The shutdown

DOUG By Guest Blogger Doug Rowat

Hopefully, you weren’t trampled during Black Friday, wrestling your fellow consumers for the last Walmart flatscreen.

But while you were engaging in retail hand-to-hand combat, there were folks in the investment world trying to capitalize on that silent oath you were making to yourself to shop online next year. ProShares, the day before Black Friday, launched the Decline of the Retail Store ETF (with the clever ticker EMTY). The ETF tracks, inversely, a basket of retail stocks ranging from JC Penny Co to Target. The rationale for owning it, of course, aside from JC Penny Co’s inability to get the DeLorean out of 1986, is that e-commerce giant Amazon will eventually destroy them all.

JC Penny Co’s 5-year 80% Share Price Decline Remains a Mystery

Source: JC Penny

No doubt Amazon and other online retailers are going to take their toll on bricks-and-mortar retailers, but it’s going to be a gradual process. For example, two of the largest retailers in the US—Walmart and Costco—have seen their shares, respectively, jump 9.5% and 16.5% annually over the past five years. Hardly the quick, painful death short-sellers might be hoping for. So the success of this new ETF, at least over the short to medium term, is very much uncertain.

The ETF launch also raises another interesting question: what if the strategy an ETF is advertising fails to gain traction in the market? Much has been written about the explosive growth of ETFs, but ETFs are not immune to the market forces of supply and demand. If an ETF company miscalculates market interest, misprices its product or fails to promote it properly, the ETF will simply be shut down, never to be heard from again. This happens frequently.

According to Invest With An Edge, the US ETF industry reached a significant milestone earlier this year when the 700th ETF was closed. Because there are relatively low barriers to entry in the ETF marketplace and any half-baked idea often results in a product launch, there will be many more closures to come. In fact, in 2009, during the heart of the financial crisis, only 56 ETFs were closed.

Last year, this number shot up to a record 128. And while what constitutes a profitable asset level is the subject of debate, Invest With An Edge notes that many analysts believe that it’s at least US$100 million—making roughly half the US-listed ETFs currently unprofitable. Invest With An Edge aptly concludes that “we will probably see a day when the number of closures becomes larger than the quantity of ETFs that are still listed for trading.”

US ETF Closures by Year: The Graveyard Grows

Source: Invest With Am Edge; includes US-listed ETFs and ETNs

Some ETFs fail because their naming or structure is bewildering (AdvisorShares Market Adaptive Unconstrained Income ETF, closed June 2017), some because they’re too specialized (SPDR Nuveen Barclays California Municipal Bond ETF, closed August 2016), some because there are plenty of similar ETFs already represented in the space (iShares MSCI Emerging Markets Horizon ETF, closed August 2016) and others because they’re a tough sell in a particular type of market—leveraged bear-market ETFs, for instance, will experience low demand in a raging bull market (Direxion Daily Healthcare Bear 3x Shares, closed September 2017).

Now, ETF investors don’t lose their investment if an ETF is shut down—except in rare instances where underlying liquidity is an issue, they’ll get fair market value. However, a closed ETF often equates to a poorly performing ETF. And the closure can also cause unexpected tax consequences potentially forcing an investor to realize a capital gain. And then, of course, there’s the reinvestment risk and general inconvenience as these funds will need to be placed elsewhere.

We try and guard against ETF closures by focusing on established ETF providers, low MERs and avoiding overly specialized ETFs—we likely won’t be buyers of the Quincy Jones Streaming Music, Media & Entertainment ETF, for example. (Quincy Jones actually has no involvement in the development or design of the index that the ETF tracks, interestingly.) I’ve also already written about the dangers of leveraged ETFs (http://www.greaterfool.ca/?s=frenzies). The ETF graveyard is littered with these risky and gimmicky products.

While ETFs are broad-based and diversified, creating a global and balanced portfolio still requires a number of them. In addition to the guidelines above, owning several ETFs is another good way to mitigate the risks of an unexpected closure.

But ultimately, if its name confuses you, it focuses on an area of the market that you don’t understand (be honest with yourself) or it’s leveraged to the teeth, it’s probably not an ETF worth owning.

Just like the outfit from JC Penny Co.

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

84 comments ↓

#1 Dwight on 12.02.17 at 4:13 pm

Do you have a prediction for how long Hudson Bay Company will last? After walking through the local HBC store several times in the last few months, I’ve noticed that there are very few customers. Your thoughts?

#2 Stone on 12.02.17 at 4:14 pm

Hi Doug,

Just curious about Total Return Index ETFs and your take on them in a non-registered account. For example, HXS, HXT, HXDM, HBB. They appear to be general ETFs but wondering if there’s a catch with something that is swap based. Are these more specialized ETFs that should be avoided?

Thanks,

#3 And with marketing ... on 12.02.17 at 4:19 pm

Ploys the consumer is believing ;

Low mer good , higher mer bad
Etf good , Mutual fund bad

We now have ‘balanced etfs’ with Mers nearing 1%

What a racket

#4 Ponzius Pilatus on 12.02.17 at 4:20 pm

The joy of ownership.
This may just prick the bubble in overrated Steveston.
http://www.richmond-news.com/news/clear-a-path-we-re-comin-through-1.23110368

#5 Ponzius Pilatus on 12.02.17 at 4:24 pm

Doug,
I suspected something on Bitcoin.
Instead it’s back to pushing EFTs.
Got problems making the Porsche lease payments?

#6 Ponzius Pilatus on 12.02.17 at 4:26 pm

I don’t need a high priced finance guy telling me that Costco is doing well.
I go there every week.
The place is a madhouse.

#7 Volume on 12.02.17 at 4:40 pm

Interesting.
Thanks Doug, learned something new today.

Even the large names like Vanguard have some ETFs with very questionable volume on TSX, I found out recently.

E.g. TSE’s VEH has no trading. Surely a candidate for closing down.

#8 mike from mtl on 12.02.17 at 4:42 pm

Decline of the Retail Store ETF (with the clever ticker EMTY).

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

Probably already know but it only tracks prominent PUBLICLY traded retailers. The obvious dying ones are either private or PE firms.

#9 TRUMP on 12.02.17 at 4:42 pm

What we don’t understand and what confuses us is …..

How TRUDEAU and MORNEAU get away with stealing taxpayer dollars, making their own rules, and getting away with it…

And we have no choice but to keep paying off our paycheques..

Explain that one !!!????

#10 Stan Brooks on 12.02.17 at 4:48 pm

No doubt Amazon and other online retailers are going to take their toll on bricks-and-mortar retailers, but it’s going to be a gradual process. For example, two of the largest retailers in the US—Walmart and Costco—have seen their shares, respectively, jump 9.5% and 16.5% annually over the past five years. Hardly the quick, painful death short-sellers might be hoping for.

————————————

Retail is:
1. Consolidating.
2. Going digital.
3. Automating.

Wallmart is extensively going gitital.
Costo is filling the wholesale space, they also started selling healthy products. They are also digitilizing.

Together Amazon, Wallmart, Costco will eliminate all other brick and mortars retailers, except the grocery stores an high end retailers.

And most of the jobs that exist in retail will be automated.

Next steps will be automation of grocery stores which will be a bit slower.

Watch out Loblaws for Amazon Ca, whole foods and Co.

Eventually everything will be digital with your fridge ordering preferred food supplies and automated delivery.

8-10 years. The internet of things and Amazon.
The death of traditional pharmacies.

#11 Stan Brooks on 12.02.17 at 4:56 pm

BTW as I read here complains of oversupply of ETFs can somebody please recommend ETF that shorts the Canadian, in particular GTA housing market in real terms, i.e hedged in USD and Euro or broad stock market performance?

Non leveraged or even moderately leveraged at 1.2 let’s say times on quarterly bases?

That could be your ONLY retirement hope.

Shorting Mississauga, Scarborough and Vaughan housing markets could be the cherry on the cake.
I will take it with a sip of quality scotch.

#12 SmarterSquirrel on 12.02.17 at 5:04 pm

Before you can buy an ETF, you need to have saved money to invest in the first place…

With everyone starting to head to bricks-and-mortar retailers and online retailers to buy gifts for Christmas, it’s a good time to go through the exercise of really understanding how much you are spending on gifts in a year. It’s probably a lot more than you think you spend.

If you can cut back a little on spending on gifts, without reducing the joy you bring to others and yourself, then you might just save enough to give yourself the gift of a good retirement.

You can go through the exercise of figuring out how much you spend on gifts in a year here…
http://smartersquirrel.com/tis-the-season-to-spend-on-gifts

#13 LivinLarge on 12.02.17 at 5:10 pm

11 grumpy ol’ gits before me…wow.

Nice post, well written and informative…a breath of fresh air although not a nice breath of fresh air.

Let’s just hope that the bloom hasn’t worn off the rose that is the ETF world. Personally I detest hearing the “oh by the way you have a capital gains event you didn’t initiate yourself” letter

#14 Penny Henny on 12.02.17 at 5:11 pm

The other night after the third or fourth vodka I had a thought.
Will the tracking of individuals be the ultimate use of blockchain?
Digital money is already here in the form of visa/debit/apple ipay/etc.
You are already being tracked via gps by your smartphone.
Using blockchain to connect the two and your every movement will be able to be tracked.

Am I crazy for thinking this is possible?

#15 Stan Brooks on 12.02.17 at 5:13 pm

#9 TRUMP on 12.02.17 at 4:42 pm
What we don’t understand and what confuses us is …..

How TRUDEAU and MORNEAU get away with stealing taxpayer dollars, making their own rules, and getting away with it…

And we have no choice but to keep paying off our paycheques..

Explain that one !!!????

—————————-

Dumb voters and lack of democracy impeachment practices?

How can one explain the circus with the Bahama Bill, his and his father’s timely sale of shares, french villa and corporation to manage it, lack of blind trust fund, failure to recuse himself – Bill C27 and other bills, the assault on small businesses, the fact that such arrogant and strong headed man can not be booted out along with his apologetic for everything dear leader with fancy socks?

How can you explain the housing market and the lack of transparency/CREA court case?

By failure of authorities. Look at how journalists were trying to trick members of parliament into insider accusation/out of the parliament where the lieberal elites high priced fancy lawers can go after them?

This is the world you live in – the world of and for the rich.

You are not part of it.

Chrystia Freelend is describing it – her party elite in the her book:

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else.

#16 AK on 12.02.17 at 5:27 pm

“For example, two of the largest retailers in the US—Walmart and Costco—have seen their shares, respectively, jump 9.5% and 16.5% annually over the past five years.”
——————————————————————–
I will be concerned for COSTCO once I see less than 50 people waiting in line for it’s doors to open each and every day.

The recent Amazon and Whole Foods nonsense, knocked the price of COSTCO down to the low $150 range, which has recovered and then some in recent days.

#17 David McDonald on 12.02.17 at 5:31 pm

The ETF CHI was shut down a couple years ago. I received notification several months prior to the shutdown but since I was up quite a bit I decided to hold onto the ETF until closure.

Big mistake! The Chinese government intervened in the market and everything Chinese tanked. Normally I would have just wait for the storm to blow over but the ETF was scheduled to shut down and it did at the worst possible time.

My advice now is to sell as soon as the notice of closure is received.

#18 Stan Brooks on 12.02.17 at 5:33 pm

#9 TRUMP on 12.02.17 at 4:42 pm

Its is part of the elite’s grand master plan, implemented through its puppets like T2/and taxation authorities controlled by BM which is to control you not trough the code of laws but through rules, subject of interpretation by them.

the whole taxation guidelnes, Ontario Human rights tribunal travesties are living examples of the implantation of that plan.

We are already told what to think and what to say and accused of hate if we exercise our right to disagree.

It is called fascism.

#19 BobC on 12.02.17 at 5:39 pm

Anybody know a way to short the NFL? They keep digging their own grave.

#20 The Big GTA Short on 12.02.17 at 5:46 pm

#11 Stan Brooks

The only way to short the GTA housing market in real terms is to become a renting lowlife.

As a renter you will no longer be burdened with ownership and you can share exciting war stories with friends and family about how you’ve been bounced around from place to place by each promising landlord who ends up not giving a rats butt if you live or die so long as that cheque is not late.

How is that for a GTA short strategy?

#21 Senta on 12.02.17 at 5:53 pm

ETF’s can make sense if they give you access to strategies which a retail investor does not have ready access – like japanese dividend paying small caps or insider trading indexes in Europe or the south korean market (cheapest in the world btw). EMTY is clearly a scam you should be able to see a mile away.

#22 GrosPeterd'ascenseurBonde' on 12.02.17 at 5:59 pm

@#162 Ben
‘crowdedelevatorfartz – one could argue that having your banks launder money to ramp the price of *the exact same* housing is printing money.”
++++++
One could also argue that having one Province in the Confederation of Canada holding all the other provinces “hostage” with the continued threat of seperation……Thus causing those provinces to continually shovel money via “Equalization Payments” at Quebec’s generous social programs….is blackmail.

But we really wont know who’s right until Quebec seperates….and then….Mon Dieu! What have we done!

Maybe you didn’t notice, but the separatists were defeated. Try to keep up. — Garth

#23 Stan Brooks on 12.02.17 at 6:03 pm

#20 The Big GTA Short on 12.02.17 at 5:46 pm
#11 Stan Brooks

The only way to short the GTA housing market in real terms is to become a renting lowlife.

As a renter you will no longer be burdened with ownership and you can share exciting war stories with friends and family about how you’ve been bounced around from place to place by each promising landlord who ends up not giving a rats butt if you live or die so long as that cheque is not late.

How is that for a GTA short strategy?

————————
Bad.

I am talking about financial instruments to short it/the market.

Any suggestion that I will live and rent in this hell hole called GTA is insanity.

#24 Interstellar Old Yeller on 12.02.17 at 6:03 pm

I don’t see what’s wrong with the JC Penney sweater shown, except that it’s quite expensive.

#25 crowdedelevatorfartz on 12.02.17 at 6:06 pm

If Jared Kushner goes to prison…..will Ivanka agree to conjugal visits?

https://www.google.ca/url?url=https://www.reuters.com/article/us-usa-trump-russia-flynn/trump-says-no-collusion-between-his-campaign-and-russia-idUSKBN1DW0HK&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwij5rmEuOzXAhVMw2MKHZZkA6wQqQIILDAH&usg=AOvVaw2HbTMaTMgu5c-pTJhyraC7

#26 SWL1976 on 12.02.17 at 6:15 pm

Great article

Thanks for sharing

There’s been nothing short of blog gold here recently

#27 Doug Rowat on 12.02.17 at 6:23 pm

#19 BobC on 12.02.17 at 5:39 pm

Anybody know a way to short the NFL? They keep digging their own grave.

Or short the Browns.

–Doug

#28 Ponzius Pilatus on 12.02.17 at 6:28 pm

The Amazon guy is a thief.
He stole the idea from Sears.
As Garth says
Technology changes but humans stay the same.
Greed, the most dominant of human traits.

#29 Smudgekin on 12.02.17 at 6:29 pm

A few things to learn about online shopping:

If you don’t like custom fees check your shopping on a Canadian site. This applies to Amazon, .ca or .com?

Keep all receipts. Customs fees are not refunded by the courier companies once paid. If that item doesn’t fit and needs to be returned you’re battling CRA.gc.ca for refund. After all its government taxes you paid.

The shipment could get stolen off your doorstep.

Bricks & mortar ain’t so bad for the well informed…

#30 Doug Rowat on 12.02.17 at 6:30 pm

#21 Senta on 12.02.17 at 5:53 pm

EMTY is clearly a scam you should be able to see a mile away.

0.65% MER, so it isn’t cheap. The guaranteed winner is ProShares.

–Doug

#31 Ponzius Pilatus on 12.02.17 at 6:33 pm

#14 Penny Henny on 12.02.17 at 5:11 pm
The other night after the third or fourth vodka I had a thought.
Will the tracking of individuals be the ultimate use of blockchain?
Digital money is already here in the form of visa/debit/apple ipay/etc.
You are already being tracked via gps by your smartphone.
Using blockchain to connect the two and your every movement will be able to be tracked.

Am I crazy for thinking this is possible?
—————-
Drunk maybe, but not crazy.

#32 GrosPeterd'ascenseurBonde' on 12.02.17 at 6:34 pm

2018 could be a good year for many reasons.
Realtor info monopoly ending but one …..

http://www.macleans.ca/politics/washington/the-coming-american-explosion/

#33 young & foolish on 12.02.17 at 6:35 pm

This blog may end up losing a big chunk of it’s cred with it’s dismissal of blockchain technology and its emerging applications.

Learn to read, Junior. Blockchain was lauded here. Bitcoin was called a bubble. They are not synonymous. – Garth

#34 young & foolish on 12.02.17 at 6:38 pm

“Any suggestion that I will live and rent in this hell hole called GTA is insanity.”

Another small town fart here … why do folks like you insist on trying to insult your fellow citizens who happen to prefer urban life?

#35 Victor V on 12.02.17 at 6:46 pm

U.S. Senate passes sweeping tax overhaul

https://www.theglobeandmail.com/news/world/us-senate-passes-tax-bill-as-trump-gop-near-big-legislative-win/article37170418/

Republicans pushed a nearly $1.5-trillion tax bill through the Senate early Saturday after a burst of eleventh-hour horse trading, as a party starved all year for a major legislative triumph took a giant step toward giving President Donald Trump one of his top priorities by Christmas.

#36 mike from mtl on 12.02.17 at 6:54 pm

#7 Volume on 12.02.17 at 4:40 pm

E.g. TSE’s VEH has no trading. Surely a candidate for closing down.

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

I assume it’s to offer something to counter blackrock. Personally I have predominately Vanguard funds but no hedging as it does’t make sense to hedge on poloz peso.

Obviously who else hedges in Ca$ other than Canadians and in short term? Hence low volume.

#37 Fish on 12.02.17 at 6:59 pm

I’m ready for that sunshine list, oh ya!!!

#38 NoName on 12.02.17 at 7:07 pm

#25 crowdedelevatorfartz on 12.02.17 at 6:06 pm
If Jared Kushner goes to prison…..will Ivanka agree to conjugal visits?

https://www.google.ca/url?url=https://www.reuters.com/article/us-usa-trump-russia-flynn/trump-says-no-collusion-between-his-campaign-and-russia-idUSKBN1DW0HK&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwij5rmEuOzXAhVMw2MKHZZkA6wQqQIILDAH&usg=AOvVaw2HbTMaTMgu5c-pTJhyraC7

there is always that chance that kushner is a leaker, trying to save his own skin and trow some under bus, before it get to him, theory and interesting one, came strait from dudes mouth that worked for O administration.
(podcast)
i.ve heard this some time ago… interesting

#39 Greg on 12.02.17 at 7:16 pm

This is why I don’t want to manage my small sum of 30k. I’d probably screw it up and I just don’t enjoy the exercise. Heck, I get HRB to do my two T4 income tax return. Is there a good company out there that will properly manage my money for 1%? I think most places require larger balances.

#40 Bezengy on 12.02.17 at 7:20 pm

Good grief, it’s not that Amazon is stealing business, (well maybe a little), it’s because no one over 50 needs anything, and no one under 50 has any money to buy anything.

#41 NoName on 12.02.17 at 7:31 pm

#10 Stan Brooks on 12.02.17 at 4:48 pm

Amazon, Wallymart, Costco

—-

3 very retailers that are doing same thing very different ways.

Few years ago i red an article comparing wallyworld and costco, basically boils down to items for sale per sq, and workers pay, if i remember well similar store size wallyworld had 100k items vs costco that have “only” 10k. what was interesting that costco was getting 2x as much sales per employee vs wallyworld.
Amazon all together is different beast…

#42 TurnerNation on 12.02.17 at 7:35 pm

Last week Questrade brokerage shuttered most of their ETFs.

(Was wondering how long divergence between market leading Semis sector – SMH.US – and overall market would last. Friday answered that question.)

#43 Banta on 12.02.17 at 7:44 pm

Have you seen the price of gold lately? Eric Sprott is piling into Kirkland Gold big time.

#44 Ponzius Pilatus on 12.02.17 at 7:57 pm

#29 Smudgekin on 12.02.17 at 6:29 pm
A few things to learn about online shopping:

If you don’t like custom fees check your shopping on a Canadian site. This applies to Amazon, .ca or .com?

Keep all receipts. Customs fees are not refunded by the courier companies once paid. If that item doesn’t fit and needs to be returned you’re battling CRA.gc.ca for refund. After all its government taxes you paid.

The shipment could get stolen off your doorstep.
———————-
You’re so right.
The burglars are happy.
No more need for breaking in.
The packages are just waiting there on the front porch.
Everything is nicely packaged and ready to be fenced.
Ah, the spoils of progress.

#45 I cannot brains today on 12.02.17 at 8:07 pm

[img]https://pics.me.me/cannot-brain-today-i-has-the-dumb-19325580.png[/img]

All that talk about ETFs and JCPenny (what’s that) really gave my head a yuge headache! Stick with Canadian real estate bubble and the collapse of Audi sales!

#46 Nonplused on 12.02.17 at 8:19 pm

Amazon is probably having an affect on Brick and Mortar, they have to as they are occupying more and more of the retail space, but I believe the larger reason so many stores are closing at present is because nobody has any money! They have stagnant wages, aren’t in the labor force and living on disability (many fraudulently), have huge mortgages, student loans, car loans, credit card debt, a HELOC, and probably owe their mom $20,000. They aren’t buying nothing.

If it were just retail I’d say ok maybe it’s Amazon only, but the auto industry isn’t exactly robust either. Remember all those new cars that were going to be needed after the hurricanes? Didn’t happen. When your car gets wrecked you get enough insurance to buy a used one of the same make, model, and year, not a new one. So it is the used market that got support from the hurricanes not the new market, and you have to assume somewhere up the chain there was someone with enough money and motivation to sell his used car and buy a new one. So far it isn’t happening to the extent it needs to. The dealership I bought my truck at phoned me directly to try and convince me to take advantage of the strong trade in prices caused by the hurricane and also dealer incentives, but I was still going to have to come up with $40,000 to get the exact same truck only newer. Oh and he added my warranty was expiring so that’s another good reason. Not for $40,000 it’s not. There is nothing wrong with my truck (except a slight crease on the top of the tail gate where the fifth hitch contacted it, but you have to really look for it and the tailgate works fine. Not going to fix it the fifth will just hit it again. Not even going to fix it so there goes the broken glass fallacy.)

Also, do you know anyone who doesn’t already have a flat screen TV? These technology revolutions have a half-life. Once everyone’s already dumped the CRT sets and bought a flat screen the market dies down. Like computers, I’ve got so many of the dang things I don’t see buying another one for years unless they die. We have 5 of the things plus a 32 inch CRT that still works fine and there are only 3 people. Not to mention all the computer monitors. It’s crazy, but that acquisition and replacement stage is over for me for a while. I’m pretty sure it is for most other people too, I don’t see a shortage of flat screens when I visit friends and neighbors.

Most recently the smart-phone market has been the big driver of a lot of consumer spending, but I think that’s saturated too. They have a good planned obsolescence and financing model, but I think there are limits to this market too when push comes to shove. I have an iPhone 6S (I think) now, but it doesn’t do anything the 5S I had before, or the Galaxy 3 before that, or the Blackberry I had before that. The only reason to replace any of these things is because the battery died and the new one is baked into “the plan”. But you can always get your phone unlocked and go Fido once it’s paid for if the battery is ok.

So there is a lot more going on here than just Amazon IMHO. People don’t have any money. They are living on debt and that has it’s limits.

#47 dr. talc on 12.02.17 at 8:27 pm

#160 Data Gold Mine on 12.02.17 at 4:12 pm
Can anyone blog dog here explain how the Land Registry office in Ontario works? An early comment by a Brit made sense. He said our tax dollars pay for the Land Registry to exist and that Canadians should demand that the data be open and accessible. This makes a lot of sense to me.

Land registry data should be online and this way someone with data mining skills can download the data and post it on a website in a user friendly way. Even if TREB if forced to release all data this Land registry data would still be useful to have because sometimes a sale price in TREB is not the same sale price registered with this government office.

—-

land registry and assessments are outsourced to
mpac and teranet (corporate fascism)
your ‘government’ is too useless to figure out the value of what it is they want to tax and they have zero interest in what you think should be online. If you own any real estate in 416 you’ll notice the tax bill in January does not even show total tax bill for the year, you cannot pay the year in full in January – the final amount comes mid year
all land registry data is available to everyone online for a fee,
for some reason people here think its treb’s responsibility to give it to them for free

#48 AACI Homedog on 12.02.17 at 8:47 pm

Pontius Pilate you rude SOB. A typical Costco idiot… I suppose. Glad I am small town without such BS.

#49 Victor V on 12.02.17 at 9:09 pm

‘We are going to blow your mind’: Attorney general promises new details on alleged money laundering in B.C. casinos

http://nationalpost.com/news/local-news/more-to-come-on-money-laundering-allegations-b-c-attorney-general-says/wcm/cec93feb-c939-4459-8352-556d12e83a92

Eby also said that he believes B.C.’s property ownership system — in which true owners of property can hide behind opaque legal mechanisms — could be attracting foreign criminals and corrupt officials seeking to hide wealth in the province. Eby said Finance Minister Carole James is working on reforms to pull back legal veils that cover true ownership of property and corporations.

Eby pointed to a 2016 study by Transparency International that showed real estate buyers in B.C. are using shell companies, trusts and nominee buyers to hide their beneficial interest in property.

In examining Vancouver’s 100 most valuable homes, the report found that 46 per cent — amounting to more than
 $1 billion in assets — have opaque ownership. Of the 100 properties, 29 are held through shell companies, at least 11 are owned through nominees (listed as students or housewives on land titles), and at least six are disclosed as being held in trust for anonymous beneficiaries, the report said.

Eby said B.C.’s landownership system could be connected to Metro Vancouver’s skyrocketing home prices. Top economists have “made inescapable arguments that taxable incomes reported to Revenue Canada have no connection to real estate values in Metro Vancouver until you get out to the distant suburbs of Vancouver,” Eby said.

#50 Cici on 12.02.17 at 9:13 pm

Amazon is a joke. Prices are way too high. If you look hard enough, you can usually find better, and now they can’t even be bothered to ensure secure delivery…they just dump your stuff on your doorstep in sight of every passerby.

#51 Smoking Man on 12.02.17 at 9:19 pm

USA economy is booming. Every store I go to in Orange county California is packed.

Things are so cheap here compared to Canada. No wonder Canadians are drowning in debt.

Furnished an entire 2 bed room appt for under 7k.
Loving it down here.

#52 For those about to flop... on 12.02.17 at 9:27 pm

CONFIRMED PINK SNOW.

This house in Maple Ridge is yet another flip gone wrong.

26290 126 Avenue, Maple Ridge.

The details…

Paid 2m March 2016

Sold 1.94 September 2017

And so after expenses roughly a ten percent loss.

The guy from Down Under will call this flip a 200k blunder…

M43BC

Sold on September 18

26290 126 Avenue, Maple Ridge, BC V2W 1C9 paid 2m
$2,299,000
2016-11-28

26290 126 Avenue, Maple Ridge, BC, V2W 1C9
$2,269,900
2017-03-25

Now asking 2.198 as of today.

https://www.zolo.ca/maple-ridge-real-estate/26290-126-avenue

https://www.zolo.ca/index.php?sarea=26290%20126%20Avenue,%20Maple%20Ridge&filter=1

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

P.s. As always, I appreciate the support and encouragement given to me.

This is my gift back to this blog as a thank you for the boss of this blogs efforts,as well as the regular commentators.

That includes you too,Robax.

#53 Wrk.dover on 12.02.17 at 9:37 pm

Meh, I have spent $38 at Amazon, once. Anything they have, someone else has more conveniently and for less. That emperor wears no clothes.

I buy socks, $27.00 Wrangler jeans and some car fluids at Walmart. Period. So much for monster sized retailers.

On line shopping is a godsend, but no one has it all tied up. Or will have.

RockAuto is the business model to emulate. Supreme site and service with no follow up spammy crap!

#54 young & foolish on 12.02.17 at 9:52 pm

I was taught that value is based on earnings …… no earnings means you are speculating.

Many companies listed in an ETF or index fund have scant earnings and their prospects look dim. It’s probably why passive investing will never take over entire markets and overtake active management.

An ETF mirroring the S&P 500 holds the five hundred biggest corporations. You are losing it lately, kid. – Garth

#55 akashic record on 12.02.17 at 9:53 pm

Blockchain was lauded here. Bitcoin was called a bubble. They are not synonymous. – Garth

Nice.

The obvious question then: How is the lauded blockchain in the balanced ETF portfolio?

#56 young & foolish on 12.02.17 at 10:02 pm

“So there is a lot more going on here than just Amazon IMHO. People don’t have any money. They are living on debt and that has it’s limits.”

I suspect this as well … and it’s what’s making policymakers nervous. Wait until we get more AI, blockchain transactions (like contracts and registers), and robotics. Now with transferable rent allowances coming are guaranteed income supplements far behind?

Anything to keep the peace and the pitchforks in the barn.

#57 conan on 12.02.17 at 10:17 pm

Anyone else think that Trump is toast? That this Russian connection is going to go bad for him and someone like Trump, would start a war, just to put this investigation on the back burner.

https://youtu.be/-orFtcORyuM?t=70

#58 Smoking Man on 12.02.17 at 11:43 pm

The problem. Been here 3 days have not seen a smoker or a discarded cigarette butt.

The new gig. Drunks and Smokers not welcome.

The sacrifice I need to make right now for year round flip flops . Worth it.

Call me Silverster Stalone.

It’s going to be hard but I can do it. The job is easy. Fitting in a huge challenge.

I’m doing it for more book food. I don’t need a gig.

#59 Nonplused on 12.02.17 at 11:52 pm

Milton Friedman explains inflation in 1980:

https://www.youtube.com/watch?v=GJ4TTNeSUdQ

For those who don’t have 14 minutes it’s when they print money faster than the economy grows.

#60 FOUR FINGERS WATSON on 12.03.17 at 1:16 am

The same day Bitcoin cracked its all-time high above $11,000, the government dealt its first blow to the crypto world…
On Wednesday, a federal judge in San Francisco ordered the popular Bitcoin exchange, Coinbase, to provide the IRS with information on over 14,000 account holders.

#61 islander on 12.03.17 at 1:59 am

http://vancouversun.com/news/local-news/more-to-come-on-money-laundering-allegations-b-c-attorney-general-says

The ‘shutdown’ !!

Regarding investigations in B.C. casinos: “The public is no longer in the dark about what is going on,” David Eby (BC Attorney General) said. “And they shouldn’t be. And there is more to come.”

…..allegations of transnational money laundering linked to casinos…..“I have reason to believe that these matters might be linked to other areas of B.C.’s economy.”

Eby ….. believes B.C.’s property ownership system — in which true owners of property can hide behind opaque legal mechanisms — could be attracting foreign criminals and corrupt officials seeking to hide wealth in the province.

….. real estate buyers in B.C. are using shell companies, trusts and nominee buyers to hide their beneficial interest in property.

#62 jane24 on 12.03.17 at 2:35 am

If J C Penny wants to know why they are in trouble they should look at that awful sweater they are flogging in that ad. I am in my 60’s and would not be seen dead in it, no shape, no fashion, no trend, in lilac for God’s sake. When did you ever see lilac on a catwalk. Where does J C Penny think the demand is for such dated horrible stuff.

One thing that web shopping does is open your eyes to what is actually in fashion and available world-wide. Suspect that folk are more demanding today. The web gives us more, far more options to purchase. Clothes standards have been raised. Standards and choices for everything have been raised. I would shop http://www.asos.com by 100 times over J C Penny. Burn that sweater.

#63 BillyBob on 12.03.17 at 4:59 am

The sneering at the woman’s sweater gives me a pang of sadness for some reason. Perhaps it’s because it’s exactly the type of thing my sweet, elderly mother – who still likes flowers and pretty things – would wear.

Can’t all be Porsche-driving hipsters in designer suits, y’know.

#64 Mike in Toronto on 12.03.17 at 5:59 am

#53 Wrk.dover

Walmart is highly competitive in the online market too… depending on the deals, we’re buying baby formula, diapers, etc, etc, from either Walmart or Amazon, and they’re being delivered regularly.

Putting the babies into the car and driving to a retailer seems like an insane amount of effort. We’re lucky to have a few spare hours a week. Spending that time in traffic or in the asiles of a supermarket looking for whatever is a horrible waste of time. And the people? in the parking lots and lineups? so mizerable.

It’s a bit insane because we live in the core of the city. There’s 5 grocery stores, multiple department stores and 3 Shoppers’ drug marts within walking distance. None have nearly as good prices as Amazon or Walmart.

Although… maybe our local Wholefoods will start carrying the Amazon deals… we could push the stroller over there… but still, the lineups. Our time would be better spent visiting friends or going to the park.

#65 Gravy Train on 12.03.17 at 7:02 am

#25 crowdedelevatorfartz on 12.02.17 at 6:06 pm
“If Jared Kushner goes to prison…..will Ivanka agree to conjugal visits?”

#38 NoName on 12.02.17 at 7:07 pm
“[T]here is always that chance that [K]ushner is a leaker, trying to save his own skin [while] t[h]row[ing] [others] under [the] bus….”

Ten legal experts say Trump “can’t pardon his way out of the Russia investigation.”

“If someone like … Kushner were preemptively pardoned, he wouldn’t be able to plead the Fifth … if he were called to testify against Trump…. But if someone has been pardoned, they no longer face the threat of prosecution, and so they can’t use a desire to avoid incriminating themselves as an excuse not to answer a question.

“So in addition to potentially obstructing justice, Trump would only leave himself — and his colleagues — more vulnerable if he decided to pardon anyone currently under investigation. Of course, that doesn’t mean he won’t pull the trigger anyway. But he might want to think long and hard about the implications before he does.

“There is, however, one scenario in which Trump could save himself and others from potential prosecution. It’s what Susan Bloch, a law professor at Georgetown, calls the Nixon scenario: ‘Trump pardons them [Flynn, Kushner, Manafort, and Donald Trump Jr.] as he is exiting the White House and Trump exits early, allowing Pence to become president, and Pence then pardons Trump. Trump will then have successfully shielded himself and his colleagues from criminal liability.’”
https://www.vox.com/2017/8/29/16211784/flynn-charged-fbi-trump-pardon-mueller-russia

#66 maxx on 12.03.17 at 8:35 am

“….price decline remains a mystery…..”

Really?! Wow, offerings like this made of your grandmothers dining room curtains that you can get for $2 at your local second-hand/charity shop demystify the share price decline enchilada for me.

Far too many bricks and mortar retailers truly need to up their game. I seriously wonder about the buyers that are hired to stock the racks and shelves.

All fashion retailers for example, must realize that they need to offer “haute value”, at all price points. Comfort is a given, however style is absolutely de rigueur.

The more debt and less cash people have, the more demanding they become.

#67 I’m stupid on 12.03.17 at 8:39 am

I can’t imagine a world without brick and mortar stores. I think there will be a blend between the two. Where you order online and have pickup/retiurn locations. I think Amazon will transition to that and Walmart is already doing it.

Shipping is a very big expense. I believe it’s not a profitable business model if your trying to offer the lowest prices. With that said having huge stores like Walmart is very expensive as well. I think having a blend of both will offer the best price/profit/service strategy.

Central distribution centres and boutique retail locations for pick ups and returns. This eliminates the high cost of shipping and the huge costs of mainaing a super centre.

Who remembers the store called Consumers? I think it was a brilliant idea ahead of its time. For those that are too young to remember it, it was a retail chain that delivered a catalogue in the service area with all their products. If you wanted something you went to the store and filled out a form with the item number and they would get that item. It failed because customers didn’t know if items were out of stock and they couldn’t adjust their inventory since the catalog came out once a year I believe. The internet solved the missing ingredient for something like that to return.

#68 Doug Rowat on 12.03.17 at 9:18 am

#42 TurnerNation on 12.02.17 at 7:35 pm

Last week Questrade brokerage shuttered most of their ETFs.

Technically, a merger with WisdomTree, but you’re correct the largest ETF providers in Canada, including BMO and iShares, shut down funds all the time. Simply a new reality of the growing ETF landscape.

–Doug

#69 Dharma Bum on 12.03.17 at 9:24 am

When it comes to ETFs, just stick to the basics:

XIU
XRE
XSP
VGH
VUS
VXC
ZPR
ZUT

You got your Canadian stock market, your US stock market, your global stock market, the NASAQ, US High Dividend stocks, REITs, laddered preferred shares, and utilities.
Easy Peasy.

ETFonehome.

#70 TurnerNation on 12.03.17 at 10:03 am

#11 Stan Brooks while you cannot short the housing market you may go long the busy middle consumer market:

Goeasy – formery Easyhome still a scuzzy lender) small yield or sit in its convertable debentures.
Enercare water heater rental – 4.8% yield
Pizza Pizza 5.36% yield
Apartment REITS

#71 NoName on 12.03.17 at 10:49 am

#46 Nonplused on 12.02.17 at 8:19 pm
Amazon is probably having an affect on Brick and Mortar

What was going for amazon for long time was no sailes tax on internat purchases in us, for years and years. If i got i corect, before, if amazon didnt have werhouse in states that order was made from, no salis tax was collected. Until recently that was majority of states.

Amazon collecting sailes tax collection was put in place recently, around beggining of this year. Funy thing when you make people to start changing old habit, and develop new one, more than half of the botle is done. Some time i read, probably heard on youtube how amazon is losing hundreds (800-us)of dollars per year on amazon prime members, it wont be long before al a crate new prime will be introduced, at this point there is almost enough momentum going for amazon them to do that.

#72 crowdedelevatorfartz on 12.03.17 at 11:19 am

@#65 Gravy Train.

Yeah, I had considered the “Presidential Pardon Shuffle”

And if Trump Pardons his son in law and all the rest as a sitting President and then Pence pardons him……
Ohhh Baby.
Sit back and watch the outrage build to unbelievable levels.
Crooked Hillary would have nothing on the morassTrump will have created for the Republican Party.
But if his intention all along was to be a Wrecking Ball for the American political system……he’s suceeded.

#73 Gravy Train on 12.03.17 at 11:30 am

Just read this quote yesterday, and thought I’d just share it:

“People are often unreasonable, irrational, and self-centered. Forgive them anyway.

“If you are kind, people may accuse you of selfish, ulterior motives. Be kind anyway.

“If you are successful, you will win some unfaithful friends and some genuine enemies. Succeed anyway.

“If you are honest and sincere people may deceive you. Be honest and sincere anyway.

“What you spend years creating, others could destroy overnight. Create anyway.

“If you find serenity and happiness, some may be jealous. Be happy anyway.

“The good you do today, will often be forgotten. Do good anyway.

“Give the best you have, and it will never be enough. Give your best anyway.

“In the final analysis, it is between you and God. It was never between you and them anyway.”

— Mother Teresa

#74 crowdedelevatorfartz on 12.03.17 at 11:37 am

Apparently it isnt just BC that has issues with its Regulatory Authorities…
Political Pressure, underfunded, inexperienced…..
Ontario…take a bow.

https://www.reuters.com/article/us-canada-mortgages-regulator-specialrep/special-report-canada-regulator-ignored-warnings-on-risky-mortgage-investments-idUSKBN1DU1YP

This Real estate implosion is beginning to look more and more like 2008 in the US

#75 Damifino on 12.03.17 at 11:48 am

#53 Wrk.dover

On line shopping is a godsend…
———————————–

I agree that online ‘browsing’ is godsend. After that, I like to go to a physical place and buy the goods there. I feel more in control that way. Makes it easier to change my mind too, when confronted with reality, before the transaction is made. Guess I’m old.

One exception is software, because you download that immediately. The machine you use to buy it is the same machine that delivers the product. No problem there.

#76 Vampire studies gmst on 12.03.17 at 12:18 pm

69 Dharma – can’t speak to each etf, but the mix looks pretty good!

#77 Damifino on 12.03.17 at 12:21 pm

#65 Gravy Train

But [Trump] might want to think long and hard about the implications…
—————————————–

Perfect example of a contradiction in terms.

#78 Steven Rowlandson on 12.03.17 at 12:57 pm

If one is not paid to live in Canada and is or is close to being a real estate refugee like I am what need is there for anything offered by retail markets beyond a few consumables? Thanks to the real estate market and some economic and social engineering Canada’s economy has had the biscuit and the box is damned near empty.

#79 Jungle on 12.03.17 at 1:25 pm

Doug would also like your opinion on comment #2, horizon beta pro ETF (swap based) particularly

HXT
HXS
HBB
HXDM

The risk of these shutting down
The risk of counter party and swap based ETF return
GOv crack down on tax avoidance (no distributions)

Thanks

#80 Doug Rowat on 12.03.17 at 1:33 pm

#67 I’m stupid on 12.03.17 at 8:39 am

Who remembers the store called Consumers?

I do. There was one in Scarborough. Not far from the A&A Records where the Bare Naked Ladies filmed their “Lovers in a Dangerous Time” music video.

Ironically, all–including the band–are gone. (It’s not BNL without Steven Page, sorry).

–Doug

#81 SoggyShorts on 12.03.17 at 1:38 pm

#75 Damifino on 12.03.17 at 11:48 am
#53 Wrk.dover

On line shopping is a godsend…
———————————–

I agree that online ‘browsing’ is godsend. After that, I like to go to a physical place and buy the goods there.
*****************************************
I like a 3 step process for major purchases:
1. Do a little online research, find roughly what I want.
2. Got to a brick and mortar to actually see the product choices and ask questions if I can’t get the info online.
3. Go home and order it from wherever is cheapest.

A great example is BestBuy, they are basically just a showroom for Amazon as far as I’m concerned.

#82 Stan Brooks on 12.03.17 at 2:00 pm

#78 Steven Rowlandson on 12.03.17 at 12:57 pm
If one is not paid to live in Canada and is or is close to being a real estate refugee like I am what need is there for anything offered by retail markets beyond a few consumables? Thanks to the real estate market and some economic and social engineering Canada’s economy has had the biscuit and the box is damned near empty.

————————————

Yep, it has had the biscuit, somebody ate it and now they are looking for greater fools to pay the bills, with no rewards left.

Canada’s economy is basket case of engineered ‘businesses’ and profit extraction oligopolies with very little left for the little man.

Combined with the weather it becomes a very, very unattractive place.

As a friend of mine once said: If you only use the stick, it won;t work, you need also the carrot.

THERE IS NO CARROT LEFT IN THIS PLACE. only sticks.

#83 John Dough on 12.03.17 at 2:30 pm

I would gladly pay double my Amazon Prime fee if I never have to step into another cinnamon-scented mall again. The prices are usually the lowest and if not I shop elsewhere. But this can’t last, because shipping costs to my rural location 3 – 4 times a week is much more than their margin. Drones won’t work because the farmers around here shoot them down as they have been used in a rash of burglaries. I will enjoy it while it lasts, but how can any company make money shipping cat litter via UPS for free?

#84 AGuyInVancouver on 12.04.17 at 3:33 pm

#67 I’m Stupid
Stores that view shopping as an experience, like Simons, seem to be doing pretty well. helps when you don’t have pesky shareholders. It worries me that HBC might downsize their stores and remove the unique environment they provide. BTW, why is it the Bay doesn’t have a Food Hall, a la Selfridges and Harrods. In their downtown stores that seems like a no brainer?

PS #52 For those about to flop… Over $2 million for Maple Ridge?! Madness!