The no brainer

girl-modified

Another day, another stock market record. More Chicken Littles saying it’ll all blow up. And other day closer to higher interest rates. (Already Americans are facing an average of $16,000 more to buy the typical house since the Trumpster was elected as mortgage costs jump. Wonder how many voted for that?)

Before we get to Brad, it’s worth clarifying yesterday’s pathetic post. Just because equities have added about $1 trillion in the past month is no reason to buy in now. You should already have been fully invested – that’s the point. People who try to time markets are fools or (if they’re paid to do it) cons. You cannot tell when the next tsunami, terrorist act, weird political event or Kardashian moment may occur. So just build the right portfolio with the correct weightings and go walk the dog. Never exit an asset class. Never chase returns. Never sell into a storm. Never read the zero guy. Or watch BNN. Lethal.

Remember to always be balanced, diversified and liquid. No stocks. No mutuals. No commissioned salesguys masquerading as advisors. And be especially wary of insurance dudes who sell guilt, along with baby vultures who peddle the wrong kind of RESPs. The [email protected] is a little sketchy, too.

In short, hone your common sense. Have confidence the world’s expanding, not contracting. Don’t take too much risk reaching for big gains. Don’t eschew risk and turn into a saver trying to avoid every danger. Never concentrate your wealth in a single thing, like one house. Learn all about tax avoidance. Be aware that running out of money will be the outcome for so many people. But that doesn’t need to include you.

So this brings us to Brad. By most standards, he’s doing okay for a 40-something.

“I’ve been reading your blog for a couple of years now and enjoy it immensely,” he begins, with the mandatory, genuflecting, suck-up salutation I require.

“I have a question about mortgage payoff versus investments. As a family we make $240k (me $170k my wife $70k) a year and own a house worth $500k ish and owe about $265k on it. We have $100k in RRSP, $10k in RESP (for our 2 year old) and expecting a second next year.

“Our mortgage is up next year and I’ve been debating borrowing an extra $100k to put into a spousal/personal and the $100k would get me a $45k tax refund. So $100k in RRSP @ 6% over 25 years would end up around $400k, the $45k refund in a TFSA would plump up to around $200k. From what I can tell the extra $100k would cost me anywhere from 50-100k in interest depending on interest rates end up over the years. This seems to be a no brainer … am I missing something here or is this really a good idea?

Brad and his squeeze, by income, are in the top 2% of Canadian families. But they’re lagging in assets – $235,000 equity in the house and just $110,000 in financial stuff. Obviously they’re better at spending than saving, and things are about to get worse as the second kid arrives and a maternity leave looms.

Don’t know if there are pensions involved, but because 70% of us don’t have one waiting, probably not. No TFSAs – bad. All financial net worth in RRSPs, taxable in retirement – not great. No joint non-registered account to earn tax-advantaged income and income-split – a failing.

But Brad has the desire, obviously, to do better. He reads this trashy site. He writes me. So what’s the answer to his question?

No. Don’t do it.

Increasing the mortgage by $100,000 upon renewal means the additional amount will be amortized along with the rest of the principal. Thus, the amount to be repaid is higher than would be the case with simple interest (such as with a line of credit). Second, borrowing for an RRSP contribution means the interest is not deductible from taxable income. Bummer.

A better option might be to set up a secured line of credit (HELOC) against the house. Bankers will give you up to 65% of your equity ($150,000 in this case) at prime plus a half (3.2% these days), and allow you to make interest-only payments ($400 a month on this amount). Since Brad is in the 33% tax bracket, this is effectively reduced to $270 (just over 2%). Borrowing at 2% and investing for 6% or better is not a bad gig.

He could also take an RRSP loan in a month or two when they become available. A banker would happily fork over $100,000, then wait for the refund to roll in, applying that to the outstanding amount. In this case Brad would end up with $100,000 in assets that cost him $55,000. He could still set up a HELOC, put the money in a taxable account, deduct interest and use some of the funds to repay the RRSP loan.

Or, he and his partner could craft a budget, spend way less money, concentrate on topping up their TFSAs, stop wasting time on soul-sucking blogs and research baby modelling agencies.

Look at Justin Bieber.

134 comments ↓

#1 Randy Cross on 12.08.16 at 5:47 pm

Only Millennials are that dumb.

#2 patrick on 12.08.16 at 6:05 pm

~ Just because equities have added about $1 trillion in the past month is no reason to buy in now. ~

That statement ought to CYA.

Not sure anyone who reads the blog really `believes` the great algorithmic equities rally- although its free money for the brave.

Good point on the HELOC.

#3 Confused on 12.08.16 at 6:22 pm

I understand that TFSA’s account should definitely be maxed out but…. if ‘Brad and his squeeze ‘have tons of RRSP contribution room – doesn’t it make more sense to load up (and max out) their RRSPs first at their high incomes before they jump into TFSAs? We are in a similar situation to ‘Brad’ with >$200,000 RRSP room still and that was our plan.

#4 wallflower on 12.08.16 at 6:22 pm

And then there is the mid thirties crowd.
V-E-R-Y scary. Is this couple typical?
http://www.theglobeandmail.com/globe-investor/thirtysomething-and-in-debt-what-to-do/article33025169/

I could emphathize if they were mid twenties… typo?

#5 turn of the tide on 12.08.16 at 6:25 pm

House prices have gone up due to low interest rates, fine. It’s cheap to borrow money, so high demand. Ok.

Now, when rates go UP and cost of money is more expensive, house prices are predicted to go down. Fine.

HOWEVER, for a person purchasing a home, now cheaper to due to higher interest rates, isn’t the cost of borrowing higher?

In other words, they may pay less for the house BUT for aren’t they now paying much, much, much more in interest? Effectively making the final cost about the same?

What am I missing here? Anybody with math skills know how to break this down?

#6 kat on 12.08.16 at 6:32 pm

What is the wrong kind of RESP?

#7 Justin Bieber is not Gay on 12.08.16 at 6:35 pm

C$ is rising again. At almost 76 cents. Projecting it to increase to 85 to 90 cents before the end of the year.

Canada is doing great with the Q3 results. Q4 will show more growth.

#8 Mark on 12.08.16 at 6:40 pm

Simple question: how does someone earning $170k/year end up in the 33% tax bracket? I thought Alberta offered about the best deal going for those top earners with a 39% bracket?

Or watch BNN. Lethal.

Agreed. Its kind of sad running into people who start talking like the guests on that show because they’ve watched too much of it. Baggers this and that. And whatever other spew that a particularly liked guest or host goes on and on about.

#9 Scumop on 12.08.16 at 6:46 pm

It is nice to have not looked at the portfolio in a couple months and find its up. Somewhat balanced and all good.
More people need to read this blog.

#10 lookb4uleap on 12.08.16 at 6:49 pm

Just because equities have added about $1 trillion in the past month is no reason to buy in now. You should already have been fully invested – that’s the point”
Garth

Garth, the market could have just as easily have dropped 1 trillion and everyone would be saying now is the time to jump in….

#11 PhrisCitzel on 12.08.16 at 6:50 pm

Brad and his squeeze, by income, are in the top 2% of Canadian families. But they’re lagging in assets

This is what I was thinking. Where did the money go? It’s incredible how a house keeps people in the same financial place regardless of their income. It’s a financial treadmill.

#12 David Prokop on 12.08.16 at 6:56 pm

From the Elliot Wave Theory perspective this looks like the market has entered its final 5th, blow off top, euphoria stage, where everything is going parabolic regardless of the news. Just look at some US financials like GS or BAC, they have this 1999 tech bubble look. All bull markets end at some point this one will end too, maybe sooner than Garth thinks. What might make things worse this time is that the bull market in bonds could be over too, which would be lethal to the ‘balanced’ portfolio. Fundamentally nothing has changed, world still has mountains of debt that will never be repaid, but the market has decided to go up on Trump hopes. Do you really believe Trump will be good for America Garth after warning against him for the entire year?

#13 Ret on 12.08.16 at 7:09 pm

” $16,000 more to buy the typical house since the Trumpster was elected…Wonder how many voted for that?”

The cost of RE goes down when the cost of money goes up. I don’t see a problem here. Qualified, worthy buyers will probably save more than $16,000 in the long run as they play hardball with sellers and the banks.

#14 espressobob on 12.08.16 at 7:10 pm

One of the problems many retail investors face is the taxation issue. It can be a real bitch if those investments one makes are in the wrong accounts.

RRSP withdrawals are fully taxable.

TFSA withdrawals are tax free.

Non- registered investments can be tax friendly if you know what to invest in. That’s the kicker. Homework pays off.

#15 Calgary Guy on 12.08.16 at 7:28 pm

Garth, oh great maestro of balanced portfolio’s, oh prominent prognosticator of human behaviour, a question for you. (Is that enough grovelling?)

From what I can ascertain reading some of your blogs the 60% “growth stuff” should be comprised of ETF’s that are about 17% maple, 21% USA, 18% international, and 4% completion. Sounds balanced to me.

But, if you look at all of the world’s stock exchanges by market CAP, then you noticed things such as the Canada stock exchange (TMX) makes up about 2.5% of the world total, or the nasdaq and nyse make up about 37.5% of the world total.

Based on this, your portfolio allocation recommendations have Canada much more overweight than the world total, and the USA slightly overweight the world total. Many, many other advisors in Canada also have a similar overweighting.

What’s the though process behind this? Why not build the “growth stuff” based on what the world market cap percentages are? Is there location bias or is there some other good reason to own a lot more maple than the small 2.5% market cap that Canada contributes to the world?

Here is a website with some interesting info on all the stock markets in the world:
http://www.visualcapitalist.com/all-of-the-worlds-stock-exchanges-by-size/

#16 prairie person on 12.08.16 at 7:40 pm

According to the Victoria Real Estate Board’s most recent figures, 10,151 homes were sold in 2016 up to Dec. 1, a 30 per cent increase from the same period last year. The dollar value of sales increased 46 per cent to $5.9 billion compared with 2015.

The board’s benchmark price for a single-family home in the Victoria core last month was $753,800, a 23.9 per cent increase from the same time last year.

– See more at: http://www.timescolonist.com/business/assessments-may-be-up-by-40-some-homeowners-warned-1.4011333#sthash.pFBWRaqU.dpuf

There is someone on this board who has been floating false numbers.

#17 InvestorsFriend on 12.08.16 at 7:49 pm

Should (NOT) Weight Canada at 2.5%?

Calgary Guy asks:

But, if you look at all of the world’s stock exchanges by market CAP, then you noticed things such as the Canada stock exchange (TMX) makes up about 2.5% of the world total, or the nasdaq and nyse make up about 37.5% of the world total.

Based on this, your portfolio allocation recommendations have Canada much more overweight than the world total, and the USA slightly overweight the world total. Many, many other advisors in Canada also have a similar overweighting.

******************************************
One main reason to so-called overweight Canada is because you have no currency risk on your Canadian investments (assuming the company earns its money in Canada).

Another reason would be comfort with the Canadian legal system. In the case of individual stock pickers it would be comfort and familiarity with the individual companies.

I think it is preposterous to suggest the Canadian weight should be anything close to as low as 2.5%.

#18 For those about to flop... on 12.08.16 at 7:50 pm

The way politicians are nowadays wanting to blow taxpayers money away in the wind I think they should do their fare share before raising taxes.

My proposal is that in the House of Commons they wear smocks with a corporate sponsor emblazoned on it to help foot the bill for all this excess.

Some members would be natural choices by name association,such as Rona Ambrose could be sponsored by Rona Hardware,Kelly Block could stump up for H&R Block.
Sheri Benson should have no problem attracting interest from Benson and Hedges, although she might need to get an alcohol and tobacco exemption.
Gerry Ritz will surely get snapped up by whoever owns Ritz Crackers.

Some of the politicians that have had travel expense drama will be targets for taxi companies,Über and rental agencies like Hertz.

Others such as Justin Trudeau could find a sponsor for something they have participated in or have lobbied for.
I don’t think he would have any trouble attracting interest from one of the bigger Marijuana dispensaries.

If the Metrosexual Messiah doesn’t get the exemption for that,he can always rely on the back up plan of company that sells elbow pads…

M42BC

#19 InvestorsFriend on 12.08.16 at 7:50 pm

RRSP investing

Does Garth’s firm even offer RRSP investing? He is not a fan of RRSP investing.

I have written often about the utility of RRSPs. — Garth

#20 Lee on 12.08.16 at 7:56 pm

To support Kat what is wrong RESP.
PLEASE EXPLAIN

#21 DC Plan with Manulife on 12.08.16 at 7:57 pm

Does anyone have a work DC plan with Manulife (formerly Standard Life), and what would a “Garth” weightings/asset mix look like?

#22 mike from mtl on 12.08.16 at 7:58 pm

C$ is rising again. At almost 76 cents. Projecting it to increase to 85 to 90 cents before the end of the year.

Canada is doing great with the Q3 results. Q4 will show more growth.
=======================================

Well a few cents that were lost over the few months are back. But 85-90 by year’s end (which is weeks away) I seriously doubt it.

I can take some comfort in the poloz peso before seriously starting to consider switching to CAD hedged.

#23 Bobo on 12.08.16 at 8:04 pm

Garth why are you always telling us to not time the market and then you are constantly trying to time the real estate market telling us for years its time to get out ?

Correction. I tell you not to overweight in real state or go nuts with leverage. — Garth

#24 A belieber on 12.08.16 at 8:09 pm

stop wasting time on soul-sucking blogs and research baby modelling agencies.

Look at Justin Bieber.

if only it was so easy. Every little snot-noser would be selling out the Rogers Centre….twice!!!

I heard the Rolling Stones tried to play the Rogers Centre but the Toronto Fire Dept shut it down. Said you’d never evacuate 30k walkers and wheelchairs in case of a fire.

#25 TCContrarian on 12.08.16 at 8:26 pm

I’m a market timer – in fact, it’s the only way to beat the market. Now, I know that most fail at this – they have too (mathematically).
The operative word is ‘most’, because it implies that ‘few’ DO succeed.
My goal for years was to somehow become part of the ‘few’. I think I’m ‘there’, but it has taken $500k in ‘tuition’ (aka ‘losses’).

But there is a downside: Too much to be paid in capital gains taxes!! Any tips on tax-avoidance?

TCC

#26 DD on 12.08.16 at 8:26 pm

I am also interested how to properly invest in a RESP. For my first child i have a monthly contribution set up that goes to a mutual fund with Mackenzie. I can’t say it’s doing great but not too bad either. We just had a second child and would like to start contributing. With etfs i guess it should be one or at most two and contribute once a year (instead of monthly) around 3000 to maximize the government credit. Another option would be CST but i have a feeling that this is not what you’d recommend. Thank you on advance for any advice!

#27 TCContrarian on 12.08.16 at 8:26 pm

Error: “they have too” should be “they have to”
TCC

#28 Self Directed on 12.08.16 at 8:30 pm

Housing costs in GVRD are still insane. For all 3 housing types! I have no idea how people can afford to make any near term housing purchase decision. Is KD a publicly traded company. There’s a stock pick for you.

Waiting but still no crash for the middle class (the people who need it most).

#29 cramar on 12.08.16 at 8:37 pm

U.S. net household worth up 6% this year to $90T. Asset inflation, i.e. housing, stocks, savings, are fuelling the rise. Anyone that thinks the FED is not going to raise rates several times must have their head buried in the sand.

http://wolfstreet.com/2016/12/08/calamity-economy-performs-household-wealth-miracle/

#30 Derek R on 12.08.16 at 8:37 pm

#15 Calgary Guy on 12.08.16 at 7:28 pm asked:
… your portfolio allocation recommendations have Canada much more overweight than the world total, and the USA slightly overweight the world total. Many, many other advisors in Canada also have a similar overweighting.

What’s the though process behind this?

Since Garth didn’t answer, I’ll take a shot.

Canadians get tax advantages when they invest in Canadian equity. They also avoid foreign currency risk by buying assets which are valued in (and return dividends in) Canadian dollars. This makes it advantageous for Canadian investors to overweight the Canadian element of their portfolios.

#31 Self Directed on 12.08.16 at 8:37 pm

And it’s not just RE that’s expensive in GVRD…

I took transit to work the other day because of the snow storm. Bus to Skytrain $3. 2-Zone Skytrain $4. Skytrain return ride home $4. $11 bucks for a single day on Transit! And, I had to wait with a bunch of deplorables for 35 minutes at the station for a bus I was convinced did not exist. Top it off, they didn’t shovel or salt the bays. We were all standing on ice.

How is it different or better here in GVRD? I don’t know anymore.

#32 Fiendish Thingy on 12.08.16 at 8:40 pm

Garth, for all the valuable advice and insight you provide, you have avoided a detailed discussion of the risks to investors when Trump repeals Dodd-Frank. This is not doomer CT stuff, but on the minds of many a reasonable, informed investor.

http://fortune.com/2016/12/08/trump-dodd-frank-2008-financial-crisis-steve-mnuchin/

#33 Keith on 12.08.16 at 8:48 pm

#8 Mark

Studies have shown that almost all citizens pay about 33 percent in taxes. Top tax rates are a huge focus, but they are almost never described as “the marginal tax rate.” When taxes are increased on people with high incomes, they will look for legal tax avoidance strategies more vigorously, which is why it’s so difficult to “increase taxes.”

The most successful tax increase was the freezing of the basic income exemption by the Liberals, in the great deficit fight of the 1990’s. Their unprecedented and politically courageous combination of tax increases and spending cuts resulted in turning a 40 billion dollar deficit into a surplus, never before or since accomplished.

Low income Canadians also pay 33% to the government, because they pay so much in user fees. Not much in income tax, but user fees are not reduced for lower income Canadians and provincial governments are particularly fond of them. B.C. boast of its low provincial income tax, but on low income citizens it handily makes up for it with a comprehensive and expensive set of user fees.

#34 Andrew Woburn on 12.08.16 at 8:56 pm

#5 turn of the tide on 12.08.16 at 6:25 pm
House prices have gone up due to low interest rates, fine. It’s cheap to borrow money, so high demand. Ok.

… In other words, they may pay less for the house BUT for aren’t they now paying much, much, much more in interest? Effectively making the final cost about the same?
============

Yes, it wouldn’t be hard to find examples where the total outlay for a cheap house with a high rate mortage would be equal to that of an expensive house with cheap financing.

However, let’s pretend for the sake of example that a 25 year cash outlay on a $300K mortgage at 15% is the same as that of a $1 million mortgage at 3%. The cash may look the same but the risk is not. The 15% rate has much more room to fall than rise. The opposite is true at 3%. If rates move from 3% to 6% on renewal, the high mortgage debt remains. The homeowner is probably crippled as will happen to many recent buyers.

On the other hand, if the 15% rate drifts down to 12% or lower, the homeowner has a windfall because new buyers can afford to bid up the price of his home. This is why boomers think they are real estate geniuses.

#35 quebecEconomist on 12.08.16 at 9:01 pm

Still fully invested.
Getting out jan 10th.
…remember this warning:
worst crash in stock market history within 3 weeks that trump takes office…the worst is you know it.. denial.

#36 Smoking Man on 12.08.16 at 9:06 pm

Funny clip. Near the end, shows you what Harvard has desended too. If I had an obidance certificate from the school. It would be off my resume.

Next big wave. Home Schooling.

https://youtu.be/wU4XKa4r2wo

#37 Mark on 12.08.16 at 9:07 pm

“Does Garth’s firm even offer RRSP investing?”

I’ve never heard of a full-service financial advisor that doesn’t offer the full plethora of options. Garth even tells people to buy RE when it is appropriate, so he’s obviously not wedded to the idea of having all client assets under his firms’ management specifically. This is the advantage of engaging a fee-for-service financial advisor instead of one which is strictly compensated by assets under management. The element of conflict-of-interest in asset selection significantly removed under such model.

One main reason to so-called overweight Canada is because you have no currency risk on your Canadian investments (assuming the company earns its money in Canada).

The Dividend Tax Credit is another big reason. 1/2 of long-term returns from stocks come from dividends, so if we assume a long-term return of 10%, 5% of the return will come from dividends and dividend growth. A Canadian “eligible” dividend has already had its tax paid-up to the tune of around 30% (give or take), while a foreign dividend will attract tax at full marginal rates. So a Canadian investment could under-perform by 1.5%/annum over the long term, and still provide, on a total after-tax return basis, a return comparable to that of the higher performing foreign asset.

Of course, with a contemporary younger investor who may have 100% of their assets in tax-sheltered or deferred accounts, this is meaningless. But for those who have taxable accounts it is a legitimate consideration. Also, the Canadian markets, over the long term, do perform comparably with foreign markets — the past 35 years not being the greatest for Canada due to the factors I explained yesterday with respect to Canada’s inverse correlation to the long-term interest rate cycle. The Canadian (TSX) sectoral mix favouring the rising/higher rate environment.

#38 Andrew Woburn on 12.08.16 at 9:09 pm

The Donald has made much about how he is going to bring back all that cash that US companies are holding offshore. He is going to put it to work creating American jobs right after he reinvents coal mining.

Like almost anything the Donald says after “Hello!”, this is dubious. First of all, there is nothing to prevent a US multinational from having its offshore sub simply lend the money it holds back to the parent if it wants to finance US projects. Secondly, large chunks of that “offshore” cash are already invested in US government securities.

“Taking advantage of an exemption tucked into America’s Byzantine tax code, Apple stashed much of its foreign earnings—tax-free—right here in the U.S., in part by purchasing government bonds, according to people with direct knowledge of the matter. In return, the Treasury Department paid Apple at least $600 million and possibly much more over the past five years in the form of interest”

https://www.bloomberg.com/graphics/2016-apple-profits/

#39 willworkforpickles on 12.08.16 at 9:10 pm

2017 will see riots and civil unrest but no major economic collapse. Not the big one. Not yet.
Food will be on the shelves in supermarkets in 2017 and possibly 2018 as well.
Change looms large ahead.
As the sun hangs low on the horizon
leave the worry for later
but for now…
……eat plenty , sleep well and good night.

#40 Smoking Man on 12.08.16 at 9:19 pm

Wait For It.

8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

#41 Lots of Satisfaction on 12.08.16 at 9:19 pm

#24 A belieber on 12.08.16 at 8:09 pm

stop wasting time on soul-sucking blogs and research baby modelling agencies.

Look at Justin Bieber.

if only it was so easy. Every little snot-noser would be selling out the Rogers Centre….twice!!!

I heard the Rolling Stones tried to play the Rogers Centre but the Toronto Fire Dept shut it down. Said you’d never evacuate 30k walkers and wheelchairs in case of a fire.

Lol. Well the head jumping jack flash dude just pumped out kid number eight at 73!!

#42 I don't know! on 12.08.16 at 9:20 pm

“Another day, another stock market record. More Chicken Littles saying it’ll all blow up.” – Garth

————————————————————–

And don’t forget the Chicken Littles that keep saying the TO RE market is going to blow up.

Not here. Check the archives. — Garth

#43 Tesla glowballs on 12.08.16 at 9:32 pm

#40 Smoking Man on 12.08.16 at 9:19 pm

Wait For It.

8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

Ok but why did you get the BoC call yesterday 100% WRONG alien man…. you are NEVER wrong… lost a shit load of money dude.. wife is not impressed.. she believed you were a financial alien..

#44 Andrew Woburn on 12.08.16 at 9:33 pm

Looks like Warren Buffett is tiptoeing away from Walmart. Funny, during the dot.com frenzy, he was put down as being out of touch with technology. Maybe he learned something after all.

“Berkshire said last month that it cut its holding in the Bentonville, Ark.-based retailer to 13 million shares as of Sept. 30, marking the third-straight quarter that Mr. Buffett’s company lowered its stake. Online shopping has shifted the balance of power among retailers, a trend that’s become more evident this holiday season, and Wal-Mart stock has trailed Amazon.com Inc. in recent years.”

http://www.theglobeandmail.com/globe-investor/investment-ideas/buffetts-shrinking-wal-mart-stake-signals-amazon-holiday-threat/article33236723/

#45 Ret on 12.08.16 at 9:39 pm

” and own a house worth $500k ish and owe about $265k on it. ”

I don’t know how to break it to Brad, but he doesn’t own anything until the last payment is made.

I will concede that he appears to have some equity in the house that he lives in.

#46 common sense on 12.08.16 at 9:43 pm

Bump

#47 GenXer on 12.08.16 at 9:45 pm

#6 kat on 12.08.16 at 6:32 pm
What is the wrong kind of RESP?

Knowledge First Financial is the one I got involved in. Very disappointing returns. High fees. If I knew then what I know now I would have done self directed. There is a Federal match you would lose out on though

Of course you do not lose the grant. It applies to any RESP, no matter where it is hosted. Did the baby vultures tell you that? – Garth

#48 InvestorsFriend on 12.08.16 at 9:57 pm

Putting Down Buffett?

#44 Andrew Woburn on 12.08.16 at 9:33 pm

Looks like Warren Buffett is tiptoeing away from Walmart. Funny, during the dot.com frenzy, he was put down as being out of touch with technology. Maybe he learned something after all.

***********************************
Buffett is greatly lauded but has also been “put down” thousands and thousands of times.

He can take solace though given that he is generally acknowledged to be the most successful investor in history and sits very (very) close to the top of the list of world’s richest people.

Buffett has learned more than just about anyone in the world. And he has a phenomenal memory and has forgotten basically none of what he learned.

If you look it up, you will see that Buffett has been speaking highly of Amazon for at least a decade.

#49 bubu on 12.08.16 at 9:59 pm

“income, are in the top 2% of Canadian families”

Maybe top 10-15% but not 2%….

#50 Smoking Man on 12.08.16 at 10:00 pm

Back in July. Post 94
When no one saw this coming.

http://www.greaterfool.ca/2016/07/31/really-3/

#51 Smoking Man on 12.08.16 at 10:14 pm

When I get some time hopefully on Saturday I’m doing a paper on why the left is unhinged. I’ll explain climate change. Gender wars. Race batting. And all the other crazy shit that’s going on.

Nothing happens by accident, there is an agenda with a secret defined goal. Unless you attend Davos or Bilderburg you really have no clue.

Disclosure is coming, stay tuned to this bat channel.

Dr Smoking Man
PhD Herdonomics

#52 Bottoms_Up on 12.08.16 at 10:15 pm

#4 wallflower on 12.08.16 at 6:22 pm
——————————–
Not a typo, that is an average debt load for todays 30-somethings.

#53 Smoking Man on 12.08.16 at 10:20 pm

43 Tesla glowballs on 12.08.16 at 9:32 pm
#40 Smoking Man on 12.08.16 at 9:19 pm

Wait For It.

8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

Ok but why did you get the BoC call yesterday 100% WRONG alien man…. you are NEVER wrong… lost a shit load of money dude.. wife is not impressed.. she believed you were a financial alien..
……

Serves you right for listing to a confessed lier and a Drunk.

I did a few days before said I take the call back. When I made the 100% call it was going to happen. Then things changed.

So technically I was right yet again. So long as you make the right call before the event.

Bombardier and Yellow pages is all you have to hang me on…

#54 Bottoms_Up on 12.08.16 at 10:20 pm

#26 DD on 12.08.16 at 8:26 pm
———————————
You get the credit regardless if you contribute monthly or yearly.

#55 Whitehouse Tag Team Wrestling on 12.08.16 at 10:23 pm

Groin kicking McMahon in charge of small business.. T2 better be ready to rumble!!

https://nationalpostcom.files.wordpress.com/2016/12/c_zpsc841c3a2.gif?w=300

#56 Deplorable Dude on 12.08.16 at 10:27 pm

Ya….that sign ain’t true….

Loving the Trump-effect on my loot…time to rebalance and I’m loath to sell anything…it keeps going up!

Good strategy. Wait until it goes down & then sell. — Garth

#57 Balmuto on 12.08.16 at 10:32 pm

“Remember to always be balanced, diversified and liquid. No stocks.”

Boooooring

In a volatile world, that’s exactly the point. — Garth

#58 Smoking Man on 12.08.16 at 10:36 pm

#56 Deplorable Dude on 12.08.16 at 10:27 pm
Ya….that sign ain’t true….

Loving the Trump-effect on my loot…time to rebalance and I’m loath to sell anything…it keeps going up!

Good strategy. Wait until it goes down & then sell. — Garth

Tempted to put a huge short on Twitter now that Gab is taking off. As twitter dies a slow social death some one with a brain might try a take over killing the short. Better bet is to contact the owner of gab. Give him some loot and buy some. Before it goes public.

Once gab can figure out a way to get rid of the three weeks to sign up and has an app. Twitter will get crushed.

It will be to gab what MySpace is to facebook.

Jack is a total idiot.

#59 Smoking Man on 12.08.16 at 10:44 pm

Starwars calling Trump supporters Nazis.

Being a seasoned door knocker with shit marketing skills, my success comes from knuckles.

Look at who’s calling the kettle black.

Deranged lefty’s. All mind fkd by Marxists teachers.
Jealous idiots with huge pensions that really pisses off those that risk, make bets, and pay there salary.

Retribution is coming you unless morons.

#60 Tesla Glowing Orbs on 12.08.16 at 10:47 pm

#53 Smoking Man on 12.08.16 at 10:20 pm

43 Tesla glowballs on 12.08.16 at 9:32 pm
#40 Smoking Man on 12.08.16 at 9:19 pm

Wait For It.

8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

Ok but why did you get the BoC call yesterday 100% WRONG alien man…. you are NEVER wrong… lost a shit load of money dude.. wife is not impressed.. she believed you were a financial alien..
……

Serves you right for listing to a confessed lier and a Drunk.

I did a few days before said I take the call back. When I made the 100% call it was going to happen. Then things changed.

So technically I was right yet again. So long as you make the right call before the event.

Bombardier and Yellow pages is all you have to hang me on…

Well you do lie constantly about everything!

#61 Crap on 12.08.16 at 10:50 pm

I’m brokw

#62 A belieber on 12.08.16 at 10:51 pm

@ Lots of Satisfaction

Lol good handle. But seriously, that’s gross, I figured even viagra had it’s limits.

#63 Help me please on 12.08.16 at 11:00 pm

Thank you to the persons that answered my question the other day, god bless you all! I’m confused? Garth says no stocks but he wrote the Dow would increase from 10,000 to 20,000 so he was spot on. If a person would of invested in stocks when it was 10,000 wouldn’t they made a mint? Can’t you be diversified and balanced by owning different types of stocks pipelines banks etc…
As I research more why not just invest in stocks that pay dividends and stocks that will outlive my children’s grandchildren? I asked a gentlemen if you could own one stock what would it be? His response Johnson & Johnson
What do you people think?
Thx u

#64 Smoking Man on 12.08.16 at 11:01 pm

My advice to future fiction writers who actuly have marketing skills. . Ear Budd’s on. Drink,. Type when you go a bit uncoordinated with fingers.

Try this song. https://youtu.be/xSHYlSxQyJM

Any song. Music stimulating the fingers. You will create gold.

#65 Dangle on 12.08.16 at 11:06 pm

You say people that try to time markets are fools. Why are we preaching that people attempt to perfectly time the residential real estate market? If you need a house, find a good deal and buy in. If your long term, you win. Very simple.

#66 dr. talc on 12.08.16 at 11:07 pm

‘I don’t know how to break it to Brad, but he doesn’t own anything until the last payment is made.’

not true, when he sells it he gets a cheque on closing
payable to ‘Brad’

#67 Smoking Man on 12.08.16 at 11:12 pm

59 Tesla Glowing Orbs on 12.08.16 at 10:47 pm
#53 Smoking Man on 12.08.16 at 10:20 pm

43 Tesla glowballs on 12.08.16 at 9:32 pm
#40 Smoking Man on 12.08.16 at 9:19 pm

Wait For It.

8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

Ok but why did you get the BoC call yesterday 100% WRONG alien man…. you are NEVER wrong… lost a shit load of money dude.. wife is not impressed.. she believed you were a financial alien..
……

Serves you right for listing to a confessed lier and a Drunk.

I did a few days before said I take the call back. When I made the 100% call it was going to happen. Then things changed.

So technically I was right yet again. So long as you make the right call before the event.

Bombardier and Yellow pages is all you have to hang me on…

Well you do lie constantly about everything.
….

To lie is to be glorious…

True mark of a rebal.

But when you pretend to lie and are right. A God.

No idea where I’m going with this post. Anit a lie. I’m hammered. Working on a sequel to Deplorables, you want to be in it. Give me your annishals.

#68 Pete on 12.08.16 at 11:17 pm

35 quebecEconomist on 12.08.16 at 9:01 pm
Still fully invested.
Getting out jan 10th.
…remember this warning:
worst crash in stock market history within 3 weeks that trump takes office…the worst is you know it.. denial.
———————————
You might want to get out now. Remember that the US has enacted legislation which mandates clawbacks of money from people who ‘get out’ just in time. Read up on it and how it might pertain to any US holdings you may have.

#69 Ace Goodheart on 12.08.16 at 11:21 pm

RE: #118 pBrasseur:

“Garth, interest rates respond to one thing and one thing only: The demand for money. When demand for money is high (people and companies don’t spend, save a lot and pile up money) rates are low. Rates rise when the demand for money slows and more are prepared to spend and invest.”

This actually isn’t true.

Interest rates are a function of the bond market.

Back when we had the gold standard, interest rates were determined by how much gold there was in existence. More gold = lower rates. Less gold = higher rates. Reasoning, you can only print as much money as there is gold.

We went off the gold standard.

From then on, interest rates were measured by how much money you could raise by selling bonds.

For 35 years, there has been a decline in rates, because you could get less and less for bonds, as they gradually expanded in sales.

This situation almost crashed our global economy, when the Americans figured out how to securitize the bond market.

Now that situation has changed. No one really knows why, but all of a sudden, the bond market has repriced itself. We now have a situation where new bonds are worth more than old ones. This is sort of like a situation where the wave that just came is smaller than the one coming.

Again, this is not something anyone is used to. But we now have a bond market that is causing interest rates to rise.

#70 yorkville renter on 12.08.16 at 11:24 pm

Is that a plug for Carolyn’s Models? You secretly selling ad space now?

#71 Smoking Man on 12.08.16 at 11:28 pm

To a top gun who I’ve personaly got into dog fights with. Orange plasma flier capabilities so under tated

Shep RIP

I dedicated this to you.
https://youtu.be/BP0IXOr9O8U

#72 Pete on 12.08.16 at 11:31 pm

39 willworkforpickles on 12.08.16 at 9:10 pm
2017 will see riots and civil unrest but no major economic collapse. Not the big one. Not yet.
————————————
The Donald might be able to push the collapse back several years but it is coming. It won’t come until the rest of the world loses all faith in the US, but with Donald winning the election there are a great deal of positive vibes around these days (in the real world, not the phony world of the lefties). Collapse cold be brought on at any thime by the ‘Powers that Be’, but I don’t believe that that is in their game plan for the near future.

#73 Smoking Man on 12.08.16 at 11:39 pm

For You Idiots That Cant Read. Behind The Lines

For You

https://youtu.be/HHjKzr6tLz0

#74 Rexx Rock on 12.08.16 at 11:41 pm

Wow!Another record year for houses in the land of milk and honey!!Some houses in Victoria went up over 40% so they say in BC assements.How on earth are new homebuyers will be able to afford the average $750,000 house in Victoria?Ok,most couples here make over $100,000 a year but its still not enough with other expenses.Its all about sacrifice in certain parts of Canada.The ulmighty sign of success of owning your own home comes and a very dear sacfrice like no other.The consumer it certain areas will be tapped out to the maxx.

#75 RIL on 12.08.16 at 11:48 pm

As the vicious and hoary beast of winter hits us in Ft. McMurray, I come to grips with some aspects of living in this country. The landscape has far too much “North” and far too little “South”. A quick search tells me that it is 2900 km to Ellesmere Island from the oil sands. Jeez.

So I turn to the oft used expression of my wife during our forays in the wilderness. “There is no such thing as bad weather. There is only inadequate and inappropriate clothing and equipment.”

#76 Stock picking cowboy on 12.08.16 at 11:52 pm

I’d like to clarify the gulf between timing the market and risk mgmt. chasing this market is suicide if you already have full positions in the big five. Pouring more money into stocks at this time is Russian roulette, because the profit cycle may happen at any time. Frankly I think profit taking, likely in May be be brutal for the buy and hold investor. Institutional investors have to window dress in order to secure bonuses and there will no drought be a significant drop when stocks flood the market. Therefore, I don’t consisider not chasing this juggarnaut as market timing, but risk mgmt 101. The opportunities will be significant when the distribution cycle takes hold. Greed and fear friends, bears make money, bulls make money….but pigs get slaughtered. Therefore I will continue to time the market by not adding to positions, but only buying thos issues which present as undervalued, such as my telegraphed buys in TD and pd over the last month and earning double bangers on both. But…..buying into an etf right now? I wouldn’t paint the market with such a broad confident brush….until after the enhevitable profit taking is well underway.

#77 meslippery on 12.08.16 at 11:55 pm

#134 IHCTD9 on 12.08.16 at 2:19 pm

from yesterday.
60 hrs every week for ever.
at the time it was fun…

I will get by and be happy but I think about the
children.
Whats wrong with good wages, benifits and pensions?
Right free trade and globalization.

#78 Dark Matter on 12.09.16 at 12:26 am

40 Smoking Man on 12.08.16 at 9:19 pm
Wait For It.
8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

Google “Holographic Universe”. Quantum Mechanics experiments suggests we are actually “living” in a computer simulation, a holographic universe. Albert Einstein (the father of Quantum Mechanics, with his experiment demonstrating light is a particle), initially refused to accept the foundation of Quantum Mechanics, The Uncertainty Principle which suggests the true nature of all reality is a“Probability wave”, not matter as we see it. The conscious act of observing these probability waves transforms them to the matter we see. A Holographic Universe is not confining to the speed of light if you understand the underlining cosmic source code. It would be a little bit like a two dimensional being discovering the third dimension, and was able to burrow through the pages of a layers two dimensional world, as opposed to being confined to the each page. This is how one could explain UFO Alien technology that seems to defy our physics, or even observed supernatural presence.

#79 Newcomer on 12.09.16 at 12:39 am

>>In other words, they may pay less for the house BUT for aren’t they now paying much, much, much more in interest? Effectively making the final cost about the same?<<

The first couple of years look similar, but it changes fast. If interest rates are high, so is inflation, so wages and rents are going up, but your mortgage payment stays the same (or goes up only slightly if rates continue to rise). That means that, in real terms, the amount you pay each month and the amount owe shrinks. You can pay it off early, rent the place out for a profit. Lot's of options. And don't forget, no matter where interest rates are, it's aways better to owe less. People talk about mortgages as if there were no principal involved, but owing a million bucks is totally a thing.

#80 calgaryPhantom on 12.09.16 at 12:44 am

#6 kat on 12.08.16 at 6:32 pm
What is the wrong kind of RESP?

Knowledge First Financial is the one I got involved in. Very disappointing returns. High fees. If I knew then what I know now I would have done self directed. There is a Federal match you would lose out on though

Of course you do not lose the grant. It applies to any RESP, no matter where it is hosted. Did the baby vultures tell you that? – Garth

——————————-

Same thing happened to me. Have two RESPs with TD. One gic account ( which was opened before i started reading this blog ). The other is with td brokerage ( with 90% of funds so far)

Went in to the bank to transfer that remaining 10% amount from GIC account to my trading account. Was told that by doing so i will loose all the governemnt grant given to me. Even that initial 500$ grant from govt. Trying to fight that out.

#81 Bob dog on 12.09.16 at 12:54 am

Trump sold all stock investments in June.

#82 Metaxa on 12.09.16 at 1:01 am

Step 1: find a person with a book to sell, hopefully somewhat inline with your target audience. A person selling a book will do amazing things to get in front of an audience…take advantage of that.

Step 2: rent a hall from your local community college, preferably one with a semi-private foyer leading into it.
Have drinks and appies in the foyer, get a harpist if you want to be posh. Local colleges are hot to rent unused space out, its cheap and the harpist? Artists want an audience, you are providing that, easy win for both of you.

step 3: Find a “personal chef” that does onsite catering, often available from the same college. See drinks and appies above. Regarding cost, see harpists desiring an audience…chefs are like artists only with a little more crazy mixed in.

Step 4: approach the Chamber of Commerce, Board of Trade, Home Based Business Association, whatever and offer them an exclusive window to offer this amazing speaker to their members.

Step 4A: press releases to local papers, both big and small.

Local colleges rent rooms out cheap, someone peddling a book provides amazing bios and other publicity material, a cooking school chef will do handstands to impress a group of business shakers and movers because of future bookings and the CofC will promote the heck out of this “event” because they are constantly trying to add value to their member’s dues.

Pay the hall rental, pay the caterer for the appies, maybe pay travel and lodging for the speaker, let them sell books at the end. Go to Vegas with the harpist…

Do not let the CofC collect the money at the door, only any pre-sale tickets they sell. Do the accounting and for a couple of hours work over maybe a month and a half, mostly on the phone and in one night someone I know quite well pockets $7,000.

After expense.
And I’m pretty sure the CofC pocketed a bit of the pre-sale money.

Makes Xmas spending a whole lot easier when its almost free money, right?

There is more to life than worrying about your house and/or portfolio.

Of course you couldn’t do this in Toronto because reasons but still…

#83 Calgary Guy on 12.09.16 at 1:09 am

Per my post, #15, on why to allocate more than 2.5% on maple ETF’s, thanks to the following folks who responded:
#17 InvestorsFriend
#30 Derek R
#37 Mark

A few thoughts on your responses:

1) In terms of CAD currency risk, I’m discovering that there are a lot of ETF’s that have a CAD-hedged and non CAD-hedged version. So I’m assuming that you can negate the CAD currency risk if you go the CAD-hedged route. I’m sure you’ll correct me if I’m wrong…

2) We do have a good legal system in Canada, one of the reasons I live here. There are many other countries that are pretty top-notch as well though (US, Japan, UK,France, Germany, Australia, Switzerland, Netherlands, etc) and have large economies that we should probably be exposed to.

3) Pay lower taxes if invested in maple. This one makes a lot of sense to me, as taxes can definitely eat away at future profit.

4) The TSX comp does do well over the long haul. But I checked and since 1980 the TSX Comp had a gain of 650%, the S&P500 roughly 1800%, and the Nasdaq roughly 3100%. The best stock market from 1900 to 2009? That goes to Australia (which surprised me): http://business.financialpost.com/investing/trading-desk/worlds-best-stock-market-why-australia-of-course?__lsa=5cc5-1b78

The taxes argument seems to make sense to me to have a higher weighting of maple in the right accounts, but I still think there is definitely some location bias when choosing what to invest in. For example, I have friends living in Australia and they have a lot of Aus exposure, and friends in the USA who have a huge amount of US exposure. As a matter of fact my friends in the US tend to invest only in US equities and ignore every other country. Living in Calgary I know people who are more heavily weighed in oil and gas stocks. So 17% of the total 60% growth stuff in maple still seems high to me.

#84 AB Boxster on 12.09.16 at 1:13 am

Wondering if anyone had any comments on portfolio rebalancing.

There seems to be two schools of thought on this.
Rebalance based upon time (ie twice a year) or based upon specific threshholds.

How can time based rebalancing be effective especially in volatile markets?
As the DOW and TSX reach new highs, should one not rebalance and take some profits in these sectors based upon the fact that they are up 15% YTD?

But really, does one truly want to sell right now to buy a bond etf?
Maybe preferreds?

If one were to wait until a specific time to rebalance, say Jan1 of each year, do you not risk that the market could back off by then and one might miss some nice profit taking?

And though time based rebalancing may ensure that regular rebalancing is done, it makes no allowances for the realities of bull and bear markets, or swings due to volatile issues such as Brexit, wars, elections etc.

I know that Garth says not to time the market to try to buy and sell, but does it not make sense to sell some, when an index is up 15%, just as it seems to make sense to buy some, when an index is at a low.

And if threshhold rebalancing makes sense, what is the best approach?

For example, I hold a commodities sector ETf that is up 50% this year.

Should I have been taking profits when it gained 5% and again when went to 10% etc, etc, or should I just let it run up, given that it was at such a low price when I bought it?

It’s easy to believe that when investments rise they will go up forever, and it is easy to get greedy, but the issue of when to take profits, and when and how to rebalance does not seem to have any strong concensus.

#85 Greg on 12.09.16 at 2:04 am

Oddly hot

#86 Mark on 12.09.16 at 2:36 am

“C$ is rising again. At almost 76 cents. Projecting it to increase to 85 to 90 cents before the end of the year.”

I’d be astonished if that actually happened in such a short timeframe. I am going to get that ‘prediction’ absolutely wrong. But looking back at my post of January 1 this year, things are shaping up well. The TSX is closing in on the mid 15,5k range (prediction = 16k EoY), the GDX (large cap gold stocks) is up ~50% YTD (prediction = 50%), and the junior index (GDXJ) has approximately doubled (prediction = 100%). Oil back at $51 now (prediction = $45, so there was a comeback!) as well.

No the CBC isn’t running any television series on bankruptcy trustees. And interest rates didn’t go negative in the USA. Got those wrong. But overall, the record is okay. Definitely predicted the rise of retail mortgage rates, despite no increase to policy rates. And sales mix changes have now run out of steam, especially in Vancouver where horrific numbers are now being posted. Last but not least, Canadian CPI is anemic as Canadians are hunkering in for the long side in RE equity and job weakness thus associated in the previously hot sectors.

http://www.greaterfool.ca/2016/01/01/el-predicto-3/#comment-421882

#87 Freedom First on 12.09.16 at 3:32 am

#56 Deplorable Dude

Yes. I have been reaping my profits again. I am now 55% cash/fixed income. Overweight cash. Still liquid and diversified.

Last time I was this overweight cash/fixed income was when oil was at 140$. I sold all my energy ETF’s then. I wrote about it here.

I also wrote when I bought back into oil/gas when oil was down into the 30’s.

I also wrote when I went back to being balanced, and even shared which ETF’s I bought more of in the different sectors.

Remember, I also wrote I only buy sector ETF’s in Canada, while for other countries I buy only the index ETF’s.

I know Garth says never leave an asset class, which I follow 95% of the time. Except when I take tremendous profits because of what I see as a bubbleicious gain. Can’t lose. I am too diversified.

Catbird seat. No Fear. No Greed. Just good judgement for 40 years.

And no wife to explain anything to about anything. So I am always relaxed, clear minded, calm, and serene. I have been Blessed.

Also, Garth is a calming influence in an insane world.

007
Freedom First
Master of Freedomonics

#88 Freedom First on 12.09.16 at 3:44 am

#63 Dangle

Yes. You are wrong. There is just too many variables for your Blanket statement to be seriously considered as anything but rubbish.

Perhaps you missed all of the housing crashes world wide in recent history?

#89 NEVER GIVE UP on 12.09.16 at 5:09 am

#31 Self Directed on 12.08.16 at 8:37 pm
And it’s not just RE that’s expensive in GVRD…

I took transit to work the other day because of the snow storm. Bus to Skytrain $3. 2-Zone Skytrain $4. Skytrain return ride home $4. $11 bucks for a single day on Transit! And, I had to wait with a bunch of deplorables for 35 minutes at the station for a bus I was convinced did not exist. Top it off, they didn’t shovel or salt the bays. We were all standing on ice.

How is it different or better here in GVRD? I don’t know anymore.

—————————————————————
Cities should be thinking about not building anymore public transit.
They should be thinking small.
Computerized cars will kill public transit. and the cab industry.
Public transit has been a failure from the get go but most Unschooled Canadians don’t even know how good it could have been.
When you arrive at a station there you are sucker. Walk. 6 blocks in the rain, 1 km, whatever you have to go there is no link between the station and the residence.
Why?
Cash in brown bag politicians taking bribes from the taxi industry that consequently have managed to amalgamate all taxi licences into the hands of a few bribe paying owners.
There is no private ownership left in the taxi industry in any major city in Canada or especially the US as a result of the fake “licencing medallion or plate system”.
All of it was a distortion of the economy and caused millions of good people to walk to their destination due to
1.High cab fares to pay off $500,000 tin plates.
2. Millions of wasted hours of taxi workers sitting in taxis during slow hours instead of cheap taxi plates in the hands of the drivers who would only drive during the times of day that taxis are needed. Rush hours, Bar rush, evening and daytime. In a free market the taxi fleet doubles during winter time. Edmonton used to be the last free market in our country until someone got to city hall in the late 90’s and they went with the corrupt system. Now the plates are almost all in the hands of multi owners.

All this went over everyones head!

We shot ourselves in the foot.

In the rest of the world there are cabs everywhere when you need them. Here we don’t even know how good it could have been.
The reason you don’t know this is because it is really really hard to catch a politician receiving a bribe.
For every caught bribe there are 100,000 bribes that were successful. Just look at the Governors of Illinois in Jail!

Why don’t we restrict the number of restaurants in the city? Or corner stores? Or Trucking companies? Because the Cab industry is huge on untraceable cash and has been doing this since the 1930’s. Tradition.

So there ya go suckers, pay your $11 bucks and walk home. I’m going to drive my gas belching car everywhere because public transit is a fail!

#90 NEVER GIVE UP on 12.09.16 at 5:13 am

4 out of the last 7 Illinois Governors went to jail!

http://abc7chicago.com/archive/8973798/

#91 NEVER GIVE UP on 12.09.16 at 5:25 am

Looking forward to 2050 when self driving cars will take you everywhere without having to contract the flu by holding on to a greasy skytrain handle rail.

Roads that are 2 lanes now will become 4 lanes because skinny single occupant cars will travel in packs of 4 wide and 20 deep 6 inches apart or linked with magnets.
Then they will break off when a turn off from the pack is coming up.

Computers communicating with the immediate vicinity of moving objects will co-ordinate a slow down of north south traffic so the East west traffic can go through the intersection without any pesky traffic lights wasting our lives.

Forget scummy Skytrains that are built with property developers in mind.

No longer will you be beholden to transit unions shutting down the system for 123 days.

http://www.theglobeandmail.com/news/national/long-transit-strike-ending-in-vancouver/article25444990/

I will never forgive nor forget that strike!

#92 Rentin on 12.09.16 at 5:40 am

I have been reading this blog since 2008. Coles notes for anyone that doesn’t care to do a lot of back issue reading…

Diversify – your investments
Shed – expensive debt
Timing – is impossible, waiting will kill the rewards you think you can get
Rent – If its cheaper than buying; factoring in risks
Don’t – Argue with Garth on peak house – its a touchy subject….

Garth is a little reckless with his rants and words, but not with his money or advice on investing. Sound, boring investing – the kind that 99% of us NEED.

Stop reading here if you know it all already.

Now I will share a small piece of my investment history.

I tried for 2 years to time the bottom on oil. Traded 3x leveraged futures (don’t do this – its gambling). I knew the risks and played. Made 6-8x my annual salary in the months (I’m top 2% you do the math. There were – 45K per day swings. 200k per month sometimes (both directions) volatility is your friend and foe here….

Bottom line, didn’t make money or lose any, other than the lost opportunity on my play money churning away 6 or 7% over the 2 years. Also missed the bottom, and I don’t need any experts to point out the W in Feb 2016. Point is, you can’t see the bottom (or top) until its past. People will argue and likely comment on my comment, but if you could, you wouldn’t be reading this right now. You would have timed all those bottoms, made billions by now and wouldn’t waste time reading this pathetic blog – I love the self admission Garth!

Just like Garth used to try and elude to peak house and mention its coming, for about 5 years now… He has only started pointing at it specifically now, backwards in time, because only now is it obvious – spring 2017 should seal the deal. Not the climate for crickets on the coast, but you might hear some in the real estate market this coming spring.

In actuality, entrepreneurship is the best way to go for those who can tolerate the risk. Asked a guy I worked a few years ago about his investments – the paper type, and he gave me the best line: “I invest in myself.” He didn’t own a single stock or bond. Completely self made millionaire. In reality your return is potentially infinite, your loss potentialy 100%

But for the masses refer to the begining of the post. Boring, stable, balanced, diversified. The slogan from the big six banks should be “Your not as rich as you think”. I don’t mean this in a negative way at all. I just see people spend way to much money without realizing it.

If you have read this far you’re a real trooper. If you rent and constantly are looked down on by your peers and family, I get it. Certainly now is not the time to extinguish that disgust with a real estate purchase. I know you can’t time anything, but it really would be bad timing.

Instead throw out your TV. I don’t have one. WFT you say? As soon as someone finds out you don’t have a TV, the conversation immediately shifts focus from your “houseless” life.

I can pay cash for a single house in YVR. No – not Chip Wilsons house, but any nice house in Kitsilano. That should qualify me as a potential buyer. But I stay away because its a rediculous investment. The only way it makes sense is on an asset appreciation level. ROI on a down payment calculation style. But those days are likely over.

It is true that a house in YVR purchased in 2010-2013 and sold summer 2016; I missed out on a lot of gains (tax free as well I might add) I also missed out on a lot of risk.

Anyways, I am done. So is real estate. It will probably grind lower for the next 3 -5 years. There. I said it. There is my prediction. Garth is smart enough to leave that guess alone.

Oh and for the record, since nobody can time anything, Garth included, Garth actually got one thing right. No, not peak house, he has been wrong for many years. Sorry – Had to get that one in there.

But trough house USA. With the exchange rate at the time, it was brilliant and he actually called it, as it happened. 1-0 Garth

#93 Harbour on 12.09.16 at 7:18 am

#23 Bobo on 12.08.16 at 8:04 pm
Garth why are you always telling us to not time the market and then you are constantly trying to time the real estate market telling us for years its time to get out ?

Correction. I tell you not to overweight in real state or go nuts with leverage. — Garth

…………………………………………………………………

This blog site has always been about trashing real estate. It’s been the main topic everyday since it started.

#94 jess on 12.09.16 at 7:18 am

andrew

France’s former tax Tsar sentenced to three years in jail for tax fraud

=======
The fast-food group’s tax structure in Luxembourg uses some of the complex cross-border arrangements that have attracted widespread criticism from politicians around the world. In October last year, G20 leaders agreed a radical overhaul of international tax rules designed to stamp out such loopholes.

Two former employees of accountancy firm PwC were convicted last year of theft and violating Luxembourg’s professional secrecy laws over the document leak. They received suspended sentences, but prosecutors are pursuing an appeal against that decision, which will be heard next week.

The whistleblowers have also lodged an appeal, arguing the trial judge had failed to properly consider how their actions had been taken in the public interest. They are asking the appeal court to overturn the convictions.
McDonald’s to scrap Luxembourg tax structure (8 Dec 2016)
McDonald’s moves international base to UK after run-in with EU tax regulators (8 Dec 2016)
Why did McDonald’s flip out of Luxembourg? (8 Dec 2016)
McDonald’s Moves Tax Base to U.K. Amid EU Attack on Burger Giant (8 Dec 2016)

http://visar.csustan.edu/aaba/jerseypage.html

#95 cto on 12.09.16 at 7:58 am

“Metro Vancouver smashes record for new housing starts, with more to come by year end”
Derrick Penner(Vancouver Sun)

http://www.theprovince.com/business/real-estate/metro+vancouver+smashes+record+housing+starts+with+more/12499352/story.html

Wow, this is surreal!
Almost 10 years ago my wife and I were visiting fort Lauderdale. We were at a restaurant in the central core shopping district, condo’s being constructed everywhere, but the place that was so busy in previous year was eerily empty on our visit and my wife asked, why so quiet?
She kind of laughed and said, nobody’s got any money! Looked up and said, “Look! there still building um!! 30 stories thousands of units, nobody here! but they have to build, build, build!
At the time, I had no idea what she was talking about, but a few months latter it was abundantly clear because everyone by that time knew that America was in a crisis.
Keep build my happy little friends in Vancouver and Toronto

#96 Renter's Revenge! on 12.09.16 at 8:16 am

#25 TCContrarian on 12.08.16 at 8:26 pm

Any tips on tax-avoidance?

========

You could generate more losses (j/k)

#97 drydock on 12.09.16 at 8:28 am

40 Smoking Man on 12.08.16 at 9:19 pm

Wait For It.

8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

……………………………………………………………..

https://www.youtube.com/watch?v=Vi_sABa21QM

#98 crowdedelevatorfartz on 12.09.16 at 8:32 am

@#21 DC with Manulife

As a former Standard Life employee I was underwhelmed at the rate of return.
Manulife was no different.
I moved it and all my other investments into a balanced and diversified portfolio.
Much better results.
Dont waste what time you have left dithering with conservative, anal life insurance companies that use your money and pay you next to nothing.

#99 maxx on 12.09.16 at 8:34 am

#4 wallflower on 12.08.16 at 6:22 pm

“And then there is the mid thirties crowd.
V-E-R-Y scary. Is this couple typical?
http://www.theglobeandmail.com/globe-investor/thirtysomething-and-in-debt-what-to-do/article33025169/

I could emphathize if they were mid twenties… typo?”

60K in debt and a 4.5 month trip to SE Asia on credit? Retail floor staff and uneven income? Seriously?
No empathy whatsoever. They ought to give their heads a serious shake and pay off what they OWE- yesterday.
Entitled idiots.
Canada is so screwed with major fools like this borrowing what’s left of their brains out. The only way out of this is for gubbmint to carry on raising the borrowing bar and the do-nothing BOC to raise rates- and they know it.

#100 Grantmi on 12.09.16 at 8:53 am

http://bc.ctvnews.ca/average-house-price-down-15-per-cent-or-more-in-parts-of-metro-vancouver-1.3195949

Panic in BC … RA’s can’t even believe it..

#101 IHCTD9 on 12.09.16 at 8:55 am

Brad is a 40 something with a 2 year old and one in the oven yet. Brad has a great family income, I wish mine was that good!

This just goes to show how time is the anabolic steroids of financial portfolios.

Brad has a family income that is double mine, and he is about the same age as me. Brad’s debt outweighs his investments by ~165K.

With half the income and at roughly the same age, (and nearly “paid for” kids :) ), our debt is zero, and our investments are way, and I mean WAY ahead of the Brad family. Last year, we even had a 40K emergency fund kicking around, but I’ve since blown about 16K of that on toys.

But, with Brad’s big horsepower family income – I think he could still recover – the RRSP allowables must be huge between the two of them. I’d pound it in there like a beast and reinvest the tax return the following year. Fill those TFSA’s too. Could they save 65K a year to invest? Probably could, if so probably should. That big income is a second chance at a decent retirement, I wouldn’t blow it. You may have to work past 65 if “40 something” is actually over 45.

#102 Stock picking cowboy on 12.09.16 at 9:25 am

AB#81, rebalancing/selling winners is a dumb idea. Great for advisors who make commissions on every trade but of no use to the investor. You’ll trigger capital gain taxes and incur accountancy costs. If you’ve done the right thing and only own dividend paying issues then you use the dividends to beef up the laggards while letting the winners run. Buy great companies and keep them forever, starve the beast. This worked great for me and now I’m screwing the tax man a second time by reducing my response incrementally so that the 71 rule tax bite will be minimized. Use the draw downs to feed the tfsa

Lame advice. The point of investing is to secure a routine, predictable return and to ensure continued diversification while you realize gains. Rebalancing is a critical part of that success and allows investors to reap profits. Buying the TSX a decade ago and holding it until now was not exactly a winning plan. But harvesting gains along the way and investing when assets dropped and became underweight was. Fee-based advisors do not charge for trades and reap zero commissions for doing this. Rebalancings are free. Your ignorance is showing. — Garth

#103 IHCTD9 on 12.09.16 at 10:15 am

#74 meslippery on 12.08.16 at 11:55 pm
#134 IHCTD9 on 12.08.16 at 2:19 pm

from yesterday.
60 hrs every week for ever.
at the time it was fun…

I will get by and be happy but I think about the
children.
Whats wrong with good wages, benifits and pensions?
Right free trade and globalization.
_________________________________________

Same here, the wife and I will be fine, globalization has been good to me up till a few years back, but will not be so for my kids. Still some time to turn things around before the kiddies will be looking for their career job, we’ll see what happens.

If everything is still the same when the time comes, I will gently coach them towards a career in the public service or in some other part of the world. Nothing would suck worse than being one of these suckers out there in the GTA working paycheque to paycheque, fighting traffic, bureaucracy, and mega-debt, going nowhere, and maybe getting 3 years out of a crap job before they’re front-kicked out the door again.

#104 soost on 12.09.16 at 10:20 am

Garth, all the boomer home owners in my office are already citing the re/max market outlook & TO star report – calling for GTA RE increases next year – with glee. Hoping you can address it in today’s post.

What do you expect from a real estate sales organization? Truthiness? — Garth

#105 millenially on 12.09.16 at 10:52 am

Hi Garth,

As a young millennial I have a question about using the RRSP effectively. My partner and I are 25, and make about 55K each. In our professions, incomes seem to be stagnating and so we are unsure if we should contribute to our RRSPs now or wait, hoping for a significantly higher income. Our thinking is, should we put some money in RRSPs now and invest the tax refund in the TFSA or wait?

-Alice

Max your TFSAs first, now. RRSP room accumulates indefinitely and you’ll find it more useful for tax deferral later in your careers. You can still grow money now just as effectively within the tax-free accounts. — Garth

#106 jay on 12.09.16 at 11:19 am

Garth , the realturds must be counting on greater fools here in Raincouver , here’s a 1 bed condo in Trump Tower for a bargain $1.4 million, double the original purchase price . http://urbanyvr.com/trump-tower-vancouver-condo

#107 Julie K. on 12.09.16 at 11:24 am

Deals in West Van SFH’s?

You bet!

Dundarave, 7000 sq ft south facing lot, views across Burrard Inlet to downtown, lane access, decent older home with suite.

Listed a week ago for 1million UNDER comparables.

Sold in 1 wk.

#nobrainer

Sidebar: the agent who listed/sold that beauty gonna get some big love from his peers for setting new price threshold…

#vanre

#108 InvestorsFriend on 12.09.16 at 11:45 am

Corporate Use of Tax Havens

Jess at 91 mentioned:

McDonald’s to scrap Luxembourg tax structure (8 Dec 2016)
McDonald’s moves international base to UK after run-in with EU tax regulators (8 Dec 2016)

*************************************
I consider a company’s aggressive use of tax shelter countries to be a serious warning sign of their ethics in general.

Sino-Forest had about 50 subsidiears in the British Virgin Islands hmmm.

Valeant was using Luxemburg to avoid income taxes and was a U.S. company registered in Canada for tax reasons.

Most insurance companies have a “captive” reinsurance company in Bermuda or some other tax haven where they reinsure risks with -yes- themselves as a way to move profits to the tax haven.

I have never seen it mentioned but Berkshire Hathaway does not do this. Buffett does do things to minimize taxes (mostly by avoiding triggering capital gains, using capital cost allowances and using wind energy tax credits at his utilities) but he does not EVER move profits to tax havens to avoid income taxes.

And yes Buffett avoided and will avoid income taxes on his gains in Berkshire shares – by giving away ALL of his Berkshire shares over time. Giving away your money to avoid taxes is NOT unethical and it’s a somewhat pyric victory against the taxman.

#109 turn of the tide on 12.09.16 at 11:47 am

@34 Andrew Woburn

THANK YOU! Great comment, really puts it in perspective. I appreciate the response. Great point, risk management.

#110 InvestorsFriend on 12.09.16 at 12:00 pm

You’re Poorer Than You Think

Speaking of RRSPs it is worth reminding people that when you put say $10k in an RRSP and get a 4k tax credit, it only APPEARS that your net worth just went up 4k.

In fact you should count the net worth of your RRSP as about 6k since you can expect to lose approximately 40% of your RRSP to the taxman eventually. (If you end up poor in old age your tax rate might be lower, if you do as well as you hope, your marginal tax rate is unlikely to be under 40%, and a lot of people will get hit with old age pension clawback and be at more like a 55% marginal tax rate.)

Bottom line $6k in A TSFA is of course $6k. 10k in an RRSP is really about $6k after tax. BUT, the good news is that in effect the 6k will grow approximately tax free as the governments 40% contribution to and share of “your” RRSP will often be enough to pay the tax bill on withdrawal.

To be honest, I still count my RRSP money as if it were all mine. Just like all those net worth stories in the newspaper do. But in reality I should be knocking off 40% to recognize the tax man’s share of “my” RRSP. It has still worked out VERY well for me since I only ever made about 60% of the contributions in the net after considering the tax credits. My 60% share has effectively grown tax free.

#111 Capt. Serious on 12.09.16 at 12:07 pm

Garth, you are wrong on the rebalancing point. While intuitively satisfying, the act of rebalancing does not generate excess return nor reduce risk except in some subset of possible outcomes. Most of the finance papers that would purport to show an enhancement are running to that conclusion over like infinite time spans (math), which is not at all practical with finite time periods involved in our little investing lives.

This article is a fairly thorough debunking of myths around rebalancing:
https://www.advisorperspectives.com/articles/2016/08/16/the-academic-failure-to-understand-rebalancing

Rebalancing can actually reduce your end wealth, in the worst case. These are the so-called deep risk scenarios, like a multi-year decline in the stock market with subsequent years of low returns. It can (and did) happen.

As a manner of instilling discipline for the investor, rebalancing has some appeal. Just do not kid yourself that returns are enhanced or risk reduced always. It’s just not true.

Yes it is. — Garth

#112 Smoking Man on 12.09.16 at 12:20 pm

#75 Dark Matter on 12.09.16 at 12:26 am
40 Smoking Man on 12.08.16 at 9:19 pm
Wait For It.
8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

Google “Holographic Universe”. Quantum Mechanics experiments suggests we are actually “living” in a computer simulation, a holographic universe. Albert Einstein (the father of Quantum Mechanics, with his experiment demonstrating light is a particle), initially refused to accept the foundation of Quantum Mechanics, The Uncertainty Principle which suggests the true nature of all reality is a“Probability wave”, not matter as we see it. The conscious act of observing these probability waves transforms them to the matter we see. A Holographic Universe is not confining to the speed of light if you understand the underlining cosmic source code. It would be a little bit like a two dimensional being discovering the third dimension, and was able to burrow through the pages of a layers two dimensional world, as opposed to being confined to the each page. This is how one could explain UFO Alien technology that seems to defy our physics, or even observed supernatural presence..
………..

Google electric universe and Ether. Tesla got it right. Einstein not so much. Zero patents. No inventions, just crap on a chalk board that no one understands.
The us millatary did an experiment in the sixtes that proves Ether exists.

Einstein said if Ether exists all his work is meaningless.

Sadly the world of science chasing Einstein theory insuring it never gets proved and the funding never stops.

Everyone and everything is electrical.

#113 InvestorsFriend on 12.09.16 at 12:21 pm

THE PERVERSE ADVANTAGE OF RRSPs

1. People are sort of tricked into contributing by the tax credit, forgetting that roughly 40% of “their” RRSP will ultimately go back to the tax man so that the 40% rebate was more like the taxman being a silent partner in and permanently owning 40% of your RRSP. BUT without this little trick huge numbers of people would never invest at all. So, perversely, the trick is highly beneficial. A lot of people with a good job, especially, again perversely, those with pensions, maximise their RRSP contributions faithfully every year to get the tax credit.

2. Most people treat RRSP money as absolutely untouchable until retirement due to the tax hit upon withdrawal. Perversely the tax threat means that people usually keep RRSP money in the account and compounding for decades.

With TFSA only that small percentage of the population that is highly disciplined will resist using some of the money for spending purposes instead of compounding for decades. TFSA money is too easy and too tempting to access for a lot of people.

I owe a HUGE portion of my savings to the fact that I always maximised our RRSP contributions over the years.

#114 CJBob on 12.09.16 at 12:59 pm

It might be time to buy a few more US$, nearly .76

#115 Sonny on 12.09.16 at 1:06 pm

More than half of B.C.’s most expensive homes owned by secret shell companies spurring money laundering fears

http://www.calgaryherald.com/business/hidden+ownership+homes+prevalent+report+says/12502054/story.html

Wow. 50 houses. Call the cops. — Garth

#116 Context on 12.09.16 at 1:33 pm

What is going on with T2 and his carbon tax vision? This has to be good for Canada in some way but cannot find it, as surely there are more pressing matters at hand.

#117 Sonny on 12.09.16 at 1:46 pm

Silly Garth…the article states that the RCMP already know:

The use of nominee owners is a common tool for money laundering through real estate, according to an RCMP case study, the report says. Also, “beneficial owners can use nominees to avoid or evade tax by claiming principal residence or first-time homebuyer exemptions,” the report says.

=========================================================
#112 Sonny on 12.09.16 at 1:06 pm
More than half of B.C.’s most expensive homes owned by secret shell companies spurring money laundering fears

http://www.calgaryherald.com/business/hidden+ownership+homes+prevalent+report+says/12502054/story.html

Wow. 50 houses. Call the cops. — Garth

#118 april on 12.09.16 at 2:16 pm

#101 – Don’t be so naive as to believe their spin.

#119 april on 12.09.16 at 2:24 pm

$97 – I love the way these people always say “it’s a buyer’s market” when prices have only begun to drop with a long way to go yet.

#120 Polls R Phake on 12.09.16 at 2:38 pm

#112 Sonny on 12.09.16 at 1:06 pm
More than half of B.C.’s most expensive homes owned by secret shell companies spurring money laundering fears

http://www.calgaryherald.com/business/hidden+ownership+homes+prevalent+report+says/12502054/story.html

Wow. 50 houses. Call the cops. — Garth

_____________________________________________

When was the last time the cops arrested a Canadian banker for money laundering? That’s why it keeps happening here in BC unabated.

#121 Deplorable Dude on 12.09.16 at 3:06 pm

#56 Me…..Loving the Trump-effect on my loot…time to rebalance and I’m loath to sell anything…it keeps going up!

“Good strategy. Wait until it goes down & then sell. — Garth”

Thanks for the sarcastic kick in the butt Garth :-)

I rebalanced this morning.

#81 AB Boxter – ‘Any comments on rebalancing’

I don’t think there is a hard science on when/how to rebalance. I’ve not seen any backtesting on portfolio’s to model to how/when.

Personally I check twice a year, anything more than 2% out of wack gets rebalanced.

As a side….came across this interesting anecdotal ‘Feet on the ground’ thread on Reddit about growing U.S business confidence since the Trumpening.

https://www.reddit.com/r/The_Donald/comments/5hdr3g/interesting_i_work_for_a_company_that_represents/

#122 Context on 12.09.16 at 3:11 pm

Canada is being gamed as a patsy, and T2 had better wake up to reality, as he is impressed by those who want him to lead the way with carbon tax and cap to trade nonsense. Canada’s total emissions of so-called greenhouse gases amounts to no more than 2% in the world. Let those with the big numbers lead the way with this farce because our contributing factor has no standing.

#123 crowdedelevatorfartz on 12.09.16 at 3:27 pm

@#112 Sonny

Respectfully Garth.

The jist of the article is Canada’s lax enforcement and the ease at which anonymous companies can set up shop to invest here.

“In Canada, more rigorous identity checks are done for individuals getting library cards than for 
those setting up companies.”

Those 100 houses were estimated at combine valued of roughly $1 billion dollars….
Not exactly chump change.

And while High End homes definitely skew the sales numbers……the rules set up to track money laundering and suspect investment seem to be geared more towards “Joe SixPack” with a Grow Op in his basement than sophisticated criminal organizations with legions of lawyers to tie things up for years in Court IF they are even charged.

#124 TurnerNation on 12.09.16 at 3:44 pm

Want a government guaranteed pension and gold plated benefits plan and overtime?

Just drop by this country for a bit. Show up with pulse.
You might have to be sober? Unknown

……………

Now, recruits don’t have to be Canadian citizens, they can put off taking the physical fitness test until they’ve been accepted at the RCMP’s training division and university graduates no longer have to take the national police force’s entrance exam.

http://www.cbc.ca/news/politics/rcmp-applications-jobs-mounties-1.3887995

#125 Waves of Gravity on 12.09.16 at 3:49 pm

#109 Smoking Man on 12.09.16 at 12:20 pm

#75 Dark Matter on 12.09.16 at 12:26 am
40 Smoking Man on 12.08.16 at 9:19 pm
Wait For It.
8 Plasma Fliers In Austraila. Then two go back Into Mothership
https://youtu.be/cY2xnaUr1dc

Google “Holographic Universe”. Quantum Mechanics experiments suggests we are actually “living” in a computer simulation, a holographic universe. Albert Einstein (the father of Quantum Mechanics, with his experiment demonstrating light is a particle), initially refused to accept the foundation of Quantum Mechanics, The Uncertainty Principle which suggests the true nature of all reality is a“Probability wave”, not matter as we see it. The conscious act of observing these probability waves transforms them to the matter we see. A Holographic Universe is not confining to the speed of light if you understand the underlining cosmic source code. It would be a little bit like a two dimensional being discovering the third dimension, and was able to burrow through the pages of a layers two dimensional world, as opposed to being confined to the each page. This is how one could explain UFO Alien technology that seems to defy our physics, or even observed supernatural presence..
………..

Google electric universe and Ether. Tesla got it right. Einstein not so much. Zero patents. No inventions, just crap on a chalk board that no one understands.
The us millatary did an experiment in the sixtes that proves Ether exists.

Einstein said if Ether exists all his work is meaningless.

Sadly the world of science chasing Einstein theory insuring it never gets proved and the funding never stops.

Everyone and everything is electrical.
…………

Spewing the BS as usual… Einstein had lots of patents

http://www.sciencedirect.com/science/article/pii/S0172219005001742

And without relativity based corrections the GPS in your phone would drift… and you would be lost in space.. but then again we know that already…. relativity is understood very well

Telsa was a cool dude though.

#126 InvestorsFriend on 12.09.16 at 4:38 pm

If U.S. Tax rates are cut should Corporate Profits Rise?

Part of the rise in the S&P 500 sine the election is based on hopes/promises of lower corporate tax rates.

But wait.

In a highly competitive market would not tax reductions get passed along as lower prices? Virtually EVERY company claims it is in a HIGHLY COMPETITIVE industry. In reality many are not but many are.

I have not heard a single word about ANY of the tax cut getting passed along in lower prices. Does the financial press not believe in competition?

#127 jess on 12.09.16 at 4:40 pm

….”Hong Kong authorities are under pressure from international bodies to clamp down on illegal money flows following a number of high profile cases that involved Hong Kong-based companies, including a corruption scandal that engulfed global soccer body FIFA last year.The SFC is sharpening its focus on money laundering activities after Hong Kong figured prominently in the leaked ‘Panama Papers’, which contained details on thousands of shell firms. Hong Kong was the most active centre in the world for the creation of shell firms, which have many legitimate purposes but can also be used to hide assets and avoid taxes.
The next big target for the global law enforcing agencies are the broker dealers. It kind of makes sense they are cracking down visibly and I suspect that will happen across Asia,” he added.

======
Apr 24, 2013 – Investigators have cracked down on 497 counterfeit production bases and …. China confiscates 70 mln counterfeit invoices during first half of 2011

==================================
China’s Export Boom That Wasn’t

A close reading of the numbers suggests accounting tricks have played a significant role in China’s economic data.

Naomi Rovnick Apr 4, 2013

http://www.theatlantic.com/china/archive/2013/04/chinas-export-boom-that-wasnt/274660/

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

South Korean parliament votes overwhelmingly to impeach President Park
http://uk.reuters.com/article/uk-southkorea-politics-idUKKBN13X2JW

#128 InvestorsFriend on 12.09.16 at 4:45 pm

OPEC and Rusiian oil production custs

BNN salivating over OPEC and Russian cuts in production and saying it allows Canadian oil producers to ramp up. They say this without a trace of irony regarding the fact that Canadian producers would be contributing to lower oil prices through higher production while praying that OPEC colludes to push prices up. All the while the Canadian producers are proud that they operate in a free market (They certainly do not).

#129 Dark Matter on 12.09.16 at 5:09 pm

#109 Smoking Man…
Google “Michelson and Morley Experiment”. (Spoiler Alert—No Ether either). It was the negative results of this experiment that pointed Einstein into the concept that C is always constant and from there he developed the Special Theory of Relativity.

#130 Nemesis on 12.09.16 at 5:32 pm

“Wow. 50 houses. Call the cops.” — ImperturbableGT

#Gittin’ErDoneSzechuanStyle…

[Xinhua] – China captures 2,442 fugitives from abroad since 2014

…”According to an article posted Friday by the Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI) on its website, 2,442 people, including 397 state officials, were captured or returned from over 70 countries or regions and more than 8.5 billion yuan (1.2 billion U.S. dollars) of illegal assets have been recovered.

The article said that in the first 11 months this year, the “Sky Net” campaign alone has accounted for 908 returnees and recovered 2.3 billion yuan in illegal assets.

A total of 19 people named as China’s top 100 fugitives released in an Interpol “red notice” have returned this year, bringing the total number of the people on the list who have returned so far to 37.”…

http://news.xinhuanet.com/english/2016-12/09/c_135893661.htm

#BonusCops,Or… #ArrivalsGateYVR…

https://youtu.be/0Rl9Cxc7uZA

#131 Notme on 12.09.16 at 5:35 pm

#89 Rentin 2 percenter, could pay cash for a house, but still rentin’? Mr Scrooge, you seem to know the future, why not time the markets? (btw, you can’t get even with 200k monthly swings, no way no how you would put a stop where it’s reasonable, human mind does not work that way)

Trough house USA – my 85 yo mother in law called that one, but if you don’t know what the problems really were with buying one of those power-of-sale 50k properties in Florida, then you really don’t know much about RE markets.

#132 Uh Oh mortgage rates up... on 12.09.16 at 5:51 pm

http://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

5 year blasting higher today….get ready for more hikes from the banks….

#133 Context on 12.09.16 at 6:02 pm

#121 TurnerNation:- There was a time of dignity and men that the world perceived as will always hunt down the crook in a timely manner. Now we will have a bunch of donut and coffee drinkers who can’t outrun a teen who just knocked over a Tim’s outlet.

#134 Stock picking cowboy on 12.10.16 at 3:40 am

#99 Garth, dude we’re stock pickers, no one in Thier right mind would hold the tsx for a decade. But, if I had consistently sold my winners I would have missed out on the juicy gains winners like CGI have brought in.. 15 to 65…. and a hundred other ten naggers along the way. Now why would you want to sell stocks that go up. Selling means handing the tax man undeserved revenue. Nope Garth, you’re wrong in this. Never sell your winners and never buy an etf if you’re serious about investing. This balanced thing is a straight shot into the cat food aisle.)