wg).

The stock market is currently enveloped with this same unnatural quiet. The CBOE Volatility Index (VIX), which measures expectations for volatility on the S&P 500, sits at the measly 9.30 level, more than 50% below its long-term average. Over the summer, the VIX actually dropped to an all-time low of 8.84, breaking the previous record of 8.89 from December 1993. What’s amazing, of course, is that the VIX has hit these low levels during the tenure of one of the most bombastic and unpredictable presidents in history. A president who has threatened nuclear armageddon no less. But perhaps the VIX is subdued because everything external to the president and his administration is so steady and positive at the moment: the Fed, the US economy, corporate profitability and even Robert Mueller, who just quietly works away gathering evidence.

Quiet…Too Quiet: CBOE Volatility Index

Source: Bloomberg

But regardless, the calm will not last. At some point something will occur that will cause volatility to spike and a market downturn will almost certainly follow. So what to do when this happens? First, of course, ensure that you have a balanced and globally diversified portfolio to more easily ride out these occasional speed bumps. But equally important is to be aware of your susceptibility to a particularly dangerous behavioural investing error: myopic loss aversion.

Myopic loss aversion refers to the tendency of investors to be more sensitive to portfolio losses than gains. Myopic investors also tend to evaluate their portfolios more frequently when losses occur, which only amplifies their unwillingness to bear the discomfort of holding riskier investments such as equities.

It’s often been said of great athletes that they dominate because they have a better sense of available time. How often did Gretzky continue to hold the puck when other players would have just fired it off the glass? In other words, great athletes don’t panic. Investors exhibiting myopic loss aversion completely lose sight of their available time. Granted some investors don’t have the flexibility to suffer near-term losses, but the vast majority do. Investors who become emotionally consumed with short-term losses have probably lost sight of two critical factors: 1) markets eventually recover and 2) their actual investment time horizon can probably be measured in years, if not decades.

The following may seem obvious, but for emphasis it’s worth highlighting: Over the long term, equities outperform safer assets such as bonds. Therefore, if you have a reasonable time horizon, you’ll do better by maintaining exposure to riskier assets and remaining calm throughout the uncomfortable, but temporary, bouts of volatility. For the US market, holding equities has historically offered more than a 6,000% cumulative advantage over bonds over the past 40 years.

Long term, Risk Pays Off: S&P 500 vs Barclays US Aggregate Bond Index Over 40 Years

Source: Bloomberg; Returns from end-Sept 1977 to end-Sept 2017

So, when volatility inevitably arrives, don’t check your accounts any more frequently than you normally do. Logging in to your investment account every day will do you no good whatsoever. There’s a 100% correlation between our clients who make hasty, emotional decisions and the ones who check their accounts the most often. As zeninvestor.org puts it:

If an investor checks his holdings on a daily basis, he will experience many days of losses. Conversely, the longer the time frame between checks, the less likely it is that the portfolio will experience losses. Given that investors feel the pain of losses far greater than they feel the pleasure of gains, they are likely to not only experience disappointment if they check their portfolios with great frequency, but they are more likely to panic and sell as the pain of losses becomes intolerable.

Cornell University’s Richard Thaler conducted pioneering work on myopic loss aversion, identifying the problem of excessive portfolio evaluation. While market conditions cannot be controlled, the frequency of portfolio evaluations is a choice—one that can easily be altered. Regular portfolio checkers entirely forget that markets eventually rally. As Thaler bluntly stated: “transitory fluctuations [in portfolio value] impose only psychic costs”.

So, be strong of mind. Volatility? This too shall pass.

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

113 comments ↓

#1 Andrewski on 10.07.17 at 4:08 pm

So rebalance your portfolio where necessary & stay the course is what I am hearing from Doug.

#2 Robert White on 10.07.17 at 4:27 pm

The VIX is extremely interesting subject matter and I have been following it over the summer as well. Clearly, Mr. Rowat’s thesis concerning the transitory nature of markets as though this time is no different from all other economic recessions. In point of fact, USD is a known defunct currency with liability in the form of unsecured liabilities to the tune of over $500 trillion, and a public set of books with over $20 trillion in deficit. This pales in comparison with the $1.5 quadrillion in Dark Pool Derivatives, and Global De-Americanization. Add to this the impending collapse of BIG oil due to thermodynamic oil collapse. In brief, anyone that advocates being in the ” stock market ” fails to understand that most savvy investors have pulled their assets from the stock market due to the extreme overvaluations on all stocks. Nothing transitory is on the horizon, Mr. Rowat. This time is different, and the fact that everything from Dry Bulk Shipping to the VIX is in a Secular Stagnation drydock does not empirically indicate that this time is qualitatively, or quantitatively, similar to the last market cycles over time. This time is different, Mr. Rowat, I assure you.

RW

#3 espressobob on 10.07.17 at 4:31 pm

Contrarians load up on bargains when the opportunity presents itself.

Panic is good.

#4 Lost...but not leased on 10.07.17 at 4:41 pm

U snooze U lose

#5 chuck on 10.07.17 at 4:41 pm

What a timely reminder- Thanks for your excellent work

#6 The doubter on 10.07.17 at 4:44 pm

What? No comment?

Doug, you are 100% correct. I wish I knew this 20 years ago.

#7 TurnerNation on 10.07.17 at 5:01 pm

From the Killing us Softly Dept.

They blew up real good the Nuclear Family (so-named).
They’ll stone you just like they said they would.
T-More Butts Jr. is leading our charge.

“The increase in opioid prescriptions from 1999 to 2015 could account for about 20 percent of the observed decline in men’s labor force participation (LFP) during that same period.

In “Where have all the workers gone? An inquiry into the decline of the U.S. labor force participation rate” (PDF), Princeton University’s Alan Krueger examines the labor force implications of the opioid epidemic on a local and national level.”

Seen in weekend IBD edition:
https://www.brookings.edu/bpea-articles/where-have-all-the-workers-gone-an-inquiry-into-the-decline-of-the-u-s-labor-force-participation-rate/

#8 conan on 10.07.17 at 5:14 pm

I think the calm part is about to end. Grey skies and choppy seas are ahead. Everyone believes in flight to safety and don’t bet against America. Well, the Trumponian affect has seen both those things happen in spades.

American markets are not up 24 % because of Trump’s business or political acumen. They are up because the World is wound up to the point of breaking, and money is pouring into the USA because of the very loud and obvious war drums.

Would not surprise me if Tillerson has informed every friendly country that war in North Korea is inevitable.

Hang on to your Cheetos.

#9 Robert White on 10.07.17 at 5:14 pm

I screwed up my first paragraph above and am wondering if an edit button exists?

RW

Deposit an extra $2. — Garth

#10 For those about to flop... on 10.07.17 at 5:16 pm

Pink Pumpkins being carved in North Vancouver.

Yet another relatively affordable house by Vancouver standards struggling to match early 2016 prices.

This 77 build was picked up for 1.52 last February with an assessment that falls in between the buy and ask at 1.55.

Vancouver speculators had a good thing going for a long time and so this guy needs to clean up his mess so that nobody works out that anything is amiss.

Don’t wreck it Ralph…

M43BC

1791 Ralph Street, North Vancouver

Jul 25:$1,689,000
Oct 6: $1,599,000
Change: – 90000.00 -5%

https://www.zolo.ca/index.php?sarea=1791%20Ralph%20Street,%20North%20Vancouver&ptype_house=1&max_price=1400000&min_price=800000&filter=1

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

#11 greyhound on 10.07.17 at 5:28 pm

True, Often when stocks go down bonds go up, easing nest egg volatility; more rarely stocks, bonds & real estate will all go down together. In 1987 stocks dropped more than 20% in 90 minuets. And that was in a market environment without today’s HF computers doing most of the trading, and only 6 years into the current bond bull. Now we’re 36 years into it & sovereign yields are negative for the 1st time in thousands of years.
What could go wrong?
I’ve got my bowl of popcorn sitting contentedly on the sidelines. What’s coming should be quite a show!

#12 For those about to flop... on 10.07.17 at 5:34 pm

Pink Pumpkins being carved in North Vancouver.

This pumpkin is a little bit bigger than the last and appears to be a little bit more rotten as well.

Picked up for 2.75 in June 2016 ,they waited a year to try and get out clean but it appears that plan is falling apart.

Assessment comes in at 2.59 and the chance that they take a small loss at least after expenses on this one is 9.99 out of 10.

So your telling me there’s a chance…

M43BC

974 Wavertree Road, North Vancouver

Jun 10:$2,985,000
Oct 6: $2,588,000
Change: – 397000.00 -13%

https://www.zolo.ca/index.php?sarea=974%20Wavertree%20Road,%20North%20Vancouver&ptype_house=1&max_price=1400000&min_price=800000&filter=1

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

#13 Warren- the lagging indicator on 10.07.17 at 5:44 pm

I agree, that vix indicator is acting very very strangely. I surely thought the left would have taken out Trump by now or at least impeach him on whatever pleasant fiction suits their purpose. The vix says no??? It surely must be wrong in its proposed measure of volitility.

#14 3d on 10.07.17 at 5:55 pm

We smart people know the same is true for real estate only the gains are much bigger. You just have to ride out any tempory loss and realise that the only longer term way really is up. Don’t….succumb….to….myopic loss aversion. Build confidence. Keep the faith. Buy the dips. Remind peers not to panic. Well written article. Good work.

#15 Lost...but not leased on 10.07.17 at 6:00 pm

What I am reading is that the global economy will be moving from Quantitative Easing to a phase of Quantitative Tightening.

#16 For those about to flop... on 10.07.17 at 6:01 pm

Pink Pumpkins being carved in North Vancouver.

Another person in trouble on the north shore.If you look at zolo at first glimpse things don’t see that bad in North Vancouver,with it being up 15% yoy but when you look at detached they are struggling like other parts of the city and these folks are slowly working out that a sure thing ain’t so sure after all.

5 bedders are down 12% yoy in this part of town.

This pumpkin was plucked from the patch for 2.28 in April 2016,the assessment doesn’t clear the two mark at 1.93

Asking 2.38 if they roughly get asking the will likely go halves in the expenses but nobody yet knows where the Rocklands…

M43BC

112 w Rockland Rd,North Vancouver

Jul 8:$2,688,000
Oct 6: $2,388,000
Change: – 300000.00 -11%
https://www.rew.ca/properties/R2212559/112-w-rockland-road-north-vancouver-bc

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

#17 Howard on 10.07.17 at 6:03 pm

#13 Warren- the lagging indicator on 10.07.17 at 5:44 pm
I agree, that vix indicator is acting very very strangely. I surely thought the left would have taken out Trump by now or at least impeach him on whatever pleasant fiction suits their purpose. The vix says no??? It surely must be wrong in its proposed measure of volitility.

——————————–

How can the left impeach Trump when both houses of Congress have a Republican majority?

#18 Doug Rowat on 10.07.17 at 6:22 pm

#2 Robert White on 10.07.17 at 4:27 pm

The VIX is extremely interesting subject matter and I have been following it over the summer as well. Clearly, Mr. Rowat’s thesis concerning the transitory nature of markets as though this time is no different from all other economic recessions. In point of fact, USD is a known defunct currency with liability in the form of unsecured liabilities to the tune of over $500 trillion, and a public set of books with over $20 trillion in deficit. This pales in comparison with the $1.5 quadrillion in Dark Pool Derivatives, and Global De-Americanization. Add to this the impending collapse of BIG oil due to thermodynamic oil collapse. In brief, anyone that advocates being in the ” stock market ” fails to understand that most savvy investors have pulled their assets from the stock market due to the extreme overvaluations on all stocks. Nothing transitory is on the horizon, Mr. Rowat. This time is different, and the fact that everything from Dry Bulk Shipping to the VIX is in a Secular Stagnation drydock does not empirically indicate that this time is qualitatively, or quantitatively, similar to the last market cycles over time. This time is different, Mr. Rowat, I assure you.

RW

Canned beans and iodine tablets it is.

–Doug

#19 tccontrarian on 10.07.17 at 6:33 pm

“…the calm will not last. At some point something will occur that will cause volatility to spike and a market downturn will almost certainly follow. So what to do when this happens? First, of course, ensure that you have a balanced and globally diversified portfolio to more easily ride out these occasional speed bumps. ” -D.R.
————————————————————–

Sure, and don’t be shy about increasing cash position and/or establishing short positions. Contrary to popular opinion, one does NOT always have to have long positions.
After one of the longest bull markets in history (fueled by several QE’s), we have the breeding ground for one of the worst bears in history (likely to be the worst since 1929-32).
I’m almost 15% short positions now.

Since I’m ‘active’ and monitor my portfolio on a daily basis anyway, this ‘myopic loss aversion’ is not an issue.
Besides, losses in any one year can be claimed back against gains in future years!

TCC

#20 El Presidente Orangeface on 10.07.17 at 6:35 pm

Me and little rocket man can help you out there with volatility……..

#21 For those about to flop... on 10.07.17 at 6:36 pm

We’re all familiar with the overused trope, “it’s quiet…too quiet”, which may or may not have originated from an old 1930s western. In fact, the idea of an ‘eerie calm’ is so effective at inducing suspense that it’s reused constantly.- Doug Rowat.

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

Hey Robax ,I watched your Alien trailer but I think this one is a better fit.

Peace ,Flop…

https://m.youtube.com/watch?v=TEC4nZ-yga8

#22 AB Boxster on 10.07.17 at 7:10 pm

#126 conan on 10.07.17 at 7:57 am


In AB Boxster terms, please explain why the USA pays 30 % less for Alberta oil. Feel free to swear as much as you want, use ****, or @#%.

I think it makes sense to lay the blame on the Conservative government in Alberta. There is no excuse why Sweden can have this huge oil fund, while Alberta, paid it all out to rich people, and has almost nothing. Cons have been running Alberta since forever. It is only recently, that people woke up to the monstrosity, called modern Canadian Conservatism, and gave you the boot.

“And you seriously argue, that if Alberta were to upgrade it’s crude, that this would miraclously mean that pipelines would be approved?”

Yes, it would help, and you could charge the USA more for your oil. I take it refining oil, leads to lots of carbon taxes? So, the plan was to send it to the Irvings?

———————–
Oil 101

Oil Prices
The US pays 30% less for Canadian oil because they can.
Canada (Alberta) does not have access to world markets as there is no pipeline to tidewater. Therefore Canada cannot get world price or their oil. We sell oil mostly to the Americans, and so they pay less.

If Canada had access to other world markets (ie a PIPELINE) Canada could sell its oil on the world market. If the Americans then did not want to pay us full world price, that would be too bad for them. We would just sell our oil elsewhere.
Without a PIPELINE, we cannot get world price, and we are screwed.

Norway vs Alberta
Norway is a country, Alberta is a province.
Alberta sends vast amounts of its oil wealth to the rest of Canada via transfers. Between 2000 and 2014 Alberta sent over $200 billion dollars to the rest of Canada. Also, Norway gets full world oil price rather, because they have access to world markets. Canada, (Alberta) does not because Canada will not build a PIPELINE.

Please give us our $200 billion back.

Stupidity of Canada Energy policy
Eastern Canada pays full world oil price to foreign countries.
That money goes out of Canada.
There is no PIPELINE from Alberta to replace this foreign oil.
Liberals just killed it.

It is estimated that Canada loses $30 billion dollars of revenue because eastern Canada buys oil from foreign countries, rather than from itself.

How does this make sense?
It is sheer stupidity to send hard earned Canadian dollars, to foreign companies and governments, rather than buying Canadian product.

Re: Processing in Canada
Why not send to the Irvings?
They create jobs in Canada, pay taxes in Canada and contribute to Canada.

Why send oil to the states (at a discounted price because we don’t have a PIPELINE) so they can refine it (creating jobs in the US, with all the taxes associated to people n the jobs as well as the companies)?

And then the US sells the oil back to eastern Canada. And guess what?
You pay full world price.

The US gets all the benefit.
Canada gives up a massive amount of money.
But it doens’t really matter I guess.
As long as Alberta keeps sending $20 billion dollars out of its economy to Quebec and Ontario every year, what’s the problem, right?

This is what the Liberals call intelligent energy policy.

It is the most stupid policy, enabled by corrupt Liberal politicians, who buy votes in Ontario and Quebec.

#23 Damifino on 10.07.17 at 7:34 pm

#11 greyhound

I’ve got my bowl of popcorn sitting contentedly on the sidelines. What’s coming should be quite a show!
——————————

I’m still waiting for the Vancouver housing crash show. It’s been in production for years and we haven’t even seen a pilot yet. My popcorn is getting awfully stale.

#24 Al on 10.07.17 at 8:06 pm

Excellent article on the $27 billion held in Doctors corporations invested in stocks and bonds and paying minimal taxes; https://www.thestar.com/business/2017/10/05/six-facts-you-need-to-know-about-ottawas-tax-reforms-olive.html

David Olive has always been a socialist. He’s good at it. — Garth

#25 Linda on 10.07.17 at 8:14 pm

Doug, any Mom or person who takes care of children on a regular basis can confirm the ‘It’s quiet – too quiet’ meme pertains to the lack of noise children make when they are up to an activity the person in charge would disagree with:)

#26 For those about to flop... on 10.07.17 at 8:16 pm

Damifino on 10.07.17 at 7:34 pm
#11 greyhound

I’ve got my bowl of popcorn sitting contentedly on the sidelines. What’s coming should be quite a show!
——————————

I’m still waiting for the Vancouver housing crash show. It’s been in production for years and we haven’t even seen a pilot yet. My popcorn is getting awfully stale.

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

Did someone say pilot?

Check out the nightmare on Pilot Rd.

LS in Arbutus polished my number with opportunity costs added and it ballooned into a million dollar loss

Have ten other cases in the same area and same price bracket hanging on.

I can’t show you guys a flood but I can point to the cracks in the dam…

M43BC

$$$$$$$$$$$$$$$$$$$$$$$$$$$

CONFIRMED PINK SNOW.

Well,here is confirmation of the biggest loss I have recorded since my study on the Vancouver real estate market started.

I do original reporting and research and don’t go regurgitating someone else’s porridge.

The details…

Paid 5m in April 2016

Sold 4.4 m in July 2017( the deal was done in late May)

Roughly a 17% loss after expenses and approximately 850k mistake with known expenses.

Seems like it is only a matter of time before someone takes a million dollar hit…

M43BC

Sold on May 22
4765 Pilot Rd West Vancouver 5m.paid asking 5.295
https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyOTFTRA==

https://www.zolo.ca/west-vancouver-real-estate/4765-pilot-house-road

#27 For those about to flop... on 10.07.17 at 8:26 pm

Damifino on 10.07.17 at 7:34 pm
#11 greyhound

I’ve got my bowl of popcorn sitting contentedly on the sidelines. What’s coming should be quite a show!
——————————

I’m still waiting for the Vancouver housing crash show. It’s been in production for years and we haven’t even seen a pilot yet. My popcorn is getting awfully stale.

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

Did someone say pilot?

Check out the nightmare on Pilot Rd.

LS in Arbutus polished my numbers with opportunity costs added and it ballooned into a million dollar loss

Have ten other cases in the same area and same price bracket hanging on.

I can’t show you guys a flood but I can point to the cracks in the dam…

M43BC

$$$$$$$$$$$$$$$$$$$$$$$$$$$

CONFIRMED PINK SNOW.

Well,here is confirmation of the biggest loss I have recorded since my study on the Vancouver real estate market started.

I do original reporting and research and don’t go regurgitating someone else’s porridge.

The details…

Paid 5m in April 2016

Sold 4.4 m in July 2017( the deal was done in late May)

Roughly a 17% loss after expenses and approximately 850k mistake with known expenses.

Seems like it is only a matter of time before someone takes a million dollar hit…

M43BC

Sold on May 22
4765 Pilot Rd West Vancouver 5m.paid asking 5.295
https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyOTFTRA==

https://www.zolo.ca/west-vancouver-real-estate/4765-pilot-house-road

#28 TnT on 10.07.17 at 8:30 pm

#22 AB Boxster on 10.07.17 at 7:10 pm

I always said Canada is a colony of worker bees here to serve our Queen and now our President.

This is a great read on how the USA will still dominate the next 1000 years.

Accidental Superpower by Peter Zeihan

https://www.amazon.ca/Accidental-Superpower-Generation-American-Preeminence/dp/1455583685

Great part in this books describes how Canada is broken down into 5 regions. West, Prairies, Ontario, Quebec & East Coast. All 5 regions biggest trading partner is the US and not each other. No cohesion here, just worker bees.

#29 Dolce Vita on 10.07.17 at 8:51 pm

#23 Damifino

“Real Estate Association of Greater Vancouver figures show the median price of a detached home is down more than $500,000 since February, to $1.7 million.”

Yup, that’s 23% in 7 months.

Try to keep up.

Now, go buy some popcorn for when B20 creates insult into a YVR RE crash in very early 2018.

#30 Stone on 10.07.17 at 8:55 pm

#2 Robert White on 10.07.17 at 4:27 pm

—-

Sorry, you lost me after “The VIX is extremely interesting subject matter.”

LOL

#31 Smoking Man on 10.07.17 at 9:05 pm

Globalists are evil bastards. Power hungry emoral heathen.

There was a motive for the Las Vegas shooter. It was to be the insighting insident that started a civil war between the left and right. Reason it’s not being made public is to keep the pease.

I’m not bashing lefties anymore. I see the big plan.
I don’t know who I’m going to get my lefty brothers out of this hipnotic spell they’re under.

Open to suggestions.

#32 Stone on 10.07.17 at 9:06 pm

I’ll add that greed needs an outlet and the markets are an efficient way for that greed to be expressed. Yes, the markets will tank from time to time and then greed will prop it right back up. Therefore, outside a nuclear holocaust, and maybe not even that, the markets will continue on their merry way because greed couldn’t care less.

I agree. A nicely balanced diversified portfolio will do the trick. I’m not into building nuclear bunkers as #2 seems to indicate. Not an efficient use of my money. My dividends would be very cross with me for wasting them on something so useless. Now, a spaceship. I’m on side with that. Maybe in the not too distant future… ;-)

#33 Stone on 10.07.17 at 9:13 pm

#28 TnT on 10.07.17 at 8:30 pm
#22 AB Boxster on 10.07.17 at 7:10 pm

I always said Canada is a colony of worker bees here to serve our Queen and now our President.

This is a great read on how the USA will still dominate the next 1000 years.

Accidental Superpower by Peter Zeihan

https://www.amazon.ca/Accidental-Superpower-Generation-American-Preeminence/dp/1455583685

Great part in this books describes how Canada is broken down into 5 regions. West, Prairies, Ontario, Quebec & East Coast. All 5 regions biggest trading partner is the US and not each other. No cohesion here, just worker bees.

—-

For the next 1000 years? Bro, most people can’t think beyond their next meal, let along the next 1000 years. The way I see it, We’ll all be dead within the next 100. Who cares what happens after that. Seriously!

I do agree about the worker bees bit. Definite wageslaves. But heh, I need someone to keep feeding me my dividends, capital gains and interest payments. Better them than me.

Thanks for the laugh. I needed that. Much appreciated.

#34 Herb on 10.07.17 at 9:16 pm

“David Olive has always been a socialist. He’s good at it. — Garth”

So be a good capitalist, Garth, and point out where what he’s written is wrong.

#35 Robert White on 10.07.17 at 9:20 pm

#18 Doug Rowat ‘Canned beans & iodine tablets it is.’

Market optimism on the sell everything side is better than the buy side, eh. The Royal Bank of Scotland was right to say SELL EVERYTHING a few years ago, Doug.
Don’t neglect to understand the implications of the poorly attended new Apple iPhone unveiling in China.
If Apple is the strongest performing stock on the market and there are no lineups or animal spirits to generate higher stock valuations we are looking at peak Apple iPhone irrational exuberance. This translates to a drop in the valuation for Apple Inc. If Apple Inc. stock drops whatsoever we are looking at the end of high priced high tech gadgetry. No lineups, no market buzz, and Britney Spears goes back to looking at herself in the mirror instead of at an Apple iPhone.

The canned Stag Chili is good stuff, but it is way more expensive than the no-name brand beans, eh. I still have to get the iodine tablets, whiskey, vodka, and smokes. Glad to see you know what to do, Doug.

RW

#36 Smoking Man on 10.07.17 at 9:23 pm

So T2 is going for a free trade agreement with China.

I use to think he’s dumb as rock. That to complimentary more like dumb as a pebal a microscope pebal.

This little mindless pajama boy has bought into the globalist sales pitch of flying Unicorns and candy for all.

He’s going to destroy the middle class while whole hearty thinking he’s helping them.

Definition of Stupid = Trudeau

#37 AB Boxster on 10.07.17 at 9:34 pm

#28 TnT on 10.07.17 at 8:30 pm

Thanks for the book suggestion.
I’ll add it to my reading list.

#38 conan on 10.07.17 at 9:37 pm

#22 AB Boxster on 10.07.17 at 7:10 pm

Nice job with the explanation. Impressive actually.

Makes me want to follow the money on that 30 billion. Could be some interesting characters sharing on that deal.
They would not want Alberta getting a pipe line either, would they?

#39 Smoking Man on 10.07.17 at 9:39 pm

Morneau Shepell looking for an ace VBA programming guru.

It’s tempting from a sabatage perspective. A vbs script timed to go off when I’m safely out of the country.

It would require me getting up in the morning. Going downtown and walking with Zombies.

Better to sleep in log into my proxy server. And make forex bets. I’m good

Any slave dog vba craftsmen. Here you go. My money is on a TFW

http://ca.indeed.com/viewjob?from=appsharedroid&jk=abbaf8fcdd132375

#40 Robert White on 10.07.17 at 9:39 pm

#30 Stone ‘ You lost me after VIX…lol’

Sometimes I don’t look at what I write before I hit the Submit button. I was busy listening to diner burning on the stove when I hastily wrote that remark. I will attempt to edit before I Submit in the future, sorry. And no I don’t smoke BIG Government marijuana, but I did inhale in high school if that’s any consolation.

RW

#41 Smoking Man on 10.07.17 at 10:01 pm

On the Morneau Shepell gig notice how they are looking for people with mutiple degrees.

Insuring they get mind fkd grads that belive in flying Unicorns.

#42 Fake News Again on 10.07.17 at 10:11 pm

Garth has been very very right about the stock market continuing to go up for the foreseeable future but not for the reasons people think.

We are entering a period of ANTI-Govt and this includes Govt Bonds, Municipal Bonds basically ANYTHING Govt will be avoided by investors. For this reason….more and more investments will go into private ownership of assets.

#43 Doug Rowat on 10.07.17 at 10:12 pm

#25 Linda on 10.07.17 at 8:14 pm

Doug, any Mom or person who takes care of children on a regular basis can confirm the ‘It’s quiet – too quiet’ meme pertains to the lack of noise children make when they are up to an activity the person in charge would disagree with:)

Agreed. Silence = danger.

–Doug

#44 Smoking Man on 10.07.17 at 10:14 pm

Can’t belive my shit book never made it to a Hollywood sound stage. To many truths is what I’m thinking.

#45 Tony on 10.07.17 at 10:16 pm

When this one implodes it will be more like myopic wiped-out aversion. In theory this coming crash should eclipse the ’29 crash by a wide margin.

#46 Screwed Canadian Millenial on 10.07.17 at 10:21 pm

What the heck Garth? This time my post definitely isn’t showing. Cmon it was harmless.

Don’t push me or you will be gone for good. — Garth

#47 Pete from St. Cesaire on 10.07.17 at 10:32 pm

SMOKING MAN: There was a motive for the Las Vegas shooter. It was to be the insighting insident that started a civil war between the left and right. Reason it’s not being made public is to keep the pease.
———————————————————-
I think it was supposed to be portrayed as a “domestic ISIS” attack on ‘Sin City’ but for some reason that narrative had to be scrapped.

#48 Russ on 10.07.17 at 10:36 pm

Robert White on 10.07.17 at 4:27 pm

This time is different, and the fact that everything from Dry Bulk Shipping to the VIX is in a Secular Stagnation drydock does not empirically indicate that this time is qualitatively, or quantitatively, similar to the last market cycles over time. This time is different, Mr. Rowat, I assure you.

RW
======================

Hi Bob,

That dry bulk shipping thing… is it in conflict with a recent story in our little local news rag?

http://www.nanaimobulletin.com/news/ocean-freighter-mv-tanja-officially-named-in-nanaimo/

These guys seem pretty pumped with the freighter… I mean, bulk carrier, market.

#49 akashic records on 10.07.17 at 10:51 pm

Everybody is just guessing.

The world is basically running on auto-pilot.
Including algos, VIX, ETFs and decision making in general in business, governments, military, etc.

The cockpit is empty, everybody is too busy with the global ideological freak show and the usual scheduled tasks. Complete nihil, melancholy and breakdown of all values. Smells like reset.

#50 Re., Robert White on 10.07.17 at 10:59 pm

Do you ever get tired of being a fool ?

Get some fresh air

#51 conan on 10.07.17 at 11:00 pm

“It is the most stupid policy, enabled by corrupt Liberal politicians, who buy votes in Ontario and Quebec.”- AB Boxster

Or, maybe it is this, which is it?

http://ipolitics.ca/2017/10/06/take-a-pill-oilpatch-energy-east-was-doomed-from-the-start/

#52 AB Boxster on 10.07.17 at 11:08 pm

#38 conan on 10.07.17 at 9:37 pm


Could be some interesting characters sharing on that deal.

——————————

There has been some interesting speculation that much of the funding that goes to Canadian environmental groups that actively opose pipelines in Canada, comes from American special interests.
And where this money comes from is another issue.

I am not a big conspiracy believer, and have no opinions on this.

It just makes no economic sense for Canada to behave the way it does with respect to oil.

We should get as much as we can from this resource in the most enviromentally friendly way we can. Because of federal gov’t policies, Canada loses out on huge revenues and job opportunities.

And none of these policies does anything to reduce the world production consumption and burning of fossil fuels.

The worldwide development of fossil fuels is driven by demand, not supply.

The more you decrease Canadas ability to supply the product (ie through restricting pipeline development or killing LNG processing development)
the more the rest of the world just fills the void, and produces more.

No difference in energy sold.
No difference in fuel burned.
No difference in carbon emmited.
Just less revenue for Canada.
More for our competitors.

Not developing Canadian natural resources just makes Canada poorer and the rest of the world richer.

Its great way to make Norway more wealthy.
It’s a great way for the Americans to make an easy buck.

Maybe that should be the new Canadian slogon.

Let’s Make everyone (except Canada) wealthy again!

#53 I’m stupid on 10.07.17 at 11:15 pm

#18 Doug Rowat

Canned beans… priceless

It’s funny how all the doomers prepare for the end thinking they’ll survive. If it does all come crashing down luck will determine who survives, if anyone does survive. Plus who would want to be around? No canned tuna here, better dead than living in a bunker eating canned food like a rat.

#54 NEVER GIVE UP on 10.07.17 at 11:16 pm

SOLVE THE BUBBLE EASILY!

You could solve the problem easily if you tax heavily on real estate gains. Exempt only those who have held the same property for 7 years or more.

Most of these properties have been flipped multiple times in one year. Much of the speculation is from locals as well as the foreign money that tips the scales over the edge.

Taxation should be so heavy that returns are negligible for flipping. Keep the buyers tax and whoever sells be it corporation or individual.

You simply calculate the difference between the sellers purchase price listed at the land titles office and the new sales price. That amount should be taxed at 50% minimum. Payable before the title is changed over.

This would ensure housing was used for people who live here.

It would also make up a lot of lost revenue that slower and lower RE prices would give the Government in Transaction taxes.

But even the NDP don’t want to do this because of the shallow reasoning that they themselves as individuals are benefiting and flipping as well. If it were revealed we would see a large percentage of the movers and shakers are cashing in on the boom as well!

To hell with all of you in the water “We are already in the lifeboat!”.

#55 AB Boxster on 10.07.17 at 11:29 pm

#44 conan on 10.07.17 at 11:00 pm


Or, maybe it is this, which is it?

—————————————-

Well I’ll tell you how one should decide.

Now that Transcanada has backed off of this pipeline, if the reason was for economics, lets see what they do next.

I suspect that they (just like Petronas will do after cancelling the LNG processing plant in BC) will take their money and invest in pipelines and plants elsewhere. ie not in Canada.

Investment capital has left Alberta for places all over the world because companies do not trust the NDP government here.

How come companies can be succesful in the US in these low oil environments, but not in Canada?

How is it that Transcanada will invest in Keysone XL to deliver oil to the southern states, but not in Canada?

It’s because Canada is not open for business.
Canada’s decision to add upstream, downstream emmissions as well as make ‘social license’ a thing, makes is impossible to do business in this country.

Even when a pipeline is approved such as Trans Mountain, the likelihood of it actually being built is small. TransMountain will be tied up with court challenges for the next 20 years and no company is prepared to spend the time and effort.

So companies go elsewhere and create high value jobs for Americans and contribute taxes to American coffers.

There is oil and gas exploration and oil and gas pipelines and LNG projects being developed all over the world to feed world markets.

Yet not in Canada.
So the argument of low commodity prices is bogus.

Canada is just no energy business unfriendly.
And the Liberals own this.

#56 Screwed Canadian Millenial on 10.07.17 at 11:50 pm

Geez Garth, what did I do? I said you were a fan of the 1980s. Is that so bad? Cmon man relax, I’m harmless.

#57 LP on 10.07.17 at 11:58 pm

#53 I’m stupid on 10.07.17 at 11:15 pm
#18 Doug Rowat

Canned beans… priceless

It’s funny how all the doomers prepare for the end thinking they’ll survive. If it does all come crashing down luck will determine who survives, if anyone does survive. Plus who would want to be around? No canned tuna here, better dead than living in a bunker eating canned food like a rat.
********************************

You got that right…they should spend a weekend reading The Road, by McCarthy.

#58 Nonplused on 10.08.17 at 12:41 am

Just watched that movie on Air Canada (perhaps that’s where you saw it too) because I am on their airplanes far too often lately and despite the fact that they have a great in-flight entertainment system they don’t back it up with anything decent to watch. “Good Will Hunting” is on there for cheese and crackers! Don’t you think we are done with that movie by now? “Plane, Trains and Automobiles”?? Ya, funny 20 years ago. The latest Spider-man? Embarrassed to say I had time to watch that too in the last couple of weeks. Yeesh. Rip the in-flight entertainment out and save some fuel, half the people are watching the map because it’s more interesting.

But Alien Covenant does have some interesting things to say about how the powers that be think about human behavior. No one will ever think about containment. No one will ever safe-guard the settlers if someone gets killed and nobody knows why on a planet that nobody knows anything about. Mysterious AI will for it’s own unexplained reasons try and follow the Engineers (from Prometheus) and destroy everything leaving super destructive organisms behind. The engineers used these biological weapons against each other. Your robot can’t kill their outdated robot and that outdated robot plans to kill everyone.

But the underlying theme of these movies is always the same. No one can sense danger, and they always consider it more important to save themselves than contain the danger. Oh and it’s always ok to wander off by yourself and wash up with no one to cover for you on a strange planet. Ya, you get your head bitten off and your head floats up face first in the fountain, but hey, we all got to go some how. These movies are so silly. They really are silly. I really hope that if we ever get to space, we aren’t that still that stupid.

The message seems to be that there are beings of far greater scientific capability out there, but it’s genetic they don’t bother with robotics, but one of our robots can change everything. Just turn it off.

And just so you all know what I think. There may be life on other planets and some planets may have had “intelligent life” for a while. But none have conquered space-time. How do I know this? We are here instead of them. Had they been able to come here, we would live in zoos. Well maybe we do live in a zoo. Actually there is no way to prove otherwise we can’t go anywhere else. We are trying to prove maybe one day we’ll go to Mars. Why? There is no point. Robots can do everything we can do better and much cheaper.

The fact is, thought leaders like Ridley Scott, are leading us down a dark road. All that the think is stupid, he is a stupid man, just trying to make a bunch of money. If God is dead, so are aliens. If God cannot travel the expanses of space and time, neither can aliens. Neither God nor aliens can come to this planet. How do we know? Well, they’ve had 13.4 billion years to show up an we’ve escaped all interaction.

If God, or the aliens, ever do arrive, which I think it’s safe to say they won’t, but if they do, well you are better off dead, and according to this movie to stupid to end up otherwise. Even your own AI creations will be against you.

#59 Dave on 10.08.17 at 12:45 am

#54
I agree that capital gains on housing should be taxed to prevent flipping for quick gains. Better than exempting after holding 7 years would be having zero exemptions and tax all capital gains. The offset could be tax deductible mortgage interest. If tax deductible mortgage interest replaced capital gains exemptions then new buyers that take out mortgages would benefit, old buyers upsizing would benefit on new mortgages, and the incentive for flippers would be reduced. Downsizing would be a bit more costly but offset by years of tax deductions from mortgage interest. Foreclosures from rising rates would be reduced. Government would still get lots of tax from capital gains.

#60 Arlene on 10.08.17 at 1:22 am

#51 Conan
The Liberals have been bent on keeping Alberta “in their place” since before T1. When confederation was set up , they split up Alberta and Saskatchewan to dilute their power. Don’t kid yourself, the collapse of Energy East was planned by the Liberals. Gotta keep Quebec happy!

#61 Tony on 10.08.17 at 5:43 am

Re: #15 Lost…but not leased on 10.07.17 at 6:00 pm

No one believes it, especially the bond market worldwide.

#62 Oft deleted much maligned stock.picker on 10.08.17 at 6:01 am

Doug, if I hadn’t just clocked a six figure month picking stocks I’d agree with everything you say.

#63 Oft deleted much maligned stock.picker on 10.08.17 at 6:07 am

#44….SM……entire chapters out of two of my books have been mouthed on screen by the likes of John Goodman in “The Gambler”. Good luck with your lawsuit if you do happen to find you’ve been plagerized. Careful what you wish for.

#64 Katching on 10.08.17 at 6:54 am

#9 Robert White on 10.07.17 at 5:14 pm
I screwed up my first paragraph above and am wondering if an edit button exists?

RW

Deposit an extra $2. — Garth

********

Monetizing re-dos. Priceless.

#65 AK on 10.08.17 at 7:41 am

#13 Warren- the lagging indicator on 10.07.17 at 5:44 pm
“I agree, that vix indicator is acting very very strangely. I surely thought the left would have taken out Trump by now or at least impeach him on whatever pleasant fiction suits their purpose. The vix says no??? It surely must be wrong in its proposed measure of volitility.”
——————————————————————
Trump will not be impeached. Stop listening to useless propaganda.

#66 AK on 10.08.17 at 7:52 am

#2 Robert White on 10.07.17 at 4:27 pm
“This time is different, Mr. Rowat, I assure you.
RW”
——————————————————————–
Geez, you sound like Marc Faber.

The S&P 500 is trading at a forward PE of 19.27. Not cheap, but far from expensive.

#67 Andrew on 10.08.17 at 8:36 am

Great reminder/post.

#68 Jack on 10.08.17 at 8:36 am

From the sound of this article you’re expecting a drop in the market soon. I currently have all the cash from selling my house in a high interest savings account as I believe there will be a drop if not a crash of the market … shouldn’t I wait for that to happen and buy in then?

#69 maxx on 10.08.17 at 8:42 am

#36 Smoking Man on 10.07.17 at 9:23 pm

“So T2 is going for a free trade agreement with China.”

The Chinese will wipe the floor surgically clean with this.
Canada will be perpetually concessionary.

This country has never truly valued nor appreciated its incalculably precious raw material/commodities.
What Canada could achieve, relative to its sludgy results is nothing short of tragic.

I believe that productivity is at its lowest in government (all levels) in a country that already has a long-standing problem in this regard.

Now…..where did those selfies from the Great Wall go?

#70 conan on 10.08.17 at 8:58 am

#60 Arlene on 10.08.17 at 1:22 am

It is more likely the Americans. One can pull a lot of strings with 30 B dollars.

Who signed that deal? The one where you guys lose 30 B a year.

#71 Dharma Bum on 10.08.17 at 9:27 am

Investors exhibiting myopic loss aversion completely lose sight of their available time. – Doug
——————————————————————–

“Time is a created thing. To say ‘I don’t have time,’ is like saying, ‘I don’t want to.”

“Do you have the patience to wait
Till your mud settles and the water is clear?
Can you remain unmoving
Till the right action arises by itself?”

― Lao Tzu

Don’t panic.

Keep Kharma and Carry On!

#72 Doug Rowat on 10.08.17 at 9:28 am

#58 Nonplused on 10.08.17 at 12:41 am

The fact is, thought leaders like Ridley Scott, are leading us down a dark road. All that the think is stupid, he is a stupid man, just trying to make a bunch of money.

He got my 15 bucks for Alien: Covenant.

–Doug

#73 Dharma Bum on 10.08.17 at 9:31 am

#59 Dave

“The offset could be tax deductible mortgage interest.”
——————————————————————–
Say WHAT?!

I buy my houses with cash.

Next brilliant idea?

#74 Keith in Rio on 10.08.17 at 9:34 am

Great article Doug.

I’ve been long in Brasilian government bonds for 16 years now and done extraordinarily well, holding them to maturity, and collecting the interest for reinvestment.

Lots of people don’t like bonds because they are not sexy and don’t impress over conversation in the club. But they fit perfectly as the vehicle to use if you want the best attributes of your article to work for you. It’s easier to keep your finger on the pulse of a countries political risk, than it is a varied and broad stock portfolio. A lot less dangerous too.

#75 conan on 10.08.17 at 9:43 am

#55 AB Boxster on 10.07.17 at 11:29 pm

That article I linked to suggested that Trans Can does not give a flying fandango about EE anymore because XL got approved. EE was a back up to the back up.

If I profit a 100 dollars a day from each employee, I am not going to shut my company down if I only profit 98 dollars a day, because of some carbon tax.

If my business crashes (too much competition) and I can only charge half my usual rate, I am royally F’d in the immediate sense.

Trying to understand the issue here, and I keep coming back to the person who signed that deal with the USA. The one where you lose 30 B a day. Who signed that?

#76 TurnerNation on 10.08.17 at 10:30 am

Leslieville Toronto. An ever increasing effort propping up ever aging slanty semis.
Ever increasing rents, prop values and taxes fueling a rotating chain of Main Drag retail stores.

Each one more hipsterish than its last incarnate.
And more expensive.

Folks I’m worried about becoming priced out of the coffee market!!!

#77 NoName on 10.08.17 at 11:02 am

#55 AB Boxster on 10.07.17 at 11:29 pm

How come companies can be succesful in the US in these low oil environments, but not in Canada?

—-

Oil extraction cost, maybe?!

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iI5wZHW3zjBs/v0/-1x-1.jpg

#78 NoName on 10.08.17 at 11:10 am

@ land locked dude on 55

http://www.letmegooglethat.com/?q=oil+price+per+barel+today

http://www.letmegooglethat.com/?q=oil+prices+per+barrel+last+2+years+chart

#79 crowdedelevatorfartz on 10.08.17 at 11:15 am

@#35 Bob Blanc
“The canned Stag Chili is good stuff, but it is way more expensive than the no-name brand beans,”

++++++

Not if you have to share your bunker…….

#80 HaHaHa on 10.08.17 at 11:18 am

The beauty of reading this blog sometimes it helps me when I feel down. Just when I think to myself maybe I am not that smart or grounded in reality a quick read on here jolts me back. Alot of nutjobs are taking over this blog and the entertainment is free. Carry on tinfoilers……………

#81 crowdedelevatorfartz on 10.08.17 at 11:20 am

@#46 Totally Financially Screwed Canadian Millenial.
“What the heck Garth? This time my post definitely isn’t showing. Cmon it was harmless.”
++++++

I was wrong.
You ARE special.
It takes a unique skill set to be teetering on…..”permanently banned”.

#82 crowdedelevatorfartz on 10.08.17 at 11:24 am

@#58 Nonplused

“God and Aliens”
+++++

Hmmmm,
I sense a screenplay in there somewhere……or a padded cell.

#83 Gravy Train on 10.08.17 at 11:45 am

Kazuo Ishiguro was finally awarded the Nobel Prize in Literature (last Thursday). I bet SM will now start bellyaching that he should’ve won the prize. :)

#84 AB Boxster on 10.08.17 at 11:52 am

#75 conan on 10.08.17 at 9:43 am

Trying to understand the issue here, and I keep coming back to the person who signed that deal with the USA. The one where you lose 30 B a day. Who signed that?

——————————————–
$30 billion a year, which is bad enough.

It’s not a deal signed by anyone.

There is no single negotiator in Canada that sells oil.
Oil prices are set every day by world markets and companies negotiate these prices with each other.

Canadians benefit from royalties on the oil, jobs created in Canada, and taxes on the people with the jobs and on the companies earning the income.

It’s the economics of world oil prices and Canada’s inability to get this prices because they have no pipeline to the world.

As I mentioned before, because Canada’s primary customer is the US, the US (ie US companies) can choose to pay us less.

Sure, companies in Canada could decide not to sell product to companies in the US.
We could turn off all the pipelines tomorrow.
But then we sell no oil at all.
Then we get no revenue, the oil industry dies, and Ontario and Quebec and federal govt get not massive transfers from Alberta.
Plus 100s of thousands of people lose their livelihood.

We can’t sell to anyone else in the world because we have no pipelines to get it there.

By selling to the US at discounted prices, Canada leaves 30 billion in revenue on the table every year.

That is 30 billion dollars directly lost to the economy because of Liberal stupidity.

Would it make sense for the Ontario auto industry to be forced to sell their cars to the US at a 30% discount?

Would it make sense for BC to be forced to be forced to sell its softwood lumber product to the US at a 30% discount?

If this were the case, Canada would have no auto industry and no lumber industries very soon.

#85 Leo Trollstoy on 10.08.17 at 11:59 am

Millennials dunno what a Gretzky is

#86 Doug Rowat on 10.08.17 at 12:11 pm

#68 Jack on 10.08.17 at 8:36 am

From the sound of this article you’re expecting a drop in the market soon. I currently have all the cash from selling my house in a high interest savings account as I believe there will be a drop if not a crash of the market … shouldn’t I wait for that to happen and buy in then?

The Canadian economy is strong, the US economy is strong, corporations are highly profitable and global markets have momentum. Our view is positive. What if the correction doesn’t happen for 3 or 4 years? Think of the upside you’ll have missed out on.

Consider your own ‘available time’ and invest accordingly.

–Doug

#87 AB Boxster on 10.08.17 at 12:14 pm

#75 conan on 10.08.17 at 9:43 am

If I profit a 100 dollars a day from each employee, I am not going to shut my company down if I only profit 98 dollars a day, because of some carbon tax.

————————————————–

You are correct.
TransCanada will not shut down.

None of the energy companies will shut down because of Liberal energy policy of carbon taxes.

They just leave Canada and go elsewhere.

Capital (ie money)is mobile. Canadian companies do not have enough money to develop the resources in this country. We need big foreign dollars to do this.
You see, the oil industry does not get billion dollar handouts from the Canadian government like Bombardier, or multi-billion dollar bailouts like the auto industry did in 2009.

That is why BC encouraged Petronas (from Malaysia) to build a LNG gas terminal in BC.
BC has huge natural gas resources, but they cannot sell it to the world because they have no processing facilities.

The absurd regulatory requirements and ‘social license’ lawsuits , and carbon tax nonsense, eventually forced them to leave. They have taken their money elsewhere and will use it to create good jobs, not in Canada.

Oh, and for the global warming fools…
The gas from this plant was to be sent over to the Asian markets. Much of this natural gas could have been used to replace coal plants in China. But no more.
China will get its energy one way or another.
And if it cannot get clean burning natural gas, it will build coal fired plants.
Another brilliant global warming activist win.

So while the BC plant would have likely increased C02 emissions in Canada, on a worldwide level, it would have drastically reduced them.

But, this fine point is lost on global warming religious nutjobs.

So you are correct.
Companies will not go broke.
They can either choose to make less money.
Or they just take their money, and spend it elsewhere.

Canada loses, the world gains.
No less oil is produced.
No less C02 is generated.

Other countries win.
Canada and Canadian lose.

Brilliantly executed Liberal energy policy.

#88 Arlene on 10.08.17 at 12:24 pm

#70 conan
You make an excellent point. Most likely a terrible combination of both. Canada is hooped.

#89 IHCTD9 on 10.08.17 at 12:45 pm

#58 Nonplused on 10.08.17 at 12:41 am

And just so you all know what I think. There may be life on other planets and some planets may have had “intelligent life” for a while. But none have conquered space-time. How do I know this? We are here instead of them. Had they been able to come here, we would live in zoos. Well maybe we do live in a zoo. Actually there is no way to prove otherwise we can’t go anywhere else.

———————

Interesting thoughts, especially if you came to this conclusion on your own.

Google the”Fermi Paradox”, and “The Great Filter” for more on the same assertions. Why is the probability of extra terrestrial life so high, yet after billions of years there is no evidence whatsoever of any intelligent life out there other than us?

Heap on top of the above question the fact that theoretical physicists are tossing out old theories like the Big Bang, Big Crunch, and even the beginnings and creation of time itself. Now in an effort to create a unified theory that gets general relativity and quantum mechanics into some kind of agreement, we are getting some radical stuff like string theory, the universe is holographic, the universe has no beginning and no end.

If the universe has always existed, what are the implications of that on the nearly complete lack of intelligent life (or any kind of life) in the observable universe?

#90 Doug in London on 10.08.17 at 1:17 pm

Checking your investments more can lead to more losses? My experience shows the opposite. When assets go on sale, like REITs did in 2013, by watching the markets and my investments I took it upon myself to buy more of those assets at Boxing Day prices. The idea is to invest like a governor that responds to a drop in speed by opening up the throttle and giving the engine more fuel/air mixture. Say, haven’t I mentioned that idea many, many, many, many times here before?

The servo mechanism is oiled up and ready to pull the throttle open at a moments notice.

#91 Robert White on 10.08.17 at 1:40 pm

#48 Russ on new dry bulk carrier builds & fanfare.

2017 marks the so-called turn around of DBS. New builds are an integral part of the system and all builds are preplanned years in advance. The DBS industry is attempting to paint a picture of a rebound for DBS but
they have just been through the worst 8 year period in history. Instead of announcing how many ships have been scrapped they are announcing newly built carriers. Suffice to say that market management likes to promote future gains & growth just like TBTF banks do. Moreover, banks & Treasury Secretaries have often been known to be overly optimistic when the project future growth. DBS is just as overtly optimistic with no real empirical proof to back up their erroneous claims.
Impression management is always biased towards leaving a good impression. That’s why they call it Impression Management, eh.

RW

#92 Screwed Canadian Millenial on 10.08.17 at 2:29 pm

#85 Leo Trollstoy on 10.08.17 at 11:59 am
Millennials dunno what a Gretzky is

——————–

Some guy who’s been living in Southern California since 1989.

And whose kids self-identify as American.

#93 crowdedelevatorfartz on 10.08.17 at 3:18 pm

@#84 AB Boxster

While I cannot deny that the Liberals are pandering to everyone with a “cause’.

I’m sure if the LNG deal that Petronas signed with the Provincial Libs was financially viable. They would still be here bargaining.
But with world prices for LNG in the toilet and Australia, Russia, Saudi and the US continuing to pump the stuff out in droves. The economic viablity of BC LNG doesnt make sense at this time.
Especially when BC has to build a controversial $9 Billion dollar ( and rising) Dam to provide subsidized power for the liquification process. (With flawed economic and environmental reviews no less.).
Nah.
The longer this “deal” festered in public under the noon day sun the more it started to smell…….

2 years to the next Federal election, a BC govt hanging on by its coalition fingernails……

None of the spineless gastropods in political office want to touch it with a 10 foot barge pole until AFTER their elections

Petronas walked away.
The gas will still be there in 10, 50 or 100 years.

#94 Entrepreneur on 10.08.17 at 3:50 pm

The “myopic loss aversion” investor worried about losses, wondering if that is the same as “buck fever” everything is a buck and must use one of those repeat rifles. That last few seconds of panic and rational thoughts are lost.

Yes AB Boxster, every country must be on the same page at the same time to correct sensitive earth. And yes, if countries are not environmentally intelligent and others are, back to square one or negative (earthquakes, floods, tornados, etc.). But us supposedly intelligent ones should of had a plan of transition “long-time ago.” That is if we want to be the real leaders of climate change.

Aliens and God put together #58 Nonplused…so do you think that God might have been a alien? Possible and why not. As for tossing out the beginning of creation #89 IHCTD9 on theories…Always thought that hundreds of years ago we are basically all the same but differ in languages and colour within a country. Hold that thought, now notice that even though we all speak different languages that a tree is a tree no matter what language says tree. To me, it feels that we are all programmed with a slight turn/dna to speak different languages. A theory.

Add ESP, twilight zone, lol.

#95 Lost....but not leased on 10.08.17 at 4:04 pm

First off…..I’ll admit being a bit optimistic about Canada’s oil and gas export potential and all the positive economic impact ” blah blah blah”.

Not any more…

It doesn’t take much due diligence to conclude this is a pipe dream once some basics are analyzed. The energy sector seems to be classic quasi-potemkin village in the politicians bag of tricks when the economy starts to
suck and the knee-jerk need to spread the fairy dust of false hope.

The details of each energy proposal are often ignored…to the ultimate detriment of the citizen base.

I often refer to Andrew Nikiforuk, who writes on this subject..and while he could be considered left of center, still does his homework.

Later I will post on Bitumen and pipelines..but on the natural gas front, it is far more complicated than drilling , accessing the gas and transporting it to and export facility and the billions of $$$$$ promised.

Whether it be alternate fuels, slower economic growth etc…the market for natural gas is not strong..it is actually quite fragile. Just like the coal market in the 1980’s (where various countries developed domestic coal to supply the Japanese)…natural gas follows a similar path.

EXAMPLE: Australia and natural gas
( which should be reviewed first as having the same circumstances as elsewhere, but often dives into a given first and we have the benefit of hindsight )
Australia dove head first into natural gas selling into the Asian markets.

The oft -ignored variables are the cost to extract and ship, which gov’t tend to highly subsidize and which outweigh the projected revenue. In addition, Asian countries have pipeline access to Russian natural gas..so????????

In Australia, in attempting to tap global markets,(and all the skullduggery that goes with it) had up to 3 fold increases in domestic natural gas price…. which negatively impacted Australian citizens and economy.

In other words, the costs vastly outweighed any benefit. In essence ,Western nations that promote natural gas are often deceiving their citizens and concurrently setting them up big time.

#96 Mr Dalvin on 10.08.17 at 4:18 pm

Great post Doug on an important topic!
I’ve gotten into the habit of only checking my portfolio balance on the last day of each month and re-balancing every 6 months

#97 conan on 10.08.17 at 4:23 pm

RE #84 AB Boxster on 10.08.17 at 11:52 am

“By selling to the US at discounted prices, Canada leaves 30 billion in revenue on the table every year.”

You see a discounted price, but I see an off the books transaction ,on a really big oil deal.

“That is 30 billion dollars directly lost to the economy because of Liberal stupidity.”

Sorry, not getting that leap in logic. I suspect, the 30 B in question has been divided among high level people, who do not have Alberta’s interest at heart.

Call me crazy.

#98 Spock on 10.08.17 at 4:34 pm

#92 Screwed Canadian Millenial on 10.08.17 at 2:29 pm

You conveniently left out “working in US” after he was traded in 1988. But I expect no less since you do not understand the meaning of work.

I am still waiting for your facts and data to back up your “boomers do not give back” statement. I guess you have convenience amnesia.

What a gong show you put on.

——————————–

#92 Screwed Canadian Millenial on 10.08.17 at 2:29 pm
#85 Leo Trollstoy on 10.08.17 at 11:59 am
Millennials dunno what a Gretzky is

——————–

Some guy who’s been living in Southern California since 1989.

And whose kids self-identify as American.

#99 Gravy Train on 10.08.17 at 4:48 pm

#87 AB Boxster on 10.08.17 at 12:14 pm

Sorry for being so dense, but what was the problem again with solar and wind power? To me, you seem like the very last seller of buggy whips! :)

Was that tactful enough, Flopster?

#100 For those about to flop... on 10.08.17 at 5:03 pm

48 pm
#87 AB Boxster on 10.08.17 at 12:14 pm

Sorry for being so dense, but what was the problem again with solar and wind power? To me, you seem like the very last seller of buggy whips! :)

Was that tactful enough, Flopster?

Share your comment:
Name
48 pm
#87 AB Boxster on 10.08.17 at 12:14 pm

Sorry for being so dense, but what was the problem again with solar and wind power? To me, you seem like the very last seller of buggy whips! :)

Was that tactful enough, Flopster?

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

Yes Gravy,very subtle.

Reminded me of the time I tried to crack open a walnut with a sledgehammer…

M43BC

#101 conan on 10.08.17 at 5:17 pm

#58 Nonplused on 10.08.17 at 12:41 am

There may be life on other planets and some planets may have had “intelligent life” for a while. But none have conquered space-time.

I have to disagree here. There are millions of told and untold UFO sightings. If 99.99 percent are garbage, that still leaves a hundred plus that are real.

Solving the time space problem is no problem for them. Or, for that matter, making themselves invisible to us.

I have no doubt that they are around.

#102 Screwed Canadian Millenial on 10.08.17 at 5:20 pm

#98 Spock on 10.08.17 at 4:34 pm

Funny how he’s long retired and is still living in Southern California. You boomers are delusional. He ain’t coming back sweetie.

Janet sure as sh*t isn’t going to be living in f-ing Edmonton.

#103 Sell on 10.08.17 at 5:32 pm

#35
So how did the royal bank of Scotland’s SELL EVERYTHING work out for you?

Doug, use your own logic: if you can miss your money for a decade or more, 0% bonds and 100% stock is the only sensible way. Let’s drop that diversify mantra already

#104 AB Boxster on 10.08.17 at 5:32 pm

#99 Gravy Train on 10.08.17 at 4:48 pm


Sorry for being so dense, but what was the problem again with solar and wind power? To me, you seem like the very last seller of buggy whips! :)

————————
Nothing wrong with it all.
Its a great idea.

But your analogy to buggy whips is wrong.

The auto was fully able to replace the horse and carriage.
(Mostly due to fossil fuels ironically)

It was faster, did not require rest, and could do far more than a horse.
So buggy whips died a quick death.

Renewable energy cannot replace fossil fuels. Yet.

Solar and wind provide power while the sun shines and the wind blows.
But when the sun does not shine, at night, and when he wind does not blow, where does your energy come from.

Battery technology does not exist that can store the amount needed to power the world. Maybe some day. But not yet.

Fossil fuels ‘are’ the store of energy, and can be turned on and off any time.

Do you think that wind and solar can power massive cargo ships that deliver products around the world and enable global trade?

Do you think wind and solar can power boeing 747 jets that deliver people and products around the world?

Maybe some day. But not now.
Until then fossil fuels rule.

If the automobile was only able to run for a few hours at a time, mostly during daylight hours, and only if the wind was blowing, and took 2 hours to refill, do you really think it would have replaced the horse and carriage?

Nope. We would stilll be making buggy whips.

#105 Lost...but not leased on 10.08.17 at 5:38 pm

Energy sources…

California is often used as a reference example of progressive jurisdictions.

It is on its own a quasi-global economy,and in a more moderate climate less severe than Canada.

GOOGLE “Energy in California wiki” 2016

—-almost 50% of California’s electricity is generated from natural gas
—15 % is from Hydro
—solar and nuclear are approx 10% each
—-wind and geothermal are approx. 6% each

It is common within the general human psyche to wax philosophic and yearn for some” low environmental impact” bohemian lifestyle.

However. when rubber hits the road, is this practical?

One has to invoke the “long tailpipe theory”…whereby one has to extrapolate right to the source and then analyze the big picture from A to Z

Those electric cars in California are sufficiently dependent on???….what???…a renewable resource?? or a less politically correct resource?

Given 2016 stats….50% of California energy needs are met by natural gas as source…so what does that say electric cars? Somewhat tainted?

In addition..the energy variable reaches a nexus whereby if, say California LEGISLATED all vehicles be electrically powered in say 10 years..this would have huge impact on the grid..but would electric generation sources besides Natural Gas be able to fill the void ? Token options (ie geothermal….biofuels etc)always exist, but what are their practical limits?

What are the downstream and upstream conseqeunces of such moves?…..moreso in a global economy?

The point is….be careful what you wish for..it is never as simple as it may appear to be, especially when idealism usurps cold sober logic.

#106 conan on 10.08.17 at 5:40 pm

#31 Smoking Man on 10.07.17 at 9:05 pm
Is it conspiracy night at the Greater Fool? Let me get some tinfoil…..

I think he did it to break the NRA and the 2nd amendment.

#107 Howard on 10.08.17 at 5:41 pm

#99 Gravy Train on 10.08.17 at 4:48 pm
#87 AB Boxster on 10.08.17 at 12:14 pm

Sorry for being so dense, but what was the problem again with solar and wind power? To me, you seem like the very last seller of buggy whips! :)

Was that tactful enough, Flopster?

——————————

Maybe you should ask Bombardier if it can please power its trains with wind power?

Eventually, people far smarter than you will figure out how to mass-produce solar and wind power at a cost that isn’t prohibitive, but that day is decades and decades in the future. In the meantime, you prefer buying oil from Saudi Arabia?

#108 Spock on 10.08.17 at 6:27 pm

#102 SCM

Unfortunately I am just really years older than you but not begging for a handout.

The Great one can stay wherever he wants.

I notice you again avoided backing up your facts.

Keep the hand open for handouts on Thanksgiving

#109 Robert White on 10.08.17 at 7:08 pm

#103 Sell ….’So how did RBS SELL EVERYTHING work out for you?’

I took their advice and have almost sold EVERYTHING except my antique furniture and a few paintings. The art market imploded in 09, and if you knew how cheap it is to buy fine antiques for dirt cheap money you would probably open an antique store with all the availability out there. Unfortunately, art & antiques don’t sell in this market. RBS is one of the only banks to step up to the plate with that comment they made. I respect them for the warning, and I think they acted professionally in terms of their announcement to SELL EVERYTHING.

RW

#110 Gravy Train on 10.09.17 at 9:06 am

Cornell University’s Richard Thaler conducted pioneering work on myopic loss aversion, identifying the problem of excessive portfolio evaluation. — Doug

Richard Thaler was just today (Monday) awarded the Nobel Prize in Economic Sciences “for his contributions to behavioural economics.”
https://www.nobelprize.org/nobel_prizes/lists/all/

Doug, was your reference to Richard Thaler last Saturday just a coincidence, or was it a premonition? :)

#111 meslippery on 10.09.17 at 11:38 am

Happy Thanks Giving.
http://www.thesudburystar.com/2017/10/06/gallery-the-dogs-of-summer

#112 Doug Rowat on 10.09.17 at 2:41 pm

#110 Gravy Train on 10.09.17 at 9:06 am

Cornell University’s Richard Thaler conducted pioneering work on myopic loss aversion, identifying the problem of excessive portfolio evaluation. — Doug

Richard Thaler was just today (Monday) awarded the Nobel Prize in Economic Sciences “for his contributions to behavioural economics.”
https://www.nobelprize.org/nobel_prizes/lists/all/

Doug, was your reference to Richard Thaler last Saturday just a coincidence, or was it a premonition? :)

I’ve been reader of his brilliant research for a long time, but I have to confess, a coincidence.

–Doug

#113 Braj on 10.10.17 at 1:40 pm

#2 Robert White on 10.07.17 at 4:27 pm
The VIX is extremely interesting subject matter and I have been following it over the summer as well. Clearly, Mr. Rowat’s thesis concerning the transitory nature of markets as though this time is no different from all other economic recessions. In point of fact, USD is a known defunct currency with liability in the form of unsecured liabilities to the tune of over $500 trillion, and a public set of books with over $20 trillion in deficit. This pales in comparison with the $1.5 quadrillion in Dark Pool Derivatives, and Global De-Americanization. Add to this the impending collapse of BIG oil due to thermodynamic oil collapse. In brief, anyone that advocates being in the ” stock market ” fails to understand that most savvy investors have pulled their assets from the stock market due to the extreme overvaluations on all stocks. Nothing transitory is on the horizon, Mr. Rowat. This time is different, and the fact that everything from Dry Bulk Shipping to the VIX is in a Secular Stagnation drydock does not empirically indicate that this time is qualitatively, or quantitatively, similar to the last market cycles over time. This time is different, Mr. Rowat, I assure you.

RW

***

Too many big words for too small a brain. Sounds like you have zerohedge set as your homepage.