Naked

As of Wednesday afternoon over 350,000 people had clicked on this vid and watched a morose 10-minute summary of the end of James Cordier’s career. RIP, naked call options trader.

The post was the teary farewell of JC to the 290 high-net-worth investors who’d shoveled money into his high-risk, high-stakes, usually-high-return fund called Optionsellers.com. The guy was a self-proclaimed guru in the naked options biz, having written a book on the strategy, then launching a fund based on the same hokum. But that was $150 million ago. Now there’s zero. In fact, less than nothing.

This is a cautionary tale about what market volatility can do to people who confuse investing with gambling.

What’s a naked call option? Well, when you buy an option you’re securing the right (but not the obligation) to buy or sell a commodity (in this case it was nat gas) at a certain point in the future. So, you gamble on what it might be worth at that moment in time. A ‘naked’ option is one which is unhedged, in other words there’s no counterbalancing position in case you bet wrong. Instead of losing only the money it costs to buy the option, you’re forced to buy the asset at whatever price occurs. Therefore, unlimited risk.

Cordier piled his clients into naked short options positions, betting without a parachute that nat gas would cost less. But, whoops, the price spiked wildly. The entire fund lacked enough money to cover the positions, so the brokerage acting for it had to borrow to do so. Now Cordier has no money, no fund, no clients and a giant liability. You’d be teary, too.

As I said, this ain’t investing. It’s rank, reckless speculation, made all the more repugnant and reprehensible because it used other people’s money. Yeah, they might have been greedy, rich folk willing to roll the dice. But there’s no excuse. Mr. Market fried them all.

Lately stock markets have been blowing off a lot of the froth accumulated during the last two Trump years. Valuations have fallen to more reasonable levels. Major US stock markets have dipped about 10% from their record highs, thanks to rising rates and trade tensions. Plunging oil prices whacked Bay Street. The TSX is down a little more than 5% over the past year, but investors with a balanced and diversified portfolio have largely escaped that.

Of course, in the age of Internet geniuses and fake financial news, fear sells. When markets go up 500 points we’re told they ‘gained’. When markets drop an equal amount, we’re told they ‘plunged.’ And you can count on something like this: ‘Fear grips markets as investors climb a wall of worry.’

What a load. By the way, here’s the S&P 500, the broadest US market index, for the past decade. Not hard to see those deciding to jump off every time there was a ‘plunge’ missed a profitable ride afterwards.

Human nature is a bitch, apparently. It drove James Cordier and his clients into taking extreme risk to secure windfall gains betting against the market. Equally, even small declines and spikes in volatility send other investors running for the exits in a panic. Because fear trumps greed, we see the greatest reactions when the price of any asset goes down. The biggest headlines, too. And the most irrational behavior.

History’s no slouch. It shows (look at the chart) that those who ignore temporary plops, bumps, dips, spikes and corrections do just fine by staying invested. Especially if they have a balanced portfolio with both safe and growth assets in it. As I have shown in the past, during the GFC a balanced portfolio lost 20% (while stocks gave up 55%), regained it in a year and grew 17% the next. So the three-year returns during the worst financial dust-up in our lifetimes was 5% annually. Meanwhile those who panicked and sold at the bottom turned a paper loss into a real one. And all-stock investors had to wait seven years to get their wealth back.

In short, what this blog has yammered at you about for years now, works. B&D portfolios are designed to mitigate losses and participate in gains. But they need constant rebalancing and adjusting to ensure the best outcome. For example, over the last 18 months my fancy-pants portfolio manager buddies have sold off small cap US funds (too risky), trimmed the preferreds exposure (as rates rose), added short bonds (less volatile), adjusted TSX holdings to low-vol and high-divvy assets and last summer reduced S&P exposure (too expensive).

The point of having various assets (not just stocks) is to contain risk and still pursue growth. Nobody knows what the morrow shall bring, after all. In the last year, for example, REITs have done great – up almost 9% – while maple dividend stocks have sold off 7%. Common-sense investors have been protected from the kind of capitalist cowboyism of naked call options.

And don’t forget – despite sucky markets and online doomsters trying to terrify you –  that a B&D portfolio’s pleasing gains in 2016 and 2017 have been largely retained by investors in 2018.

I you think this is the End of Days, go hide under the bed. If you believe the sun will rise tomorrow do nothing. And if you’d like to be sweet and send poor James a sympathy card, here you go: [email protected]

 

132 comments ↓

#1 For those about to flop... on 11.21.18 at 3:07 pm

Well your last two posts have been called Naked and Busts.

You got something you want to get off your chest…

M44BC

#2 Goldenboy on 11.21.18 at 3:18 pm

HMMMMM Cicken. 1

#3 RadMoney on 11.21.18 at 3:20 pm

Can anyone recommend online resources or books to learn more about diversification? There is a strong feeling that we’re going to be in a recession in 2020 and I need to future proof myself today for the future. Thanks!

– RadMoney

#4 Parksville Prankster on 11.21.18 at 3:21 pm

… but, but, but, aren’t these the same fancy pants advisors that suggested that Rate Reset Prefs do well in a raising rate environment, and that now was a good time to level up? I must have missed the ‘trim exposure’ blog topic day. Damn, when a guy doesn’t sign in every other day….

Guess you get what you pay for. – Garth

#5 soiledItAgain on 11.21.18 at 3:24 pm

Another gas options trader caught naked. Brian Hunter, an Albertan, did the honors in 2006.

#6 NotLegalAdvice on 11.21.18 at 3:24 pm

“And if you’d like to be sweet and send poor James a sympathy card, here you go: [email protected].”
– Garth

Not a sweet soul left on here Garth! These are dark times for us millennials lol

FIRST!

#7 KJ on 11.21.18 at 3:26 pm

Ok great chart.

Now please show the S&P for the the 10 years prior …lets say 1999 – 2009 to show what else can happen over the short term (10 year window).

#8 crowdedelevatorfartz on 11.21.18 at 3:27 pm

Or, if you’re Frank.
You blame it all on the 1% of the Billionaires that control the world and “get back” at them by not working or saving…..
That’ll fix those greedy Billionaires eh Frank?

#9 Property Accountant on 11.21.18 at 3:42 pm

The guy weeps, sheds tears in this video, so I did some research how he lost his client’s funds.
Over the last 2 months very unusual event happened, WTO oil price went down from 76$ to 54$ as of now, and Natural Gas contracts skyrocketed from $2.50 to 4.44$ as of now.

Those 2 commodities usually have a significant correlation with each other, they are substitutes and most of the time they are mined / extracted together. There are tons of articles about Natural Gas / Oil relationship.

They guy most likely hedged one with the other using naked options long / short calls & puts. Because last 2 months showed extremely unusual correlation close to -1, he was smacked with double whammy, being wrong twice. He likely went long calls on oil crude and short calls on Nat Gas. If both prices of Oil Crude and Nat Gas went up or down in tandem (like they did historically) his gains and loses would even out. Mr. Market was ruthless , since October 2018, unfortunately.

#10 crossbordershopper on 11.21.18 at 3:44 pm

Americans are generally risk takers and speculators, Thats why they have trillions of dollars. Canadians are generally poor, conservative, arent that aware of financial things.
This guy lost the letter D in hedge, they simply dont buy puts to protect their position, they are greedy and believe in their own cooking.
we should all be jealous of him, articulate smart etc. most canadians just walk around with their winter jacket and drive their used corolla.

#11 waiting on the westcoast on 11.21.18 at 3:48 pm

But Garth… It’s so hard to brag about a balanced and diversified portfolio. And no juicy stories to tell… Both good and bad!

#12 Shawn Allen on 11.21.18 at 3:56 pm

And they Said Buy and Hold is Dead!

What Garth said…

And meanwhile the misinformed like to say that buy and hold is dead. When in fact, buy and hold a diversified index of equities has always gone up over longer periods of time as money flows from customers of businesses to owners of businesses (albeit with some leakage to advisers and but that leakage can be made very small).

Meanwhile all equity strategies OTHER than buy and hold the index, by definition layer a zero sum game on top of buy and hold and what one gains (over and above the index) must be lost (under and below the index) by another. Plus the leakage to investors and trading costs are higher.

No point to deviate from the index unless you think you have an edge – like James at option sellers thought.

#13 Mike on 11.21.18 at 4:00 pm

.
No real price cuts in Vancouver area. Prices are being lowered by only those who have listed 50% above 2017 values. They cut by 10%…pfffttt…

Those who missed the bus in 2014-15, just simply missed it. Real estate makes money in Vancouver…

#14 Unhinged Trader on 11.21.18 at 4:02 pm

Lol, Boomers and their legacy assets.

You don’t need Bitcoin to wipe out 98% of your capital.

Legacy assets? You mean like shares in the company employing you, the money you spend and the house you live in? – Garth

#15 Nelson from The Simpsons (tm) on 11.21.18 at 4:31 pm

Ha Ha! Four Seasons condos sell at a loss in a hyperfeminist city!
http://projects.thestar.com/four-seasons-condos/

#16 Lee on 11.21.18 at 4:42 pm

US Small Cap has historically bounced back faster and higher than the DOW and S&P so I do not believe it is a good idea to be scared of them. There is room to put 10% of your money into them in US dollars. Buy on the dips.

#17 baloney Sandwitch on 11.21.18 at 4:43 pm

Feel sorry for James. Problem was not so much he was naked, but short and concentrated. I have been doing naked options for the last 9 years on a hobby basis but keep myself diversified. I lost money the first couple of years while I learnt the ropes (paid the tuition to Mr. Market) but now I mostly make money. Here is my trading record for the last 10 years. I have made $269K US till now with basically zero down. Another 9 years and I should be up a million.
hers.ttps://docs.google.com/spreadsheets/d/1sHiJUqqa-UdJkQ_35zCZdB_TsnplgYHD_ZFiTiaVTEM/edit?usp=sharing

#18 For those about to flop... on 11.21.18 at 4:52 pm

Pink Pumpkins being carved in Vancouver.

East meets West edition.

I have been detailing how you can get a liveable detached on the Eastside for below a million,and also how the bottom of the Westside is now down to around 1.5.

This one kind of falls in between, as it has an Eastside address by about the distance Usain Bolt made a living out of running.

The details…

7095 Quebec St,Vancouver.

Paid 1.54 November 2016

Originally asking 1.88

Now asking 1.38

Assessment 1.68

So they tried it on for 1.88 for the bulk of the year,had a time out, then came back with a price that will get attention, but they need to get someone back up.

Maybe they hired a new realtor that had some smelling salts in the glovebox…

M44BC

https://www.zolo.ca/vancouver-real-estate/7095-quebec-street

#19 robert b on 11.21.18 at 4:52 pm

Please educate me.
Since you’re saying that naked options are not hedged, it seems like you are implying that options *are* hedged. Are they really hedged? I always understood options to provide you the opportunity to buy or sell an asset by a future date.
You wrote: “A ‘naked’ option is one which is unhedged, in other words there’s no counterbalancing position in case you bet wrong. Instead of losing only the money it costs to buy the option, you’re forced to buy the asset at whatever price occurs. Therefore, unlimited risk.”
I always thought that what you describe here was called a “future” and was inherently high risk. Have the meanings of options and futures changed?

#20 Calin on 11.21.18 at 4:58 pm

The past 10 years have been a sweet ride indeed, with the S&P 500 up ~400% after the 2009 crash. But the data for the previous decade tells a different story. From 1999 to 2008 the index was practically flat (~1450 in Dec ’99 vs 1400 in Jan ’08). Did people make money during that decade? Probably, if they invested in a disciplined fashion every quarter or so. Time is one big factor, but regular contributions and diversification (TSX/FTSE/DAX/CAC…) are equally important. Dumping all your money into the S&P500 in March 2009 would have been a great idea. The same thing in March 1999 – not so much.

Nor did I suggest that. Your point? – Garth

#21 Wallflower on 11.21.18 at 5:10 pm

Barrie area, examples of common theme

SOLD $450,000
2018-11-08 2018-11-19 $459,900 final list price
2018-10-30 2018-11-08 $474,900
2018-10-19 2018-10-29 $479,900
2018-10-03 2018-10-18 $489,900
2018-09-15 2018-10-03 $499,900
2018-09-04 2018-09-11 $509,000
2018-08-29 2018-09-04 $524,900 first list price

SOLD 476,600
2018-11-01 2018-11-21 $499,995 final list price
2018-10-09 2018-11-01 $519,995
2018-08-14 2018-10-09 $559,950
2018-06-18 2018-08-14 $599,900 first list price

#22 jess on 11.21.18 at 5:10 pm

being critical
President Donald Trump fired back Wednesday after Chief Justice John Roberts issued a rare rebuke of the President’s disparaging remarks about federal judges.
“We do not have Obama judges or Trump judges, Bush judges or Clinton judges,” Roberts said in a statement responding to comments Trump made earlier in the week criticizing the US 9th Circuit Court of Appeals. “What we have is an extraordinary group of dedicated judges doing their level best to do equal right to those appearing before them. That independent judiciary is something we should all be thankful for.”
https://www.cnn.com/2018/11/21/politics/supreme-court-john-roberts-trump/index.html

#23 Peak in the rearview on 11.21.18 at 5:13 pm

August and September was the time to sell and go into cash. Now those peaks are in the rearview mirror. It will take a couple years to get back to those levels. There is no suggestion that CBs increase liquidity yet. Before the announcements are coming, the insiders will show you the way with stronger moves upwards in transportation and infrastructure related businesses. 2019 is the year for Trump to start the infrastructure programs. Funded by new money from bonds at better than fund rates.
Time frame for the announcements after January ’19.

#24 Guy in Calgary on 11.21.18 at 5:25 pm

#18 robert b on 11.21.18 at 4:52 pm

Naked vs covered

#25 stuck in Richmond on 11.21.18 at 5:27 pm

You forgot to mention that not only the clients account balance, and his hedge fund account balance went to 0, but also their brokerage firm had to borrow money from outside to cover their shorts, and now clients are on the hook for more money than they started trading with.

#26 AJM on 11.21.18 at 5:27 pm

Lol @ #12 – Mike

Tell that to the previous owners of:

1388 Inglewood Ave. West Vancouver

or the current owners (bagholders?) of:

1305 Kings Ave West Vancouver
2290 Haywood Ave West Vancouver
3050 Spencer Dr West Vancouver
2843 Marine Dr. West Vancouver

Just to name a few in my hood…

#27 Dave on 11.21.18 at 5:34 pm

November December and January are set to be the worst Real Estate sales record in over a decade. Cant wait to see the stats…finally list prices are dive bombing!!!

#28 yvr_lurker on 11.21.18 at 5:38 pm

James Cordier and bitcoin are one and the same to me. I’d rather buy GIC’s and aggressively be frugal with all purchases (as I am now essentially) and to get extra $$$ through some side jobs. No need for a roller coaster ride to your death.

There is a middle ground between GICc and naked call options. Maybe you should get out more. – Garth

#29 The real Kip on 11.21.18 at 5:39 pm

Just watched the Cordier statement. He looks every bit as fancy pants as your Porsche driving staff.

There will be more ships going over the falls. Steady as she goes!

He looked pathetic and authentic to me. – Garth

#30 Ace Goodheart on 11.21.18 at 5:44 pm

Well shorting natural gas just before winter might not have been that great an idea.

But he is from Florida.

Maybe he didn’t know?

#31 Dolce Vita on 11.21.18 at 5:46 pm

#12 Mike

“Those who missed the bus in 2014-15, just simply missed it.”

You read like K-Mart of old.

Early last year, replace 2014-2015 with 2017. Late last year replace 2017 with 2016.

By the end of this year, 2014-2015 will become 2013, and so forth.

New Age “thoughts create” may carry muster in La La Land but the numbers are far and away against them. That “bus”, it’s emptying.

Looking forward to future updates: one at the end of 2018 and another at the end of 1st Qtr. 2019.

#32 april on 11.21.18 at 5:56 pm

#12 – not true…. a realtor, or two much skin in the game… right?

#33 TRUMP on 11.21.18 at 6:04 pm

THANK GOODNESS…..

NOT ANOTHER ARTICLE ON YVR REAL ESTATE.

#34 Natty is a Widow Maker on 11.21.18 at 6:04 pm

This is what happens when you gamble on natgas. It’s not called the Widow-Maker for nothing. I feel really bad for this man and his clients but gambling like this is just reckless.

#35 baloney Sandwitch on 11.21.18 at 6:12 pm

#19 Calin – Lots of people made money. Here is my portfolio chart from 1999. I went from around 100K to about 2.5 mil to 2008. Sure I lost half of that in the great recession but when it ended it was off to the races. I think this cycle has another couple of years left. I am treating the current correction as a buying opportunity. No recession in sight. https://i.imgur.com/NfHBNEl.png
I practice value investing + buy & hold for the most part.

#36 Alessio on 11.21.18 at 6:20 pm

I’m balanced and diversified and still have losses. It’s the everything bubble remember that. My portfolio is going no where and any profit is taxed as I’ve maxed rsp and TFSA. Meanwhile house prices sky rocketed and haven’t been chopped away since. Sure some discounts but those are off astronomical million $ prices for the lowest quality home furthest from GTA. Small segment can buy these anyhow. And looking at your chart I think people get scared because the next dip could be right down to the bottom. They’ll lose all even balanced. And take ten years to make it up if they can wait that long. Why investment folk show 10 year plus historical charts is beyond me. Few people can invest that long. Most need their money to live shelter food etc… so showing those average returns for the average folk is useless. This is all why the rich get richer.

Actually, your comment shows why the un-rich stay that way. – Garth

#37 Long-Time Lurker on 11.21.18 at 6:20 pm

Naked options sounds like fun but it sure is risky. Hee hee.

#38 The real Kip on 11.21.18 at 6:27 pm

Yea, gotta watch those “rogue waves”, they can make a mess of your portfolio. Ben Bernanke didn’t see it coming in 2008 either and it swamped him.

#39 Charlie Don't Surf on 11.21.18 at 6:29 pm

What’s your opinion of self rebalancing low cost index ETFs like VGRO?

Don’t own just one ETF. – Garth

#40 Don't Be A Dumb Ass on 11.21.18 at 6:31 pm

You see it and read it in many of the comments – delusional people believing that prices will still always go up. Little do they know about critical thinking and watching carefully for the clues. Think of a ski jumper who made it to the top of the ladder and….. It is an endless cycle of people buying and selling until they are picking up speed on the way down.

#41 STM on 11.21.18 at 6:37 pm

What’s your opinion of bond funds in this market, especially with rising rates? Over the course of a decade, the net depreciation in these funds seems to eat up a lot of what they give back.

#42 technical analysis? on 11.21.18 at 6:52 pm

“Fed removes QE”

false statement. the fed has not removed QE.

pre Crisis balance sheet was less that $1 T. today it’s still over $4 T

pre Crisis Fed Funds 5.3% today 2.2%

exactly what has been removed?

Google ‘taper tantrum’. That might help. – Garth

#43 SmarterSquirrel on 11.21.18 at 7:08 pm

Garth.

What are your thoughts on diversified portfolios that provide cash flow with dividends and distributions? I find that even when markets decline, the cash flow provides the passive income needed, decreasing the need to cash out positions in a declining market to generate cash flow for paying bills. Side benefit is if you’re getting more passive income than you need you can use the extra to buy more holdings at the lower prices (assuming the fundamentals are intact).

#44 tccontrarian on 11.21.18 at 7:14 pm

“When markets go up 500 points we’re told they ‘gained’. When markets drop an equal amount, we’re told they ‘plunged.’ ”
—————————
Not always – sometimes we’re told that they ‘surged’ up and ‘corrected’ down. But, looking at charts with the benefit of hindsight is always ‘clear’.
The difficult decisions are in real time – as the last few days. Who was busy scooping up the bargains in the energy sector? Only the contrarians, I assume.

BTW, I trade ‘naked’ all the time – the only risk I got is catching a cold! hahaha

TCC

#45 Doug t on 11.21.18 at 7:24 pm

I sleep well enough with 2.75 GIC on 500k –

RATM

Zzzzzzzzzzz

The inflation rate is 3%. Great advice. – Garth

#46 mogulrider on 11.21.18 at 7:42 pm

Crypto-Mining Firm Giga Watt Files For Bankruptcy, Faces Eviction In Washington County.

Yup Crypto is gonna change the world alright.
Tulips – nothing more

#47 Long-Time Lurker on 11.21.18 at 7:45 pm

#3 RadMoney on 11.21.18 at 3:20 pm
Can anyone recommend online resources or books to learn more about diversification? There is a strong feeling that we’re going to be in a recession in 2020 and I need to future proof myself today for the future. Thanks!

– RadMoney

>Look up Diversification on Investopedia.

Introduction to Investment Diversification
By James McWhinney | Updated March 20, 2017

https://www.investopedia.com/articles/basics/05/diversification.asp

#48 Crazyfox on 11.21.18 at 7:45 pm

http://www.multpl.com/shiller-pe/

You know this chart Garth. You know it well. Currently P/E ratios are tied with the 2nd highest ratios since NYSE’s beginning. P/E stands for tock price earnings averages for those who don’t know, meaning corporate profits in the way they’ve been translated from media to jobs is what boosts them ever higher. It is the hallmark of investor/consumer confidence built on years and years of a high/steady profit economy, usually with a few darlings that have dominated from a term known as “disruption”.

If you all look at the charts, you will see that we’ve had a 10 year long run in earnings since 08′ and the risk is, the higher valued you buy into a stock or bond, the higher the risk is for you to lose money. That’s a fact. That’s just plain inarguable.

Where are we now? In a market soaked in risk. You can see it on the chart. Do we somehow think PE ratios are going to 40? 50? Based on? What, America’s capacity to elect a decent president? Trade wars? The U.S. leaving the WTO? NATO? Its want for isolation leading to the nowhere land of shrinking markets? What makes the U.S. so special… interest rates with nowhere to go but up as a consequence of inflation pushed by a tight employment market and a trade war with China? And what will all of that do to corporate earnings, make them soar through the roof?

I see a trade war with China hitting restocking shelf pricing within the next couple months and the first Q1 of next year with a shock causing inflation surprises reported in Q2, interest rate hikes coming to stem inflation from the U.S. trade war with China, as well as wage growth and coupled with a falling U.S. dollar as money bails. We will see the U.S. fed hike rates a .25 point in Q1, possibly .5% in Q2, .25% in Q3 and .5% in Q4 if tariffs and Trump are still around, .25% if Trump isn’t and its all in response to inflation meaning the U.S. fed, from what I can see, will exit 4.25% by the end of December next year.

If I’m right, Canadian real estate, fueled by U.S. treasuries borrowed from Canadian banks and backstopped by MBS’s will be 3.75% by the end of June. Add the spreads between banks and mortgage holders and you get what we are already seeing now, a disappearing wealth effect as home equity walks, HELOC’s evaporate in RE and shrinking consumer spending craters corporate profits and because its RE led and lots of defaults are coming with rates ever higher, it will be 2022 before profits return aside from some minor boom and busts in commodities.

All of this spells recession. In Canada, we get hit in Q3 and in the U.S., it takes longer to work its way through the system, but very best guess is Q1 or Q2 of 2020. I wish it was different, but that’s what I see. We had a good 10 year run though, didn’t we overall? And sure, its a whole lot sweeter if you go all in at the bottom instead of ride one out from the top, waiting 7 to 10 years to recover…. but that’s the gambling nature within ourselves. Gamblers like to go all in. “Got to have my money working for me”, “got to invest in hope”, fear grips their hardest decisions and paralyzes them from taking initial losses, diversifying their investments and to always have cash lying around. Always!! The classic fail of an investor is to invest money that they will need later, the investment value drops and they sell because they need the money only there is less of it now if any, and they are set back hoping for job earnings to bail them out. Time goes by, the unexpected happens and they struggle and some never get back in the game and the one’s who do, make the same mistakes as before.

But I digress.

Doesn’t it make sense to not be fully invested in this market especially?

Exactly. Be diversified. That took only 3 words. – Garth

#49 mogulrider on 11.21.18 at 7:48 pm

From what I’ve been hearing the forced margin calls and forced liquidations are coming in greater volume each day as specs who mortgaged their Toronto and Vancouver houses and invested in FANGS are selling at any price now.

Who was it that said to take out a mortgage, invest in FANGS, deduct the interest, blah blah blah…..

I can’t remember who it was.

But boy – those that listened now have an underwater mortgage, a liquidated portfolio, etc etc etc

That 20 year bull call is getting stretched…….

#50 mogulrider on 11.21.18 at 7:52 pm

The inflation rate is 3%. Great advice. – Garth

Not after a 30% drop in oil my friend
A 30% drop is real estate
A 30 Drop in stocks….

These are not indicators but they the foundation of inflationary pressures….

Wealth effect creates inflation
Wealth effect right is -30% in sentiment

Now if we want to talk currency devaluation in Canada – well you have a point…

Its one of the reasons I moved south and converted to a reserve currency the last 20 years…

Canada’s fiscal outlook is truly ugly

#51 KLNR on 11.21.18 at 7:58 pm

@#39 Don’t Be A Dumb Ass on 11.21.18 at 6:31 pm
You see it and read it in many of the comments – delusional people believing that prices will still always go up. Little do they know about critical thinking and watching carefully for the clues. Think of a ski jumper who made it to the top of the ladder and….. It is an endless cycle of people buying and selling until they are picking up speed on the way down.
_________________________

meh, no more delusional than the doomers on here.

#52 Crazyfox on 11.21.18 at 8:03 pm

So…. lets talk about the term “disruption” for a moment because that’s where the money is and isn’t. If people are, shall we say, not savvy enough to see recessions building before they come, its ok, I mean… it takes experience, it truly does. And sometimes, it takes luck. The market place is frothy, to this few will disagree, even still. And to buy into high valuations is to buy into risk. Buy high and sell low is not the way to make money unless you are shorting a crumbling market but I again digress.

We have several disruptions coming to this world in the next decade so if you are too “inexperienced” (a polite word for it) with investing and end up a greater fool, perhaps you can cash in, in the future.

The key word is, “disruption”. The link below illustrates just how real technological change is coming with transportation with electric, self driving cars (even heavy trucks) and what impacts this will have on the price of oil, the environment and the lecture is worth every minute.

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

In January of 2017, the CEO of Ford came out with a 3 year plan for shareholders/buyers in terms of what to look forward to with cars and trucks. By 2020, 13 of 20 Ford brands are going electric (hybrid and/or full electric). This includes the hybrid only option F-150 for 2020 and 2 all electric SUV’s with over 300 km’s of range before 2020 unless, of course, something has changed with Ford since, with it’s new CEO, Hackett now in there for 16 months?

Ford’s newish CEO Hackett of the 7:15 mark:

https://www.youtube.com/watch?v=0HZqKTSDtZE

… says to the question of “will I have a driverless electric car by 2030 or sooner”? Hackett’s answer, “We are committed by 2021 to be at market”.

So, we have 3 major transportation disruptions coming in the next decade. Full electric cars and trucks, self driving cars and trucks and major advances in cloud tech concerning traffic lights and parking so the cities are about to get much more streamlined with transportation within the next 10 years.

We can disagree about exactly when, but the 2020’s will see electric cars dominating the market at some point with the introduction of driverless cars, 2 major techs diverging at once, if not in Dinosaur Trump land, last of the modern but obsolete oil driven economy, definitely in Europe, China, east Asia and likely Brazil, possibly the rest of the world. I’m thinking by 2023, 2024, electric cars will dominate new sales of cars and trucks and change the way people get around. Driverless cars are a huge computer on wheels, will be a major disruptive change and we will live to see it ;) Seniors will be able to live longer in their homes, transportation will be more shared but affordable and the market place will adjust accordingly. It will effect oil pricing, C02 emissions, people will live longer in the cities (well, inland anyhow, we’ll get to that later) positive changes will come however late. The young will have visions and the old will dream dreams…

#53 CharlieDontSurf on 11.21.18 at 8:12 pm

Hey, post #38, get your own name. CDS is mine.

#54 Biddy on 11.21.18 at 8:18 pm

“Exactly. Be diversified. That took only 3 words. – Garth”

Golden.

#55 KLNR on 11.21.18 at 8:21 pm

@#51 Crazyfox on 11.21.18 at 8:03 pm
So…. lets talk about the term “disruption” for a moment because that’s where the money is and isn’t. If people are, shall we say, not savvy enough to see recessions building before they come, its ok, I mean… it takes experience, it truly does. And sometimes, it takes luck. The market place is frothy, to this few will disagree, even still. And to buy into high valuations is to buy into risk. Buy high and sell low is not the way to make money unless you are shorting a crumbling market but I again digress.
____________________

looking forward to it.
disruption creates opportunity.

#56 Charlie Don't Surf on 11.21.18 at 8:33 pm

Thanks for the reply, Garth. Can you just clarify the “Don’t just own one ETF” in the context of VGRO, would it still apply?
Reason I ask is VGRO is actually a collection of seven ETFs ( Vanguard US Total Market ETF, Vanguard FTSE Canada All Cap ETF, Vanguard FTSE Dev AC ex Nrth Amer ETF, Vanguard Canadian Aggregate Bond ETF, Vanguard FTSE Emerging Mkts All Cap ETF, Vanguard Global ex-US Aggt Bd ETF CAD-H, Vanguard US Aggregate Bond ETF CAD-H )

http://portfolios.morningstar.com/fund/holdings?t=VGRO&region=can&culture=en-US

In this case, would you still advise to hold the underlying ETF’s or just trade it for the convenience of holding a single self-rebalancing Index of Indices like VGRO?

The advice stands. – Garth

#57 young & foolish on 11.21.18 at 8:35 pm

Bigger deficits …. just to stay in place. Now that’s re-assuring, isn’t it?

Lower business costs, more jobs. That is. – Garth

#58 Hogtown Harry on 11.21.18 at 8:43 pm

#126 IHCTD9 on 11.21.18 at 11:18 am
#103 Hogtown Harry on 11.21.18 at 6:07 am

_________
Did you read the article cowboy? I am questioning your sanity after reading the article… Seriously, are you in the same mental ward as Stan Brooks?

https://www.huffingtonpost.ca/2017/03/01/canadians-leaving-major-cities_n_15080726.html

“This is EXACTLY the information you asked for delivered to you on a silver platter, at no cost whatsoever!!You can thank me later.”

For what? Not knowing how to read…. It clearly states that folks are bailing to place like Oshawa, Whitby, Ajax and other communities around the GTA where they commute to Toronto for work. I personally have witnessed bumper to bumper traffic on Hwy 400 from Toronto to Barrie. 80 kms of folks descending from Barrie and the hinterlands to work in Toronto. I am not kidding. 80 kms of bumper to bumper traffic. The article also states that the 40 year long migration from Montreal to Toronto continues…

“I must warn you however, that this link will connect you with media containing verifiable and irrefutable facts, so you may be unable to understand what is being said.”

It is you cowboy that do not understand how to read articles. Read it again. Slowly. Ask for help on words you don’t understand….It clearly states that while folks are moving out, there is a net increase in population due to immigration. Further, those moving out are doing so to commute back to Toronto.

“You may find yourself getting confused and experiencing a sudden unexplained loss of the ability to read.Chronic Factophobia is real, and should not be suffered in silence. It is OK to need help sometimes, especially with difficult flare ups of fact, truth, and times when intellectual honesty is getting you down.”

Those are your symptoms not mine. It really rankles you that homes in Toronto are worth so much. Even worse, is that when they were purchased decades ago when I purchased they were very affordable only to see staggering gains, all capital gains free on a principal residence. A neighbour just sold out for north of $2million and is heading north to a place on a lake for a fraction of the price. Retirement is sweet.

“Well, I’m here to help hogster! In the event you find yourself unable to digest said facts, I am trained to help you absorb them, just a little bit at a time; so as to minimize your discomfort.”

You are the one in need of help. First for your reading skills and comprehension and second to get over your delusion that Toronto is emptying out. Lastly, help for your overwhelming jealousy of those who have scored big time in home values in Toronto.

#59 There Is Hope on 11.21.18 at 8:45 pm

I just saw a new listing for $139,900 on a 18,000 SF lot by the transit bus. 3 bedrooms, new steel roof, new laminate flooring, new backyard deck, two heat pumps with a forced air additional heating system, vinyl siding, paved driveway, all freshly painted, large nice eat-in kitchen; separate dining room, new storage building in backyard, and looks good inside. Great price for a nice starter home with nothing to do, but move in.

#60 Tony on 11.21.18 at 8:45 pm

I’ve traded plenty of naked futures (like a man) in the past well before 1994 when everything in the stock or commodities market made sense. Today the bankers always take the opposite side of any trade that makes sense and try to squeeze out the other side with their vast sums of money. This is the reason why you should be leery of trading naked options or futures.

#61 Shawn Allen on 11.21.18 at 8:48 pm

The Balanced Income Spending Money Portfolio

#42 SmarterSquirrel on 11.21.18 at 7:08 pm
Asked Garth:

What are your thoughts on diversified portfolios that provide cash flow with dividends and distributions? I find that even when markets decline, the cash flow provides the passive income needed, decreasing the need to cash out positions in a declining market to generate cash flow for paying bills. Side benefit is if you’re getting more passive income than you need you can use the extra to buy more holdings at the lower prices (assuming the fundamentals are intact).

***********************************
I’ve been giving thought to this as well.

Imagine you had a $500k insurance settlement and it was to provide income for a disabled young adult. Let’s say start with $20k or 4% and hopefully would rise with inflation.

Well how hard would it be to put together a pretty safe portfolio that yields 4%? Let the kid spend every sent of this income as a supplement to whatever other income he might have. (Move as much as allowed into TFSA as well each year)

The dividends / income would probably rise more than inflation over the years.

The portfolio value would fluctuate sometimes up sometimes down (occasionally a lot). But chances are the income would march steadily higher year by year.

The entire finance industry and even the law would require this portfolio to judged primarily by its fluctuations in value – which are almost irrelevant in this case!

A few investors on here talk about a goal of simply rising dividends (JSS of rub tummy). But I never see any portfolios tracked this way.

Such a portfolio has its place for some people. What adviser is providing it? (For those that need advice)

#62 Crazyfox on 11.21.18 at 9:02 pm

Exactly. Be diversified. That took only 3 words. – Garth

Lol, you know that can’t happen with me! Tell you what, you first! :D

Ok, so where was I… “disruption”. I’ve scoured you tube and other searches as best I can to see where there might be breakthroughs in electrical storage. Again, this link sets it up:

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

The storage I’ve looked at that holds the most promise is Ambri corp. This is corp that may never go public. If it successfully leads the market place, there is enough private wealth concentrated now that the average joe won’t get a chance on it but its here because without major tech advances in storage going to market, wind and solar market share won’t have the penetration it should and electrical energy is a major component to C02 emissions currently world wide.

the world needs to get off of fossil fuels for electrical generation and to do that, we need storage, hence, a discussion on Ambri.

https://www.youtube.com/watch?v=pDxegcZqx_8&index=2&t=1761s&list=PLmcIOryg2Jqq_3b8NgR0vNYsK9PtqewVX

– near zero fade
– 75 – 78% efficiency
– cheap base metal composition
– semi load modular
– cheap (likely below $ 100 Kwh, possibly as low as $25 which is disruptive pricing)

Its weakness, best I can tell, is efficiency which can be overcome with greater efficiencies in wind and solar. Bill Gates says it best. “Without (inexpensive storage), renewable energy sources like wind turbines and solar cells will never approach the scale or affordability that is necessary,” – Bill Gates

And without solar and wind dominating market share of electrical generation, electrical generation making up 29% of C02 emissions alone in the U.S. will continue.

If EPA charts can still be trusted (sad to say but true)

https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions

Electrical generation is 28% of C02 emissions, parallel to cars. So cars are going electric, potential for more than 50% market share world wide by 2030, great! But we need the same to happen in electrical generation and that won’t happen without storage that is cheap and can be universally applied with high efficiencies speaking of which, there are many forms of storage. This link below touches on 19 forms:

https://www.youtube.com/watch?v=MLUvBOMa60k

Storage is essential for green tech dominating electrical generation market share but its coming too slow. We aren’t talking merely about efficiencies or capital costs in the equation, but the need to streamline solar, wind and storage together with a cheap enough capital cost to finance more cheaply than to use existing technology consuming fossil fuels and there’s the rub. By the time portable commercial storage is ready to dominate the market place, where will interest rates be? Will it be financeable in a high interest rate environment? These answers remain unknown for now other than the pressing need for disruption specifically with the environment in mind. Right now we have governments working against it, its large donors pushing back to preserve present energy industry status quo and that means battle lines have been drawn.

#63 Ottawamike on 11.21.18 at 9:09 pm

Seems like he still managed to hang onto his Rolex to display on his arm in the video.

#64 Hedgers on 11.21.18 at 9:20 pm

Trimming Preferreds? Don’t remember hearing about that until today..thought preferreds were safe when rates rise..guess after a 10% drop you can say after the fact that your boys were trimming. Would have been nice to know about a month ago.

Why should I rebalance your portfolio? – Garth

#65 Kilt on 11.21.18 at 9:37 pm

Buying a option gives you the right to buy or sell, but not the obligation!
Nothing wrong with buying call or puts. The down payment on my home was from buying some call options. You just need to be sensible about it. I buy leaps (ideally 1 to 2 years out) in stable companies that are undervalued. I buy the option significantly below the current strike price, so the premium I pay is usually 10-20% depending on the volatility of the stock. Thus I can commit far less cash and still get most of the upside. The only negative is if the stock pays a dividend, which you miss out on, or if stays undervalued. They key is to be patient and never gamble with more than 10% of your portfolio.
I’ll buy puts, but far less often. It is usually easier to time the bottom.

Kilt.

#66 Doug t on 11.21.18 at 9:38 pm

The inflation rate is 3% – great advise
Garth

Meh I sleep at night so what

RATM

#67 Crazyfox on 11.21.18 at 9:43 pm

I have disruption on the brain tonight…

One form of disruption we need to happen within the next decade is in the food manufacturing industry and there is, once again, no political will to stand in their way. Until an honest, educated government is elected in the U.S. that is willing through regulation, it will be business as usual and its killing us slowly, we can see it everywhere. This next link sets it up, answering the why of what is wrong with refined, processed foods in general, who is responsible and what we, as consumers, do about it (best documentary I’ve seen so far):

https://www.youtube.com/watch?v=tHYu8NlWDLU&t=1731s

Ok, so… after watching this, you will likely be wondering if there is anything safe to eat. Of the 600,000 or so products on grocery shelves in North America, 75% have added sugar. So, you tell me. The main message is, eat whole foods. Eat foods in their natural, raw form that haven’t been processed. Its the only way to keep added sugar out, and fiber in. There really isn’t much choice unless you wish for a metabolic disease and/or obesity.

Lets again look at the numbers. Of the 240 million American adults in the U.S. , 72 million are obese (30%) and of that 30%, 80% have a metabolic disorder meaning 60 million Americans. Of the 168 million Americans that are considered “normal” weight, 40% also have a metabolic disorder. 40% of 168 = 67.2 million. All told, there is 60 + 67 million = 127 million people out of 240 million with a metabolic disease. Today!

Right now, in North America, (we can include Canada with this), its more than 1 in 2 adults that have a metabolic disorder, at least 75% of which is totally preventable with diet and I’m thinking that percentage of 75% is actually higher, like in the 80’s.

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

So… we can recap concerning what we don’t get enough of:

– Fiber (was 100 to 400 grams a 100 years ago. Today its 12g’s)
– Omega 3 fatty acids (from fish which is laden with more toxins and farmed fish don’t have omega 3’s we are looking for because they aren’t eating their food source of Omega 3’s, Algae.
– micro nutrients (our experiment with herbicides are messing with micronutrient uptake inhibitors and micronutrient extraction is only as good as the soils that possess them, hence, globalization is a good thing persay)

And what we get way too much of:

– Trans fats (still! Yes, still! Should be off the shelves outright, where is regulation)
– Branched chain amino acids (leucine, isoleucine, valine)
– Omega 6 fatty acids (plant oils, polyunsaturates)
– Additives
– Emulsifiers (polysorbate – 80, carboxymethylcellulose)
– Nitrates (processed red meat)

And finally, SUGAR. SUGAR!!!!!!!!!!!

In other words, if you want at least a 1 in 2 chance of developing a metabolic disorder in your lifetime, eat refined, processed foods. And if you don’t, eat raw, whole unprocessed foods with a heavy emphasis on plants. And, once you are done looking after you and yours, ask yourself…. what kind of world do you want to live in? Does anyone really enjoy looking at 3 in 10 obese adults at a grocery store? Does it please you to know 1 in 2 adults are living with a metabolic disease, at least 75% preventable, and not going to see the winter of their years? Where are our governments with this? Where have they been? Do they not know that sugar is addictive? Are they that docile? Or just corrupt… business as usual, while health care costs spin out of control and work place performance continues to decline, how can it not. We could be headed for a disruption in food manufacturing and health care if only our governments did their jobs but we continue to elect klepocrats and fools, when will the electorate learn and demand better?

Again… more battle lines have been drawn.

#68 Doug in London on 11.21.18 at 9:44 pm

Why would anyone sell a naked call option? If you absolutely must sell call options first buy the stock or ETF when it’s on sale, at times like we’ve seen recently. When its value goes up, that’s when sell a covered call option. That way the “worst” thing that can happen is you end up selling the stock or ETF, still at a profit, but for less than you could have if you waited. It seems so simple.

#69 Andrew on 11.21.18 at 9:55 pm

For all those who were skeptical of bitcoin on yesterday’s post:

Bitcoin mining company in Canada. Purchasing natural gas that would have gone to waste. Contributing 40+ jobs to community. Being involved in local community. Also listed on the tsx

https://hut8mining.com

#70 blarg on 11.21.18 at 10:13 pm

That’s not strictly accurate on optionsellers.com What they actually did was get their high net worth clients to put money into managed accounts at fcstone (probably among other places). So technically, optionsellers.com high net worth clients are out all they put in the account plus whatever make whole payment is needed to cover the loss when they were stopped out. The liability the idiot running this scheme has is probably small and limited to whatever his own personal managed account is subject to.

#71 Ronaldo on 11.21.18 at 10:13 pm

Wow. That was quite a performance. Truly pathetic. Kinda looked like a farewell speech before the window jump.

#72 Smoking Man on 11.21.18 at 10:22 pm

Just look at that chart.

If you can spot the camel toe and Batman. Know what to do and own a set of nuts metaforicly speeking.

You never need to work again. Unless you are an un schooled egomaniac who can’t spell worth a shit but gets his jollies teaching phd math dudes on trade floors world over how to code vba the right way..

It’s just one of my many addictions.

#73 J. Canuck on 11.21.18 at 10:23 pm

#61 Crazyfox
*************************
Do you have any technical background in power generation and transmission?

#74 Crazyfox on 11.21.18 at 10:44 pm

I you think this is the End of Days, go hide under the bed. – Garth

Its a slow moving train wreck. Environmental degradation of which, in the past, in posts too long winded illustrate, speak of the bowls of wrath and the whore of Babylon only too well. There is nowhere to hide from climate change. The best link I could find on just what kind of timeline we are looking at in terms of sea level rise (SLR):

https://www.youtube.com/watch?v=AAPPq43iRLs&t=2947s

Eric Rignot is one of the top glaciologists in the world and easy to watch with a friendly accent etc. . Simply put, he’s flown over Greenland and large parts of Antarctica to measure, more than anything else, ice sheet thickness (SLR potential) and changes to thickness indicating ice on the move or retreat, and upon summarizing the land ice potential of ice sheets to SLR or the pie, and all of the individual ice packs contributing to the pie, assess risk. This is what gives his words credibility for Eric has actually been there, been a part of the data collection and has packaged his findings in this presentation.

The greatest risk from climate change isn’t flood or drought that will no doubt effect crops and cause damage as storms come more intense, its SLR. Simply put, there is nothing that can cause massive coastal flooding (4 metres or higher) without the ice sheets falling apart and Eric gets to the heart of where these risks are.

Its a great vid for those who are interested in the nuts and bolts but the conclusion at the 47 minute mark is this:

– greater than 1M SLR is very likely by end of century.
– SLR commitment with 1.5 to 2 degree C warming:
6 to 9 metres.
– Time scale of major shift (100 to 200 years, not 1,000 years)
– ASE in West Antarctica is in irreversible retreat (1 m sea level rise).
– 2 out of 3 marine based sectors retreating in Greenland (3 m SLR)
– East Antarctica losing mass at an increasing rate (Totten 4 m SLR)
– the pace of change is fast i.e. decades

So… why did the IPCC become so climate change alarmist a month or so ago with the declaration that if the world doesn’t address climate change massively by 2030, it spells disaster for the planet? 2014 was the hottest year on record going back to the 1880’s. 2015 beat 2014 and 2016 beat 2015. 2015 & 2016 were El Nino years while 2017 and 2018 were La Nina years. In the hottest month seen in 2016, the world was 1.3 degrees above the industrial average. What did Eric say, 1.5 to 2C commits us to 6 to 9m of SLR?

Lets look at it another way. We are, right now at 410 ppm of C02, an increase of 130 ppm’s since pre industrial times. At our rate of world C02 emissions, we will add, with business as usual, another 40 ppm over 14 years. We are committing ourselves to at least 2 C above pre-industrial world temp by 2032. That’s why I’ve chosen to spend more than 3 words on it. We are talking about a future disruption like no other environmentally and there is no political will to stop it at present, if anything, with Trump, it is the opposite, the political will to keep green tech from evolving for “business as usual”.

Need I mention that near 80% of the world’s population is on the coast lines? Where will they go? How will they be fed and sheltered? What will happen to world economies? World ecologies? Environments that sustain life? If the world’s melt happens quickly, and a ticking Methane time bomb is very possible…. then it becomes biblical.

#75 young & foolish on 11.21.18 at 10:47 pm

“Such a portfolio has its place for some people. What adviser is providing it? (For those that need advice)”

Check John Heinzl in the Globe & Mail … he has a model portfolio as an example.

#76 For those about to flop... on 11.21.18 at 10:50 pm

Pink Pumpkins being carved in Vancouver.

This one has been a long term case that I have featured a couple of times.

Someone once remarked it looked like a hillbilly shack or chicken coop.

The details…

4213 w 14th ave, Vancouver.

Paid 2.88 Feb 2016

Originally asking 3.07

Now asking 2.3

Assessment 2.86

“Well maintained.” States the real estate agent.

Ah, I probably wouldn’t have gone there…

M44BC

https://www.rew.ca/properties/R2271768/4213-w-14th-avenue-vancouver-bc

https://www.zolo.ca/vancouver-real-estate/4213-w-14th-avenue

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

#77 palebird on 11.21.18 at 10:53 pm

crazyox you talk a good line but there are many holes in your yarns.The fact that manufacturers and countries have decreed that they are going electric does not mean that it will be so. The infrastructure is not there. The technology is not there. And, as you have noted, you can use electricity for your vehicle but where is that energy coming from? Exactly..It is a wonderful dream but there will be many potholes on the road to nirvana. The third world is so far behind with infrastructure. That takes a pile of money to rectify and things are about to get very tough when it comes to funding such projects. The petroleum powered vehicle is here for a long while yet.
But what really is interesting is when people who live in major metro areas in North America talk about traffic and parking. The only solution is to stop driving. That means we need some serious reboots regarding public transit. Try driving during business hours in Amsterdam, Paris, London, Madrid. It is ridiculous. Go to any major metro area outside of North America and check out how people get around.Some of it is pretty basic, overflowing buses and trains in India, no trains in Brasil but the buses in South America have to be seen, same in Africa. It is accepted that everyone cannot drive. It is simply not feasible. People have to alter their lifestyles and adapt. I know so many people who have never taken a bus or a subway/train simply because it is beneath them. Wow. That mindset has to go away.

#78 TurnerNation on 11.21.18 at 11:13 pm

1.15m for an ancient gawdy semi with some lipschtick thrown on inside. Would have been a tear down, but saved.
Parking? Ha no. Greater fool found:

“Then the buyers increased their original offer to $260,100 over asking. The sellers considered holding out for other offers, but ultimately decided to accept, because they were concerned that the waiting list for street parking permits in the area might deter other buyers.”

https://torontolife.com/real-estate/houses/toronto-house-sold-149-monarch-park-avenue/

#79 JSS on 11.21.18 at 11:14 pm

#60 Shawn Allen

I selected twenty or so stocks with the following criteria:
– blue chip conservative companies ($1B+ market cap in Canada)
– history of annual dividend growth
– dividend growth must’ve occurred even in bad years (eg 2009)
– payout ratio < 75%
– beta of 1 or less
– diversified over various sectors: banking, pipelines, groceries, telecom, consumer defensive, utilities, industrials

Over the last ten years the average annual dividend has been between 5-7%.

I’m not so concerned with the capital value of the portfolio, but primarily that the dividend growth is increasing.

I couldn’t find an ETF that can do the above.

However, there is a closed fund called Canadian General Investments (CGI), that can closely approximate.

#80 TurnerNation on 11.21.18 at 11:18 pm

^ And only a single bathroom!! 1.15m. I suspect buyers are public union employees. A hunch.

#81 Jay Currie on 11.21.18 at 11:23 pm

Some great advice here.

Writing naked calls is silly but there are smart strategies in options if you want to take the time to learn them.

Meanwhile, because I cover the sector, spare a thought for the junior resource side of the TSX-V. Beaten up by the cannabis boys and the crypto lads, there are some bargains and some interesting long shots. Taking 10% of your portfolio, ignoring Garth’s very good advice about avoiding single stocks, and having a bit of fun is never a bad thing.

Names?

Victoria Gold (V.VIT) is building a mine in the Yukon. They will pour gold next year. Trading around $0.35.

Marathon Gold (V.MOZ) switching over to development of a 2.7 million ounce deposit in Newfoundland. Trading around $0.70.

Bayhorse Silver (V.BHS) has a producing silver mine in Oregon and will pour silver in the next few months. Trading around $0.12

And for your longshot, Precipitate Gold, great geological theory in the Dominican Republic right next door to the largest gold mine in the Americas. Brilliant directors and a drill plan which proves or disproves the hypothesis in ten, short (200 meter) holes. Trading at $0.08.

All are risky, none are as risky as writing naked calls on natural gas in October.

Best part? You can call any of the CEOs and they’ll be happy to tell their story. Try that with the Royal Bank.

#82 Darren on 11.21.18 at 11:42 pm

I will not kick James when he is down, karma is a bitch. The lesson for the kids is to understand risk. Naked options offer plenty and should be avoided.

#83 Crazyfox on 11.21.18 at 11:45 pm

Reflections:

This is a world on a crash course with disruptions… some good, some bad, some needed, some coming too late, but they are coming. In the next decade we are sure to see a disruption in transportation and this will ultimately disrupt the price of oil, of this I have no doubt. Electric cars, self driving cars, the cloud that streamlines transportation through cities and parking is coming and the convergence of this tech is so needed but it will come.

We have or should have a disruption in energy storage and with it, as solar continues to become cheaper to produce energy with capital costs than oil/gas, solar and wind will capture much greater market share. It comes late, maybe too late, but it will come. We need storage now and it might even make sense to do it now regardless of who pays too much for it initially.

I am reminded of the guy who talks about his grandmother’s foolish investment in solar panels for her roof, an investment that will pay for itself in, what, 180 years… 7 years ago… and how foolish an investment it will always be even though, unbeknownst, solar was then, 500% more costly and storage 250% more costly than it is today. She was the greater fool who invested in the future, the soldier who walked point and took the first shot, the worker who took the bad air and industrial smog for the team, losers in their time so that there would be future winners.

Everyone is so concerned with covering their own ass… so distracted with their pursuit to become a have or better than for, you know, security and such.

And that is what is so wrong with this world.

We don’t just need disruptions in tech, in energy, in the food manufacturing industry, in health, in the way governments are chosen, in the way we price risk, price pollution, price it all, we need disruptions in the way we think. So many of us live in a bubble… so many of us are just covering our own asses and how well has that worked? How is that going for us? As we lap up a 50 year lie on Sugar that mirrors a 50 year lie on cigarettes and vape our way into the new tomorrow with pot, when will we learn what we were always supposed to, what our good willed ancestors wanted us to learn and know, when will we finally develop a relationship with our father and the tree of life?

For as long as mankind walks this earth, there will be money, currency, some kind of numerical exchange. There will always be numbers to define value but how long can humanity last investing in folly? When will we learn that the ideal of equality or the egalitarian ideal:

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

… best defined as everyone having the same value or worth regardless of our differences, but there’s the rub. A great number of us don’t want it. A quick glaring example, America first. Some of us want to be superior/inferior and as such, will make war to make that happen. Some of us will hold grudges, harbor revenge and hatred to make sure it won’t happen and so, the world is full of conflict and bad choices, unwanted disruption.

For we can chose equality, the path of peace through love and forgiveness of everyone and thing we’ve ever encountered in our hearts, or we can choose inequality, the path of war, revenge and hatred to hang onto that which we believe makes us superior/inferior, like wealth and power however fleeting regardless of cost. Our choice, peace or war. Equality or inequality. Charity or greed. Love or hate. Forgiveness or revenge.

The disruption we most need is found within the recognition of who we truly are and by consequence, who everyone else is, by claiming our birthright, regardless of difference, of race, religion, education, wealth/poverty, age, gender, status, name, even past choices. Its found within the connection to the divine, its purpose laid out for millennium and the future to come if we so choose it. Choose it we must lest we become the greatest fools of all.

#84 kbean on 11.21.18 at 11:53 pm

Find it a bit funny that people are complaining that Garth did not publicize his portfolio managers actions. If you want to get all the details, maybe consider paying for his services?

He also said “trimmed”, probably going from ~18% to ~13%. He hasn’t existed the asset class and this is tweak. Folks just need to chill a bit and rebalance (I wouldn’t even bother changing my asset allocation).

#85 Smoking Man on 11.22.18 at 12:28 am

Logic is finally beating insanity. I’m felling it.

How will you bet?

#86 Jacky Dangerous on 11.22.18 at 12:41 am

Re:Cordier. Look into the mans eyes, demeanor, vocabulary and you easily recognize a man in deep crisis. During my time in the industry it was common to watch an individual falling into a nervous breakdown . They get glassy eyes, start saying emotional goofy things. Not uncommon were the suicides aplenty. Investing is a rough game. Hedge fund managers should be forced to show themselves on video once a month so that people can gauge their state of sanity. Cordier wasn’t blown out by mistaken strategy, he is more than likely stuck between several layers of mental illness. A guy talking about himself as a captain lost at sea and his ship going down isn’t vernacular, its unhinged. His coworkers should have pulled the plug a lot sooner.

Meanwhile, my call is that the bottom occurred two weeks ago. My numbers have been creeping up, big confirmation in energy and transport yesterday. Forget the headlines, look at the meat and potato stocks.

As a student of the EMT decades ago I agree generally with Garth the theory, but I use what’s called the ” ketchup index” for consumer price inflation, which has been up up up, far more than acknlowedeged by our lying politicians.

If I was satisfied with a 6% return when the price of things I consume is roaring along at 20% p/a , than
my savings are going to be worth zero in a third The same net timeframe. I tried a dog bisquit once, didn’t like it. Ergo, I am a straight up GARP guy with cash dividends a must. Five years ago I was buying a bottle of ketchup to under a dollar, now it’s three.

#87 crowdedelevatorfartz on 11.22.18 at 12:47 am

@#58 There is Hope
“I just saw a new listing for $139,900 on a 18,000 SF lot by the transit bus.”
+++++

How long does it take to commute from Hope?
2 hrs each way?

#88 SoggyShorts on 11.22.18 at 1:25 am

#65 Doug t on 11.21.18 at 9:38 pm
The inflation rate is 3% – great advise
Garth

Meh I sleep at night so what

RATM
**********************
And wake up poorer every single morning? Ouch.

#89 Stammerai on 11.22.18 at 3:33 am

Garth,

That dodgy fund guy JC is lucky he ain’t in Japan or he would have had to end the vid with a dramatic hara-kiri moment.
BTW that poor dog must be having a doozy of a night, emerging from the Dutch oven, only to be greeted by some sweaty odiferous feet…….

#90 Cry me a river on 11.22.18 at 3:52 am

DELETED

#91 When Will They Raise Rates? on 11.22.18 at 4:23 am

…and it’s gone

https://www.youtube.com/watch?v=_nVk25ZvTkU

#92 Howard on 11.22.18 at 5:57 am

Now Cordier has no money, no fund, no clients and a giant liability.

——————————–

You forgot to mention what he likely WILL have very soon : multiple lawsuits.

#93 Jacky Dangerous on 11.22.18 at 6:04 am

#3 Parksville Whiner, I’m not always Garths biggest fan, we’ve had our disagreements, sure. But whining about the CPD performance is just wrongheaded, it’s at least a triple for Team Garth. He brought it to our attention , and when I backed up the truck, it was $11.37. From yesterday’s close we’re still up 15.34%, plus the juicy fat dividend. Anyone who’s in, holding and stomachs the normal volitility, is up 20% +, that’s fine with me. The premise for ownership is still solid. Thx Garth.

#94 Frank The Tank on 11.22.18 at 6:22 am

I don’t understand why everyone is so fixated on their portfolios. It’s a long game, or at least should be. If you want large gains quickly, well, you can see what happened to Cordier and his clients. That is gambling.

On another note, the Toronto Star came out with an interactive data map about rent increases across the country.

It’s amazing to see how widespread the rental increases have gone outside Toronto and in the surrounding GTA. Newmarket is a whisker behind Islington. As for downtown, 26.2% increase in 5 years … ouch.

Link: https://www.thestar.com/news/canada/2018/11/22/which-neighbourhoods-have-seen-large-spikes-in-rent-the-star-mapped-5-years-of-rental-data-in-15-canadian-municipalities.html

#95 Howard on 11.22.18 at 7:00 am

#57 Hogtown Harry on 11.21.18 at 8:43 pm

Grow a little humility. I know it’s not easy for your generation that has been given everything on a silver platter.

You won the birth year lottery and followed the masses to home ownership “decades ago” (your words) when a 416 detached could be bought for the price of Leafs season tickets.

You are not some sort of financial oracle.

#96 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 11.22.18 at 7:45 am

Make Believes choke, lose 5-2.

https://www.cbc.ca/sports/hockey/nhl/toronto-maple-leafs-carolina-hurricanes-recap-1.4915454

But it IS different this time! Everyone in the GTA, HURRY, take out everything left in your HELOC and buy all the remaining tickets you can for the rest of this season. No worries, because your home value will only go up, and the Leafs will only win! It’s what happens there!

The last 51 seasons? Just ignore it, that was just a blip. It’s different now. Promise.

You are proudly Torswampo, Ontariowe. You KNOW what has value :)

BTW…there’s a slanty shack for sale down the road from you, why not borrow from your MIL and BIL and outbid everyone else and make it an income property? You’ll make millions, fer sure!

#97 crowdedelevatorfartz on 11.22.18 at 8:19 am

Wow.
Mr Cordier should be nominated for an Emmy for the tears.
I noticed he spent the first 6.5 minutes of a 10.5 minute video talking to the suckers….err…clients…..err “friends” that have now lost everything “invested”.
Classic attempt to pull at the heartstrings to avoid lawsuits, “I trusted him, he’s a really nice guy, He’d never do anything to hurt me….”
The folksy ‘splainin about “turning the ship” and “rogue waves” doesnt negate the fact that the real reason he’s gulping for air and teary eyed is…. HIS party is over…for now.
Unless a pack of commission based lawyers are set free on him to root out his money…..
This guy will be back with some other “investment” idea in a few years and a whole new set of “friends”.
Hopefully it isnt just the rolex he’s stashed away and the SEC can strip him to the bone for losing his clients money and toss him in general population for 5-10 years.

It appears he did nothing illegal. If greedy clients, willing to gamble, had not given him money, there would have been no losses. Don’t lose perspective. – Garth

#98 Asterix1 on 11.22.18 at 8:42 am

#95 50 YEARS OF MAPLE LEAF INCOMPETENCE! on
__________________________________________

You seem to be posting your nonsense on the wrong website! Try this one instead. Goodbye…

https://www.sportsnet.ca/hockey/nhl/hurricanes-beat-maple-leafs-halt-toronto-streak-4/

#99 IHCTD9 on 11.22.18 at 8:56 am

#57 Hogtown Harry on 11.21.18 at 8:43 pm
#126 IHCTD9 on 11.21.18 at 11:18 am
#103 Hogtown Harry on 11.21.18 at 6:07 am

_________
Did you read the article cowboy? I am questioning your sanity after reading the article… Seriously, are you in the same mental ward as Stan Brooks?

https://www.huffingtonpost.ca/2017/03/01/canadians-leaving-major-cities_n_15080726.html

“This is EXACTLY the information you asked for delivered to you on a silver platter, at no cost whatsoever!!You can thank me later.”

For what? Not knowing how to read…. It clearly states that folks are bailing to place like Oshawa, Whitby, Ajax and other communities around the GTA where they commute to Toronto for work. I personally have witnessed bumper to bumper traffic on Hwy 400 from Toronto to Barrie. 80 kms of folks descending from Barrie and the hinterlands to work in Toronto. I am not kidding. 80 kms of bumper to bumper traffic. The article also states that the 40 year long migration from Montreal to Toronto continues…

“I must warn you however, that this link will connect you with media containing verifiable and irrefutable facts, so you may be unable to understand what is being said.”

It is you cowboy that do not understand how to read articles. Read it again. Slowly. Ask for help on words you don’t understand….It clearly states that while folks are moving out, there is a net increase in population due to immigration. Further, those moving out are doing so to commute back to Toronto.

“You may find yourself getting confused and experiencing a sudden unexplained loss of the ability to read.Chronic Factophobia is real, and should not be suffered in silence. It is OK to need help sometimes, especially with difficult flare ups of fact, truth, and times when intellectual honesty is getting you down.”

Those are your symptoms not mine. It really rankles you that homes in Toronto are worth so much. Even worse, is that when they were purchased decades ago when I purchased they were very affordable only to see staggering gains, all capital gains free on a principal residence. A neighbour just sold out for north of $2million and is heading north to a place on a lake for a fraction of the price. Retirement is sweet.

“Well, I’m here to help hogster! In the event you find yourself unable to digest said facts, I am trained to help you absorb them, just a little bit at a time; so as to minimize your discomfort.”

You are the one in need of help. First for your reading skills and comprehension and second to get over your delusion that Toronto is emptying out. Lastly, help for your overwhelming jealousy of those who have scored big time in home values in Toronto.
————

Yeah, I can read. The article says Toronto loses more locals than any other city in Canada.

I am under no delusion that Toronto is emptying out, and never made a single assertion that Toronto is losing net population. Go ahead and check my original post if you must.

Oshawa, Whitby, Ajax, Barrie etc are not Toronto.

I made no statement on where anyone chose to work, nor of commuting times or traffic jams.

I don’t begrudge anyone windfall RE gains (even you Hogster), I have a couple buds who won this same lottery. I’m not wealthy, but I’m working on it the old fashioned way. IMHO, the more cash that is in Canadians’ pockets; the better everything will be.

I think it’s pretty clear you’ve jumped to some conclusions before actually understanding what I originally posted. I’m not going to go over it again, just try to remain calm (and understand what is being said before posting back) the next time I use this same data to point out changing perceptions and actions in the GTA (and you can bet I will).

#100 Stan Brook's Psychiatrist on 11.22.18 at 9:07 am

#95 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 11.22.18 at 7:45 am

Hi folks. Stan “Madman” Brook’s psychiatrist here. As I am sure most of you have figured out who the Toronto hater is and yes, it is our beloved Stanley. He was frothing more than usual as he pounded the keyboard with his diatribe against the good folks of Toronto. Please have mercy on poor Stanley. He is one sick puppy….

#101 baloney Sandwitch on 11.22.18 at 9:23 am

It appears he did nothing illegal. If greedy clients, willing to gamble, had not given him money, there would have been no losses. Don’t lose perspective. – Garth

Remains to be seen if he provided proper disclosure of his strategy. However most likely he is “judgement proof” as his LLC would have no assets and very hard to go after his personal assets unless fraud is proven. That is why, when use naked options I do it with discretionary cash. I have put $1 million in a balanced fashion for that – instructions are to target x2 the inflation rate.

#102 IHCTD9 on 11.22.18 at 9:24 am

#141 KLNR on 11.21.18 at 2:58 pm

hmm, Over the past 15yrs I’ve made substantially more on housing than I could have ever made with a balanced portfolio. lucky timing for me, definitely couldnt achieve same results if I started now.
—————-

Yep, right place, right time. I have owned for 17 years, so we probably bought around the same time and are near the same age. If I bought in Toronto in 01 instead of down the road from Sanata Claus – I’d be sitting on a heap of potential profits too. As it is, if I sold now and after a throughly honest assessment of what I’ve put into owning; I might just get my costs back out plus 1-2%.

Folks our age who decided to set up shop in the GTA/GRVD have won big. Pretty much everyone else is in the same boat as me (if they are honest about their costs of ownership).

#103 russell on 11.22.18 at 9:32 am

And the idiot puts the entire bank on shorting gas… trading sense right out the window and not only looses it all but the clients are on the hook for the settlement ater market close and they still owe on top of what was lost.

#104 karl linden on 11.22.18 at 9:41 am

Garth, not sure if this has been pointed out, but when trading’naked’ options you are SELLING an option, so your statement about buying and paying for the option is backwards. The whole point of the strategy is to collect the option premium and hope not to be called / put into the underlying position.

#105 James on 11.22.18 at 9:55 am

#51 Crazyfox on 11.21.18 at 8:03 pm
_________________________________________
I believe Crazyfox is on the correct path re Electrifying the auto world. The commitment is there and it’s coming! Part of my investment portfolio is in infrastructure companies which are the ones who will electrify the charge and distribution networks for new tech. The other is power containment units and alternative power sources (not wind and solar) such as bio. Having said that I am not going out to purchase a Tesla.

#106 Fish on 11.22.18 at 10:10 am

Liberals cut taxes, mend fences with Canadian businesses
Facebook
Twitter

Tax breaks are welcomed but continuing deficits are seen as a problem

Peter Armstrong · CBC News · Posted: Nov 22, 2018 4:00 AM ET | Last Updated: 5 hours ago

https://www.cbc.ca/news/business/tax-dollars-1.4545415

#107 James on 11.22.18 at 10:12 am

https://www.huffingtonpost.ca/2017/03/01/canadians-leaving-major-cities_n_15080726.html

The was a interesting read but I really didn’t learn anything new? The millennial crowd has been bailing the city and the core for years now due to cost. The ones that stay are in glass greenhouses in the clouds. Most of my neighbours where I am in the central core have not moved nor do they have any intentions of moving. I have seen two neighbours leave for the burbs over the years one went to Halton Hills (closer to job & larger home) and the other to Burlington due to a job transfer (she works in the medical field). Overall the city continues to grow with the influx of new Canadians and transfers.

#108 Nice Weekly Sale on 11.22.18 at 10:28 am

#77 TurnerNation – Thanks for the morning hoot on this beautiful semi for only $1.15 million. It needs a parking permit, 2176 SF including the basement, and look at the view from the rear. This is a turkey cooked for a greater fool. What a waste of investment dollars.

#109 Fish on 11.22.18 at 11:03 am

Highlights of Bill Morneau’s 2018 fiscal update

CBC News · Posted: Nov 21, 2018 4:15 PM ET | Last Updated: November 21

Finance Minister Bill Morneau delivered his fall economic statement Wednesday. Here are the highlights of his fiscal update:

Growth: 2 per cent forecast next year (up from 1.6) — and slightly higher inflation.
Unemployment rate: 5.8 per cent next year, down from 5.9.
Projected deficit: $18.1 billion for current fiscal year.
Revised 2017-2018 deficit: $19 billion, down $0.9 billion.
Debt: Expected to grow by $96.7 billion to $765 billion by 2023-24.
Debt-to-GDP ratio projected to fall each year, to 28.5 by 2023-24.
New measures announced today: $17.6 billion over 6 years.
Biggest move: $14.4 billion to allow businesses to write off some capital costs more quickly.
Trade: Infrastructure spending moved up and other measures to promote trade. The goal is to boost overseas exports by 50 per cent by 2025.
Read the full 2018 Fall Economic Statement (PDF)
UPDATEDLiberals deepen federal deficit in response to Trump tax cuts
Fall economic statement sets target of 50 per cent export growth by 2025
Morneau’s update bolsters struggling media with $600M in tax measures
Support for Journalism: Charitable status for non-profits, local news tax credit and tax deduction for subscriptions.
Francophone media: $14.6 million over 5 years to create digital platform for TV5Monde, a channel created by French-language public broadcasters.
Strategic Innovation Fund: Additional $800 million over 5 years, including $100 million for forestry sector.
Social Finance Fund: $755 million over 10 years to help charities and non-profits fund social projects.
Wild fish stocks: $202 million more over 5 years to support sustainability.
Nutrition North: $62.6 million over 5 years and $10.4M per year after that for food security program.
Avalanche Canada: $25 million one-time endowment to promote avalanche safety.

https://www.cbc.ca/news/politics/highlights-morneau-fall-economic-statement-1.4913231

#110 dharma bum on 11.22.18 at 11:19 am

That graph looks like the mountain I’ve been hiking, while ignoring all the stock market news.

http://annemckinnell.com/blog/wp-content/uploads/2014/04/arizona_20140305__DSC5909-Edit-2_lg.jpg

#111 Paul on 11.22.18 at 11:27 am

https://youtu.be/vyUOo6BJTE4

#112 IHCTD9 on 11.22.18 at 11:29 am

#104 James on 11.22.18 at 9:55 am
#51 Crazyfox on 11.21.18 at 8:03 pm
_________________________________________
I believe Crazyfox is on the correct path re Electrifying the auto world. The commitment is there and it’s coming! Part of my investment portfolio is in infrastructure companies which are the ones who will electrify the charge and distribution networks for new tech. The other is power containment units and alternative power sources (not wind and solar) such as bio. Having said that I am not going out to purchase a Tesla.
————-

I think it’ll be primarily an urban thing if it ever takes off, and only among a certain demographic.

The weekend 401 traffic out here in the lemming infested Taiga is jammed with Toronto traffic. Mostly folks who are visiting family in other cities like Montreal and Ottawa (probably established new Canadians from the looks of it). More again are heading out to summer homes, cottages, fishing and camping trips etc… Long weekends see bumper to bumper traffic jams 2 hours from Toronto.

Needless to say, no one will be doing this kind of travel or hauling gear, multiple adults, or trailers in an electric sub-compact. The only E-car that has enough range and comfort/passenger capacity/power to even think about doing this is the Tesla S, and those cost more than a new Z06. Even a top end model 3 is like 75 grand CAD!

I have to admit though, that my power tools are now almost all battery powered. I just bought a 40V cordless 14” chainsaw, and can now forget worrying about plugged carbs, mixing gas, the smoke, and the bloody noise of a gas saw. It has the motor-power and battery life to do real work, it’s perfect for a guy that needs a chain saw only a couple times per year. I just love these new 20V+ power tools :).

So things are moving along, but IMHO, there needs to be a major breakthrough in range, and price; before E-Cars go mainstream.

#113 Guy in Calgary on 11.22.18 at 11:52 am

Trimming Preferreds? Don’t remember hearing about that until today..thought preferreds were safe when rates rise..guess after a 10% drop you can say after the fact that your boys were trimming. Would have been nice to know about a month ago.

Why should I rebalance your portfolio? – Garth
————————————————————-

LOL exactly. This is just a blog.

#114 IHCTD9 on 11.22.18 at 11:55 am

#106 James on 11.22.18 at 10:12 am
https://www.huffingtonpost.ca/2017/03/01/canadians-leaving-major-cities_n_15080726.html

The was a interesting read but I really didn’t learn anything new? The millennial crowd has been bailing the city and the core for years now due to cost. The ones that stay are in glass greenhouses in the clouds. Most of my neighbours where I am in the central core have not moved nor do they have any intentions of moving. I have seen two neighbours leave for the burbs over the years one went to Halton Hills (closer to job & larger home) and the other to Burlington due to a job transfer (she works in the medical field). Overall the city continues to grow with the influx of new Canadians and transfers.
————-

Thank you for reading the data and understanding it.

The actual original point I was making days ago was in reference to a new StatsCan study that noted a **huge increase** in **locals** leaving the GTA, with the most startling number being the over 300% increase in Millennials (local ones) leaving compared to the previous study.

The articles I linked to never said Toronto was emptying out (and neither did I), rather it said a certain two demographics had severely increased their preference to bail out of the GTA (and yes, undoubtedly due to housing costs).

The articles were making forward looking statements based on the continuation of this new data, like more seniors, less youth, more 3rd world immigration (all that I 100% agree with), but it’s just a **current** trend for now. It could calm down, it could also accelerate.

If, 5 years from now; the same trend is still increasing, then we will have a decade plus of accelerating intraprovincial emigration of established local young folks exiting the GTA – and that then, is obviously a serious problem for city hall and businesses.

The final assertion I made was that the **growth rate* of the GTA has been on the decline for decades. This obviously does not mean the GTA has a shrinking population, rather it means the population growth has been slowing down.

#115 Vooch on 11.22.18 at 12:01 pm

So how come anything other than a stock index can look like tulip mania. Has anyone seen a 100 year chart of the DOW?

#116 TurnerNation on 11.22.18 at 12:09 pm

#14 Nelson sure a hyperfeminist city where childcare is unaffordable to all but the top 20%. How’s that working out.

The point is that at that time for the sake of a 3 million two bedroom condo in the FS one could have purchased 10 regular 2-bedroom condos. Which would have handily then doubled (+ rental income) in the decade that ensued.

Makes though for a good condo fish story. The Big One that got away.

#117 yvrguy on 11.22.18 at 12:37 pm

#78 JSS on 11.21.18 at 11:14 pm

I don’t have time to research specific stocks or want to buy individual stocks, so for dividend growth companies I choose the following ETF and hold a 10% position:

DXG

actively managed, 22 holdings of internationally diversified stocks, high conviction.

let them do all the research.

#118 Shawn Allen on 11.22.18 at 12:44 pm

An Income Growth Portfolio

JSS describes his income portfolio:

#78 JSS on 11.21.18 at 11:14 pm
#60 Shawn Allen

I selected twenty or so stocks with the following criteria:
– blue chip conservative companies ($1B+ market cap in Canada)
– history of annual dividend growth
– dividend growth must’ve occurred even in bad years (eg 2009)
– payout ratio < 75%
– beta of 1 or less
– diversified over various sectors: banking, pipelines, groceries, telecom, consumer defensive, utilities, industrials

Over the last ten years the average annual dividend has been between 5-7%.

I’m not so concerned with the capital value of the portfolio, but primarily that the dividend growth is increasing.

I couldn’t find an ETF that can do the above.

However, there is a closed fund called Canadian General Investments (CGI), that can closely approximate.

**************************************
Very interesting. And looking it up CGI has been around since 1995. But it used to have a widely variable dividend mostly paid at year end and based on capital gains. Since 2014 its goal is a steadily rising eligible dividend paid quarterly.

Of course CGI goes up and down with the market. But if the goal is truly to send out cash for spending those variations could be almost irrelevant. (Yet they get almost 100% of our attention).

Despite rising interest rates and come what may, I suspect JSS is going to be doing a lot of tummy rubbing for year to come.

#119 Crime Factor on 11.22.18 at 12:51 pm

This will not be going away, and only become worse. The number of cops who threw in the towel have moved away to smaller communities to retire or work has been hidden. Why is there a shortage of cops, so now you know. The tourists and day trippers will think twice about visiting Toronto out of fear, costing the city a loss in revenue. Students by the thousands graduating with skills from Colleges and Universities can no longer afford moving to Toronto, and go elsewhere. Toronto will suffer from lost revenues, and skills needed to function. Many have blown off their homes to move away to live a better life elsewhere at a discount price free from crime. Follow the money trail and its not in the GTA anymore its going elsewhere.

#120 Ace Goodheart on 11.22.18 at 1:09 pm

RE: #77 TurnerNation on 11.21.18 at 11:13 pm

1.15m for an ancient gawdy semi with some lipschtick thrown on inside. Would have been a tear down, but saved.
Parking? Ha no. Greater fool found:

“Then the buyers increased their original offer to $260,100 over asking. The sellers considered holding out for other offers, but ultimately decided to accept, because they were concerned that the waiting list for street parking permits in the area might deter other buyers.”

https://torontolife.com/real-estate/houses/toronto-house-sold-149-monarch-park-avenue/

You can walk from there to two subway stops. That is the attraction of it.

For some reason people in Toronto get all teary eyed whenever they find a house located within a 5 or 10 minute walk of a subway.

Perhaps it is due to the relative rarity of subway stops in Toronto in general. Perhaps they think back to the last time they tried to board a street car (push, push harder! you can fit in there. Just shove, and have someone behind you shove, and everyone will shuffle back a bit more so you can get in the door….or wait for the next one, which will also be full…..) or a bus (I’ve been waiting for 45 minutes, then four busses show up all at the same time, two of them are packed full, the fourth suddenly changed its sign to “Not in Service” as it approached my stop, and the only one with any room for me, zoomed past, splashing me with road salt, while one of the two completely full ones stopped, and the driver announced that despite her best intentions, it was clear I would not fit on board and I would have to wait for the next “bus cluster” to trundle past and try again).

The subways come predictably (except during rush hour, when someone always pushes the panic button and they are delayed for hours), and except on weekends when they are upgrading the signal system (which has been going on for 20 years).

So I guess people now cry for joy and open their wallets when they can live close enough to a subway stop that they can walk there, and not have to take a bus or a street car.

Oh well. Now they have decided that rather than build a new subway in downtown Toronto (where there is no space for any more busses or street cars) they are going to build it out to Pickering instead, so 4600 people a day who currently ride the half empty GO trains into Toronto, can ride a 15,000 person per hour subway instead, for what will be probably an hour long subway ride downtown.

So, turn on the tears and open the wallets and call your banker and beg and plead for more money.

Another rare house in walking distance to a subway in Ontario’s capital city, just went up for auction.

#121 NoName on 11.22.18 at 1:32 pm

IHCTD9 i have my money on you!

Anyways, i was listening talk radio and topic was something like what do you keep away from you spouse. Lady called and she introduced her self (same name as my wife) and she sad i have secret account that my husband doesn’t know about. Funny thing my wife also have secret account. I remember once someone asked us are those all accounts? And me saying, no there is one more, my wife’s secret account, wife was blushing and person that asked questions was smiling. So if your wife’s name starts with S and finishes with a, claim your half before Christmas shopping starts, or its going to be to late in a week or two.

#122 Wrk.dover on 11.22.18 at 1:36 pm

#109 dharma bum on 11.22.18 at 11:19 am
That graph looks like the mountain I’ve been hiking, while ignoring all the stock market news.

http://annemckinnell.com/blog/wp-content/uploads/2014/04/arizona_20140305__DSC5909-Edit-2_lg.jpg

———————————

And those California poppies will show for the last week of March

#123 crowdedelevatorfartz on 11.22.18 at 2:08 pm

@#108 Fish
“Growth: 2 per cent forecast next year (up from 1.6) — and slightly higher inflation.
Unemployment rate: 5.8 per cent next year, down from 5.9.
Projected deficit: $18.1 billion for current fiscal year.
Revised 2017-2018 deficit: $19 billion, down $0.9 billion.
Debt: Expected to grow by $96.7 billion to $765 billion by 2023-24.
Debt-to-GDP ratio projected to fall each year, to 28.5 by 2023-24.”

++++++
UGH.
More spending, more debt. Painful.

As for the economy “growing”….
We aint the States and the burp in the Real Estate sales could turn into something much messier in 2019.
I cant wait to see the “Black Friday” sales stats for Canada with our Postal Strike pounding the crap out of e- commerce.
Perhaps a harbinger of the Christmas sales to come?

#124 portfolio weights on 11.22.18 at 2:16 pm

Hi Garth,

Regarding the trimming of preferreds in the portfolio,
What are your new portfolio weights you recommend?

Thanks! and love your blog.

#125 Steven Rowlandson on 11.22.18 at 2:44 pm

I just had to replace my computer and I am in the process of whipping it into shape.

#126 Craig Lewison on 11.22.18 at 2:47 pm

Doug T, Google credit unions GIC’s and you will see 3.75% to 3.8% 5 year GIC rates.

Your $500,000 will earn an extra $100 a week more in annual interest compared to your 2.75% GIC.

#127 Fish on 11.22.18 at 3:19 pm

@ 122

strong sales TVs electronicS Etc??

waiting for realestate,

#128 Doug t on 11.22.18 at 3:34 pm

#125 Craig

Cheers thanks for that

#129 Chinese Dude on 11.22.18 at 4:09 pm

#106 James on 11.22.18 at 10:12 am
https://www.huffingtonpost.ca/2017/03/01/canadians-leaving-major-cities_n_15080726.html

————————————————–

The data is old (2011-2014). Back then, the oil price was high and the job market in Alberta was great.

Since the collapse of oil price in 2015, many people have been moving from AB to YVR due to unemployment.

#130 Crazyfox on 11.22.18 at 5:24 pm

#76 palebird on 11.21.18 at 10:53 pm

Watch the lecture from Tony and the interview with the CEO of North America’s #1 seller of cars and trucks. Its not just me saying it.

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

#111 IHCTD9 on 11.22.18 at 11:29 am

G.P.S. goes everywhere (except mountain ranges, towers will have to go up) and so will driverless cars.

While I am on the subject, all the links I’ve provided on here are excellent and should be watched. I mean, I love tech. The stuff that’s already come out that has simplified our lives, give me more, its great! :) But we need tech in areas that we haven’t got right now, or are slow to market because buyers are too resistant to change.

I brought up Ambri corp because storage is so needed in solving the electrical generation riddle in the fight against climate change. For those who take the time, the prof at MIT lecturing has covered the bases, you can tell. A guy like myself with too much time on his hands (sort of) spent the hours looking into what else Donald Sadoway knows and his first lectures from 5, 6, 7 years ago were raw and full of mistakes. There is an evolution to it, an evolution to the mindset of the inventor and its product evolution in parallel with how the inventor presents and takes it to market and I found it highly educational to see Don’s evolution from his perspective.

What hurdles will you face, from drumming up cash (in this case, no problem. Bill Gates, French energy conglomerate Total etc.) to how you pitch your product to those that need it and that’s perhaps the biggest hurdle of all. One can only imagine Donald pitching liquid batteries to owners of power generation plants who see him as the enemy because he wants them to replace what they have.

Not everyone wants progress, even if it saves or makes them money. Perhaps they believe its too good to be true, skeptics abound… in part because they didn’t take the time to watch the lectures of change in the industry from those in the know, greed/fear, fear of the unknown so go with what you know, there’s a host of reasons but at some point, common sense has to prevail and it can’t all come from consumers, industry or the marketplace, it has to come from government and that means voters and political parties have up their game and that’s what scares me most. On this area alone, our track record is abysmal.

I believe the disconnect comes from not knowing, either by accident or design, just how much risk C02 e.i. climate change truly is to this world. This is not someone else’s problem, its everyone’s. My #73… if readers understood the lecture provided and its not hard to absorb when you watch it, they would know why the ICPP is ringing alarm bells. They have no choice, the public needs to know and be given a chance to react but even so… what was the reaction to telling the world we are headed for irreversible worldwide disaster if we continue with business as usual by 2030? Its left the news cycle and ends up in the dustbin of every other news cycle. We need more disasters now, like California wildfires relocating 250,000 people leaving maybe 1,000 dead to drill it home and even then… we get prez Trump telling us to Rake America Great Again. RAGA. until it happens to us right, but that’s just it. It is happening to us, we are too disconnected, too self absorbs with daily life to notice.

My # 73 comment scares me most not because its not yet mainstream and should be so climate change awareness is a huge problem… but because of the psychology driving our bad choices. Look at my #66 for a moment. More than half of adults in the U.S. have a metabolic disease and in at least 75% of all cases, they came from food and drugs, i.e., self chosen lifestyles. Instead of changing the way we live (and think), we go to doctors who have been trained to dope and cut and that’s mainly all they know which is fine if you need that, but don’t expect more than this. They can’t live our lives for us and don’t expect them to tell us how to eat raw/whole foods for our sake because that’s not in their wheelhouse. Its the resistance to change, the refusal to venture into the unknown, the refusal to take risks… without recognising that business as usual is the greatest risk of all. Its not as hard as it seems, the unknown. Increments. Check out this story:

https://www.youtube.com/watch?v=8svuSIYQu74

I’ve got some power reading to do, can’t be helped, will be off this site for at least a month, G’day all.

#131 Ronaldo on 11.22.18 at 6:16 pm

#128 Chinese Dude on 11.22.18 at 4:09 pm
#106 James on 11.22.18 at 10:12 am
https://www.huffingtonpost.ca/2017/03/01/canadians-leaving-major-cities_n_15080726.html

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The data is old (2011-2014). Back then, the oil price was high and the job market in Alberta was great.

Since the collapse of oil price in 2015, many people have been moving from AB to YVR due to unemployment.
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Do you have a link to this data re: people moving to Vancouver because of being unemployed. Seems a bit whonky why they would move to the most expensive place in Canada.

#132 jess on 11.22.18 at 6:53 pm

the donald wall …will not stop these guys

no ordinary double homicide in tampa ….look what was in the garage!

https://www.propublica.org/article/an-atomwaffen-member-sketched-a-map-to-take-the-neo-nazis-down-what-path-officials-took-is-a-mystery