Nope

Justin Trudeau frets over Lavalin. So should you, if you own it.

Things just keep getting worse. The giant Quebec-based engineering conglomerate lost 9.6% of its value on Tuesday. That was atop a 7% plop Monday. This week a slew of analysts chopped their price target for what was once a darling hunk of most investors’ portfolios, as the stock crashed down to twenty bucks a share – the worst showing in 14 years.

Investors have lost 50% on ride to the basement

Lavalin, as an investment, has shed 50% of its value in the past year. The bleeding is not over yet. The largest shareholder, Quebec’s premier pension fund, has publicly flamed management for corporate “deterioration” which is “a growing cause for concern.” And as you know, the outfit remains at the centre of a federal Liberal government scandal that caused the departure from cabinet of two prominent female ministers. They will now run as indies, in opposition to the Trudeau party.

But Lavalin is not alone in the category of Big Companies That Blow Up. Look at Boeing.

On Wednesday the massive airplane maker with global reach announced a Q2 loss of three billion and a 35% crash in revenues. Said the CEO Dennis Muilenburg: “This is a defining moment for Boeing.”

No guff. The company’s 737 Max cost 350 lives in two crashes and now hundreds of planes are grounded. Company creds are shredded and it may never really recover. The stock is down 12% while the market is up 10%. Regulators are all over the company like a moist fungus. What was once a no-brainer hunk of investment portfolios has become a bundle of unknowns.

Now consider Blackberry. Nortel. Enron. Yellow Pages. Bombardier. Valeant. It’s a long list of ‘blue chippers’  that have ended up as lumps of coal, weighing down investors who had absolutely no inkling things could go so wrong, so fast.

This is why the stock cowboys and other macho men who ride onto this blog to shoot things up and scare the horses are gamblers, not investors. And it’s why most people – 95% of us – should have nothing to do with owning individual equities. It’s a crap shoot. Catastrophic losses can, and do, take place. It’s happening now. Lavalin.

JP Morgan catalogued this. It examined a broad-based index of US equities and found that over time the odds of any one company’s stock tanking – a decline of 70% or more from peak to trough – was a stunning 40%. In some sectors (like tech), that jumped to near 60%.

Yikes. Who needs that when trying to finance a house purchase or plan for retirement? This kind of danger is called ‘unsystematic risk’ – the potential of a company melting down. (In contrast to ‘systematic risk’ which is a general market decline or macro-economic event.) To eliminate unsystematic risk, as much as possible, you’d have to own dozens of individual stocks – likely 60 or more. And that would take a lot of dough, in a big and complex portfolio. For most investors, managing that would be impossible, since you also need other asset classes (bonds, preferreds, REITs etc) in order to be balanced as well as diversified. Plus, imagine the trading fees.

So the goal is to spread investment capital around, reducing exposure to any one thing, so you don’t get burned by the unexpected. To squash volatility, in other words. The goal of diversification is not to boost investment returns, but to keep your spouse from killing you for unexpected losses. You both want growth, yes. But you also need predictability. Without it, how can you plan for the future?

The best, cheapest, most liquid way to diversify is with ETFs – exchange-traded funds. For example, a single ETF can hold positions in the 500 largest companies in the US, so if Boeing blows up you barely feel it. There are big advantages over mutual funds, which also have broad exposure – namely instant liquidity (they trade on the stock market, which mutuals do not), and low fees (often 90% less).

But not all ETFs are created equal. Some give exposure only to narrow sectors of the market or the economy (not the best choice) while others use two or three times leverage to exaggerate profits (and turn losses into nightmares). When picking a fund, ensure it has the right underlying assets, lots of liquidity (should you need to exist fast) and that the embedded management fee is microscopic. Yes, there are hundreds and hundreds of them to choose from now, so be careful. Or get help.

As for Justin, well, the price of Lavalin may be secondary to the smell.

127 comments ↓

#1 TurnerNation on 07.24.19 at 3:56 pm

Is that H in today’s photo?? Either way it must be taken down..cultural appropriations you know ;)
Tsk tsks coming.

#2 Photo on 07.24.19 at 4:08 pm

Those were the Village People who appeared in Toronto about 1972 at the Downtowner Club by the International Airport.

#3 Rainman on 07.24.19 at 4:20 pm

Diversification and time. simple…

#4 Dollarama Dude on 07.24.19 at 4:25 pm

I mostly agree with you Garth, but have dumbly followed that other path since the 90s. Been burned a lot on individual stocks, esp gold stocks and tech burnouts. But since about 2001 that turned around, Bought Nortel for peanuts and tripled within a year. Then realized how much I was using Google, bought shares in 2003 and have done nicely. Same for other FANG stocks. Latest is dollar stores. (Some US ones are now tanking, so watch out.) But I picked up Dollarama between $10-30 ten years back. It went to about $150 then split. As the economy and the wealth divide increases, this store will become the go-to place for millions more Canadians. I am already up over 2 million overall, including all my past losses. I am planning to dump DOL however, but not until it goes past $135 or so, which should be about two years Then I will definitely go balanced, maybe hire a good firm like yours!

#5 Matsebula on 07.24.19 at 4:49 pm

Garth, you must be a huge Burton Malkiel (Random Walk Down Wall Street) fan. His asset weightings and general methodology are pretty hard to distinguish from your blog’s content here. Excellent book.

#6 Aaron Edgar on 07.24.19 at 4:49 pm

Systemic?

#7 Lee on 07.24.19 at 4:54 pm

But if you don’t pick some individual stocks, its like letting someone else do your gardening. You don’t feel like you have contributed anything?

And by the way, recent polls put JT back on top ahead of boring Scheer. Scheer is goign to smile his way to the official opposition’s seat.

#8 Dave on 07.24.19 at 4:57 pm

“The goal of diversification is not to boost investment returns, but to keep your spouse from killing you for unexpected losses.”

These words are gold, and absolute truth as far as I’m concerned . After riding a TFSA on individual stock purchases and pure luck to a 15% gain in one year and coughing it all up the next, Mrs just about gave me one last chance at investing. 4 years on following Garth’s advice on weightings and doing the odd rebalance, I’ve never looked back.

I can’t imagine the difference between the steady growth to come and the losses I’d have had by sitting on cash over the next 25-30 years.

Purely and simply, the (free) advice on here is the only advice that has ever worked for me, and I’m very grateful for it. Thanks Garth.

#9 mrnick on 07.24.19 at 5:09 pm

Indexing in Canada is of some help, but doesn’t remove specified risk entirely. These are the constituents of CPD, one of the more popular ETFs for preferreds:

TD 8.76
RY 8.39
TC 5.68
ENB 7.66

So 4 issuers account for about 30% of the index. Not a lot of diversification here.

ZPR and HPR are heavily invested in almost identical names.

Same thing with XIU where ENB, RY and TD account for about 20% of the index.

So if your portfolio is 20% in preferreds and another 20% in Canadian equities with say 10% in Canadian bonds, you have a lot riding on select few Canadian businesses.

Imagine a big bank blowing up or an insurance company faltering and you’ll see the repercussions across the Canadian common, preferred and bond markets. Literally, too big to fail scenarios there.

S&P 500 on the other hand offers a lot more diversification with top 10 stocks comprising no more than 18 to 20% of the index.

Garth mentions diversified global portfolio and the reasons are obvious.

#10 Penny Henny on 07.24.19 at 5:19 pm

#74 Sail away on 07.24.19 at 4:35 pm
#70 TheDood on 07.24.19 at 2:36 pm
#66 Sail away on 07.24.19 at 1:23 pm
#61 Penny Henny on 07.24.19 at 11:23 am
This is how I determined I had enough F-You money and tricked my former employer to constructively dismiss me and then settle for damages.
—————————————-
You sound morally bankrupt, untrustworthy and selfish. Why would you ever think that defrauding your employer is something anyone wants to hear? Are you proud of this sleazy maneuver?
If you were one of my past employees and I saw this type of commentary, I’d hire a private investigator to track your social media boasting and start a lawsuit to regain the stolen funds.
People like you deserve zero respect.
______________
Is unfortunate that many live their lives a certain way. Still, without knowing the context behind the scenario, it’s easy to sit and judge. With corporate greed now an accepted societal norm, why expect different from an employee? Follow the leader ……….

————————————–

Are you serious? It’s now acceptable to commit crimes against those we’re unhappy with?

All we can do is regulate our own actions. When someone brags about criminal activity on social media, they are completely in the wrong. Felony fraud is a very serious crime.
////////////////////

No fraud committed.
More like a game of chess, except I was thinking three moves ahead.
You mistakenly think the every business owner has morals similar to yourself. Think again.
Every penny I got I deserved, ever hear of common law.

#11 JSS on 07.24.19 at 5:22 pm

Boeing should now change their name to “Boing”.

#12 tccontrarian on 07.24.19 at 5:31 pm

“And it’s why most people – 95% of us – should have nothing to do with owning individual equities. It’s a crap shoot. Catastrophic losses can, and do, take place. It’s happening now. Lavalin.”

I’m glad that you’ve gotten ‘softer’ Garth – by saying ‘95% of us’. Sort of legitimizes us 5% of ‘outliers’ (or just plain ‘liars’ lol) who are dedicated DYIs.
With Lavalin, I had had the thought to short it but never got around to it – would’ve been highly profitable.

Anyway, as the JP Morgan table shows, EVERY sector can provide negative returns – and that’s why I still believe that WHEN you buy (anything), is always more important WHAT you buy. I would include bonds here as well (and obviously, Real Estate!)

tcc

#13 yvrguy on 07.24.19 at 5:55 pm

#9 mrnick on 07.24.19 at 5:09 pm
Indexing in Canada is of some help, but doesn’t remove specified risk entirely. These are the constituents of CPD, one of the more popular ETFs for preferreds

—————————

simple, no maple.

XIC is junk.

ZLI instead. 10-12% max.

#14 JPN on 07.24.19 at 5:58 pm

For young guns starting out go 66% XAW, 33% XIC/VCN in the TFSA. When your income grows start the RRSP. VAB should be your first purchase, a bond fund that has 20% corporate and 80% government bonds. If you manage to fill both your TFSA and RRSP you’ll be golden. However should you have excess cash in a taxable account this is where things get a bit muddled. Should you hold a Canadian ETF for the dividend tax credit? Or do bonds make more sense with the crazy low interest rates? Even though youre taxed at your marginal rate WRT bonds does it make sense to stuff registered accounts with low growth stuff? Lots to consider. Most important though is to call your parents and tell em you love em every other week. And treat your coworkers well, along with customers/ patients. You never know what they’re going through. Also….. stay sexy.

#15 Sail away on 07.24.19 at 6:02 pm

Yes, agreed, 95% people should have nothing to do with individual stocks.

I’ll stick with the 5% since it’s so much fun- the first bankruptcy is devastating and the first 10-bagger is euphoric.

#16 paracho on 07.24.19 at 6:26 pm

Diversification is key . Necessary actually to blunt the effects of not only unsystemic risk , but also systemic risk .
Diversification would also include US and International holdings within ones equity portion along with reits, ETFs to gain even more diversification and bonds or fixed income exposure via actual bonds or bond ETFs …. this along with a diverse holding of preferred should help blunt volatility .
Weighting is key and too much in one particular holding can cause either too much exposure along with not taking advantage of other opportunities out there .

#17 S.Bby on 07.24.19 at 6:42 pm

BRE-X

#18 Jacques Strappe on 07.24.19 at 6:50 pm

Garth – you’ve said in the past holding individual stocks is OK if you have a large enough portfolio (>7 figures). Would equity ETFs or a professionally managed portfolio of stocks be better for a middle aged dude with a few mil?

#19 Timmy on 07.24.19 at 6:51 pm

I’ve owned blue chip dividend paying stocks for 10 years and none of them have dropped by 70%. The worst was 35%, but many of them have risen by more than that amount. My 5 year return was over 9 percent.

#20 Chimingin on 07.24.19 at 6:52 pm

Gee, Lee #7, I don’t do my own dental work either, but I still feel like I’m participating.

And who cares what the polls say right now? They will be up and down until the worthless bum gets thrown out of the PMO in October.

#21 TRUMP on 07.24.19 at 6:59 pm

Buy UTILITIES Stocks…….. That’s what the data tells me.

And time to jump into SNC…..

“The time to buy is when there’s blood on the streets”

SNC is bleeding heavily. Management will change, the company will carry-on.

#22 espressobob on 07.24.19 at 7:03 pm

Individual stocks are fine for side bets, keeping in mind any substantial gain or loss really has no impact overall on ones portfolio.

Systemic risk owning ETFs that track the major indices tends to produce decent returns over time. The trick is to leave it alone and never ever trade out of a position when panic sets in. Hell, buy more.

#23 S.Bby on 07.24.19 at 7:08 pm

What’s that old saying? The market takes the stairs up and the elevator down…

#24 acdel on 07.24.19 at 7:09 pm

The ship has sunk. People are broke; taxes are high, priorities are wrong, decency has gone out the window. Going back to my cheap bottle of C.C.! :)

#25 Nonplused on 07.24.19 at 7:23 pm

The problem with Lavalin was corruption. The problem with Boeing was, well corruption.

In an effort to install larger more fuel efficient engines on the 737-Max at minimal design and testing costs they moved the location of the engines and tried to compensate for the altered flight characteristics using software. This was dangerous. Planes should be designed to fly just fine without computer assisted corrections required to keep them in the air. The exception being high performance military aircraft. But no civilian aircraft should be designed in such a way that it is not stable in flight without computer corrections to the control surfaces. Certainly not without computer corrections that can overwhelm the pilot and override his instructions. Well, that is exactly what they did here in an effort to reduce costs.

It is likely to cause the company great harm, because there is no way to correct the flight instability of putting larger engines in a different location without the computer attitude control. It may be the case that the 737-Max may never fly again. If that is the case, the shares your ETF had in Airbus might well offset the losses they have from Boeing.

No company should be thought of as an enduring entity like the Catholic Church. They have a life cycle. They were originally designed to undertake specific projects. Like railroads, for example, although those have been some of the most enduring.

Companies are not enduring, the same way we are not. Some last a very long time, like say car manufacturers. But look at how many times those have been bailed out at tax payer expense and a near total loss to the shareholders.

For example I was thinking about this the other day when asked by my son’s soccer club to comment on a proposed “facility fee”. The idea was to start collecting a fee from each player to build a fund so they could one day build their own field house. But 3 questions came to my mind: Why are current players funding a facility that they will never use as it will be built far in the future after they are no longer playing? And if the club collapses, which they often do they come and go based on what the parents think of the management, who owns the building? And if it never gets built, will they hunt us all down and return the money? Indeed, such facilities are things only the city should own because they can rent them to whatever clubs are on the rise at the time. The only exception I can think of is when a private investor builds the facility and leases it to whom he sees fit. But the clubs themselves are not a proper entity to own long term facilities, because every 10 years or so the membership is entirely and wholly different. And they wax and wane like the moon. I’ve seen clubs that were founding members of the league reduced to a former shell of themselves within a few years just by hiring the wrong technical director.

Mainstream churches are a little different, as it is the church itself that owns the buildings. It doesn’t matter if the membership in a certain congregation rolls over, the same entity still owns it.

I suppose another way to run such things as churches and soccer clubs would be to sell the members shares, so they do actually own it partially, and can sell the shares upon leaving the club or congregation. But in the case of a sports club I think it would be easier to rent from the city, and in the case of a church let Rome own it.

Corporations can own property, but of course it is clearly understood who gets the assets when the corporation fails: The banks. Always the banks. And it is also clear who owns the assets if the corporation hasn’t yet failed: The shareholders.

Corporations, governments, political parties, sports clubs, charity organisations, and churches are all similar in one way: They are all one bad leader or technical innovation or scandal away from dissolution. This is why it takes so long to appoint a Pope. It’s also why Notley and Trudeau accomplished nothing and are now being erased by the dust in the wind.

#26 Dazed and CONfused on 07.24.19 at 7:26 pm

“….Regulators are all over the company like a moist fungus…….

Sounds more like penicillin to me.

#27 Sail away on 07.24.19 at 7:33 pm

#10 Penny Henny on 07.24.19 at 5:19 pm
#74 Sail away on 07.24.19 at 4:35 pm
#70 TheDood on 07.24.19 at 2:36 pm
#66 Sail away on 07.24.19 at 1:23 pm
#61 Penny Henny on 07.24.19 at 11:23 am

This is how I determined I had enough F-You money and tricked my former employer to constructively dismiss me and then settle for damages.
—————————————-
You sound morally bankrupt, untrustworthy and selfish. Why would you ever think that defrauding your employer is something anyone wants to hear? Are you proud of this sleazy maneuver?
If you were one of my past employees and I saw this type of commentary, I’d hire a private investigator to track your social media boasting and start a lawsuit to regain the stolen funds.
People like you deserve zero respect.
______________

Is unfortunate that many live their lives a certain way. Still, without knowing the context behind the scenario, it’s easy to sit and judge. With corporate greed now an accepted societal norm, why expect different from an employee? Follow the leader ……….
————————————–
Are you serious? It’s now acceptable to commit crimes against those we’re unhappy with?
All we can do is regulate our own actions. When someone brags about criminal activity on social media, they are completely in the wrong. Felony fraud is a very serious crime.

////////////////////

No fraud committed.
More like a game of chess, except I was thinking three moves ahead.
You mistakenly think the every business owner has morals similar to yourself. Think again.
Every penny I got I deserved, ever hear of common law.

—————————————-

Probably not the smartest idea to publicly gloat about tricking the company into a legal settlement then.

#28 crowdedelevatorfartz on 07.24.19 at 7:39 pm

My my.
As a former SNC Lavalin (press ganged via corporate absorption) employee who walked away in disgust from a multi year employee seniority position……
My heart pumps purple urine.
I sold my employee shares several years ago at a hefty profit.
As for the Liberal / SNC …..financial / political incest…..
May Jody Wilson Raybould be the Supreme Court judge that hands down the final verdict….

I was in Lunenburg on Monday and drove past our intrepid blogsters excellently reconditioned office…
Well done Garth!
I wanted to stop but the street parking was at a minimum and the horse drawn carriages seemed to “own the road” .
Alas.
No “Bandit” sightings….too damn hot!
So Garth….when are you going to chip in repaint the beautiful Academy at the top of the hill?
We could start a Go Fund me page……..

#29 Smoking Man on 07.24.19 at 7:40 pm

DELETED

#30 Shawn Allen on 07.24.19 at 7:51 pm

Credit Card Delinquency Rates

Okay, so we noted that other day that mortgage delinquencies (90 days or more late) are at record lows. And it was mentioned that people will keep the mortgage current even when late on other bills. And we know that mortgage defaults are more likely when home prices fall.

What about credit card delinquencies?

Also at record lows at 0.8% as of 2018. The recent high was only 1.3% in 2008 and the record high was 1.8% back in 1990.

So less than 1 person in a 100 is 90 days behind on their credit card.

https://cba.ca/Assets/CBA/Documents/Files/Article%20Category/PDF/DB038%20-%20Visa%20%20MCI%20Stats%20-%20Updated%20for%202018-7-16.pdf

Of course we don’t know what percent of people are making minimum payments. We don’t know how many are treading water using the Visa to pay the MasterCard.

Many people have large amounts of debt. But with unemployment rates low and with access to new loans to pay old debt the ability to tread water and remain current on payments in spite of it all is remarkable.

U.S. 30 day credit card delinquencies are 2.6%. Down from 6.5% in 2009.

https://www.federalreserve.gov/releases/chargeoff/

It would be far easier to compare if the Canadian Bankers Association provided 30 day delinquencies.

#31 crowdedelevatorfartz on 07.24.19 at 7:54 pm

@#23 S.Bby
“The market takes the stairs up and the elevator down…”

+++++

Speaking of “Down Elevators”….
The South Burnaby riding is really starting to “Smell” for the leader of the NDP……

#32 Yukon Elvis on 07.24.19 at 7:57 pm

DELETED

(Never try that again – Garth)

#33 Shawn Allen on 07.24.19 at 7:59 pm

SNC

#27 crowdedelevatorfartz on 07.24.19 at 7:39 pm
My my.
As a former SNC Lavalin (press ganged via corporate absorption) employee who walked away in disgust from a multi year employee seniority position……

*****************************
I’d be interested to know more if you can share.

My conclusion back when the bribery scandal broke was that SNC was rotten to the core. It seemed to me that they tried to blame things on a few rogue employees and never really took ownership of that issue.

Now they had the misfortune of losing work due to Canada’s spat with Saudi Arabia.

But we also now find that they were incompetent in their fixed bid projects business and also to some degree in their consulting engineering services to the resource sector.

Fire sale of assets seems to be under way.

#34 JD on 07.24.19 at 8:02 pm

@#25 Nonplused on 07.24.19 at 7:23 pm

Amazing how you come up with so many ideas in a single blog comment….and then the fluidity with which you express them. Do people like you still exist in an age when most writings are either 7-times recycled points or otherwise banal? Seriously, take it as the compliment it’s meant to be. (And this from an often lurker!)

#35 Shawn Allen on 07.24.19 at 8:08 pm

Boeing and Bombardier C-Series

It was sad when Bombardier had to basically give away half of the C-Series to Airbus for no money. And remember that was in some part due to Trump imposing huge duties.

Will the C-Series benefit greatly from the problems / possoible demise of the 737 max. Or will the older model 737s remain the go to option along with Airbus products?

#36 PeterfromCalgary on 07.24.19 at 8:12 pm

Why is Africa so poor? It is not only because of colonialism 100 years ago. China and Hong Kong suffered the same colonial rule and they have managed to prosper in recent decades.

The reason Africa is still poor is a high level of corruption. Corruption like we have seen in the SNL Lavalin scandal in which a company closely connected with Trudeau’s Liberals bribed government officials.

Think about that when you vote in October!

#37 SoggyShorts on 07.24.19 at 8:12 pm

#73 Mattl on 07.24.19 at 3:06 pm

I get that, but I suspect that renters on the whole don’t save anymore that home owners. The renter that puts aside every dollar saved from owning is a myth IMO.

***********************
Certainly rare, but not a myth. The entire FIRE community does it (That’s Financial Independence Retire Early).
A significant chunk of Gen x (yes we exist too!) and mills realized that the old way of having 1 job for 40 years with promotions and raises every x years and a nice pension are mostly gone. Those who combined that knowledge with some financial literacy are in pretty good shape now.
Sure many got lucky in GTA/VAN RE, but I think that the success stories from the prairies are largely renters who do have a much higher savings rate.

#38 Yukon Elvis on 07.24.19 at 8:24 pm

#32 Yukon Elvis on 07.24.19 at 7:57 pm
DELETED

(Never try that again – Garth)
………………………..

You don’t care where the tax dollars go?

Sure, but not from an alt-right, religious, homophobic whack job web site. – Garth

#39 crowdedelevatorfartz on 07.24.19 at 8:33 pm

@#33 Shawn Allen
“I’d be interested to know more if you can share.”
++++
Well.
To be as legally vague as possible.

My company was purchased by SNC.
All the employees were vetted to SNC for the exact same salaries and benefits or could quit without any severance.
We were all pretty excited and optimistic about a larger company taking the helm…..
6 months later the exodus began…
SNC management .
Beaurocratic, obstinate, brainless….
Couldnt care less about the employees (or customers) concerns.
6 months later the exodus became a rout.
Former staff were bailing as quickly as they could.
Human Resource Depts all over the city were seeing the”SNC Syndrome”….excellent, skilled people walking away in frustration and disgust.
I’m amazed it’s taken this long for the markets to figure out it was all smoke and mirrors ( with a bit of bakshish tossed in)….. oh well , I guess billion dollar govt contracts do buy a bit of time……….even after the RCMP raid the Head office in Montreal……

#40 Yukon Elvis on 07.24.19 at 8:39 pm

For all the boo hoo-ing about debt and deficit I guess you don’t care about that 700 million.

#41 Shawn Allen on 07.24.19 at 8:57 pm

Are average incomes distorted way low?

Average incomes usually look shockingly low.

But as Garth has said 40% or so of people (tax filers?) pay no net income tax.

Income figures probably exclude child tax benefit and GST cheques?

#42 Rargary on 07.24.19 at 9:07 pm

Hi Garth,

In the “catastrophic loss” def’n in the chart, how long of a “with minimal recovery” timeframe before it’s deemed a catastrophic loss?

Yukon Elvis is quite insistent. Doesn’t know when to stop.

#43 Politician on 07.24.19 at 9:08 pm

#justin needs to post some more photos of his feet and the millennial vote will be his

#44 CalgaryCarGuy on 07.24.19 at 9:12 pm

Re #7 by Lee…..
And by the way, recent polls put JT back on top ahead of boring Scheer. Scheer is goign to smile his way to the official opposition’s seat.
——————————————————————–
The upcoming election is a definite intersection for Albertans. You go right ahead and crow for a Trudeau win Lee. Alberta separatists (and there are many now) are rooting for him to win as well. It will make things so much easier. It is not a joke or a fantasy. The people in this province have balls and have had enough. Just watch us. A country broken….by Justin Trudeau.

#45 T-Rev on 07.24.19 at 9:23 pm

Gartho, SNC is a stock trading on fear in a broader market trading on greed. This isn’t Blackberry. It isn’t Nortel. It isn’t Enron. They don’t trade on a narrow product suite vulnerable to technological change and competition, and they’re not cooking the books. They conducted business in a corrupt market and played by he local rules, not the international ones, and the cost of that mistake is already booked in. These guys are smart, capable, behemoths that know how to make money by delivering exceptional value.

10 years index investing. Never strayed, never bought a single lone equity. Today was the day for me to make a contribution to my portfolio of about 2pct of its current value. I took half that contribution, due to incur a trading fee anyway, and plunged it into SNC. We’ll see if it turns out to be a mistake- I’m gonna sell when it gains 20pct, or December 2020, whichever comes first. Something tells me I’ll cash out soon at $24 a share.

#46 Doug in Londinium on 07.24.19 at 9:30 pm

Well, look on the bright side. If SNC Lavalin doesn’t go under, there may well be a buying opportunity coming. Disclaimer, do your homework before you even think of buying into this company.

As for the photo yes, it looks like The Village People. I had largely forgotten about them until now, although 40 years ago this spring their classic tune YMCA was getting radio play. The first time I heard it I thought it was an ad.

#47 Yukon Elvis on 07.24.19 at 9:31 pm

You don’t care where the tax dollars go?

Sure, but not from an alt-right, religious, homophobic whack job web site. – Garth
…………………
Right you are. My bad. Here’s the same numbers from a globe and mail article :
Prime Minister Justin Trudeau announced hundreds of millions of dollars in new foreign-aid spending for sexual, reproductive, maternal and child health on Tuesday, helping to fill a global funding gap left by the United States’ rescinding of international abortion spending.

Mr. Trudeau said Canada must push back against attacks on women’s rights, particularly abortion rights, at home and abroad. Canada will fund this effort by gradually increasing its international funding for women and girls’ health and rights to $1.4-billion annually in 2023 and maintaining that yearly amount until 2030. Half of that yearly spending will be dedicated to sexual and reproductive needs. That is up from $1.1-billion spent right now, $400-million of which is spent on sexual and reproductive needs.
https://www.theglobeandmail.com/politics/article-trudeau-announces-billions-in-foreign-aid-for-maternal-and-child/

#48 akashic record on 07.24.19 at 10:10 pm

Mueller shed more of his social capital today than all the stocks mentioned.

#49 Smoking Man on 07.24.19 at 10:14 pm

Now we cant talk about what an epic screw up the Mueller investigation turned out to be.

Dear God.

Your post was libellous, and cruel. – Garth

#50 Catholic on 07.24.19 at 11:01 pm

#47 Yukon Elvis – T2 and his wife indicate they are good Catholics, so what would his Priest have to say regarding this matter? In fact, have never seen them going to any church of this faith for a photo opp.

#51 Spectacle on 07.24.19 at 11:02 pm

“Lavalin, as an investment, has shed 50% of its value in the past year. The bleeding is not over yet. The largest shareholder, Quebec’s premier pension fund, has publicly flamed management for corporate “deterioration” which is “a growing cause for concern.” ”

So,
– a one assett strategy,
– in one Province as the one biggest shareholder,
– one industry
– one huge political mess
– One broken, corrupt Political party losing its grip and authority to cover it all up

What part of One Big Mistake did they not see coming?

ONE call to Sir Turner would have saved billions, and a Political party…..”. Yup, pretty much.

#52 Capt. Serious on 07.24.19 at 11:02 pm

#4 Dollarama Dude on 07.24.19 at 4:25 pm

Then realized how much I was using Google, bought shares in 2003 and have done nicely.

That’s quite a trick, seeing as Google didn’t IPO until 2004.

I am already up over 2 million overall, including all my past losses. I am planning to dump DOL however, but not until it goes past $135 or so, which should be about two years Then I will definitely go balanced, maybe hire a good firm like yours!

If you are up over $2M you already won the game, and you’d best take the risk off before you blow up.

#53 Nonplused on 07.24.19 at 11:24 pm

#34 JD

If I take you on your word that that was a compliment and not sarcasm, then thanks!

Truth be told, I have a lot more time on my hands than many people do (hence the length of my comments) so I read a lot and most of the ideas I espouse are not entirely original, although they come from selected sources. But I do have the time to boil various ideas down into much shorter commentary than the original sources. That is perhaps my contribution.

Garth hasn’t always posted my comments without comment, and twice I got DELETED, although I think both rulings were overly harsh, but it’s his blog so he can do what he wants. He has the ultimate control of the content on his blog. But he’s left me alone lately. And to be fair he lets a lot of stuff go. So I judge him to be an excellent moderator. Although I think a disclaimer is in order, just because Garth allows a comment does not mean he in anyway agrees with it, it is the opinion of the person submitting the comment.

#54 PastThePeak on 07.24.19 at 11:38 pm

No doubt that 95%+ of the population should not be involved in any individual equity selection. Most people hate math in general, let alone an interest in all of the knowledge areas required for investing.

Just to note though, that even with its current pull back, Boeing stock has performed far better than the broader S&P 500 over the last 20 years.

#55 rc99ar on 07.25.19 at 12:07 am

You do NOT need 60 stocks to diversify. Have a few really good eggs in you basket and watch them very closely. Lots of good advice on this blog but you shouldn’t pump the EMH, beta=risk crap I paid to hear in business school. How about a post some day on what it tokes to deliver alpha and why [email protected] never will.

#56 Nonplused on 07.25.19 at 12:10 am

#88 Jesse on 07.23.19 at 2:59 pm
#86 SoggyShorts on 07.23.19 at 2:01 pm
#57 Nonplused on 07.23.19 at 2:43 am

Jesse and SoggyShorts it’s taken me a while to think of my response but I think I have it and it runs a little deeper than my hip-waders.

First of all SoggyShorts nobody enjoys the wedding not even the adults. There is only one guy in the room that enjoys a wedding ceremony and that is the father of the bride, because hopefully she is off his bankroll for a while. The kids enjoy the reception the most and the ceremony is no more painful for them than math class, which they get every weekday.

Jesse, there are studies that show that immigration does not improve demographics, because the immigrants bring their whole family including grandma and grandpa (this is not a racial comment so please don’t DELETE, it applies to all immigrants wherever they be from). In addition, those immigrants who assimilate begin to act like the locals in terms of birth rates almost before they finish junior high school.

But what is really going on here? That is the question. I believe the answer is not to be found just in the “children at weddings” question, but a much larger social trend of which this is only a part. We’ve all heard of “post-industrial society”. We’ve also heard of “post-modern society”. I propose a new term: “Post-social society.” We now live in an era where families do not live close enough to visit at Christmas, almost all the friends you have are on Facebook, people spend almost all their waking hours looking at a screen, children are not invited to family events, soccer teams are formed by some unreliable “evaluations” formula the technical director has and not by who wants to play together and who the coach wants to coach, and many families have more TV’s than they have people.

I may write more about it in the future, but the new concept I am investigating is the “post-social society.” Gone are weddings with children, church attendance, social clubs like the Elks, the Boy Scouts, and even kid’s sports teams are in decline as technical directors try and turn the process of forming teams into an anonymous process of having computers calculate scores based on 2 minutes of observation by a disinterested person who has nothing to do with the team. Even dating sites are a sign of this. Who you date is no longer dependent on where you live or the circles in which you run.

About the only place “society” still runs strong is the pub. It doesn’t even run strong in the “neighborhood” because many people don’t even know their neighbors. They’ve never sat and had a coffee or a beer with the guy living right next door. In 1960 this would have been unheard of.

It’s been some years now that the biggest influences even in the religious sphere have all been on TV. I think Billy Graham started it. But it was a continuation of the tent revival movement, where you could get saved while being anonymous to your fellow practitioners whom you have harmed.

We are moving into the “post-social” age, where the only social engagements that you have that have any longevity are to be found on social media, and can be replaced at a whim. Children not allowed.

People invited to weddings have transitioned from “family and friends” to “NPC’s” (Non Player Characters – a gaming phrase). It’s happening everywhere else too. How long until children are not allowed a funerals? Although i am sure the kids will be glad to play Xbox rather than attend a funeral.

My “children” were recently “deinvited” to a wedding as children were not invited. Except that 2 of my children were invited separately as they are adults. So only one of my children is not invited, not yet being 18 but able to drive a tractor. What a freaking mess. I should have politely said “no”. There is a real limit you can place on your guests in the quest to satisfy your own narcissism. Weddings in Cuba are a good example. If I have to take a week of work and dedicate my vacation time to it and spend $1000 per attendee on hotels and flights, guess what? I think you meant I wasn’t invited.

#57 JPN on 07.25.19 at 12:30 am

#14 JPN .. I’ve had this handle for years. Too confusing having 2 of us.

#58 Ponzius Pilatus on 07.25.19 at 12:30 am

#36 PeterfromCalgary on 07.24.19 at 8:12 pm
Why is Africa so poor? It is not only because of colonialism 100 years ago. China and Hong Kong suffered the same colonial rule and they have managed to prosper in recent decades.

The reason Africa is still poor is a high level of corruption. Corruption like we have seen in the SNL Lavalin scandal in which a company closely connected with Trudeau’s Liberals bribed government officials.
Think about that when you vote in October!
—————
Weird logic.
Canada is among the 10 least corrupt countries in the world.
China is around 90.
Yeah, think about when you vote in October

#59 Ponzius Pilatus on 07.25.19 at 12:45 am

Just found this great deal on a decent house in a decent neighborhood in Richmond.
Looks like a steal for 990k.
Or is the new reality?
https://www.ovlix.com/property/2soYgj-8971-Wagner-Drive-Richmond-BC-V7A4N2

#60 BS on 07.25.19 at 12:51 am

If you held SNC Lavalin and Boeing over the last 5 years how would that compare to CPD pref share ETF which has a 15% negative total return over 5 years? Boeing and SNC would have done better.

#61 Dolce Vita on 07.25.19 at 1:06 am

Great analysis and conclusions, as usual, Garth. And I mean it.

Off topic, if you will permit, from an Old School Chrétien/Martin Liberal here that may, that’s a BIG may, yet return to the fold.

Watch this ad:

https://twitter.com/JustinTrudeau/status/1154151957168381952

A 180° about face from the normal lipstick, kaleidoscope, things to and fro across the screen ads he has been running that look like a 5 year old created them in Digital Arts class.

And for once, he is not stretching the truth like his “we asked the 1% to pay a little bit more for tax cuts to the middle class” severely Math Challenged lipstick et. al. ads.

Here he is sincere and caring and hazard to say, Prime Ministerial.

Now, if only he would get off his past reproductive, reckless tax handouts & pay everyone off, apologize to the World, can’t keep his yap shut insulting the US, China, etc., etc., ALTRUISTIC FRAT BOY COLLEGE KID narcissist ways.

Mission Impossible?

Maybe the Phoenix IS arising from the ashes. Just the 1 data point. Hope Springs Eternal.

I hope so, for if not, he will destroy the Fed Lib Party come October and that is not good for the Country.

#62 Dolce Vita on 07.25.19 at 1:09 am

“Sure, but not from an alt-right, religious, homophobic whack job web site. – Garth”

THAT was good and OH, SO, TRUE.

#63 Smoking Man on 07.25.19 at 1:44 am

Zero to 20 took Along time
20 to 40 was faster.
40 to 60 was in a blink of an eye.
60 to death.
A mano second.
Enjoy the ride. ….

https://youtu.be/4XvI__yHNow

#64 Smoking Man on 07.25.19 at 1:53 am

DELETED

#65 Smoking Man on 07.25.19 at 2:05 am

DELETED

#66 Axehead on 07.25.19 at 4:22 am

#44. You got that right. There is a lot of discussion at Alberta coffee shops and workplace coolers about separation. Never has it been this bad for this long and is mostly political.

#67 Howard on 07.25.19 at 4:25 am

Good. Hope Lavalin goes under and takes Bombardier with it. Leeches both of them.

#68 Howard on 07.25.19 at 4:42 am

#4 Dollarama Dude on 07.24.19 at 4:25 pm
I mostly agree with you Garth, but have dumbly followed that other path since the 90s. Been burned a lot on individual stocks, esp gold stocks and tech burnouts. But since about 2001 that turned around, Bought Nortel for peanuts and tripled within a year. Then realized how much I was using Google, bought shares in 2003 and have done nicely. Same for other FANG stocks. Latest is dollar stores. (Some US ones are now tanking, so watch out.) But I picked up Dollarama between $10-30 ten years back. It went to about $150 then split. As the economy and the wealth divide increases, this store will become the go-to place for millions more Canadians. I am already up over 2 million overall, including all my past losses. I am planning to dump DOL however, but not until it goes past $135 or so, which should be about two years Then I will definitely go balanced, maybe hire a good firm like yours!

———————————

I’ve read many others promoting this line of thinking (buy where poor people shop/eat) and there’s a lot of logic to it. In the same vein, many recommend to buy McDonald’s, since come the next recession it’ll be the only place the majority of people can afford to go out for dinner. Though at $160B market cap, it seems rather overbought right now.

#69 Fabio on 07.25.19 at 6:01 am

SNC will bleed more. Wait before buying. Patience is a virtue. I’ve bought only Vanguard ETF’s. Been doing pretty good with them last few years.

#70 hookshott on 07.25.19 at 7:34 am

#66 Axehead on 07.25.19 at 4:22 am
#44. You got that right. There is a lot of discussion at Alberta coffee shops and workplace coolers about separation. Never has it been this bad for this long and is mostly political.
……..
Feel free to explore this idea and see where it leads you. Believe it or not, you will not be missed but just make sure Jason leaves with you.

#71 maxx on 07.25.19 at 8:01 am

@ #7

Garbage in, garbage out and stupid is as stupid does, eh wot?

Results are what count. Always. Not effort-driven, self-imposed failure, not socks, not hair and least of all, not a phony Cheshire cat smile mouthing “I bought a pipeline?”, “Canada’s 100th anniversary” and the list goes on and on and on…………………

Four years is way long enough to see (and suffer) results. Another round of this and Canada may never recover.

I’ll take Scheer’s smile any day. I get the distinct impression that he takes his job far more seriously.

#72 Westcdn on 07.25.19 at 8:08 am

Don’t know where to start. I have issues and like to talk them out. At the end of the day, I make decisions to carry out – hopefully not “hurting” too many. I am quite modest and respect honesty – not hard to make me okay. Yet, I am not happy with the future I see. An introvert to stand up and fight is a rare thing. Just watch me…

If memory serves me right, Billy Bob saw bullet holes in his fuselage and I am sure better pilots died under the same circumstances – let’s get real with luck. It is nice to think you are special and gifted but when push comes to shove, I will take the salt of the earth rather than oligarchs despite their power, mind you that means a lot of baggage. Reality bites. I do like his and Garth’s condescending comments – they are a check where I should be.

I will never be a draw on society. JE is killing me.

#73 jess on 07.25.19 at 8:13 am

ah but corruption needs pushers no?

The problem with Lavalin was corruption. The problem with Boeing was, well corruption. ..”oh yeah, “reputational risk” depends on the coverup.

———-
joe O latest OPINION isn’t even his opinion – amplifying an echo for example who is judith curry?

or as mueller responded it is neither witch hunt nor hoax

#74 Tater on 07.25.19 at 8:32 am

55 rc99ar on 07.25.19 at 12:07 am
You do NOT need 60 stocks to diversify. Have a few really good eggs in you basket and watch them very closely. Lots of good advice on this blog but you shouldn’t pump the EMH, beta=risk crap I paid to hear in business school. How about a post some day on what it tokes to deliver alpha and why [email protected] never will.

————-

Leverage and/or concentration. Any other questions?

#75 dharma bum on 07.25.19 at 8:41 am

“This is a defining moment for Boeing.”
——————————————————————
Boeing.

Uh Oh.

Boeing Boeing

https://www.youtube.com/watch?v=K7Wzx_jgKrE

HEY LADYYYYYYYYYYY!!!!!

#76 Another Deckchair on 07.25.19 at 9:00 am

re the Boeing 737 -MAX.

It’ll fly just fine without the MCAS software – the issue was that airlines would have to put pilots through more training. Boeing wanted the MAX to feel exactly like the older 737s to reduce airline costs. Yes, they flubbed the implementation by (in some configurations, purchased by non-first world countries, IIRC) relying on one mechanical part for determining angle of attack. Bad one for Boeing, but good for them for taking the “hit” and getting the problem(s) fixed.

Airbus has had issues, too. The landing on the Hudson, the captain is stated as saying something like that the Phugoid software (anti-vertical oscillation) had created problems, and it affected the landing. And, the Quantas A330 which, almost lost more people than the MAX aircraft. (fortunately, it landed without incident, but injuries onboard)

The MAX aircraft will fly again, and will be a pleasure to be on.

Oh, and during the NASA Shuttle downtime, code reviews showed many issues, such as “jettison the solid rocket boosters” in emergency in certain circumstances would have jettisoned ONE of them, not both.

All these aircraft, like cars, are drive/fly-by-wire. None of them are perfect…

#77 Unhinged Trader on 07.25.19 at 9:22 am

Just when I thought that the B737 mess couldn’t get much worse Boeing has allegedly made an offer to the victims of the two African tragedies as follows according to Zerohedge: – $50 million to the victims and $50 million to the two governments concerned for “community development and education”.

How egregious is that!? The $50 million to government is a straight out bribe. It’s designed to make them shut up and also pressure the victim families to take the deal. Naturally, most, if not all, of the government share will be siphoned off by corrupt officials. Boeing must know that.

I now relegate Boeing to the list of sleaze merchants. They have now demonstrated a completely cynical approach to aircraft production which is utterly opposed to the pursuit of real aviation safety – something Boeing used to be famous for. Not any more.

And the Mueller testimony was an absolute embarrassment.

Trump’s re-election is now a landslide.

#78 short horses on 07.25.19 at 9:25 am

Hey Garth, I saw your former protégés in the Guardian today:

https://www.theguardian.com/lifeandstyle/2019/jul/24/millionaire-retired-30s-kristy-shen-bryce-leung-fire

It was reading something about them a few years ago that first brought me to your website — and, among other things, adding a preferred ETF to my portfolio. I hope they dedicate the latest book to you.

#79 Penny Henny on 07.25.19 at 9:26 am

People falling behind on their ‘toy’ payments.
Is a USA based recession looming?

“The biggest red flag in the latest report is in the financials. As a maker of expensive luxury motorcycles, Harley-Davidson depends on a robust consumer credit environment for sustained prosperity. The company admits that both 30-day delinquencies and annualized loss rates are high and rising, just shy of the record levels set before the great recession of 2008.”

https://www.theglobeandmail.com/investing/investment-ideas/article-can-harley-davidson-regain-its-roar/

#80 Brett in Calgary on 07.25.19 at 10:29 am

#70 hookshott on 07.25.19 at 7:34 am
#66 Axehead on 07.25.19 at 4:22 am
#44. You got that right. There is a lot of discussion at Alberta coffee shops and workplace coolers about…
=====================================
Yes, unfortunately, we are a broken country.

#81 n1tro on 07.25.19 at 10:31 am

#68 Howard on 07.25.19 at 4:42 am

I’ve read many others promoting this line of thinking (buy where poor people shop/eat) and there’s a lot of logic to it. In the same vein, many recommend to buy McDonald’s, since come the next recession it’ll be the only place the majority of people can afford to go out for dinner. Though at $160B market cap, it seems rather overbought right now.
———————–
I think McDonald’s business hasn’t been about burgers for awhile so much as to its real estate. How they differ from say Burger King is there restaurants are all in prime locations with people traffic.

#82 IHCTD9 on 07.25.19 at 10:37 am

#7 Lee on 07.24.19 at 4:54 pm

And by the way, recent polls put JT back on top ahead of boring Scheer.
____

No they don’t.

#83 LP on 07.25.19 at 10:59 am

#56 Nonplused on 07.25.19 at 12:10 am

Your perspective is really interesting and well-considered. Thanks for it.

F72ON

#84 BillyBob on 07.25.19 at 11:17 am

#25 Nonplused on 07.24.19 at 7:23 pm
The problem with Lavalin was corruption. The problem with Boeing was, well corruption.

In an effort to install larger more fuel efficient engines on the 737-Max at minimal design and testing costs they moved the location of the engines and tried to compensate for the altered flight characteristics using software. This was dangerous. Planes should be designed to fly just fine without computer assisted corrections required to keep them in the air. The exception being high performance military aircraft. But no civilian aircraft should be designed in such a way that it is not stable in flight without computer corrections to the control surfaces. Certainly not without computer corrections that can overwhelm the pilot and override his instructions. Well, that is exactly what they did here in an effort to reduce costs.

It is likely to cause the company great harm, because there is no way to correct the flight instability of putting larger engines in a different location without the computer attitude control.

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

Except your statements are nearly completely wrong. There is nothing inherently dangerous with using software augmentation for flight control, in fact its been used for a long time in both civilian and military aircraft with no issues. There are all KINDS of software protections and augmentations built into every modern fly-by-wire aircraft, which is pretty much every Western airliner in the last 20-30 years. If you’re genuinely afraid that aircraft use technology too heavily I would advise you to never fly, ever.

The problem with the Max was two-fold: firstly the system as designed was woefully short of redundancy, which left it vulnerable to a single point of failure failure. This should never happen in modern aircraft design and is absolutely on Boeing and the regulators.

The second issue has to do with training and competency – there is a well-documented dearth of pilots internationally who haven’t been trained in the aviation equivalent of a puppy mill and thus simply aren’t equipped to deal with emergencies that don’t properly fit within the checklists they’ve slavishly learned to follow, all the while heavily leaning on automation.

The real scandal is the fact that Boeing went from being an engineer/pilot driven company to just another corporate greedmonger. When you turn things over to the accountants the results are both inevitable and predictable.

Disclaimer: I fly the Boeing B787 or B777 every day I go to work, and have over 15,000 hrs flying experience, including on the 737, so I’d like to think I’m not completely unqualified to comment on Boeing aircraft or the company.

#85 IHCTD9 on 07.25.19 at 11:30 am

#79 Penny Henny on 07.25.19 at 9:26 am

People falling behind on their ‘toy’ payments.
Is a USA based recession looming?
___

Financing has really gone off the deep end. Financing a toy has obvious questions of logic attached to it. There is no scenario where you actually need the thing – and peeps borrow and pay interest to own it?

Just imagine how much Canadian lifestyles would change if you couldn’t finance anything but a house or a car outside of your personal line of credit.

Right now Canadian Tire will finance your new toaster purchase for a couple years…

#86 Jesse on 07.25.19 at 11:41 am

#56 Nonplused on 07.25.19 at 12:10 am
#88 Jesse on 07.23.19 at 2:59 pm
#86 SoggyShorts on 07.23.19 at 2:01 pm
#57 Nonplused on 07.23.19 at 2:43 am

Jesse and SoggyShorts it’s taken me a while to think of my response but I think I have it and it runs a little deeper than my hip-waders.

We are moving into the “post-social” age, where the only social engagements that you have that have any longevity are to be found on social media, and can be replaced at a whim. Children not allowed.

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

I’ve thought about this a lot lately. Being a millennial, living in both worlds, pre and post-screen, I find myself longing for the 90s. There was still tech (the internet was booming), but people still lived and socialized in the real world. There was an optimism for the future, and this was pre-9/11. Today, we seem to have lost something, I’m not sure what it is, but we don’t really have a culture anymore…we’ve traded culture for entertainment. As society becomes more atomized, it grows lonelier and unhappier.

Social and physical contact are human needs, and are as important as water. Confined isolation is a form of torture, yet MANY people voluntarily isolate themselves to their shoebox apartments and try to live a virtual life online (how long is this experiment going to last before it blows up?). Relationships are on the decline in favor or porn and Tinder hook-ups, although many young people aren’t hooking up. Remember that famous survey that came out earlier this year that found 30% of men between 18 – 30 didn’t have any sex in the last year? As this trend rises, and it will, what else can we expect? Voyeurism seems to be taking over: we’d rather watch sex than have it (it’s easier), we’d rather watch people live than actually live (reality TV, Netflix, etc), we’d rather socialize in cyberspace than do it in person….why though? Is it because it’s easier, or has the world made it more difficult to for people to meet up in person?

Millennial’s and GenZ embrace nihilism, why? Why is there no hope for the future? Why is “despair” something the young are embracing? There’s nothing to look forward to? There is nothing to latch on to? Religion – that’s gone. Atheism, narcissism and polygamous relationships are the direction we’re heading down, but no one seems happy about this.

#87 TheDood on 07.25.19 at 11:42 am

#7 Lee on 07.24.19 at 4:54 pm

……………And by the way, recent polls put JT back on top ahead of boring Scheer. Scheer is goign to smile his way to the official opposition’s seat……………….
_______________________________

Canadians showing their knuckle dragging stupidity.

#88 James on 07.25.19 at 11:49 am

#79 Penny Henny on 07.25.19 at 9:26 am

People falling behind on their ‘toy’ payments.
Is a USA based recession looming?

“The biggest red flag in the latest report is in the financials. As a maker of expensive luxury motorcycles, Harley-Davidson depends on a robust consumer credit environment for sustained prosperity. The company admits that both 30-day delinquencies and annualized loss rates are high and rising, just shy of the record levels set before the great recession of 2008.”

https://www.theglobeandmail.com/investing/investment-ideas/article-can-harley-davidson-regain-its-roar/
__________________________________________
I bought my Harley several years ago and it is definitely a toy, a very expensive toy! It is not a cheap play toy, my bike now starts at $33,599.00. When I think about it now it was a stupid investment but it is so much fun to ride that investment. My wife and my daughter continuously goad me to sell it while two my boys love it. They do retain some of their value so at least I wont get fleeced when I do decide unload and go full on Smoking Man batshit crazy in my old age.

#89 Axehead on 07.25.19 at 11:52 am

#59. That 1M dump in Richmond would sell for less than half that in Calgary and around $400k in Edmonton. Just saying.

#90 Lisa on 07.25.19 at 12:14 pm

On Wednesday the massive airplane maker with global reach announced a Q2 loss of three billion and a 35% crash in revenues. Said the CEO Dennis Muilenburg: “This is a defining moment for Boeing.”
———————————

I find it so interesting that their ‘defining moment’ came after the loss of billions and not after the loss of 350 lives. Tell me all I need to know about Boeing. I don’t know why it even surprises me.

#91 NoName on 07.25.19 at 12:25 pm

Tesla is done.

https://www.instagram.com/p/B0R9ixhjWWn/?igshid=anrj4cda4q19

#92 Dogman01 on 07.25.19 at 12:31 pm

#7 Lee on 07.24.19 at 4:54 pm

Scheer….

“And by the way, recent polls put JT back on top ahead of boring Scheer. Scheer is going to smile his way to the official opposition’s seat.”

What is with Sheer’s milk fetish…..

He sounds anti science
He seems to be putting the interests of a protected economic group ahead of science
I am tired of protected sectors and paying crazy prices for Dairy — I am being milked.
I thought conservatives were free market.

Man o man; all the bad stuff the Conservatives have earned a reputation for in one sound bite.

Are the Dairy farmers that important and that much of a swing vote to jeopardize alienating everyone else?

#93 curiousGeorge on 07.25.19 at 12:32 pm

Many SNC-Lavalin employees purchased SNCL shares regularly through Employee Share Option plan to take advantage of employer’s contribution. What should they do now?

#94 NoName on 07.25.19 at 12:34 pm

Now that we are talking boing, interesting read.

https://mattstoller.substack.com/p/the-coming-boeing-bailout

#95 Sail away on 07.25.19 at 12:43 pm

#68 Howard on 07.25.19 at 4:42 am
#4 Dollarama Dude on 07.24.19 at 4:25 pm

I picked up Dollarama between $10-30 ten years back. It went to about $150 then split. As the economy and the wealth divide increases, this store will become the go-to place for millions more Canadians. I am already up over 2 million overall, including all my past losses. I am planning to dump DOL however, but not until it goes past $135 or so, which should be about two years Then I will definitely go balanced, maybe hire a good firm like yours!
———————————
I’ve read many others promoting this line of thinking (buy where poor people shop/eat) and there’s a lot of logic to it.

——————————–

First of all, Dollarama Dude, having tasted this success, you’re forever bent- you’ll never be able to go to a full balanced portfolio.

For Howard’s comment, instead of specifically poor person consumables, invest in business that everyone uses- the unwashed masses of humanity are your friend. Think Walmart, Costco, McD’s, Starbucks, A&W, Restaurant Brands… These have all returned 30%+ in the last 6 months.

And always watch your buy-in point. The above are all near their 52-week or all-time high. Time to buy? Nope.

#96 GregW, Oakville on 07.25.19 at 1:06 pm

Hi Garth, FYI, This could be important information/knowledge

You or someone may find this guy Ken L. Wheeler’s information interesting/enlightening, see link.

He even mention a dog tied to a stick in a yard running around in a circle in a later video, another video covers better gold dust sleuthing and how it works, and better food production method and much more.

My guess is his ideas/theory should lead to more interesting useful inventions in the near future.

His Free book 3rd addition, 4th coming out, covers the topic, ‘Uncovering the missing secrets of magnetism’

If you have question many/most are answered in later videos or his Free book. The videos he covers the theory/ideas/concepts in much greater depth.

Even I could understand it after watching more than a few of the videos. I hope his tattoos and some of his presentation style in some videos doesn’t keep you or others from having a deeper look at his material.

His first videos 14.5min. got my attention anyway.

Video 1 Uncovering the Missing Secrets of Magnetism
https://www.youtube.com/watch?v=VWMu0cndKl4&list=PLnilnjUumFqDMOeh3DVHd7QjZdObXBxxE&index=3&t=19s

#97 Ace Goodheart on 07.25.19 at 1:11 pm

The interesting thing about DPAs and their use in cases involving bribery of foreign officials, is that the DPA essentially, at its roots, simply allows the offending corporation to legally “bribe” its way out of any criminal charges it may have accrued to its name as a result of bribing people abroad.

Consider: SNC is charged with bribing persons in Libya.

To get out of this, a DPA is established.

The DPA requires SNC to pay a number of millions of dollars in “fines”, to the Canadian government, in exchange for the charges being dropped.

While in Mexico, a friend of mine was stopped by local police, driving a rental car. A number of mythical infractions were created on the spot, he was threatened with arrest and a long period in holding while the case was processed by Mexico’s glacially slow legal system, and the police prepared to impound his vehicle.

Having been to Mexico before, he knew what to do. After having been relieved of three American $20 dollar bills, he was sent peacefully on his way, all pending charges having been dropped, and with no further legal action against him.

He had just executed an informal, oral Deferred Prosecution Agreement, with local Mexican police.

So, if a company wants to get out of criminal charges, in Canada, just “bribe” the government with millions in “fines”, and you are free to go.

We take a page out of the Mexican police playbook.

#98 Penny Henny on 07.25.19 at 1:29 pm

Either Flop is on his annual summer road trip or he is joined GFA to deal with his addiction issues.
Greater Fools Anonymous.

#99 Great Posting on 07.25.19 at 1:40 pm

#86 Jesse – You have successfully grasped the madness at hand. This shows wisdom, character, and a sense of awareness. There is a way out to accomplish what your seeking. Move far away from the big city mentality, and get back to basics by living within a small town environment. The same opportunities can be found because others have done it, and are living well, if not better than before.

#100 MF on 07.25.19 at 1:46 pm

44 CalgaryCarGuy on 07.24.19 at 9:12 pm

So you will punish the rest of Canada for the 4/10 of Canadians who vote Liberal?

I was always so proud of Alberta and Albertans until I started reading their posts on here (maybe they are trolls?).

I’m still proud, most likely trolls.

Anyways, I hope it never comes close to this, but separating will be mighty difficult for some landlocked province with a largely one trick pony economy.

MF

#101 Lee on 07.25.19 at 1:55 pm

IHCTD9,

July 24 Research Co. Poll has it 34/31 Liberals.

#102 Sask to AB on 07.25.19 at 1:57 pm

re #86 Jesse on 07.25.19 at 11:41 am

Thank you for your post. Very thought provoking.
Appreciate it. Wish I knew what the answers were.
In 1985 I moved into a little 2 bedroom house in Saskatoon, and thought life is great! But the house was only $48,000, now vehicles cost more than that……. How can young people today ever get ahead–

F56AB

#103 Jesse on 07.25.19 at 2:11 pm

#100 MF on 07.25.19 at 1:46 pm
44 CalgaryCarGuy on 07.24.19 at 9:12 pm

So you will punish the rest of Canada for the 4/10 of Canadians who vote Liberal?

I was always so proud of Alberta and Albertans until I started reading their posts on here (maybe they are trolls?).

I’m still proud, most likely trolls.

Anyways, I hope it never comes close to this, but separating will be mighty difficult for some landlocked province with a largely one trick pony economy.

MF
***************************

I understand the Alberta anger, and it’s getting worse, T2 looks at them with a condescending smile (while giving them the middle finger). Anger is rising across the world (Brexit, Yellow Jackets, etc), and our political leaders can’t or won’t address it. The US is the best example of this: left vs right, both sides don’t understand the other side as they scream louder and louder. The left is now throwing cement milkshakes at people…the right (and far right) have guns, lot’s of them…where will this end?

Ray Dalio has been talking about rising populism as a threat for a few years…and it’s happening. Is this the 1920s?

#104 Negotiate Union Fees on 07.25.19 at 2:19 pm

#97 Ace Goodheart – This is called a shakedown, and happens all the time. He should have just asked for the ticket for perceived violations. The police hate being challenged for their union fees on the side, because the price they want is fixed. He should have negotiated because he paid too much!

#105 IHCTD9 on 07.25.19 at 2:48 pm

#86 Jesse on 07.25.19 at 11:41 am
#56 Nonplused on 07.25.19 at 12:10 am
#88 Jesse on 07.23.19 at 2:59 pm
#86 SoggyShorts on 07.23.19 at 2:01 pm
#57 Nonplused on 07.23.19 at 2:43 am
___

I bet a lot of us 45+ folks think about what has happened over the last 20 years.

The future IMHO, will see the majority of folks living alone, and with a significantly lower quality of life than what many have now (ie married, two incomes, relatively easy all around).

I’d also guess that marriage for love is slowly coming to an end in the West. The mechanisms which supported its formation are falling out of favour. People will still have wants and needs though, and these now will be the priorities driving couplings/marriage. Love will be well down the list, just like it was in the past. Marriage will again be a means to an end.

Western countries will cease having a dominant culture and start taking shape (like marriage) as a means to an end for the individual. I would not rule out that in the future some countries will be “where you get educated”, others “where you work”, and still others “where you retire”, just like different cities do right now. Globalism will drive this as certain things get done in certain countries based on better costs/efficiencies. This will destroy patriotism, and culture. Many of those who count most (the youth) are just passing through.

Humans will socialize less and less as normal life processes no longer force them to. The last bastion for M/F bonding will fall when education is also, at long last; finally moved online (and it will 100%). M/F emotional bonding will be primarily for the elite. Moving from one place to the next will be normal, with no real settling down allowing relationships to form. Domestic fertility will drop below 1.0.

Personal Politics will play an over-sized role in interpersonal relationships. Many electronic Tribal formations will unite over social minutia, and 1 issue voters will be commonplace. Those outside the group-think will be barred from entry.

IMHO, you can sum up the future as the hammer-milling of relations between the sexes. This could result in many outcomes. IMHO, if Men feel they can not work, can not rear offspring, will not be loved, and are barred from sex – then they will do what they have always done when faced with being “attacked” (fight, or flight).

#106 IHCTD9 on 07.25.19 at 3:01 pm

#101 Lee on 07.25.19 at 1:55 pm
IHCTD9,

July 24 Research Co. Poll has it 34/31 Liberals.
_____

CBC Poll tracker – it averages all of ’em 34/32 Cons

#107 Shawn Allen on 07.25.19 at 3:02 pm

McDonald’s is about Real Estate?

#81 n1tro on 07.25.19 at 10:31 am
———————–
I think McDonald’s business hasn’t been about burgers for awhile so much as to its real estate. How they differ from say Burger King is there restaurants are all in prime locations with people traffic.

**********************************
Part of McDonald’s success is probably good locations. I heard probably at least 20 years ago, maybe 30 some analyst said McDonald’s was mostly a real estate company.

That sounds completely bogus. Despite lots of criticism, the plain fact is that McDonald’s has products that draw in customers.

No hamburger sales, no rent paid.

My local McDonald’s is extremely busy… On a recent road trip stopped at the McDonald’s in Golden B.C. coming and going. Packed both times! McDonald’s and Tim Hortons remain the go to stops for Canadians on the road.

McDonald’s has been a winning company since the 1950’s and that will likely continue. The shares may or may not be over-priced but the company will continue to do well. Bank on it.

#108 MF on 07.25.19 at 3:07 pm

#103 Jesse on 07.25.19 at 2:11

So basically you completely ignored my point, which was 4/10 Canadians vote or voted for Trudeau.

Remind me what this has to do with the rest of Canada and Canadians in general?

The populism you mention was a result of what looked like radical leftism taking over the political arena. It was a reaction towards the center and for moderation. Far right radicalism has no part in it.

MF

#109 MF on 07.25.19 at 3:08 pm

106 IHCTD9 on 07.25.19 at 3

Conservative minority coming.

MF

#110 MF on 07.25.19 at 3:12 pm

105 IHCTD9 on 07.25.19 at 2:48 pm

Way too dystopian for me.

People can and will live meaningful lives. They just have to want to. No one says you have to have zero friends and be asexual. It’s a choice.

100 years ago life on planet earth for the majority was worse than it is now. Ponder that.

MF

#111 n1tro on 07.25.19 at 3:21 pm

#107 Shawn Allen on 07.25.19 at 3:02 pm
McDonald’s is about Real Estate?

**********************************
Part of McDonald’s success is probably good locations. I heard probably at least 20 years ago, maybe 30 some analyst said McDonald’s was mostly a real estate company.

That sounds completely bogus. Despite lots of criticism, the plain fact is that McDonald’s has products that draw in customers.

No hamburger sales, no rent paid.

My local McDonald’s is extremely busy… On a recent road trip stopped at the McDonald’s in Golden B.C. coming and going. Packed both times! McDonald’s and Tim Hortons remain the go to stops for Canadians on the road.

McDonald’s has been a winning company since the 1950’s and that will likely continue. The shares may or may not be over-priced but the company will continue to do well. Bank on it.
—————-
Are you saying McDonald’s hamburgers are particularly better than BK, Wendys, Harveys, 5 Guys, Hero Burger, Carl’s Jr, etc, etc? I doubt you would find many that would say yes. On your recent trip where the Tims and McDonald’s location were packed…was in an easy, off the highway type *location*? I think the analysts and business cases that have been written about McDonalds are correct as part of the first steps for a franchise is for headoffice to buy the location and lease it back to the franchisee. Tim Horton’s strategy seems to be to open up as many stores anywhere even though it cannibalizes other store sales.

#112 Young People on 07.25.19 at 3:38 pm

One only has to use the net, and its that simple. I have lost count of the number people / couples who have made resets in their lives to become successful. This usually starts within a smaller town of less than 20K, and they look around. Is there a demand that’s not being fulfilled? Or do I have the requirements to make a superior living within a certain field that is portable or not. Also how much liquid cash can we come up with to move forward? I have seen countless couples that started a business because the demand was not being fulfilled, and the cash came roaring in making them wealthy.

#113 IHCTD9 on 07.25.19 at 3:54 pm

#109 MF on 07.25.19 at 3:08 pm
106 IHCTD9 on 07.25.19 at 3

Conservative minority coming.

MF

____

Yep.

#114 The future on 07.25.19 at 3:58 pm

#105 IHCTD9 on 07.25.19 at 2:48 pm

#86 Jesse on 07.25.19 at 11:41 am
#56 Nonplused on 07.25.19 at 12:10 am
#88 Jesse on 07.23.19 at 2:59 pm
#86 SoggyShorts on 07.23.19 at 2:01 pm
#57 Nonplused on 07.23.19 at 2:43 am
___

I bet a lot of us 45+ folks think about what has happened over the last 20 years.

The future IMHO, will see the majority of folks living alone, and with a significantly lower quality of life than what many have now (ie married, two incomes, relatively easy all around).

I’d also guess that marriage for love is slowly coming to an end in the West. The mechanisms which supported its formation are falling out of favour. People will still have wants and needs though, and these now will be the priorities driving couplings/marriage. Love will be well down the list, just like it was in the past. Marriage will again be a means to an end.

Western countries will cease having a dominant culture and start taking shape (like marriage) as a means to an end for the individual. I would not rule out that in the future some countries will be “where you get educated”, others “where you work”, and still others “where you retire”, just like different cities do right now. Globalism will drive this as certain things get done in certain countries based on better costs/efficiencies. This will destroy patriotism, and culture. Many of those who count most (the youth) are just passing through.

Humans will socialize less and less as normal life processes no longer force them to. The last bastion for M/F bonding will fall when education is also, at long last; finally moved online (and it will 100%). M/F emotional bonding will be primarily for the elite. Moving from one place to the next will be normal, with no real settling down allowing relationships to form. Domestic fertility will drop below 1.0.

Personal Politics will play an over-sized role in interpersonal relationships. Many electronic Tribal formations will unite over social minutia, and 1 issue voters will be commonplace. Those outside the group-think will be barred from entry.

IMHO, you can sum up the future as the hammer-milling of relations between the sexes. This could result in many outcomes. IMHO, if Men feel they can not work, can not rear offspring, will not be loved, and are barred from sex – then they will do what they have always done when faced with being “attacked” (fight, or flight).

Who knows…humans are still humans….. all the millennials I work with still seem pretty pumped to bond….. but then again your ideal mate to breed with seems to be a tractor!…. Japan have got some pretty amazing robot humanoids on the way……….

#115 SoggyShorts on 07.25.19 at 4:07 pm

#56 Nonplused on 07.25.19 at 12:10 am
#88 Jesse on 07.23.19 at 2:59 pm
#86 SoggyShorts on 07.23.19 at 2:01 pm
#57 Nonplused on 07.23.19 at 2:43 am

First of all SoggyShorts nobody enjoys the wedding not even the adults. There is only one guy in the room that enjoys a wedding ceremony and that is the father of the bride, because hopefully she is off his bankroll for a while. The kids enjoy the reception the most and the ceremony is no more painful for them than math class, which they get every weekday.

******************************
I attend about 1 wedding every 2 years on average, and only the catholic ones have sucked. The “non-denominational” ones have been quite enjoyable: the funny, clever or insightful things the minister says during the ceremony, the vows, all of it.

As for the perceived shift from physical social gathering to virtual, I personally don’t see that much. I go out with friends to festivals, pubs, camping, sporting events, etc and there’s plenty of other people there hanging out with their friends too.
It’s not like you go to a hockey game and the stadium is half empty.
Most likely it all depends on your circles and how much effort you put in to find other like-minded people.

#116 Sail away on 07.25.19 at 4:15 pm

#97 Ace Goodheart on 07.25.19 at 1:11 pm

So, if a company wants to get out of criminal charges, in Canada, just “bribe” the government with millions in “fines”, and you are free to go.

—————————————

Ace, you’re saying any fine is a bribe, and it’s not a coherent argument since the Mexican example sounds like extortion without wrongdoing.

Rewriting your sentence above:

“So, if a [person] wants to get out of [a traffic ticket], in Canada, just “bribe” the government [by paying your] “fines”, and you are free to go.”

Fines are used throughout the world as penalties for breaking the rules. What would you suggest be done instead of a fine? Capital or corporal punishment? Maybe public shaming? Forehead tattoo?

#117 SunDays on 07.25.19 at 4:16 pm

55 rc99ar on 07.25.19 at 12:07 am
You do NOT need 60 stocks to diversify. Have a few really good eggs in you basket and watch them very closely. Lots of good advice on this blog but you shouldn’t pump the EMH, beta=risk crap I paid to hear in business school. How about a post some day on what it tokes to deliver alpha and why [email protected] never will.

————-

This blog is about how to STAY wealthy. Not about building wealth. Lots of young folks mix these two up.

#118 TheDood on 07.25.19 at 5:09 pm

#59 Ponzius Pilatus on 07.25.19 at 12:45 am
Just found this great deal on a decent house in a decent neighborhood in Richmond.
Looks like a steal for 990k.
Or is the new reality?
https://www.ovlix.com/property/2soYgj-8971-Wagner-Drive-Richmond-BC-V7A4N2
__________________________

Wow! What a steal!!! LOL!

More like…..what a dump! If that’s worth a million to you…..whatever makes you happy!

#119 Joe on 07.25.19 at 6:34 pm

Hello Garth
I don’t have any dog pictures to provoke a response. As well as that, I own a house in Montreal and so don’t think i am on your endangered list. But I occasionally think of indexing, especially when I hear stories of Lavalin. The problem i have, though, maybe familiar to many of your readers: i have started with individual stocks in my taxable accounts and now have several hundred thousand in capital gains. I suppose I, or my estate. I guess the only thing i can do is gradually reduce over the years. Although I may not have that many of those left. Any thoughts on that predicament? As predicaments go, i suppose, it is a good one to hay. Any thoughts you may have would be appreciated. You have already helped me considerably in your blog and have saved me from several errors. Just call me Dogless joe

#120 Paul on 07.25.19 at 7:08 pm

My sister just bought a Tesla. I have to say I’m impressed. Plus free money. 5k Fed grant, 5k (3k now) BC grant, 6k (other EV makes) Scrap it program.
If I needed a car I would certainly buy a Tesla.
I’m also amazed at what Elon Musk has accomplished. Especially when he made his patent available for others on the internet. Huge contrast to those CEO’s showing up in private jets to collect the biggest government (taxpayers) bailout. Infrastructure has a long way to go but for local traffic EV is the future.

#121 earthboundmisfit on 07.25.19 at 7:12 pm

Musk is not the new messiah but rather the king of eternal drama and government handouts. Pass, (for now).

#122 Freda Charleston on 07.25.19 at 7:29 pm

I hope we get a Liberal and NDP, Green coalition so they can really screw up Canada once in for all.

Venezuela 2.0% which is Canada so the people can real experience the most workable social program, hunger and starvation. Bring it on.

#123 Chris on 07.25.19 at 9:36 pm

#118 The Dood, yeah that’s rough. I think Toronto and BC are in the same boat when it comes to crazy prices.

https://truelofts.ca/toronto/art-condos-8-dovercourt-rd/unit-416-c4522633

500 square feet for $530K seems a bit over the top.

#124 Dave on 07.26.19 at 1:07 am

Not related to the article but Interested in thoughts on the attached article. Charging rent based on income and personal assets is this normal? Or crazy?

https://www.whistler.ca/media/news/council-endorses-updates-employee-rental-housing-eligibility-and-qualifications

#125 Nonplused on 07.26.19 at 3:35 am

#76 Another Deckchair

The Max does not fly right without computers, they put a much larger engine in a more forward position and did not otherwise correct for the altered flight characteristics with fail safe alterations to the plane’s design. And no 737 is fully “fly by wire”. They, like bombers in world war 2, fly on cables that the computers can pull on. Pull on harder than the pilot in these cases.

#84 BillyBob

Computer assisted control is a good thing, when it compensates for obvious pilot error. It is not a good thing when it is required to keep a flawed design in the air. No commercial airline should ever be built that can’t be flown without the computers. If the computers are added, they should be to prevent obvious mistakes. And “fly by wire” doesn’t change this. “Fly by wire” does not indicate anything more than that there is an electrical connection to the control surfaces rather than a hydraulic or cable connection. It has nothing to do with the computers, which can be employed on all 3 systems.

#126 Nonplused on 07.26.19 at 3:41 am

#115 SoggyShorts

Dusk does not happen all at once.

#127 Nonplused on 07.26.19 at 3:46 am

#114 The future

Love isn’t real. Attraction and attachment and a desire to raise children in a social environment are real. It was the quest to turn marriage into a a quest for love that pretty much killed it. You can’t build something out of a fantasy.

Love lasts at best 18 months. After that you have to have some skin in the game.