The International

RYAN  By Guest Blogger Ryan Lewenza

One of my favourite movies in recent years was The International, which had Clive Owen as the protagonist and combined an action-based Jason Bourne-like premise with global finance. Don’t let the Rotten Tomatoes rating of 58% deter you from seeing this film, as it’s an action packed thriller, which focuses on a shady international bank and its illegal activities. I was thinking about that movie when I decided to write this blog post on the outlook for the international equity markets. And if you dislike today’s blog post then maybe you at least get a good movie recommendation out of it. Or you end up in the 42% camp that didn’t enjoy the film and have complete contempt for me this weekend. I’ll get over it; so let’s get started.

At Turner Investments we break up equities into Canadian, US, and International and see a 20% weight (of our 60% equity weight) as being “neutral”. Since 2009, US equities have been the standout performer and without a doubt the best place to be. The MSCI US Index is up an incredible 264% since 09. This is 100% more than the MSCI Europe and Far East (EAFE) Index up 166% and way ahead of Emerging Market (EM) equities up 120%.

US equities have benefited from a slowly improving economy, a recovering financial industry, stronger corporate profits, a supportive central bank, and having a high exposure to the leading technology sector. But we believe things could be changing and we are now overweight international equities as we see EAFE and EM equities outperforming over the next few years.

Equity Returns Since 2009

Source: Bloomberg, Turner Investments

First, we are seeing a pick up in economic growth in Europe, Japan and other Asian countries. Europe’s economy accelerated from 0% GDP growth in 2013 to 2.7% Y/Y in H2/17. Some are forecasting Europe to grow at 3% in 2018.

Similarly, Japan’s economy accelerated to 2% Y/Y growth in Q4/17, with inflation finally starting to pick up following years of low and stagnant inflation readings. Japan’s economy is benefitting from “Abenomics” (economic reforms to turn around their lagging economy), massive central bank stimulus, and stronger exports.

Finally, China – the world’s second largest economy – has seen it’s economy strengthen since it’s early 2016 growth scare and is projected to grow around 6.5% in 2018, matching last years growth rate.

We see these economic trends continuing over the next 9-12 months.

Europe’s Economy is Picking Up

Source: Bloomberg, Turner Investments

As a consequence of this stronger economic growth, corporate profits for EAFE and EM equities look solid. EAFE stocks are expected to grow their earnings by 15.6% Y/Y in 2018 and EM stocks by 26% Y/Y. Admittedly the US looks the best at 27% Y/Y, but I believe estimates are too high for this year and much of this comes from the one-time gain of lower US tax rates following the major US tax reforms signed late last year. Moreover, the recovery in EAFE and EM earnings have significantly lagged the US (giving them the potential to catch up), and these areas offer higher operating leverage to the improving global economy so we could see stronger earnings for some time to come, if the global economy continues to accelerate.

These areas also benefit from higher dividend yields with the EAFE and EM indices yielding 3.1% and 2.4%, respectively, versus the US at 1.8%.

Finally, with these regions significantly lagging since 2009, they are cheap when compared to the US market. Currently, the EAFE and EM indices trade at 14.1x and 12.7x, respectively, a sizable discount to US stocks at 17.5x. Not sure about you, but in a world where everything is so darn expensive (Vancouver housing, Bitcoin, bonds, rare art etc.), I get pretty excited when I can find an asset on sale. EAFE and EM stocks may be those bargains investors need for their portfolio.

Equity Market Valuations

Source: Bloomberg, Turner Investments

So there’s the pitch. We see the lagged performance, improving economies, solid earnings outlook and cheaper valuations for EAFE and EM equities as the basis to overweight international equities in portfolios. And if you didn’t like that analysis then maybe you’ll like my movie recommendation for The International. And if you dislike both, then let ‘er rip in the comments section below.

Ryan Lewenza, CFA,CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

101 comments ↓

#1 Irent2018 on 03.17.18 at 2:32 pm

Good post Ryan Thanks.
Aside from International, would you recommend some “Bollywood” flix? Our PM just visited. I bought some ZID and it’s doing good.

#2 Nick on 03.17.18 at 2:38 pm

Canada and US are going to have terrible economies over the next year or so. Q1 GDP is going to be sad.

Expect CDN and USD to weaken against international currencies as their economies are actually growing.

Go international and make money on the value plus FX

#3 tccontrarian on 03.17.18 at 2:41 pm

Mentioning the terms, “International” and “overweight” in one article made me think of a short YouTube video I watched recently. Certainly ‘explains’ the corporate profits rising in some US equities:

https://youtu.be/WyMTSvVAtWM

TCC

#4 Howard on 03.17.18 at 2:42 pm

Thank you Ryan. Clearly, Canada is not the place to invest, certainly not until Oct 2019 at the earliest.

Can I humbly request that a future blog entry provide a few ideas on how to play the coming crash in the CAD$? Other than holding securities in USD or EUR. Are there any ETFs that directly or indirectly benefit from a crashing CAD?

#5 mark on 03.17.18 at 2:43 pm

Thanks for the article Ryan.

Would of been nice as a financial planner, your estimates going forward for the different markets, as far as your expected average returns.

Most know the USA will most likely underperform the EAFE and EM markets in next 10 years going forward most likely?

#6 crowdedelevatorfartz on 03.17.18 at 2:45 pm

Yep.
The International was one of the better pics starring Clive Owen and Naomi Watts.
Great plot, acting, scenery.
Rotten Tomatoes missed the boat on that one….

#7 JSS on 03.17.18 at 2:50 pm

Ryan, wouldn’t you recommend Canada’s TSX as a place to invest more money? TSX is also lagging the US, and currently has a sizeable dividend around 2.8%, and P/E around 15. We are a safe country, and we get a dividend tax credit too.

#8 mike from mtl on 03.17.18 at 2:54 pm

EAFE also serves as a great currency hedge from polozpeso. Euro domiciled companies have much more upside than overpriced US$ agreed.

Plus with how Canada’s ‘economy’ of wood and rocks is, probably be more fitting to classify as an EM. Boom and bust commodity cycles are that of EM.

#9 Andrewski on 03.17.18 at 3:10 pm

Great recommendation Ryan. Also check out a Netflix series called: Dirty Money.

#10 Former Fool on 03.17.18 at 3:13 pm

Thanks for the analysis Ryan. Always interesting.

One question – you state that P/E of US equities is 17.5. When I look at a broad US market ETF such as VTI, the P/E is different, coming in at 21.8.

https://personal.vanguard.com/us/funds/snapshot?FundId=0970&FundIntExt=INT&ps_disable_redirect=true&funds_disable_redirect=true#tab=2

Why the difference? Thanks in advance for your answer.

#11 Felix on 03.17.18 at 3:18 pm

Thanks Ryan, you made my day :)

Love seeing all those pooches onboard with United Airlines.

Makes a cat purrrrrrr !

#12 Stan Brooks on 03.17.18 at 3:19 pm

Agree,

Europe (where the wealth is and with very good recent growth) East Asia (where the growth is), then US (where the money is).

The movie is good.

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

#7 JSS on 03.17.18 at 2:50 pm
Ryan, wouldn’t you recommend Canada’s TSX as a place to invest more money? TSX is also lagging the US, and currently has a sizeable dividend around 2.8%, and P/E around 15. We are a safe country, and we get a dividend tax credit too.

My advice is to stay away from it.
Small economy with horrendous credit bubble.
crappy currency.

Buy mining index instead.

#13 Shawn on 03.17.18 at 3:20 pm

Makes sense. Logical. However markets are often illogical and can remain that way for some time – often many years. Valuation is a poor timing tool for tactical allocation. We have seen the revaluation of US equities during the early stage of this secular bull market. It’s possible that US equities trade at a valuation premium for the duration of this secular bull market well into 2030.

Markets are priced more on perception of fundamentals than actual fundamentals. As we are in a risk on phase for equities it makes sense that risk assets outperform defensive assets regardless of valuation. EMs are risk assets as are US equities. European equities less so.

In addition, fund flow data has shown most of the $ has gone into international equities (mostly Europe) and bonds over the past several years. $ has actually been leaving US equities since 2009 with the only exception being 2013. It flows reverse in favor of US stocks, look out.

#14 Kevin on 03.17.18 at 3:27 pm

Thank you, Ryan. I agree.

Regarding the US, at what point does the political nonsense going on impact the economy and stock market? Any insights on this?

#15 Sideshow Rob on 03.17.18 at 3:36 pm

“Kathleen Wynne warns students to vote or old white people will decide the election.”

What a racist statement. How about this. Any time a politician insults any ethnicity, demographic group or gender they should be immediately tasered. Then they can think about what they said while they are lying on the ground twitching in their own drool.

#16 Josh on 03.17.18 at 3:54 pm

Hey Ryan,

Thanks for the informative post. Haven’t seen The International but am a big fan of Clive Owen. Highly recommend “The Knick” if you have the time. Great show with fantastic production values.

With regards to China, isn’t their market extremely difficult to gain exposure to? I mean there is VEE and XEC, two ETF wrappers but will there ever be a Canadian ETF that holds emerging market stocks directly to cut down on foreign withholding taxes?

Also what are China’s A-Shares?

#17 Shawn on 03.17.18 at 3:55 pm

It’s no coincidence that international equities outperformed US equities from 2002-08. This period was a commodity centric cyclical bull market in secular bear market for US stocks. The TSX also outperformed during this period. It was also after a technology valuation bubble.

That’s not where we are today. We’re in a cyclical bull market in a secular bull market. Technology, financials and consumer cyclicals are firmly in the lead. Countries that are overweight these sectors will outperform. This is why the emerging market leadership looks so different this time around. Canada, Australia and Europe will likely remain laggards for this reason.

#18 I Recommend on 03.17.18 at 4:11 pm

I recommend “Margin Call” and “Madoff”, the mini-series from 2016 that is.

#19 I Recommend on 03.17.18 at 4:15 pm

#1 Irent2018, skip the Bollywood crap and reach for the Satiyajit Ray collection. The Apu trilogy is a great start. (Core theme is also financing, that is, the lack of it:-)

#20 Loonie Doctor on 03.17.18 at 4:32 pm

Thanks for the insight Ryan. I am still overweight the US simply because that part of my portfolio grew so much. And I like spending US dollars (currently in Florida in my US built motorhome). However, I am now rebalancing now that I know what the new rules for CCPCs look like with no grandfathering. I am underweight both Canada (by a lot) and Europe/asia by a little. I will follow my rules and work on the Canada piece the most, although likely in the Fall and building the Europe/Asia piece up to weight first. I already have a good chunk in EM that I built last year. It got me thinking though. Canada has some unique elements for portfolio builders here given the eligible dividend treatment, but beyond that, what does the Canadian market most closely follow? US (our biggest trader)? EM (also usually commodity based)? Europe (another major developed market, but not as commodity based)? I am just curious. I will stick to my plan of being globally diversified. Interested in anyone’s thoughts.

#21 MF on 03.17.18 at 4:38 pm

Europe:

Where is this growth going to come from in Europe? There is stagnant population in most European countries, and most of the main economic leading countries are in big debt like the rest of the western world. Most are very left leaning as well (bad news).

We also can’t forget that the reason the European market has lagged the US market over the last few years is because, over the same time period, Europe saw economic crisis after crisis like Grexit/NIRP, political issues like Brexit, the refugee influx, and social issues (horrible terrorist attacks).

All these issues are still present. I can’t see Europe having any bright economic future, sorry.

China:

Does anyone actually believe that paranoid communist governments “statistics”? It’s all BS, sorry.

EM:

With regards to emerging markets, don’t rising interest rates hurt EM’s worse than anyone else? If we are too actually believe rates will rise (we will see), how can EM thrive in the face of rising rates?

I could see India doing well though. I hope you are correct about Japan as well. Both great countries and people.

MF

#22 Stan Brooks on 03.17.18 at 4:41 pm

The International movie, around 35.10.

Whoever controls the debt controls everything.

This is the very essense of banking industry.

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

Great hit there Ryan.

#23 MF on 03.17.18 at 4:45 pm

Further to my post above,

Another main reason the US market has been the world leader is because there really is no one else to compare it to. The US is democratic, highly capitalistic, influential, and strong.

The world desperately needs a powerful United States.

The more powerful the better.

That’s why when something positive happens such as Trump’s pro business stance, or any other positive economic indicators are released, money pours into the US markets.

EM, EAFE, the TSX…none can compete.

MF

#24 Denizen of Eglinton on 03.17.18 at 4:51 pm

What EAFE ETF yields 3%?

#25 Stan Brooks on 03.17.18 at 5:08 pm

#21 MF on 03.17.18 at 4:38 pm

Where is this growth going to come from in Europe? There is stagnant population in most European countries, and most of the main economic leading countries are in big debt like the rest of the western world. Most are very left leaning as well (bad news).

You have absolutely no clue about how powerful the European Economy is.

Look at the current account balance:

https://en.wikipedia.org/wiki/List_of_countries_by_current_account_balance

the top countries with positive account balance?
EU as a whole, all 450 million people of it + Germany.
+ Japan, Korea, China.

but with the power of old money in favor of Europe.

hint: Canada is the worst country in the world when considering account balance per capita.

In Luxembourg alone there is more money than in whole of Canada times 3.

I worked once for a major wealth management company there with assets under management 200 billion dollars.

Repeat with me: 200 billion dollars. Not 9 billion as a relatively large private firm for Canada like Gluskin Sheff.

Total debt per capita in Europe is much less than in Canada and US.

China is the world emerging power house and you have absolutely no clue how much money and future is concentrated there.

Ever heard of the new silk road – one belt, one road connecting guess who? Europe and China.
And how many trillions of new wealth will it generate?

EM – Turkey alone has much brighter future than most of the west. Pople can get 5 kids there with no problem and run them through universities.

Go visit Istanbul and then you will appreciate what Toronto is not.

Bottom line:
I absolutely enjoy brainwashed frozen brains who have seen nothing from the world making assumptions and trying to judge places and economies they have not seen.

Go visit Berlin, Madrid, Barcelona, Amsterdam, Frankfurt, Munich, Vienna, hell even Paris.

Please for you own credibility’s sake stop commenting on things you have no clue about.

#26 Smoking Man on 03.17.18 at 5:15 pm

Ever wonder why I’m really good at timing markets and political outcomes that no one sees to see.

Take the test. I saw it instantly and counted 15.
Dyslexia perhaps.

http://www.theinvisiblegorilla.com/videos.html

#27 Stan Brooks on 03.17.18 at 5:16 pm


#23 MF on 03.17.18 at 4:45 pm
Further to my post above,

Another main reason the US market has been the world leader is because there really is no one else to compare it to. The US is democratic, highly capitalistic, influential, and strong.

The world desperately needs a powerful United States.

The more powerful the better.

That’s why when something positive happens such as Trump’s pro business stance, or any other positive economic indicators are released, money pours into the US markets.

EM, EAFE, the TSX…none can compete.

MF

Clueless again.

No doubt US market will do good.

But EM and Europe, EAFE will outperform.

I have Chinese ETFs that outperform DOW twice in the last 1.5-2 Years. That’s right, twice.

Watch the currencies and expect huge strength in the Euro. Soon to be 2 loonies.

#28 For those about to flop... on 03.17.18 at 5:16 pm

CONFIRMED PINK SNOW

This attempted flip in North Vancouver that I featured a couple of times didn’t work out so hot.

The details…

1791 Ralph st,North Vancouver

Paid 1.52 February 2016

Sold 1.45 November 2017

And so it went a little over 8% less than assessed and after we factor everything in it was probably a 175k detour.

Hope it doesn’t wreck ’em…

M43BC

Sold on November 15 for 1.45

1791 Ralph st,North Vancouver paid 1.52 February 2016 ass 1.58 2017

Jul 25:$1,689,000
Nov 6: $1,499,900
Change: – 189100.00 -11%

https://www.bcassessment.ca/Property/Info/QTAwMDAyOEVDWQ==

https://www.zolo.ca/north-vancouver-real-estate/1791-ralph-street

#29 Popey the sailor man on 03.17.18 at 5:25 pm

#76 Long Branch Apprentice on 03.16.18 at 8:34 pm
#25 Popeye the sailor man

Great question! And if the loonie really slides, does that make RE a bargain for foreign investors?

You a power engineer? I’m one test and 3 months of steam time away from being 3rd class.

_______________________________________

I feel we as Canadians have taken a hit on Real estate with the low dollar because foreigners can buy more in our country with our low dollar.

IE if you use your HELOC to buy something in the US or do a trip your equity does not go as far compared to when our money was a par.

So if real estate was near peek when the dollar was at par and later both are down 30% are we really down around 60% compared to the rest of the world (US$ being the standard)?

________________________
Long Branch Apprentice;

I am a 2nd class Marine Engineer employed as a Chief Engineer, also hold a 4th class Marine Steam and a 4th class Power.
I’m waiting for my 3rd class Power Cert once they finish reviewing my application. Will be shopping for a power engineering job in Alberta once I lock in my last couple of years at sea.

#30 For those about to flop... on 03.17.18 at 5:31 pm

CONFIRMED PINK DRAW

This view block would have been snapped up a couple of years ago by a developer looking to build as big as possible with a view a the mountains.

These guys would have had bigger dreams but they managed to limit the damage and now it is someone else’s problem.

The details …

Paid 3. January 2016

Sold 3.16 October 2017

It’s true we could say they lost money after opportunity costs but the numbers are solid enough that I think a Pink Draw is fair enough especially as it doesn’t look like they did anything to the property are drew up any plans.

Could have to re-visit this house if the new owners go for it again in a deteriorating market…

M43BC

3755 W 13th Avenue, Vancouver

3755 W 13th Avenue, Vancouver paid 3.0 January 2016 sold for 3.16 in early November 2017 ass 3.31 2017

May 25:$3,680,000
Aug 16: $3,380,000
Change: – 300000.00 -8%

https://www.bcassessment.ca/Property/Info/QTAwMDAwMDJYSA==

https://www.zolo.ca/vancouver-real-estate/3755-w-13th-avenue

#31 Kilt on 03.17.18 at 5:36 pm

Hey Ryan

In your 60/40 portfolio, where would something like dividend growth split preferreds sit. In the 40 side?

Kilt.

#32 Ryan Lewenza on 03.17.18 at 5:48 pm

JSS “Ryan, wouldn’t you recommend Canada’s TSX as a place to invest more money? TSX is also lagging the US, and currently has a sizeable dividend around 2.8%, and P/E around 15. We are a safe country, and we get a dividend tax credit too.”

Agreed. We went from an underweight position to a slight overweight in client portfolios in the second half of last year. So far the call has not worked out but we believe the TSX is a “coiled spring”. If we can resolve the NAFTA issue (Trump is still saying a deal is possible and Trump’s new economic advisor Larry Kudlow is a big free trade believer), then I think this could remove the overhang on our lagging market and see better returns after a lackluster decade. – Ryan L

#33 Blackdog on 03.17.18 at 5:49 pm

@Felix #11, You are the perfect size to fit in the overhead storage bin. Just sayin….

#34 Ryan Lewenza on 03.17.18 at 5:49 pm

Kilt “In your 60/40 portfolio, where would something like dividend growth split preferreds sit. In the 40 side?”

Yes those would go with the fixed income 40% weight. See my last blog post on the topic. – Ryan L
https://www.greaterfool.ca/2018/03/03/preferreds-101/

#35 Ryan Lewenza on 03.17.18 at 5:52 pm

Andrewski “Great recommendation Ryan. Also check out a Netflix series called: Dirty Money.”

Yeah that’s a great documentary series. The Trump and Valeant episodes were the best. – Ryan L

#36 For those about to flop... on 03.17.18 at 5:52 pm

CONFIRMED PINK SNOW

Here is another one due to my networking on here was able to show you and have verified in real time,now we have official confirmation and so let’s see what happened.

The details…

6626 Inverness Street, Vancouver

Paid 1.67 May 2016

Sold 1.55 December 2017

So that’s 7% loss right there and if we do 5 foe expenses and a couple for opportunities lost ,we land at roughly 14% or a 225k punt in the pants.

It went nearly 300k below original ask ,and because the live nearby I will lend them my hip flask.

They are shaken and stirred…

M43BC

Solid on December 13th for 1.55 PINK SNOW

6626 Inverness Street, Vancouver paid 1.67 May 2016 asking 1.64 ass 1.63

May 30:$1,849,800
Jul 27: $1,748,000
Change: – 101800.00 -6%

6626 Inverness Street, Vancouver

May 30:$1,849,800
Oct 24: $1,649,000
Change: – 200800.00 -11%

https://www.zolo.ca/vancouver-real-estate/6626-inverness-street

https://www.bcassessment.ca/Property/Info/QTAwMDAwMkJSVQ==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#37 Mark on 03.17.18 at 5:57 pm

Pretty hard to argue with the argument here. You can look at Canada, the Emerging Markets, even the EAFE countries, and see that their equity indices are still beneath that of their 2008 peaks when adjusted to USD$. While the US markets have put themselves into yet another obvious bubble, with minimal to no-earnings tech companies getting P/E multiples of the several hundreds. Bubbles that quite frankly make Vancouver RE look like a bargain.

Last time this happened, in the late 1990s/early 2000s, the aftermath was a sustained near decade of dramatic outperformance versus the US. Both in terms of currency as well as equity valuations.

#30 For those about to flop… on 03.17.18 at 5:31 pm

Keep ’em coming. :) The sooner that people are disabused of the notion that prices are still higher than in years past (post-2013 apex), the better.

With regards to emerging markets, don’t rising interest rates hurt EM’s worse than anyone else?

Why would they? Rising rates cause accelerating interest costs on USD$ denominated claims, which are increasingly held overseas. Meaning that more USD$ flows out of the US, hence, over time, weakening the USD$. Emerging markets performed fabulously in the 2003-2008 era with rising short-term USD$ interest rates.

This time around, we have long-term rates rising as well, a likely secular bull market in long-term rates / bear market in long-term bonds, which should serve to cause the outperformance of capital intensive industry. Which is definitely more represented in the emerging markets (and Canada) than in the USA where “capital light” business models have come to dominate the economy. Keeping in mind that a higher cost of capital is a competitive ‘moat’ around a highly capital intensive business or an industry.

#38 Ryan Lewenza on 03.17.18 at 5:57 pm

Former Fool “One question – you state that P/E of US equities is 17.5. When I look at a broad US market ETF such as VTI, the P/E is different, coming in at 21.8. Why the difference?”

That’s an easy one. That P/E is based on the last 12 months of earnings or what’s called trailing earnings. I referenced 12-month forward earnings or a forward P/E. Since analysts are almost always bullish they always predict higher earnings so the forward P/E is often lower than the trailing P/E. Often people ask what’s better to use. I tend to use trailing P/E’s more but I will also use forward from time to time. – Ryan L

#39 Stan Brooks on 03.17.18 at 6:00 pm


Agreed. We went from an underweight position to a slight overweight in client portfolios in the second half of last year. So far the call has not worked out but we believe the TSX is a “coiled spring”. If we can resolve the NAFTA issue (Trump is still saying a deal is possible and Trump’s new economic advisor Larry Kudlow is a big free trade believer), then I think this could remove the overhang on our lagging market and see better returns after a lackluster decade. – Ryan L

—————————-

I respectfully disagree.

1. US sees though the very naive cheap unqualified labour camp and currency manipulation policies of Canada.

2. Any gains will be nominal and in depreciating currency.

3. Canadians have no money and there is NO international interest in TSX which is actually overpriced when compared to Europe and EM.

I firmly believe that a 10-15 % of ones portfolio in diversified mining ETF, Precious Metals mining ETF, some agriculture ETF and International oil ETF will greatly outperform the same investment 10-15 % of ones portfolio in TSX whose only strength left is potentially mining and agriculture. Period.

The worst thing you would like to see is TSX gaining 5 % yearly while currency depreciates yearly by 8-10 and alternatives gain 10 % in stable currencies.

Nominal Gains?
No. Thank you.

#40 Dan on 03.17.18 at 6:04 pm

Just load up on 3-5k bitcoin… if you are lucky.

#41 Foxx on 03.17.18 at 6:04 pm

Stop saying China is the second largest economy you numb nut! It has been No.1 for quite a while now!

Quit perpetuating that carefully crafted (calculated) myth.

#42 Stan Brooks on 03.17.18 at 6:05 pm

As for bonds: when the bond king Jeffrey Gundlach is advising on staying away from fixed income instruments I kind of tend to follow.

Paul Tudor Jones Prefers A Hot Burning Coal Over Treasuries

https://seekingalpha.com/article/4148185-paul-tudor-jones-prefers-hot-burning-coal-treasuries

https://en.wikipedia.org/wiki/Paul_Tudor_Jones
Imagine where the scheisse loonie bonds rank in his investment preferences.

#43 Ryan Lewenza on 03.17.18 at 6:05 pm

Kevin “Regarding the US, at what point does the political nonsense going on impact the economy and stock market? Any insights on this.”

That’s the million dollar question. I see two key political risks to the US markets. First is the Mueller investigation into Trump/Russia. I see this unfolding by end of year, likely ahead of US midterms in November, so this could be a potential risk later this year. The second key political risk are all these stupid (IMO) moves around trade and tariffs. That’s a longer term risk (1-2 years) since that takes some time for it to make it’s way through the economy. I liked Trump’s corporate tax cut and pro-business policies, but I think he’s out to lunch on trade and tariffs. I ran some quick number of the steal/aluminum tariffs and I estimate the tariffs would equate to almost $1 million per saved steal/aluminum jobs in US. Not a great return! – Ryan L

#44 For those about to flop... on 03.17.18 at 6:07 pm

CONFIRMED PINK SNOW

Here is another update from the Tasmanian Institute of Transparency.

This one is for the Burnaby boys on the blog.

The details…

6633 Broadway Street, Burnaby

Paid 1.46 March 2016

Sold 1.33 December 2017

And so with the listings I have seen today 5% below assessment seems to be the order.

A roughly 15% loss with known expenses and a little for opportunities lost or something approaching 225k worth of pain.

No over the counter medicine powerful enough to numb the pain.

The Metrosexual Messiah has your backs though…

M43BC

Sold on December 11th 2017 ass1.40 2017

6633 Broadway Street, Burnaby paid 1.46 march 2016 asking 1.48 March 2016

$1,620,000
2017-04-30

https://www.bcassessment.ca/Property/Info/QTAwMDAzVldDMg==

https://www.zolo.ca/burnaby-real-estate/6633-broadway-

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#45 Mark on 03.17.18 at 6:16 pm

“What EAFE ETF yields 3%?”

I get a trailing cash yield of 2.77% on Vanguard’s VEA EAFE ETF. So with dividend growth over the past year, you’re probably at roughly a 3% current yield.

Should be similar for most of the others, albeit with different levels of fees slightly impacting the cash yield.

#46 Kilt on 03.17.18 at 6:19 pm

Thanks Ryan.

#47 espressobob on 03.17.18 at 6:19 pm

When I think about the upside potential of EM markets the only movie that comes to mind is ‘Easy Money’ with Rodney Dangerfield & Joe Pesci.

It’s a wonder why EMs haven’t hit it out of the park? As investing goes, you have to wait for it. My kind of comedy.

#48 For those about to flop... on 03.17.18 at 6:26 pm

CONFIRMED PINK SNOW

This is another ugly one I showed a while back and Burnaby Renter asked if I knew about it after I helped them with another heavy loss in North Vancouver on Leovista.

Let’s deal with this one in Burnaby first.

6020 Malvern Ave ,Burnaby

Paid 2.00 May 2016

Sold 1.77 December 2017

So that’s 11.5% before expenses and a little for goodies and so by the time we put that in the barn ,let’s call that roughly 18.5% or approaching 375k.

Bit of a barn burner…

M43BC

Sold on December 2

6020 Malvern Ave ,Burnaby

Paid 2m May 2016

Asking 1.99

2017-05-08 : $1,999,000
2017-05-28 : $2,099,000

https://www.zolo.ca/burnaby-real-estate/6020-malvern-avenue

https://www.bcassessment.ca/Property/Info/QTAwMDAzWDFNWQ==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#49 For those about to flop... on 03.17.18 at 6:39 pm

CONFIRMED PINK SNOW

This one in Delta Vigo the carpathian was good enough to help me show you guys back when it sold in December.

The details…

1772 55 st,Delta.

Paid 1.14 May 2016

Sold 1.07 December 2017

So not the biggest dollar amount of the day but over 6% and headed towards 13% after everything is taken into account or the best part of 150k

Some days are diamonds,some days are rough…

M43BC

Sold on December 8th 2017 for 1.07 Vigo the carpathian

This one sold 8 days ago

1772 55 st,Delta.

Paid 1.14 May 2016 ass 1.10 2017

Asking 1.09

https://www.zolo.ca/delta-real-estate/1772-55-street

https://www.bcassessment.ca/Property/Info/QTAwMDA1VlJCMg==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#50 Mark on 03.17.18 at 6:51 pm

“I firmly believe that a 10-15 % of ones portfolio in diversified mining ETF, Precious Metals mining ETF, some agriculture ETF and International oil ETF will greatly outperform the same investment 10-15 % of ones portfolio in TSX whose only strength left is potentially mining and agriculture. Period”

Let’s see. The TSX60 is 40% banks. Banks will benefit through expansions to credit spreads due to a good chunk of their customer base experiencing declining credit-worthiness. The 1990s experience with banks in a RE decline was excellent — most of the Canadian banks quadrupled until the Minister of Finance put a kibosh on bank mergers.

Oil and gas — around 20%. Pipelines are full and have excellent pricing power to raise their prices. Higher long-term interest rates are depreciating their debt and creating a ‘moat’ around entry to the oilsands field. New oilsands projects are not economic, meaning that there will likely not be any additional supply entering the market to compete. Similar factors will constrain worldwide supply. Returns to owners should be good as they have been historically in the sector.

Mines/Materials — been through a severe bear market, with the precious metals miners in particular down to levels of 1983/1984 in nominal terms (BGMI/GDX indices). How many other sectors can you buy at 1984 prices? A lot of upside there. Potash and coal/base metals, perhaps not as vibrant due to overcapacity, I will grant you that.

Industrials — 10%. Railways, which are clearly very close to capacity and for which there is excellent pricing power. Bombardier, which is a basketcase, but has a blockbuster product in the wings (no pun intended).

6% Telecom — the telecoms have been beaten to smithereens and have very attractive dividend yields. Long-term debt depreciation due to higher interest rates will help tidy their balance sheets.

The balance is mostly in the categories of “Consumer discretionary” and “Consumer staples”. In a declining Canadian consumer economy, do you really think Dollarama isn’t going to do well? Burger King? The TSX is pretty much devoid of representation from mid range or higher-end consumer consumption that may be vulnerable. Privately or US-held firms dominate that space. The TSX is pretty neat not only for its treasure trove of undervalued firms, but also for the lack of overvalued firms such as those catering to consumer consumption, or the IT sector which clearly is highly overheated.

I’m personally not a fan of the banks being 40%, and might be inclined to try and reduce that weight, but there’s little about the TSX not to love these days. Especially at 15X trailing earnings, denominated in a currency which is likely to have interest rates held quite low for a significant period going forward in response to the falling housing market.

#51 Ace Goodheart on 03.17.18 at 7:16 pm

RE: “I get pretty excited when I can find an asset on sale.”

Have a look at the TSX. Why are people fire sale – ing profitable corporations? Been like a kid in a candy store for about 3 months now, buying up companies like Enbridge, Bell, Interpipeline, Cineplex, and tons more, for over-sold prices that defy explanation.

The only way I can explain these weird crashing stock prices is to think that people are selling their equity holdings to pay off their mortgages or to pay up to be at 20% equity on their homes.

If so, no problemo whatsoever-o. I love taking your fire saled price stocks from you. Please, sell me more. I will help you to keep your massively overpriced houses. I am here to help. I care.

Ace Goodheart: https://en.wikipedia.org/wiki/G-Force:_Guardians_of_Space

Courtesy of G-Force. Some day they will make my child hood cartoon into a movie. Until then, at least I have a handle.

Craft beer: Getting into this quite a bit. Have some peeps with some major cash in this little play. Dougie, you are going to be our premier. I know you like your Mary Jane. But please, have some sympathy for the beer folks. We make money. We pay a lot of taxes. We employ a lot of people. You are going to be premier. Please be nice to us.

#52 Carol in Kelowna on 03.17.18 at 7:16 pm

Garth, you’re starting to sound like you bought some recreational props in BC the past couple years..

Arbitrary, myopic laws should be opposed by all. This is my duty. – Garth

#53 Loonie on 03.17.18 at 7:37 pm

What’s your predictions on the Loonie? Garth wrote yesterday that we probably will see a 60 cent Loonie! What to do with my Loonies? Should I just throw them away once they fall to the 60 cent level because they will be worthless by then?

Garth did not write that. – Garth

#54 For those about to flop... on 03.17.18 at 7:58 pm

CONFIRMED PINK SNOW.

This is another one the Vancouver media won’t touch and so the Tasmanian Institute of Transparency with deal with it on their behalf.

A person named VancouverDev helped me show this result in pretty much real time and someone was kind enough to write me that these guys and a lot of other people in Vancouver had deals on the side to be made whole.

These guys wish that was the case.

The details…

5691 Jaskow Dr. Richmond.

Paid 1.9 May 2017

Sold 1.58 February 2018

And so this one is one of the highest percentage losses I have recorded in the last year or so.

17%outright and by the time we factor in everything else it is approaching 25% or possibly a loss approaching 450k

That’s a pretty catastrophic result in less than a year.

Dunno what else to suggest except they probably should have gone to the River Rock Casino instead…

M43BC

Sold on January 23 2018 for 1.58 VancouverDev

5691 Jaskow Dr. Richmond.

Picked up for 1.9 million in May 2017

Asking 1.69

https://www.zolo.ca/richmond-real-estate/5691-jaskow-drive

https://www.bcassessment.ca/Property/Info/QTAwMDA1WE5SSA==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#55 For those about to flop... on 03.17.18 at 8:15 pm

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#56 For those about to flop... on 03.17.18 at 8:16 pm

CONFIRMED PINK SNOW

Compared to the last guys ,these guys got of fairly lightly.

The details…

2355 PANORAMA DR NORTH VANCOUVER

Paid 1.97 August 2016

Sold 1.99 December 2017

I have showed this type of case before ,where they got the token 1% above what they paid but after expenses and such they could possibly be 120k on the wrong side of the ledger.

Tried to get 2.39 at the start.

Dunno,I hope they enjoyed the view while they owned it…

M43BC

Sold on December 12th. For 1.99 pink snow

2355 Panorama Drive, North Vancouver

Apr 25:$2,398,000
Nov 7: $2,098,000
Change: – 300000.00 -13%

https://www.zolo.ca/north-vancouver-real-estate/2355-panorama-drive

https://www.bcassessment.ca/Property/Info/QTAwMDAyOFBKNw==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#57 FOUR FINGERS WATSON on 03.17.18 at 8:25 pm

Ryan. Dude. Thanks for the tip on that Marginal Propensity a while back. It has worked out really well for me, keep sending the statements… How is your wife liking the Kia I traded for your Rolls Canardly ? I didn’t realize at the time that u meant that it Rolls down the hills and Canardly get up the other side but its ok, my sleeping bag fits the back seat nicely and my feet and head don’t even touch the doors. Cheers !

#58 For those about to flop... on 03.17.18 at 8:31 pm

CONFIRMED PINK DRAW

These guys most likely took a small loss ,but let’s give them the benefit of the doubt and I will show this one mainly because people seem interested in what’s happening towards the bottom of detached,rather than the carnage on the Westside.

The details…

Paid 1.05 September 2016

Sold 1.1 November 2017

I remember getting ready to do a report on these guys earlier but the deal seemingly fell through and back on the market she went and they did just enough to fight on another day.

The house looked like it needed some work and so hopefully it get renovated or if it’s in a totally derelict state torn down and rebuilt for the sake of the neighbors…

M43BC

Sold on November 8th for 1.10
505 Rupert St. Vancouver paid 1.05 asking 1.08 September 2016 ass1.18

https://www.zolo.ca/vancouver-real-estate/505-rupert-street

https://www.bcassessment.ca/Property/Info/QTAwMDAwMlA4Wg==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#59 Madcat on 03.17.18 at 8:39 pm

“Arbitrary, myopic laws should be opposed by all. This is my duty. – Garth”

We have taxes on alcohol, cigarettes, gasoline, luxury cars…. And now vacation homes… I’m not a huge fan of taxes at all, however as taxes are a necessary evil… Vacation/vacant second homes seem like a good thing to tax when we’re in the middle of a major housing crisis no?

What housing crisis? There are thousands for sale and rent. – Garth

#60 Frank on 03.17.18 at 8:45 pm

You can’t own a Chinese company stock or through a ETF. These are variable interest entities with contracts with Chinese individuals who agree to provide the benefits of owning some of their stock. Many Chinese companies have gone dark in the last decade. They ignore the US listing, and its delisted.

See https://www.imdb.com/title/tt7215388 for the movie China Hustle and https://deep-throat-ipo.blogspot.com/ for an in depth discussion.

Many US ETFs make up their own calculations for the P/E, for example QQQ was being quoted at 23 when it was actually 28 in the normal way. They’re selling a product.

Low priced US companies with a great business are the best. Buy them individually to avoid the overpriced ETFs. Buying correctly with industry diversification is the key factor. Over extended periods 100% equities do the best. These are companies such as Apple, Alaska Airlines, Gilead Sciences, Michael Kors, Skyworks, Lam Research etc.

#61 For those about to flop... on 03.17.18 at 8:49 pm

I just want to present one more case before I clear the dance floor for the other punters.

The number VancouverDev supplied me for the case at Jaskow turned out to be correct ,however something happened with this house in Abbotsford and I want to set the record straight.

This case is an example of why I follow things right through,things change ,deals collapse and people accidentally make mistakes when trying to assist me.

I make hundreds of mistakes a day and I don’t take myself too seriously but I want the numbers to be correct as much as possible.

With their help I reported that they paid 1.21 and was told it went for the same number,most likely the person got confused and as the number at Jaskow was 100% correct I see no malice involved.

The details…

Paid 1.21 March 2017

Sold 1.37 January 2018

And so after expenses they most likely pocketed roughly an 8% return.

There is your happy ending…

M43BC

Sold on January 18 2018 for 1.21 VancouverDev

34288 Farmer Road, Abbotsford.paid 1.21 March 2017 Farmland asking 1.44

Sep 8:$1,489,000
Oct 25: $1,349,000
Change: – 140000.00 -9%

https://www.zolo.ca/abbotsford-real-estate/34288-farmer-road

https://www.bcassessment.ca/Property/Info/QTAwMDBGN1FGNw==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#62 MF on 03.17.18 at 8:50 pm

#25 Stan Brooks on 03.17.18 at 5:08 pm

“I absolutely enjoy brainwashed frozen brains who have seen nothing from the world making assumptions and trying to judge places and economies they have not seen.”

-Gotta ask then, why are you on here, on this Canadian blog *crap talking* Canada all the time?

Europe has proven twice in the last century how flawed it is. Going back further there were more wars, more conflicts, more radical leaders, more radical political views and so on.

You continuously disparage Canadian institutions on here. You talk about how corrupt you think our leaders are, or how the Canadian wealthy take advantage.

The wealthy on that continent have the blood of billions of souls on their hands. History is always a guide. We can therefore expect -at some point- another outbreak of violence and conflict, loss of life, and downfall of whatever worthless economy exists in the EU.

That’s what you don’t get. Political stability is what human beings need, and that is what Canada offers lots of. Always will.

MF

#63 MF on 03.17.18 at 8:59 pm

#25 Stan Brooks on 03.17.18 at 5:08 pm

The Chinese government is still communist. Period. Even with the reforms they have undertaken in the last few decades. Their goal is the same of all communist governments: to remain in power at all costs.

They don’t play by the rules and therefore we cannot put any value in the statistics they release.

There are billions of dollars that leave that country and end up all around the world (yes even in Canadian RE) from Chinese too untrusting of the state.

Does that sound like a country you would like to invest in?

Ask surrounding Asian countries what they think of the Chinese Government and see if they want to go along with it all. That will tell you all you need to know about a world with an increasingly strong china and what will happen to economic markets that crave stability over everything.

MF

#64 windsor guy on 03.17.18 at 9:07 pm

Great article Ryan…At this point in time, what percentage would you recommend for holding Canadian equities in a balanced portfolio other than our holdings in a reit?

#65 CalgaryCarGuy on 03.17.18 at 9:24 pm

Re #204 Crowdedelevatorfartz 3/17/18

Why do BCers hate Albertans? It’s ugly. – Garth

+++++++

An itch we have to scratch?

If you want even more ridiculous.

Try the Edmonton vs Calgary rivalry.

Now THATS a pig wallow.

—————————————————————–

Wrong. The Calgary/Edmonton rivalry is good-natured Albertan competitivness and always has been. The B.C./Albertan issue is not even rivalry—it is pure dislike. A great many British Columbians will be quick and proud to tell you so.

#66 dr. talc on 03.17.18 at 9:28 pm

Here’s a politician who is an exception to the rule:
Victor Orban

https://www.youtube.com/watch?v=GmGyDw6_ypo

#67 Big Kahuna on 03.17.18 at 9:40 pm

#25Stan-lots of running down Canada these days (it starts at the top) but this is the first time I have heard Canada compared unfavorably to a dump like Turkey-they have a wonderful legal system over there in your Sharia Paradise.

#68 Gravy Train on 03.17.18 at 10:04 pm

#23 MF on 03.17.18 at 4:45 pm
“The US is democratic, highly capitalistic, influential, and strong…. That’s why when something positive happens such as Trump’s pro business stance….”

Trump is anti-globalization, anti-immigrant, authoritarian, chauvinist, nationalist, protectionist, nativist, xenophobic and reactionary. Please explain to me how Trump is making the U.S. more democratic and pro-business! :)

#69 out with Wynne on 03.17.18 at 10:08 pm

DELETED

#70 NoName on 03.17.18 at 10:08 pm

interesting read and watch

https://www.theguardian.com/news/2018/mar/17/cambridge-analytica-facebook-influence-us-election

#71 NoName on 03.17.18 at 10:10 pm

this is no fake news

https://www.facebook.com/business/success/rick-scott-for-florida

https://theintercept.com/2018/03/14/facebook-election-meddling/

#72 What up with Enbridge? on 03.17.18 at 10:44 pm

#51 Ace Goodheart on 03.17.18 at 7:16 pm
RE: “I get pretty excited when I can find an asset on sale.”

Have a look at the TSX. Why are people fire sale – ing profitable corporations? Been like a kid in a candy store for about 3 months now, buying up companies like Enbridge, Bell, Interpipeline, Cineplex, and tons more, for over-sold prices that defy explanation.

————————

Hey Ace (or anyone else), what is the deal with Enbridge? Looking at their quarterlies…
Q4 2016 – Revenue $9.4B and Net Income $441M
Q4 2017 – Revenue $12.9B and Net Income $291M

Why the huge revenue gain with a decrease in net income? Seems odd…

#73 SoggyShorts on 03.17.18 at 10:51 pm

#62 MF on 03.17.18 at 8:50 pm
#25 Stan Brooks on 03.17.18 at 5:08 pm

The wealthy on that continent[europe] have the blood of billions of souls on their hands. History is always a guide. We can therefore expect -at some point- another outbreak of violence and conflict, loss of life, and downfall of whatever worthless economy exists in the EU.

MF
*************************************
Since pretty much everyone who had a part in the world wars is dead or soon will be, I assume you mean that their ancestors have blood on their hands?
So I must ask, where do you think the wealthy on this continent came from?
Or perhaps you’d care to share which wealthy bloodlines anywhere in the world have an unsullied past?

#74 Mark on 03.17.18 at 11:05 pm

“Hey Ace (or anyone else), what is the deal with Enbridge? Looking at their quarterlies…
Q4 2016 – Revenue $9.4B and Net Income $441M
Q4 2017 – Revenue $12.9B and Net Income $291M”

Per Enbridge’s investor presentation (https://www.enbridge.com/~/media/Enb/Documents/Investor%20Relations/2017/2017_Q4_Joint_Presentation.pdf)

“Effect of US Tax Reform • 4Q17 Reporting Implications – $860 million non-cash charge due to the establishment of a regulatory liability related to lower tax rate

In other words, “blame Trump”.

#75 CliffOwenz on 03.17.18 at 11:37 pm

Well Rayn, finally agreed on one of your posts as that is a great movie. As for pooches on a plane, no chance. Sorry to you and Garth but allergies, bights, rabies, smell and defecation means no animals….or let ALL animals, cats, gerbils, elephants, etc. No animal is more equal than others (now where did I read that?)

#76 CliffOwenz on 03.18.18 at 12:00 am

#160 jane24 on 03.17.18 at 3:42 am
Here in Britain as the token Canadian at a social gathering I get a lot of negative comments about Trudeau Junior. People are mystified as to how he got elected. I explain that he promised legal weed to the kids”

Unfortunately, most Canadians and people in other democracies are a bit naive as they think that they have an individual say in matters. In fact, the country is run by a secret cabal elite who control matters. T2 is just an empty suit doing the elite’s bidding, although he may be even dumber than they had hoped for. This is starting to sound alot like the plot to “The International”

#77 CliffOwenz on 03.18.18 at 12:10 am

#4 Howard on 03.17.18 at 2:42 pm

Can I humbly request that a future blog entry provide a few ideas on how to play the coming crash in the CAD$?”

Howard, go long USD/CAD. Hit it big and if your prediction is right, you are a guru!

#78 Russ on 03.18.18 at 12:43 am

Madcat on 03.17.18 at 8:39 pm

“Arbitrary, myopic laws should be opposed by all. This is my duty. – Garth”

We have taxes on alcohol, cigarettes, gasoline, luxury cars…. And now vacation homes… I’m not a huge fan of taxes at all, however as taxes are a necessary evil… Vacation/vacant second homes seem like a good thing to tax when we’re in the middle of a major housing crisis no?

What housing crisis? There are thousands for sale and rent. – Garth
===================

I have a solution to over debtor Canadians and over-spending Governments.

Put a 1/2% tax on interest payments. All types, mortgage, credit cards, vehicles, etc.
Take direct taxes off property.

And 1/2% tax on interest paid, instead of adding it to earnings.

Think of the changes.

#79 Dee on 03.18.18 at 1:25 am

what happens if home capital starts taking it on the chin again? I dont think we’ve seen the worst of it. Do problems there lead to problems with the big 6? I dont think this thing is contained and we do know some other lenders have issues outside of hcg

#80 Smoking Man on 03.18.18 at 3:56 am

To all the dogs that did not sell Toronto real estate when I did. It wasn’t a secret.

Your song.
https://youtu.be/vx2u5uUu3DE

#81 Stan Brooks on 03.18.18 at 7:39 am

#62 MF on 03.17.18 at 8:50 pm

I thought the purpose of this blog was crap talking Canadian real estate with the hope of saving some poor soul from debt slavery and bad investment. No?

I am not crap talking all Canadian institutions. But if you believe that BoC or current lieberal federal government does decent job, that is you right.

I prefer to look at facts, leaving believes aside.
No point arguing with believers.

My intent is not to irritate but educate you.

You know nothing about communism. It reject private property ownership of productive capital, it has nothing to do with modern China.

If you decide not to invest in China that is your right.
It seems everyone else is interested in doing Business with them. I personally don’t like their attitude and politics, but hey, our leaders let them become # 1 economy in the world. Ignore it at your own peril.

On Europe you are deadly wrong. Probably never been there.

#67 Big Kahuna on 03.17.18 at 9:40 pm

I don’t like Turkey’s political system.
But there economy is pretty good. Overall much better place than Saudi Arabia, our top ally in the middle east.
I did not hear you calling that one a dump.

BTW you comment on Sharia law seems like hate for another religion. I thought that was prohibited in Canada by law. No?

#82 I'm stupid on 03.18.18 at 8:22 am

This one is for Flop…

Talk about losing your shirt.

58 Elmartin Dr, Scarborough, ON M1W 3C5

Purchased May 5th 2017 for $1 380 000

Sold February 28 2018 for $1 060 000

That’s a loss of $320 000 plus $48 000 in land transfer costs, 40 000 in REALTOR fees, plus legal.

This dumb ass managed to lose over $400 000 in less than a year.

#83 Howard on 03.18.18 at 8:36 am

#226 Bitcoinnaire on 03.17.18 at 10:47 pm

Uh oh, Bitcoin has now “fallen” to the level it was in November!

How will they ever recover…?

Sure, if you bought in at 20K, you’re in for a bad time. The trick is to buy when the asset class is out of favour in the public perception, with no underlying fundamental flaws, which is RIGHT NOW. $6K is a very good entry point, because one can quite carefully compute the cost of Bitcoin related to the energy consumption needed to mine a single coin, and that value currently, with the current hash rates, is approx. $6K per BTC.

Buy the dip. We’ll see $100K in the next 1-2 years.

——————————

You said $100K by June….

#84 Howard on 03.18.18 at 8:40 am

#11 Felix on 03.17.18 at 3:18 pm

Thanks Ryan, you made my day :)

Love seeing all those pooches onboard with United Airlines.

Makes a cat purrrrrrr !

————————————

Rather in bad taste, even sadistic, to make light of pets dying on United Airlines flights.

That’s a cat for you. – Garth

#85 No thanks on 03.18.18 at 9:10 am

To Europe , to EM , to Canada , to silly bonds

S&P 500 . I add (if cash available ) on any 5-10%. I will use burrowed money when a 30% correction

Historically ;
-it’s worse correction took 5 years to recover . Don’t think need the money in 5 yes so I’m cool
-no other asset beats it . Not even close

I let history be my guide. .

#86 Dups on 03.18.18 at 9:18 am

Int. Markets can go up but currency conversion can bring them down at the same time. So the currency is as important as the market. You mentioned nothing on that.

#87 TRUMP on 03.18.18 at 10:29 am

FORD NATION & TRUMP INC.

WERE gonna make North America great again!!

Invest in your home countries.

The best countries on Earth

#88 Victor V on 03.18.18 at 10:44 am

As Toronto housing cools, A-Rod, Pitbull bring wealth ‘cheerleading’

https://www.bnn.ca/as-toronto-housing-cools-a-rod-pitbull-bring-wealth-cheerleading-1.1029261

Yet while the massive event promotes real estate – and this year, even bitcoin and cannabis investments – as ways to get rich, it comes at an inflection point in Canada’s largest housing market. Greater Toronto Area home sales plummeted 34.9 per cent year-over-year in February in the wake of several regulatory changes, according to the Toronto Real Estate Board.

“I think the purpose of those seminars is more for entertainment than for anything else,” said Hilliard MacBeth, an Edmonton-based financial advisor and author of the book When the Bubble Bursts: Surviving the Canadian Real Estate Crash.

“This is to keep people’s spirits up, and given how sales of single-family homes in Toronto are down, cheerleading might be a difficult task this year and so people are choosing to concentrate on bitcoin.”

#89 Stormy Daniels on 03.18.18 at 10:49 am

Ryan, my patience with you is running out :(

You’re supposed to be Garth’s wingman and flunkie, his very own Michael Cohen, but you instead keep acting like a complete dipsh*t.

Let me repeat, therefore:

If you do not deliver me at least $130,000 by March 25 I will go public with FULL DETAILS of my intimate relationship with Bandit and Garth Turner!

(Hint, hint – it happened at the dog park and I have security cam footage as well as voice recordings, and receipts from PetSmart and Victoria’s Secret)

And don’t lie again!!

Last week you thought you could fool me, giving me a $130,000 gift card for Belfountain Ice Cream Parlour, valid only on March 17. I went there to treat all my fans, and the place was CLOSED!!!

IT DOESN’T EVEN OPEN UNTIL APRIL 1 – you knew that, you bugger, didn’t you !!?!!

Last chance for you NOW.

(And don’t complain that poor little you can’t get the cash, Ryan. Any moron in the GTA can get a $200,000 HELOC if they barely have a pulse!!)

The clock is ticking for you and Garth and Bandit……

….Excuse me, I have a call waiting from CP24 – better make that payment date March 21, Ryan.

#90 acdel on 03.18.18 at 10:54 am

Great Movie..

Favorite line: “You control the debt, you control everything”!

#91 Madcat on 03.18.18 at 11:13 am

#78 Russ on 03.18.18 at 12:43 am

I said something similar in April of 2017:

“#22 Madcat on 04.20.17 at 6:48 pm
TAX DEBT/CURE BUBBLE/ GENERATE HUGE REVENUE FOR GOV COFFERS!

Their ideas suck… Here’s one for them that will generate tonnes of revenue without hiking the overnight rate…
Tax cheap money!!! Add 3% to new mortgages that would be collected by banks and handed over to the gov’t. That would jack that 2.5% mortgage rate to 5.5% and cure this bubble whilst generating heaps of cash to pay for bridges/schools etc…
This simple new tax would allow the Government to hike the interest rate without actually hiking the rate! Win! Win! They could slowly add the tax to existing mortgages over the course time (In five years existing mortgages to pay 1%, 10 years 3%).
This would also encourage people to SAVE instead of DROWN THEMSELVES IN DEBT!!!”

http://www.greaterfool.ca/2017/04/20/cold-comfort/

#92 Doug in London on 03.18.18 at 11:14 am

@Ace Goodheart, post #51:
I have much the same idea. There has been a lot of discussion about Bitcoin here in the last 4 months or longer. Personally I have absolutely NO IDEA what bitcoin will do in the future. Similarly, I have absolutely no idea how mining this Bitcoin actually works, but know it consumes a lot of energy. It’s my understanding some smart people in Iceland have been using the cheap electricity there to produce Bitcoins. Closer to home, I saw a clip on the news about some smart guy in Manitoba with computers running producing these Bitcoins using relatively cheap electricity there and then using the waste heat generated to heat buildings. It’s a good idea as it gets quite cold there in the winter. The money made pays the electric bill so it’s essentially free heat. If a lot of people get the same idea, the market will get flooded with Bitcoins which will only bring down the price.

Now back to investing in real world assets, I would rather invest in companies producing the power to make bitcoins, like Northland Power (NPI). Some of that power generation uses gas which needs to be transported, so I’ve been scooping up cheap pipeline companies like ENB and PPL.

#93 DanB on 03.18.18 at 11:51 am

“US equities have benefited from a slowly improving economy, a recovering financial industry, stronger corporate profits, a supportive central bank, and having a high exposure to the leading technology sector. But we believe things could be changing and we are now overweight international equities as we see EAFE and EM equities outperforming over the next few years.”…

Did this author forget the trillions of dollars of funny money injected into the global economy by the fed (QE1, QE2?) and the historically low-interest rates + ballooning debt. It’s obviously a fake recovery as wall street took all that funny money and left the main street in the slums. The big elephant in the room is being ignored, how fitting.

#94 Niagara Region on 03.18.18 at 11:59 am

REAL ESTATE IN THE NIAGARA REGION IS FALLING!

Here is Remax’s official take on RE in the Niagara Region:

http://www.remax-gc.com/mw0101-market-overview

Remax estimates that 20% of the purchases in the region for the two years prior to the April 2017 foreign tax law were made by Chinese nationals.

Although Remax strategically ends its charts in Dec 2017, it’s clear that RE in the Niagara Region is plummeting. Remax is scared: I’ve had the same real estate agent for five years, and this is the first such newsletter–designed to reassure would-be buyers–she has sent me.

I’m looking forward to owning my first home later this year.

Thanks, Garth (and Pink Snow), for encouraging us would-be house buyers to wait.

(From a happy professional in her early 50s who has waited patiently for 3 years for the end of the absurd climb in housing prices)

#95 Hana on 03.18.18 at 12:14 pm

Ryan, that is great post! I watched movie as well.
VDU or VEF? Which one should I buy?
Thanks,
Hana

#96 BS on 03.18.18 at 12:20 pm

#51 Ace Goodheart on 03.17.18 at 7:16 pm
RE: “I get pretty excited when I can find an asset on sale.”

Have a look at the TSX. Why are people fire sale – ing profitable corporations? Been like a kid in a candy store for about 3 months now, buying up companies like Enbridge, Bell, Interpipeline, Cineplex, and tons more, for over-sold prices that defy explanation.

All these stocks have some unique reasons for going down but dividend stocks in general are heading down because rates are heading up. Investors sell their dividend stocks when they can get a better fixed income return.

Don’t catch a falling knife. Rates are only starting to rise. More weakness to come. Cineplex has a PE of 27 which is not cheap for a theater stock and Enbridge is paying out more in dividends than it earns which means the dividend may not be safe.

I remember you talking about Corus Entertainment being a smoking buy a year or so ago? Down 50% in the past 7 months that dividend does not look so good when you lose half your capital.

#97 Tim on 03.18.18 at 12:48 pm

Thanks to Ryan for the data, and to Mark for his comments too.

Ryan, are the equity return figures in CAD terms or in native currencies? Also, total return or price return only?

#98 Mark on 03.18.18 at 1:30 pm

what happens if home capital starts taking it on the chin again? I dont think we’ve seen the worst of it. Do problems there lead to problems with the big 6? I dont think this thing is contained and we do know some other lenders have issues outside of hcg

The big-5/6 are relatively conservative in their business compared to the alternative lenders that tend to take more risks to cover their higher cost of debt and equity capital. A Canadian RE crash, if it follows the US model, will substantially wipe out the smaller banks (in the Canadian context, the credit unions), and “alternative” lenders. By ‘wiping out’, I don’t mean that depositors will be hurt, but rather, such institutions or the business of such institutions will be substantially absorbed into the big-5.

It will be in the national interest to see an orderly liquidation of housing excesses, and both the government and the big-5 banks have it in their economic interest to resolve the situation without loss of confidence in the Canadian economy.

I’ve written in the past that, after everything is said and done, the CMHC subprime mortgage insurance program may very well be a $200-$300B loss to the taxpayers. Government may attempt to recoup some of this through a surtax on bank profits. In other words, it won’t be clear sailing for big-5 shareholders either, and at a current 40% TSX weight, other sectors will need to take a leadership role as the FIRE sector can’t be a perpetual TSX overweight.

#99 DON on 03.18.18 at 1:48 pm

#65 CalgaryCarGuy on 03.17.18 at 9:24 pm

Re #204 Crowdedelevatorfartz 3/17/18

Why do BCers hate Albertans? It’s ugly. – Garth

+++++++

An itch we have to scratch?

If you want even more ridiculous.

Try the Edmonton vs Calgary rivalry.

Now THATS a pig wallow.

—————————————————————–

Wrong. The Calgary/Edmonton rivalry is good-natured Albertan competitivness and always has been. The B.C./Albertan issue is not even rivalry—it is pure dislike. A great many British Columbians will be quick and proud to tell you so.
*************************

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

Most likely it comes down to the arrogance on both sides. Two economic giants of raw resources.

I have an Albertan brother in law (great guy) and another good one from the centre of Canada (Toronto). Hell I married a girl from Toronto. I identify with them rather than some of the asswipes I grew up with.

Then again it could come from vacation homes, wages and arrogance when visiting neighboring provinces.

And the comment about marrying a girl from there…that only applies to the lower mainland. lol

Thanks for the info Ryan!

#100 AGuyInVancouver on 03.18.18 at 7:19 pm

China’s growth was 6.5%? I guess if you believe whatever figure Xi picks out of a hat. And don’t look behind that silk curtain, there’s a mother of a housing bubble behind it.

#101 NEVER GIVE UP on 03.19.18 at 1:30 pm

#15 Sideshow Rob on 03.17.18 at 3:36 pm
“Kathleen Wynne warns students to vote or old white people will decide the election.”

What a racist statement. How about this. Any time a politician insults any ethnicity, demographic group or gender they should be immediately tasered. Then they can think about what they said while they are lying on the ground twitching in their own drool.
===================================
It seems quite alright for White men and Christians to be insulted.

But if a white man makes a similar remark to another ethnic group he will be financially punished by losing his job or his company will have to disown him.

This is the “new” fair!