The good stuff

ATTENTION modified

It’s a fact we fear loss more than we relish gains. No wonder most investment decisions are made because people occasionally have the crap scared out of them. That’s why your co-workers and questionable in-laws own houses and GICs and think investment advisors sport a blood-sucking proboscis. Actually with a good tie, most are attractively hidden.

As I’ve told you before, the greatest risk for most people (especially women) is not losing money, but running out of it. So, we make bad and emotional choices, motivated more to preserve capital than make it grow. As a consequence, Canadians have a dismal amount of liquid assets, fear capital markets and will probably have sucky retirements. Too bad.

Truth is, we haven’t had a good stock market fright since about this time three years ago. That was during the 2011 debt ceiling debate in the US, with the deficit exploding, politicians at each others throats and the prospect of the world’s biggest economy defaulting on its debt. Then markets dropped more than 10%, with daily gyrations of 500 points.

At the time this pathetic blog urged the metalheads to dump their bullion at a silly $1,900 an ounce (it’s now $1,226), and for everyone else to get invested because America was not going down. Since then the Dow has added 34%, the Toronto market is up 28%, the S&P 500 has swelled 78% and gold has plunged 35.5%.

More importantly, in the past three years the US deficit has dropped to the lowest level in eight years, and corporate profits have increased more than 25%. Now 200,000 jobs are being churned out each month, inflation is moribund and housing prices have gained a third of the ground they lost in the GFC. In other words, no US real estate bubble despite 3% mortgages and a resurgence in unemployment.

Meanwhile the US central bank – the Fed – has taken back almost all of its massive stimulus spending, and the economy has held. Wow. A lot of people who came here a year ago – when the idea of tapering was first floated (dropping the price of bonds, REITs and preferreds) – forecast economic disaster and stock market collapse if the $85 billion-per-month was curtailed. Well, now it’s almost gone and guess what? No impact. In fact the US grew at a fat 4% rate in the last quarter.

So what does this macroeconomic stuff mean?

In the past twelve months, while the stimulus was systematically scraped away, the S&P gained 19% and stocks in Toronto romped 23% higher. Bond yields basically behaved because inflation was tepid, and balanced portfolios have delivered double-digit returns – around 11%. Fixed-income stuff, like preferred shares, and rate-sensitive assets like REITs, have recovered from last summer. ETFs mirroring the equity indices have been Beyoncé-hot.

And it continues.

Yesterday markets hit record highs, even as bombs flew over Syria, the Scotch were revolting and Ebola turned into a global threat. Investors looked at the latest data showing a drop in US jobless claims, plus the Fed news that interest rates won’t rise until July, and kept on buying. Also at play was the news American inflation has dropped the most significantly in four years – which means you can get the good stuff (jobs and profits) without having to swallow the bad (higher prices and rates).

Stock markets may have a high and scary number attached to them (both the Dow and S&P are at a record index level), but expressed as a multiple of corporate earnings, things are way more serene. Because corps have been plumping their bottom lines for the past few years, we’re nowhere near the sleazy multiples of the dot-com era or the pre-crash of 2008-9. In fact, sustained high unemployment numbers are a kind of proof companies are more efficient and leaner than they used to be. Thus, it’s a better time to be an investor than an employee.

This makes Canadian real estate far riskier than equities. At least stock prices are supported by the moolah being generated by member companies. House prices in 416 or 604 by comparison, are completely divorced from the incomes of people buying them or the rents paid by those leasing them. These valuations are supported by a mountainous pile of debt and the tulip-bulb mentality of the masses.

Rich people seem to know this. They have far less net worth in a house than your cousin does. They love liquidity, and have a lot of fun buying stuff when people who read the Huffington Post are changing their shorts.

Maybe you should, too.

136 comments ↓

#1 James on 09.18.14 at 6:35 pm

“in other words, no US real estate bubble despite 3% mortgages and a resurgence in unemployment.”

There are certainly local areas of concern. Even the wonks at the Fed have noted that the bubble may have reinflated in some cities. I think here of SF, San Diego, Portland and a few other places. My own neighbourhood in Seattle is not too far off the peak.

#2 Funny that on 09.18.14 at 6:38 pm

It’s a fact we fear loss more than relish gains.-Garth
++++++++++++++++++++++++++++
I guess it’s true but there comes a time when you say WTF.
Just shy of 50 and I’ve decided it’s just going to be part time or seasonal work so that I can enjoy myself doing what I please or nothing.
I think many would be wise to try to restrict spending and try to live on less. Which ultimately can be much more because you have time to enjoy yourself more.

Challenge yourself, for 1 month rack all your spending to see where it goes.

Catfoodlady, missing you. Hope all is well.

#3 Yitzhak Rabin on 09.18.14 at 6:43 pm

Total US Debt down to the penny:

September 15, 2014 = $17,770,878,224,353.80
September 15, 2014 = $16,738,502,722,145.90

Difference = $1,032,375,502,207.90

A slight difference than the claimed $589 billion 11 months into the year. Remember, the Soviet Union had economic and budget numbers too. Many believed them, certain academics said as late as 1989 that the USSR would overtake the US.

First the US was addicted to low interest rates, then zero interest rates, and now QE. The Fed will be back in the QE business before the end of 2015. There is a reason the first 2 QEs were not followed by rate hikes and an exit strategy, but rather a larger dose of QE.

#4 Shawn on 09.18.14 at 6:47 pm

Investors won and doomers lost.

There is nothing to disagree with in today’s edition of the blog.

I recall back in August 2011 we still had lots of doomers on this blog who were sure that American house prices would continue to decline and definitely fail to recover and that stocks were toast. Not to mention the American dollar was toast. Banks were “technically bankrupt”. The U.S. was bankrupt…

We were all doomed!

Nope, just the doomers were.

Most of the doomers from back then have gone quiet.

Though Tony has joined us to keep the doomer flag flying.

Sucks to have bought Gold at $1300 much less $1900 and to still be holding it.

#5 LH on 09.18.14 at 6:54 pm

Healthy 5%-7% cap rates are still available in 416 multifamily residential. It’s not all doom and gloom. It’s 905 SFHs that are totally overpriced.

#6 Nemesis on 09.18.14 at 6:56 pm

#Seriously!?! #We’reSupposedToReadTheHuff&Puff? #SayItAin’tSo!… #Personally,I’dMuchRatherCruise… #TheAutoBahn… #YouKnow… #WithAbootFullOfTheGoodStuff:

http://youtu.be/PJM9xpvMbJ0

[NoteToGT: Just between the two of us… I thought we had an understanding about that little mishap of mine in Deauville. NoCherrysForYou!… Just kidding. I know you prefer Scotch to Brandy.]

#7 Kenchie on 09.18.14 at 6:58 pm

#78 Shawn on 09.17.14 at 10:03 pm
“Marginal Tax rates available here:

http://www.taxtips.ca/marginaltaxrates.htm

Scroll down and look for your province…”

I was chatting with my buddy in Van (I live in TO) today. We were chatting about marginal rates…

Let’s just say I can’t wait to move back to BC…

Another convenient calculator is this:

http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2014-Personal-Tax

#8 My Life is a Pile of Shit on 09.18.14 at 6:59 pm

Fed funds rate is on hold indefinitely because the US economic recovery is a mirage. Forgotten now is a time when the Fed had to raise rates to cool the economy.

“They [rich people] have far less net worth in a house than your cousin does.” That is a fallacy. Rich people have far more net worth in a house than other people, if only because they have far more net worth. They may have less fraction of net worth in real estate, but only because they have more money than they know what to do with.

#9 Retired Boomer - WI on 09.18.14 at 7:01 pm

The house represents about 15% of our total net worth, and I think that is TOO HIGH!!!!

The sam thing has to be insured, it sucks up $3,000 a year in taxes, and then add in the maintenance, too!

All that continual expense despite the fact we built it, and paid it off!

No dividends, no intertest. No chance of a stock split.

It seems a rather hugh price for a place to hang your clothes, rest your bones, and cook your food, and pee!

I can only get my money back (maybe) by selling it.

That said, I wouldn’t have it any other way. sorry

#10 eddy on 09.18.14 at 7:01 pm

‘ the Scotch’
???

that’s a drink

Scots
or
Scottish
are
acceptable

#11 Happy Renting on 09.18.14 at 7:04 pm

I’m definitely getting old, I’m losing track of time. The debt ceiling crisis was a whole three years ago? Wow. That long since a 10% pullback!

#12 Alberta Ed on 09.18.14 at 7:04 pm

Not to mention, our tulip-bulb finance minister.

#13 Rainclouds on 09.18.14 at 7:21 pm

Maybe leave the revolting Scotch to the Scots……..

Thanks for continuing in reinforcing the balanced portfolio strategy! Hard to shut out the feckless prattle of the many delusional people here on the left coast ……

#14 Victoria Real Estate Update on 09.18.14 at 7:39 pm

. . . . . . . . .Single Family Home Prices. . . . . . . .
. . . . . . . . . . . . . .Langford. . . . . . . . . . . . . . .
. . . . . . . . (Percent Below 2010 Peak). . . . . . . .
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0%. . . .* . . . . . . . . . . . . . . . . . . . . . . . . . . .
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-21%. . . . . . . . . . . . . . . . . . . . . . . . . . . *. . .
———————————————————————————
. . . . .06/10. . .06/11. . .06/12. . .06/13. .12/13. . .

This chart was put together using SFH median price data for Langford (averaged over 3 months to smooth out monthly price fluctuations). By the end of December 2013, SFH prices in Langford had fallen 20.7% below June 2010’s peak level. Note that December 2013 was the last month that median price data was available for Greater Victoria.

Langford’s 21% price plunge was accompanied by similar price drops in other areas of Greater Victoria. For example:

Oak Bay (- 15.3%)
Victoria ( -12.7%)

SFH sales are close to record-low levels across Greater Victoria even with mortgage rates at historically low levels. If historically low rates can’t bring SFH sales back to near-normal levels, what will? Obviously much lower prices is the only answer.

Since 2010, it hasn’t been uncommon for prices to experience a temporary mid-season bump in Victoria (this isn’t unusual for any city). 2014’s seasonal price bump is definitely a thing of the past.

Canada’s housing bubble began to inflate in 2000, the same year as in the US. Prices in Victoria are currently 128% higher than they were in 2000, whereas prices in the US are much closer to pre-bubble (2000) levels. Let’s compare:

Percent price increase since 2000:

Victoria: + 128%
Las Vegas: + 30%
Atlanta: + 13%
Phoenix: + 40%
Chicago: + 21%
Tampa: + 52%

Since 2000, Victoria‘s 128% price gain has left increases in rents and incomes far below. On the other hand, rents and incomes in most US cities have more closely tracked price gains since 2000, providing price support. Victoria’s housing bubble is currently comparable in the size to the bubbliest US markets in 2005-06 (Los Angeles, San Diego, Las Vegas, Phoenix, Miami, etc.).

The lowest-priced SFH in Langford (2670 Peatt Rd.) is listed at $259 K and is priced below assessed value ($272 K). (2 beds, 1 bath, 864 sq. ft., built in 1960 and in original shape)

For approximately $272 K (or a lot less) it is possible to buy a much bigger and newer house in a number of US cities that are desirable for their warm winter weather. Examples:

Florida:
$191 K Port St. Lucie, FL (5 beds, 3 baths, 3,350 sq. ft., built in 2006, double attached garage, pool)
$284 K, Tampa, FL (5 beds, 3 baths, 3,002 sq. ft., built in 2005, attached 3 car garage, pool)
$176 K, Palm Coast, FL (5 beds, 3 baths, 2,731 sq. ft., built in 2013, attached 3 car garage)

<Arizona:
$219 K, Maricopa, AZ (6 beds, 3.5 baths, 3,317 sq. ft., built in 2005, attached 3 car garage, pool)
$266 K, Phoenix, AZ (5 beds, 3 baths, 3,359 sq. ft., built in 2004, attached double garage, pool)
$131 K, San Tan Valley, AZ (5 beds, 3 baths, 3,164 sq. ft., double attached garage, pool)

Girls and guys, do not buy a house in Victoria at this time. It is always a bad idea to buy a house near the peak of a major housing bubble. Wait for lower prices. Renting for now is a no-brainer.

Until next time – Cheers!

#15 espressobob on 09.18.14 at 7:48 pm

Thanks Garth for all your insight.

#16 Mister Obvious on 09.18.14 at 7:54 pm

Three times in fifteen years I made very major contributions to my investment portfolio:

1. Three months before the dot com bust of the early 2000’s got underway.

2. Six months before the global financial crisis of 2008 kicked in, and…

3. Two months before the USA debt ceiling debate in the summer of 2011 that ushered in a 15% market correction.

You’d think I’d be somewhat jaded and paranoid.

Not so. Instead, I feel invincible (although I know I’m really not). But in hindsight, those events have been mere blips. Even the very nasty GFC.

I have handily recovered from them all. My portfolio is still far greater in value than all the money I have ever contributed. That’s in addition to the fact that since I retired over seven years ago I have been living a comfortable retirement from the income. Income which is favourably taxed due to the nature of the investments.

This is not intended as bragging or smugness. It’s just fact. I took risks and experienced profit AND loss. Fortunately for me, more profit than loss. I expect that will continue. If you think I’m a soft, pampered, lucky boomer then go ahead. I’m finished arguing about that.

I concede that Real Estate investment played a part but so did many other things including living within my means, sticking to a long term plan, soliciting the help of true professionals, making the most of a generous employee share option plan and, perhaps most importantly, knowing when to crystallize RE gains and stop flogging a dead horse.

Garth is 100% correct. Ignore him at your own peril.

#17 Realties.ca » The good stuff on 09.18.14 at 8:06 pm

[…] Source: http://www.greaterfool.ca/2014/09/18/the-good-stuff/ […]

#18 Trojan House on 09.18.14 at 8:09 pm

With rates so low, I think there is no interest being paid anywhere, therefore, people are either hoarding their money, or looking to find yield, they are investing in something that is very liquid – the stock markets.

In Europe, there is talk of negative interest rates. Japan is in the same boat and emerging markets have tanked. Bonds suck. However, the US dollar is still the reserve currency, so the only place to go is the US stock markets. Even the Canadian stock markets and British markets are looking good (mainly because the Brits are not on a tanking Euro).

The major investors are buying driving the markets up. Hence, no need for QE. Retail investors are scared shitless because of 2008. But as Newton found out, what goes up most eventually come down. My advice – get in while the gettin’ is good.

#19 Sheane Wallace on 09.18.14 at 8:12 pm

I thought there was market correction coming /sarcasm off

Of course markets will go up. 20 K Dow, then 30 k

Dead wrong on gold.

‘Growth’ is barely 1 % for first half of the year with underreported inflation.

Spot on housing.

#20 Kenchie on 09.18.14 at 8:13 pm

#100 Londoner on 09.18.14 at 4:41 am
“#42 Millennial_Falcon
#34 Kenchie

Some of your friends will walk away looking like geniuses despite their ignorance. Others not so much. Your biggest mistake is assuming everyone will be in the same boat. They certainly will not.”
———
Londoner, thanks for your perspective. What you mention about “geniuses despite ignorance” is applicable to any small sample of people. You are correct that not everyone will be affected at the same amount (in the boat) due to variables such as amount of debt, spending habits/saving discipline and income level and income growth potential, etc. But it’s pretty safe to say that most indebted millennials will be worse off in an environment of rising rates over the next 5 years.

And

“You can continue to preach to your friends about risks but the outcome will not be the same for all. On the other hand you could take what you know and make a bet on something else. Your friends have been winning on their bets so maybe it’s time you did a little gambling of your own?”

Obviously it’s not going to be the same for all due to above mentioned variables. Nor do I have the time and energy to lecture grown-ass people on their financial affairs. And no, they haven’t been “winning” on their bets, as Vancouver condos haven’t been outstanding investments since mid-2009, believe it or not. I’m grateful that I was able to sell and close on my condo in Van for 18.4% above BC assessment value (14.4% after closing-costs).

#21 Mr. Frugal on 09.18.14 at 8:15 pm

I believe they call this a secular bull market. One day we will fondly refer to this time period as “the good old days”. Low rates and steady growth should not be squandered.

#22 debtified on 09.18.14 at 8:24 pm

Garth,

Where do you buy your eye glasses? I want to see how you see things. I was so sure that bad things were going to happen to the stock market. Good thing I listened to you and my portfolio is up double digits. I am spending less money on my rent than I would have had I bought the same place I am renting now.

Thank you very much once again. Your free education is much appreciated and it encouraged me to even learn some more. I have since educated myself by taking classes on investing and financial planning. I now not only know what an ETF is, I now also have a pretty good idea which ones to invest in. Keep up the great work!

#23 A Yank in BC on 09.18.14 at 8:24 pm

Only say Scotch when you’re thirsty. Otherwise.. it’s Scots.

#24 };-) aka Devil's Advocate on 09.18.14 at 8:27 pm

Take a look at pretty much any city and its major players in the real estate development industry. You will notice that it is those who build and hold onto their properties who have a significantly higher economic power than those who build and sell, build and sell, and build to sell the property never holding onto any.

I’m just Sayin’

#25 Sheane Wallace on 09.18.14 at 8:30 pm

#18 Trojan House

buy europe

#26 Kenchie on 09.18.14 at 8:40 pm

#126 Kevin on 09.18.14 at 10:09 am

“If you qualified to borrow $400,000 5 years ago, then qualifying for $370,000 today should be easy. As for the “higher payments” due to increased loan rates, I already showed how extending the amortization back out to 25 years partially mitigates that.”
———
And when it’s not “easy”, there will be an equity injection required, which was my point from the previous post… Also, as far as I know, CMHC mortgages don’t allow reamortization, which may or may not be a surprise to those people who qualified 5 years prior.

And

#127 Rational Optimist on 09.18.14 at 10:39 am

“If Kevin is right, and people cut their discretionary spending to afford their higher payments, that is terrible news for the economy. If Kenchie is right, and significant numbers of homeowner are unable to afford their mortgage payments and have no practical choice but to sell, that is terrible news as well.”
—-
Thanks for answering Kevin’s point. The $70k/$400k scenario was highly unrealistic. According to RBC’s mortgage pre-approval calculator, someone with $70k income would only be able to borrow $261,950 from a bank at 3%. Assuming 2% wage growth over 5 years, that income would grow to $77.3k. If in 2019 rates are 5%, that same borrower would be able to borrow about $243k. Therefore, the borrower would have to have paid off about $19k over the 5 years, which isn’t exceptionally difficult, just to stay in the same spot. And they best hope the house hasn’t fallen by more than that amount.

#27 Son of Ponzi on 09.18.14 at 8:42 pm

The linear thinkers are out in full force today.
Remember, life has its ups and downs.
And, it’s better to be 80% right than 100% wrong.

#28 takla on 09.18.14 at 9:00 pm

http://goldprice.org/charts/history/gold_all_data_o_b_usd.png gold chart going back to 73′..id say theres some solid gains there.No all gold investors bought their first oz @1900.00 and have held to now being down 30 plus %,many I know bought in the 80’s/90s and bought the lows and sold the highs and are still up large @ todays prices..As many here have said time to buy is when prices are in the skides as all asset price are cyclical.I think we all know why the gold price is capped.
Now one other point I wanted to make just what happened to that US debt ceiling from a yr ago………..US still in deficit and no mention of the ever accumulateing US debt…wish I could run my household in this manor//

#29 Kenchie on 09.18.14 at 9:06 pm

#8 My Life is a Pile of Shit on 09.18.14 at 6:59 pm

“‘They [rich people] have far less net worth in a house than your cousin does.’ That is a fallacy. Rich people have far more net worth in a house than other people, if only because they have far more net worth. They may have less fraction of net worth in real estate, but only because they have more money than they know what to do with.”

I think Garth’s definition of “rich people” is significantly different than yours… No offense.

#30 Cow Man on 09.18.14 at 9:09 pm

Sir Garth:

You wrote: “More importantly, in the past three years the US deficit has dropped to the lowest level in eight years…” This is because the “tea party wackos” as you call them wouldn’t let the Democrats increase the spending. Further the Keynesian economics are working in US but no where else. Lets see how long it is before they have to return to printing if the rest of the world doesn’t soon pick up.

#31 Nemesis on 09.18.14 at 9:15 pm

#@eddy/10…

http://tinyurl.com/k7fnwpx

#BonusZen:

http://youtu.be/ULkuwxJTGtY

#32 takla on 09.18.14 at 9:15 pm

Ps thx garth for letting me put that AU chart out there…I know that I did bad :] but the continuous bad mouthing of current prices by those to young or ill informed to know or remember the history gets under my skin.Of course it should just make up a portion of anyones portfolio but gold is money,just ask all the central banks that are currently accumulating at fire sale prices…thx

#33 Shawn on 09.18.14 at 9:24 pm

Secular Smechular… and How to Get Rich in Stocks

Mr. Frugal at 21 said:

I believe they call this a secular bull market.

******************************************
Notions of “secular” bull or bear markets are foolish nonsense that leads to troubles. Same for notions of bull or bear markets.

These terms imply that there is an ability to time markets or know if they are heading up or down.

First there is probably no such ability

Second success in investing is in no way dependent on predicting such things.

Buying and holding the index always works out fine in the longer run.

Better still is buying and holding the best companies.

Do that combined with rebalancing a target asset allocation of cash, fixed and stocks and you will automatically do a bit of buying low and selling high layered on top of the underlying buy and hold bias.

CN Rail closed today at $82.01. Its IPO in 1996 saw it open trading at $4.60 according to Yahoo Finance. That’s up 17 times or 1600%. That does not count the considerable dividends paid out. (All historic prices adjusted for splits)

In January 2000 it was $5.87

In August 2011 it was $36.02

Was it really all that hard to predict that this company with only one major rail competitor in Canada was going to be a good investment?

What about all the big Canadian Banks. As one example Royal Bank is at $83.11 Back in January 2000 it was at $14.76 (split adjusted). Again was it all that hard to predict that the big Canadian banks would do well? The self same banks that are so well reviled for high fees and being an oligopoly?

Buy the best companies and simply avoid sky-high P/E ratios and you will do fine.

Nortel you say? It was reporting consistent annual losses for several years BEFORE it peaked in price. It did not qualify as a good company. It pretended to make a profit by focusing on adjusted earnings but it was actually reporting losses.

It’s really not all that hard to identify good companies.

How did any Canadian NOT own Tim Hortons after seeing all those line ups or at least take a look and see if the P/E was reasonable.

Meanwhile the day traders keep chasing penny stocks.

#34 takla on 09.18.14 at 9:31 pm

must also comment on the great picture used today…..if I had a buck for everytime I also racked up the Harley under those same circumstances id already be wealthy and wouldn’t need to read this blog!

#35 Left Vancouver, Sayonara Canada on 09.18.14 at 9:37 pm

#1 James on 09.18.14 at 6:35 pm

Portland is definitely not a local area of concern. I live there and am currently in the market. I get zillow and redfin reports daily, and there is an upswing in sales, but not prices. People are buying again, and that is not a problem.

I suggest you check those websites and their historical sales data before throwing random cities into your analysis.

Too bad Canada Doesn’t have Redfin or Zillow. Canadians may not have become lambs lead to a financial slaughter by the realtors and media then.

#36 Son of Ponzi on 09.18.14 at 9:47 pm

#30 Cow Man on 09.18.14 at 9:09 pm
Sir Garth:

You wrote: “More importantly, in the past three years the US deficit has dropped to the lowest level in eight years…” This is because the “tea party wackos” as you call them wouldn’t let the Democrats increase the spending. Further the Keynesian economics are working in US but no where else. Lets see how long it is before they have to return to printing if the rest of the world doesn’t soon pick up.
————–
Agree overall.
A narrow focus on the performance of the US may not be prudent at a time when China’s and Europe’s economies are sputtering.

#37 Son of Ponzi on 09.18.14 at 9:50 pm

How did any Canadian NOT own Tim Hortons after seeing all those line ups or at least take a look and see if the P/E was reasonable.
———————-
Shawn, most Canadians have a life.

#38 Judly1 on 09.18.14 at 9:56 pm

note to self, never wear a Jason style goalie mask while driving my Porsche.

#39 Transplant on 09.18.14 at 10:01 pm

re: #14 Victoria Real Estate UpdateFlorida:

$191 K Port St. Lucie, FL (5 beds, 3 baths, 3,350 sq. ft., built in 2006, double attached garage, pool)
$284 K, Tampa, FL (5 beds, 3 baths, 3,002 sq. ft., built in 2005, attached 3 car garage, pool)
$176 K, Palm Coast, FL (5 beds, 3 baths, 2,731 sq. ft., built in 2013, attached 3 car garage)

This is of personal interest to me as I live a 10 minute drive from the Tampa house referenced in the note.

This is not a shack. This is a very nice area with a diverse group of people, many professionals and of diverse backgrounds. The surrounding area is rife with a wide variety of flora and fauna.

Within a 10 minute drive are a high school, middle school and elementary school as well as a top-notch new shopping centre, a new hospital with a superb fitness facility attached (cost to me-90 cents daily), restaurants, state parks, the usual gamut of big box stores, 4 Publix stores, several churches, I-75 and construction of the largest ice rink in Florida is set to start soon.

Within a 30 minute drive are 2 universities, downtown Tampa, nightlife, a world-class cancer testament centre, a science museum, Busch Gardens, access to 3 professional sports teams and many other attractions, cultural and otherwise. Another 15 minutes gets you to some of the best beaches in the world and outstanding fresh and saltwater fishing.

Toronto is a nice place and, except for dealing with the terrible traffic, I enjoy visiting. However, the point is, the sun does not rise and set on Toronto, and for a fraction of the price one can enjoy a nice life in many other attractive locations for far cheaper, with less stress and in a beautiful area with a good climate. I fear that some people are mortgaging their lives thinking they have no other options, and that real estate will rise in value forever, because after all, why would anyone want to live anywhere else?

#40 Transplant on 09.18.14 at 10:03 pm

sorry-“treatment” centre

#41 hohoho on 09.18.14 at 10:19 pm

> Shawn, most Canadians have a life.

and not much money, apparently.

> … Further the Keynesian economics are working in US but no where else.

Nowhere else? How so??

#42 Shawn on 09.18.14 at 10:20 pm

Son of Ponzi said:

How did any Canadian NOT own Tim Hortons after seeing all those line ups or at least take a look and see if the P/E was reasonable.
———————-
Shawn, most Canadians have a life.

***************************************
Life passes by whether you choose to get rich or not.

Takes less time to buy Tim Horton shares that it does a double double at peak line up hours.

By the way, Ponzi, am I sensing capitulation on your part? Ready to join the optimists of the world?

Also I suspect that none of those Canadians that have a life resemble anyone wasting their time here on this pathetic but strangely addictive blog.

#43 My Life is a Pile of Shit on 09.18.14 at 10:21 pm

#29 Kenchie on 09.18.14 at 9:06 pm

“I think Garth’s definition of ‘rich people’ is significantly different than [from] yours… No offense.”

What does that mean? Why would that be interpreted as an offense? What do you think is Garth’s definition of rich people? Does Garth have a special definition of rich people other than people with wealth? Unless you complete your thought, perhaps by explaining Garth’s definition of rich people, you are talking to yourself, because you are alone in understanding your comment.

#44 AB Boxster on 09.18.14 at 10:43 pm

I agree that people have too much invested in one asset – real estate.
However, I disagree that in order for people to live comfortably that they have to invest in the crap shoot known as the markets with balanced portfolios or not.

It should be that a person can invest in safe, non volatile instruments and receive a reasonable return without having to know anything about investing.
Cripes I can buy and drive a reliable vehicle without knowing the physics behind the inner workings of the internal combustion engine.
I can buy and eat food without knowing how it is grown, harvested and understanding the ‘krebs cycle’.
The vast majority of people want to be able to save money, get a reasonable return for it, work at jobs that pay them reasonable amounts, live their lives and enjoy their families, and retire on a reasonable amount until they painlessly die in their sleep.
Many have neither the time or inclination to figure out the logic behind the markets, or to rebalance their portfolios.
For those that do, good on ya. No argument here.

But frankly the most pathetic thing about today’s society is that people care more about their ‘portfolio’ and ‘net worth’, than they do about things that are really important in life, like health, family and community.
Once upon a time there were well paying jobs, and workers had pensions which were funded and we didn’t have to pay $25 fricking dollars to put a suitcase on a plane.

Feeling old today.

#45 KommyKim on 09.18.14 at 10:48 pm

RE: “Rich people seem to know this. They have far less net worth in a house than your cousin does.”

Well, it’s pretty easy to only have 10% of your net worth in a house when you are worth $50 million.
$500K in net worth? Not so easy.

#46 Nemesis on 09.18.14 at 10:51 pm

#JustForFun… #&RomanticIdealists… #Sometimes,”TheSkySmiles”. #Really&Truly.

http://youtu.be/EAZOETtWiqQ

#47 Soma on 09.18.14 at 10:53 pm

Syria ISIS EBOLA Haggistan ! And S&Pee still rising ?
Hmmm… I wonder which markets are the “Greater-Fools” playing these days !

#48 Boombust on 09.18.14 at 10:58 pm

Hi Garth,

Condo developments here in Coquitlam (a Vancouver suburb) are now nearing completion with offers ment to entire…

For example, Windsor Gate (Polygon) is offering a $7500,00 discount to the first 30 buyers…things are definitely slowing and inventories are rising at an incredible pace, particularly in the new condo developments surrounding Coquitlam Centre.

I think we’re going to see a BIG correction in the Vancouver area market. And, not just for condos, either.

#49 omg on 09.18.14 at 11:04 pm

Couple of month back people were waiting for the big market pull-back to buy.

My advice at the time was to just buy if you were investing for the long-term, do not worry about trying to catch a 10% correction.

Human nature is such that, if there is a 10% drop you will be to afraid to buy because CNBC, BNN MSM brings out all the wackos saying the market is going down 60%.

AND if the market does not drop then when do you buy, especially after it goes up 5 or 10%. Do you still wait for a pull-back – the pull-back may not come until the market goes up another 20%. And then it may be no where near the amount its gone up.

I know several people that cashed out during the GFC and have never bought back in. The didn’t buy in 2010 because the market was too rich, nor in 2011, or 2012…… Now do they buy in at 2014 levels, or still wait for that big pull-back??

If you are in it for the long-run just buy and forget it…period. And keep buying as you get more money to invest.

There are no end of studies that show that the buy and hold, buy and hold, buy and hold strategy, beats any trading strategy over the long-run.

#50 Soma on 09.18.14 at 11:05 pm

Syria ISIS Ebola Haggisland ! And S&Pee still rising ?

One wonders where “GreaterFools” are playing these days ?

#51 SWL1976 on 09.18.14 at 11:12 pm

Well today I got a cheque to deposit into my self directed RRSP account, wasn’t easy, 10 month process, but worth it. I have an important tip for young professionals and construction workers chasing the better gig and working for many companies along the way and contributing to many diffenent pension plans, pay attention. My advice is find out how long after you are no longer with a company that you can pull the pension and manage yourself, this will prevent losing these pension dollars into the abyss of pension fraud these days. Its rare anymore that people spend their entire career working for one said company, yet many still do have pension plans that you contribute to, don’t wait till you want to retire and hope for a cheque, withdraw the money as soon as you can and manage it in your own account

On another note I flew out of fort mac today and couldn’t help but notice the spray in the sky was thick and low. Bold face lies right in front of our eyes, most people are oblivious, but not me I see what’s going on…

One thing is for certian who ever is behind all of this does not have our best interests in mind

Just look up… Our skies used to be blue, not a white haze…

Remember?

#52 Victor V on 09.18.14 at 11:23 pm

AND IT WENT FOR – 106 Crescent Road – ROSEDALE

http://themashcanada.blogspot.ca/2014/09/and-it-went-for-106-crescent-road.html

This is a mess.

Two years ago, I posted this 5+1 bedroom, 6 bathroom house on a 36 x 138.73 foot lot at 106 Crescent Road in South Rosedale.

It was a nice house but not at the asking price of $3,379,000.

It didn’t sell and it was brought back on the market a few months later at the same price.

Of course, no sale and the price was finally dropped the following year in September 2013 to $3,195,000.

It finally sold in January 2014 for $3,042,235.

Then, at the end of August, it was on the market again…

For $2,499,000!!!!!!

So…either this place was a mess or it was a VERY strange bidding war strategy.

Turns out, it was a mess.

It just sold…

For $2,300,000.

Or $742,235 LESS than what it sold for 8 months ago.

#53 Shawn on 09.18.14 at 11:26 pm

Buying Back in after cashing out

omg at 49 said:

I know several people that cashed out during the GFC and have never bought back in. The didn’t buy in 2010 because the market was too rich, nor in 2011, or 2012…… Now do they buy in at 2014 levels, or still wait for that big pull-back

*************************************
The problem is that the rebound in the markets came very fast after the bottom in March 2009.

In a few months the market was up 20% and many would have felt stupid buying back in, as it would be an admission they had been wrong to sell.

A couple years later the market was up 50% or more and one would feel really stupid buying back in. (Feel stupid for selling and then stupid for not buying back in earlier) It just got worse as the market soared 100% then 200%.

The only sane thing to do then was to read zero hedge and convince yourself that the market was rigged and the end was nigh and all that.

Those people will mostly be on the outside looking up at the market for the rest of their lives.

But they will assuredly find someone to blame. It’s not human nature to blame ourselves, at least not publicly.

#54 Roman on 09.18.14 at 11:41 pm

I wonder if this is a gentle humour from Garth about investing into S&P after it tippled in price and hadn’t had a correction for 3 straight years while bonds rallied 15% from the beginning of 2014.

Buy everything – because what can possible go wrong?

Using the same logic, why not buy house that had tripled in price as well? Sure it illiquid and doesn’t pay dividend (unless you rent out basement), but one still will be enjoying a nice place.

Stock values are rooted in corporate earnings. House prices are based on emotion. My argumentt’s always been to have diversification and balance – it’s not about selecting one asset to the exclusion of the other. However it is a fact that a balanced portfolio has outstripped housing gains for the past five years, with none of the attendant cost. – Garth

#55 souvereigninternational on 09.18.14 at 11:43 pm

Garth, you just can’t stay away from mentioning gold. May be you should just buy some. Did it hit the bottom? Shawn is Buffet buying Gold at these prices? If he is would you follow him?

I myself prefer silver and like to keep my portfolio at 20% silver, 5% gold, 5% PM stocks/ the rest split between “Garthlike” assets and cash for ammo . I bought my silver at 9-11$us so I’m still up more than 30%.
I’m also aware that I’m a speculator not an investor. If you don’t speculate that a stock is gonna go up why “invest” in it. I don’t get it why speculating became such a dirty word (just like doomer/conspiracy theorist/Anarchist).

#56 Roman on 09.18.14 at 11:50 pm

Another observation how it is a great time to start doing stocks… again.

PIMCO’s Bill Gross (aka Bond King) goes full retard, sorry, I mean fully invested with… futures and other 45$ bln of derivates, to lift fund returns.
Proof: http://www.bloomberg.com/news/2014-09-17/bill-gross-used-45-billion-derivatives-to-lift-fund-gain.html

“The firm is recommending that clients consider strategies implemented with futures, options and swaps to lift subpar returns.”

Garth, do you know how to get into swaps? Need to enhance balanced portfolio to boost returns

#57 Roman on 09.18.14 at 11:51 pm

Victor V, the bank has shorted crap out of this place
Made 800k
Easy money.

#58 Nemesis on 09.19.14 at 12:00 am

#aParcelOfRogues… #MaybeNextTime?…

…”I would, or I had seen the day
That treason thus could sell us
My auld gray head had lain in clay
Wi’ Bruce and loyal Wallace!
But pith and power, till my last hour
I’ll make this declaration
We were bought and sold for English gold:
Such a parcel of rogues in a nation!”…

http://youtu.be/gLufwtSZiIs

#59 Happy Renting on 09.19.14 at 12:12 am

#16 Mister Obvious on 09.18.14 at 7:54 pm

Though it looks like the impulse is to invest a huge chunk, you’ve been pretty accurate calling the market top during the last few major events. Will you let us blog dogs know when you’re feeling that way again so we can stockpile cash for the upcoming deals? ;)

Seriously, glad to hear none of those blips hurt you, long term. I sat tight through 2008 and kept up my little RRSP contributions the whole time. Everything recovered, and then some.

#60 Flawed on 09.19.14 at 12:14 am

Scottish Vote….

Well its pretty obvious that people dependent on “guvmint money” won out the night in Scotland. So sad for the young people that will continue to stay under the boot of the City of “bankers” London.

Guess people have to learn the hard way…..like most of the world is going to do.

http://armstrongeconomics.com/2014/09/18/scotland-votes-no/

#61 Flawed on 09.19.14 at 12:19 am

Speaking of NO……what you WONT hear from Govt or the Main Stream Media

http://jonrappoport.wordpress.com/2014/09/18/un-climate-change-1000-scientists-say-no/

#62 Amanda Rubenwitz on 09.19.14 at 12:40 am

I work at in the medical field, and i earn $143,000 gross pay….my debt load is lesser than $5,000 and my house is valued at $843,140, an increase of over $300K when i first bought my house…

Maybe some of you need to work harder and lower your debt???? rather than complaining???

A simple Google search will show that Toronto is one of the best cities for men and women to live, and Canada is one of the most stable economies in the world…sheessh there is no conspiracy or housing bubble in Canada.

#63 smallcapsteve on 09.19.14 at 12:45 am

One of my favourite things these days: most people I know have most of their net worth in real estate and with most of what’s left in the Canadian Banks!

When I try to tell them this only makes their exposure to risk higher, they look at me and say “but you know the Canadian banks are safe?” To which I think, God help us!

#64 Nomad on 09.19.14 at 12:51 am

My colleague argued with me today. He is certain the stock market is a scam. He’s a talented guy, and smart, so imagine the rest of canadians. We’ll never get them on-board with investing. Unless the TSX goes up another 25% and we show up to work with a luxury car. Then they’ll start buying, at the peak.

Sigh.

Took some gains and bought some Autocanada, Avigilon, RIO Can, HR REIT.

My other colleague spent the same money on a new floor.

#65 Basil Fawlty on 09.19.14 at 1:03 am

The lowest interest rates in history combined with massive money printing (QE) have pushed up bond and stock prices. This has created massive bubbles, while the US labour participation rate is the lowest in 45 years. Not to mention companies buying back their own stock with cheap money from the Fed, which pushes up earnings per share.
How can this be sustainable? We have heard about the coming interest rate increases for years, but they are still not here. Does anyone wonder why? Mortgage applications are down 14%. Job creation is horrible, as most of the jobs are low paying and parttime. Food stamp recepients remain near 50M people. Major retailers, such as Walmart report declining sales, as commercial/retail vacancies continue to rise.
One should consider both sides of any storey, or you are just blowing smoke.

#66 Chickenlittle on 09.19.14 at 5:34 am

Garth I am so glad you mentioned the Huffington Post. I allow myself only one depressing read a day and usually it is you. Throw in the Huff Post and I’d be swinging from my..well, you know
Huffington Post: The doomers guide to living like everyday is your last (and not in a good way).
I can’t stand that rag.

#67 liquidincalgary on 09.19.14 at 5:36 am

#4 Shawn on 09.18.14 at 6:47 pm

Investors won and doomers lost.

There is nothing to disagree with in today’s edition of the blog.

I recall back in August 2011 we still had lots of doomers on this blog who were sure that American house prices would continue to decline and definitely fail to recover and that stocks were toast. Not to mention the American dollar was toast. Banks were “technically bankrupt”. The U.S. was bankrupt…

We were all doomed!

Nope, just the doomers were.

Most of the doomers from back then have gone quiet.

Though Tony has joined us to keep the doomer flag flying.

Sucks to have bought Gold at $1300 much less $1900 and to still be holding it.

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

first off, it is ‘tosed. as in comatose.

secondly, still humping a lot of gold? lucky you! now is the greatest opportunity to ‘average down’. if the metal does not hold in the 1180-1200 area, the next leg down is to 700.

happy buying!

go riders!

#68 earthboundmisfit on 09.19.14 at 6:11 am

The only revolting scotch is a blended scotch.

#69 Skip Wiley on 09.19.14 at 8:02 am

#39 Transplant on 09.18.14 at 10:01 pm

I hear you in respect to lower house prices and a nice lifestyle in sunny Florida.

How does paying for health care (especially if you have pre-existing conditions) impact on your financial well being?

And how about the interest that the dreaded IRS has in you now that you are a resident of the USA?

Since you’ve “been there and done that” I’d really appreciate your input in respect to health care costs and IRS/CRA impact.

Comments?

#70 Andrew on 09.19.14 at 8:33 am

According to a BMO survey, 75% of potential home buyers are worried that condos will not hold their value.
Seems like the herd is starting to catch on.

http://m.theglobeandmail.com/report-on-business/economy/housing/rising-home-prices-cause-rude-awakening-for-potential-buyers/article20680269/

#71 };-) aka Devil's Advocate on 09.19.14 at 8:48 am

#44 AB Boxster on 09.18.14 at 10:43 pm

But frankly the most pathetic thing about today’s society is that people care more about their ‘portfolio’ and ‘net worth’, than they do about things that are really important in life, like health, family and community.

Exactly… and so too is it of houses. Let’s face it, the average house of today is quite a different commodity than that of 50, 40, 30 and even 20 years ago. Hell the average house of 10 years ago is unacceptable to many for its lack of accoutrements.

Look around and the fat assessed, lazy, obese average person and their preoccupation with material things and money… pathetic. None of it matters if you don’t have your health and someone to share it all with.

SHIFT happens and so too, given time, will this hedonistic paradigm for it too is unsustainable.

#72 Kenchie on 09.19.14 at 8:49 am

G&M’s resident “Financial Services Reporter”has put out a relatively bearish article (finally!)

http://www.theglobeandmail.com/report-on-business/economy/housing/rising-home-prices-cause-rude-awakening-for-potential-buyers/article20680269/#dashboard/follows/

#73 Shawn on 09.19.14 at 9:07 am

Is Buffett buying Gold

sovereign international at 55 asked:

Shawn is Buffet buying Gold at these prices? If he is would you follow him?

*****************************************
If he did, no one would know until he was done.

Check his annual letters a couple of years ago he included a brilliant section where he calculated that if you owned all the gold in the world you could at that time trade it for I believe it was 13 Exxon Mobiles and all the farmland in the U.S. and have a trillion left over for pocket money. He figured that in the next 100 years the Exxons etc. would throw off huge cash while the gold would just sit there doing nothing.

Rule Number 1: Always assume Buffett is correct

Rule number 2: Don’t forget rule number 1.

#74 Holy Crap Wheres The Tylenol on 09.19.14 at 9:09 am

Yesterday markets hit record highs, even as bombs flew over Syria, the Scotch were revolting and Ebola turned into a global threat.
_____________________________________________
Scotch is a drink, don’t ever say tell a Scot that they are Scotch. They are Scottish or a Scot!
Learned that lesson from my distinctly Scottish relatives whom by the way are drowning their sorrows in Scotch still today after yesterdays vote!

Amazing how many humourless literalists read this blog. — Garth

#75 Inglorious Investor on 09.19.14 at 9:12 am

Are the Scotts the basement-dwelling, ‘Millennials’ of Europe?

Far be it from me to tell a nation of people whether they should be independent or not. And I will not claim to be an expert on the United Kingdom.

However, IMO the question of Scottish independence, or the independence of any nation, comes down to one simple question: Do you want to govern yourselves, or be ruled by outsiders? Or, to put it another way: Are you children or adults?

Apparently, the Scotch are still children who are too afraid come out of their English parents’ basement and stand up in the world on their own two feet.

My limited understanding of the Scotch is that they see themselves as a distinct nation, a distinct culture, a distinct Gaelic people separate from the Anglo-Saxon English. Scotland was in fact an independent country up until 1707, I believe. It was a hard-won independence, accomplished with the leadership of men like William Wallace and Robert the Bruce and the blood of countless Scottish patriots.

Yesterday, the Scotts had a chance for a peaceable separation from England. They had a chance to come out of the basement. They decided against it. They decided against their own freedom.

On the other hand, perhaps Scotland is not the basement dweller of Europe. Apparently the Scotts looked to Quebec for inspiration. Maybe what they learned is, like a screaming child, if you cry loud enough and threaten to run away, your parents will bribe you with goodies to keep you at home.

The question posed to Scottish voters yesterday was this: “Should Scotland be an independent country?” Simple. Direct. To the point. They said, “no.” Whatever the reasons, one has to conclude that the Scotts are still children. Or at least that’s how they see themselves.

If I were a Scott, I’d be ashamed. I can only imagine what Wallace would have thought.

#76 Montellino on 09.19.14 at 9:24 am

Hi Garth

Earlier this year you were setting up Jenny’s $35K portfolio with the equity portion set aside to wait for the “pending” correction..

Not sure if you can share with us but when abouts did she pull the trigger on equities?

—–
The last fifteen will go into growth assets – six into an ETF holding the 60 biggest companies in Canada, and nine into one owning the 500 largest corps operating in the US. Let’s wait a bit, I said, and see if this truly is the correction I’ve been expecting. If so, we’ll buy at the appropriate point.
——
thanks

As I have said many times, if you are naïve, have no stomach for short-term fluctuations and can’t help bailing in a correction, then wait. If you’re investing for the future, it makes less difference. — Garth

#77 liquidincalgary on 09.19.14 at 9:29 am

#55 souvereigninternational on 09.18.14 at 11:43 pm

Garth, you just can’t stay away from mentioning gold. May be you should just buy some. Did it hit the bottom? Shawn is Buffet buying Gold at these prices? If he is would you follow him?

I bought my silver at 9-11$us so I’m still up more than 30%.

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

careful now! if silver refuses to hold at 17.50….next support is 8.00-10.00 (2009 level)

please see above for my earlier musings on gold

#78 Inglorious Investor on 09.19.14 at 9:29 am

“Since then the Dow has added 34%, the Toronto market is up 28%, the S&P 500 has swelled 78% and gold has plunged 35.5%.”

I don’t think it was intentional, but this statement implies that gold is somehow counter-cyclical or antithetical to stocks. I think that is simplistic to say the least. Each asset class moves up or down in price for a number reasons. Sometimes they trend together, sometimes not. It is wise to understand the reasons, rather than to simply peg them as opposites.

In the absence of inflation or financial distress, there is zero reason to hold gold. Hence, it’s been dumped by serious investors. Only the nutbars hang on. — Garth

#79 Funny that on 09.19.14 at 9:39 am

#62 Amanda Rubenwitz on 09.19.14 at 12:40 am
I work at in the medical field, and i earn $143,000 gross pay….my debt load is lesser than $5,000 and my house is valued at $843,140
+++++++++++++++++++++++++++++++
House evaluation down to the dollar!!!
I like it!

#80 Inglorious Investor on 09.19.14 at 9:47 am

Implicit in today’s post is the admission that retail participation in the ‘paper’ markets is historically low. Most people simply do not trust ‘Wall Street’ anymore. Another factor may be that most people simply don’t have the surplus funds to invest. A double whammy that worries the BNN crowd and their sponsors.

Analysts, such as Martin Armstrong opine that US stock markets are not in a bubble because that would require retail investors to be ‘all in’ and buying stocks like proverbial tulip bulbs. Perhaps he’s correct. On the other hand, liquidity is the fuel, buy-backs are rampant, breadth is negative and long-term volumes are still in a downtrend.

But I wonder if maybe, just maybe, what we are witnessing today is generational revulsion of ‘paper’ markets on the part of the ‘dumb money’. Certainly, most Millennials don’t have the money to be in the markets. They can barely pay their rents, and if they did have the money they’d buy a home before they bought Horizons.

So, when this market eventually does turn, will it be because the retail investors are exhausted and ‘all in?’ Or should Wall Street just forget about pinning their hopes on Mom and Pop for the foreseeable future?

#81 Holy Crap Wheres The Tylenol on 09.19.14 at 9:51 am

Smoking Man going out for a nice steak dinner tonight with an old friend I was in the service with. He’s up here with the ball and chain for a vacation doing the Toronto, Niagara Falls, Ottawa circuit. Anyway he was stationed at Malmstrom and was there during the missile shut down incident. Swears by it!

http://msnvideo.msn.com/?channelindex=4&from=en-us_msnhp#/video/f29e3617-2ae9-4ec2-8ee2-27454e7d9d53

#82 Holy Crap Wheres The Tylenol on 09.19.14 at 9:58 am

This makes Canadian real estate far riskier than equities.
______________________________________________
True enough however for the young ones starting out its 50/50 to either get into the market or wait it out! They risk getting left behind for their future domain as prices rise at a non- linear amount vs renting and investing what little savings they have at a paltry return.

#83 Doug in London on 09.19.14 at 10:08 am

@Nomad, post #64:
You just explained, with a good example why some people accumulate wealth and others don’t. It’s worth adding that those who don’t accumulate wealth, but make a good income, blame the government, corporations, or say the system is rigged against the average person.

#84 Basil Fawlty on 09.19.14 at 10:16 am

“In the absence of inflation or financial distress, there is zero reason to hold gold. Hence, it’s been dumped by serious investors. Only the nutbars hang on. — Garth”

Who are these “Nutbars” you insult? Eric Sprott, John Embry, Pierre Lassonde, China, India, Russia? If financial distress was absent, interest rates would not be at zero around most of the globe and the Fed balance sheet would not be at $4.5T.

No, actually, I meant you. — Garth

#85 Shawn on 09.19.14 at 10:21 am

Gold is Shiny but Buffett is Brilliant

See starting at page 17 for Buffett’s essay on Gold and the other major investment asset classes.

http://www.berkshirehathaway.com/letters/2011ltr.pdf

This is absolute must read material.

The 2011 letter was released after the end of 2011… so not too far off the peak for Gold.

If you have never read one of Buffett’s annual letter you really don’t know what you have been missing.

#86 Blacksheep on 09.19.14 at 10:46 am

Inglorious Investor # 75,

“Yesterday, the Scotts had a chance for a peaceable separation from England. They had a chance to come out of the basement. They decided against it. They decided against their own freedom.”
———————————————–
I must say, as someone with plenty of Scottish blood in my veins, I’m quite disappointed.

They had an opportunity to send a message that would have resonated round the planet, but instead, cowered.

Fear is a very strong emotion, quite sad really.

Scots made the correct economic decision. — Garth

#87 Casual Observer on 09.19.14 at 11:01 am

In the absence of inflation or financial distress, there is zero reason to hold gold. Hence, it’s been dumped by serious investors. Only the nutbars hang on. — Garth

Garth, I’m confused. Have you changed your views on gold since writing, “Money Road”?

There’s a section in the book under the heading “Why every investor should have some gold” where you say every rational investor should have at least a 5% position.

I’m not being critical if you’ve changed your opinion, I’m just curious.

Because it’s not 2009 any more. Duh. — Garth

#88 Basil Fawlty on 09.19.14 at 11:01 am

“No, actually, I meant you. — Garth”

You said “nutbars”, not nutbar. But that’s okay, I think you are a quacks.

#89 Grantmi on 09.19.14 at 11:02 am

Is Alibaba going to be the straw on the camels back today! Another over priced IPO opening swelling at even before it opens.. .. smells like 1999 all over again.

Has anyone looked a the Twitter stock price recently.

http://scharts.co/1saFb5N

The entire IPO went to 25 accounts. Focus more on 4 million iPhones selling in 24 hours. — Garth

#90 Holy Crap Wheres The Tylenol on 09.19.14 at 11:04 am

#75 Inglorious Investor on 09.19.14 at 9:12 am
Are the Scotts the basement-dwelling, ‘Millennials’ of Europe?
On the other hand, perhaps Scotland is not the basement dweller of Europe. Apparently the Scotts looked to Quebec for inspiration. Maybe what they learned is, like a screaming child, if you cry loud enough and threaten to run away, your parents will bribe you with goodies to keep you at home.
____________________________________________
Major difference being that Scotland was an independent country for almost 1000 years before making some major disastrous investments that lead to a union with England. Quebec on the other hand was never a independent country, just a colony and an extension of France, then handed over to Britain via a battle. Totally belonging to Britain whereas Britain handed the whole lot over to us as a package, viola Canada a whole country. They (Scotland) had the right to ask should we be separate again? The vote was nay!
Naething muckle!

#91 Mixed Bag on 09.19.14 at 11:06 am

Scots made the correct economic decision. — Garth

I figured it came down to that. As the European economies are still weak, and jobless rates high, the ones who voted no were likely more concerned about supporting themselves and their families than the lovely, but can’t-put-food-on-the-table financial risk and promise of national independence. If economic times were better, or far worse, the outcome might have been different.

Why vote for a worse outcome, when nobody is threating your cultural uniqueness? — Garth

#92 Kenchie on 09.19.14 at 11:07 am

Some light reading for the blog dogs interested in China’s housing market:

http://research.stlouisfed.org/wp/2014/2014-022.pdf

#93 Grantmi on 09.19.14 at 11:07 am

The entire IPO went to 25 accounts. Focus more on 4 million iPhones selling in 24 hours. — Garth

I did.. bought more at $102 the other day!

#94 Shawn on 09.19.14 at 11:08 am

“the Scotch were revolting”

I basically agree but I am told it is an acquired taste.

#95 Son of Ponzi on 09.19.14 at 11:09 am

#79
+++++++++++
House evaluation down to the dollar!!!
I like it!
————-
Not enough 8s in it, though.

#96 Shawn on 09.19.14 at 11:11 am

Scottish Independence

Anyhow, the whole notion of nations is rather quaint and old-fashioned in a globalized world as cultures slowly but surely merge.

When it comes to Canadians or Americans or Scots there is really is no “we” just a collection of individuals.

Nationalism comes in useful in rooting for sports teams and not much else.

Okay, yes we still need countries for a while because of a few wars and such and because of the need to restrict immigration. That will get worked out as globalization continues.

#97 Mixed Bag on 09.19.14 at 11:16 am

Why vote for a worse outcome, when nobody is threating your cultural uniqueness? — Garth

Emotions.
I expect emotions will also figure large in the Toronto mayoral elections, whether we like it or not.

#98 Son of Ponzi on 09.19.14 at 11:19 am

#92 Kenchie on 09.19.14 at 11:07 am
Some light reading for the blog dogs interested in China’s housing market:

http://research.stlouisfed.org/wp/2014/2014-022.pdf
—————
Thanks for sharing this good find.
Applies to Vancouver and Toronto as well.

#99 Son of Ponzi on 09.19.14 at 11:25 am

Anyhow, the whole notion of nations is rather quaint and old-fashioned in a globalized world as cultures slowly but surely merge.
—————
I agree that’s the case in Canada.
Many very successful European countries are going the other way.
Germany, Austria and Switzerland are examples.

#100 Grantmi on 09.19.14 at 11:35 am

Now it looks like BABA is going to be opening over $100/share when it opens…

Amazing! BIGGER then PROCTER and GAMBLE!!

#101 Cato the Elder on 09.19.14 at 11:43 am

Re: #3 Yitzhak Rabin

Total US Debt down to the penny:

September 15, 2014 = $17,770,878,224,353.80
September 15, 2014 = $16,738,502,722,145.90

Difference = $1,032,375,502,207.90

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

Totally spot on. Good to see I’m not the only one that can see through government statistic BS. If you want to know the true stats on inflation or unemployment check out:

http://www.shadowstats.com/alternate_data/inflation-charts

Currently inflation running at 10% and unemployment almost 25%. Want to know why these numbers are REAL? They’re using the governments OWN calculation formulas, just from 20 years ago! They’ve revised their formulas since then in order to mask the problems they are creating.

#102 Inglorious Investor on 09.19.14 at 11:46 am

“Scots made the correct economic decision. […] Why vote for a worse outcome, when nobody is threating your cultural uniqueness? — Garth”

Point taken, but those are short-term concerns in the long scope of history. Also, one could argue that in the long run Scotland might even be better off economically.

But that’s not my point. My point is, they missed a chance to shape their own collective future. A people who see themselves as a distinct nation (and were in fact once an independent country) but are not willing to stand on their own 11 million feet and accept the attendant responsibilities and privileges of independence––when easily given the chance––don’t deserve to govern themselves. They simply deserve whatever their foreign masters decide to dish out.

Where would the US be if they chose fear, subservience and dependence on England over independence, freedom and the will to take destiny into their own hands (current problems not withstanding)? Before American independence many people expressed the same concerns and excuses that the fear mongers used to cow the Scots into a ‘no’ vote. I know Scotland is not the United States and the circumstances are different, but to give up before even trying, it’s just sad.

#103 Cato the Elder on 09.19.14 at 11:47 am

The USA is rapidly devolving into a totalitarian police state. All the big companies are merging, competition is declining, new business creation is rapidly declining. Only those businesses with the closest ties to the banks and government are able to thrive.

Why do you think all this legislation is being passed which is destroying the civil liberties in that country? Patriot act, NDAA, etc.? The inevitable conclusion of an empire is that it requires an emperor. A centrally planned state also requires complete coercive force in order to allocate resources the way the state wants.

Thinking we’re Canadian and we shouldn’t care? Think again. Almost everything the US does, we invariably follow. I don’t trust our politicians to have the guts to stand up to these pressures. Look what they did to Garth the moment he demonstrated some degree of independent thought.

#104 Smoking Man on 09.19.14 at 12:05 pm

le future?

 Holy Crap Wheres The Tylenol on 09.19.14 at 9:51 amSmoking Man going out for a nice steak dinner tonight with an old friend I was in the service with. He’s up here with the ball and chain for a vacation doing the Toronto, Niagara Falls, Ottawa circuit. Anyway he was stationed at Malmstrom and was there during the missile shut down incident. Swears by it!

http://msnvideo.msn.com/?channelindex=4&from=en-us_msnhp#/video/f29e3617-2ae9-4ec2-8ee2-27454e7d9d53
…………..

Yes I remember the incident well…

#105 Cato the Elder on 09.19.14 at 12:16 pm

Garth is pretty cool – I mean, what other person from political life would let you openly criticize and disagree with them on their own blog? Most of them think they’re so right that everyone who disagrees has to be censored.

#106 Macrath on 09.19.14 at 12:19 pm

The Vanguard European ETF( VGK ) death cross technical this morning.
No EU euphoria !

http://tinyurl.com/lmq94ua

#107 Funny that on 09.19.14 at 12:20 pm

Yesterday markets hit record highs, even as bombs flew over Syria, the Scotch were revolting and Ebola turned into a global threat.
_____________________________________________
Scotch were revolting. I don’t get it, are they no longer revolting?

#108 Macrath on 09.19.14 at 12:46 pm

#103 Cato the Elder
Only those businesses with the closest ties to the banks and government are able to thrive.
———————————————————-
I was in a another local small business that does not accept credit cards yesterday. I`ve experienced how Banks/ Gov eliminate small businesses. Tragic, but some are fighting back and surviving.

#109 Kenchie on 09.19.14 at 1:04 pm

For those who don’t know much about the United Kingdom (of Great Britain and Northern Ireland), here is a simple video to describe the differences:

https://www.youtube.com/watch?v=rNu8XDBSn10&list=TLRi2aEKrj-uKFzH5WY87qbhP3MX71d8Zm

PS: CGP Grey is hilarious. Watch his other videos too, as they are funny and informative.

#110 Shawn on 09.19.14 at 1:07 pm

Revolting

Macrath asks:

Scotch were revolting. I don’t get it, are they no longer revolting?

*************************************
No, it’s Friday night there, and big parties are on, and after enough drinks they are becoming quite alluring now.

#111 Tony on 09.19.14 at 1:56 pm

Re: #67 liquidincalgary on 09.19.14 at 5:36 am

You guys would never be any good at games where you have to think ahead like snooker or card games. When the crash that rivals the ’29 crash comes then you’ll know the reason why you all went broke.

#112 Basil Fawlty on 09.19.14 at 1:58 pm

“Garth is pretty cool – I mean, what other person from political life would let you openly criticize and disagree with them on their own blog? Most of them think they’re so right that everyone who disagrees has to be censored.”

True, Garth does have thick skin, which is appreciated.

#113 happity on 09.19.14 at 2:04 pm

The USA big banks have gotten bigger but fixed nothing. The fed is only reducing it’s purchase of crap, it hasn’t gotten rid of anything.

To believe that the economy is rosy is to deny the obvious.

#114 SWL1976 on 09.19.14 at 2:11 pm

#103 Cato the Elder

Nicely put, that about sums it up

All safe bets are off, its a rodeo of a crap-shoot out there

Anyone ever heard of head smashed in buffalo jump?

We are the herd

#115 Flawed on 09.19.14 at 2:16 pm

Yesterday markets hit record highs, even as bombs flew over Syria, the Scotch were revolting and Ebola turned into a global threat.

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

When volume is at record lows and its pretty much Goldman Sucks and JP Morgouge controlling the entire market why would you expect anything less?

#116 Hol Crap Wheres The Tylenol on 09.19.14 at 2:19 pm

#104 Smoking Man on 09.19.14 at 12:05 pm
le future?

_____________________________________________

I just showed my old friend this blog, he is amazed at how much money it cost to live here! He thinks were all crazy. Housing is insane, he can’t believe its true. I said yes true, but you’re the one that saw UFO’s now who would believe you? We are heading out for a some drinks and to catch up on the shitty old days overseas. At least he lives in Georgia and has good weather.
P.S.
I believe this guy as much as anything I trusted him with my life and visa versa.

#117 SWL1976 on 09.19.14 at 2:24 pm

Silly me, I should have posted the link

#118 :):( Ying Yang on 09.19.14 at 2:42 pm

Smoking Man just left Seneca with cash In hand. The girlfriend wants to eat at Casino Fallsview tonight. I was looking forward to the crabmeat at Seneca buffet. Dam!
I sugest the Spanish 21 at Seneca, made out like a bandit!

#119 bill on 09.19.14 at 2:43 pm

The Scotch by John Kenneth Galbraith

#120 Bottoms_Up on 09.19.14 at 3:00 pm

#102 Inglorious Investor on 09.19.14 at 11:46 am
————————————————–
Also consider this: if the YES side won by 1% of the vote, that would mean that roughly 20,000 Scottish people, 16 and 17 years old, ultimately decided the fate of all of the UK. A silly proposition at best.

The threshold for separation should be higher than 50%+1

#121 Kenchie on 09.19.14 at 3:28 pm

Smoking Man will luv this MSM article:

http://www.bloomberg.com/news/2014-09-19/mom-and-dad-banks-step-up-aid-to-first-time-home-buyers.html

#122 Blacksheep on 09.19.14 at 3:34 pm

Smoke & Vlad,

From: Russian Union of Engineers.

From Mish’s site:

http://globaleconomicanalysis.blogspot.ca/2014/09/surprising-mh17-crash-update.html

“At the very least the report should be broadly discussed in western media, and western experts asked to refute what parts of it they find fault with.”

#123 Harbour on 09.19.14 at 3:36 pm

Did Alibaba Crash the Bitcoin Price?

http://www.cryptocoinsnews.com/alibabas-us-ipo-may-have-crashed-the-bitcoin-price/

#124 Harbour on 09.19.14 at 3:44 pm

Silver, Gold, Platinum all getting crushed

http://finance.yahoo.com/news/silver-getting-crushed-185448671.html

No surprise there. — Garth

#125 Smoking Man on 09.19.14 at 4:35 pm

#116 Hol Crap Wheres The Tylenol on 09.19.14 at 2:19 pm

Show your buddy this, it’s when me and my 3 partners arrived..

Tell him he’s aged well since we flew over his base.

http://www.syracusenewtimes.com/1957-ufo-brass-colored-disc-lake-erie/

#126 Victor V on 09.19.14 at 4:46 pm

Above-target inflation puts rate pressure on Bank of Canada

https://ca.finance.yahoo.com/news/canada-annual-inflation-rate-holds-steady-2-1-123448826–business.html

OTTAWA (Reuters) – Canada’s annual inflation rate remained above the Bank of Canada’s 2.0 percent target in August for the fourth month in a row, putting pressure on the central bank to drop its neutral stance on interest rates.

Statistics Canada said on Friday overall inflation held firm at 2.1 percent while the closely watched core rate unexpectedly jumped to 2.1 percent from 1.7 percent in July to hit a level last seen in April 2012.

The Bank of Canada, citing a below-par economy, says the next interest rate move could either be a hike or a cut, but analysts said the new data called this into doubt. Central banks generally raise rates to cool inflation.

“With inflation on both headline and core now about 2 percent, there is a limit to how long the Bank of Canada can continue to maintain its current tone,” said Camilla Sutton, chief currency strategist at Scotiabank.

#127 Transplant on 09.19.14 at 5:02 pm

#69 Skip Wiley re: US taxes & healthcare

Since this is not directly related to real estate or investing I hope Mr. Turner will indulge us. It sometimes is good to get the real story firsthand rather than rely on all the misinformation that is widespread online.

I have been paying US taxes since the first day I moved here in 1978, initially as a “Resident Alien” i.e. green card holder and subsequently as a US citizen. Acting on the advice given to me by a Canadian immigration official at Pearson many years ago, I also hold a Canadian passport and therefore Canadian citizenship i.e. “dual”. The only financial connections I have with Canada are a small RBC account to use when we are up there to avoid transaction fees and to help pay bills for a disabled family member residing in a nursing home, as well as CPP for my wife and I, and OAS for me. The pensions are directly deposited to my local bank account electronically.

Each year RBC sends us a statement listing our maximum balance in the previous year. The Canadian authorities send us a statement summarizing our pension payments. This information is given to our CPA who uses it in filing our taxes. The US and Canada have a reciprocal agreement so that we are not taxed by both jurisdictions. Since I pay only US taxes I assume the country of residence does the taxing. So I file a return with the IRS the same as any other American would and file no Canadian return.

Both my wife and I are over the age of 65 and retired so we have Medicare as our “primary” payer; this is paid for by a $103 deduction from our Social Security electronic deposit monthly. Over and above that we receive $3,500 SS monthly. Medicare covers 80% of what Medicare allows (not what is actually charged by the provider) and supplemental insurance covers the remaining 20%.

In addition we have a “secondary” payer known as a “Medicare supplement”. This is available from commercial insurance companies, ours is with Blue Cross/Blue Shield which to me is the “gold standard”. Due to the provisions of the Affordable Care Act i.e. “Obamacare” I have been forced to change my insurance as of December 30, 2014. The ACA is extremely unpopular here and not just with “tea baggers”. I consider myself to be pretty moderate and support medical coverage for everyone, but how requiring me to change my insurance is helping those who are uninsured is beyond me.

I have arranged for replacement insurance effective December 1, 2014 and the benefits and costs will be about the same as I am now paying, about $700 monthly for my wife and I including drug coverage. There are no longer any exclusions for pre-existing coverage or waiting periods or prorating of fees. These are good things but not as altruistic as you would think. Surely you wouldn’t force the cancellation of peoples’ insurance and then expect them to fend for themselves with preexisting conditions and so on. My insurance has no co-pays and minimal deductibles with a limit on out-of pocket expenses of about $1,000 annually.

One thing about having to purchase insurance is that you realize that there is nothing “free”, either down here or up there but down here you have a better idea of the real numbers; we get regular statements from Medicare and BC/BS with all the numbers. My insurance has stood me in very good stead as I developed a life-threatening illness 2 years ago and continue to struggle with it as I shall lifelong, however long that happens to be.

You hear horror stories of outrageous medical costs but they are sensationalized. The actual payment to providers bears no resemblance to the actual reimbursement. By law everyone presenting to the ER has to be treated. Not doing so is a violation of “EMTALA’ laws, feared by all hospitals as an infraction will result in not only a fine but suspension from the Medicare program which will very quickly result in bankruptcy of your institution. Yes, these uninsured individuals will get a bill but nobody realistically expects that they will be paid. Those ill enough to be hospitalized and uninsured, especially with a serious condition e.g. stroke or heart attack or severe trauma are almost always put on Medicaid retroactively.

You will read about the cost of medical care causing bankruptcy. In my experience medical costs are but a part of what these people owe-they owe on their cars, houses, boats and other consumer goods. Universally when these people file for bankruptcy the judge puts medicals bills at the bottom of the list of creditors, after all, you can’t repo a gallbladder or foreclose on pneumonia. You can quote all the studies you want giving you all kinds of numbers, but having been on the front line I know what happens in real life.

Just to give you a scale of some of the numbers referred to above, my monthly treatments over a 6 month span last year each had a “sticker” price of about $80,000 but the actual reimbursement to the facility was about $8,000 from Medicare and $2,000 from BC/BS. My cost-$0. One of my medications cost $10,500 monthly. I paid $750 the first month and nothing for the second month at which point it was discontinued, but if I had been kept on it I would have incurred no further cost.

Mr. Turner, I can understand that you might not want to OK this lengthy comment. However from my reading the Canadian papers, even up there where healthcare is popularly thought to be “free”, medical costs can seriously crimp retirement financial planning and I can attest to it not being free by virtue of having a brother for whom I am responsible in a Toronto nursing home and seeing that many services are not covered by government health plans. So maybe this is germane to investment planning.

It certainly is. — Garth

#128 liquidincalgary on 09.19.14 at 5:05 pm

#111 Tony on 09.19.14 at 1:56 pm
Re: #67 liquidincalgary on 09.19.14 at 5:36 am

You guys would never be any good at games where you have to think ahead like snooker or card games. When the crash that rivals the ’29 crash comes then you’ll know the reason why you all went broke.

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

….annnnnd, the doomers are officially back!

#129 NostyVlad the Snugglebombed on 09.19.14 at 5:20 pm

#47 Soma on 09.18.14 at 10:53 pm — “Syria ISIS EBOLA Haggistan ! And S&Pee still rising ?”,
#60 Flawed on 09.19.14 at 12:14 am — “So sad for the young people that will continue to stay under the boot of the City of “bankers” London.”,
#75 Inglorious Investor on 09.19.14 at 9:12 am — “Do you want to govern yourselves, or be ruled by outsiders? My limited understanding of the Scotch is that they see themselves as a distinct nation, a distinct culture, a distinct Gaelic people separate from the Anglo-Saxon English.” (Such as Crimea, Quebec and others)
— and —
#122 Blacksheep on 09.19.14 at 3:34 pm — “Smoke & Vlad, From: Russian Union of Engineers.”

One thing — “It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything.” — Joseph Stalin

There is no possible way that polls released a day or two prior to the referendum, which showed both sides in a dead heat would suddenly become a 10% gap with 12% of voters not voting.

There’s’s a buncha shit goin’ on in this outer school of a planet all at the same time — Glasgow (alleged voter fraud), No shit Sherlock, Medical Martial Law, ISIL (CIA – Mossad) and <a href="#47 Soma on 09.18.14 at 10:53 pm — “Syria ISIS EBOLA Haggistan ! And S&Pee still rising ?”,
#60 Flawed on 09.19.14 at 12:14 am — “So sad for the young people that will continue to stay under the boot of the City of “bankers” London.”,
#75 Inglorious Investor on 09.19.14 at 9:12 am — “Do you want to govern yourselves, or be ruled by outsiders? My limited understanding of the Scotch is that they see themselves as a distinct nation, a distinct culture, a distinct Gaelic people separate from the Anglo-Saxon English.” (Such as Crimea, Quebec and others)
— and —
#122 Blacksheep on 09.19.14 at 3:34 pm — “Smoke & Vlad, From: Russian Union of Engineers.”

One thing — “It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything.” — Joseph Stalin

There is no possible way that polls released a day or two prior to the referendum, which showed both sides in a dead heat would suddenly become a 10% gap with 12% of voters not voting.

There’s’s a buncha shit goin’ on in this outer school of a planet all at the same time — Glasgow (alleged voter fraud), <a href="Spain, Italy and Belgium, No shit Sherlock, Medical Martial Law, ISIL (CIA – Mossad) and MH17.“>MH17.

What about CC? Oh yes, it’s been snowing for several weeks in various locations!

#130 espressobob on 09.19.14 at 5:37 pm

#84 Basil Fawltry

Eric Sprott-John Embry, seriously?????

As you feed on their ‘thesis’ and go long they bet the other direction! Ever wonder how some get rich?

#131 Blacksheep on 09.19.14 at 5:44 pm

“Silver, Gold, Platinum all getting crushed”
———————————————-
Come on, single digit silver!

#132 Kenchie on 09.19.14 at 6:31 pm

#43 My Life is a Pile of Shit on 09.18.14 at 10:21 pm

“#29 Kenchie on 09.18.14 at 9:06 pm

“I think Garth’s definition of ‘rich people’ is significantly different than [from] yours… No offense.”

What does that mean? Why would that be interpreted as an offense? What do you think is Garth’s definition of rich people? Does Garth have a special definition of rich people other than people with wealth? Unless you complete your thought, perhaps by explaining Garth’s definition of rich people, you are talking to yourself, because you are alone in understanding your comment.”

This is pure guessing based on how Garth worded his statement. Garth, probably, thinks “rich” is about $20 million or more in net worth.

The reason why it could have been offensive to you, or anyone else, is that not everyone thinks “big”, for a lack of better term. So, perhaps, you may think that $500,000 is “rich” or, perhaps, $50 million is “rich”. I was initially thinking you were of the former mindset since your use of the word “fallacy” when objecting to Garth’s statement and also your rationale in arguing that he may be wrong.

Your original post says that the “rich have far more net worth in a house, if only because they have far more net worth”. That’s more or less irrelevant because Garth is talking about a relative basis, while you are talking about on an absolute basis. And when you say the rich “have less fraction of net worth in real estate, but only because they have more money than they know what to do with”, you are belittling their intelligence. It’s dismissive to suggest that the “rich” don’t make rational investment decisions when managing their portfolio’s asset allocation mix.

#133 Kenchie on 09.19.14 at 7:13 pm

#61 Flawed on 09.19.14 at 12:19 am
“Speaking of NO……what you WONT hear from Govt or the Main Stream Media”

There’s a couple reasons why the MSM doesn’t cover this thing you post: a) It’s old and therefore not newsworthy, b) it’s from a hyper partisan organization, c) it’s from a hyper partisan organization that doesn’t disclose its key funding sources, d) it’s from a hyper partisan organization that puts “free market solutions” before environmental preservation, e) the actual “report” is not a report but rather a compilation of news articles, names and a letter(s) addressed to Ban Ki Moon. So lame.

#134 Kenchie on 09.19.14 at 7:42 pm

#62 Amanda Rubenwitz on 09.19.14 at 12:40 am

“I work at in the medical field, and i earn $143,000 gross pay….my debt load is lesser than $5,000 and my house is valued at $843,140, an increase of over $300K when i first bought my house…

Maybe some of you need to work harder and lower your debt???? rather than complaining???

A simple Google search will show that Toronto is one of the best cities for men and women to live, and Canada is one of the most stable economies in the world…sheessh there is no conspiracy or housing bubble in Canada.”

Amanda, I totally agree with you on people should stop (or slow down) their complaining, and that they should work harder. I also agree with you about TO being stable/liveable place and that there is no conspiracy conspiring against these pessimistic blog dogs. However, the housing bubble portion of your statement is dubious at best.

Assuming your house is valued at what you say it is (ps: it’s not. Houses are valued by negotiation, not by listing price), you have done very well for yourself by your fiscal responsibility. But you may be neglecting the falling interest rate environment that has helped your cause (unbeknownst to you) in elevating house prices across this fine country. The word “bubble” may not be the correct term, but there are/have been misallocation of resources by many Canadians, and particularly Torontonians and Vancouverites.

#135 Chickenlittle on 09.19.14 at 10:01 pm

“What about CC? Oh yes, it’s been snowing for several weeks in various locations!”

Nosty

…………

I love those “Save the polar bears” commercials. I almost spit out my tea when I saw one for the first time last month.
The North Pole was going to be the new Myrtle Beach, eh? Too bad that isn’t what’s happening.

What will we put in our scotch when the ice melts?

#136 Skip Wiley on 09.20.14 at 6:31 am

#127 Transplant on 09.19.14 at 5:02 pm

Thank you for taking the time to reply.

The costs and issues associated with living outside of Canada are things many Canadians may not have factored into their thinking and their budget.

Given the number of Canadians reportedly buying property in the USA, your reply will hopefully open their eyes when (perhaps If) they review their budget. It’s all part of the investment planning process (or at least it should be).

Well written post too…kudos for taking the time!

I do appreciate it.

(Mr Turner… perhaps this subject warrants more discussion?)