Number crunching

DOUG By Guest Blogger Doug Rowat

Harper’s Magazine was launched in June 1850 making it, according to Wikipedia, the second-oldest continuously published monthly magazine in the US. However, in 1984 the magazine developed a new feature—its monthly Index—which has become as famous as, if not more so, than the magazine itself. Editor Roger Hodge described the Index as “a statistical poem”—a listing of insightful stats, usually (but not always) connected thematically in some way.

The Harper’s Index entries range from the political (“Portion of likely US voters who think that Mike Pence would make a better president than Donald Trump : 1/5”) to the social (“Average amount Microsoft spends each month assisting people who need to change their passwords : $2,000,000”) to the outright strange (“Minutes for which food-storage containers must resist mauling to be designated “bear resistant”: 60”).

As our readers know, we only use ETFs in the construction of our portfolios. This means that we spend a lot of time looking at the ETF universe. According to Bloomberg, there are currently just shy of 630 ETFs listed in Canada with an average market cap of $259 million with entries from 28 different ETF providers. So, let’s take a look at this universe. With the Harper’s Index as our inspiration, here are some random, but hopefully revealing, stats related to the Canadian ETF universe (naturally, we don’t necessarily endorse any of the ETFs mentioned—it’s purely what the data presents):

  • Largest and smallest ETFs by market cap (minimum 3 years trading history): iShares S&P/TSX 60 Index ETF ($10.5 billion), BetaPro Gold Bullion–2x Daily ($2.1 million)
  • Expense ratio iShares S&P/TSX 60 Index ETF and BetaPro Gold Bullion–2x Daily: 0.18% and 1.47%, respectively
  • Average Canadian ETF universe expense ratio: 0.55%
  • Percentage listed as actively managed: 30%
  • Average expense ratio of actively managed ETFs: 0.70%, or 27% more than overall universe and 43% more than passively managed
  • Best and worst performing ETFs past year: Horizons Marijuana Life Sciences Index ETF (+166%), BetaPro Crude Oil–2x Daily Bear (-65%)
  • Average standard deviation (volatility) of Canadian ETF universe past year: 8.0
  • Average standard deviation (volatility) of Horizons Marijuana Life Sciences Index ETF: 53.8
  • Average standard deviation (volatility) of BetaPro Crude Oil–2x Daily Bear: 39.1
  • Average standard deviation (volatility) of Canadian ETF universe past 5 years: 12.8
  • Most and least volatile ETFs past 5 years (standard deviation): BetaPro Canadian Gold Miners 2x Daily Bull ETF (76.8), iShares Premium Money Market ETF (0.10)
  • Highest yielding ETF: Harvest Energy Leaders Plus Income ETF (8.7%)
  • Y-o-y % change in Harvest Energy Leaders Plus Income ETF monthly distributions: -47%
  • Number of ETFs below $25 million market cap ($25 million is often considered the minimum size for a Canadian ETF to remain profitable): 226
  • Number of ETFs focussed on women or gender diversity: 3 (BMO Women In Leadership Fund ETF, RBC Vision Women’s Leadership MSCI Canada Index ETF, Evolve North American Gender Diversity Index ETF)
  • Number of ETFs focussed on marijuana: 4 (Evolve Marijuana ETF, Horizons Emerging Marijuana Growers Index ETF, Horizons Marijuana Life Sciences Index ETF, Purpose Marijuana Opportunities Fund)
  • Number of Canadian ETFs with “2x” in their name: 20
  • Number of Canadian ETFs with “3x” in their name: 0
  • Number of ETFs in US universe with “2x” in their name: 34
  • Number of ETFs in US universe with “3x” in their name: 79
  • 5-year annualized return of Canadian leveraged ETFs: -8.7%
  • Percentage of Canadian leveraged ETFs posting negative returns after 5 years: 64%
  • Y-t-d return of Canadian leveraged ETFs: -1.6%
  • Average expense ratio of Canadian leveraged ETFs: 1.40% (2.5x ETF universe average)
  • Number of Canadian ETFs with “factor” in their name: 19
  • ETFs with the most indecipherable names (a subjective call): iShares Edge MSCI Multifactor Canada Index ETF, AGFiQ Enhanced Global ESG Factors ETF
Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.

 

80 comments ↓

#1 TRUMP on 09.08.18 at 3:16 pm

Here goes the number crunchin….

It’s a ZERO SUM game.

When the market CRASHES the poor will get poorer and the rich will get RICHER.

My doctoral math degree at it’s finest.

#2 Myra Andrews on 09.08.18 at 3:35 pm

Real Estate stats for the Greater Vancouver area from realtor Paul Boenisch

Sept 7 New 197 Sold 87 TI: 12,681
Sep 5|6 New 609 Sold 195 TI: 12,653
Sept 4 New 498 Sold 53 TI: 12,439

Inventory at the end of August was 12,510

#3 islander on 09.08.18 at 3:59 pm

https://www.globalpropertyguide.com/news-why-real-estate-prices-in-greece-are-set-to-rise-3362

Wanna buy in at the bottom??

“In October 2017 media published news about a Chinese investor who acquired more than 100 apartments in central Athens, in the neighbourhood of Exarchia in one transaction.”

Not the ‘best neighbourhood’ in Athens, but if you buy up 1/2 of it, I guess you can affect change!

Buy now or be priced out forever!!

#4 The Real Mark on 09.08.18 at 4:07 pm

“When the market CRASHES the poor will get poorer and the rich will get RICHER.”

How so? Usually market crashes destroy the wealth of the rich far more severely than the wealth of the poor. The poor don’t participate as heavily, if at all in the financial markets, and their capital tends to be heavily human capital. When the poor do participate in the markets, it tends to be weighted more towards fixed income — ie: savings accounts, bonds, GICs, rather than the 100% equity portfolios with extreme sector concentration that are typical of the richest people in the world. In both the 2001 and 2008 meltdowns, fixed income performed dramatically better than most other asset classes.

The next market crash may very well be curious, in that, since interest rates cannot meaningfully drop below zero, fixed income doesn’t have the chance of outperforming like it did in previous market crashes. Central bankers just don’t have much power to suppress interest rates. In the 1930s, when such happened, both cash and gold did very well in a systemically deflationary environment. Yes, I know the contemporary media portrays gold as performing well in strong inflation, which is true, but there is ample historic precedent to indicate that gold performs well in an environment of substantial deflation and asset value destruction. And very few rich people at this point own anything but trivial quantities of gold as portfolio allocations are very low. Certainly nowhere near enough to hedge losses in their other assets should historically similar situations of severe financial market losses occur. Your typical poorer person, who may have a little bit of gold in a wedding ring or some jewelry, may very well have more gold and fixed income investment relative to their overall wealth, than a billionaire.

Another curious thing happened in the 2008 crash, and that was, because a large swath of the population was highly leveraged, and housing prices collapsed so quickly — negative equity was created on a widespread basis. Negative equity means, in the literal sense, that a child, with presumably minimal assets and no liabilities, was wealthier than a very large number of Americans. So the historically poor, the young, actually found themselves comparatively very wealthy. Thus disproving the claim that the market crash made the poor poorer — the poor actually got richer. Especially so when combined with the redistributive “social programs” that were enacted in the aftermath.

#5 not so liquid in calgary on 09.08.18 at 4:10 pm

Okanagan Ramping Up “Stop the Spec Tax” and “Scrap the Spec Tax”

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

Thanks for the link in yesterday’s comment section… I signed the petition

#6 martin on 09.08.18 at 4:12 pm

to #1

—–

you made me laugh and I hadn’t had a great laugh in a little while about this finance ETF ‘s

#7 crossbordershopper on 09.08.18 at 4:15 pm

the real question is two, one is why do most canadian still have mutual funds sold by an agent at high mer fee’s with sub par performance compared to the us.
secondly, with the advent in the us as close to zero or actual zero cost trading, jp morgan at zero and schwab and etrade at 4.95, let alone others.
people with a simple buy can buy the market at next to nothing fee, do they need another layer of manager to manage which diversified portfolio.
in context i dont see any value added proposition that advisors bring, it used to be 15 years ago that you would have access to ipo etc.
but now, no new issues, sub par candian performance, and high mer fee’s. i have no idea why anyone has a broker or advisor.
i have actually only used a travel agent once in my life when i went to china, i must have taken 150 airflights in my life, i dont know. do i really need someone to help me buy a canadian back stock. like really. what insight, wisdom etc can you add to the already existing market or my personal position. Canada is a craziest place, poor performance and high fee’s.
so of course go to america where you have access to the world, and trade to next to nothing.

#8 martin on 09.08.18 at 4:20 pm

If you are the average Joe and you have some savings around Your best bet it’s to always invest that very cash. Either the market crash or not it’s irelevant. If America is going down, then might as well you got to go down too.

Where else other than the United States of America can you put and trust your hard earnrd money , wake up guys.

When you see all Canadian Indian dudes buying 3-4 homes here in Toronto that’s when you know that you’re doing something right by staying away.

cheers

#9 Honey Dripper on 09.08.18 at 4:22 pm

Most are just crap along with Efficient Market Theory
Learn to DIY or use Turner Investments if yiu need to hold hands.

#10 Jungle on 09.08.18 at 4:24 pm

For ETFS the largest and most liquid are the best bet, stick with the board index.

If not, VGRO has made this really easy now.

#11 Jungle on 09.08.18 at 4:36 pm

The stress test didn’t do anything to Toronto prices.

Mortgage brokers and bears said a 20% loss in buying power would greatly effect the market. Fear mongering was aroused, promising to be an impact.

Dec 2017 (Stess test starts Jan 1 for all)

Detach $1,250,235
Condo $532,700

Aug 2018
Detach $1,244,275
Condo $585,355

And the market is stable, NOT unstable.

Condos under 2 months of inventory

Detach 2.8 months of inventory

I think what we saw is a slow down in acceleration.

#12 Jungle on 09.08.18 at 5:01 pm

The Ontario GOV forecast the GTA population will be 10 million by 2041. Where are they going to build houses in Toronto? No room.

Subway and highways over capacity for years now. Rush hour starts at 12 noon sometimes. A lack of infrastructure investment, policy errors keeps local RE holding firm price. BILLIONS needed for investment and this seems unlikely anytime soon.

Immigrants keep POURING in. Cheap RE is not going to happen. A premium more likely. RE will be PRIME and not for everyone- especially with the wealth inequality supporting it. Plus, with the lack of expanded transit and highways, more people are willing to pay extra for to live closer to work in the core.

#13 espressobob on 09.08.18 at 5:02 pm

Temptation is one of those things that can damage ones portfolio. Something I’ve learned reading Garths blog for some time.

Invest in the indices and keep it balanced. Growth is built on the principle of compounding and this is another good reason to rebalance once in a while.

Gambling in leveraged, inverse, sector, or commodity plays is a fast track to disaster and regret. Just ask any goldbug, energy bull, or cryptonite how things are working out? Still tempted?

#14 Dave on 09.08.18 at 5:07 pm

These days everyone that I know that is middle class is living pay check to pay check. Never seen things so bad, the real inflation for rent, auto, food and clothes is double digit high.
Now with interest rates increasing and housing decreasing something major is going to break.

#15 OttawaMike on 09.08.18 at 5:12 pm

Using greaterfool blog logic — buy shares of poor performing, unloved assets. So we should be loading up on leveraged ETFs?

#16 Broke Teenager on 09.08.18 at 5:50 pm

“according to Wikipedia,”

Your Grade 12 teacher would tell you that WIKIpedia is not a reliable source while texting you to come by her house for some female empowerment!

#17 Hawk on 09.08.18 at 6:00 pm

This elderly gentleman has an intelligent and rational position on the current US/Canada trade situation.

https://www.youtube.com/watch?v=o5legLpp_cE

#18 Dogman01 on 09.08.18 at 6:07 pm

Hi Doug
Any comments on the BMO covered call ETF’s.

Usefull?

ZWU
ZWB
ZWH
ZWE
They seem steady , MER

#19 Dogman01 on 09.08.18 at 6:09 pm

Rich get richer:

“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

“At times like the present, when the evils of unsound finance threaten us, the speculator may anticipate a harvest gathered from the misfortune of others, the capitalist may protect himself by hoarding or may even find profit in the fluctuations of values; but the wage earner – the first to be injured by a depreciated currency – is practically defenseless. He relies for work upon the ventures of confident and contented capital. This failing him, his condition is without alleviation, for he can neither prey on the misfortunes of others nor hoard his labour.”
Grover Clevland 1837

“Capitalism is a little like cell division: absolutely necessary to the organism and fatal if it runs amok.”- steelcityguy

“To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Adam Smith The Wealth Of Nations, Book I, Chapter XI, Conclusion of the Chapter, p.267, para. 10.”

#20 Stan Brooks on 09.08.18 at 6:12 pm

#12 Jungle on 09.08.18 at 5:01 pm
The Ontario GOV forecast the GTA population will be 10 million by 2041. Where are they going to build houses in Toronto? No room.

In 2041 there will be no jobs in GTA whatsoever due to automation and AI, how would these 10 millions be sustained and what exactly will they do?


Subway and highways over capacity for years now. Rush hour starts at 12 noon sometimes. A lack of infrastructure investment, policy errors keeps local RE holding firm price. BILLIONS needed for investment and this seems unlikely anytime soon.

Immigrants keep POURING in. Cheap RE is not going to happen. A premium more likely. RE will be PRIME and not for everyone- especially with the wealth inequality supporting it. Plus, with the lack of expanded transit and highways, more people are willing to pay extra for to live closer to work in the core.

You are describing a sh.thole. You literally can’t live there now.
Who would want to live there in the future? Closer to work? I just told you that there will be no work in 2041 in GTA. Even with a house or 2 or 3, what would you eat?

You seems like in a nervous breakdown, hoping that screaming/capitalizing will make your delusions true.

Which part of ‘the real estate party is over’ is not clear to you, realtor?

The next patient please.

#21 Doug Rowat on 09.08.18 at 6:23 pm

#15 OttawaMike on 09.08.18 at 5:12 pm

Using greaterfool blog logic — buy shares of poor performing, unloved assets. So we should be loading up on leveraged ETFs?

Americans love the 3x leveraged ETFs–go big or go home, I suppose. However, unless you are a brilliant short-term market timer, and few are, leveraged ETFs are pointless.

–Doug

#22 Doug Rowat on 09.08.18 at 6:34 pm

#7 crossbordershopper on 09.08.18 at 4:15 pm

but now, no new issues, sub par candian performance, and high mer fee’s. i have no idea why anyone has a broker or advisor.

Because investors want more than active management, they want sound advice in difficult markets to avoid making emotional, imprudent decisions and they want life-long financial planning and tax advice. We also never get involved in IPOs or new issues. Typically, these enrich the advisor, not the client.

–Doug

#23 Jungle on 09.08.18 at 6:38 pm

@stan Traffic and transit are common problems in large, world class cities, yet they are still desired due jobs, housing density, opportunities, communities, cultures, etc the list goes on.

On a world scale we still rank high due to stable economy, low crime rate, political stable, developed nation with social benefits and clean water.

A continued population increase has huge economic benefits, that is why the Gov is increasing target to 370k by 2020

#24 arfmoocat on 09.08.18 at 6:42 pm

1)

It’s a ZERO SUM game.

When the market CRASHES the poor will get poorer and the rich will get RICHER.
……………………………………………………………………

It’s a ZERO SUM game

When it ends we all end up in the same pile of dirt

#25 TRUMP on 09.08.18 at 6:56 pm

#4 Mark….. I guess you live in that perfect world where everyone you know and associate with is quite well off. You should take a trip to the states sometime and just see with your own eyes the destruction that 2008 caused and how many people are still struggling. There are more people on social assistance, more people on drugs, and more people not willing or able to work than ever before. The government has skewed the unemployment numbers making us believe that we are at full employment but the reality is that there are just fewer people in the work force which makes the equation look better.

Babies, gold, and social programs?????

God please dont let them legalize weed.

#26 Bytor the Snow Dog on 09.08.18 at 7:13 pm

I like the fake Real Mark’s comments better than the real Real Mark’s.

#27 Smoking Man on 09.08.18 at 7:16 pm

This is why Trump is building up space force.

https://youtu.be/3VSdekRa7As

#28 waiting on the westcoast on 09.08.18 at 7:56 pm

#26 Bytor the Snow Dog on 09.08.18 at 7:13 pm says… “I like the fake Real Mark’s comments better than the real Real Mark’s.”

+1

#29 X on 09.08.18 at 8:14 pm

The random ETF stats were interesting.

#30 Ace Goodheart on 09.08.18 at 8:17 pm

So in other words, avoid ETFs unless you know what you’re doing.

Gotcha.

Same as stocks bonds and preferreds.

Been in the game (RE, ETFs, stocks, bonds) for 17 years. My yearly return has never been under 10%

But I knows what I be doin’

Yeah, most peeps need an advisor.

Investing is not a do it yourself sort of thing.

#31 Ace Goodheart on 09.08.18 at 8:28 pm

All I have been doing quite honestly investment wise the last year or so is buying preferred shares.

There are some ridiculous deals out there for cumulatives with rate reset clauses that would make a Wall Street junk bond trader blush.

Yeah never underestimate a company’s ability to make dumb share issuance decisions in a low interest rate environment.

There is some seriously juicy stuff out there still flying under the radar.

Buffett type mis valued stuff.

A preferred share is a bond with benefits.

Don’t miss out peeps.

#32 Sydneysider on 09.08.18 at 8:32 pm

So Doug, what was the average return on the non-leveraged ETfs? That would be an interesting statistic.

#33 Fish on 09.08.18 at 9:06 pm

Ontario health minister eyes ‘system transformation’ for health-care sector

Christine Elliott says government will address overcrowding, but concerned about finances
CBC News

September 06, 2018

https://www.google.ca/amp/s/www.cbc.ca/amp/1.4813513

#34 akashic record on 09.08.18 at 9:09 pm

Doug, what is the YTD performance of the balance ETF portfolio?

#35 Doug Rowat on 09.08.18 at 9:17 pm

#32 Sydneysider on 09.08.18 at 8:32 pm

So Doug, what was the average return on the non-leveraged ETfs? That would be an interesting statistic.

Non-leveraged ETFs far outnumber leveraged ETFs, but on average, non-leveraged ETFs have returned 5.3% annualized over past 5 years.

–Doug

#36 Fish on 09.08.18 at 10:13 pm

Former adviser on NAFTA talks trade negotiations
News
September 7, 2018 08:17

https://www.cbc.ca/player/play/1314994755944

#37 The Real Mark on 09.08.18 at 10:27 pm

“Non-leveraged ETFs far outnumber leveraged ETFs, but on average, non-leveraged ETFs have returned 5.3% annualized over past 5 years.”

All that fanciness. Still can’t beat plain ol XIU which returned 8.84% annually looking back 5 years as of August 31.

The weird thing is that XIU, Canada’s largest ETF and a direct descendant from the first ETFs available worldwide has been shrinking like crazy recently in AUM, and was actually beneath 400M shares outstanding. Canadians may be buying ETFs, but they certainly don’t seem to be taking a liking to the best performing and most liquid ones.

#38 Tony on 09.08.18 at 10:33 pm

The biggest “sucker money of all time” is presently in the Canadian marijuana stocks and marijuana ETF’s. Many times what was the best performing ETF’s will become the worst performing ETF’s. Looks like that will be the case in the next few months.

#39 TOrealtor on 09.08.18 at 10:39 pm

Had this one come across my desk from a colleague

278 Dunview Ave, North York

sold for $3.4mm in Mar 2017
Sold for $2.4mm in Aug 2018

Loss = $1.0mm + other fees/costs.

This fall/winter is not looking good even if Jungle keeps pumping it up. Jungle = middle age asian who is over leveraged in the real estate game.

#40 Tony on 09.08.18 at 10:41 pm

Re: #4 The Real Mark on 09.08.18 at 4:07 pm

The young inherit all the debt and hangover from the previous eras. This is what kicking the can down the road accomplishes.

#41 Tony on 09.08.18 at 10:54 pm

Re: #15 OttawaMike on 09.08.18 at 5:12 pm

When everything it rigged it seems what is the most expensive gives the best return and what it the least expensive gives the worst return. Or put another way its what they’re going with no matter what the fundamentals are. The opposite of common wisdom when everything used to be on the level in the U.S. stock market. Sir John Templeton must be rolling over in his grave.

#42 Dean Lester on 09.08.18 at 11:08 pm

How long before we have a Turner Investments ETF, then all we have to do is buy that and never have to worry about anything else ever again except when the Blue Bombers will finally capture that elusive Grey Cup Win?

#43 The Real Mark on 09.08.18 at 11:09 pm

My mom’s basement has appreciated more than the S&P

#44 Oft deleted much maligned stock.picker on 09.08.18 at 11:10 pm

Trudeau blew Canada’s political currency and now he’s being mocked in international press every day.

Yesterday it was NYT and India….today Russia and Mexico. Canada is a lughing stick and Trudeau is a clown. Dummy’s slip about a descent into chaos is foremost in his slithering tongue.

https://sputniknews.com/amp/world/201809081067865784-canada-pm-trudeau-diversity-entropy/

#45 10 Million is nothing on 09.09.18 at 12:01 am

@20 Stan Brooks

Toronto can definitely get A LOT worse and the people will still keep coming. Even 10 million is nothing. Look at Beijing. It’s a dirty, crowded metropolis of 20 million people and they keep pouring in from surrounding areas. Real estate prices are through the roof there. So don’t worry, Toronto will always have its real estate buyers because it is a very clean and uncrowded city in comparison.

#46 Smoking Man on 09.09.18 at 12:11 am

Doug your post was brilliant. I think I need to give you a few lessons in Herdonomics.

You start tossing % symbols and decimals you’re going to chase off all the females. Perhaps a shirtless pic of you might keep em around.

Not sure if Garth let you read my book. But if you did.

The arch enemy of the world is a fellow Nictonite that goes by the name of Shlong Zumaga.

I hate him, that’s why I helped Trump win the election.

This guy is scared shitless of Shlong Zumanga.

I’m not.

https://www.google.com/amp/s/www.express.co.uk/news/weird/687350/Did-EU-chief-confirm-aliens-EXIST-Juncker-speaks-of-BREXIT-to-leaders-of-other-planets/amp

#47 Dave on 09.09.18 at 12:32 am

Any good analyst will tell their audience that the leveraged ETF’s are to only be used as a very short term trading tool. They are not for long term hold

#48 Smoking Man on 09.09.18 at 1:38 am

James you Harley bicept beast who ckickend out at the smoking man duke of Devon event last June. Nictoines are indistructable in spite of all your efforts.

We have special powers.

https://youtu.be/AsrnGyRS6l4

#49 MF on 09.09.18 at 1:38 am

#20 Stan Brooks on 09.08.18 at 6:12 pm

“You are describing a sh.thole. You literally can’t live there now.
Who would want to live there in the future? Closer to work? I just told you that there will be no work in 2041 in GTA. Even with a house or 2 or 3, what would you eat?”

-I was downtown Friday with some friends. Everyone having a blast around us. All of us doing well. All the young people back in school were out for a night on the town. Youthful energy everywhere.

What you cannot seem to fathom, is that urbanization is the future. This is especially true for young people. #23 Jungle is correct and you are wrong. Give it up already.

MF

#50 Stan Brooks on 09.09.18 at 2:33 am


#23 Jungle on 09.08.18 at 6:38 pm
@stan Traffic and transit are common problems in large, world class cities, yet they are still desired due jobs, housing density, opportunities, communities, cultures, etc the list goes on.

On a world scale we still rank high due to stable economy, low crime rate, political stable, developed nation with social benefits and clean water.

A continued population increase has huge economic benefits, that is why the Gov is increasing target to 370k by 2020

You are so transparent in your self interest.
Realtor with no work or somebody with a huge mortgage trying to justify the decision to buy at the top.

All world class cities are or were for a very long time either capitals or financial centres of prominent world empires and power states.
Reachable, in close proximity, with cultural traditions.

None was made such by pumping the biggest real estate bubble in history. That is transitory.

You are putting the cart before the horse, trying to use the outcome from the biggest credit bubble the world has ever seen – high prices, overpopulation, crumbling infrastructure and use that as a reason to justify the ridiculous prices in first place.

Pathetic.
If Toronto was a world class city no mortgage insurance of 1 trillion would have been necessary.

Even world class cities have housing rises and price declines.

No world class city has 8 hours of wait time in the hospital emergency.

Toronto is the pot capital of the world, the capital of a bankrupt province, drifting father and father away from the world’s biggest and wealthiest trade partner and its markets – US.
There goes the cheap labour camp narrative, Mexico was much better than us in capitalizing on it.
Is Mexico City a world class city?

a decade ago every Torontonian regarded Chicago as a wealthier city is Chicago a world class city?

Look at New York, holding all the money of the world, professionals there make as bonuses alone twice than the yearly salaries in Toronto or Vancouver with much lower taxes, why would Toronto and Vancouver (as they are currently) be more expensive than New York?

Because of ‘free health care’ or because everyone wants to live here?

Take you head out of you butt.
Importing poor people into a cheap labout camp with no work does not make a city wealthier or world class.

Toronto lost his appeal for immigration 15 years ago so we had to compensate for with the credit bubble.

Now we are running on the fumes of it.
Cheers,

#51 ts on 09.09.18 at 6:56 am

@45

“Look at Beijing. It’s a dirty, crowded metropolis of 20 million people and they keep pouring in from surrounding areas. Real estate prices are through the roof there.”

This may be true; however, how long did it take to become a “world class” city and how long did it take for real estate prices to increase to what they are today? certainly, it was not in the last 10 years.

#52 FOUR FINGERS WATSON on 09.09.18 at 7:26 am

DELETED

#53 BillyBob on 09.09.18 at 7:37 am

#45 10 Million is nothing on 09.09.18 at 12:01 am
@20 Stan Brooks

Toronto can definitely get A LOT worse and the people will still keep coming. Even 10 million is nothing. Look at Beijing. It’s a dirty, crowded metropolis of 20 million people and they keep pouring in from surrounding areas. Real estate prices are through the roof there. So don’t worry, Toronto will always have its real estate buyers because it is a very clean and uncrowded city in comparison.

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

This is such a laughably stupid attempt to equate Toronto to Beijing that I can’t even bring myself to debunk it beyond highlighting it.

The REALTORS™ are truly scraping the barrel now.

#54 dharma bum on 09.09.18 at 8:28 am

Just got a lowball offer on the house I’ve listed.

One day on the market.

12.7% under asking.

Yikes.

#55 Stan Brooks on 09.09.18 at 8:31 am

#45 10 Million is on 09.09.18 at 12:01 am
#49 MF on 09.09.18 at 1:38 am

You realtor are really funny.
I know it is hard to be logical and not emotional when the buyers have disappeared, the commission is long gone and the hungry stomach plays the Chopin’s funeral march. Pot just makes you more delusional.

Looking down upon Beijing…

It is the capital of China – a world empire for millennia,
with rich history and culture, population of 1.3 billion (40 times that of Canada) , that grew by 10 % + in the last 30 years and is the second largest economy on earth with 500 billions in trade surplus yearly with US.

Ever wondered why there are no more people from China coming here in the last 15 years?

Our immigrants are mostly from war torn Middle east, overpopulated India, the Philippines. Not even Africa or the Caribbeans. When was the last time you saw immigrants from Mexico here?

Good, hard working people but hardly rich.
Making 35 k in before tax income here you need 40 times annual average before tax income to purchase a house and 25 times annual before tax income to purchase a condo in GTA and start paying maintenance fees.

To make it ‘severely unavoidable by any world standards (at ratio of 10) you need to compress 4-5 families, 20 people in a house, 3 (12 people) in a condo to justify current prices.

Delusion squared.

We used to be immigrants magnet, not any more.
If immigration worked we wouldn’t need this giant, the biggest ever credit bubble and 1 trillion in ‘insured mortgages’ as no bank will touch that garbage otherwise.

#56 Stan Brooks on 09.09.18 at 8:36 am

#45 10 Million is on 09.09.18 at 12:01 am
#49 MF on 09.09.18 at 1:38 am

You realtors, including the Jungle, are really funny.
Try to align your story-line, one time GTA is underpopulated, beautiful, with great infrastructure, magnet for the rich, cultural capital,…

Then is suddenly becomes crowded, overpopulated, with crumbling infrastructure, where people will kill for a house. With 8 h waiting time at the emergency.

So which one it is?
Cheers.

#57 dharma bum on 09.09.18 at 8:39 am

#38 Tony

The biggest “sucker money of all time” is presently in the Canadian marijuana stocks and marijuana ETF’s.
——————————————————————–

Up In Smoke!!!

https://www.youtube.com/watch?v=CWxgfTMLtc0

#58 Jungle on 09.09.18 at 9:03 am

#39 torealtor

That transaction likely didn’t close and treb doesn’t go back to revise failed closing sales in reports. So many transaction you find like this didn’t lose A million dollars, they likely already in the market a long time, some when prices were 1/12 the cost or have a lot of money to be holding 2-3m real estate.

It was estimated hundreds maybe thousands of transactions didn’t close back in April 2017 when unfair housing plan announced and a deal is not closed successful until cash delivered in hand

At the same time all landlord jacked rents 20% almost overnight sure to inflation restriction on raising rent

This killed the whole rent is better than buying especially since Gta re didn’t crash like the bears expected.

#59 Jungle on 09.09.18 at 9:15 am

Supply and demand says it all Stan. And what that is telling us is market is stable, toronto desirable.

I was bearish for long time but forgive myself and horrible wrong on the market as I expected this to come to horrible ending.

I can’t speak for the rest if the country as I don’t follow to closely I can say Gta is stronger
Economically and more populated. The is insane opportunity here we have the second biggest tech corridor next to silicon Valley

Not a realtor but thankfully never bet against or tried to time the market. Just did my last mortgage renewal last week will be done next
Year.

Just like my case study realarive who bought worse time 1990, by the time 12years went by mortgage was paid off , market recovered and made out well considering.

The days of buying detach in Toronto as typical first time buyer are gone, welcome to the property ladder working your ass off and not expecting everything in life to come easy.

Seems like most world class cities would you expect anything less?

#60 Happy Housing Crash Everyone! on 09.09.18 at 9:21 am

Stan Brooks on 09.08.18 at 6:12 pm
#12 Jungle on 09.08.18 at 5:01 pm
The Ontario GOV forecast the GTA population will be 10 million by 2041. Where are they going to build houses in Toronto? No room.

In 2041 there will be no jobs in GTA whatsoever due to automation and AI, how would these 10 millions be sustained and what exactly will they do?

Subway and highways over capacity for years now. Rush hour starts at 12 noon sometimes. A lack of infrastructure investment, policy errors keeps local RE holding firm price. BILLIONS needed for investment and this seems unlikely anytime soon.

Immigrants keep POURING in. Cheap RE is not going to happen. A premium more likely. RE will be PRIME and not for everyone- especially with the wealth inequality supporting it. Plus, with the lack of expanded transit and highways, more people are willing to pay extra for to live closer to work in the core.

You are describing a sh.thole. You literally can’t live there now.
Who would want to live there in the future? Closer to work? I just told you that there will be no work in 2041 in GTA. Even with a house or 2 or 3, what would you eat?

You seems like in a nervous breakdown, hoping that screaming/capitalizing will make your delusions true.

Which part of ‘the real estate party is over’ is not clear to you, realtor?

The next patient please.
————————————————————–

Bahahahahahahahahaha You tell those stupid SHYSTERS. 1 in 3 houses for sale in Toronto is EMPTY. Yup no one lives there. How many desperate SHYSTERS on the verge of going BANKRUPT are SCREAMING buy! buy! buy! or else they are finished?

Happy Happy Housing Crash Everyone! :-)

#61 Doug Rowat on 09.09.18 at 10:00 am

#47 Dave on 09.09.18 at 12:32 am

Any good analyst will tell their audience that the leveraged ETF’s are to only be used as a very short term trading tool. They are not for long term hold

I thought the stated long-term performance implied that. But see #21. As almost everyone is a terrible short-term trader, I would suggest not using them at all.

–Doug

#62 MF on 09.09.18 at 10:09 am

#50 Stan Brooks on 09.09.18 at 2:33 am

We get it. You missed the RE opportunity years ago in Toronto and are bitter. Join the club.

Your last post is hilarious. Toronto is the New York of Canada. Does any other Canadian city compare? There are big salaries here too. There are tons of immigrants doing well.

All you have to do is talk to others to see. The fact you keep posting this garbage means you are either delusional, in denial, anti social..or all of the above.

Crying about RE does not mean it will go down. I learned that a while ago. Others have learned it as well. Now it’s your turn.

MF

#63 MF on 09.09.18 at 10:17 am

#56 Stan Brooks on 09.09.18 at 8:36 am

“You realtors, including the Jungle, are really funny.”

Lol buddy I’ve been posting on here for 5 years complaining about my rent in my one bedroom condo. Realtors are scum 100%. But they have won. The market is not going anywhere. Get used to it.

I wish I bought years ago, but, like you, I assumed the market would roll over.

Once again, time to realize we lost and it’s over and stop complaining. you are worse than a high school kid.

MF

#64 Stan Brooks on 09.09.18 at 10:36 am


#59 Jungle on 09.09.18 at 9:15 am
Supply and demand says it all Stan. And what that is telling us is market is stable, toronto desirable.

Exactly, supply and demand determine prices. Desire by the poor means nothing.

And as there was lack of any demands for like 15 years in a row, we had to invent mortgage insurance, 1 trillion of it in order to boost artificial demand from ultra-sub-prime borrowers who would never qualify for a loan otherwise.

Now with the whole economy depending on housing and unable to raise rates meaningfully we are stuck with the consequences – depreciating currency, inflationary depression.

This Ponzi scheme is over.

#65 Stan Brooks on 09.09.18 at 10:50 am


#62 MF on 09.09.18 at 10:09 am
#50 Stan Brooks on 09.09.18 at 2:33 am

We get it. You missed the RE opportunity years ago in Toronto and are bitter. Join the club.

Your last post is hilarious. Toronto is the New York of Canada. Does any other Canadian city compare? There are big salaries here too. There are tons of immigrants doing well.

Bhahahahahha. Hungry realtor,

You did not miss the crypto currencies meteoric rise, right? Classical FOMO, except it does not work any more.

GTA is 6 millions, in a country of 37.
New York is 8.5 millions in a country of 330 millions but controls the world economy, banking.

Keep repeating that ‘the new New York delusion’, you might eventually believe it yourself.

#66 Stan Brooks on 09.09.18 at 11:25 am


#63 MF on 09.09.18 at 10:17 am
#56 Stan Brooks on 09.09.18 at 8:36 am

“You realtors, including the Jungle, are really funny.”

Lol buddy I’ve been posting on here for 5 years complaining about my rent in my one bedroom condo. Realtors are scum 100%. But they have won. The market is not going anywhere. Get used to it.

I wish I bought years ago, but, like you, I assumed the market would roll over.

Once again, time to realize we lost and it’s over and stop complaining. you are worse than a high school kid.

MF

I have no desire to buy your real estate.

I care when my country’s economy and currency is destroyed by incompetents and thieves in a really ridiculous way.
You should too.

Soon you will see the roll over.

I am not sure what losses you are referring to.
I am absolutely delighted by the performance of my portfolio. I have been preaching about investments in US for years here.

#67 NoName on 09.09.18 at 11:31 am

problem solved…

Purdue Pharma, the maker of OxyContin, has received a patent designed to treat opioid addiction.

https://www.cbsnews.com/amp/news/oxycontin-maker-receives-patent-for-drug-to-treat-opioid-addiction/?__twitter_impression=true

#68 Long-Time Lurker on 09.09.18 at 11:40 am

Off topic but interesting.

I’m in the US right now. My young relative was taking Ritalin for ADHD. Apparently, Ritalin is legal watered down meth. I don’t remember the exact name but it’s called something like methylphenidate. Even his doctor told him was meth. So they’re giving meth (like methamphetamine) to kids and teenagers down here.

My young relative said he took the Ritalin for three weeks then quit because he was getting dependent on it.

He also said his friends ate a weed gummy bear and were completely stoned for twenty minutes. They also said they still felt the effects the next day. They had to wait a couple of hours before they could walk home.

Maybe I’ll start calling weed: Justin’s Soma? (Brave New World)

#69 joblo on 09.09.18 at 12:15 pm

4MORE years!
Entropy is our strength!
T2 crew, brilliant minds!
just watch this….

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

#70 Jungle on 09.09.18 at 12:18 pm

The 0-5% down mortgages was risky but these were not the same level of sub prime NINJA loans like the states, applicants still had to meet strict underwriting LTV and income metrics with CMHC and then the banks, then show source proof of down payment beyond 3 months. + they are backed by the taxpayer. So three levels of protection?

The banks are well capitalized, delinquency rates near all time low, loan and loss previsions improving from almost non-risk perspective on the back of a strong and growing economy.

Housing is about 20% of GDP. The rest of the economy (80%) can easily pick up the slack; it’s 4X bigger than RE.

To show this, 2nd quarter GDP was 2.9% despite a slowing RE market across the country.

#71 Fluorine on 09.09.18 at 12:36 pm

Heya Doug,

Is Harvest Energy Leaders Plus Income ETF just a bunch of bundled mineral/oil royalties? Or is the payout ratio higher than the income from it’s holdings?

Seems like a strange way to operate, unless you’re just trying to attract people who aren’t paying attention with a large distribution.

#72 Dissident on 09.09.18 at 12:44 pm

#68 Long-Time Lurker on 09.09.18 at 11:40 am

This is common knowledge. Watch “Take your pills” on Netflix, a documentary about ADD medications basically being meth. Pretty cray cray.

Also, ingesting ‘weed’ products orally is bad news. You can barely control the effect. Smoke it instead.

Nobody should smoke anything, obviously. – Garth

#73 T on 09.09.18 at 12:47 pm

#62 MF on 09.09.18 at 10:09 am
#63 MF on 09.09.18 at 10:17 am

Hey MF, you can’t teach stupid and it’s probably best to ignore Stan. He’s going to drop from a heart attack one day if he keeps it up.

Now, I will disagree with you on a few points, as always.

1. Toronto is not Canada’s New York. Montreal always has been and always will be. Just because Toronto builds a few new towers doesn’t make it the centre of finance in Canada. You should go visit Montreal and actually walk the financial core, BMO’s first building, etc. Yes Toronto has financial services, but Montreal has the real wealth in Canada and finiancial head offices. I would tend to attribute Toronto to more of a working class city leaning towards tech lately.

2. Real estate will roll over. It sucks to miss out on years of gains, but life goes on. I missed the spike in condos since I sold my 2 bed on queens quay in 2016, I probably missed out on at least an easy $100k. I’m watching the listing data (actual data not a site) and condos look to be starting a big leg down. Doesn’t mean much to you I’m sure, but it’s there in the data and I’ve seen this play out before. I felt it was better to get out early then late, I still feel I made the right choice.

3. Never classify yourself as a loser. There are winners, and losers, but for that you have to play. Renting isn’t playing.

You are one of the posters I disagree with often here, but I get the feeling you are a decent person. Keep your head up MF, your time with come to buy, just be ready for it.

#74 Tony on 09.09.18 at 12:50 pm

Re: #54 dharma bum on 09.09.18 at 8:28 am

Anyone in Alberta would take that in a heartbeat. Problem is it could years before they even get one offer.

#75 LP on 09.09.18 at 1:15 pm

#24 arfmoocat on 09.08.18 at 6:42 pm

#1 It’s a ZERO SUM game

When it ends we all end up in the same pile of dirt
**************************************
You’ve modernized the old Italian saying: “We could learn a lot from crayons… Some are sharp, some are pretty and some are dull. Some have weird names, and all are different colors, but they all have to live in the same box.”
(Author unknown)

#76 SoggyShorts on 09.09.18 at 1:29 pm

#72 Dissident on 09.09.18 at 12:44 pm
#68 Long-Time Lurker on 09.09.18 at 11:40 am
Also, ingesting ‘weed’ products orally is bad news. You can barely control the effect. Smoke it instead.
**********************
I’m not sure that’s true at all. In pill or liquid form can’t you completely control the amount THC and CBD?
Netflix series “explained” has a quick show about weed

#77 KLNR on 09.09.18 at 1:51 pm

@#63 MF on 09.09.18 at 10:17 am

you’re better off ignoring Stans posts lest his bitterness rub off on you. Not sure why he posts the same nonsense on here 30 times a day.

#78 Elon sky pilot on 09.09.18 at 1:54 pm

72 Dissident on 09.09.18 at 12:44 pm
#68 Long-Time Lurker on 09.09.18 at 11:40 am

This is common knowledge. Watch “Take your pills” on Netflix, a documentary about ADD medications basically being meth. Pretty cray cray.

Also, ingesting ‘weed’ products orally is bad news. You can barely control the effect. Smoke it instead.

Nobody should smoke anything, obviously. – Garth

Dude..I beg to differ… we are gonna colonize Mars any day… how high can we fly … now if I could only get these damn cars working

#79 Stan Brooks on 09.09.18 at 2:31 pm


#70 Jungle on 09.09.18 at 12:18 pm
The 0-5% down mortgages was risky but these were not the same level of sub prime NINJA loans like the states, applicants still had to meet strict underwriting LTV and income metrics with CMHC and then the banks, then show source proof of down payment beyond 3 months. + they are backed by the taxpayer. So three levels of protection?

The banks are well capitalized, delinquency rates near all time low, loan and loss previsions improving from almost non-risk perspective on the back of a strong and growing economy.

Housing is about 20% of GDP. The rest of the economy (80%) can easily pick up the slack; it’s 4X bigger than RE.

To show this, 2nd quarter GDP was 2.9% despite a slowing RE market across the country.

It is so amusing to argue with people who think they know stuff.

The GDP was not 2.9 %, it grew by 2.9 % on yearly bases largely due to inflation.

Read this:

https://www.statista.com/statistics/594293/gross-domestic-product-of-canada-by-industry-monthly/

and this:

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

Real estate, construction and their proxies – financial sector, insurance as Primary sectors determine most of the economic activities, including most of the downstream retail and services.

The rest is commodities (in bear market) and manufacturing – threatened by NAFTA troubles.

Retail and services are downstream, dependent sectors that exist only because of the primary sectors.

If not for excessive bubble in housing and construction that drove finance sector and underlying services, including retail, our economy would have been 50-60 % from current economic activity, at most, maybe lower.

If housing and construction crashes, what would the financial sector do (whom would they loan to or insure) and what would happen to all downstream services?
How would the banker or real estate pay for food in the grocery store/retail?

Easy pick up the slack of losing 20 % of GDP…. OMG I have seen ignorance but this…

#80 Jungle on 09.09.18 at 5:22 pm

@stan thanks I’ll look into it.

I do think a brutal recession (key world brutal) will impact all housing, even GTA and much more.

The most recent GDP does seem to show the rest of the economy grew more than what RE contributed, but you are right if housing crashes very badly it can bring a lot down around it, industries connected. Although I doubt the RE contribution to GDP will lose it’s entire 20% contribution. There is still a chance if RE contribution dips, the rest of the economy can keep YOY gdp even or even growing.

In the GTA, a lot of people who didn’t try to time the market over the years had a good chance now to pay their mortgages off, while the property appreciates or recovers whatever entry point they go in.