Last week market junkies fretted over the US economy. Next week they’ll obsess over the Bank of Canada’s rate. For those who’ve forgotten about the mess in 2011 (debt ceiling crisis), who were in high school in 2008 (the GFC), sporting Huggies in 2001 (dot-com bust) or not even wriggling upstream in 1987 (Black Monday), these seem like scary, uncharted days.
This pathetic blog is a sampler of human emotion. We swing between greed (houses will always go up) and fear (the word is ending), while life meanders as usual down the middle.
Here’s a sample of what I get daily from people half my age who know twice as much:
Your (sic) a clown Garth. No US recession?? You talk about supported facts and then you won’t publish ALL of the facts that show you are full of shit. Your a fckn asshole. You have gained the false trust of Canadians who you COULD be helping but you continue to live in the 80’s and ignore the changing reality of our collapsing world.
Extremism is now mainstream. A recent survey in the US found 43% of women are afraid of the stock market, just slightly ahead of death (46%). Meanwhile 83% of people under 40 think houses are a good investment, despite the fact they’re never cost this much, involved such debt, or posed such risk. But history shows us financial assets have outperformed real estate for many decades – simply more proof people do things for emotional reasons, not rational ones.
An astonishing number of folks, mostly moist, believe we live in the worst of times with governments, banks and institutions run by incompetent fossils. They argue ‘fiat’ money is doomed, some derivative debt crisis will engulf the world, financial assets are toxic, the rich cheated and should be eaten, interest rates will never rise and America is toast. Maybe it’s because they’re struggling in their own lives and feel defeated, that their view is dark. And flawed.
We all get emotional. Screwed-up decisions abound. When people think the world’s choppy, volatile or dangerous, they revert to fight-or-flight mode. It’s why you have the phenomenon of a radicalized Occupy Movement of young people who have GICs and savings account in the orange guy’s shorts, because they fear loss. The Google age intensifies it. Fear sells, and in the digital world, it’s wall-to-wall. Look at Zerohedge, or Automatic Earth – info designed to make suicide appear hopeful.
In real life, we all need forever income, not gold or canned tuna. In a time when rates are structurally low, savers will probably run out of money before they run out of life. If society did not end in 1930, or 1942 or 2008, it’s unlikely to happen now. It’s the arrogance and myopia of youth that makes kidults believe we live in unprecedented times. It’s simple financial illiteracy that leads others into one-asset strategies. But that’s not new. We all loved Nortel. Now we all love houses.
This is what makes booms and busts. Markets (stocks, bonds, real estate) don’t get dangerous on their own, only when human emotion pushes them to unsustainable peaks. Ironically that’s when most people are blinded to the risk, because everybody else thinks the same.
So, there’s a reason this blog has a central message of diversification and balance. The doomers are massively wrong about what’s coming. Likewise the house-humpers are in for big surprises. The best shot at a happy, successful life is to invest with your head, not your pants.
The basic message today is that you may think you can handle volatility, but you can’t. When things go up, people lust after them – like houses in YVR. When things go down, people shun them – like houses in Calgary. When assets plunge, people panic and sell – like stocks and funds in 2009. Everybody – from hipsters to spinsters – makes financial decisions based on emotions. The dominant one is fear. It’s stronger than greed or sex. And it permeates the comment section of this blog.
Happily, there’s an antidote.
Investing is not about chasing the best possible return or avoiding the worst risk. Rather it’s a process of weighing your needs, goals, means and relationships to devise a path to financial security. Forget getting rich. Don’t obsess about being a bag lady. Realize you don’t have the discipline or courage to buy things and hold them for gains decades from now. It’s hopeless. If they temporarily soar, you’ll buy more. If they crash, you’ll sell. Especially if you read the crap posted here.
Throughout history, stocks do best. They track human progress and economic growth. But they gyrate mercilessly. So, you need stuff to balance this out and calm your portfolio. It’s the logic of a balanced approach, in which you hold safe stuff (40% is a good amount – bonds, preferreds, cash) as well as growth assets (spread over regions, sectors and range of companies). Don’t try for home runs, but constant singles and doubles. That will keep you from selling after assets have already dropped and buying after they’re risen.
A guy I work with, portfolio manager Doug Rowat, also reminds us that newspaper writers, the numbnuts at Zerohedge, Global TV’s anchorettes and all the renown experts posting here confuse the stock market with all financial assets.
“This often causes investors to conclude one of two things,” he says. “1) why am I not keeping pace with a skyrocketing stock market or 2) the world is ending, I need to sell everything and abandon capital markets forever. Investors rarely consider how a balanced, globally diversified portfolio may be performing. And the answer is likely very simple: probably not quite as good as an equity- only portfolio in the good times, but certainly much better than an equity-only portfolio in the bad times. The returns and reduced risk profile of balanced, globally diversified portfolios don’t make for great headlines, but they certainly control emotion. And saving us from making bad, reactionary investment decisions are what diversification and balance are all about.”
So, the latest US job numbers are irrelevant. So is whatever the central bank does next Wednesday. Ditto the budget later this month. If you had a balanced portfolio in 2008, you snoozed through what some people here still can’t get over.
Which is why it sucks to be them.
271 comments ↓
Happy Easter. First?
Did you hear about the dyslexic, agnostic, insomniac? He used to lay in bed at night wondering if there really was a doG!
You get some mean flame action Garth! And it might help to remind people – readers from wherever – that a balance of information is also helpful. We can’t get all our wisdom from you, that wouldn’t be balanced. It would also grant you undue authority. Something you might rather like, but in the long run we all need to make up own our minds.
People read Zero Hedge because it has a massive global following and posts are clearly outside the mainstream. With all other news being captured and delivered by corporate media, there are few places that can earn trust, and a crowdsourced site like that reflects the spirit of the time. People are fed up with official propaganda and are desperate for other sources.
While half the stuff in ZH can be ignored, the international coverage is good, as most of its sourced from other articles we don’t usually see. Like this bit about Chinese wealth comprised of 75% housing http://www.zerohedge.com/news/2015-04-05/facing-housing-hard-landing-chinas-propaganda-department-goes-all Which looks like Canada.
People have to develop a capacity to make up their own minds about what information means to them. I include you at the top of my list, but I also evaluate everything I read before deciding to act.
Gimme 2 portfolios for a 30 year old:
1) Money for retirement
2) Money for a down payment when the time is right. (could be 2 years, could be 5)
You should have another (sic) after the abomination ” 80’s ” in your half-age quote.
Very good post Garth. Keep up the good work.
There are many of us that appreciate your time and effort.
What a fantastic post, Garth! Thank you!
The thing about the doomsday scenario is – it sells. The fear button is pushed pretty much continuously by the media, the government, anyone who wants to get your attention in any way for whatever reason. One would think the fear button would have worn out by now, but apparently not.
The thing about being rational, building growth etc. is that in the above environment, it is borrrriiiinnng. No one listens, because it doesn’t push that fear button the way ‘you’ll lose EVERYTHING!!!’ ‘Buy NOW or buy NEVER!!!!!’ does. Yet for all of us to achieve the things we want (or think we want) in life, the dull, slow, build thing is the way to go. Just not too exciting, is all. Everyone focussed on the bunny (hello, Easter) & not the tortoise.
Myself, I like laid back & relaxed. The world provides more than enough excitement, I do not need to add to it by running around screaming that the sky is falling. Frankly, the world could use a lot more peace (dull as that may be) & a lot less excitement. Happy Easter, all.
Money talks, dogs barks.
Garth is actually right. Live long, make a fortune by working, invest it for a second fortune. Keep yourself financially and humanly diversified.
#4 PM
“Gimme 2 portfolios for a 30 year old:”
Ok, but only because you asked so nice. The 2 portfolios are the same. Garth recently posted a millennial portfolio. Look it up.
Picture for a moment that you (doomer) are the Illuminati or shadow government/hidden hand.
Would you let some guy from Texas, Alex Jones, broadcast your plan to anyone that has ears and a radio?
or
Would you let some guy from Texas, or anywhere, fill the airwaves with vast amounts of false information carefully tailored to create a false, yet believable narrative?
What is more useful?
I’m no Illuminati but if I was….
their existence is of little doubt….their #1 tool against is mis-direction
IE:
making you your own worst enemy by believing their crap, whatever the flavour (CBC, InfoWars whatever)
Garth:
I read today’s blog and then read the latest offering from Rex Murphy.
Do you know him? Could you teach him how to write?
I come to this blog to avoid sesquipedalian tendencies.
Happy Easter!
A plethora of doomers coming out of the woodwork with all kinds of data. Too bad markets don’t trade that way. Now that they’ve had their say lets get the s and p revved up for a spring bounce.
Nothing like new highs to get doomers crazy about how unfair life really is.
Time to walk off some chocolate and get ready for a nice family dinner.
Enjoy everyone. All Lindt half price at shoppers drug mart.
#8 Linda on 04.05.15 at 2:53 pm
The thing about the doomsday scenario is – it sells. The fear button is pushed pretty much continuously by the media, the government, anyone who wants to get your attention in any way for whatever reason.
………
Not only does fear sell but thought history its been the controlling mechanism whereby the herd can easily be managed.
You don’t follow the rules, pray to the lord and donate to the church you will burn in hell.
You don’t let us listen to your email and telephone calls al Qaeda will come and blow us all up.
You don’t do all your homework memorize, regurgitate and obey you will be a garbage man.
One thing I know about fellow zillionares, we lack the fear gene. Never worry about loss.
Its a lucky emotion I guess.
Wealth acquisition is contrarian. When it comes to money, avoid what everyone else does. As William Bernstein says in his wonderful “If you can…” pamphlet, if everyone you know tells you about a great restaurant, you should absolutely eat there. If everyone tells you to buy a house, or get into a certain stock or invest in a particular business or sector, you should avoid it like the plague.
Wise words there Mr. Turner. I don’t believe 95% of what I read on ZH and about 50% in the New York Times.
I have been an investor for 30 yrs, higher percentage in stocks at times like 2009 when the next direction was UP, less in times like right now. Today 60/40% works for me.
Why, you ask. Old Bull market at 6 years probably won’t go too much longer, but look where it started 2009….. so we don’t know. RIGHT NOW the economy is steaming inward though oil is slow, oil is NOT where the bulk of my money is invested, though I own some oil stocks.
I don’t need all the money in the world, just enough to pay the regular bills, indulge a couple of vacations, keep me interested in life, and eating decently.
Simple requests really. For a guy who was never the sharpest knife in the drawer, he did listen to those who achieved what I now have when he was much younger.
Thank you, John Bogle for index funds, where my money grew from the 1980’s onward, thanks for diversification, thanks for teaching people that “staying the course” is more important than the market timers.
Thanks, for teaching me the market in the short run is a voting machine, but a weighing machine over the long run.
Thanks, for allowing me the simple wisdom to listen, and then do nothing. Thanks for a great Basketball game last night! Go Badgers!
“Gimme 2 portfolios for a 30 year old:
1) Money for retirement
2) Money for a down payment when the time is right. (could be 2 years, could be 5)
“
Agree with the other poster, the suggested portfolio should be the same, and housing should be purchased at a time when both the portfolio and housing are valued appropriately with respect to each other and historic metrics.
For instance, if your stock portfolio has an average P/E of 15, and grows at the rate of nominal GDP growth (ie: 5%), the total implied return is approximately 12%/annum.
Real estate has long-term growth at the rate of inflation, so say, 2%. So you would want to only invest in RE when its E/P was 12% – 2% = 10%, or a P/E of 10.
Canadian RE is currently priced at a P/E of 35 on average throughout the country. Hence, either the stock portfolio needs to triple relative to RE, or RE needs to fall by 2/3rds relative to the stock market for such to be a reasonable investment prospect.
As in the 1990s, give it enough time, and there will be an excellent long-term buying opportunity. Do this even once, and the tailwinds of wealth creation will be at your back for pretty much the rest of your life. Get it wrong, by buying a house when houses cost roughly 3X that of stocks, and it’ll be a world of pain for many years to come!
happy easter
my money has been in a balanced fund since 1979
it has averaged close to double digit gain
garth is correct
Give me a period of time when banks around the world were racing to devalue currency.
Give me a time in history when negative interest rates existed in major central bank policy and more scheduled to join.
When you can do that, you have sold me on the well balanced diversified portfolio always works over time.
Truth is Garth, there isnt a single economist or investment adivsor in the world who:
1) Has sent this before
2) Has basic models to price in the risk.
It is for that reason brick and mortar will trump whats coming in the next few weeks, which we both know will be painful.
You are just choosing to cherry pick data when the majority is awful.
The USA has expanded its balance sheet to fund QE from$800 Billion to $4 Trillion.
6 years after this, you see what? 126,000 jobs crested? Near zero inflation? 85 million who gave up looking for a job?
Seriously Garth, this is not picking or sending you nasty posts. These are hard facts you choose to ignore.
Great post.
I remember a savvy (and very wealthy) friend remarking about zerohedge that, “only about 5 percent of those people know what they’re doing.”
Maybe if more folks took it as entertainment rather than investment advice they’d be richer and sleep better.
if that dog took a piss…
Doom is exciting when you are young. If it happens maybe you won’t have to go to school or to that crappy job at Starbucks. Zero Hedge tells you things your stupid parents don’t know or wouldn’t understand anyway. It’s so deliciously 60’s like when we knew that nobody over 30 could be trusted and wars could be ended by sticking flowers down gun barrels.
The thing I see with the young doomers in my social circle is that there is a new crisis every week. “Whoa, Dude, I’m moving to Europe before that Japanese radiation hits Vancouver!”, but next week the old one is forgotten. Nobody seems to use Google to dig into the back story. They don’t seem to be able to focus on anything for more than 30 seconds.
Silly me. Why bother? If everything is a conspiracy, there are no facts.
Garth
I’m one of the wrinklies you mention so often and I am writing to commend you for the excellent work you do.
Although I have made money on all of the thirteen houses I have owned, it was mostly luck. One house was sold in the spring of 1981 for 103K sold six months later for 67K. I didn’t see that coming!
The last place I sold was in Alberta two years ago after a conversation with my young neighbor who worked in the oil patch. After suggesting he consider saving some of his money instead of buying toys because the oil boom would end someday, he replied that this time it was different.
I had seen this movie before. It was time to sell.
You are correct about what you are telling people about real estate. All the commissions I have paid on 13 homes would have bought another home.
However, the 250K I socked away in a private pension over 37 years was invested in a balanced portfolio. When I retired at 55 the commuted value was 1M.
I am not bragging. Left to my own devices I would have bought the toys too.
So, to all the young people who read your blog ‘listen to Garth , he really is trying to help you’.
I am down to talking about personal finances with zero people now. I enjoy my Freedom First lifestyle and I live comfortably. The majority of people who bring up financial conversations sound like the people who wrote Garth in today’s Post. Financially disturbed. And the majority of people who are wealthier than I am, outside of this Blog of course, look to me like they live lives that have too many overhead costs requiring too much effort and stress to maintain.
I enjoy the work I do, work only when I want to since I was 50, I am now 61, and have always put my focus on having cash, cash flow, income streams, liquidity, diversity, balance, and $0 debt. I have been blessed. Happy Easter to all!
Your not so pathetic blog is a very worthwhile attempt to educate the world. Thanks for doing all this, Mr. T.
The only specific advice I’d add, is that people should try not to be someone else’s lunch…that is, minimise your borrowing.
Today’s blog is succinct and to the point. Bang on.
Looking at millennial portfolio post, Garth also says: “Of course, once you set this portfolio up, careful to buy assets at attractive prices, you must routinely rebalance it.” In other words, it seems to me he is saying to time the market. When is it a good time to buy those things? Is it now? It seems to me it is not a particularly good time to buy anything now, as most of the assets in this portfolio seem to be near a cyclical peak.
If you have years to invest, it matters not. — Garth
Balanced portfolios don’t blot out the zeitgeist of the times. I’m in my early thirties and have ~250k invested 60/40 with a weighted average MER of 0.15, so maybe I can be considered to be doing well by the standards of my generation. Even so, it’s hard not to notice that the pie gets smaller every year. The fact that my slice isn’t shrinking as fast as some only makes me more anxious — not less.
A piece of made-in-Canada Saputo cheese costs $12; no FX inflation to blame. A loaf of bread costs $5. A liter of gas is back over $1. In YYC, rent goes up 10% every year; it takes a lifetime of debt slavery to liberate a desiccated boomer from their fully depreciated post-war bung. I’m making less today — even in nominal terms, much less real — than I was seven or eight years ago, fresh out of school. And I’m one of the lucky ones, because I still have an income, and if I save enough of it today, I may just achieve escape velocity before the debt singularity implodes us all.
Stephen Poloz has his “fingers crossed”. I’m sorry if I don’t find that especially reassuring.
Forget Getting Rich?
Never!
However that goal is never quite reached since the definition of rich is always an income at least 3 times larger than our own and/or wealth at least 3 times larger than our own. Or maybe 10 times, the point is the goal posts do move.
Still, the journey is enjoyable and some investors rightly shoot for a lot more than mere comfort in retirement.
Canadian RE is nothing but modern day slavery imposed be the gangsters that are running the country.
Well, let’s look on the bright side. When fear sells, and the financial illiterates are cowering from the stock market and financial assets, who are the ones who benefited from their irrationality? People who are financially savvy, people like us on who follows this blog and have a balanced portfolio.
If the majority of the populace is keeping their money in GIC, that only translates to keeping the dumb money from the stock market, thereby keeping equities at a relatively cheap/fair value. We should be fearful when the media start trumpeting the revival of equities and that they’re the true path to wealth. That’s when people will behave irrationally and start dumping all their money into individual stocks, thereby bringing up valuations.
Since most people are financially illiterate, I’d say, now is the time to dump all your money into your portfolio, screw the 6-months emergency funds when you can get an unsecured LOC at prime.
For most people, it’s not the flashy stuff that kills you (terrorism! ISIS!) but the creeping mundane (blindly following the herd, compounding consumer debt.) Someone recently asked me if I feared flying after the recent new stories of plane crashes. I said I more feared the effects of consuming fast food.
Both amused and dismayed that the stock market is nearly as scary as death. Is there an easier way to get rich slowly than balanced investing, patience, and restraint?
Happy Easter, all!
#10
“Millenial portfolio” was the key term. Thanks!
This is the one right? http://www.greaterfool.ca/2014/05/15/the-millennial-portfolio/
FWIW if anyone is interested here’s a list of sample portfolios linked from the comments. I like the Vangaurd one:
http://canadiancouchpotato.com/model-portfolios-2/
Knowledge in regards to living a good life is free and easy to obtain. Application of knowledge is hard for most, less hard for the few. This is life in our current era.
There are also level headed commenters that reckon that the U.S will not raise rate, and their economy is not on an upward path.
You we’re once a politician Garth.
I’ve been many things. Experience is the best teacher. — Garth
Garth, is there not validity to the notion of a seven year, negative cycle in the markets? You can’t miss it. 2008, 2001, 1994, 1987. Aren’t the signs there again and warning us? Fall of 2015 doesn’t look good if you choose not to ignore the cycle – and the warning signs are everywhere.
I hate to say it, but with all due respect, you seem to uphold the same “it’s not going to happen” sentiment regarding the prospect of another financial downturn in the same way the housing proponents are doing here.
Seeing the warning signs for what the are, and the irrefutable evidence of a pattern does not make one a doomer.
No, there is no cycle. — Garth
Another good post….. maybe you only save “1 person” but ‘inform many’ if they chse to listen, had some beers last night with some of the character types you mention, even call some of them friend…but man-o-man when they drink the doomer koolaid, just not sure how we get through…more beers i guess…… eitherway, Garth, thanks for your efforts.
“… simply more proof people do things for emotional reasons, not rational ones.?”
Currently reading ‘Thinking Fast and Slow’ on just that sort of thing. Being rational seems not to be in our dna, being lazy thinkers looking for the easy answer – much more.
So in the grand pool of sharks known as the real estate market, the feeding frenzy continues…
#227 Van Doom on 04.05.15 at 12:18 pm
DELETED (Anti-Chinese)
Garths Blog – anti posting of factual evidence.
(Regarding yesterday’s debate on automating industries.)
A friend and I are both in industries where human labour is widely considered obsolete (or will be, very soon.)
They are, admittedly, mature businesses under constant pricing pressure. Automation, however, is not a straight-line process, nor a sure thing.
For the cheap, simple products, robots are gaining ground and will surely soon dominate. However, there are surprising areas where automation is proving unable to cut it (high-end, complex, or instances where judgment and a near-zero failure rate are required.)
Interestingly, older Gen-X and previous generations a) remember when service was universally good and want that, b) like the assurance and social aspect of dealing with a human, and c) are more advanced in their careers and wealth accumulation, thus have more to spend and more ability to buy according to quality and wants. These customers are proving to be a segment where our declining industries can still operate above the break-even point. And surprisingly, there are frequently instances where the human expert optimizes the price paid as they know sources and solutions a computer system does not yet spit out. Companies do not adopt cutting-edge technology at anywhere near the rate that such technology is generated, so it’s not only a case of if the capability exists, but if industry has invested in the automation to provide that robo-capability to consumers.
Neither my friend nor I work in financial advisory, but I see similar considerations.
I also tend to not be an early-adopter of unproven technologies. Show me a decade or two where automation outperforms the human expert in the services I want, then we’ll talk about switching.
I Have Returned,
Dividend Man
Doomers never get Rich. They’re all poor. Doomers host circle jerk depression conspiracy parties.
The opportunist drank the wine when the optimist and the pessimist were deciding if the glass was half full or half empty.
Doomers are amusing. I leave them alone. They create enough suffering for themselves. I’m too busy drinking wine.
I have a message for the MORON that posted that filthy tripe to you, Mr. Turner.
Dude – write an apology, grovel, and then sit down and shut up.
If you have NOTHING to add, from your obviously empty cranial area, and are so disrespectful to our generous host, you ought to get one in the Harleys from the people that appreciate this incredible resource.
Man, some people.
You are a better man than I, Mr. Turner. I would be just LIVID.
Sheesh.
Somewhat unrelated, but seems to be spreading like a virus – what do you think of the Early Retirement Extreme (ERE) movement and its most prominent proponent, Mr. Money Mustache: http://www.mrmoneymustache.com ?
Why would anyone want to retire in the 30s or 40s? — Garth
[…] Source: http://www.greaterfool.ca/2015/04/05/balance-3/ […]
Small but significant revision:
“If you had a balanced portfolio in 2008, you snoozed through what some people here still can’t get over (after the central banks of the world executed the biggest reflation of all asset classes in world history).
The growing number of individuals that aren’t participating in the US labour force (93 million) are a good example of many who have yet to get over it.
Why? It will end up meaning little. But if it keeps you from investing, it will be costly. — Garth
Several years ago you said an interest rate increase in Canada and the US was imminent. Didn’t happen. Actually went lower. You also said housing prices,especially in the hot areas like TO and BC lower mainland would decline significantly. Didn’t happen. Actually went up. You continue to say job growth in the US is healthy. Facts don’t support that opinion. Since 2009 , in the USA,11 million more people are out of work. The BLS job numbers, which are totally BS, are almost always revised down and have been for the past 5 years. In the US, if you are no longer collecting unemployment benefits or after 6 months of unemployment are no longer looking for work, you are not counted as unemployed. You know this. But you continue to paint a skewed picture of the facts.
You said a few years back that the precious metals were a poor investment. You were correct then but that’s likely to change. Because of the drop in value of the Canadian dollar, gold has appreciated in Canuck bucks about 20% the past few months. Far more than most investments. If anything, the Canadian buck will drop more in relation to the US dollar in the future so the metals which are priced in US dollars could be a hedge. I said could.
You said a few years back that REITs would be a good investment. You were correct. But ,if Canada raises interest rates that may no longer be the case.. However, I believe Poloz will panic and lower interest rates again, because truth be known, the last quarter GDP was likely negative….one more and officially a recession… and the Canuck buck will fall further. ….We are screwed Garth..
Truth be known, the economic condition of Canada is …ON LIFE SUPPORT!!
There is no way the US or Canada will increase interest rates because to do so would cause a collapse in the stock market as well as real estate. Savers are screwed and have been since 2008!
The entire world now depends on debt! …addicted to it !!…and increasing!!
Because of the plunge in oil prices, Alberta is no longer the province from which equalization payments will originate in the future and provinces like Ontario and Quebec will no longer be able to suck off the hind tit for nothing. Both provinces are technically bankrupt. Actually so is Canada.
This is Canada and the US which I’ve referenced. You and I know the rest of the world is also pretty much screwed. So, how do you feel about the future?
Happy Easter to you sir…
Enjoy everyone. All Lindt half price at shoppers drug mart.
Finally a blog dog that posts useful information.
“You said a few years back that REITs would be a good investment. You were correct. But ,if Canada raises interest rates that may no longer be the case.. “
REITs aren’t a good investment, not because of the spectre of rising interest rates (which, at least in Canada, is likely a good decade away). But rather, because consumer austerity and long-term over-capacity in retail is going to impair their rents.
Target, and soon, that department store that rhymes with “ears” failed or are failing for a reason — consumers simply don’t have money to spend, as the so-called “wealth effect” from rising house prices, is now a ‘poverty effect’ from falling house prices. Interest rates falling won’t fix this. We’re past the peak. Yes, owners of balanced portfolios will continue to do just fine. Those especially heavy into equities in industries inversely correlated to FIRE will do especially fine after suffering for so long. But everyone else, its going to be tough for a long time.
Another unsubstantiated, inaccurate and biased comment from you. A basket of Canadians REITs has returned about 10% a year to investors, with a steady income distribution. REITs are like stocks or bonds – you cannot make a generalization about an entire asset class. Some are well-run, stable and will continue to reward investors. Others are marginal. As for retail REITs, you’re spectacularly wrong as Target’s spaces have been snapped by other retailers such as Loblaws – now in the midst of a massive expansion. There is a valued, if minority, position for REITs in every balanced portfolio, especially due to a large non-correlation with equities. — Garth
How much longer are we going to perpetuate the lie here on this blog?
Shanghai family buys small tear town for gazillions.
http://m.theglobeandmail.com/report-on-business/economy/housing/vancouver-real-estate-prices-continue-climb-projected-to-skyrocket/article23799929/?service=mobile
Actually, it’s irrelevant, unless the Shanghairs beat you in a bidding war. — Garth
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No 7 Year Cycle???- 1973 Arab oil embargo and oil spike, 1980 S&L Crisis, 1987 Black Monday Stock Crash, 1994 Bond Market Massacre, 2001 Tech bubble- 911, 2008 Stock Crash Housing collapse and re-inflate. Yeah NO CYCLE THERE??? I could go back further but if you say there is no cycle it must be true with ALL of your experience getting a average 7% return on diversified investments which just happens to be the rate of inflation as stated by a PHD statistician like John Williams. Where was you PHD in stats from?
No, actually. No cycle. — Garth
#49 Vancouver on 04.05.15 at 5:52 pm
How much longer are we going to perpetuate the lie here on this blog?
Shanghai family buys small tear town for gazillions.
http://m.theglobeandmail.com/report-on-business/economy/housing/vancouver-real-estate-prices-continue-climb-projected-to-skyrocket/article23799929/?service=mobile
Actually, it’s irrelevant, unless the Shanghairs beat you in a bidding war. — Garth
********************************
which is easy in HAMcouver where they do not check proof of income or care about locals and where RE money laundering is the norm.
We’re not starting this again. Chinese dudes are not the reason you can’t afford the house you think you’re entitled to. Don’t bother replying. — Garth
Well… US economy is doing well for my businesses… Operating largely on both coasts. Continued high growth rates (20%+). But it has been a few years of this now…. Started picking up in late 2011.
Garth – any predictions (from RJ) on how long the US economy can keep expanding? My contrarian spidey sense is starting to wonder how much longer…. Also – I have an opportunity to sell out of one of my businesses at an excellent multiple but it is growing strong (worried that I might leave my position too early).
“A basket of Canadians REITs has returned about 10% a year to investors, with a steady income distribution”
True, however, that was in the past. Houses, likewise did the same, but are now grossly overvalued by all metrics imagineable. Additionally, a great amount of that alleged “income distribution” from REITs is legally classified, by the CRA, as a return of capital, not as “income”. GAAP-reconciled “earnings” adjusted for tax equivalency to business corporations, of the Canadian REIT sector are abysmal and put them in a bubble in proportions similar to that of residential real estate.
Totally false. Commercial real estate with real real cash flow is at the heart of REITs. Houses cost money rather than earn it. No comparison. — Garth
#44 Ilona on 04.05.15 at 5:32 pm
I have enjoyed the writings of both. Mainstream values could use more focus on eliminating wasteful and counterproductive behaviours. Both writers emphasize the economic virtues of healthy lifestyles. Anything that gets people thinking about their financial fitness is a good thing as it seems to permanently dwell in the “to do later” pile for many.
I find it interesting that both writers have chosen to do various kinds of work, despite the ability to sustain an idle retirement. It makes you ask yourself, “what meaningful, enjoyable, and productive activities would I pursue if earning a paycheque wasn’t the dominant consideration?”
Great read.
Still dodging and cherry picking again. No explanation of exponential function or explanation of quadrillion’s in Nominal derivatives. Or explanation counter party risk. Or why we are now (post 2008) using a market to model accounting rules as opposed to market to market valuations. Or explanation of HFT trading like in ‘FlashBoys’ that is skimming billions and trillions from joe average diversified. History of the stock market?? Naughty Naughty! Soo 80’s
Can’t argue with idiot.
I’m encouraged you see your shortcomings. One small step at a time, friend. — Garth
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A little story about 2008. I was working on a restaurant build out, with about 75% funding by GE Capital. For 2 weeks in October, though we had met all the requirements, we could not get a disbursement from them. Now I am talking about $100K, not $100M.The slick guy in Montreal I was on the phone with was losing his mind. Then the US Fed opened the taps, guaranteeing everything; we got a wire midway week three, and the balance of the funds over the next 6 months as we expected.
Anything can happen. Hopefully the Central banks know where the liquidity issues will show up and can get cash in the right place at the right time.
What really dried up? Trust.
Buy stocks in companies that will be around regardless of what happens. In the future he who loses the least comes out ahead.
My GM in Portland, OR has requested pay increases for himself and team.
My front line guys make $10 an hour with bonuses for top performers. My GM says competitors are paying up to $13/hour to start.
For himself, he is asking for a nearly 40% base increase and an increase in bonuses. Now – I have held his wages tight over the past few years but there is definitely upward pressure on labor rates for both managerial and hourly employees.
So confidence if increasing… Even at the lower end of the wage spectrum… Which is a sign that things are picking up significantly.
‘ … but you continue to live in the 80’s … ‘
What, you too Garth?
Hi-five man!
“Look at Zerohedge, or Automatic Earth – info designed to make suicide appear hopeful.”
You clearly don’t read the Automatic Earth – just slag it to score points with sycophant blog-dwellers.
Here’s an Automatic Earth article that’s actually designed to help people with the crushing deflation we’re facing (as opposed to just trying to beat them over the head with ETFs and balanced portfolios, as if they’re in any less of a bubble than houses):
http://www.theautomaticearth.com/2012/01/how-to-build-a-lifeboat/
Heck of a lot more uplifting & realistic than the snake oil being pushed around here.
Nice. But we don’t have crushing deflation, nor will it occur. — Garth
“Small but significant revision:
“If you had a balanced portfolio in 2008, you snoozed through what some people here still can’t get over (after the central banks of the world executed the biggest reflation of all asset classes in world history).
The growing number of individuals that aren’t participating in the US labour force (93 million) are a good example of many who have yet to get over it.
Why? It will end up meaning little. But if it keeps you from investing, it will be costly. — Garth”
I am not discouraging or criticizing the concept of diversity and the resilience it fosters. Of course not. All I am doing, along with many others, is claiming that the pivotal event for those that survived the GFC had little to do with their diversified portfolio. It had much more to do with central banks intervening on behalf of the financial elite. You are an exceptional member of that group, a thin sliver of the population had hold the majority of the assets. I may be wrong in assuming this, but in spite of our different political leanings, we still share a marked care and concern for our fellow humans, regardless their financial situation. This is the essence of your blog, its motivation I believe. So, when we see a country with a third of its population unable to find any work, let alone meaningful formal work, the question of investing in its economy (given its tenor and trajectory) becomes problematic. Of course, you may be correct from the perspective of sheer financial gain. And that may be enough for some, but I doubt it is for you, and I know it isn’t for me. If investing in this system means perpetuating one that comes up so short for so many, then it should be resisted. One of the meister carpenters I trained under told me he is not afraid of dying broke but right and honest in his dealings. As life goes on, I am tending to agree with his statement, although I hope it doesn’t come to be.
“Extremism is now mainstream.” – Garth Turner
These words resonated with me. What we, as a society, seem to be most afraid of is using our noggins to solve problems; figure out fact from fiction and help ourselves and each other do better tomorrow than we did today.
I was dismayed (though not surprised) to read that “A recent survey in the US found 43% of women are afraid of the stock market, just slightly ahead of death (46%).”
I used to be one of those women. Then I started reading Garth’s blog. Lack of literacy (financial or otherwise) can be overcome. But it takes time… And you have be willing to fail a few times and not be afraid to pick yourself up and try again. The worst kind of fear is the one that prevents you from learning to do better next time.
Looks like the Easter Bunny found a Golden Easter egg! The Gold Futures market has reacted to recent news and those who diversify are getting rewarded right now (for now) by the Golden Easter Bunny! This will help Canadian ETF holders tomorrow!
A recent survey in the US found 43% of women are afraid of the stock market, just slightly ahead of death (46%).
Hahahaha..you make me laugh (that’s why I read your blog)!
For myself I am not at all afraid of death…(there is any by the way..but this is another topic) just incompetent brooker!
This post should be named……….”When Charlatans Attack”……….
Call them out on their fiat money stock stuffing Ponzi scheme and get labelled as a moist, emotiona,l and extremist nutbar (before the edit). People who ignore history are doomed to repeat it……..and just because it’s that time again (to repeat it) doesn’t mean you can’t try to rebut these positions with logic, facts, and reason. Problem is, logic, facts, and reason aren’t in your favor at present. It’s a cyclical thing. And do you want to know the best part, while you can print all the funny money you want, you cannot manufacture logic, facts, and reason, for they only expose themselves when you least expect, and need, it.
It’s like debating with the Chinese government about their housing bubble…..LOL !!
Back to RE.
In the condo I rent in Calgary units used to sell in around 30 days………….it’s been that way for the 4 years I have lived here. Now, for the last 90 days nothing is moving. Nothing at all……except the asking prices that is, for they are dropping. I live in one of the most desirable inner city concrete buildings too……..go figure.
“In real life, we all need forever income, not gold or canned tuna.”
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In real life, is gold not a part of a balanced portfolio?
No. — Garth
If you want any more proof about Zero Hedge being a BS site these days, ask why they still post about surging US oil production and haven’t posted a thing about EIA revisions based on states’ production data that showed production falling in January.
Who is making money off that misinformation?
“Commercial real estate with real real cash flow is at the heart of REITs. Houses cost money rather than earn it. No comparison. — Garth”
Houses provide imputed rent, which can be realized as real rent if an owner wishes to. So not really sure where you are trying to go with such an argument. Yes, REITs hold commercial real estate, but as my argument went, the price of net earnings from such REITs is off the charts, right up there with that of residential RE which most agree is dramatically overpriced relative to other asset classes and historic norms.
REITs and residential real estate, of course have their places in balanced portfolios and historically have acted as an inversely related, counter-cyclical component to equities. However, it is fairly problematic that you reject the argument that REITs themselves could be in a bubble merely because they derive their cashflows from the “commercial” activity of renting to (often business) tenants, rather than imputed rent from an owner.
Additionally, it defies common sense to suggest that REITs, many of which are chock-full of businesses sensitive to the consumer spending cycle, won’t suffer deterioration in their cashflows and earnings as major anchor tenants increasingly become insolvent, and other tenants use the weakness in occupancy and in the economy to negotiate lower rents.
In real life, is gold not a part of a balanced portfolio?
Of course it is. Global asset allocation to gold as an asset class has historically ranged anywhere from 0.5% of a portfolio, all the way up to roughly 20%. The former experienced after long-term bear markets in gold and bull markets in financial assets, and the latter during the 1930s and the late 1970s/early 1980s.
#6: Very good post Garth. Keep up the good work.
There are many of us that appreciate your time and effort.
#7: What a fantastic post, Garth! Thank you!
Why do I feel as in a retarded Olympics where everyone is a winner? The endless repetition of low brow encouragement, which doubtfully was showered on the authors through the years of their (delayed) development.
Feel good financial advise, Garth pedals, is misplaced in the environment of rigged markets in unprecedented times of inventive financial interference by central banks, whose sole purpose is to prop the 1% (whom they consist of) for as long as it takes.
Case in point: my RRSP portfolio, equally divided between preferred shares and bonds ETFs, hardly made any gains in the last 12 months.
Then you invested badly. Blame yourself, not ‘rigged’ markets. — Garth
People read automatic earth? My god…
#36 Bassrage — “Garth, is there not validity to the notion of a seven year, negative cycle in the markets? You can’t miss it. 2008, 2001, 1994, 1987.”
Did something happen in 1987? The S&P 500 returned 5.25% including dividends, TSE 300 was 5.9%. Inflation was running at 4%, so hardly a banner year, but so what?
I would not be comfortable posting on a blog putting man above dog.
GARTH … A recent survey in the U.S found 43% of women are afraid of stock market.
I guess I belong to the 57%…
27% love of investing…
10% love of tax avoidance…
10% love of this pathetic blog..
10% love of Smoking Man
#1 Muffintop: “Happy Easter. First?”
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After Garths’ intense blog this is the very best you can come up with? What an idiot…and how terribly pathetic.
#21: “…if that dog took a piss…”
****************
Another real bright comment. From another dumb idiot. *sigh*
Hey Garth,
Quite a post tonight. Your ‘arrogance of youth’ comment made my ears perk. I guess only time will tell. All the best.
We are all young once. We are all arrogant being so. — Garth
#29 Shawn Allan
What would be your definition of “mere comfort in retirement?”
Mine would be to have the sustenance to buy whatever I wanted, or needed, when it struck my fancy.
I am there. While trying not to live too stupidly, I lack nothing trust me.
It also didn’t come from gambling casinos, RE, dope, or FX. I am not wired that way, and I hated school!! I would not go to a casino to spend your, or the house’s money.
It came from the equity / bond markets, not bank or insurance products.
No need to do it over, it was done right the first time.
In real life, is gold not a part of a balanced portfolio?
No. — Garth
________________________________________
don`t listen to Garth. of course it`s part of a portfolio. he`s just sour.
gold was up 11 consecutive years returning 15% pa COMPOUNDED. it beat every asset class during those 11 years.
Garth missed that, and he`s sour.
Gold is not only purely speculative, but has been a horrible investment for four years. Holding an ETF which owns the TSX60 provides more than enough exposure to rocks. — Garth
“Markets (stocks, bonds, real estate) don’t get dangerous on their own, only when human emotion pushes them to unsustainable peaks.”
Uh, well… having looking into high frequency trading and market microstructure lately, I have to disagree.
My own take is that electronic markets are getting so complicated, inter-connected (etc) that they are now a major source of systematic risk. The flash crash being one example. As latency becomes lower, as they continue to push hardware and to increase connectivity, you’ll see more and more system levels issues that have nothing to do with human psychology.
On the contrary, technology has made markets more efficient than ever, to the ultimate benefit of investors. The flash crash was interesting, but meaningless. — Garth
#33 PM
millennial portfolio
Also have a look at Garths post:
21 November 2014 “Trust”
Garth gives specific examples of what a millennial portfolio might look like.
Case in point: my RRSP portfolio, equally divided between preferred shares and bonds ETFs, hardly made any gains in the last 12 months.
Then you invested badly. Blame yourself, not ‘rigged’ markets. — Garth
Really?! So CPD/XBB is not a key ingredient of the Holly Grail “balanced portfolio” you never cease preaching about? Where are my 7%?! Oh, I should have added the magic SPY for that? But since the thing was supposed to be “balanced”, and 2/3 was to be in bonds/preferred according to the Sermon on the Mountain, and since that portion of the “balanced” brought zilch, the whole thing appears to be a sham riding on the promise of Yellen to deliver.
‘Balance’ means the asset mix I have written about here often, not one that is two-thirds in preferreds (which should not be inside your RRSP) and a long-bond ETF. Yes, you are to blame for a return lower than suggested. — Garth
RE:#47 Maxine on 04.05.15 at 5:40 pm
You said a few years back that the precious metals were a poor investment. You were correct then but that’s likely to change. Because of the drop in value of the Canadian dollar, gold has appreciated in Canuck bucks about 20%
The same could be said of an unhedged ETF like VUN which mirrors the US stock market. It’s up 52% since inception (Aug 23, 2013) while the S&P500 is up 22% in USD over the same period.
Good advice Garth. Happy Easter.
Got crushed on the shop ride today. Ugh…
I have been reading this site for quite a while. The posts are always insightful. Today’s is probably the best one yet. Thank you Garth.
Umm, you know the nature of preferred shares is that the price doesn’t move much – even in “good” times – while it pays you dividends, right?
‘Balance’ means the asset mix I have written about here often, not one that is two-thirds in preferreds (which should not be inside your RRSP) and a long-bond ETF. Yes, you are to blame for a return lower than suggested. — Garth
You must have missed my CPD/XBB line:
Only 1/3 of my retirement portfolio in preferred stocks: CPD ETF. The other third is in XBB: long bond ETF. The last third is in US stocks (not by choice mind you, but due to stupid rigid rules of my particular 401k) – that portion is doing great, but not because of any magic on my part, but only because the US stock market is rigged. Overall I see nothing close to 7% return on the bond/pref portion. perhaps 1.5%. Orange guy does better.
Sigh. — Garth
Gold is not only purely speculative, but has been a horrible investment for four years. Holding an ETF which owns the TSX60 provides more than enough exposure to rocks. — Garth
One does not hold gold for gain, but rather to bribe the guards to get to the other side when time comes. And to buy some bread to last through the darkest hour. Which is of course just a rampant paranoia, as stuff like that never ever happened. Not in the thousand years. Not even in sixty.
I rest my case. — Garth
#78 amazon girl on 04.05.15 at 7:30 pm
GARTH … A recent survey in the U.S found 43% of women are afraid of stock market.
I guess I belong to the 57%…
27% love of investing…
10% love of tax avoidance…
10% love of this pathetic blog..
10% love of Smoking Man
…
You reading this Mark, might I point out the last line of the Amazonian.
I’m in conflict, trying desparatly to finish my book, and if I didn’t have such a compulsive addiction disorder, would have finished it along time ago.
Good thing to have when learning how to code Smith , but it sucks as a would be novice writer who has a small but dedicated fan base waiting.
Everyday I say, im having a muffin for breakfast, it becomes bacon and eggs.
Not having any wine tonight, end up killing the bottle and some JD.
Only Smoking 1/2 a pack and end up smoking two.
I got to work on my book, no posting on GF , and we’ll , look, your reading this..
It sucks.. So want to finish and publish this bastard of a book, but as you can see. I’m not perfect. Easily distracted.
The book is amazing, lets face it , I’m a literary genius. I know saying that pisses a lot of you off. especially all of you so insanely caught up on spelling and grammar. But someone has to challenge our programmed social norms, like bragging is bad, humbleness is good.
You can’t bend what you can’t offend.
#74 Umm, you know the nature of preferred shares is that the price doesn’t move much – even in “good” times – while it pays you dividends, right?
Counting the dividends, bro. Quicken does the basic math for me. Thank you.
Kaganovich at 65 says one-third in the U.S. out of work
So, when we see a country with a third of its population unable to find any work, let alone meaningful formal work, the question of investing in its economy (given its tenor and trajectory) becomes problematic.
****************************************
It’s an interesting claim and based I believe on the labor force participation rate.
Yet the official figures indicate the unemployment rate among those in the labour force but unable to find work is 5.5%
What shall we make of the close to one-third of adults that are not in the labour force, that are not working and not officially counted as even looking for work? Who are these people?
Some of them, no-doubt are discouraged workers.
But some are retirees with no desire to work. Yes, even those over 100 years old are considered to be adults not in the labor force. It would be a mistake to assume that all or even most of the adults not in the labor force would want to work.
Some are students. All students over 15 years old who are not working and not looking for work are officially “adults” not in the labor force.
It includes those Moms, Dads and other spouses that stay at home by choice.
It includes those too ill to work.
It perhaps includes prisoners, who number not a few in the U.S.
The thing is, it is easy to jump to the conclusion that something close to 100% of adults would be working if they could. That is far from true.
5.5% unemployment may well understate the true unemployment, but not by as much as “one third” wildly over states it.
There are problems in the U.S. economy to be sure. But to suggest that it has an unemployment rate around 33% is doomer fantasy. Refusing to invest in the U.S. because of such a false perception is not a wise choice.
Refusing to invest is hardly going to create jobs. Such a move will help no one.
Low Labour Force participation Rate
There was a time when people looked forward to a day when many people would not have to work to support themselves. The life of leisure was seen as a good thing. Something to work toward. To cheer.
Now that we have an economy where almost everyone lives pretty well while one third of adults do not have to work many people cry doom.
Would that only half of us had to work.
As noted previously, next month I am voluntarily joining the ranks of those outside the labor force.
I love it! One bad jobs report and the goldbugs are back. Have ya seen the overnight spot price? SPIKING! To levels not seen since — gasp! — early March! The ten year Treasury is at levels not seen since early February! USD/EUR at levels not seen since March 26th!
Thanks for your posts and for your thoughtful commentary. I’ve been following since you started and it has helped me immensely. Mainstream is on a different path. Good luck to the masses.
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Bassrage on 04.05.15 at 4:52 pm
……is there not validity to the notion of a seven year, negative cycle in the markets? You can’t miss it. 2008, 2001, 1994, 1987. Fall of 2015 doesn’t look good if you choose not to ignore the cycle…..
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Then you should be selling the market short or buying some puts on the S&P. You could make your billions.
But seriously, we are due for an correction, but nobody knows how big it will be, or when it will be. On average we have had about a 15-20% correction twice a decade for the last 110 years.
But will the correction be from S&P 2000 or S&P 2500, that question is the big problem for market timers. Or could this be an odd decade out like the 1990s with no major correction.
The only thing that is for certain is that the world economy will continue to chug forward and a “corrected” equity market will recover and continue to make new highs.
Of course to be safe one could always build a portfolio of gold, cans of beans and dehydrated food.
There may well NOT be a US “recession”.
But what’s a “recession”, measured by government-created statistics, anyway? What’s “GDP”, when it includes whatever the establishment wants to include in it? Statistics and charts can say whatever their creators and users want them to say.
What IS certain is that fake economic “growth” will go on. More money will be create and misspent. Debts will pile up; deficits will rise and rise. Standards of living will drop year by year as personal and governmental debt rises. Those “not in the workforce” will remain at 1978 levels and will likely go even lower; the “unemployment rate” will remain “low” and “jobs” will be created.
Wait those tables. And those with good jobs, who never lost their positions in 2007-2008, will be protected and will keep those jobs, because THEY are the big spenders.
Governments, wedded to Keynesianism, will go nuts trying to “stimulate” and create price inflation, but they will never succeed.
The work-earn-spend portion of the consuming public is slowly shrinking.
Things don’t collapse instantly. They move like melting glaciers. The governments have made sure that another 2008 will not happen- at least not noticeably. Something else may break – likely will – but even if it doesn’t our future is clearly one of increasing personal austerity.
Mark is on fire tonight with his baseless, idiotic, unfounded and unsourced (as always) opinions on gold, REITs and the general economy. I feel badly for his investment portfolio. They don’t deserve to be mistreated so badly.
DELETED (Language)
Dutch?
http://tinyurl.com/dxye95d
Lots of high fiven boomers trashing doomers. Typical can’t happen now cause it hasn’t happened yet.
Well reality is about to rear its ugly mug, just when most (who for the life of me I can’t understand) will not expect it. The reality is that we are currently living through the economical collapse that people talk about, most just can’t see the forest for the trees. I agree with lots you say Garth, but such claims as there will never be another financial meltdown is ludicrous. You know what they say never say forever or never.
I think when history is reviewed in 50 to 100 years (if the truth still exists then) will read such that 9/11 was the tipping point and the build up to WW3 and the North American Police State. Things happen when people least expect it. I find videos of people being marched off and loaded into unmarked vans as FEMA camp training in Ft Lauderdale alarming and should be enough to wake anyone up, but it’s far easier for many to dismiss and look the other way. Sounds like gestapo training to me, but go ahead call me a nutbar
Us doomers are not as crazy as you might think. I have gained an immense amount of financial knowledge here, and feel like many could learn from the more fringe researchers and observationalists here. But to learn you first have to keep an open mind to the possibilities that exist
It doesn’t take a rocket appliance to see where this is going and that the numbers just don’t add up
You can ignore reality, but you cannot ignore the consequences of ignoring reality
The world is not coming to an end, but it is however taking a drastic turn for the worse all while we pretend everything is fine in the hands of the central bankers
I have been a long time lurker and feel, finally, compelled to post. Garth, this article was probably the most profound blog post I have ever read and has been at the heart of my invesment philosophy since my divorce and bankruptcy three years ago. I wish I would have discovered your blog a lifetime ago.
#102
Like him or not his posts are way more entertaining to read than yours….
I read where the ASSE members gave the executive the boot yesterday, in a meeting closed to the press. Because the execs recommended postponing the April 7th protest march until after summer on the grounds that the labour unions would be more ready then. The members know compromisist bullshit when they see it.
It’s not only young Quebeckers who are angry. I submit we have an entire generation of angry young adults in Canada. Poloz: Why don’t yas work fer free for a year?
In my day – the most reactionary creatures were the pancake-faced bee-hived Wonder Bra lifted-and-separated, stilletoed and hobble-skirted middle-aged women who were, in effect, told by the bra-burning barefoot etc. girls that: We will not be victimized like you have been.
The anti-war Hippies were typed as Dirty Immoral Lazy Doped-up Dumb subversives.
Gay-bashing is no longer an issue in Toronto –
The Occupy Movement is an anti-wealth gap, economic justice movement still in its infancy. Tho it’s had an enormous conceptual success with the “1%” and “We are the 99%”.
I have nothing against a balanced, re-balanced, diversified portfolio OR substantial risk-taking if that’s preferred – but let’s not hold that the anger of young adults is a pointless pessimism.
Great.
Now stop with the timing calls and stick to the script. When you miss calculate blame it on something else.
Man oh man! Goldbugs are back! As well as people who are heavily into fixed income and blame people for their lack of performance. I know I’m not blaming anyone since my portfolio is up +8% YTD, haha.
Re: #79 Daisy Mae
#1 Muffintop: “Happy Easter. First?”
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After Garths’ intense blog this is the very best you can come up with? What an idiot…and how terribly pathetic.
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Easter bunny must have crapped on your egg, Daisy Mae. Geez buddy, get a life.
If you struggle to find the courage to invest, start with one dividend paying stock. If you can tolerance the feeling of seeing it fluctuate (as it pays you dividends), buy another one a few months later.
Maybe you’ll like to see those dividends come in.
Maybe you’ll then be disgusted by your Tangerine returns.
This post is the philosophy I’m trying to follow.
But still Garth, you make timing calls sometimes. Like buying US last year.
I’m not going to say it was a bad call. But it goes against the philosophy you describe here.
I’m gonna sell my 500′ condo in 2030 and buy a private jet and a small pacific island.
http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/vancouver-real-estate-prices-continue-climb-projected-to-skyrocket/article23799929/
There is one thing I *DO* know. Our world is controlled by psychopaths and lunatics who are only looking out for their self-interests. I’ve reached a point where I no longer believe a word people tell me anymore. I feel as if I’m on a tiny island surrounded by a vast sea of incompetence, from corporate run tax scams to government run business scams. Crime, Corruption, Greed, Fraud, and Ineptitude is the name of the game. Winner take all, loser fall down and bawl. Kids coming out of college/university with record debt, entering dead-end minimum wage jobs, while Canadian households are struggling just to pay the bills and make ends meet. Anyone else notice how things just keep going up and up? Tell me Garth, how much longer DOES this game of cat & mouse go on?
@Randy randy..
My portfolio is up 27% YTD as I shorted the Canadian dollar!!
Garth, I visit only occasionally and am pleased you allowed my post earlier today. You have some very clever people who seem to be regulars and I hope to get some reaction from them on my concerns for our Canadian economy. I have very little faith in Mr Harper for so many reasons though I did vote for him and may do so again because what are the alternatives? …Justin?? I think Canada is facing some very serious issues, for example, the high personal as well as government indebtedness, higher than reported unemployment, inevitable RE bubble bursting as you have warned for so long, increasing poverty by our older folks relying on a safe return on their savings and getting actually negative returns. But these people Garth are deathly afraid of the stock markets because of their experiences the past couple decades. Many lost so much money in the stock markets. Yes they sold at the bottom, but isn’t that normal human behavior?
Do you think we in Canada are going to go into a negative interest rate environment like so many European countries? Furthermore, I believe it was the last budget when bail in provisions were enacted as was the case in so many countries the last couple years. I really don’t have a good feeling about where all of this is going Garth. When you have time,would you be kind enough to offer some opinion and guidance on the issues I’ve raised by way of your daily missive to the masses? Thanks.. Maxine..
Sure. No negative rates here. No bail-ins, either. — Garth
Nosty
Is General (Breedlove) the ultimate example of an oxymoron?
Talking about the Vancouver detached housing market as a beacon of the Canadian real estate market as some do is pointless. Vancouver has a population of about 600,000 (a small city) and only about 55000-60000 detached sfhs. It is a unique, rather small samle of homes which may maintain their growth trajectory even though the rest of Canada could tank. Just like I am sure there were small markets in the U.S. unaffected by thier housing correction. In Toronto, people will get sick of paying 850000 dollar mortgages when they realize they can rent the same place for half as much.
Tulip bulbs, anyone?
Garth, you speak of the Occupy movement, extremism going mainstream and people reverting to fight-or-flight mode.
All true. Yesterday I spoke of the recent shocking updates on the climate change calamity that is fast approaching, likely within a decade or two.
Experts agree that if upcoming necessary changes to global emissions are not implemented in a way that is both significant and fair (meaning the historic western polluters who have benefitted the most from their emissions must now pay the most to fix the problem) we will almost certainly face global terrorism on a scale previously unimagined. Coastal states going literally underwater will lose all central control, letting loose thousands of disaffected individuals with more decentralized cyber and technical power at their disposal than at any time in human history, able to wreak havoc all over the world.
This chaos will absolutely happen if severe climate change reduction measures are not taken.
Which is why Paris in December must be absolutely historic to avoid incredible global chaos and destruction.
But if it is successful, as it must be for the planet……
Alberta’s tar sands economy is toast.
Hi Garth, really like what you’ve preached, and I ‘d like to practice it: My situtation is 30 year old, with family of 4 with 100k pretax dollars in GTA. Renting seems to be taking a good chunk of my take home dollars, and with 60% of my equity as a 20% downpayment for a condo in the GTA, i’m not sure which is the lesser of the two evils. What would you or your fellow bloggers suggest?
re: “I’ve been many things. Experience is the best teacher. — Garth”
Only if you f’d up and paid for it. Otherwise its a wash.
#56 Interstellar Old Yeller on 04.05.15 at 6:07 pm
#44 Ilona on 04.05.15 at 5:32 pm
It makes you ask yourself, “what meaningful, enjoyable, and productive activities would I pursue if earning a paycheque wasn’t the dominant consideration?”
—————————
Thank you, as from the first glance it looked to me that people who follow it would rather live at the poverty level (25K for the family of four!) than go to work :) But now that I’ve read some more, I can see why some young people start planning to retire at 35 in their early 20s… Would be interesting to see what happens if this movement gets traction alongside retiring boomers.
Further to my last point, it’s not just global terrorism born of environmental chaos we need to worry about.
It is also state sponsored military actions, war in other words. Some states with little to lose will inevitably attempt to massively geo-engineer their ways out of climate change. Other states will tell them to stop, or face war, even nuclear war.
Nobody wins in either scenario.
While the deniers still have no clue and live in their own pathetic echo-chambers, those closest to the Paris negotiating tables understand much better what is at stake ahead.
This is why Alberta’s (and Canada’s) status quo is about to be decapitated in the name of the planet.
Too bad we Albertans have had such incredibly short-sighted, deceitful and incompetent political and financial leadership for so many years, and so are completely unprepared for what lies ahead.
Alberta real estate at 25% of today’s values will be reasonable within just a few years.
#44 Ilona on 04.05.15 at 5:32 pm
Somewhat unrelated, but seems to be spreading like a virus – what do you think of the Early Retirement Extreme (ERE) movement and its most prominent proponent, Mr. Money Mustache: http://www.mrmoneymustache.com ?
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There are a lot of great tips on these kinds of sites and I appreciate the anti-excessive consumerism sentiment but to me it is an underachievement movement.
20 years after HGTV started broadcasting – the US Housing market blew itself to pieces and now the Canadian housing market is close to meeting a similar fate.
The power of the mass media and those flunkie hucksters on late night tv that we all remember telling each of us to buy their get rich quick program, cd’s and books on how to “buy with nothing down” and make a fortune in real estate.
#120 ALBERTASTROPHE on 04.05.15 at 10:06 pm
Garth, you speak of the Occupy movement, extremism going mainstream and people reverting to fight-or-flight mode.
All true. Yesterday I spoke of the recent shocking updates on the climate change calamity that is fast approaching, likely within a decade or two.
Experts agree that if upcoming necessary changes to global emissions are not implemented in a way that is both significant and fair (meaning the historic western polluters who have benefitted the most from their emissions must now pay the most to fix the problem) we will almost certainly face global terrorism on a scale previously unimagined. Coastal states going literally underwater will lose all central control, letting loose thousands of disaffected individuals with more decentralized cyber and technical power at their disposal than at any time in human history, able to wreak havoc all over the world.
This chaos will absolutely happen if severe climate change reduction measures are not taken.
Which is why Paris in December must be absolutely historic to avoid incredible global chaos and destruction.
But if it is successful, as it must be for the planet……
Alberta’s tar sands economy is toast.
—————————————————-
Boo.
What colour is the sky in your world?
Four months ago, we finally moved out of our rented apartment unit in Toronto to a very nice house 45 minutes north of Toronto in a growing town. Friends all asked if we ‘bought’, but we didn’t, we’re renting. Apparently, we’re throwing our money away.
We went for breakfast today at a local diner and noticed that the couple on our right were talking about the new addition to their house that they wanted to build to increase value to their home.
There was a late 20-30 year old that walked in shaking hands with his buddy that was waiting for him. He proceeded to tell him about the rental properties that his brother and himself own. Telling his friend that they were having issues with one of the tenants.
Then on our left were a couple about the same age as us, mid 30s, where the wife was complaining about the credit card debt they had and the husband saying that it was because she wanted the new furniture and so forth.
At that moment, I turned to my wife and I wasn’t sure if she’d know what I was talking about, but I just said, ‘It sounds like the tulip bulb craze, everybody is talking about housing’!
RE: #91 x-moose on 04.05.15 at 8:11 pm
Overall I see nothing close to 7% return on the bond/pref portion. perhaps 1.5%. Orange guy does better.
Sigh. — Garth
The 7% average annual return that Garth quotes is the weighted return of the sum of ALL the stuff in a balanced portfolio. It does not refer to just the bond/pref portion, which you appear to have allocated too large of a percentage to. Hence the Sigh.
What a doomer magnatron of easter weekend posters. Ya might want to cast a more upbeat note for easter monday Garth and see what that brings in. Holy crap.
Target has 133 leases in Canada. 11 have been sold to landlords (REITS) to date:
http://tinyurl.com/n7uwjv8
Nothing public I can find re: Walmart, Loblaws, Canadian Tire etc.
The grocery market is over saturated already. I don’t see Walmart taking over these leases either.
The article is a month old. Try for fresher data on commercial real estate leases. — Garth
Garth gets the doomer crowd going every time.
C’mon folks. The s and p chart worked through two world wars.
Yes, crazy stuff happens all the time and will again. You just don’t know what and when. Global warming, earthquakes, countries going bankrupt, meteors. Who knows.
Large scale war or currency collapses? Not likely.
I personally think that a shifting balance of power in the world will lead to more peaceful times. People inherently don’t want to lose what they have and the fear of losing is becoming more balanced. Hence we have cooperation. It’s basic animal nature.
At the same time nobody has to invest in anything. A person can live their life many different ways. But Why have a doomer justification for your choices?
Does it follow that the world has to be a wonderful place before anybody can make money? I’m not sure that’s ever happened.
We are all free to do as we wish. But it never hurts to see both sides.
Money in the end is just numbers. It makes no judgement and has no opinion. Its people who attach these things to it.
#104 SWL1976 on 04.05.15 at 9:26 pm
“I find videos of people being marched off and loaded into unmarked vans as FEMA camp training in Ft Lauderdale alarming and should be enough to wake anyone up, but it’s far easier for many to dismiss and look the other way. Sounds like gestapo training to me, but go ahead call me a nutbar. Us doomers are not as crazy as you might think”
——————————–
Nut bar would be far too kind.
Shawn
Thank-you for responding to my post. You make some good points about the composition of those who are officially out of the labour force, and I didn’t mean to employ that the US unemployment rate was 33%. This is more of a popular strawman ‘doomer fantasy’ propped up by many of the status quo apologists that contribute to this site. My main point was that we can see labour force participation dropping during the recovery:
https://confoundedinterest.files.wordpress.com/2015/04/notinlabormarch.png
The growth in wages remaining subdued or stagnant:
https://confoundedinterest.files.wordpress.com/2015/03/wwagelow.png
And the nature of the work/jobs to be found in the US becoming more slavish and less appealing in the context of developing skills/independence:
http://www.bloomberg.com/news/articles/2015-03-16/your-wallet-isn-t-getting-fatter-as-economics-101-comes-unhinged
The companies/economy you are investing into doesn’t seem to be intent on creating high quality jobs that will allow individuals to develop innate talents etc. It seems that their shares and value increase without such aims. I don’t see evidence of a positive correlation between the performance of a stock portfolio and job quality in both wage levels and nature of the work. Again, Goldsmith’s warnings about the repercussions of off-shoring and hollowing out the North American labour market were prescient. Shareholders were the winners of this, working class/middle class, not so much. I know this playlist gets posted frequently, but it deserves some attention by those who are hitherto unfamiliar:https://www.youtube.com/watch?v=4PQrz8F0dBI&list=PLD255EEFDD0D9F07E
Now, as for your follow-up post qua summation of your opinion of labour force participation rate
“There was a time when people looked forward to a day when many people would not have to work to support themselves. The life of leisure was seen as a good thing. Something to work toward. To cheer.
Now that we have an economy where almost everyone lives pretty well while one third of adults do not have to work many people cry doom.
Would that only half of us had to work.
As noted previously, next month I am voluntarily joining the ranks of those outside the labor force.”
Umm…are we from the same planet? To insinuate that those who aren’t officially on the labour force are enjoying the leisurely life is insane given what we know of the ongoing economic upheavals is, well, sort of crazy. Of course, many people looked forward to a day when they wouldn’t have to work to support themselves. The closest that many came to this was thanks to hard fought for gains by the working class in the form of state administered social safety nets secured by progressively taxing the wealthy. These days are gone. As far as your claim that everyone is ‘living pretty well’, I am baffled. The claim is psychotic. For many of the group not in the labour force, I would guess that it is not a question of whether they ‘want’ to work or not, but that they have to in order to survive.
Garth,
Based on my advanced studies on the Newtonian forces of gravitational acceleration and balance, it appears that the dude on the bottom may shortly become the recipient of some unwanted droppings….
#125 Spaccone on 04.05.15 at 10:35 pm
#44 Ilona on 04.05.15 at 5:32 pm
There are a lot of great tips on these kinds of sites and I appreciate the anti-excessive consumerism sentiment but to me it is an underachievement movement.
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I was surprised that some call it “Financial Independence” or “Financial Freedom” – but, then again, I’m not ready to give up going to the movies with my family and a few other things, so will have to keep working :)
#133 Wildnutter
Nut bar would be far too kind
————————————
Why? Please explain.
Are you implying you should be mean to me because I found what I described very disturbing?
Go ahead look it up and if you don’t find it alarming then that my friend… Is even more alarming
#115 mike in kelowna on 04.05.15 at 9:57 pm
Good for you bud! I meant my balanced portfolio is up +8% YTD, so nothing spectacular like yours. Wish I have the balls or the means to short CAD way back in Jan.
The biggest machine ever built… will try to make mini black holes..
Hopefully it can be tuned to take out all the doomers.
http://news.nationalpost.com/news/world/cern-restarts-worlds-biggest-particle-accelerator-after-two-year-upgrade-to-enable-dark-matter-experiments
#129: For the balanced portfolio consisting in three equal parts of bonds, preffs and stocks to deliver 7% only because the stock portions delivers 18% and the former two combined between zero and one, points to such outcome as a consequence of unbalanced (rigged) stock market. Gart’s advice is sound, but not applicable to the current situation.
#107 Nagraj on 04.05.15 at 9:36 pm
I read where the ASSE members gave the executive the boot yesterday, in a meeting closed to the press.
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The ASSE folks are hilarious… big balls Couillard is refreshing.
Bonus Points for me?
In post 134 I or my views got called extra-planetary, crazy, insane, baffling and psychotic all at once.
Surely, I earn bonus points for that?
P.S.
If those not in the labor force want a job, they should at least be willing to actually look for one (which puts them in the labor force, albeit unemployed). Otherwise I will assume they don’t want a job or can’t work.
Hey smoking man #93
When are you going to come out with this book of yours? What is it anyway? A book of poetry? The muffin, the bacon & eggs, the smokes – those are all loaded poetic images. We’re all waiting man.
So Garth, let me get this straight: if there is an economic event in the fall of 2015, equal to, or worse than the meltdown 2008, are you still going to assert that there is “no cycle”? It goes way back. What is it going to take to see the light, man?
#36 Bassrage on 04.05.15 at 4:52 pm
Garth, is there not validity to the notion of a seven year, negative cycle in the markets? You can’t miss it. 2008, 2001, 1994, 1987. …………………………………………………………………….
No, there is no cycle. — Garth
Well, there might not be a cycle in terms of the stock market crashing every 7 years but there is certainly a business cycle and recessions have some regularity to them. The next one is coming whether Yellen, Draghi and the other clowns want to admit it or not. They can play their funny games trying to smooth out business cycles but the recessions are getting stronger and stronger. The next one could well be a great one, all this financial engineering is NOT going to hold on this mirage for much longer.
We love Greaterfool, but we also love MrMoneyMustache. Room for both in my world. And who would want to retire in their 30s or 40s? That is the wrong question. Who would want to be financially independent in their 30s or 40s so they could ‘work’ at what they want. That is the question. And the answer is ME.
Have a little love for MMM. Well worth following.
Like him or not his posts are way more entertaining to read than yours….
Thanks for responding. I’m flattered!
“Its difficult to get a man to understand something when his paycheck depends on not understanding it.” No MER’s on recommending precious metals- eh Garth?? May as well work for WFG. Investing is about diversification NOT in one asset class. Some are suppressed and some are jacked. Housing, bonds, and the make believe valuations of the stock market due to QE to infinite are jacked. PM’s are suppressed. When the sucker crashes this year. There will be atime to move back into other asset classes- but that time is not now. Alot of VERY knowledgeable people come here to pick up info on the changing Alberta real estate market and I for one am trying to help my fellow man. I am not selling anything or charging for investment ‘advice’. There is nothing to be made by looking at the stats of printed money and recommending the ultimate safety in physical PM’s. Investing is also about changing to take advantage of the world we live in. WE didn’t have HFT’s 10 years ago. Christ we have only had computer trading for 20 years. We have only been off the Gold standard for 40 Years. It’s all coming down- This is not immaturity or fear mongering or lack of ‘experience’ theis is the ability to see that 1 + 1 is 2. Exponential function in a finite world. Wake up- SHEEP. You are going to get slaughtered.
Gold is a refuge from nothing, and nobody’s getting slaughtered. As for my advice, believe it or not, it’s offered gratis. I do not earn a cent from selling any financial products. But I do enjoy trying to save the naive from their own welling ignorance. — Garth
#118 lee
In Toronto, people will get sick of paying 850000 dollar mortgages when they realize they can rent the same place for half as much.
***************
And in Vancouver? You think people will be happy to pay double in mortgage and other homeowner related costs when the same units can be rented for half?
Not likely. Vancouverites are the unhappiest people already when it comes to home “ownership”….
Condos were being offered pretty cheap in the late Nineties. Bachelors starting under 100k and one-bedrooms starting around 150k was quite typical for the first of many condo buildings. Sure, the prices made a jump around ’03 and ’04 but the many units in Yaletown and Coal Harbor were initially pretty cheap.
The landlords who bought first can afford to rent much cheaper if the market conditions deteriorate. The guys who bought around ’07 and onwards will take a kick in the shins.
What does the density and lack of available SFH have to do with prices? When Vancouverites can’t afford to keep up with the Jones’, they will have to find cheaper housings.
Vancouver RE valuations are complete bullshit.
I’m out after 15 years. Sold my last property a couple weeks ago. Renting and holding cash. Nothing is worth investing or buying here.
A propos de rien (which is French for I got nuttin better to do, I’m sure) two posters invoked TULIP MANIA.
Oh fer cryin out loud, google Tulip Mania and understand yer both out to lunch.
Somebody styled hisself SPACCONE. I’m impressed. Try RODOMONT.
Which of course brings us to GT’s “meander”. MEANDER was a River God. Named after the river. But it turns out that meandering may not be a wholly neutral exercise . . . In any case, Life as a River is as much a bullshit metaphor as Art is a Mirror.
All of which compels me to urge all of you to consider the implications of the historically unprecedented difference in appearance and style of our three PM contenders. Obviously JT jumped out of the pages of a Paris edition of GQ. Obviously the NDP guy chops wood for fun. As for the pasty-faced pudgy CON, clearly the Queen and he share the same hairdresser.
(Poloz looks like a just constructed apple doll.) (Did you know Mark Chatty Cathy Carney was a card-carrying Liberal?)
If ya had to dress the SPX –
Ridi Pagliacci
Should I finish this Bombay Sapphire
Look for Street Style when the kids march in Montreal on the 7th.
Fear is a great tool to control masses, Smoking Man and Garth both get it.
And I agree with Garth, that rising interest rates will definitely not be good for housing prices.
We have the mother of all bubbles at the moment, thanks to ZIRP.
The question for you Garth, is can we deleverage without risking a sovereign debt crisis? If interest rates begin to climb, say back to a normal healthy 4%, will national debts still be serviceable? Contemplate the full impact of deflation, the government is already broke, tack on a huge jump in debt service costs. I see severe austerity as a best case scenario, and an outright default as a worst case scenario.
Socialist Canada with severe austerity would be a sight to see. Teachers used to making $85k+/year forced to get a job at private industry rates. Garth, can we deleverage this bubble? That is the question. No fear, no Zerohedge, no doom/gloom. I see a bubble big so big right now, even the BoC is worried about it popping.
So how does this end? How about an article on that you bearded genius.
Thanks Garth, for continuing to write your blog. Please ignore the idiots, doomers, and the inconsiderate morons out there. Your blog has been very valuable and there is a loyal corps of your readers who appreciate what you are trying to do. It reinforces many things that I have learned about investing in a balanced, diversified portfolio from other books and websites. I think people forget that you give a lot of your time writing on your blog to try to educate the masses about personal finance. For free! You are like the Rodney Dangerfield of personal finance. You get no respect. As for the haters out there, get a life! A lot of Garth’s wisdom, insight, and wit go into this blog. He’s not your personal research department. That’s why we have the internet. You’ll be amazed at what you can find out there. And try reading a few books on personal finance and visiting websites on personal finance for your own education. I’m not saying that Greater Fool is not the one source of truth, but you need to read and digest a lot of information and filter out the BS to get to closer to the truth. Ok, nuff said.
#130 Squirrel meat on 04.05.15 at 10:49 pm
What a doomer magnatron of easter weekend posters. Ya might want to cast a more upbeat note for easter monday Garth and see what that brings in. Holy crap.
**************************************
How about starting with the fact that easter monday is an invented holiday for PUBLIC SECTOR workers only. It is a GOVT ONLY stat holiday. Remember that as you work for 30% less money than the public sector and receive no gold plated pension as you return to work……on Monday.
typo, error, double negative.
should be: I’m not saying that Greater Fool is the one source of truth, but you need to read and digest a lot of information and filter out the BS to get to closer to the truth. Ok, nuff said.
Canada Housing, Office Market Mauled by Oil, Layoffs – but Vancouver Bubble Still Soars
http://investmentwatchblog.com/canada-housing-office-market-mauled-by-oil-layoffs-but-vancouver-bubble-still-soars/
142 Shawn
The leisurely life: http://www.huffingtonpost.com/2015/01/28/kids-on-food-stamps_n_6564740.html
Shocker, workers are discouraged from finding gainful employment. Could it be that prospects for many are dim?
http://www.macleans.ca/economy/economicanalysis/the-return-of-the-discouraged-worker/
“A more buoyant economy and tightening labor market were supposed to draw in those now sitting on the margins. But the probability of a worker re-entering the labor force continues to slump. Over the past three months, an average of 6.8% of those outside the labor force either found a job or began looking for one. That means people are entering the labor force at the lowest pace in records kept since 1990, down from more than 8% in 2010.
So even as the labor market has strengthened, the chance that a jobless worker will ever return to the workforce has decreased.”
http://www.wsj.com/articles/labor-market-dropouts-are-staying-out-1419793807
Hmm, could this problem of labour force participation, one that, according to the WSJ, nags at economists, be in part due to the nature of work now available to a growing underclass?
http://www.alternet.org/story/148237/bitter_tales_from_the_massive_white_underclass_in_joe_bageant's_%22redneck%22_memoir
Shawn, your assumptions about the North American labour force only serve to reinforce the insularity and disconnectedness of your perspective. Let’s hope that the exclusive communities in Scottsdale, where a number of people with your outlook seem to congregate in ‘retirement’, has high enough gates. Given what’s brewing though, I doubt they will be.
Garth, I was wondering if you could do a post with your thoughts about the future of private sector employment in Vancouver? The business I work for has been fortunate enough to be able to pass along some cost increases to local customers, but a big chunk of our business is export services where we’re absolutely being squeezed. Do you see non-real estate, non-“services for the wealthy” private sector jobs being squeezed out of the city long term?
Fantastic post…don’t know how you do it! Yes Financial Illiteracy is fueling those conspiracies. I guess You don’t know what you don’t know….
#140 x-moose on 04.05.15 at 11:31 pm
I’m just going to pray/assume that you understand the definition of “average” in “average annual return”.
While I like reading Garth’s blog posts, I think I like his comments even more.
I need a new set of tires so I looked up Kal Tire the other day on the internets. Now when I go to Zero Hedge I am getting completely bombarded with Kal Tire Adds! 5 of them on a single page at once! And Garth has no adds on his site.
Why would anyone want to retire in the 30s or 40s? — Garth
**
I can think of 50 things I would like to do today instead of working. Mr Money Mustache has been enjoying retirement from the 9 to 5 since he was 30. But he is monetizing his blog and working at other projects to generate income, so it’s not a “rocking chair” retirement. His main point is that most live a life of excess and that simple changes can open the door to financial freedom. For instance, that Caddy Escalade you buy today could be adding 4 years to your working life. Is it worth it? Our family is almost free and we are still in our 30s with a paid off house, zero debt. The arguments are not for those who enjoy work and find it’s the best use of their limited time. They apply to those who value freedom above all.
Monetizing a blog and toiling at projects for income? Sounds like work to me. — Garth
#104 SWL1976
Paranoia is a like greed, it only grows bigger.
I think they are watching you!
https://youtu.be/7YvAYIJSSZY
#49 Mark
——
Think outside the retail REIT box
http://www.dividendearner.com/best-canadian-reits/
For dogs sake smoking man focus on your book !
It’s going to be pure gold when it comes out. I can feel it.
Then all us ole blog dawgs can say that we knew you way back when you were just an oddball wasted commentator on the GF.
#151 Fuzzy Camel
Teachers making 85k/yr. What is the appropriate private sector salary for someone with 5-10 years experience and two degrees and teaching your kids?
What about 40k, what an Accounts Receivable clerk might earn? Only the best eh.
I’m more worried about Toronto parking officers earning 6-figures with overtime.
Happy Easter, Garth!
I’ve said this before… How the heck do you keep your sanity? You give a free public service and you get these nasty emails. I really don’t understand the people who write you these emails. If they don’t agree with you, why don’t they just simply stop going to your blog? I suspect they are probably afraid that you may be right and you put fear in their greedy hearts. In a way, they can be taken as compliments (in a masochistic sort of way).
Anyway, I don’t always agree with you but I always appreciate your free public service. I have read every single one of your entries in four continents so far. You always get a fair share of my sometimes limited internet access.
Thank you!
The only thing worse than someone who is half your age and knows twice as much, is someone one third your age who knows three times as much.
Lots of those, too. I used to be one of them. — Garth
Garth you talk about a balanced portfolio and a lot about the gasbag housing bubble. What I think many here would like to see is Garth’s market picks. Maybe even create a private pay site. You have proved to be a market guru.
#156 Kaganovich — “Shawn, your assumptions about the North American labour force only serve to reinforce the insularity and disconnectedness of your perspective. Let’s hope that the exclusive communities in Scottsdale, where a number of people with your outlook seem to congregate in ‘retirement’, has high enough gates. Given what’s brewing though, I doubt they will be.”
You’re far too optimistic if you think anything is brewing.
While the North American underclass slept, police forces have turned paramilitary. When I was a kid, police wore blue shirts and carried revolvers. The other day a Calgary officer had a police issue assault rifle and 2 28 round magazines stolen from his car. Civilians are on notice that police will use deadly force at the slightest provocation, with few consequences. Civilians who protest, or are even caught near protesters, will be arrested and left to marinate in their own urine for a day or two before being released without charge. Arrests are recorded electronically, and will disqualify you from many, many jobs.
Everything is monitored. If you think an underclass movement can organize, undetected or unmonitored, I’ve got a compound in [redacted] for sale, cheap. See if you can count all the interesting trigger words in this message.
The underclass is anaesthetized. Half of them vote against their own interests, if they vote at all. Gerrymandering and voter suppression are working just fine. And an endless loop of police procedurals on TV reinforce the message that anyone committing a serious crime will be caught and jailed.
Popular protest movements have fizzled completely, in North America and Western Europe. The underclass has been marginalized. Sorry to be so stark and bleak, but there you have it. The revolution was televised, and the bums lost.
There, there poor Van Doom.
What happened to you to foment this irrational hatred of public sector workers? Did one steal your lunch money when you were a kid or something?
Sheesh!
#165 Steve french on 04.06.15 at 9:16 am
For dogs sake smoking man focus on your book !
It’s going to be pure gold when it comes out. I can feel it.
Then all us ole blog dawgs can say that we knew you way back when you were just an oddball wasted commentator on the GF.
…….
Never mind forgetting you dogs, I’m making you all famous. Have many references to gf.ca
You bastards inspired me. Until you bugger’s got me interested in writing, with references to other greats, and the similarities, would have never attempted this..
Its acctully easy, and very hard.
That’s it. I’m focused. Atlantic City in a few weeks, then Vegas for ten days in June, I will wrap it up, send it for editing( poor bastard , probably charge double , then launched in the fall.
Private-sector mortgage insurer Genworth follows CMHC in raising premium
http://business.financialpost.com/personal-finance/mortgages-real-estate/private-sector-mortgage-insurer-genworth-follows-cmhc-in-raising-premium
#170
Ralph
All the reasons you listed for the continued subduing of a growing swath of the population still don’t make the prognosis absolute. Its still too early to tell. We will see I guess, but some of what you describe is a form of lullaby used by the rich to sleep at night. How effective the burgeoning police state will be during the next couple decades is anyone’s guess. At least you feel that the prospect of something brewing is optimistic. History shows that things deemed impossible for generations suddenly became possible in a matter of weeks.
#166 TurnerNation,
You do not need 2 degrees to teach kids under the age of 16. I realize you feel entitled, with your worthless degrees to some sort of extra compensation, but that was your choice.
Do we need teachers with degrees to teach grade 1-8? Nope. Not hard to follow a lesson plan. Pretty much glorified day care. And tutors are cheap and available for any questions. Teaching is a scam at this point. Online learning is where it is at.
The entire system needs to be flushed. Doctors with overpriced pills that kill not heal. Ugh, don’t get me started on how stupid and worthless this socialist system is.
We need free markets again, not this pseudo hybrid socialism-cronyism. Health Canada is corrupt to the core. Teachers run the province of Onterrible.
Have to say I agree with Garth on this.
Too late for me though as I missed the boat during my earning years, so am relegated to living (on the public dole, as Garth phrases it) life in a land of palm trees, sun, sand and surf, in a house bought with some of the profits from the sale of my commercial real estate (can’t afford to live in Canuckistan).
It utterly amazes me how many, supposedly educated, readers are sheeple of the doomsayers.
#116 please vote for Herr Harper again, my dole will be cut again and I will have to transfer the ‘fun money’ from my B&B to living money.
And, on a lighter note, much to the doomer’s chagrin, the DOW refused to tank this morming as forecast.
News is just that; news.
Those who think that a given news story or report has some inherent predictive value take note.
The news itself is never the important thing; what is important is the Market’s reaction to it! (And the first reaction, like the light-weight, electronic plunge in the DOW mini futures on the abbreviated trading session on Friday, is often NOT the final reaction!)
Predictions aren’t worth spit; Price is the only thing that pays.
#163 NoName
#104 SWL1976
Paranoia is a like greed, it only grows bigger.
————————-
I am not paranoid, but I am informed and observant
I my honest opionion those who simply dismiss conspiracy theories as paranoid drivel are far more scared of the truth, maybe even say… Paranoid of the truth
We are a taking you all down with us…
http://www.theglobeandmail.com/report-on-business/economy/economic-hit-spreads-beyond-oil-patch-bank-of-canada/article23804287/
#28: “Stephen Poloz has his “fingers crossed”. I’m sorry if I don’t find that especially reassuring.”
**********************
Almost laughable. Except for the fact it’s a disgusting performance. The feds are setting up a way out…whatever happens won’t be their fault.
What hubris! Nemesis will provide some balance.
Ozymandias
I met a traveller from an antique land
Who said: “Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
`My name is Ozymandias, King of Kings:
Look on my works, ye mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away”.
Ten short years and the population will be over 8 billion.
http://www.worldometers.info/world-population/
It’s estimated that 90% of the oceans big fish are gone.
http://www.paulcraigroberts.org/2015/03/30/oceans-dying-paul-craig-roberts/
Houses will go up forever. Infinite growth on a finite planet. Climate change will be solved by business as usual. It’s different this time. What could go wrong? This will end well.
#43: “You are a better man than I, Mr. Turner. I would be just LIVID.”
********************
What you have to do is consider the source. And that makes it easier to deal with when you understand that you’re dealing with obnoxious know-it-all idiots who can’t help being stoooopid.
@#171 Bytor
“What happened to you to foment this irrational hatred of public sector workers? Did one steal your lunch money when you were a kid or something?”
++++++++++++++++++++++++++++++++++
Nah, its worse.
They’re stealing his taxes and throwing them away…..
#178 SWL1976 on 04.06.15 at 10:41 am
Being aware that Governments have become paranoid and are surveilling everything along with militarizing the police is fine. Ralph Cramdown gave you the key to not worrying about it though, they’re only after the bums. Are you a bum? No, forget about it then.
@ Daisy Mae
I have to admit that when I saw the picture of the “balanced dog” I immediately thought of the dangers of uncontrollable canine bladders.
Sorry if the cute photo moment was ruined for you.
I think its a ‘cup half full or a cup half empty” view of the world. And in this case. The “cup” has urine in it and no understanding of when it’s ok(or not) to let loose…..Wouldnt be the first time a dog pee’d on its owner.
It sucks to be blinded by your own ego to the clear alarming indicators of what is happening.
Garth is a wealthy elite, and benefited immensely from QE. Of course he views it as a success, it enriched him and others like him, at the expense of everyone without large amounts of financial assets. Of course he is blind to the truth that such policies are simply a gift to the rich at the cost to the poor and are essentially large scale financial fraud perpetrated on a governmental level. Nothing abnormal or alarming about the BOJ becoming one of the worlds largest asset management firms eh? How about the fed’s balance sheet? Nothing unusual there either eh? Of course not, it made those of us who own financials stinkin rich! must be good.
Also funny garth labels those who are more bearish than himself as ‘doomers’ Garth your a doomer on Canada housing, yet you mock people who extend your views to a broader scope. Pathetic.
I wish I could practice the funny math that Garth does in regards to the state of the global economy. Almost every economic indicator available are swinging towards contraction, yet you are a doomer when you point that out.
Wait for it, stocks will have a 1% gain today and garth will ignore everything else save for an up day in the markets as evidence everything is awesome.
Things aren’t awesome, actually. But neither are they contracting, collapsing, imploding or alarming. They’re normal in many ways. Those who apply intellect and ambition, plus take a few risks, usually succeed. Those who moan, snipe and cower, usually don’t. — Garth
Buying shelter is a super emotional decision for those with families. Even the well-informed and stretched-to-the-max are forced to weigh the ridiculous prices against the emotional cost of, say, the kids changing schools. The following quote is from a Vancouver teacher (trigger word! Where da tomato-throwers at?) who bought in (AHHH!!!!) North Vancouver:
“I thought about continuing to rent for a while,” she notes. “The people upstairs [her landlords] are great, but for me a couple key things were consistency and stability. I wanted to stay in the area for my daughter’s schooling and didn’t want the possibility of being asked to move or the possibility of having to move several times if I continued to rent.…Investing made sense for the long term and for our future. I can always sell if need be.” (bolded for the schadenfreude types looking for their point-and-laugh moment of the day)
http://www.straight.com/life/392866/buy-now-or-wait-new-lower-mainland-home-buyers-eye-interest-rates
Canada should adopt the Danish system of mortgage finance.
http://www.politico.com/news/stories/0310/35030.html
#150 Nagraj
You sound like a reborn Smoking Man.
Good posts, though.
Genworth hikes mortgage insurance premium, matching CMHC move.
Less risk. Stock is happier. Borrowers sader.
http://www.cbc.ca/news/business/genworth-hikes-mortgage-insurance-premium-matching-cmhc-move-1.3022236
Garth,
I appreciate that your blogs are filled with optimism.
You are obviously a glass half full kind of guy.
However,
What I find fairly obvious is that the folks who seem to be experts in government, global finance, economics, environment etc., really are just engaging the entire world in a massive experiment and they have no clue how it will end or what will be the effects along the way.
Globalization – sure let’s embrace it fully and see how it turns out?
Massive Government Debt – let’s have government spend money at levels that can never be repaid. It will interesting to see the result.
Unregulated Markets – How about Wall Street create as many bizarre unregulated derivatives as they want, and sell them as quality assets. Lets be sure that the rating agencies are on side too. I wonder how this will go?
Fraudulent Lending Practices- Let’s encourage our banks to lend as much money as possible to as many unqualified borrowers for overpriced boxes of wood. I wonder what will happen?
Socializing Losses – Let’s save, and in fact reward and continue to reward, the entities that have take part in some of the most fraudulent financial practices. Lets see how that works.
Socializing Corporate Profits – Let’s continue to allow global corporations to hold massive amounts of untaxed profit offshore from their home countries, while we support them paying their staff ridiculously low wages domestically.
Socializing Criminal Behavior – When corporations are found guilty of fraud, illegal behavior, etc., let’s not criminalize the perpetrators, let’s fine them a trivial amount. Let’s see how that works?
Holding Rates Artificially low – Let’s use monetary policy to drive down rates to stimulate underperforming economies.
It should be interesting to see the result of this policy.
Unsustainable Growth – Let’s not have any real regulation on how much the world harvests from our oceans, or how much carbon we push into the atmosphere.
You have made comments that people should focus on what they can control and to not fret about what they cannot influence. Fair enough.
But, with this great economic and environmental experiment that we are all now participating in, it is also a little disingenuous to expect that this will not result in massive levels of volatility in terms of economic and social upheaval.
The recent financial meltdown, was a tremendous shock to the worlds economy and we are ‘still’ living with its results. That a balanced portfolio survived and prospered 8 years later is an interesting fact.
That individuals have tended to invest their hard earned money in hard assets such as real estate is really not difficult to understand.
Because of the ‘great experiment’ the continued volatility will have its greatest impacts on the worlds economies and financial markets and instruments.
Despite any massive mess that can occur, even if real estate falls 50%, it is still there, it still exists.
When Nortel disappears (despite the ‘experts’ telling us it can not happen), along with the money you invested, you are left with nothing.
Not really convinced that a ‘balanced portfolio’ has a hope in hell of protecting any of us from many of the impacts and results of this ‘great experiment’ that all our brilliant government and corporate leaders are leading us through.
Although, unfortunately, I’m not sure that there is a better alternative.
#44 Ilona on 04.05.15 at 5:32 pm
Somewhat unrelated, but seems to be spreading like a virus – what do you think of the Early Retirement Extreme (ERE) movement and its most prominent proponent, Mr. Money Mustache: http://www.mrmoneymustache.com ?
Why would anyone want to retire in the 30s or 40s? — Garth
++++++++++++++++++++++++++++++++
Why would anyone WANT to work past 60?
Same reason, it’s a choice.
When you control your work, why would you not? — Garth
I think the posters who speak of early retirement are more interested in the advantages of financial freedom. Having a safety net of their own.
The freedom comes from doing the things that you have real interest in. The ability to take advantage of opportunity without feeling conflicted or bound by a duty to provide.
Living a life of what could be termed voluntary simplicity and being financially aware can allow for this at an early age.
These people often become busier in their ‘retirement’ as they transition to helping others and working to create a vision for themselves.
Of course it can happen that income opportunities follow in areas that don’t really feel like work.
Self determination I suppose and a simple way to generate income for oneself regardless of life’s twists and turns.
An urban version of Alaska frontier.
Unless you’re financially independent with assets generating their own income stream, or dig living on charity and dandelion greens, this is just another form of work. Stop romanticizing. — Garth
#161 Bill Scribbens
In the early days of radio it was not so hard to get a license and an assigned frequency to start your own local, low-power station. There was a time when, for example, a furniture store was broadcasting advertising on its own exclusive station.
Since it couldn’t just be advertising 100% of the time
the owner might get his 12-year-old daughter to sing and play the violin once in a while. Maybe uncle Mort would tell some jokes. It was like YouTube with only one channel and just sound.
It soon became clear amateurs could not possibly supply enough continuous programming to which anyone would care to listen.
Radio had to be greased with money or it simply didn’t work. Quality programming that would capture an audience had to be paid for.
Radio was originally touted to be a wonderful new panacea of free communication that would, in good time, educate all of humanity. But radio and its successor TV in fact became something quite different.
Now we turn to the Internet…
#190 AB Boxster on 04.06.15 at 11:29 am
Good post. The only real alternative is to stop worshiping Mammon and turn to Sophia. It won’t happen though as that would require people to completely change their actions and values. Social status, and all the material prosthetics that requires, means too much to apes. So the tower of babble collapses again. No big deal.
#163 No Name
Paranoia is like greed, it only grows bigger
I think they are watching you
Right now, at least 50 U.S. law enforcement agencies had secretly equipped their officers with a radar device allowing them to peer through walls. The courts and the public had no notice these units have been in operation for the past two years.
This device (RANGE-R) uses radio waves to zero in on movements as slight as human breathing from a distance of more than fifty feet.
Police in Denver used this device to enter a home of a man on a parole violation last year. The courts were outraged at the “warrantless” use of a powerful tool to “search” inside a home.
This technology was designed for military use in Iraq and Afghanistan, unlike these” war zones” in North America we have a constitution and a charter of rights and freedoms that protects its citizens from unlawful search/seizure.
This raises new concerns about the extent of government surveillance!!
#175 Fuzzy Camel
You’re speaking my language. The problems are older than you and I. Even my grandpa referred to the entire sector as “legalized mafia”. Extortion rackets and all.
Private sector workers have been living and adjusting in the global race to the bottom for years now. The public service sector will have some catching up to do. It will be painful when austerity becomes inevitable.
Washed Up Lawyer: I read today’s blog and then read the latest offering from Rex Murphy.
Rex Murphy: here’s his piece on the gun registry:
https://www.youtube.com/watch?v=4XOmUXycDPs
The gun registry is a fraud because it promises to address the problem of guns and gangs in big cities but that doesn’t mean the program should be cancelled and the data destroyed. The program should have been scaled back so that it is less costly and less intrusive on law-abiding people.
The obvious solution is to empower the police to demand that selected people register their guns.
#191 AB Boxster — “What I find fairly obvious is that the folks who seem to be experts in government, global finance, economics, environment etc., really are just engaging the entire world in a massive experiment and they have no clue how it will end or what will be the effects along the way.”
Of course. And we’ve been doing it through 7,000 years of civilization. War, slavery, war, empire and tribute, war, feudalism, war, mercantilism, war, colonialism, global war, cold war, proxy war, détente, free trade… ?
There’s a bit of hubris involved in saying there was some sort of desirable system in the past that was stable and would have endured, better than today’s version of the grand experiment. There’s almost certainly a lower percentage of the world’s population living in abject poverty now than at any time in history, and the last 30-40 years have seen fewer dead from war, famine and disease than was previously common. Some of the global top 10% now eschew the accumulation of stuff in favour of a more examined, experiential life. Creating a pop song or a smartphone app doesn’t use up much in the way of finite resources. Things could be worse.
We have ALWAYS been in uncharted waters.
#192 Broke Dick on 04.06.15 at 11:29 am
#44 Ilona on 04.05.15 at 5:32 pm
Somewhat unrelated, but seems to be spreading like a virus – what do you think of the Early Retirement Extreme (ERE) movement and its most prominent proponent, Mr. Money Mustache: http://www.mrmoneymustache.com ?
Why would anyone want to retire in the 30s or 40s? — Garth
++++++++++++++++++++++++++++++++
Why would anyone WANT to work past 60?
Same reason, it’s a choice.
When you control your work, why would you not? — Garth
+++++++++++++++++++++++++++++++++++
Because if given a choice and your choice was to do something else and if financial independence was reached, then start whenever you want.
But if you have to question why someone would make that choice at a younger age (be it at 30, 40, 50 or 60) then maybe you haven’t lived enough.
Some would even sacrifice some luxuries in order to get an earlier start, again a choice.
Life is about choices, unfortunately for some they don’t have a choice to stick around longer. Like if a toilet seat flew off the space station and hit you on the head. Loved that show.
Garth, embedded within COMER’s Statement of Claim (against the Bank of Canada, Treasury, Minister of Finance, Her Majesty) is the answer to how a nation purportedly so rich, is always so poor, at Point 15 (h) here:
http://www.comer.org/content/AmendedClaimStatement26Mar2015.pdf
COMERS = nutbars. — Garth
#161 Bill Scribbens on 04.06.15 at 8:12 am
I need a new set of tires so I looked up Kal Tire the other day on the internets. Now when I go to Zero Hedge I am getting completely bombarded with Kal Tire Adds! 5 of them on a single page at once! And Garth has no adds on his site.
—————————
get your wife to do some online research for a swimsuit purchase and you will get better looking ads.
#166 TurnerNation on 04.06.15 at 9:32 am
#151 Fuzzy Camel
Teachers making 85k/yr.
——————————-
“$36,000 (USA)
Private school teachers make way less than public school teachers. Average salaries are nearly $50,000 for public, and barely $36,000 for private. That’s not just a gap. It’s a chasm.Oct 24, 2013”
the rich are fine with their kids being taught by teachers at market rates.
I’m more worried about Toronto parking officers earning 6-figures with overtime. – —————yes and others doing jobs at par with flipping burgers making 4x the pay .
or dig living on charity and dandelion greens, this is just another form of work. Stop romanticizing. — Garth
————-
I grew up eating dandelions.
They are very nutritious.
Once my retirement funds run out, it’s back to dandelion and patato salad.
Yummy.
#44 Ilona on 04.05.15 at 5:32 pm
Somewhat unrelated, but seems to be spreading like a virus – what do you think of the Early Retirement Extreme (ERE) movement and its most prominent proponent, Mr. Money Mustache: http://www.mrmoneymustache.com ?
=============================
He still does odd jobs and I am sure that his website requires work too.
Work. Don’t work. Do whatever you like. Personally I don’t work. My 2 mortgage free FL multi units (30 doors) provides ~15k USD per month ($8k USD on a ‘bad’ month) for me to do whatever.
I could hussle an make more $ but what’s the point? My parents passed with $1m in the bank (RRIFs, LIFs, non-reg, TFSA, cash) In the end, they couldn’t spend it even if they wanted to. Hoarding money is stupid. You can’t take it with you.
Why retire at 40? If you can afford it, why not?
#199 Ralph Cramdown
————————–
I agree that it always been a great experiment.
But rather than believing that there was were stable systems in the past, I rather regret that we are still doing the ‘great experiment’ without any thought
or learning from the past.
Most problematic is that without any sort of rational thought or planning, today
we have the capacity to create massive changes that I fear we cannot recover from.
If we are putting too much carbon in the air, or overfishing the oceans, or exploiting
resources unsustainably then we have no recourse.
We cannot buy a new ocean, no matter how much money exists.
The financial messes can (maybe) be addressed by creating other financial messes.
Or it may be too much of a mess to fix now.
Can governments spend themselves out of a massive global recession?
Can we continue to hold rates artificially low to try to spark the economy without major economic
and social problems?
I guess we’ll see.
I’m not a Doomer, but I think the volatility along the way will be mind numbing.
I hope I’m wrong.
#170 Ralph Cramdown
I understand where you are coming from…but on the same note crime is still around and changing to the new reality of present day…so to will revolutions. Where there is a will there is a way. We tend to think in the present (as Garth mentions on a quarterly basis…things change and opportunity is always abound. The police state can also fold on its own accord. People are pessimistic only because they have lost the will to continue.
When you control your work, why would you not? — Garth
I guess that’s really at the heart of it. Having the income producing assets merely eases the income pressure. But of course financial security shouldnt have to be a prerequisite to control your work or your life’s path. We all have choices.
Stop romanticizing. — Garth
I’ve been a leaf fan for a long time. Hopeless romantic is one of my redeeming qualities. I think.
#171 Bytor the Snow Dog on 04.06.15 at 10:11 am
There, there poor Van Doom.
What happened to you to foment this irrational hatred of public sector workers? Did one steal your lunch money when you were a kid or something?
Sheesh!
*****************************
More likely a factory owner employing children who was forced to pay them minimum wage.
Tiny bit of info.
A friend who works for Calfrac told me that the crews got the lay off notice. The company will reevaluate in 60 days to see if any on those crews will go back to work. Most doubt that will happen but you never know.
Engineer who works for the Victoria shipyards/Navy tells me they have been flooded with resumes formerly from the oil and gas sector. These folks are waiting for the ship building contracts to happen…remember those federal contracts yet to take hold.
too funny …..
https://youtu.be/wcAMtvNfp78
#117 Smoking Man on 04.05.15 at 10:02 pm
Nosty
Is General (Breedlove) the ultimate example of an oxymoron?
_____________________________________________
He is a shark and a bit of a prick. He is younger than me and I’m glad I never had to deal with him. Of course I only made it to USAF Capt O-3 so what do I know?
Smoking Man are you responsible for this?
http://www.msn.com/en-us/news/other/video-of-massive-brawl-at-queens-casino-goes-viral/vi-AAaqUjO
#178 SWL1976 on 04.06.15 at 10:41 am
#163 NoName
#104 SWL1976
Paranoia is a like greed, it only grows bigger.
————————-
I am not paranoid, but I am informed and observant
I my honest opionion those who simply dismiss conspiracy theories as paranoid drivel are far more scared of the truth, maybe even say… Paranoid of the truth
**************************
Agreed….First they laugh at you…etc
Not saying all conspiracy theories are true, but to discount all would be a mistake. People at work don’t even want to come down to the reality of the situation.
My friend in Cushing says this is real!
Told you this could happen, so all bets are of with oil at this point!
http://www.msn.com/en-us/money/other/record-gasoline-output-to-curb-biggest-us-oil-glut-in-85-years/ar-AAat7VK?li=AAagzW5
#178 SWL1976
“I am not paranoid, but I am informed and observant”
if you say so.
Some time ago (2002-3-ish) I red a news article on msn or yahoo cant remember 100%, that talks about some research done in late 90-is and follow up few years later.
Research was about accuracy and truthfulness of news. what people preferred more accurate, less accurate or inaccurate news, and integrity of news source.
In the late 90-s research participants (people) wanted most accurate news from credible sources, but same research done few years later showed something very different, participants (people) didn’t care about accuracy and truthfulness of the news reported, but about diversity of opinion on a topic in the news. Why, I guess, so they can gravitate to the reporting that fits their view…
https://youtu.be/mWAV_IXqCvI
Pattern? Humans are good at seeing patterns where there are none. It’s a pattern if there is a common cause, which in your list there is none. It’s only a pattern based on two things: events you choose to keep to build your pattern, and events you choose to ignore to maintain the pattern.
There were warning signs in 2014 too. But that doesn’t fit your definition where events only happen every 7 years. There were also signs in 2013. And 2012.
Worthy read and positive looking charts…
“Racing Towards Full Employment”
http://csen.tumblr.com/post/115570318269/racing-towards-full-employment
#161 Bill Scribbens
https://adblockplus.org
—————————————–
#172 Smoking Man…
(☞ﾟヮﾟ)☞ Do it, do it, do it…Do it.
http://tinyurl.com/nsjcsez
———————————————–
Kaganovich…
Appreciate the posts (and links).
———————————————–
Well, just cuz I like the message (and the music, of course). There comes a time…
‘One more mile, one more road, one last bridge, one less load.’ – TAPP
http://tinyurl.com/lcjqb3z
Risk. How do most people define it?
We usually save / invest for far off goals such as the children’s education, and retirement.
Retirement is the one you will not have enough for if you use risk free assets like Bonds & GICs. Think about your future.
Economic hit spreads beyond oil patch: Bank of Canada
http://www.theglobeandmail.com/report-on-business/economy/economic-hit-spreads-beyond-oil-patch-bank-of-canada/article23804287/
The hit to jobs and investment from the oil price plunge is spreading beyond the oil patch, according to businesses surveyed by the Bank of Canada.
“Signs of spillovers to other sectors and regions are . . . emerging,” the bank said in its quarterly business outlook survey, released Monday.
Over the next 12 months, fewer companies expect to invest in machinery and equipment, to expand sales or to hire.
“Lower oil prices continue to dampen overall sale outlook of firms, weighing on investment and hiring intentions,” the bank said.
#196 chapter 9
You can always turn Amish.
http://mentalfloss.com/article/31510/9-things-invented-military-use-you-now-encounter-everyday-life
1.9 million!!
http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/vancouver-real-estate-prices-continue-climb-projected-to-skyrocket/article23799929/
#97 Ralph Cramdown
interestingly gold is around 1200 and rallying lately despite the rising dollar while other commodities are creamed.
Commodity? Rock? Diamonds are rocks as well and prices keep going up and up.
Otherwise I agree with Garth that stocks are better, specially in a bull market and specially gold ETFs.
GDXJ and GDX might appreciate 2-3 times in the next year or two. If one has the guts.
Oil strategy: Buy the Drips.
#224 Squirrel Meat
1.9 million dollarette/confetti, not money.
-Frank Act. KBR required witnesses in certain internal investigations interviews to sign confidentiality statements with language warning that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department. Since these investigations included allegations of possible securities law violations, the SEC found that these terms violated Rule 21F-17, which prohibits companies from taking any action to impede whistleblowers from reporting possible securities violations to the SEC.
http://www.sec.gov/news/pressrelease/2015-54.html#.VSLT1fBTvwp
“These problematic agreements are widespread and growing,” said Jordan Thomas, a former S.E.C. official who now represents whistle-blowers.
=====
“On the contrary, technology has made markets more efficient….
“Within two years, tax authorities will automatically exchange information on everyone, every year, regardless of whether they’ve been paying their taxes or not.
The information to be shared includes account balances, interest, dividends and sales proceeds from financial assets. The collection of this information will start from next year with the first exchange of information in 2017. At first, 58 jurisdictions will be involved including the expat offshore centres of the Channel Islands and Isle of Man as well as countries across the EU. Bermuda, the Cayman Islands, Liechtenstein, Argentina and South Africa will also take part.
By 2018, a further 35 countries will have joined including Australia, Canada, China, Singapore, Qatar, Monaco and Switzerland.
#204 Ponzius Pilatus on 04.06.15 at 12:52 pm
or dig living on charity and dandelion greens, this is just another form of work. Stop romanticizing. — Garth
————-
I grew up eating dandelions.
They are very nutritious.
Once my retirement funds run out, it’s back to dandelion and patato salad.
Yummy.
——————————————
Dandelion wine goes very well with smoked squirrel. And now with less spraying they grow everywhere and are very easy to harvest.
#175 Fuzzy Camel
Many people with undergrad degrees work as waiters.
Ask around at your local Earls or Moxies. Most job ads specify Undergrad. Not specific to teachers.
I went to http://www.indeed.ca and typed in Accounts Receivable Clerk. Most ads specify degree or diploma as nice to have or a requirement.
Glorified daycare…maybe it is. Most daycare workers are imported and earn around min. wage. Maybe they can teach kids too?
As I’ve mentioned before, Australia is almost in an identical situation as Canada is. I wish somebody would do this in-depth article for Canada:
http://www.theguardian.com/business/grogonomics/2015/apr/06/steady-on-with-cutting-interest-rates-it-will-fuel-a-housing-bubble-on-the-edge-of-bursting
“People half my age who know twice as much” has to be one of the better put downs I have heard. The only other reference that I can find on Google does not use this phrase ironically. Garth original?
BC is going to be worthless over time as radiation is washing up on the BC coast…..But not need to worry! You can trust government not to lie. Expect unexplained rise in cancer in BC but don’t worry about it or think for yourself.
#233 BC swimming in radiation on 04.06.15 at 4:24 pm
BC is going to be worthless over time as radiation is washing up on the BC coast…..But not need to worry! You can trust government not to lie. Expect unexplained rise in cancer in BC but don’t worry about it or think for yourself.
—————————————————–
The melting glaciers will wash it away…
http://www.theglobeandmail.com/news/british-columbia/skiing-salmon-spawning-may-be-casualties-of-glacial-melt-report/article23806021/
#233 BC swimming in radiation on 04.06.15 at 4:24 pm
BC is going to be worthless over time as radiation is washing up on the BC coast…..But not need to worry! You can trust government not to lie. Expect unexplained rise in cancer in BC but don’t worry about it or think for yourself.
————————————–
GODZILLA
Remarkably similar.
http://www.theguardian.com/business/grogonomics/2015/apr/06/steady-on-with-cutting-interest-rates-it-will-fuel-a-housing-bubble-on-the-edge-of-bursting
I continue to see the suggestion in the MSM that tech startups are locating to Vancouver. What a dumb thing to do. I would seriously doubt the acumen of a management team that would locate at Burrard and Georgia and try to staff up with employees that cannot afford to live within an hour of that location.
In 1986 Microsoft located in Redmond, Washington. I have a relative that felt that Microsoft was going to go big and bought real estate all around the Microsoft campus in Redmond. Hit a huge homerun.
Watch for tech startups that have the sense to locate in Abbotsford and Medicine Hat. Then buy the company store.
#210 Don on 04.06.15 at 1:19 pm
#171 Bytor the Snow Dog on 04.06.15 at 10:11 am
There, there poor Van Doom.
What happened to you to foment this irrational hatred of public sector workers? Did one steal your lunch money when you were a kid or something?
Sheesh!
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More likely a factory owner employing children who was forced to pay them minimum wage.
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Actually I’m in IT, make 125K a year and have 5 kids. But I dont like having 60% of my pay stolen by Govt Trolls like yourselves who for the most part push paper all accomplishing less than nothing. Except for today….where you really are paid…..to do nothing. Happy Govt Day !!
#237 Washed Up Lawyer on 04.06.15 at 4:42 pm
In 1986 Microsoft located in Redmond, Washington. I have a relative that felt that Microsoft was going to go big and bought real estate all around the Microsoft campus in Redmond. Hit a huge homerun.
Watch for tech startups that have the sense to locate in Abbotsford and Medicine Hat. Then buy the company store.
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A fair point……….but have you been to medicine hat!
#178 SWL1976 on 04.06.15 at 10:41 am
#163 NoName
#104 SWL1976
Paranoia is a like greed, it only grows bigger.
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I am not paranoid, but I am informed and observant
I my honest opionion those who simply dismiss conspiracy theories as paranoid drivel are far more scared of the truth, maybe even say… Paranoid of the truth
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How would anyone know – weren’t the monitoring stations moved inland to the interior of BC?
Over the weekend I was surprised to find the Staples store closed. Was totally expecting the Future Shop closing up, but didn’t read any news about Staples closing locations …
I guess retail is in big trouble. What does it leave in the real economy, only the Canadian banks?
DELETED (Anti-Chinese)
#235 Squirrel meat
LOLz!
https://www.youtube.com/watch?v=SBIyxnpStRw
#210 Don on 04.06.15 at 1:19 pm
#171 Bytor the Snow Dog on 04.06.15 at 10:11 am
There, there poor Van Doom.
What happened to you to foment this irrational hatred of public sector workers? Did one steal your lunch money when you were a kid or something?
Sheesh!
*****************************
More likely a factory owner employing children who was forced to pay them minimum wage.
*******************************************
Actually I’m in IT, make 125K a year and have 5 kids. But I dont like having 60% of my pay stolen by Govt Trolls like yourselves who for the most part push paper all accomplishing less than nothing. Except for today….where you really are paid…..to do nothing. Happy Govt Day !
*********************
Well actually – I am in IT as well. Not everyone in IT makes assumptions or blames the government. I too would like to see efficiency in gov spending. And if you assume I am a gov worker because I am posting on a monday – it is my natural day OFF. yes some people have to work on the weekends and don’t get the full Saturday to spend with the kids. But then again some people never grow up or plan accordingly.
No one bitches at the oil and gas people doing a couple hours of labour for insane money (i am sure some work really hard and some don’t). When the shit hits the fan people need to vent and must do so by knocking those who chose a different path. People in IT don’t make as much in gov as they do in the private sector especially over the long run. I here they have IT in the gov to. The choices you make.
So you are at work posting today or are you working from home?
What’s up with the uptick in doomer-tinfoiler-rock licker- RE only goes up here 4ever-teacher/public servant-sky is falling haterz infesting the blog today?
The top MUST be in… it’s a sign.
Blog needs a nice warm salt bath and a good smudging.
Sorry all – this was meant for Van Doom.
#210 Don on 04.06.15 at 1:19 pm
#171 Bytor the Snow Dog on 04.06.15 at 10:11 am
There, there poor Van Doom.
What happened to you to foment this irrational hatred of public sector workers? Did one steal your lunch money when you were a kid or something?
Sheesh!
*****************************
More likely a factory owner employing children who was forced to pay them minimum wage.
*******************************************
Actually I’m in IT, make 125K a year and have 5 kids. But I dont like having 60% of my pay stolen by Govt Trolls like yourselves who for the most part push paper all accomplishing less than nothing. Except for today….where you really are paid…..to do nothing. Happy Govt Day !
*********************
Well actually – I am in IT as well. Not everyone in IT makes assumptions or blames the government. I too would like to see efficiency in gov spending. And if you assume I am a gov worker because I am posting on a monday – it is my natural day OFF. yes some people have to work on the weekends and don’t get the full Saturday to spend with the kids. But then again some people never grow up or plan accordingly.
No one bitches at the oil and gas people doing a couple hours of labour for insane money (i am sure some work really hard and some don’t). When the shit hits the fan people need to vent and must do so by knocking those who chose a different path. People in IT don’t make as much in gov as they do in the private sector especially over the long run. I here they have IT in the gov to. The choices you make.
So you are at work posting today or are you working from home?
I’m a bit late but this was an amazing post. Experience, wisdom, relevance, context, well done Garth.
#237 Washed Up Lawyer
Great point. Tech co’s here in Van have a penchant for cough *lobbying* our provincial government for special TFW exemptions to be able to legally import their best people and hire internationally.
A good share of these newly created high tech jobs don’t go to locals, and the locals who DO have these skills follow the money & get the “ell out of Van as fast as possible after graduating & head to the states in many cases.
The cost of living here (taxation and housing) is too high. A higher paycheque straight out of post-secondary and much lower cost of living can be had elsewhere. The brain drain out of Van seems to increase proportionately to the ever-increasing cost-of living here.
#241 Mike S — “Over the weekend I was surprised to find the Staples store closed.”
It’s all the stores with red corporate colours — Target, Staples, Future Shop, etc. I’m long red paint and I’m SCREWED. Maybe I can relabel it and sell it as red ink.
http://business.financialpost.com/personal-finance/debt/heres-how-to-afford-everything-you-just-pay-big-for-it-in-the-future
Yesterdays picture was hilarious.
http://www.greaterfool.ca/wp-content/uploads/2015/04/BUNNY-modified-modified.jpg?8f4c78
No one bitches at the oil and gas people doing a couple hours of labour for insane money (i am sure some work really hard and some don’t). When the shit hits the fan people need to vent and must do so by knocking those who chose a different path. People in IT don’t make as much in gov as they do in the private sector especially over the long run. I here they have IT in the gov to. The choices you make.
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I can choose to buy cheap or expensive gas or cut down on driving. I cant choose govt from pissing away billions a year.
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So you are at work posting today or are you working from home?
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None of your effing business……what kind of IT are you? CSIS contractor? That would make you a govt worker too…
#245 Vanecdotal
“Blog needs a nice warm salt bath and a good smudging.”
Actually, there are a few posters here who are in dire need of an enema…
“Unless they’re a fiduciary, it’s very difficult to win that case.”
Industry lobby against changing “suitability” rule, written in 1975,
read some of the horror stories
http://www.heraldtribune.com/article/20150330/WIRE/150339996/-1/news?Title=Investors-blame-losses-on-brokers-they-once-trusted
Excellent post Garth!
People come to this sexy blog for lots of sound financial advice.
Truth be told, the investments with stable yields tend to bet the least sexy (under the radar).
To sum up this post.
Grow a pair and avoid following the herd over the precipice!
#245 Vanecdotal on 04.06.15 at 5:12 pm
What’s up with the uptick in doomer-tinfoiler-rock licker- RE only goes up here 4ever-teacher/public servant-sky is falling haterz infesting the blog today?
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Maybe people are tired of shitty expensive services and paying 60% in taxes/fees especially on a day like today when the Public Sector gets a second day off on my dime.
#244 Don on 04.06.15 at 5:10 pm
“No one bitches at the oil and gas people doing a couple hours of labour for insane money”
The difference is that government worker gets paid from tax payers money.
236 Australia is FINISHED
Heath Aston
http://www.smh.com.au/federal-politics/political-news/energy-companys-11-billion-transfer-to-singapore-rings-tax-avoidance-alarm-bells-20150403-1me7ij.html
Energy company’s $11 billion transfer to Singapore rings tax avoidance alarm bells
….is revealed in an internal Australian Tax Office memo, obtained under Freedom of Information.
#199 Ralph Cramdown
“We have ALWAYS been in uncharted waters.”
Great perspective! Thanks Ralph.
Thank goodness, they are banning plastic water bottles.
http://news.nationalpost.com/arts/celebrity/leonardo-dicaprio-unveils-plan-for-multimillion-dollar-ecotourism-resort-on-island-off-the-coast-of-belize
#230 TurnerNation
Who cares, university is a scam unless you plan on getting a profession out of it. If you think taking a job that pays min wage and requires 4 years of university ($80k in cost) is a good idea you deserve to live in poverty.
I call this nation the degree stupid nation. It is full of idiots who have useless degrees and think it means something, it doesn’t. My wife makes $400k/year with no university. I make $100k/year + rental income, no university.
Plumbers make $85k/year easy. Degrees that do not lead to a profession are for idiots. What pisses me off is most go into teaching as plan B, when they realize that gender studies degree won’t pay the bills. And most are too lazy or stupid to get a profession or trade. I’d say most university grads with useless degrees are both stupid and lazy. Too lazy and entitled to take a real job, try doing a trade, real work, produce something.
Idiots, I hate subsidizing these useless socialist jobs that do more harm than good.
#259 AfterTheHouseSold on 04.06.15 at 5:53 pm
#199 Ralph Cramdown
“We have ALWAYS been in uncharted waters.”
Great perspective! Thanks Ralph.
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Which is funny because Govt ALWAYS lies to people that they know what they are doing.
#247 Time is #1 on 04.06.15 at 5:23 pm
I’m a bit late but this was an amazing post. Experience, wisdom, relevance, context, well done Garth.
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I concur.
I don’t share *quite* as rosy a view on some thing as you do, Garth. IE I think the US ‘recovery’ is to a sound economy like a cheese slice is to nutrition, but by and large I love the message of the post.
Fear is the mind killer. And boy, are many of us brain dead right now. (myself included on the bad days)
Re Van Doom
So you are at work posting today or are you working from home?
hahaha good one! Truth hurts….
#252 Van Doom — “I can choose to buy cheap or expensive gas or cut down on driving. I cant choose govt from pissing away billions a year.”
Criminal record and an underwater mortgage keeping you from relocating to a jurisdiction with politics you prefer?
Either this is the place you want to be, taking into account all the positives and the negatives, or it isn’t. Fish or cut bait. If it IS the best place but you’d still like to make it better, consider running for office or otherwise getting involved politically. Pissing and moaning on a former politician’s blog doesn’t cut it.
#256 Van Doom
Sounds like you could benefit from tax planning dude, although high cost of living in YVR makes that challenging. Simple answer is to move to a cheaper jurisdiction to ply your trade. The system sure as ‘ell isn’t perfect and could benefit from a ground up overhaul. Your bitterness could best be channeled into effecting some positive change then, yes?
I trust you bothered to actually vote to effect some positive change in the last election? If NO, then stfu.
The alternative is a race to the bottom a la Cdn. private sector in many industries currently underway. There is a wage disparity that needs to be addressed, ideally somewhere in the middle imho.
If you were offered a lucrative govn’t IT contract tomorrow you’d turn it down on principle then?
Government Worker Bashing?
Joe at 257 said:
The difference is that government worker gets paid from tax payers money.
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And the point is?
Yes the government has to pay when it needs employees.
Should the snow plow driver, the policeman, the teacher and the nurse feel guilty about where the government gets its money?
Where does the private sector get money to pay for things? From customers maybe? Are some of those customers also tax payers?
The economy is complex.
It behooves each of us to offer services that others will pay for.
If government workers are paid too much, that’s the fault of the government, not the individual worker.
Bashing all government workers strikes me as silly.
Claiming (as many do) that all government workers produce nothing or that they don’t pay taxes because their wages come from taxes is simply misguided.
#261 Fuzzy Camel on 04.06.15 at 6:01 pm
#230 TurnerNation
Who cares, university is a scam unless you plan on getting a profession out of it. If you think taking a job that pays min wage and requires 4 years of university ($80k in cost) is a good idea you deserve to live in poverty.
I call this nation the degree stupid nation. It is full of idiots who have useless degrees and think it means something, it doesn’t. My wife makes $400k/year with no university. I make $100k/year + rental income, no university.
Plumbers make $85k/year easy. Degrees that do not lead to a profession are for idiots. What pisses me off is most go into teaching as plan B, when they realize that gender studies degree won’t pay the bills. And most are too lazy or stupid to get a profession or trade. I’d say most university grads with useless degrees are both stupid and lazy. Too lazy and entitled to take a real job, try doing a trade, real work, produce something.
Idiots, I hate subsidizing these useless socialist jobs that do more harm than good.
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Surely you could have managed at least three more idiots thrown in there.
206 Leo Trollstoy on 04.06.15 at 1:08 pm
I could hussle an make more $ but what’s the point? My parents passed with $1m in the bank (RRIFs, LIFs, non-reg, TFSA, cash) In the end, they couldn’t spend it even if they wanted to. Hoarding money is stupid. You can’t take it with you.
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I’ve been mulling over the same thing. I like the solution of Ted Johnson. He’s the guy who went to work for UPS in 1923 and retired in 1953 at $270/week. But he collected UPS stock all that time and never sold. When he died in 1993 at 91, he lived in a modest 2BR condo and lived frugally as he always did. His UPS stock was estimated to be worth $70 Million!
It would be easy to judge that to be stupid as you mentioned. But what Johnson and his wife did was to set up a mega-million dollar foundation to give education scholarships to disadvantaged students overlooked for financial aid, including the disabled and American Indians. The foundation will exist as long as society does. Now THAT is the way to depart this life! Set up a foundation to help people and fund causes you believe in. I love it!
As soon as a poster like Van Doom or someone of his neocon ilk refers to taxation as “stealing” I ignore any further comment.
That said, I tend to agree that money is wasted. I could write a book. However, take that out on the political leadership that make the decisions…not on the rank and file and lower management staff.
#269 Cramer
You may already know this but it’s fairly easy to set up a charitable trust in Canada.
And you can move assets without that apparently wasteful government taking their share.
Maybe garth could include a post on ideas for giving.
It could help the 1% here with how to best ensure a giving legacy.