The cowboy gene

cowboy

“You won’t be doing that much longer,” she said caustically, as I pulled out my snappy, sorta-new Blackberry. I looked at my wife with disdain, toyed with a retort, but gave it up. She was probably right. After 11 years of personal addiction, my Berry was turning into a Sony Walkman.

Yesterday the latest deal to save BB blew up, along with the CEO. Shares lost another whack, which means investors waiting for a big takeover were re-punished. This stock – once a Nortel-like icon on the TSX – has lost 96% of its value in the last five years.

But this isn’t about Blackberry or my Apple-smug wife. It’s about stocks.

This blog has warned in the past about holding individual equities – unless you have enough money to buy a whole mess of them. Think seven figures. I know this goes against the cowboy gene that gallops through the veins of every hunter. But get over it.

I also understand most people have no idea of the distinction between investing and gambling. Still others have never heard of anything other than GICs (safe) or the stock market (scary). And as far as I can tell, whole swaths of the country, including all of Alberta (speaking of cowboys), are inhabited by folks who think buying penny stocks in upstart drilling companies without money or drills is normal.

Most people buying stocks get clobbered, but always lie about it. It’s a guy thing. Amateur traders without a clue how to read a corporate balance sheet spend 20 minutes on a stock-swap web site, then click their way to oblivion. But as the Blackberry experience shows, even massive, cash-rich, profitable companies can slaughter you.

So, don’t buy stocks unless you have millions. And don’t buy mutual funds, either. Equity funds normally carry management fees big enough to decimate long-term results, and they’re not even tax-deductible.

This brings us to ETFs, exchange-traded funds. They’re referred to here almost as much as bungalows and tasty virgins, still I’m often asked what they are and how they work. Here are a few basics on a vehicle less volatile than stocks and cheaper than mutuals.

What’s a ETF? It’s like mutual fund on steroids (not crack) which trades on the stock market, just like corporate shares. This means its value changes constantly, unlike mutual funds where the net asset value (NAV) is determined once a day, after markets close. So, ETFs have great liquidity and you can buy or sell at a precise price, instead of guessing.

The big advantage over having a few stocks, of course, is that you get to own oodles more companies (or bonds etc.), and this diversification smooths out risk. For example, on Monday Blackberry stock lost a sickening 16% of its value. But on the same day the ETF holding all of the 60 biggest companies in Canada (including Blackberry), XIU, lost nothing while gaining more than 8% in the past twelve months.

And ETFs are cheap. Unlike mutual funds, which pay heaps of money to some dude with a Porsche in a Bay Street parking garage, exchange-traded funds don’t have managers. They’re just baskets of assets which mirror indices. They don’t pretend you’ll ever do better that the overall market. But that’s cool, because 80% of fund managers never do. And while a Canadian equity fund can cost 2.5% in fees to own, the equivalent ETF has an embedded fee of just 0.18%.

ETFs also avoid one of the nastier surprises of owning mutual funds – when investors get a fat capital gains tax bill, even if their fund lost money. How can that be? Simple. The Porsche-driving hotshot buys and sells a bunch of holdings within the fund trying to make money, and in so doing realizes capital gains which are passed on to the unitholders. But those people don’t actually get the money (since it’s all tied up in the fund), they just get the bill.

This isn’t likely to happen with an ETF, where stocks are held for long periods of time without churning. Also, because ETFs are market-traded the funds won’t face big redemptions from unhappy investors (as with mutuals), when the manager has to dump holdings in order to raise cash.

So, here are things you can buy that are liquid, transparent, cheap, tax-efficient and less volatile, while passing through dividends from companies they own. They’re inherently less dangerous that trying to pick two or twelve stocks. They’re way less costly and lower-taxed than mutual funds. You can buy as little or as much as you want, then stick them in your RRSP, your tax-free savings account or a non-registered portfolio. And you can get ETFs for stocks, bonds, sectors, countries or a myriad of other things. But ETFs still have all the features some stock-junkies want, like short-selling or options.

Imagine having a balanced and diversified portfolio that keeps volatility, taxes and costs down yet gives exposure to thousands of great companies, bonds, REITs or preferreds – all through a handful of holdings. That’s why ETFs rock.

And why they don’t sell them at the bank.

191 comments ↓

#1 Mike on 11.04.13 at 8:03 pm

What exactly did the CEO do during the one year he was at the helm of BB? Not much, lost shareholders some more value. No problem though, as all NA CEOs he will make out like a bandit, doesn’t matter how crappy a job he did :)

#2 T.O. Bubble Boy on 11.04.13 at 8:07 pm

Got it! So, we shouldn’t own stocks, we should short them instead!

(would have made a nice profit on BlackBerry today… and really since 2007 if you look back that far)

#3 Devore on 11.04.13 at 8:15 pm

I don’t understand why MF redemptions should lower their value? Do they have a fixed number of units, like trusts or closed-end funds? Or do they just liquidate underlying assets and erase the units being redeemed like an ETF?

#4 T.O. Bubble Boy on 11.04.13 at 8:16 pm

Maybe Leapfrog (maker of kids tablets) can buy Blackberry – they probably have more apps than Blackberry does at this point! (also got killed today after hours)
https://www.google.com/finance?q=NYSE%3ALF

Admission of my cowboy gene – I own some of this sucker… might even buy more tomorrow AM if it stays down 9%-10% like it was after hours.

We’ll see how another individual stock holding (Michael Kors) does with their earnings tomorrow.

These are 2 of my riskier holdings… 80%+ of equity holdings are in ETFs like VTI, VCN.TO, CIE.TO, ZRE.TO, etc… even dumped most of my Berkshire after it’s big run.

#5 Smoking Man on 11.04.13 at 8:18 pm

The cowboy gene

Was thinking the same thing, sort of.

The Girly Men at city hall and MSM

Watching the news coverage of the Ford file; The scene, city hall.

2 Men said yup we accept his apology, let’s move on. Deep voices, masculine demeanor and confident.

O but not the Girly men at city hall, in a total feminized posture, in lady teacher pitched voices the critics speak. He should really go, He’s not worthy. Consequences are appropriate.

“Consequences are appropriate.” The two most hideous words I have ever heard

I am left wondering when exactly did these things get the blood transfusion replacing testosterone with estrogen.

Why is it in fashion for that these sweetie men to get involved in woman’s conversations when woman are showing each other their new shoes.

A real man would visualize those shoes whishing the heel was a bit higher, attached to pantyhose with a line up the back anticipating ripping them off after a bit of bullshit and a few wines.

The male reporters for the Star, they’re so schooled and stupid and never need to worry about a hard kick to the growing causing any pain what so ever.

If they were Men they would take the cameras and crews to Wynn’s house, walk on her driveway, show her the pic’s of the steel columns on the property in Oakville and ask, Why the hell did you pay 1 Billion dollars for that. You don’t deserve our trust.

No not these men, to preoccupied deciding were to get their eyebrows trimmed while getting a manicure and pedicure at the Girly Shop.

I’m really thinking about opening up!!!!!!!!!!!!!!!!!!!!!

The School for Smoking Men.

Men who proudly display uni-brows automatically advance to a yellow belt on admission.

#6 Smoking Man on 11.04.13 at 8:26 pm

#2 T.O. Bubble Boy on 11.04.13 at 8:07 pm

When My son bought the S10 and said it was amazing phone, he knows gadgets.

I bought a bit of BBRY, 1 week later when he took it back because he could not even get his banking app, or any other reasonable app. I sold it.

writing was on the wall, but TO bubble boy you never short a take over target, ever.

#7 not 1st on 11.04.13 at 8:27 pm

Garth, it should be noted that some ETFs are buying puts and calls to bump up their payout yield. Is this ok or should one steer clear of those funds?

#8 OttawaMike on 11.04.13 at 8:31 pm

My employer supplies me with a BB Curve phone and all I can say is the sooner they are put out of their misery, the better. Extremely inferior product compared to the competition.

This company fell behind through arrogance and lack of attention to their core business. The defining moment was when Jim Balsillie bid on and was denied a new NHL franchise. If only he had placed the same effort in refreshing BB.

#9 not 1st on 11.04.13 at 8:31 pm

This is for Smoking Man…never to late to reconsider your habits.

http://www.businessinsider.com/how-smoking-ages-the-face-of-identical-twins-2013-11

#10 Lurker on 11.04.13 at 8:34 pm

Thanks so much for all your work on this fantastic blog. I spend a good deal of time in the afternoons refreshing for your updates.

I’m looking to transition out of individual holdings into ETFs, and wondering if it makes sense to sit on cash for a while instead of buying now (at the top of a serious rally), or should I forget trying to time it and buy ?

#11 AK on 11.04.13 at 8:35 pm

I hold 7 ETF’s and over 50 individual stocks.

I like to be well diversified and it has worked very well for me.

#12 BG on 11.04.13 at 8:37 pm

What about index funds Garth?

I know they’re more expensive in Canada than elsewhere, but aren’t they still interesting?

I read somewhere hat the index funds were more interesting when you invest below 50k.
Less transaction feeds or something. Can’t remember.

#13 Freedom First on 11.04.13 at 8:38 pm

Great advice as usual Garth!

Got me thinking. I use a Direct Investing account to buy ETF’s etc. , so I rarely have to talk to anyone, however, I notice when I do have to talk to a person, like to buy Real Return Bonds, it is always a male I am talking to. Now, although I have never owned any mutual funds, as I saw they always were a ripoff, the salesperson at the bank, [email protected], is always a cute little babe selling the mutual funds. Just wondering Garth, do you know the stats on whether men buy more mutual funds than women? Because, I am also aware that the banks do not sell ETF’s, and because of this, my no fee bank I deal at for my daily stuff is always after me with info on TFSA’s. I always tell them, if it is a face to face conversation, that my TFSA’s are maxed out, and they just look at me with a puzzled expression. Just makes me shudder to think of all of the Canadians who have their TFSA, if they even have one, in a savings account at their bank. I know you have given us the # of $$$$ in TFSA’s that Canadians have in those savings accounts, so I understand the puzzled looks, or dumb questions I get from the bank employees.

#14 johnny d on 11.04.13 at 8:42 pm

Still some fun etf’s to gamble with out there. Commodity based etf’s are roller coaster rides. Anyone wanna hop on HNU with me? Haha

#15 Smoking Man on 11.04.13 at 8:44 pm

#9 not 1st on 11.04.13 at 8:31 pm
This is for Smoking Man…never to late to reconsider your habits.

http://www.businessinsider.com/how-smoking-ages-the-face-of-identical-twins-2013-11
………………………………………………………..

Interesting, Old smokers. Notice no Fat people, they die before they hit that age.

I will take my chances, after all I am a gambling man.

#16 Andrewski on 11.04.13 at 8:48 pm

BB’s now departed CEO’s last listed sell of BB stock was: 10/01/13.
Heins, Thorsten Gerhard.
Director of Issuer
-65,162 Acquisition or disposition in the public market at $7.929 – $7.929 per share.
-$516,669
That’s gross proceeds of over half a mil! (& that was just his last stock sale).

#17 Steve on 11.04.13 at 8:55 pm

#12 BG

Usually you hear that about index funds because even though MERs are usually higher compared to ETFs, there’s no commission. So if you’re making small contributions every week or month to build an account it can be a lot more cost effective once you factor in commissions.

However, more and more places are offering certain commission free ETFs and Questrade actually has zero commission on ALL ETF purchases (you still pay them when you sell them).

#18 TEMPLE on 11.04.13 at 8:57 pm

The big advantage over having a few stocks, of course, is that you get to own oodles more companies (or bonds etc.), and this diversification smooths out risk. For example, on Monday Blackberry stock lost a sickening 16% of its value. But on the same day the ETF holding all of the 60 biggest companies in Canada (including Blackberry), XIU, lost nothing while gaining more than 8% in the past twelve months.

Garth, I am going to correct the above paragraph for you. No charge (I’m cheaper than an ETF). Here we go:

The big disadvantage over having a few stocks, of course, is that you own oodles more companies, and this diversification reduces returns. Although Blackberry stock lost a sickening 16% of its value today, this is a straw man argument against investing in individual stocks. On the same day, the ETF holding all of the 60 biggest companies in Canada (including Blackberry), XIU, made nothing.

TEMPLE

No correction whatsoever. — Garth

#19 macduff on 11.04.13 at 8:59 pm

I was under the impression that with non-registered accounts, mutual fund management fees are tax deductible. Is this incorrect?

Incorrect. — Garth

#20 T.O. Bubble Boy on 11.04.13 at 9:01 pm

@ #6 Smoking Man on 11.04.13 at 8:26 pm
#2 T.O. Bubble Boy on 11.04.13 at 8:07 pm

writing was on the wall, but TO bubble boy you never short a take over target, ever.
———————–

Agreed – I would never have bought or shorted in the current climate… time to short is when it was on top of the world, and Oprah and Obama were addicted to their crackberries.

(just like Apple last year – we can all now watch it fall for the next 5 years)

#21 Ralph Cramdown on 11.04.13 at 9:09 pm

ETFs are this year’s fashion. Now that the message is out that ETFs are better than mutual funds because they index and have low fees, every wannabe fund manager out there is building actively managed ETFs, or creating fifty sector ETFs with the tacit promise that those that don’t grow to mid 8 figures in assets within a few years will be merged or killed off.

So make sure your ETF really is low fee, has decent AUM, and volume if selling when you want to is important to you. If it is actively managed, make sure you’re comfortable with the strategy. And, once you’ve found your perfect ETF, if you need cash to buy it, just short GLD.

#22 Smoking Man on 11.04.13 at 9:09 pm

What a Toronto Star Reporter does when his not pumping real estate or Ford bashing.

http://dyslexicsmokingman.blogspot.ca/2013/11/girly-men.html

#23 MarcFromOttawa on 11.04.13 at 9:21 pm

Is it worth owning US listed ETFs in a non-registered portfolio considering there’s a 15% withholding tax on dividends (after filling out the W-8BEN form)?

#24 magnanimousmatt on 11.04.13 at 9:23 pm

cool, garth ive been putting my money into td eseries index funds. specifically the us index which tracks the s&p 500 mostly. whats your opinion of the eseries funds ?

#25 Macrath on 11.04.13 at 9:28 pm

A good documentary on a high frequency quant turned whistle blower.

http://www.zerohedge.com/news/2013-11-04/exposing-wall-streets-hidden-code

#26 Serge on 11.04.13 at 9:30 pm

GTA Weekly Drop – November 2, 2013 with DOM

http://gtapricedrop.blogspot.ca/2013/11/gta-weekly-drop-november-2-2013.html

#27 Victor V on 11.04.13 at 9:33 pm

#20 T.O. Bubble Boy

If you’re so confident AAPL is going to sink in the years ahead, then you should be shorting it.

Easy money? Pull the trigger…

#28 not 1st on 11.04.13 at 9:33 pm

This post is totally the reason why I don’t buy tech. Any industry that eats itself every 12-18 months is nowhere to put your money. Financials, commodities, consumer cyclicals much more secure.

#29 Renter's Revenge! on 11.04.13 at 9:41 pm

The top ten holdings of XIU comprise 46.5% of the fund’s total holdings. How hard would it be to take your funds allocated for Canadian equities and buy the individual stocks instead? You pay commissions either way, and you don’t have to pay any management fees at all. Sprinkle in some picks from #11 down and you’re set. Avoid the gold producers, pick up some potash producers while they’re still down, whatever you want. Investing should be fun!

#30 sheane wallace on 11.04.13 at 9:43 pm

yep,

mutual funds sick
etfs rock.

#31 sheane wallace on 11.04.13 at 9:47 pm

Is it worth owning US listed ETFs in a non-registered portfolio considering there’s a 15% withholding tax on dividends (after filling out the W-8BEN form)?
————————

If your dividend is 4 % you are taking haircut of 0.45 % yearly.

#32 sheane wallace on 11.04.13 at 9:48 pm

but canadian dividends are taxed at 15 % on non registered account as well, correct?

#33 Retired Boomer - WI on 11.04.13 at 9:51 pm

Garth – Tonight your advice was a bit off the mark.

Here’s why.

Timing. When you are in the accumulation phase (working) you probably are in an employer’s retirement plan. There your choices are limited, sometime severely, others maybe not too much. Even if you are contributing to a tax deferred plan outside of work, you are likely doing so every pay check.
To buy into an ETF every pay day insure a brokerage charge. If you had say, a low cost index fund available, a better place to go during the early days of the accumulation phase.
Later on when you have a grand or more, sure buy into the ETF.

I am an American, we have access to index funds from .05% and no transaction costs available here. I own numerous mutual funds that charge only .10% a year to own. I do own one ETF. Not sure those low costs translate across borders, but here ETF fees can run higher than the least expensive Index funds. Costs DO matter!

Sure we have expensive (usually under performing against their respective index) mutual funds available here, with front end loads, 12b 1 fees, high annual expenses of 2% or more which can steal up to two thirds of your investment dollars over say a 50 year time period.

These STILL attract suckers, I mean investors.
Caveat Emptor!! It Still applies in 2013

#34 TheThorn on 11.04.13 at 9:53 pm

Hi Garth,

I just saw an add on MLS where the owner (seller) is offering to rent their sold home… like a DIY reverse mortgage.

Behold the future….

#35 Cici on 11.04.13 at 9:55 pm

# 3 Devore

Probably because the manager would have to sell the profitable securities within the MF in order to redeem fundholders, thereby leaving behind the non-performing securities that debase its overall value.

#36 joe on 11.04.13 at 10:05 pm

Mutual funds are not that bad. With about 2% fees, they still gave me about 7% returns since last year, especially with the last last month or so.

And the nice lady @ the bank tells me I can deduct the fees on tax time at the end of the year…so maybe even more than 7%

Also over time, the more you hold, the fees go down…to 1.75 and close to 1% if your up there

I don’t know, but I trust the bank more than the individual advisor, and paying that extra 1% makes me feel safer…

I want to be proven wrong, but I just havne’t found that advisor yet.

Go with the bank that lied to you. Good choice. — Garth

#37 Cici on 11.04.13 at 10:06 pm

# 5 Smoking Man

That was the most insulting and sexist piece of trash I’ve read in a long time.

And no, Ford does not get my sympathy just for being an overly confident, red-neck with “testosterone.”

And I wrote of all of that in a very low-pitch growl. Hear me ROAR!

#38 Daisy Mae on 11.04.13 at 10:10 pm

I bought a copy of Bill Brysons’ ONE SUMMER – AMERICA 1927 today at Chapters.

QUOTE: “It is a little hard to imagine now, but Americans in the 1920s had grown up in a world in which most of the most important things happened in Europe. Now suddenly America was dominant in nearly every field — in popular culture, finance and banking, military might, invention and technology. The center of gravity for the planet was moving to the other side of the world, and Charles Lindbergh’s flight somehow became the culminating expression of that.”

I expect it will be good reading.

#39 Obvious Truth on 11.04.13 at 10:10 pm

Etfs have become important no matter how much wealth you have. They have become the defacto way to interpret flows. Institution has a pile of new cash. Go with low risk Eft. New margin money. Low risk index buy. The triples show hot money.

Personally I never own more than about a dozen individual securities. That’s about two per important sector that I can keep an eye on. Always ready to rotate or trim on run ups to earnings.

Sat outside store recently. 9 of 10 people leaving the store made a purchase. Noticed local bell store changed all galaxy posters to iPhone.

Please short apple. The more people that can’t read a balance sheet or go to a mall the better.

Fb and aapl were gifts this summer. Nothing like that left now. Except maybe gold. A flush for tax loss would be nice. Even bad earnings won’t give us 2 seconds to snap up a deal. Might have to buy potash if they trash it in December. Or just moo.

#40 Marco Polo on 11.04.13 at 10:10 pm

While I agree with Garth’s approach to investing, there are still some long term, mostly safer resource stocks which appear undervalued, and given a long investment horizon over many decades, they may return significant rewards. Large mining companies; gold, potash, aluminum, uranium, and natural gas producers are all cheap now. For a younger person, these may be part of a balanced investment approach, as well as ETF’s. Unless we’re throwing stones at each other in the next decade, and digging up our yellow rocks out of the flower garden to pay the bills…

You can the same companies in an ETF with far less risk and volatility. — Garth

#41 JimmyAAA on 11.04.13 at 10:11 pm

#33 Retired Boomer – WI on 11.04.13 at 9:51 pm
Even if you are contributing to a tax deferred plan outside of work, you are likely doing so every pay check.
To buy into an ETF every pay day insure a brokerage charge. If you had say, a low cost index fund available, a better place to go during the early days of the accumulation phase.
Later on when you have a grand or more, sure buy into the ETF.

=====================================
Questrade charges no commissions for purchases of ETFs.

http://www.questrade.com/trading/services/free_etf

#42 [email protected] on 11.04.13 at 10:15 pm

Some of the good mf that were hit hard in 2008 are doing 30% this year. The interesting note is everything suddenly gained this year. What’s so special about 2013?

#43 Garth's Disciple on 11.04.13 at 10:17 pm

“And why they don’t sell them at the bank.”

Exactly.

Every time I walk into my RBC branch and the tellers see that I have no RBC mortgage and I don’t have RBC mutual funds….I get pitched these products. When I decline both and say, “I am renting my family residence while I wait for real estate prices to decline so I am not interested in RBC mortgage products, and I invest in ETFs and I am not interested in RBC mutual funds” the tellers look at me with bewilderment…”House prices will continue to rise from immigration demand, and what is an ETF?”

#44 Carpe Diem on 11.04.13 at 10:17 pm

TO: #23 MarcFromOttawa

Is it worth owning US listed ETFs in a non-registered portfolio considering there’s a 15% withholding tax on dividends (after filling out the W-8BEN form)?

——

Better have those in RRSPs since those don’t get taxed in there. From my readings, the withholding tax happens in TFSAs and non-registered accounts.

But now I have the W-8BEN form ….

#45 on a train bound for nowhere on 11.04.13 at 10:18 pm

It is like this post was aimed directly at me. I know it isn’t.. but what a coincidence! Garth. I invested 70% of my savings on a upstart oil drilling penny stock. For real and I don’t think I am crazy. It is like you just tried slapping some reason into me.

TID.TO, Tuscany International Drilling which is trading at 0.13-.14 cents currently. Walter Dawson is the CEO. I was playing it safe, originally with a perfectly balanced portfolio based on the couch potato example. But then again, I have the luxury of time. So I decided to gamble like some crazy cowboy. I am gambling also on TRQ (which is mixed up with Rio Tinto in Mongolio with that big billion dollar copper mine).

Anyhow I am waiting on the Q3 report due on Nov 7 (and especially the Q4 in January) to prove it isn’t such a bad idea.

#46 Mehdi on 11.04.13 at 10:19 pm

Hi Garth

Thanks, as always, for the invaluable info. You recommend using fee-based advisers, so would you please help us get to such guys? Is there a directory one can use?

Much appreciated!

#47 fencesitter on 11.04.13 at 10:19 pm

You’ve probably posted this piece of advice multiple times but its always helpful to the new readers and serves as a refresher to the regular readers. Thanks a ton garth.

#48 Inglorious Investor on 11.04.13 at 10:21 pm

The Real Costs of Mutual Funds

If you had a portfolio of mutual funds that was returning an average, annual gross 7% per year, how much money would you make after covering all the costs? Well, let’s run down the costs based on a few basic assumptions and see where we stand:

1) MER and commission = 2.5%*
2) Taxes (@ 30% average tax rate) = 2.1%**
3) Inflation: 3%†

Total cost: 2.5% + 2.1% + 3% = 7.6%
Total return: (0.6%)

Therefore, you will be left a negative real return.

* The total costs of owning traditional mutual funds sold by a commissioned advisor could actually be significantly higher (see http://www.forbes.com/2011/04/04/real-cost-mutual-fund-taxes-fees-retirement-bernicke.html). However, today there are low-cost, no-commission funds available. Just keep in mind that many costs are hidden, so MER does not tell the whole story.

** Whether you hold MFs in a registered or non-registerted account, at some point you will pay taxes on your “gains.” Putting funds into RRSPs could actually be worse for tax purposes if income tax rates be higher in the future.

† CPI is currently lower than 3%, but 1) CPI has averaged about 3% over the past 30 years or so, and 2) CPI is becoming increasingly unreliable anyway. In actuality, inflation is probably currently much higher than 3%––e.g. energy, housing, education, food, healthcare, etc.

Perhaps “MF” is actually an apropos acronym for mutual funds.

Happy investing!

#49 Snowboid on 11.04.13 at 10:27 pm

#9 not 1st on 11.04.13 at 8:31 pm…

Smoking man at 30…

http://tinyurl.com/YoungSM

Smoking man today in a couple of years…

http://tinyurl.com/SM-at-age-60

#50 Smoking Man on 11.04.13 at 10:27 pm

#37 Cici on 11.04.13 at 10:06 pm
# 5 Smoking Man

That was the most insulting and sexist piece of trash I’ve read in a long time.

And no, Ford does not get my sympathy just for being an overly confident, red-neck with “testosterone.”

And I wrote of all of that in a very low-pitch growl. Hear me ROAR!
…………………………………….

My Moto.

“You can’t bend what you can’t offend”

please don’t take that the wrong way.

:)>

#51 Julia on 11.04.13 at 10:28 pm

#5 Smoking Man on 11.04.13 at 8:18 pm

If people spoke about African Canadians or Jewish people the way it’s totally tolerated to speak about women and so called feminine behaviour it would be considered a hate crime. But we have to put up with it constantly or else we’re accused of having no sense of humour. Just saying.

#52 X on 11.04.13 at 10:34 pm

32 – no tax on canadian dividends in non registered account.

36 – with an etf with the same holdings you would have made about 8.8%. That difference adds up over the years.

Good luck deducting you mutual fund fees.

#53 Tiger on 11.04.13 at 10:35 pm

Wow day light savings time , it happens out here in the west fall and spring it just is wrong fall back 1 hour spring ahead 1 hour could be a brain storm of don d wests and western mans old man!!! Are they just following a family tradition!
Can’t eat that , tobasco sauce couldn’t make taste better

#54 Tiger on 11.04.13 at 10:38 pm

Thanks smoking man , are you a investigator ass well! LOL

#55 Tiger on 11.04.13 at 10:40 pm

Sorry spose to read as well!

#56 Cici on 11.04.13 at 10:41 pm

#42 [email protected]

Supposedly the debt ceiling crisis scared some money out of the US and into the safer haven of Canadian markets.

#57 Turd Durden on 11.04.13 at 10:42 pm

November is Financial Literacy Month and Professor Turner is handing out free lessons..

BTW I dropped by Scotia Banks web site and they have no mention that you can put an ETF into a TFSA. You can buy their funds and GIC’s though… I see the big banks are doing their part to keep Canadians in the dark.

#58 Infused with Opiates on 11.04.13 at 10:45 pm

“That’s why ETFs rock. And why they don’t sell them at
the bank.”

BMO has ETFs

http://www.etfs.bmo.com/bmo-etfs/

They do not sell them at the bank. As stated. — Garth

#59 Scott in Gibsons on 11.04.13 at 10:48 pm

You may want to inform readers of “Advisor” class ETF’s

They pay a trailer fee to advisors, and I have never met anyone who employs them. — Garth

#60 he'satitagainma on 11.04.13 at 11:00 pm

Dude….saying that because BB went down that all stocks are bad is just silly. Don’t forget that every ETF in Canada also owned a smidge of BB.

#61 Smoking Man on 11.04.13 at 11:00 pm

#51 Julia on 11.04.13 at 10:28 pm
#5 Smoking Man on 11.04.13 at 8:18 pm

If people spoke about African Canadians or Jewish people the way it’s totally tolerated to speak about women and so called feminine behaviour it would be considered a hate crime. But we have to put up with it constantly or else we’re accused of having no sense of humour. Just saying.
…………………………………………

So If I was a female who wrote a book about getting abused by a men, called it 50 shades

thats cool,

But bashing scum bag reporters who scare the crap out of fords kids when they show up in the drive way, follow them on Halloween is not cool.

ET come get me now, I don’t belong here anymore.

Teachers they won

#62 David on 11.04.13 at 11:03 pm

@Retired Boomer
You can buy ETFs for free from multiple brokers. Questrade offers no commissions on all NA-listed funds. Shouldn’t you be waiting for buying opportunities instead of chucking money into your investments with every paycheque anyway?

And I know precious few individuals whose employers have a retirement plan for them to participate in, so I imagine most people are pretty free to build, or blow up, their portfolios as they see fit.

#63 Tiger on 11.04.13 at 11:05 pm

Will they come back as realtards , I know a guy that does three ids and three friends all end with west and or have west in them oh Paul ,your out out west arnt ya

#64 Matt on 11.04.13 at 11:09 pm

32- please consult an accountant with your specifics, but there are taxes for Canadian dividends in a non registered account. That’s simplified as each case differs with dividend tax credits and your income

#65 Bob Rice on 11.04.13 at 11:21 pm

Read a book recently (Millionaire Teacher) that really pushed the merits of Index Funds. Can anyone explain the difference between ETFs and Index funds or are they basically the same thing?

Thanks.

#66 Tiger on 11.04.13 at 11:21 pm

Top producers earn top wages know way they would shop in India ,they only shop the Mac jobs bro and only till robots can do it it’s just a waiting thing management thing got to go now

#67 Reverend No Money on 11.04.13 at 11:23 pm

Ah, Cowboy Gene. He played guitar and sang at a party I was at a while ago. When he was finished he sold us all shares in his new cd, haven’t of or from him since.

#68 John Prine on 11.04.13 at 11:26 pm

Can I buy ETF’s on my TD Waterhouse account? Where is the best place to compare different ones?

#69 Christopher Lackey on 11.04.13 at 11:31 pm

Let’s see the past year. REIT ETFs, Corporate Bond ETFs, DEX universal bond ETFs, preferred share ETFs, preferred shares. All down. Granted they pay yields but ETFs also charge management fees, albeit small, and with several (like XRE) it is not hard to hold the holdings directly.

And you think the MSCI EAFE and the S&P and the NIKKEI and the Russell 2000 still have juice in the tank after all the recent gains? There is a lot of investor euphoria and consequently, risk in the indexes right now.

There are plenty of cheap,undervalued companies to invest in right now if you do your research. ETFs are not a panacea.

You’re funny. You dis diversified and balanced holdings, and pump stocks. Good luck with that. — Garth

#70 PurrPurrJones on 11.04.13 at 11:35 pm

ETF’s are ok for DIY investors. With that said advisors who sell them to you usually charge more in commissions i.e. 1.25%-1.50% annually which is more than the 1% they would make off a MF “trailer” fee. For the advisor it is a win win…the all in cost comes in lower than a comparable MF yet they make 50% more in commissions + they never have to talk about performance or underperformance as the ETF will “track” the index minus the hefty commissions the advisor charges minus tracking error. So you are certain to underperform the index by a large amount each year when you factor in the above. Plus fee based investing which is what this is usually ends up higher on the commissions grid at the brokers bank or investment firm… buyer beware…

Completely false. — Garth

#71 Ralph Cramdown on 11.04.13 at 11:37 pm

#62 David — “Shouldn’t you be waiting for buying opportunities instead of chucking money into your investments with every paycheque anyway?”

Most people shouldn’t, no. Investing with every paycheque is paying yourself first, and it’s dollar cost averaging, and most people are terrible market timers. They sit out months of big bull markets promising that they’ll buy in on the first 10% correction. Then the correction finally comes and they don’t know when to pull the trigger so they don’t buy until the new rally has erased almost the entire correction. Or they’re on vacation when the correction happens. Or they get sick of waiting for the correction so they spend the sidelined money on the vacation…

#72 PurrPurrJones on 11.04.13 at 11:42 pm

Further to my comments in 65..provided it gets appoved.

This is the type of stuff I am talking about

http://www.theglobeandmail.com/globe-investor/personal-finance/etfs-spurring-shift-to-fee-based-advice/article545003/

“Usually, clients need a fairly significant amount of assets to qualify for a fee-based account. Mr. DeGoey, for example, generally has a minimum account size of $250,000. He charges 1.4 per cent on the first $250,000, and 0.6 per cent on any amounts over that. So a client with $500,000 would pay a blended fee of 1 per cent”.

You are going to pay 1.4% for 250k…are you kidding?

Anything over 1 per cent is too much. — Garth

#73 NoOneOfConsequence on 11.04.13 at 11:43 pm

There is an awful lot of talk about TFSA and how ‘awesome’ they are.

Well…the TFSA downside is the government knows where your money is. Don’t make the grievous error of having your TFSA at the same bank as any of your other assets like chequing/saving account.

For the 57% in debt and on the edge….you are just providing a convenient way for creditors to find your money.

At least RRSP’s are somewhat shielded from creditors.

#74 Seth on 11.04.13 at 11:47 pm

As I understand it’s not simply MF versus ETF. It’s more a matter of what serves your financial situation best.

Index mutual funds are an excellent choice for DIY investors with lower value portfolios (say $50,000), changing to ETFs only when the value can sufficiently outperform annual brokerage fees.

The mutual account (I use TD) is still self-directed, and so only gets hit with a low MER, and not an advisor fee. This opposed to a brokerage account, needed for ETFs, where the returns would be washed away by annual fees due to the lower portfolio value. When I hit that breaking point ($50k+), it makes sense to convert over.

#75 wykidajlo on 11.04.13 at 11:47 pm

#5 Smoking Man on 11.04.13 at 8:18 pm

Nice post

little pipe adventure vs 1 billion in canceled power plants
balanced budget vs 9.2 billion deficit
…………….. there is more

… ppl need to be ****** not to realize that they can’t spend forever more then they make. Unless you are politician and have dumb tax payers to bail you out and then vote for you again, again, again …..

Maybe some ppl need dictators?

#76 T.O. Bubble Boy on 11.04.13 at 11:57 pm

@ #27 Victor V on 11.04.13 at 9:33 pm
#20 T.O. Bubble Boy

If you’re so confident AAPL is going to sink in the years ahead, then you should be shorting it.

Easy money? Pull the trigger…
————————
Will do… I’ve witnessed Sony, Palm, RIM, and every other device company peak and then decline. If it bounces back even close to where it was at the peak (about $700/share, or $650B in market cap). If it hits $600 Billion in Market Cap again, I’ll definitely pull the trigger.

Right now, with Carl Icahn shenanigans going on, it is more unpredictable. But, regardless, he’s only in for short-term gains from some kind of financial engineering. The trend will be down long term, just look at the margin and EPS trends for the reasons why.

#77 Smoking Man on 11.04.13 at 11:57 pm

Females, is it ok to use that term, I’m not sure?

At the tax farm we have females, bright as hell, aggressive, hard ass take no prisoners. I would not f with them ever. All commanding over 7 figure incomes. The eat what they kill. I like that. Not push overs

But one day, one of them got new shoes, and a bag.

They all went girly…

In no way do intend on diminishing you ability and success. I’m Not like that.

But when MEN go girly…and don’t come back. and mob the fat kid. I got a problem with that.

Hope you understand

#78 Calgary Car Guy on 11.05.13 at 12:00 am

#37 Cici re/#5 Smoking Man
Yeah, it was over the top but I had a good laugh at “a hard kick to the growing”. Lighten up.

#79 HAWK on 11.05.13 at 12:03 am

#36 joe on 11.04.13 at 10:05 pm

Trusting large organizations, particularly banks is the most fatal mistake most people make, although in an unjust world one has to recognize that this is to some extent forced on us by governments, in cahoots with them.

The only thing “better” about large organizations are their systems, as far as personal integrity goes, time and again we have seen large banks destroy more lives globally than pretty much any other category of business………………..far more so than even Real Estate Cartels.

#80 T.O. Bubble Boy on 11.05.13 at 12:04 am

@ #23 MarcFromOttawa on 11.04.13 at 9:21 pm
Is it worth owning US listed ETFs in a non-registered portfolio considering there’s a 15% withholding tax on dividends (after filling out the W-8BEN form)?
———————————–

As some others noted…. a 15% withholding on a 3%-4% dividend is a minor consideration in the big picture.

If you are buying the stocks/ETFs purely for income, then the RRSP would be an option. However, most would be buying U.S. equities for the capital gains (or, at least, some mix of capital gains and dividends).

Overall, if you have RRSP room, and you are in a reasonably high tax bracket, it probably makes sense to use it.

#81 Son of Ponzi on 11.05.13 at 12:05 am

Sadly, but this blog has become the battle ground of RE pushers vs. the stock market pushers.
As Garth pointed out, this will not end well.
Amen.

#82 2or3orsometimes7 on 11.05.13 at 12:11 am

I’ve heard some grumblings that the stock market is overinflated compared to incomes, and that it will correct. Garth?

#83 Son of Ponzi on 11.05.13 at 12:12 am

The offers on my BauHaus outhouse are still coming in.
Lot’s of interest from off shore buyers.

#84 Devore on 11.05.13 at 12:53 am

#35 Cici

Probably because the manager would have to sell the profitable securities within the MF in order to redeem fundholders, thereby leaving behind the non-performing securities that debase its overall value.

In a high redemptions scenario, they could sell a cross section of assets, roughly corresponding to their weights, or even take the opportunity to do some rebalancing. In any case, it would be no different from an ETF.

#85 Freedom First on 11.05.13 at 1:04 am

#61 Smoking Man

Smoking Man. Great post. You nailed it, and I am glad you are arranging for ET to come and get you, as you and I know their is no seat on the lifeboats of the Titanic for us guys. Real men don’t give a $hit what you say Julia.

#86 Tony on 11.05.13 at 1:58 am

Re: #2 T.O. Bubble Boy on 11.04.13 at 8:07 pm

You got the general idea which is to short all Canadian hi-tech stocks. If you can hold out long enough a veritable fortune is assured. It looks like wi-lan will be the next one to go kerplunk.

#87 Rocko on 11.05.13 at 2:29 am

I am one of those Alberta cowboys. Bought up lots of penny stocks. Some good, some bad. Meh, it pretty much is gambling but look at the history of the junior mining companies in canada over the past 10-15 years. Up and down they go. Who knows, maybe i’ll get lucky one of these days, bound to happen eventually. Everyone will retreat to gold again one day…just as sure as house prices will sink one day…hmmm.

Wrote this from my Q10, best phone on the market. Iphones are for 15 year olds and android annoys me. Too bad blackberry has such morons at the helm, took them 5 years to come out with a phone that could compete.

#88 Waterloo Resident on 11.05.13 at 2:33 am

ETFs:

2-X the S&P = SSO

3-X the S&P = SPXL , UPRO

#89 Shawn on 11.05.13 at 2:44 am

SHOULD MUTUAL FUND MANAGEMENT FEES BE TAX DEDUCTIBLE?

I was under the impression that with non-registered accounts, mutual fund management fees are tax deductible. Is this incorrect?

Incorrect. — Garth

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

For some reason I find this a tough question.

Let’s see if I have money with a portfolio manager the fee IS tax deductible. Say the stocks make 8%, but only 7% after the fee. I pay tax on the 7% so in some ways the 1% fee already gave me a lower tax…

But then with a portfolio manager I get to deduct the fee again… as tax deduction… is this a double deduction?

With mutual funds the MER lowers my return and therefore lowers my tax bill. But no further deduction.

Should we allow the MER to be a tax deduction or have we already sort of benefited because it reduced our return and therefore tax bill?

Should the current deduction for fees paid to a portfolio manager be eliminated as double deduction?

Ralph Cramdown what do you think?

I am honestly confused on this one.

#90 Francis on 11.05.13 at 3:07 am

“And why they don’t sell them at the bank.”

Sorry but BMO got ETF and are often the lowest mer and are usualy the best canadian assets class.

But I agree, the probably wont tell you about ETF if go see your adviser at the bank even at BMO.

As stated, they are not sold at the branch. — Garth

#91 AngryMan127 on 11.05.13 at 3:16 am

Individual Canadian equities are for insiders; the game is fixed. There is no appetite in Canada to seriously investigate and prosecute securities violations. Ironically, much of the information of Canadian securities fraud comes from the SEC.

Good advice on ETFs Garth but I would suggest to your loyal readers that they research buying American ETFs only and lobby their MPs for tougher enforcement.

#92 P.Bocanegra on 11.05.13 at 3:28 am

#61
You post nothing but stupid gibberish. Get a life.

#93 Steve French on 11.05.13 at 6:41 am

Smoking Man:

Careful dude… Dudist Priests are certainly not anti-feminists (or those who are “strongly vaginal” in the parlance of our times).

Both men and women are fully capable of becoming Dudes.

http://dudespaper.com/dudeism-for-chicks.html/

“It’s The Dude’s ability to transcend the chaos with grace and patience that makes him the hero. These characteristics have nothing to do with his gender or what-have-you. His ability to float past the rough edges on the people around him allows him to, literally, “abide.”

This is the great lesson of The Big Lebowski; all of us have parts that are broken and some of us are sociopaths. The sooner we just accept that, the sooner we can coexist with those who are capable of coexistence and sidestep those who are not. So while The Big Lebowski is set in a predominately male world, the genders of the individual characters matter less and less as you manage to accept interesting, dysfunctional people for who they are. That’s the essence of abiding.”

Peace out dude…

#94 Satt on 11.05.13 at 7:09 am

I was influenced by my bank to invest the RESP savings into Mutual funds as we still have 15 +years to use them for education . Am I doing anything incorrect ? please advice if I can or have to move to ETF’s .

#95 Smoking Man on 11.05.13 at 7:39 am

#91 Steve French on 11.05.13 at 6:41 am
Smoking Man:Careful dude… Dudist Priests are certainly not anti-feminists (or those who are “strongly vaginal” in the parlance of our times).

How did you get anti-feminist from my rant.?

I’m anti-girly men picking on fat kids.

I will never use the word feminist again, fearing being cornered by a raging mob with estrogen filled water balloons, attacking with them.

The horror

Does this mean I’m x communicated as a Dudist Priest.

#96 TurnerNation on 11.05.13 at 8:33 am

Just saw this one:

Calgary-based natural gas giant Encana cutting workforce by 20 per cent

CTV News – 20 minutes ago

CALGARY — Canadian natural gas giant Encana Corp. says it will cut its workforce by 20 per cent, close its office in Plano, Texas, and spin off a large portion of its Alberta assets into a separate public company.
Encana laying off 20% of workers CBC.ca
Encana to slash jobs, spin off properties in sweeping overhaul The Globe and Mail

#97 Buy High on 11.05.13 at 8:51 am

Hey Garth,

I have a small RRSP – around $60,0000. I doubt my income will get any lower as I grow older. I won’t be contributing any more to RRSP’s. I was thinking of starting to collapse it. Do you think if I do by only $5000 a year it is a bad idea?

If you don’t need the income, yes. — Garth

#98 Ralph Cramdown on 11.05.13 at 8:52 am

#87 Shawn — “Should we allow the MER to be a tax deduction or have we already sort of benefited because it reduced our return and therefore tax bill? Should the current deduction for fees paid to a portfolio manager be eliminated as double deduction?”

I’m not entirely clear on how the current system works. Predictably, a quick scan of industry information didn’t help. Here’s a few principles I suspect to be true:

– the financial industry is an effective lobbyist, and has the ear of the revenue and finance departments, so double taxation is unlikely
– revenue never ignores a large source of possible tax, so non-taxation is unlikely
– focusing on whether the tax rate on the fee is fair misses the main target. Most active managers don’t add enough alpha to cover the fee, most investors are lousy at picking alpha-adding managers ex-ante, and investors are even worse at understanding the difference fees make, compounded exponentially over long periods.

One dollar compounded at 7% over 40 years is about $15, but one dollar compounded at 6% over 40 years is about $10. Picking a lower fee fund over a higher fee one will make a huge difference in your retirement. #36 joe is the embodiment of this error.

People who don’t understand should read more Jack Bogle.

#99 AfterTheHouseSold on 11.05.13 at 8:54 am

#65 Bob Rice TD e-series vs ETFs
#68 John Prine TD brokerage

Carefully reread page 111 of Millionaire Teacher regarding the low cost e-series funds. The ones you want “can only purchase them on line…”. Beware of [email protected] who will try to flog the similar sounding funds with high fees. Build your e-series portfolio to $50,000. then switch over to ETFs through your brokerage account.

#100 Inglorious Investor on 11.05.13 at 9:07 am

#65 Bob Rice on 11.04.13 at 11:21 pm

“Can anyone explain the difference between ETFs and Index funds or are they basically the same thing?”

Think of ETFs as MFs that are just tradable like stocks. Within the universe of both ETFs and MFs there is a range of options: actively managed funds, index funds, currency funds, commodity funds, leveraged funds, inverse funds etc. These funds can have vastly different risk/reward profiles.

Index funds (ETF or MF) are simply funds that attempt to mimic a target index or sector (e.g. S&P 500, Russell 2000, etc.) by purchasing the target index’s constituent securities in corresponding weights.

Both ETFs and MFs have MERs, which can very significantly from fund to fund. Some ETFs MERs are a fraction of a percent, while others have MERs well over 1%.

Always keep in mind the value maxim: You get what you pay for. Make sure you understand what you are buying (read the fine print) and that what you are buying is suited for you.

#101 Morgan on 11.05.13 at 9:11 am

#37 Cici on 11.04.13 at 10:06 pm on # 5 Smoking Man – Yeah, that was a stellar example of someone using sexism to control men’s behaviour. Don’t do X… or you’re not a ‘Real’ man! You’re an icky girl with girly… shoes… manicures… girly…something something… I don’t like girls (but I’m not gay ’cause that’s girly too).

Do people really fall for this?

Oh yeah, and about ETFs… qtrade has a list of ones you can acquire without fees. I’ve always assumed those ones have hidden costs and/or are the dogs of the ETF market? True? False? Any experiences to share?

#102 Julia on 11.05.13 at 9:18 am

#94 Smoking Man on 11.05.13 at 7:39 am

So you are not anti women you are anti girly men. Well, to each his own. Personally I find girly men are much sexier than neanderthal men, but that’s just me. I agree though that no one should pick on people because they are fat. Good thing the mayor’s weight is the least of what makes him distasteful. Don’t forget that more boys are bullied for being what you call “girly” than for being over weight.

#103 jess on 11.05.13 at 9:29 am

The data act

Tuesday, November 05, 2013
Ex minister in UK tax haven of Jersey to be jailed over blog

Jersey’s former health minister has been sentenced to three months in prison after refusing to take down articles on his blog making serious allegations against a number of people on the island

http://www.theguardian.com/uk-news/2013/nov/04/jersey-stuart-syvret-jailed-blog-allegations

http://taxjustice.blogspot.co.uk/2013/11/ex-minister-in-uk-tax-haven-of-jersey.html-

#104 Nemesis on 11.05.13 at 9:35 am

This morning’s ‘Zen’ exists only by virtue of juxtaposition… and today’s QuantumFlow would seem to be trying to tell us something…

[G&M] – Encana to slash jobs, spin off properties in sweeping overhaul

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/encana-to-slash-jobs-spin-off-properties-in-sweeping-overhaul/article15261101/

[Reuters] – Cognizant beats estimates as demand for outsourcing grows

http://www.reuters.com/article/2013/11/05/us-cognizant-results-idUSBRE9A40EK20131105

[G&M] – Food-bank usage still near record levels in Canada, study says

http://www.theglobeandmail.com/news/national/food-bank-usage-still-near-record-levels-in-canada-study-says/article15258855/

[G&M] – Toronto tailor introduces bulletproof three-piece suits

http://www.theglobeandmail.com/technology/science/threads-of-life-toronto-tailor-introduces-bulletproof-three-piece-suits/article15260012/

#105 Buy High on 11.05.13 at 9:47 am

#96 – “Do you think if I do by only $5000 a year it is a bad idea?

If you don’t need the income, yes. — Garth”
——————————————————–
Clarification please. Does your YES mean it’s a bad idea or a good one? Sorry.

If you don’t need the income, why take assets growing free of tax and turn them into taxable income? — Garth

#106 Squatter on 11.05.13 at 9:55 am

ppl need to be ****** not to realize that they can’t spend forever more then they make. Unless you are politician and have dumb tax payers to bail you out and then vote for you again, again, again …..

Maybe some ppl need dictators?
**********************************
We live in a monarchy sir.
Please send your request to Queen Elizabeth II.

#107 Shawn on 11.05.13 at 10:18 am

Should MERs be tax deductible

#87 Shawn — “Should we allow the MER to be a tax deduction or have we already sort of benefited because it reduced our return and therefore tax bill? Should the current deduction for fees paid to a portfolio manager be eliminated as double deduction?”

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

Ralph thanks for the response.

I am about 99% sure that MERs should NOT be tax deductible since they ALREADY get deducted from the return on which tax is paid.

I probably confused matters by talking about fees to a portfolio manager which I believe are deductible but I agree that is unlikely to be double deduction. More likely the taxed return in that case is before the fee is deducted…

The point is people seem to want to ask for a tax deduction that they are already getting. I believe they are effectively already getting a deduction on MERs since their return is lower because of it.

I agree Ralph that mutual fund fees arr a bigger issue than their deductibility.

#108 Ralph Cramdown on 11.05.13 at 10:22 am

#81 Son of Ponzi — “Sadly, but this blog has become the battle ground of RE pushers vs. the stock market pushers.”

Or, people who are wise enough to save, to know the need to protect their savings from the ravages of inflation, and to attempt to grow them using conservative OPM strategies.

#109 economictsunami on 11.05.13 at 10:24 am

It’s not merely a case of capitalism versus any other form of market system; it’s the type of capitalism we are willing to endure.

The Official Video Documentary by Renegade Economist: The Four Horsemen

https://www.youtube.com/watch?v=5fbvquHSPJU

The status quo has got to go…

#110 Bob on 11.05.13 at 10:33 am

Wow, the MSM advocates renting instead of buying in certain cases

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/save-your-money-rent-dont-buy/article15257443/

#111 Herb on 11.05.13 at 10:49 am

#91 P.Bocanegra,

this blog is Smoking Man’s life.

#112 Holy Crap wheres the Tylenol on 11.05.13 at 11:19 am

Been there done that with Motorola, Samsung, Blackberry, Nokia, and Apple. I have owned every one of their technology’s at one point or another. I did purchase Blackberry stock twice and did quite well. I have purchased some Apple as well and done OK. Right now I have zero stocks in any of these guys. It really is a dynamic and highly volatile time in the Tech field. Could go either way. I have been there with Nortel back in the 90’s where I made a ton of cash and then held on to some of the stock until it became toilet paper. We where all caught up in the belief that Huge Corps like Nortel where absolutely infallible. Blackberry is following that same path unfortunately. I believe they will get bought out and get stripped down to nothing. My last foray was with Blackberry when I sold this year just in time to make a nice profit. Some of my friends did not bail out, bad choice! I belong to an old guys investment group. We all meet twice a month to talk about stock indices and directions from trending indicators. In other words we all take our best educated guess based on inferences and make some decisions then we all go on our way and meet up the next time to see who has done the best. Most of our group are retired and a few of us still run our companies. Its really a gambling club! Perhaps we should call it the Smoking Mans Club! Some of our decisions are based on gut feeling and not a logic choice. Investment clubs are a good excuse to go for a couple of drinks and a nice dinner out here in the boonies of Oakville.

#113 PurrPurrJones on 11.05.13 at 11:32 am

Garth – what I said is 100% correct. At the brokerage houses at the banks it’s true. The media needs to bring this to people’s attention.

MER tax deduction:

Decent explanation

http://www.steadyhand.com/industry/2010/07/08/management_fee_deductibility_clearing_the_air/

The mutual fund industry loves people to think they have fee deductibility, sort of, because their overall returns are diminished by fees before being added to taxable income. In part, that is correct. But I think most investors would rather enjoy a fully robust performance, with the ability to deduct an advisor’s (lower) fee from the highest-income earner in a marriage or common-law relationship. Spin as much as you like, but ETFs are lower-cost, more liquid and tax-efficient vehicles than dino funds. — Garth

#114 T.O. Bubble Boy on 11.05.13 at 12:00 pm

Good work KORS!
sold out this AM and will now turn off the cowboy gene for a little while

#115 Mike T. on 11.05.13 at 12:06 pm

#95 TurnerNation

did you also see this?

http://www.cbc.ca/news/canada/british-columbia/b-c-alberta-premiers-cancel-pipeline-meeting-1.2404544

I know it’s different energy products….

#116 Mike T. on 11.05.13 at 12:09 pm

I got one for Smoking Man as well

Here is a story of two guys with a thousand bucks and a dream….of one day being a smoking man (genuinely – I like your posts)

http://www.castanet.net/news/Kelowna/101886/Two-plane-tickets-1-000-and-a-plan

““We sat that night and talked about buying an island, somewhere in the world….”

#117 Rational Optimist on 11.05.13 at 12:21 pm

The response to #104 Buy High was: “If you don’t need the income, why take assets growing free of tax and turn them into taxable income? — Garth”

He doesn’t need the income, but he also expects to earn more in the future than now. The assets are growing tax free for now, but he is guaranteed to eventually withdraw them at an effective tax rate higher than what he pays now. It’s not a big account, but it could still be a tax bomb.

Why not withdraw 5K at the beginning of each year and use that as his contribution to his TFSA (making it truly tax-free growth)?

He stated his income would remain flat. But let’s recognize this ($5,000 annually) is a minor issue. — Garth

#118 Smoking Man on 11.05.13 at 12:30 pm

#114 Mike T. on 11.05.13 at 12:09 pm

Perfect, UOG success story… That’s how it’s done,
Guts and never give up. The piece always come together eventually. Done it many times.

Diplomas overrated.

#119 Canadian Watchdog on 11.05.13 at 12:42 pm

GTA housing buoyed by parents helping young buyers

CIBC economist Benjamin Tal believes that backstopping by Mom and Dad, coupled with low interest rates, has kept the first-time buying market far more buoyant than many experts had expected in the wake of the tougher mortgage lending rules imposed by Ottawa over the last four years.

He’s been aiming to study the issue for a year now, but says it’s very hard to determine how much help is being given, and in what form, because there is almost no research on the subject and most young buyers are too proud to talk about it openly.

“The (housing) market would have been much weaker if we didn’t have this phenomenon. There’s no question about that,” says Tal, deputy chief economist of CIBC World Markets.

So according to Tal this year, consumer delinquency ratios are down and now kids are borrowing from their parents to buy homes, yet he's still missing where all the magic (debt consolidation and short-term cash borrowing) is coming from relating to both claims, and that is personal loan plans.

#120 Victor V on 11.05.13 at 12:54 pm

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========

If these guys were financial advisors, they’d be going to jail for ‘suggesting’ these kinds of returns?

#121 Realtor # 1 on 11.05.13 at 1:01 pm

Mortgage brokers just dropped their 5 year rate!
Could we say “next year”

Predicted here a month ago. — Garth

#122 Smoking Man on 11.05.13 at 1:26 pm

FORD just admitted he smoked crack.

That’s a man…… Not perfect, did it when he was hammered, we all done dumb things when hammered.

Eat that Toronto Star, now what,

he’s not quiting. I Love it.

ROB you get a black belt from Smoking Man School.

#123 Shawn on 11.05.13 at 1:29 pm

Don’t Rush Assets out of RRSP

“If you don’t need the income, why take assets growing free of tax and turn them into taxable income? — Garth”

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

I agree, the benefit of deferring taxes can be huge.

It will seldom make sense to take assets out of RRSP and pay tax now versus leaving the assets in an paying tax later.

Only if income is much lower now than later will it make sense.

#124 Canadian Watchdog on 11.05.13 at 1:39 pm

So it’s true. Torontonians voted a crackhead to run the city.

@CBCNews

*Breaking: Mayor Ford says he smoked crack within the last year.
*RobFord says he is “not an addict”, that he had tried crack cocaine. Wants to move forward.
*I’ve made mistakes and all I can do is move on.” – Rob Ford
*Mayor Ford: I want to see the video so I can see the state I was in
*Toronto Mayor Rob Ford: ‘Yes I have smoked crack cocaine’

#125 PurrPurrJones on 11.05.13 at 1:56 pm

Garth – lets be clear I am not spinning anyting about MER and tax deducts. I was sharing a link with your readers that i thought they might find interesting – you are very defensive about this?

As for ETFs vs. MF ..again i don’t care..i want to make sure your readers know the “spin” the brokers put on etf and “cheap fees”. As for being more efficient…maybe if you purchase a http://www.purposeinvest.com/purpose-corporate-class-fund/innovation-for-the-etf-industry-and-low-fee-investing/ however there are a lot more options in the MF world for tax efficient investing..

Not defensive. It’s just ETFs are superior to mutual funds in all aspects. People should know that. — Garth

#126 Rational Optimist on 11.05.13 at 2:17 pm

He stated his income would remain flat. But let’s recognize this ($5,000 annually) is a minor issue. — Garth

Fair enough (on both points).

#127 Spiltbongwater on 11.05.13 at 2:21 pm

LOL at Rob Ford. He is the epitome of responcibility who gets in such a drunken stooper he does not remember smoking crack.

Rob Ford will be Toronto’s Marion Berry, who will likely be re-elected next year cause TO voters always like an underdog, that is why they support the Leafs year in and year out.

#128 recharts on 11.05.13 at 2:24 pm

Fudging and embalming the TREB data is taking unusually long this month. I guess they are waiting to squeeze all possible late sale reports.
I am saying this again here, the condo numbers for TO do not look good at all. Sales have been plunging, higher end units selling discounted and the Avg price went up a lot!

#129 Plirr on 11.05.13 at 2:28 pm

Garth — please delete Smoking Man #5’s post. I don’t understand why you disallow racist, homophobic, or anti-semitic statements/rants, yet allow highly misogynistic ones on this board. Nobody minds a bit of fun here and there, but there is such a thing as going too far. It is offensive and highly disrespectful. It’s tiring again and again to see this crap. If it were said of another group, it wouldn’t be posted, so why the double standard?

I read it as an attack on feminized men. They are not a protected species. Please clarify what I missed and I will gladly review it again. — Garth

#130 recharts on 11.05.13 at 2:41 pm

October 416 Condo Sales as of today

Co-Op Apt 7
Co-Ownership Apt 6
Comm Element Condo 11
Condo Apt 1138
Condo Townhouse 203
Det Condo 1
Leasehold Condo 1
Parking Space 3

Tomorrow they might add 20-30 more sales.
October 2012 Condo sales 1141

#131 sciencemonkey on 11.05.13 at 2:48 pm

This just makes me like Rob Ford more!

Another great thing about the RRSP program is tax deferral to when you are inevitably unemployed. I’m not, but as a gen Y I’m certainly aware of the possibility. It’s best to stuff as much money as possible into RRSPs so that you get the tax refund. Then when you get laid off and your EI runs out, you draw barebones living expenses from your RRSP at a low tax rate! Just like the TFSA should be called the TFIA (tax free investment account), the RRSP should be called the RUTS (registered unemployment tax-shift scheme).

#132 Cici on 11.05.13 at 2:50 pm

#84 Devore

I disagree. I don’t think that MFs are on the same level as ETFs, but maybe I’m wrong.
I was under the impression that they were way more flexible and diversified because they mirror major stock exchanges. Therefore the value of the shares is determined by the markets, not by the number of sales and purchases made in any given day, whereas with mutual funds the key difference is that every purchase and sale by investors determines the value of the portfolio, which is why that value is only published at the end of each trading day.

#133 Penny Henny on 11.05.13 at 2:51 pm

I read it as an attack on feminized men. They are not a protected species. . — Garth
—————————————————
But they are the ones who need protecting the most.

#134 Patient in Richmond on 11.05.13 at 2:52 pm

http://brighterlife.ca/2013/10/02/why-are-canadians-so-stressed-out/?WT.mc_id=en-ca:digital_adv:paid:Outbrain:BrighterLife:HEALTH:Why-are-Canadians-so-stressed-out

#135 Herb on 11.05.13 at 2:53 pm

Just what we need: the Smoking Man “Theatre of the Absurd” now playing at Toronto City Hall.

Good thing His Worship didn’t inhale, and didn’t have sex with that woman either.

#136 GsAmazon on 11.05.13 at 2:59 pm

That’s why ETFs rock.

And why they don’t sell them at the bank.

Thanks, Uncle Garth.

For those about to rock, ;).. we sal-ute you!

Right now, the neighbourhood bank branch is officially the place we get – in descending order of importance – a) to bring the dog in; b) free chockies (like, the good ones with real toffee) or a dog biscuit; c) smiles from handsome people; d) bills for rolled coin post-piggy-bank-slaughter; and e) quarters for the laundry.

But that is all. Leonis exuvium super asinum, doggies, but don’t sweat it….if you think you see a lion, make sure you ask him to roar…;)

#137 Squatter on 11.05.13 at 3:09 pm

I read it as an attack on feminized men. They are not a protected species. . — Garth
—————————————————
#131 Penny Henny:
But they are the ones who need protecting the most.
********************************
I don’t care women being in the police or men being nurses. People who care about that are intolerant.
Just as bad or maybe worse than racism or anti-religious. Not protected species (Charter of Rights) like Garth said though.

#138 Realtor # 1 on 11.05.13 at 3:13 pm

cheaper rates are here . All you doomers will need to hope
for job losses

Five-year rates increased 1% earlier this year and may now retreat by a quarter of that. So what? — Garth

#139 erebus on 11.05.13 at 3:18 pm

@Plirr

Yeah Garth, delete the comment! The girly men at city hall and msm are effing offended and demand an apology ;-) I can hear them sobbing while I type this.

hahaha I love this blog. Faithful reader since 2009.

#140 Penny Henny on 11.05.13 at 3:30 pm

Toronto Star headline
-His world falling apart, Mayor Rob Ford admitted he is a liar.-

No he didn’t admit to lying. He said the question of whether he smoke crack before was never asked the question properly.
Ha, that’s funny.

Smoking Man, I hate to say it but I think this will be the end of Ford. To me it’s not so much what he did but the constant lies. He will not lose the bulk of his support, but enough to lose the next election none the less.

Doug-My brother has never had a drink in public
Rob- I’ve never even seen him have a drink (about Lisi).

Lies, lies, lies yeah. They’re gonna get you.

#141 Smoking Man on 11.05.13 at 3:40 pm

#127 Plirr on 11.05.13 at 2:28 pmGarth — please delete Smoking Man #5′s post. I don’t understand why you disallow racist, homophobic, or anti-semitic .

…………….

You got all of that out of my post, ha I thought I was the guy with imagination around here.

Been on record through the archives here that I like gay people, most hounest tribe on earth.

Rasist that’s a first. I don’t admit I am a bit of an islamophopic.

Anti semitic, been mentored by Jews my entire business life, great people I owe my successful life to Jews.

If fact if I didn’t need all the enhancement available at middle age, I would get the snip and make it official.

And I wasn’t even drinking when creating Post 5. Perhaps rehab is over due, so I can here and piss of you liberals some more.

#142 Smoking Man on 11.05.13 at 3:48 pm

#136 Penny Henny on 11.05.13 at 3:30 pm

Only if he quits he loses, he will win next election if he sticks it out.

He should go on vacation now for a week.

Two weeks of BS, then back to protecting our wallets from scum sucking parasites.

#143 TorontoBull on 11.05.13 at 3:59 pm

@120
the rob ford saga is not over yet…there are MUCH more twists and turns on the road to prison.
I personally (call me a sissy if you want) prefer that our civic leaders are not crack addicts, but that’s me!

#144 4 AM Sunrise on 11.05.13 at 4:02 pm

#129 sciencemonkey

That’s exactly how my life unfolded, and that’s exactly what I’m doing right now. (Yeah, I’m a little bit older than Gen Y, but my last boss kept treating me as if I were…so much so that she kept asking me if I was 28 years old when I’d already told her I was 32)

#145 Mixed Bag on 11.05.13 at 4:09 pm

#139 Smoking Man on 11.05.13 at 3:40 pm

I get both sides. I agree with the gist of Smokey’s post. The offensive part to the ladies, and really should be to the men too, is the “feminized men” term, as if something being feminine is less-than. Lower status on the totem pole, less power.

Masculine women, that could be an insult, but it’s not an insult to her power, more to her sexuality and that all she’s worth is her sexuality.

The fact that the term feminized men works, conveys the meaning we likely correctly interpreted, means we need to change the phrasing, to replace “feminized” men with “emasculated”, that would be more accurate, and, one would hope, not insulting to 50% of the population. Because, as emasculated as a guy may be (snip, snip?), he still can’t do what the woman can (have a baby). The reality is that emasculated is weaker, feminized is just a different side of a coin.

There is nothing less-than when something is feminine, and women and men need to stop apologizing when something is feminine, be it in design, decor, demeanor, behaviour. Yin Yang and all that.

#146 Ralph Cramdown on 11.05.13 at 4:11 pm

#136 Realtor # 1 — “cheaper rates are here . All you doomers will need to hope for job losses”

You’re singing from the wrong page in the hymnal. Today’s hymn is “Oh please Lord Flaherty, no more tightening we beseech Thee, it’s only sinners with expiring rate holds who took Your name in vain.”

#147 Sebee on 11.05.13 at 4:27 pm

Ha ha ha!

Look at the big news State Side. 5% Mortgages back! 2% Cash Back loans from TD in US, so really 3% is all you need. TD calls it the “Right Step” mortgage.

Did I mention…Ha ha ha!

http://money.cnn.com/2013/11/05/real_estate/down-payment-mortgages/index.html?iid=HP_LN

#148 happity on 11.05.13 at 4:28 pm

In USA US Rents Rise To New All-Time High while Homeownership Rate Stuck At 18 Year Low.

Funny, is it really better to rent?

New millions believe so. — Garth

#149 jess on 11.05.13 at 4:34 pm

That mayor must have been watching too much fox tv

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

Widow Settles Fraud Case Against Health Insurer for $1.7 Million.
LOS ANGELES (Jan. 19, 2005
http://www.stuartlaw.us/media/christensen-press-release/

Health insurer HealthMarkets sued by L.A. city attorney over ‘junk insurance’
The suit also names major stakeholders Goldman Sachs Group and Blackstone Group
October 21, 2010|By Duke Helfand, Los Angeles Times

November 3, 2008
Grassley asks AARP about misleading marketing of product called health insurance
http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=17963

The Real Story Behind the Phony Canceled Health Insurance Scandal
Insurance companies ripped off Americans for years with lousy health plans. Obamacare was designed to fix that.
—By Stephanie Mencimer
| Mon Nov. 4, 2013 7:13 AM PST

#150 See you on the Ice Flows on 11.05.13 at 4:37 pm

@#5 Smoking Man,
Don’t worry SM, the men are still here. They just don’t piss around in the visible industries. They don’t play in politics (except to win), academia, publishing or
fashion.
They are out there making the money and ignoring progessives and girly men complain about how the gov doesn’t help enough, what un-PC celebs said or how broke they are cause big bad business didn’t share ‘productivity gains.’
The real men are doing what they have been doing since the dawn of time, getting it done.
They are bagging the mammoths, building the huts, sharpening the spears and harvesting the crops.
They don’t piss around with the gossip column or shining the chrome.
They are working hard, getting dirty, putting the venison in the ground and showing the young bucks how the world works so they can get the mammoth when its time for the old men to join their ancestors on the ice flows.
My grandfather killed a grizzly with a pick axe. Cared for nothing but the hunt and his tribe. Wore the same shirt everyday, no time for fashion. Killed his own dog.
Died alone on the ice flow.
I heard of a group of Arab nomads. Every year they ford the river with goats on their backs. When they get too old they can’t cross the river but, the young bucks
do not carry them. The old stay on the far side of the river and die a death of cold starvation in the mountain passes. Better to have death then be of no use to
the tribe.
I will build my hut, sharpen my spear, protect the tribe, hunt the mammoth, bury the venison, raise a buck and die alone on the ice flows!
And Ladies, Relax. SM is bashing the Girly Men. Real Men love the Ladies!

#151 Smoking Man on 11.05.13 at 4:38 pm

Mixed Bag Thank you

Limited vocabulary here.

emasculated,

Perfect…. That’s an even way worse dis word than feminized to describe the teachers pets at the star and city hall.

Ladies I don’t do this that often but I sincerely apologize for my miss use of feminized, never realized it was even remotely offensive too you.

I will use emasculated to describe girly men from now on.

#152 espressobob on 11.05.13 at 4:44 pm

Posted this a few days ago & thought it was worth repeating. ishares has an event down at the CNE Nov. 16 for anyone who wants to learn more about ETF investing.

https://event-wizard.com/ETFIntroduction-2013/0/welcome/

#153 Retired Boomer - WI on 11.05.13 at 4:51 pm

#41 JimmyAAA
#62 David

Thanks guys for setting me straight that one can buy an ETF in Canada with no transaction costs. There are limited places here too, where one can do that.

About investing from every pay check, David, heck YES!!

It’s called “pay yourself first” also called “dollar cost averaging” as the value of an ETF, or an Index fund varies day to day. When the market hits the popper shares are cheap, when the market is on a tear, shares tend to be pricey. Look nobody I know can tell when the market is going to take a dive, or set a new higher course. Market timing is for fools!
Today is the first day of the rest of your life. Are you saving for retirement, as well as a plump emergency fund?
If not, why not? You will never be younger, and unless you do something to change it, you’ll never be richer.

Lots of good advice on here from many who know much more about investing than this old goat. I just know what has worked for me, and life has not changed all THAT much in 40 years! Good luck, but get started!

#154 miketheengineer on 11.05.13 at 4:53 pm

Garth:

Thanks for the tips on the ETF’s. You have been tooting your horn about these for a while now. I must look into this.

Stocks…you are 100% correct about the gambling part. I lost my a years worth of university fees in the market. Bought at 8 bucks, then it went down to 0.80…then watched my Old Man buy up a bunch of the stock….I eventually broke even, after 4 years of waiting for recovery, and my Old Man to my mom to europe for the whole summer. Yes it is a big gamble, and it is no joke. I also tried investing in stock in China’s first beer brewery that was private….and there was huge scandal, when the Chinese side, decided to sell 1/2 the company without approval from the Canadian owners….once again lost a small bundle. This is no joke. Once you put some cash into the market, you have no real idea where it is going to go, either up or down, and you have virtually no control over the situation, and no one to give you solid advice. On the other hand, if you could get some real experience, and you could plot trends, etc, then you could make some coin. I have seen and know some who have been successful, buying and selling stocks.

Burned and Bitter feelings about investing directly in Stocks.

Mike

p.s. 30 years remission from Bone Cancer this year…lots of aches, pains, and physio appointments, but I am still kicking and beating the odds. My biggest fears now are secondary cancers….I tried to look for survival stats for 30 years surviving with bone cancer, and could not find anything meaning full….anybody else out there make it 30 years?

#155 frank le skank on 11.05.13 at 4:55 pm

I think that anyone with most of their net worth in a house probably smokes a lot of crack.

#156 jess on 11.05.13 at 5:03 pm

huh?

http://www.blogto.com/city/2013/11/vice_alleges_ford_hired_hacker_to_destroy_crack_video/

#157 bill on 11.05.13 at 5:06 pm

while I dont equate rob ford with Sir John A.macdonald.
both may have drunk [or in fords case, smoked]to much on occasion.
[being a firm believer in naming your own poison, I dont see what the fuss is about.]
as smokingman pointed out he should be judged on his record.
you can deal with Ford’s efforts at the polls.
personally I will laugh like hell if ford gets in again.
what kind of job has he done anyway? is there an actual lucid ,non biased account by somebody?besides smokingmans?
by the time the news gets to the coast it just looks like a bunch of exclamation marks in a cartoon.

#158 Mixed Bag on 11.05.13 at 5:12 pm

#149 Smoking Man on 11.05.13 at 4:38 pm

“I will use emasculated to describe girly men from now on.”

Ha! You kill me.

#159 Penny Henny on 11.05.13 at 5:24 pm

Hey Smokey,
what if, what if………………….

Crap. I forgot what I was going to say.
Stoopid crack.

You thinks Don Cherry has the mayor’s back now?

#160 Devore on 11.05.13 at 5:28 pm

#73 NoOneOfConsequence

Well…the TFSA downside is the government knows where your money is. Don’t make the grievous error of having your TFSA at the same bank as any of your other assets like chequing/saving account.

Huh? The government already knows where your money is, if you’re worried about that sort of thing. You think moving it to another bank or into a “non-registered” account actually changes anything?

#161 T.O. Bubble Boy on 11.05.13 at 5:30 pm

@ #122 Canadian Watchdog on 11.05.13 at 1:39 pm
So it’s true. Torontonians voted a crackhead to run the city.
—————————–

And many would still vote for him.

People’s priorities are simply messed up… supporting the “illusion” of saving a few million dollars on the city budget to have to see Toronto become the laughing stock of the world.

#162 Valley Renter Chick on 11.05.13 at 5:32 pm

I first learned that ETFs existed because of reading this blog. I researched further, read books, gathered intel. I 100% agree that ETFs are superior to mutual funds, no question. I have been moving my investments out of mutual funds and into ETFs. I thank you for all the ETF insight. Great blog, my friend.

#163 Smoking Man on 11.05.13 at 5:50 pm

#159 T.O. Bubble Boy on 11.05.13 at 5:30 [email protected] #122 Canadian Watchdog on 11.05.13 at 1:39 pmSo it’s true. Torontonians voted a crackhead to run the city.—————————–And many would still vote for him.People’s priorities are simply messed up… supporting the “illusion” of saving a few million dollars on the city budget to have to see Toronto become the laughing stock of the world.
…………….

Crack Head doing a damn good job.

Now the schooled at queens park, seams to me can’t read the fine print in a contract.

Thus little billion went to ehealth
This little billion went buy two seats.

And on and on.

Take a crack head over a schooled anytime.

#164 Smoking Man on 11.05.13 at 5:53 pm

#157 Penny Henny on 11.05.13 at 5:24 pmHey Smokey,what if, what if………………….Crap. I forgot what I was going to say.Stoopid crack.You thinks Don Cherry has the mayor’s back now?

Who is Don Cherry compared to THE SMOKING MAN. A MANS MAN, NOT A EMASCULATED PINK SHIRT.

I GOT HIS BACK

That’s all he needs

#165 Herb on 11.05.13 at 6:00 pm

“girly men”

Thank you, Arnold Schwarzenegger, for your contribution to the English language.

#166 Ralph Cramdown on 11.05.13 at 6:10 pm

#152 miketheengineer — “Stocks…you are 100% correct about the gambling part. I lost my a years worth of university fees in the market. Bought at 8 bucks, then it went down to 0.80…then watched my Old Man buy up a bunch of the stock….I eventually broke even, after 4 years of waiting for recovery, and my Old Man to my mom to europe for the whole summer. Yes it is a big gamble, and it is no joke.”

Wisdom from an earlier time:

My ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate 45
Upon the fortune of this present year:
Therefore my merchandise makes me not sad.

DIVERSIFICATION! That, and not devoting much to some flyer that your brother-in-law’s rent boy’s stock-jobber says is a sure thing. As much as I hate the “invest in what you love” thesis that has all kinds of amateurs in Apple and Starbucks, it sure beats the “take a flyer” thesis that results in a portfolio of 50% Consolidated Moose Pasture Exploration Co. and 50% We’ve The Paradoran Minister in Our Pocket Infrastructure Co.

I’ve had stuff that went all the way to zero and other stuff that went most of the way. But also stuff that kept paying dividends and occasionally splitting for decades. Ed Yardeni says “Win or lose, everybody gets what they want out of the markets.”

If you invest in ETFs you’ll still be the proud owner of a few go-to-zero stocks, just as my REITs handle bad tenants for me. The key is not to invest in many I-thought-it-would-go-to-the-moon stocks in the first place, unless you’re really good at picking them in the first place, watching them like a hawk, pyramiding as they rise, ruthlessly cutting if they start to sink…

#167 Devore on 11.05.13 at 6:11 pm

#130 Cici

Seems like six of one, half dozen of the other.

Value of MFs is determined by the market as well, based on the assets they hold. It has to be calculated, because they are not publically tradedable. MFs have more flexibility, because the manager decides what he wants to buy/sell. On the one hand, ETFs that don’t track an index are actively managed as well, and on the other, there are MFs that are basically index trackers.

The number of redemption is irrelevant. The manager sells assets to cover redemptions, they don’t have to be the “performers” as you state, they could very well be the underperformers, and most likely some cross section of assets. Why would a manager sell the performers, unless he wanted to rebalance of course? At the end of the day, the fund’s assets are added up, and divided by the number of units issued. That is exactly what “the market” does for an ETF with each trade. The value of a ETF or a MF is not magically determined, they are both set by the market, and they are both based on the value of their assets, plus/minus a typically very tiny premium or discount for ETFs.

So I still don’t understand why Garth would claim high redemptions would affect the value of a MF. If half of the MF unit holders want their money back, half of the assets would still remain. Not 40% or 45%. 50%. The only way redemptions affect the value of a fund is if the sales are so high, the supply side of equities gets swamped, affecting the value of the stocks themselves, but then that would affect ETFs are well. MFs actually have an advantage here, because they can take their time liquidating assets and fulfilling redemptions, and can make use of alternate exchanges, such as dark pools, to get the most money trading large blocks of equities.

Don’t get me wrong, I’m not a fan of MFs in general. They are too expensive. You never know how much you will get or pay when you buy/sell them, or when the transaction will happen. But I don’t see how what Garth stated is a damning point for MFs. High redemptions means money leaving equities, this is a problem for ETFs as well.

#168 recharts on 11.05.13 at 6:52 pm

#159 T.O. Bubble Boy on 11.05.13 at 5:30 pm
@ #122 Canadian Watchdog on 11.05.13 at 1:39 pm
So it’s true. Torontonians voted a crackhead to run the city.
—————————–

And many would still vote for him.

People’s priorities are simply messed up… supporting the “illusion” of saving a few million dollars on the city budget to have to see Toronto become the laughing stock of the world.

I find your (both) reactions truly Canadian.
Always preoccupied with appearances.

Why don’t you kick him out of office because he is fat?! Being obese is as bad example as smocking crack.
If he was a teacher I might understand the fact that he has to be a sort of saint and example of morality.
He was elected based on what he promised to do for the city and those should be the grounds for judging him primarily.
If he broke the law smoking crack then the matter should be simple, the Law should be applied and whoever broke the law should be put in jail. I bet that many of detractors have children, relatives who tried drugs or they might even tried that themselves but …nobody knows (yet) or nobody cares.
What the guy did with himself is his business and I think that what is happening is just hypocritical. The city has problems bigger than Rob Ford and apparently he is solving some of them. My guess is that he has stepped on many toes while doing that and what we are seeing these days is some people taking revenge for that.

In my opinion what he does in his free time should be his business as long as he is not breaking the law. If smoking crack cocaine is illegal put them in jail and let’s finish this. Otherwise …keep your mouth shut because he did not smoke at your expense.

While I am not a supporter of any form of drug taking I find what is happening truly hypocritical. It is more important for us and for the province to put in jail those who lied about the gas plants than to remove Ford from the office.
The way the Toronto landscape is being f..cked up by developers, this insane densification in downtown To for instance, without building any social infrastructure there (schools, hospitals, stores, transportation etc etc) is a much bigger problem. Falling standards in constructions, artificially created problems like the lack of land and many others are going to suffocate this city and all we care about is Ford smoking crack.

An by the way, to say that the torontonians voted a crackhead is really idiotic. When he was voted there was nothing known about this affair.

I am not a big fan of him, on the contrary, but I respect myself enough not to attack him on this. These attacks run by the press and media are nothing more than just another way to increase their newspaper sales and to get more audience.

There are many other burning things but ….we collectively are what we are!

#169 Mixed Bag on 11.05.13 at 6:54 pm

#163 Herb on 11.05.13 at 6:00 pm

We’re here to pump *clap* you up!

Don’t remember Hans and Franz?

#170 Shawn on 11.05.13 at 7:13 pm

FOLLOW THE MONEY

Devore at 130… I agree with you totally exept the last sentence

High redemptions means money leaving equities, this is a problem for ETFs as well.

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

High redemptions means wealth or ownersip of equitys leaving a particular fund or ETF.

But not a dime of money leaves or flows out of the equity asset class since someone else has to buy and stock sold by a mutual fund or ETF.

If stock prices get pushed down due to MF and ETF redemptions their is less wealth in equities but no net money actucally “escaped” or was liberated from the equity asset class.

#171 espressobob on 11.05.13 at 7:17 pm

When it comes to mutual funds the unit price & NAV may be way out of whack! A supply & demand thing. A fixed number of units offered with over demand creates higher unit price (maybe a hot shot fund manager whos scoring big for now.) The unit price above NAV, sounds even riskier! A good pullback in the markets can leave a panicked investor (sell, sell, SELL!) with an even bigger loss. The unit price could descend below NAV.

Just trying to make a point as to why mutual funds suck. I hate picking on this guy in the link below, but why not?

http://sprottphysicalbullion.com/sprott-physical-silver-trust/net-asset-value/

Check out the premium/discount to NAV. I’ll stick with ETF’s.

#172 Son of Ponzi on 11.05.13 at 7:31 pm

The banks don’t sell crack either.
And I think that is a good thing.

#173 TurnerNation on 11.05.13 at 7:39 pm

Merry Christmas?!

Rogers Communications lays off 94 staff in media operations

CTV News – 49 minutes ago

TORONTO – Rogers Communications (TSX:RCI.B) has laid off 94 employees across its media division in an effort to lower expenses. The telecommunications company says the job cuts are spread across the country at the broadcast TV operations of Citytv …

#174 TurnerNation on 11.05.13 at 7:41 pm

Re. ‘feminized’ men, this month’s Toronto Life rag covers stay-at-home Dads. In the photo shoot the man has painted toenails! I hope this is a prop.

#175 JimmyAAA on 11.05.13 at 7:43 pm

#166 recharts on 11.05.13 at 6:52 pm
#159 T.O. Bubble Boy on 11.05.13 at 5:30 pm
@ #122 Canadian Watchdog on 11.05.13 at 1:39 pm
So it’s true. Torontonians voted a crackhead to run the city.
—————————–

And many would still vote for him.

People’s priorities are simply messed up… supporting the “illusion” of saving a few million dollars on the city budget to have to see Toronto become the laughing stock of the world.

I find your (both) reactions truly Canadian.
Always preoccupied with appearances.

Why don’t you kick him out of office because he is fat?! Being obese is as bad example as smocking crack.
If he was a teacher I might understand the fact that he has to be a sort of saint and example of morality.

====================================
So he is allowed to lie for months on end. Answer NO QUESTIONS that he does not like. Only deliver his message on a weekly call in show that screens all callers. is he beholden to only the 47% of people that voted for him, not the other 53%. I didn’t realize that anybody who didn’t vote for Rob Ford got his taxes suspended for the length of the mandate.

He is allowed to be best buddies with known drug dealers. Lie to get a felon buddy of his as coach of his football team. Do I need to go on?

It isn’t all just appearances, its the utter disdain he has for anybody who disagrees with him. Because he has Etobicoke and Scarborough completely snowed, he gets to ignore the rest of the City (to use a common cons. term) that pay his salary. If I lived in Toronto (and many of the journalists do) I would totally expect him to

ANSWER THE F***ING QUESTION.

As to below, there is little to no evidence that he has done much of what he promised to do vis a vis the gravy train. His biggest accomplishment seems to be getting and planning to spend a boatload of money for Subway stations to the burbs, when there is overwhelming evidence that the infrastructure needs are in the urban core. But lets face it Downtown doesn’t vote for him. So he extends his middle finger to them between texts in his cars. He is a buffoon who serves only his core, that is why deserves no respect. He doesn’t serve Toronto, he serves his masters only.
====================================
He was elected based on what he promised to do for the city and those should be the grounds for judging him primarily.
If he broke the law smoking crack then the matter should be simple, the Law should be applied and whoever broke the law should be put in jail. I bet that many of detractors have children, relatives who tried drugs or they might even tried that themselves but …nobody knows (yet) or nobody cares.
What the guy did with himself is his business and I think that what is happening is just hypocritical. The city has problems bigger than Rob Ford and apparently he is solving some of them. My guess is that he has stepped on many toes while doing that and what we are seeing these days is some people taking revenge for that.

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

In my opinion what he does in his free time should be his business as long as he is not breaking the law. If smoking crack cocaine is illegal put them in jail and let’s finish this. Otherwise …keep your mouth shut because he did not smoke at your expense.

While I am not a supporter of any form of drug taking I find what is happening truly hypocritical. It is more important for us and for the province to put in jail those who lied about the gas plants than to remove Ford from the office.
The way the Toronto landscape is being f..cked up by developers, this insane densification in downtown To for instance, without building any social infrastructure there (schools, hospitals, stores, transportation etc etc) is a much bigger problem. Falling standards in constructions, artificially created problems like the lack of land and many others are going to suffocate this city and all we care about is Ford smoking crack.

An by the way, to say that the torontonians voted a crackhead is really idiotic. When he was voted there was nothing known about this affair.

I am not a big fan of him, on the contrary, but I respect myself enough not to attack him on this. These attacks run by the press and media are nothing more than just another way to increase their newspaper sales and to get more audience.

There are many other burning things but ….we collectively are what we are!

#176 Squatter on 11.05.13 at 7:49 pm

#172 TurnerNation on 11.05.13 at 7:41 pm

Re. ‘feminized’ men, this month’s Toronto Life rag covers stay-at-home Dads. In the photo shoot the man has painted toenails! I hope this is a prop.
————————————————
He won’t tell us, but I bet SM secretly paints his toenails ;-)

#177 JimmyAAA on 11.05.13 at 7:51 pm

#111 PurrPurrJones on 11.05.13 at 11:32 am
Garth – what I said is 100% correct. At the brokerage houses at the banks it’s true. The media needs to bring this to people’s attention.

MER tax deduction:

Decent explanation

http://www.steadyhand.com/industry/2010/07/08/management_fee_deductibility_clearing_the_air/

====================================
Its funny that use this article.

I’m no fan of MFs and have not owned any for over 4 years now. But if I did ever look at buying a mutual fund again. Steadyhand would be one of few, maybe the only, I would consider.

Its fees are not obnoxious, its performance is good, and its founder is first rate. Tom Bradley is head and shoulders one of the best finance columnists at the Globe and Mail. He informs. If his company is run as well as he writes……

Read some of his stuff here.

http://www.theglobeandmail.com/authors/tom-bradley

#178 TurnerNation on 11.05.13 at 7:53 pm

Almost felt sorry for Ford during his ‘confession’ today.

‘The dog that didn’t bark.’

He said sorry to council, taxpayers, Doug…but never mentioned his wife and kids.

#179 Canadian Watchdog on 11.05.13 at 7:59 pm

And many would still vote for him.

Probably. And that's my point. This incident tells me more about voters and city council management then what Ford was doing on his spare time.

#180 Nemesis on 11.05.13 at 8:12 pm

@Herb/#163…

NiceOne! But do you recall how that idiom was introduced to the lexicon?… Let’s climb into the WayBackMachine and revisit the 2004 Republican National Convention, shall we?

http://youtu.be/SUzUbtIptqQ

I could be wrong… and loathe though I am to say it, but based on what happened to the American/Global economy shortly afterwards… perhaps things would have worked out a tad better if the “Economic GirlyMen” had been put in charge.

Food for thought.

@MikeT/#114…

Sounds like a SuccessStory!… And it is, on one level.

On another level – by implication – those OkiHomies’ dreams could only be realized by leaving… and that’s a SadIndictment, indeed.

Never mind.

On the other hand, there are a few things about Honduras that typically don’t make into ‘TheBrochure’…

[UK Guardian] – Honduras to build new city with its own laws and tax system to attract investors: Central American country hopes to emulate success of Singapore and Hong Kong by building ‘state within a state’

http://www.theguardian.com/world/2012/sep/06/honduras-new-city-laws-investors

Needless to say, that particular development model seldom works out well for the locals… still, there’s no need to worry about the Campesinos when Battalion 3-16 is OnTheJob:

http://en.wikipedia.org/wiki/Battalion_3-16_%28Honduras%29

Oh yes… TheNeighbours occasionally get a bid rowdy, too:

http://youtu.be/Od1wfZe6EvE

#181 recharts on 11.05.13 at 8:15 pm

We are wasting the time debating the Rob Ford issue.
Certainly he is a street guy who made it all the way to the City Hall.

There are more dubious economic and political criminals who are at large when they should be in jail and our beloved Torontonians are not so revolted as they are against Rob Ford.
Yes I agree with you, he is a dubious character, the fact that that one of the guys in that movie is dead tell me a lot. But that is a Police issue and they are paid for it.
What bothers me is that there are more pressing issues who have been dragging for years and nobody is revolted because of that.
The current uprise to call it so is clearly driven by media and many people got sucked into this proving that in fact they are citizens of a country side city.

And since you talked about subway, and since we like to compare our city with the Top N most livable cities in the world I encourage you to see how many cities have a subway comparable with this caricature that we call subway here in Toronto.
Use this
http://mic-ro.com/metro/table.html?feat=CILGSTDPPYPLPO&orderby=PO&sort=DESC&unit=&status=

Also I encourage you to find out how many of the major cities do not have regular metro lines or buses or trains who connect the cities to their airports.

#182 Daisy Mae on 11.05.13 at 9:03 pm

#122 Canadian Watchdog: “So it’s true. Torontonians voted a crackhead to run the city.”

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

Impressive, isn’t it?

#183 Daisy Mae on 11.05.13 at 9:13 pm

#138 Penny Henny: “Toronto Star headline
-His world falling apart, Mayor Rob Ford admitted he is a liar.”

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

The video exists according to the RCMP altho’ Ford denies it. That makes him a liar.

#184 JimmyAAA on 11.05.13 at 9:20 pm

179 recharts on 11.05.13 at 8:15 pm
We are wasting the time debating the Rob Ford issue.
Certainly he is a street guy who made it all the way to the City Hall.

===================================
We wouldn’t be wasting time, if he would just resign. At what point do our elected officials get to keep their jobs. Even if he hasn’t been convicted, the evidence is:

1) He has used illegal drugs (crime) while in office, most likely heavily. And he lied about the use. Repeatedly. Look we all lie. We also get our mouth washed out with soap when we get caught.

2) He has been publicly intoxicated (again crime) while in office, several times.

3) He has been found in contempt of office (again crime) – This is actually a big one. just because you don’t like the process, does not mean you are above the process. If you think it should change, then man up and lets see some civil disobedience. Not pouting and threatening to take his ball home.

4) He has been found texting(distracted) while driving (again crime, minor, but still illegal)

5) He is implicated in falsifying documents to allow a friend, who has a convicted felon, to coach on his football team. In direct violation of the rules and guidelines set by the school district.

Not only is there a boatload of minor indiscretions, there is the utter stonewalling. His job is too run the city. That means you answer questions sometimes. This is not Chicago (they different style of municipal government there)- you have an obligation to work with other elected officials.

Look – I get it – cast the first stone. But at what point does his get out of jail free card expire. Elected officials used to resign pending investigation ALL THE TIME. They never do anymore. While I understand it was not always right when that happened, that doesn’t mean they always get to stay in office. This is not just a citizen and his rights and responsibilities. This is a SENIOR elected official. His duty of care is WAAAAY higher. And he has failed miserably. He cannot simply keep trotting out that his obligations are what he thinks his obligations are. We have higher standards for people like him. He has no respect for the office, the city, and yes even the people who elected him.

The pressing issue is he is incapable of running the city, even if he doesn’t think so. And just because his little cabal tells him its ok, doesn’t make it ok. I am not trying to re run the election here. Sometimes, public servants have to do public service. His public service right now is to resign.

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

There are more dubious economic and political criminals who are at large when they should be in jail and our beloved Torontonians are not so revolted as they are against Rob Ford.
Yes I agree with you, he is a dubious character, the fact that that one of the guys in that movie is dead tell me a lot. But that is a Police issue and they are paid for it.
What bothers me is that there are more pressing issues who have been dragging for years and nobody is revolted because of that.
The current uprise to call it so is clearly driven by media and many people got sucked into this proving that in fact they are citizens of a country side city.

And since you talked about subway, and since we like to compare our city with the Top N most livable cities in the world I encourage you to see how many cities have a subway comparable with this caricature that we call subway here in Toronto.
Use this
http://mic-ro.com/metro/table.html?feat=CILGSTDPPYPLPO&orderby=PO&sort=DESC&unit=&status=

Also I encourage you to find out how many of the major cities do not have regular metro lines or buses or trains who connect the cities to their airports.

#185 Daisy Mae on 11.05.13 at 9:24 pm

How can anyone ever believe a liar?

#186 Marginal on 11.05.13 at 9:34 pm

When you don’t speak up, you condone.

Hey, financial superstars, there are other fields of expertise, such as science. Surprise, but if your chromosomal makeup contains XY, then you are a real man.

Doesn’t matter if you work in the fashion industry, in the oil fields, or cross your legs when you are sitting down.

If feminized, girly, emasculated men bother you from a cultural perspective, then I think you need to check your homophobic blinkers.

As we were taught at our work training sessions, if you exclude a segment of the work population (so called girly men) then you are limiting access to all your human capital (using phrases that could be understood on this blog).

If members of this blog are trashing certain segments of society because of cultural presentations, then are we really experiencing the best of the best?

#187 ANNA on 11.06.13 at 12:12 am

The Cowboy Gene?
That’s not a cowboy gene. That’s a BANKER GENE!

#188 KG on 11.06.13 at 1:13 am

one of the best photos.

#189 Plirr on 11.06.13 at 3:28 pm

DELETED

This conversation is over. — Garth

#190 spaceman on 11.06.13 at 4:29 pm

I am happy with my Royal Dividend fund, it doesn’t have any gold in it, like the TSX, it has done better than 8% in the last year, much better than the index. I also hold ETF’s in a direct investing. Both work. I have talked to people who don’t have a friggin clue about investing, they have thousands, work their fingers to the bone, and stuff it all in a Balanced Account… god help them.

#191 Randy Macho Man Savage on 11.06.13 at 4:39 pm

Seems that we are always waiting for a real estate correction. I hope I am wrong, but perhaps perpetually low interest rates and over priced homes is the “new normal”.