No guts

Let’s recap.

So far this year (it’s the end of July) the US stock market has gained 20.7%. In seven months. Once again it’s at a record level. Since last July the advance is 9.5%, including the big (and temporary, Trump-inspired) plop of late 2018.

On Bay Street the TSX had added 15.4%, is ahead 4% year/year and also in record territory. A balanced and globally-diversified, middle-of-the-road-risk-lower-vol-kinda-boring portfolio has advanced about 10% in 2019. Inflation is now 2%. Preferreds are paying 4.6%. Five-year government bonds yield 1.4%. High-interest savings accounts are in the 2% range. Since Christmas, financial market volatility has plunged 60%.

Hmm. What does this mean, and what’s it portend?

First, anyone who sold into the storm in Q4 of 2018 was a fool. You turned paper losses into real ones for no reason. The decision was emotional, not logical. At the time I wrote here about investors with millions who crystallized a loss and went to cash. They’ve now missed making hundreds of thousands in gains during 2019. Never, ever listen to your gut.

Second, as much as the weenies who flock here like to say, there is no disaster looming. Not even a hint of a US recession. Economic growth is okay, corporate profits are okay and consumer spending’s okay. The VIX is low because markets are cool – despite having Trump as the world’s most powerful guy, despite trade wars, regional conflicts, accumulated debts and Selena Gomez. Besides, 2020 is coming. As explained here a few times, you’d be unwise to bet against America before the next presidential election. Or after.

This is a big week on that front. Talks between the US and China take place to dial back that injurious trade war. And on Wednesday the Fed will announce a teensy interest rate cut, the first in a decade and one of two likely by the end of the year. But not to worry. The US central bank ain’t chopping the cost of money and throwing gas on the fire because the economy is retreating. Rather it’s (a) insurance against a slowdown after ten years of growth and (b) because Trump has been thumping on the Fed for months to cut and, yes, throw gas on the markets.

Odds are the Fed will be back raising rates in a year, erasing the half-point decline of 2019. And why not? The States has essentially full employment, wages have been rising and the threat is inflation, not deflation. The formula is for long-term corporate profitability, barring an asteroid strike, so investors would be smart to stay invested.

As for Canada, no rate cut now. Probably none this year. Maybe not for a long time to come. There’s just no reason for the Bank of Canada to ease, and a compelling reason not to – more debt. In a country with $1.6 trillion in mortgages and $300 billion in home equity loans, why would the bankers make money cheaper? Why encourage more borrowing? In the absence of a recession, why take the risk?

Having said all this, the current bull market is ten years old, just like the economic expansion. This is breaking records. It scares those who think things will go down just because they went up. It has analysts pouring over the latest data, looking for cracks, like weaker business investment. Meanwhile the effect of Trump’s big tax cut seems to have worn off, and the trade war’s higher input costs are reducing bottom lines while corporate debt keeps inching higher. So, yeah, there are risks. Volatility will return. What happened in late 2018 could return – a wrenching decline, followed by a crawl back.

That is exactly why most people – maybe all people – would be better off owning some fixed income along with growthy assets. Sure, bonds may pay only 1.4%, for example, but it’s sure nice to have some when equities decline and debt prices jump higher. That 40% safe-stuff component in a balanced portfolio mitigates against equity market drops, makes things less volatile, helps retain wealth and keeps you from repeating the mistakes of those who follow their guts.

Remember: not everything you own needs to go up in value at the same time. Bond ETF prices may decline when equity fund vales rise. And vice versa. Preferreds may lose altitude when rates fall, but churn out a low-tax dividend, pay you to own them and will rise again. Emerging market assets may plump when Trump stumbles and US markets follow. The point of investing is to preserve capital, as well as creating it. The three rules remain. Be balanced. Be diversified. Be liquid.

It’s the opposite, in other words, of owing an investment condo.

Note: If you read Friday’s post and the response that flowed from it, you know the decision on adopting threaded comments for the steerage section. Not. Happening. If you want to fight and bully, go to Reddit. Real men stay linear.

 

95 comments ↓

#1 BillyBob on 07.28.19 at 2:38 pm

Missed Friday’s post at first as I was travelling, but read it just now and have to say I’m completely in favour of keeping the comments as is. The last thing we need is more “intelligent” systems reinforcing the narcissistic bubbles everyone is intent on building around themselves.

Glad to hear the outcome. I forget to say it for long periods of time but thank you, Garth.

#2 Boom on 07.28.19 at 2:39 pm

Real men stay linear.

========

That is why smoking man wanted threaded.

#3 Shawn Allen on 07.28.19 at 2:47 pm

Credit Card Loss rates

Interest rates are low and debt is high. And so far that is not a problem.

It has been well documented that Canadian mortgage delinquencies and losses for the banks are at record lows.

Last week I commented on on credit card delinquencies since it is said that people will default on that a long time before they ever miss a mortgage payment. I was comparing Canada to the U.S. and our delinquencies were lower. But Canada reports 90 day delinquencies and the U.S. has 30 day so hard to compare.

So, now let’s look at annualized loss rates in Canada versus the U.S. These figures are comparable.

Canadian annualized credit card losses at the big banks were running at 3.27% as of Q4 2018 (the latest update).

https://cba.ca/credit-card-delinquency-and-loss-statistics

The U.S. figure is 3.5% in Q4 and a bit higher in Q1 but that is a seasonal bump.

In both cases this is near the bottom of the historical range. Seems that the number of people defaulting on any debt is near record lows in both countries. Nothing to see here?

https://www.federalreserve.gov/releases/chargeoff/chgtop100nsa.htm

#4 Flop... on 07.28.19 at 2:53 pm

Do I want to break out the blog bamboo and give My Little Pony a whack?

Not really.

What are you moaning about all the time?

Constant, constant moaning.

What is that you think you contribute that I don’t?

When was the last time you wrote a post that you weren’t bitching and complaining about something or someone?

What about your effort from 3 days ago?

Not bad.

Only thing I can add was that I wrote about that house way back in February of this year.

So I let myself down.

I’m only 7 months ahead of you.

We are not supposed to be threatening each other’s families safety or attacking each other’s cars.

As a former semi-professional footballer and fighter, I used to settle disputes in a different manner too.

I was led to believe this was Canada’s premier financial weblog and was trying to contribute in a peaceful manner.

Back on the blog for one day and you guys are trying to vote me off the island already?

Don’t worry I’m half Australian, so I’m a strong swimmer…

M45BC

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

#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

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

#176 For those about to flop… on 02.01.19 at 1:51 pm
For Duke…that post was the sequel to this post, that I only posted on my blog,I hear what you are saying but I can only report what is currently happening, look at the size of this first home.

Have a good day, Flop…

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

Race to a million. Richmond edition.

Could have Larry Lowball on the books but this is the latest one out in Richmond that I am keeping tabs on.

The details…

8971 Wagner Dr, Richmond.

Asking 998k

Assessment 1.35 down from 1.47

https://www.zolo.ca/richmond-real-estate/8971-wagner-drive

Looks like a sprawling lot and REW states the current median list price for similar properties in the area is 1.85 so we’ll see what this approach nets them.

This one was built in 1976 and is a decent size house with a decent size block like I said, so what I also decided to do was nab another one in East Richmond that was built in 2006 and is on for 1.08 to see what this more modern one goes for…

#5 NJGeezer on 07.28.19 at 2:57 pm

Not much of a blog comment poster, more of a reader and lurker. Been following the blog dawgs for years, and have a lot of respect for Garth and what he’s doing for all of us.

However, the person posting as “Boom” is acting like a douche. I remember the real Boom, M64WI, fondly for his contributions to rational discourse here.
Find this misappropriation of his screen name extremely disrespectful.

Get your own screen name, rather than stealing someone else’s.

#6 Rusty Winchester on 07.28.19 at 2:58 pm

Hey, maybe a stupid question, but if bonds are paying 1.4% and my savings account is at 2%, what is the advantage of bonds? Is it just because of their inverse relationship with ETF’s?

Nobody owns bonds for yield. They are stabilizers. – Garth

#7 Flop... on 07.28.19 at 3:18 pm

Hey Geezer, thanks, below is one of my recent posts trying to convince this person to stop being disrespectful.

Multiple people being disrespectful.

One guy apologized once they realized what they had done.

This guy?

Couldn’t give a crap.

If the guy can’t help himself then I guess the only thing I can do is ask Garth not to post anything under that name.

Boom earned our respect.

Don’t disrespect the dead.

Am I asking too much…

M45BC
M64WI

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

#20 Flop… on 07.07.19 at 5:45 pm
Boom 43 pm
You truly are the Jordan Peterson of the financial world.” For that noble suck-up, he gets to write this…Why they go back to school and get re-trained. Sounds easy, right? I would bet that the readers of this blog that are over the age of 40 would have two very strong words if this scenario would happen to them.
=============

De-militarized zone?

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

Not sure if you deliberately did this to test my resolve but I’m asking you to have a bit of respect.

I believe the guy yesterday made an honest mistake.

You?I’m not so sure.

If you read yesterday’s thread and then did this for a laugh then shame on you.

One of my favourite Boom moments was when he was having a discussion with someone who he thought was disrespectful towards himself.

From memory the person was having a go at him because he was a boomer and he did not normally initiate any confrontation but would stick up for himself.

In this case after a back and forth he wrote something like ” What’s your problem binky?”

I thought “binky”? Why are you calling this person binky?

I checked to see what a binky was.

It turns out it is something you give a baby to keep it quiet.

You guys call them pacifiers, I believe.

In Australia, we call them dummies.

Don’t use the handle “Boom”

Have some respect.

Don’t be a dummy…

M45BC

#8 Shawn Allen on 07.28.19 at 3:38 pm

Bonds?

Nobody owns bonds for yield. That are stabilizers. – Garth

********************
That’s an interesting generalization and claim.

Once upon a time bonds were certainly bought primarily even almost exclusively for the cash interest yield.

Bonds EXIST to pay interest. That is the deal.

And they always had the stability of maturing at a known par value (absent default).

We are in a strange world indeed if bonds that are issued at $1000 and cannot possibly mature at more than $1000 are bought primarily for capital gains.

And if bought for stability. Well, cash in a savings account is even more stable. Cash cannot ever give a capital loss (or capital gain). When an investor has access to a safe “high” interest deposit account (and not all may be safe above the $100k government guarantee level) I can’t think of any good reason for such an investor to buy any bond at par that yields less than the saving account.

There may be reasons for a portfolio manager to hold a 1.4% bond such as maybe they can’t access high interest savings paying more than that? I can’t think of any justification for an individual investor to do so unless they can’t find a safe high interest account.

Cash has no substitute when it comes to immediate liquidity at a price that never changes.

You appear continuously incapable of understanding that bonds reduce portfolio volatility and most often have a negative correlation to equities. It’s a shortcoming. – Garth

#9 Ustabe on 07.28.19 at 4:03 pm

One should not dismiss all of Reddit. There are parts of it that exemplify what the Internet should be and parts of it that should be removed with fire.

The fly fishing community is great as are most of the history subs. On practical matters the Teardrop Trailer sub is helpful, patient and sharing and caring.

Most of the cooking/recipe subs are good too.

I guess if your only interaction at Reddit is at r/metacanada or trying to purchase used underwear you may hold a different opinion but I use it quite a bit and it is helpful to me.

Just don’t go to r/personalfinancecanada…that will make you cry.

#10 Shawn Allen on 07.28.19 at 4:03 pm

Shortcoming?

You appear continuously incapable of understanding that bonds reduce portfolio volatility and most often have a negative correlation to equities. It’s a shortcoming. – Garth

************************
Well, I’m sure it’s not my only one.

The question from Rusty at 6 was valid as cash always has zero correlation to equities and is the only fully guaranteed to be stable asset.

The claim that no one owns bonds for yield is hard to accept as true.

Then it’s probably good you are not building and managing people’s portfolios. – Garth

#11 That dog ... on 07.28.19 at 4:18 pm

is nervous but looks like he knows what he is doing.

#12 Dolce Vita on 07.28.19 at 5:09 pm

You know, as country I think we overestimate our ills and underestimate our strengths.

Much ado about our debt woes but look at Canada compared to the other Top 9 World economies:

https://i.imgur.com/u9Ozc6D.jpg

Not so bad I’d say overall and comparatively speaking.

And ya, us old fogies are suspicious of such a prolonged period of economic growth. July 1981 came as a “thief in the night” and lasted until November 1982 (the “official dates”).

Unofficially, unemployment peaked 2 Quarters AFTER November 1982 and persisted well into 1984 (my charts from StatCan data):

https://i.imgur.com/zXnovqj.png

Look at GDP before July 1981…it looks suspiciously like the up down GDP we have had for the past year:

https://tradingeconomics.com/canada/leading-economic-index

ONE THING FOR SURE, when the next recession comes, and it will, no one will see it coming.

Diversified, not panicking, “un-weenie” and linear…all good things.

PRETTY funny today Garth, thanks for that.

—————————————-

Buonanotte e Ciao d’Italia.

#13 Dan Frankel on 07.28.19 at 5:19 pm

Shawn Allen, the whole purpose of high quality bonds, investment grade bonds was to get a fixed income, interest from it. Just because the powers at be want to pay little to no interest does not mean bonds are just for a stable factor or safety factor. It is to get your principal back and interest payments on time.

If liquidity dries up or nobody wants to pay a fair price for your bonds, you could at least hold to maturity and get the interest payments.

#14 Kelly on 07.28.19 at 5:26 pm

Fed might well cut rate 50 points on Wednesday … supposedly 70% chance.

This is full out race to the bottom around the world.

Fed will NOT be raising rates next year.
More cuts ahead to zero.

Canada will follow in our usual manner, slow and deliberate .

Our collective debt will catch up to all of us.

The day of reckoning is ahead … and not far ahead.

#15 Stanley on 07.28.19 at 5:40 pm

The Fed will not be raising rates. But they will be lowering them soon.

#16 Basil Fawlty on 07.28.19 at 5:56 pm

It is wise to remember the old adage: One man’s Weenie is another man’s Tube Steak.

One could argue that current interest rate policy falls under the category of Yo Yo Economics. They were increased due to a strong economy, but then the stock faltered, so they were decreased. Now, at near record low rates with a officially reported strong economy, rates will be lowered for insurance, due to a long 10 year bull market. However, next year when the bull market is 11 years old, rates will be increased. I guess because insurance is no longer necessary? Bond rates at 1.4% and yet rates have to fall simply beggars the mind.

#17 Shawn Allen on 07.28.19 at 6:23 pm

Bonds

#13 Dan Frankel on 07.28.19 at 5:19 pm
Shawn Allen, the whole purpose of high quality bonds, investment grade bonds was to get a fixed income, interest from it. Just because the powers at be want to pay little to no interest does not mean bonds are just for a stable factor or safety factor. It is to get your principal back and interest payments on time.

If liquidity dries up or nobody wants to pay a fair price for your bonds, you could at least hold to maturity and get the interest payments.

***************************
You talkin’ to me or Garth? I agree with what you say. I just pointed out that if 1.4% interest ten year bond is on offer then a high interest savings account paying say 1.6% does the job a little better from the stability angle and looks better from the interest angle (But as Garth says cash does not provide the inverse correlation market value). And it is true that high interest accounts could drop under 1.4%.

5-yr, not 10. – Garth

#18 Chris on 07.28.19 at 6:29 pm

If volatility in the share market bothers you, set and forget with Garth & Co. For those of us it doesn’t bother, though, market volatility is what will pay for the cherry on top of our retirement. When markets dip, buy more. It’s the best way to turbo charge your gains when the market goes back up. And it always goes back up.

#19 HT on 07.28.19 at 6:34 pm

Good decision on the comments format, Garth. I can’t stand the way typical comments sections inevitably reveal the darkness of humanity. People often forget, or never even subscribed to, the HANK test for comments: humble, accurate, necessary, kind.

#20 Canadian debt? on 07.28.19 at 6:35 pm

Have you seen what Trump is doing to US debt! Haha

The Death of the Tea Party . RIP

#21 Howard on 07.28.19 at 6:36 pm

Anyone think now is finally the time to buy some Canadian oil companies? How much lower can they possibly go? ARX.TO dividend yield is now at 10% and considered safe.

Maybe better to wait until October. If it’s Twinkle Toes again, might be lights out on Canadian energy for good.

Btw, happy with the no-thread decision.

#22 Sail Away on 07.28.19 at 6:43 pm

#10 Shawn Allen on 07.28.19 at 4:03 pm
Shortcoming?

You appear continuously incapable of understanding that bonds reduce portfolio volatility and most often have a negative correlation to equities. It’s a shortcoming. – Garth

************************
Well, I’m sure it’s not my only one.

The question from Rusty at 6 was valid as cash always has zero correlation to equities and is the only fully guaranteed to be stable asset.

The claim that no one owns bonds for yield is hard to accept as true.

Then it’s probably good you are not building and managing people’s portfolios. – Garth

—————————————
That’s being a little harsh on Shawn.

I see no reason in this low rate environment for a private investor to hold bonds returning less than GICs. Highly-rated bonds give stability to huge portfolios with many millions or billions to manage. GICs wouldn’t work for these due to the sheer size and value.

For most private investors, GICs give this fixed income stability equally well.

If government bond rates are higher, then sure, go with bonds. It depends on your personal situation. Blindly applying macro economics (buy stable govt bonds!) to micro situations (less than 1m fixed income allocation) is silly.

It wasn’t silly in December. – Garth

#23 Sail Away on 07.28.19 at 6:58 pm

#21 Howard on 07.28.19 at 6:36 pm

Anyone think now is finally the time to buy some Canadian oil companies? How much lower can they possibly go? ARX.TO dividend yield is now at 10% and considered safe.

Maybe better to wait until October. If it’s Twinkle Toes again, might be lights out on Canadian energy for good.

Btw, happy with the no-thread decision.

———————————————–

Obviously, the lowest they can go is zero. The Canadian landscape is littered with dead and dying oil companies.

Many, though, are still profitable. Do your research and invest there if it makes sense to you. You might have to wait a long time for a real turnaround, though. The question to ask is: what would trigger Canadian oil profits to increase? A pipeline would be a good start.

US oil companies are doing well, companies moving US oil (mostly pipeline companies) are doing well, and CN Rail in Canada has a long-term contract to move oil, and are doing well with it.

Always avoid the mindset that a big drop in a sector automatically makes it a value purchase. Zero is always possible and momentum is a bitch to reverse.

#24 Sail Away on 07.28.19 at 7:10 pm

#22 Sail Away on 07.28.19 at 6:43 pm

————————————————
For most private investors, GICs give this fixed income stability equally well.

If government bond rates are higher, then sure, go with bonds. It depends on your personal situation. Blindly applying macro economics (buy stable govt bonds!) to micro situations (less than 1m fixed income allocation) is silly.

It wasn’t silly in December. – Garth

——————————————–

Well, sure. And GICs also maintained value. Both work.

GIC owners have illiquid assets and must pay tax on income not yet received. Not cool. – Garth

#25 Lisa Henderson on 07.28.19 at 7:23 pm

If interest rates were higher bonds may of made more sense because of potential capital gains from falling interest rates but GIC’s in the 2.5% to 3.0% CDIC insured probably makes sense with smaller investors with $1,000 to $5,000, maybe $10,000.

GICs are not investments. They are savings vehicles. The object is not growth. – Garth

#26 Kelly on 07.28.19 at 7:43 pm

Has it really been two hours since my last post?

Thought I’d post again to remind us that the USA has slipped over another $200 billion in debt during that period.
I cannot see how this ends well for any of us plebs.

In fairness, it took T2 a lot longer to waste $600 billion in screwing up the energy sector in Canada. Pretty well, his whole pitiful four years in office.
If we return T2 to office, Canada will end as we know it in the same time frame as the sun sets on the American Empire.

Our only hope is to elect a leader who does not openly despise Trump.

#27 dirtydebtor on 07.28.19 at 8:01 pm

Reddit is absolute trash. The threaded comments with voting creates a very effective dopamine hit, and little else.

The quality of the content you voted to the top and placed on your screen is not dependent on quality; but on the timing of the post, the number of uneducated upvotes, various influence from bots with unknown agendas.

it creates subcultures where those with the most populist, loudest, impolite and charged comments dominate the discussion. Alternative ideas are buried. its the online equivalent of all right wingers moving to texas, and liberals moving to colorado. pointless polarization

keep this site the way it is

#28 Jay R on 07.28.19 at 8:01 pm

There is a 90% correlation between what the US fed does and what Canada does with interest rates. So your saying this time its different? US fed cuts this week and Canada does nothing for a year or more? Doesn’t make any sense from a historical perspective.

The correlation is 90%. And no cut in Canada this year. – Garth

#29 crossbordershopper on 07.28.19 at 8:03 pm

need guts to buy bonds?
most people dont know what junk or emerging debt is
so most only buy canadian, and those are government debt
so credit risk, most stay short so little interest rate risk, still trying to figure out how much guts you need to buy a bond. under the canadian investor framework of investing.
yes its a balance to more variable asset classes like stocks in general, but if you never look into emerging or junk or high quality

#30 Flop... on 07.28.19 at 8:08 pm

We couldn’t do threads on here.

Too many old guys on here traumatized by cross threading the bottle cap on their favourite bottle of whiskey…

M45BC

Who is More Powerful – Countries or Companies?

With the stock market making major gains this year, the market capitalization of some public companies is soaring to new heights. Market capitalization, or “market cap,” is calculated by multiplying the number of a public company’s outstanding shares by the current market price of a share. With several public companies approaching or exceeding the $1 trillion mark in market capitalization, some have values exceeding the GDP of different countries. In this visualization, we compare the GDP of various countries with the market capitalization of some well-recognized brands to see how they stack up.

Most of these high-value companies are in the tech or financial services industries.

Microsoft is currently the only public company with a market capitalization exceeding $1 trillion.

Public companies’ high market caps are particularly apparent when compared against the GDP of developing countries, especially in eastern Europe, Africa, and Latin America.

In addition to exceeding the value of a lot of smaller countries, some market caps are also comparable to the GDP of much larger countries, such as Argentina and Russia.

We used information from the International Monetary Fund to compile information about each country’s GDP and Yahoo Finance to find market caps for public companies, as of July 8, 2019. In the visualization above, the pink bubbles represent the companies and the gray bubbles represent the countries or regions that have a similar GDP. The bubbles are sized proportionally to the GDP and market cap values; the greater the value, the larger the bubble. All currencies are expressed in USD.

Microsoft

Microsoft, the world’s most valuable public company, has a market cap of $1.05 trillion. The company is known for its dominance in the computing industry, with some of its core products like Windows and Office used on PCs around the world. Microsoft’s market cap is greater than the combined GDP of nine eastern European countries: Estonia ($30.312 billion), Lithuania ($53.323 billion), Latvia ($34.881 billion), Belarus ($59.64 billion), Poland ($586.015 billion), Ukraine ($124.603 billion), Moldova ($11.404 billion), and Slovak Republic ($106.585 billion).

Bank of America

Opening its shares to the public in 1978, Bank of America had the earliest IPO among all the companies in the visualization. Bank of America’s market cap of $278.21 billion amounts to just slightly more than the GDP of the five Central Asian “Stans”: Kazakhstan ($170.539 billion), Uzbekistan ($41.241 billion), Turkmenistan ($44.114 billion), Kyrgyz Republic ($8.093 billion), and Tajikistan ($7.52 billion). The GDP for these five countries is $271.507 billion in total.

Alphabet

Alphabet, the parent company of Google and its subsidiaries, encompasses a wide variety of products and services including search engines, the Android operating system, and enterprise services like G Suite. Alphabet’s market capitalization of $786.092 billion is greater than the GDP of 38 African countries combined. That represents more than 70% of African countries, mostly concentrated in sub-Saharan Africa. Some of the countries include: Lesotho ($2.762 billion), Eswatini ($4.679 billion), Botswana ($18.998 billion), Namibia ($13.824 billion), Zimbabwe ($26.127 billion), Mozambique ($14.428 billion), Angola ($107.316 billion), Zambia ($25.179 billion), Malawi ($6.925 billion), Madagascar ($12.093 billion), and more.

Facebook

The first major social media network to go public, Facebook remains a top player in the tech space. In recent years, Facebook has grown through its acquisition of other social media platforms such as WhatApp and Instagram. Facebook has also announced its intention to launch its own cryptocurrency, Libra, further diversifying its offerings. Facebook’s current market cap ($560.622 billion) is comparable to the GDP of Argentina ($518.092 billion), which is the second-highest in South America after Brazil.

Amazon

Amazon has been a major disruptor in the online retail industry, launching services such as Amazon Prime for free shipping and video streaming, AmazonFresh for groceries, and the Amazon Kindle for e-reading. To aid with the demand for delivery services, Amazon plans to increase its aircraft fleet to 70 planes by 2021. Amazon’s market cap is about the same as the GDP of nine countries in Latin America: Colombia ($333.114 billion), Uruguay $60.18 billion), Paraguay ($41.604 billion), Bolivia ($41.41 billion), Peru ($225.203 billion), Ecuador ($107.511 billion), Venezuela ($98.468 billion), Guyana ($3.636 billion), and Suriname ($3.427 billion). In total, these countries have a GDP of $914.553 billion, while Amazon has a market cap of $956.557 billion.

Visa

Visa is one of the leading financial services firms in the world, expanding its offerings from credit cards and electronic transfers to its new blockchain product B2B Connect. Visa’s market capitalization of $398.008 billion is greater than the GDP of nine Central American countries, including Costa Rica ($59.006 billion), Panama ($65.206 billion), Nicaragua ($13.258 billion), Honduras ($23.778 billion), El Salvador ($26.057 billion), Guatemala ($78.979 billion), Belize ($1.925 billion), Jamaica ($15.422 billion), and Dominican Republic ($80.94 billion).

Netflix

Initially founded as a DVD rental store, Netflix is now one of the most popular streaming services in the world. In recent years, Netflix has transitioned from being a database of movies and TV shows to also creating its own original content, such as “Stranger Things” and “Orange is the New Black.” Netflix’s market capitalization of $166.384 billion is greater than the GDP of five Balkan states, including Serbia ($50.651 billion), Bosnia and Herzegovina ($19.881 billion), Montenegro ($5.402 billion), North Macedonia ($12.669 billion), and Croatia ($60.688 billion). These five countries have a combined GDP of $149.291 billion.

Apple

The brainchild of Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple has revolutionized the tech industry through its innovative products, ranging from the Mac computer to the iPhone. The company has recently been under fire over privacy concerns, especially related to products like the iPhone and the Apple Watch. Apple’s market capitalization of $939.678 billion is equal to more than half of Russia’s GDP ($815.3295 billion). Russia has the twelfth-highest GDP in the world.

Big companies’ influence is spreading everywhere, and not everybody likes that. For example, the ECB has already shown some concerns about Facebook’s intention to launch its own currency. Some people are also concerned about the political influence that these tech companies hold; Google alone spent $21.7 million on lobbying last year. As more calls for tech regulationarise, it will be interesting to see how market capitalization changes, if at all.”

11 July 2019

Visualization

https://howmuch.net/articles/putting-companies-power-into-perspective

#31 Gina Hernadez on 07.28.19 at 8:17 pm

I thought fixed income were investments and aren’t GIC’s part of fixed income. Anyway, the comments I read so far are just using GIC’s as safer part of their portfolio and are not using them for growth. They are just interest bearing investments.

If you call them savings vehicles or fixed income investments more people need more of them because Canadians are drowning in debt. Credit Cards at 15% to 20%, payday loans and other title, personal loans at 25% to 40% as high as 500% a year are terrible financial savings, investment devastators.

Savings accounts and GIC’s

#32 Tony on 07.28.19 at 8:26 pm

Re: #16 Basil Fawlty on 07.28.19 at 5:56 pm

The U.S. election is November 2020 that means second quarter GDP should hit 3 percent and third quarter GDP should hit 4 percent in 2020.

#33 Leo Trollstoy on 07.28.19 at 8:26 pm

US debt isn’t a problem

Sorry not sorry

“What is right about America just totally dwarfs what’s wrong with Washington. 535 people are not going to mess up 315 million over time. I know it.” – Warren Buffett

https://www.marketwatch.com/story/buffett-us-debt-on-its-own-not-a-problem-2013-01-20

#34 Robert B on 07.28.19 at 8:38 pm

Garth

The US economy is strong. Why cut rates?

The world economy is slowing down. The FED’s cut is more for the world economy and not the US.
Once we starting thinking out side the box then we will never truly understand the world economy.

#35 Bob on 07.28.19 at 8:50 pm

If interest rates were higher bonds may of made more sense because of potential capital gains from falling interest rates but GIC’s in the 2.5% to 3.0% CDIC insured probably makes sense with smaller investors with $1,000 to $5,000, maybe $10,000.

GICs are not investments. They are savings vehicles. The object is not growth. – Garth

Bonds will create capital loss if interest rates rise – which is very likely since they are so low now.

So GIC is better since there will be no loss.

#36 Robert B on 07.28.19 at 8:50 pm

——–Odds are the Fed will be back raising rates in a year, erasing the half-point decline of 2019———

Probably not the US does not want a higher dollar. Raising rates will only make the US dollar stronger.

There is $13 Trillion (and growing) worth of bonds paying ZERO or negative returns. Why should the US raise rates and attract more foreign money.
The US will lower rates .

The FED is stuck……..

#37 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 07.28.19 at 8:53 pm

No guts?

Not me Garth! With the heroic recent achievements of the Make Believes, Toronturds should invest everything they have in shares of companies that own MLSE as well as the highest priced condos they can get!

95 DAYS WITHOUT A LOSS!!!!!

The Make Believes are INCREDIBLE!!!!

Toronto really IS different!!

Any stocks or slanty semis from that town are PURE GOLD!!!!

#38 Reynolds531 on 07.28.19 at 9:01 pm

Some discussion this week about the steerage section attacking each other but honestly Garth doing a fair bit as well.

Shawn is right. The negative correlation between bonds and equities is strong but not guaranteed. Ie 2009. Bonds are also not risk free assets.

Bonds have a role to play in all growth-centric balanced portfolios. GICs do not, as they are tax-punitive, low-yield and illiquid. They are savings vehicle, not investment assets. Buy them if you want as a form of capital preservation, but make sure you have enough capital first. – Garth

#39 Sebee on 07.28.19 at 9:26 pm

Linear?

That’s a band!

Enjoy…Sending all my love to you!

https://m.youtube.com/watch?v=56KlM36Whak

Nice hair. – Garth

#40 akashic record on 07.28.19 at 9:41 pm

#33 Leo Trollstoy on 07.28.19 at 8:26 pm

US debt isn’t a problem

Sorry not sorry

“What is right about America just totally dwarfs what’s wrong with Washington. 535 people are not going to mess up 315 million over time. I know it.” – Warren Buffett

—-

That’s nice opinion that he thinks he knows it.
But there is always the possibility that he turns out to be wrong . Especially, when what is offered in this extremely important issue, is just rhetoric. Buffett would not make a million dollar investment decision based on rhetoric, without a spreadsheet.

If he is wrong, what’s then with the 315 million people’s life? Sorry, I made a mistake?

While everyone can have an opinion, it is simply not Buffett’s job or responsibility “to know”, what may profoundly effect the life of millions of people.

#41 greyhound on 07.28.19 at 10:02 pm

A lot of us right now feel like that dog.

#42 acdel on 07.28.19 at 10:02 pm

Very good blog today Garth, yeah, whatever, about that sucking up crap. Totally agree on what hard workers out there are saying, seeing and experiencing in which resonates with today’s blog.

Great decision about threaded comments; here, for the most part, we respect each others opinions; may not agree with them but respect it. Respect is what we recognize and is quickly being dissolved in today’s society; we lose that and it is game over!

#43 Tom from Toronto on 07.28.19 at 10:07 pm

#28 Jay R on 07.28.19 at 8:01 pm
There is a 90% correlation between what the US fed does and what Canada does with interest rates. So your saying this time its different? US fed cuts this week and Canada does nothing for a year or more? Doesn’t make any sense from a historical perspective.

The correlation is 90%. And no cut in Canada this year. – Garth

Wrong! Banks are offering lower fixed rates than variable because they want to lock people into what will soon be the higher of the two rates.

It is unwise to bet against a 90% correlation. It is also unwise to ever go fixed as variable has continually shown to be the better option in the long run.

#44 Christina on 07.28.19 at 10:21 pm

Hahaha That dog looks like guilt personified.

Or rather…guilt ‘dog’ified?!?

And I’m so pleased that the comments will remain the same. I’ve been coming here for years to read and learn, and I think this format works well here. Some of the comments might be a bit out there (ahem, Smoking Man), but there are some excellent ones that make sifting through worth the effort.

#45 PeterfromCalgary on 07.28.19 at 10:39 pm

Frankly I am confused about why investors are so afraid of the US China trade war. The US which is a 20 trillion dollar a year economy imports 1/2 a trillion every year from China. So only 1 in 40 dollars spent in the United States is subject the this 25% tariff. So why is everyone so worried?

#46 Treasure Island CEO - 30 mil offshore on 07.28.19 at 10:47 pm

The baby boomers are in too deep in equities right now. They are going to hit the exits for the final time in their lifetime too late once equities start falling and cause a greater downturn in the markets.

The US Fed is being played into cutting rates. The real storm hasn’t hit yet.

#47 Long-Time Lurker on 07.28.19 at 11:05 pm

I like the comments section the way it is. Yeah, I’m late.

N.A. stock markets up in August is my guess.

The GF website seems to be glitching my posts so I’m rediscovering the joys of lurking.

#48 Shawn Allen on 07.28.19 at 11:34 pm

Akashic record at 40 said:

Buffett would not make a million dollar investment decision based on rhetoric, without a spreadsheet.

*************************
Agree with your point that not even Buffett knows the future with certain. But assuming he is correct is generally a good bet.

You are right that Buffett does analysis before making an investment decision. But famously he does not use spreadsheets. He does the math in his head.

He uses a computer to get information and to play online bridge. No computer in his office. Says if you need to calculate things to so many decimals it’s too close to call. He invests in things that he thinks are obvious winners without much calculation.

P.S. Seems to be some smart people making some good comments tonight.

For example. Renolds531 says “Shawn is right”. Clearly an intelligent contributor here.

Mark used to respond to my comments but he never seemed to get it right by including those three words that, let’s be honest, we all love to hear “you are right”.

Notice how I started this comment with those words even when my aim was to point out an area of disagreement. Sometimes I neglect to do that…

#49 Leo Trollstoy on 07.29.19 at 12:04 am

US debt has never been a problem

There is no evidence from 240 years of American history that the level of the national debt has ever really mattered. The U.S. prints its own currency, and can borrow as much as it likes, increasingly from domestic investors. Per Buffett, deficit hawks have preached doom for decades. They have never been proven correct.
https://www.axios.com/warren-buffett-national-debt-6fa22c24-bc40-4cda-8895-973605ea465a.html

It’s not different this time

Sorry not sorry

#50 Sail Away on 07.29.19 at 12:20 am

Bonds have a role to play in all growth-centric balanced portfolios. GICs do not, as they are tax-punitive, low-yield and illiquid. They are savings vehicle, not investment assets. Buy them if you want as a form of capital preservation, but make sure you have enough capital first. – Garth

————————————————

Yes, as capital preservation GICs can have a place. We used them for 50% of the kids’ RESPs when they were within a year of uni. Peace of mind if nothing else.

#51 AGuyInVancouver on 07.29.19 at 2:45 am

I’ve often thought that the capital of pro-trade Republicans and the Democratic tech kings should engineer a massive stock sell-off just ahead of the US election to rid themselves of the erratic Trump.

#52 Dolce Vita on 07.29.19 at 2:51 am

#42 acdel

Well said.

This Blog and its Comment section are an oasis of reason and respect as you say when compared to Social Media such as word limit dust up Twitter and vacation-baby picture-Photoshop/savant animated GIF Facebook.

This Blog, Comment section BONUS:

not bad investment advice either.

Buona Mattina d’Italia.

#53 Billy on 07.29.19 at 4:19 am

Not sure whether Cdn. interest rates will follow USA down eventually, but the bigger concern may be whether or when the so-called long-term debt cycle ends and deleveraging kicks in for real. With markets at all-time highs and volatility relatively low, might be time to buy S&P 500 ETFs and correlated longer term PUT options.

#54 Fabio on 07.29.19 at 5:25 am

Is there a Canadian fundamental analysis website like https://finviz.com?
Thx

#55 Captain Uppa on 07.29.19 at 7:19 am

Too many armchair investors around. Too many armchair everything around.

I have a 60/40 balanced portfolio run by people who know what they are doing.

You don’t perform your own hernia surgeries, do you? Stop trying to outsmart and start BEING smart.

#56 short horses on 07.29.19 at 8:30 am

#6 Rusty Winchester on 07.28.19 at 2:58 pm

“Hey, maybe a stupid question, but if bonds are paying 1.4% and my savings account is at 2%, what is the advantage of bonds? Is it just because of their inverse relationship with ETF’s?”

The second sentence is close — I suspect you meant equities, not ETFs. You’re better off buying bonds using ETFs, which are instruments for buying bonds and equities, etc, they are not an asset class unto themselves.

If you dig through the archives of this pathetic blog you’ll see suggestions on how much of various bond classes to hold (corporate vs government, short vs long duration). But an aggregate bond ETF (think VAB, XBB, ZAG) accomplishes what you need: these have a slight negative correlation to equities, they have the lowest fees among Canadian bond ETFs, and their all-in-one structure makes your life easier.

You’re not holding bonds for their yield, you’re holding them to reduce volatility and to help with rebalancing in response to significant market events (like the 50% haircut in 2008).

#57 TurnerNation on 07.29.19 at 8:36 am

$40 burger + beer (inc tax & tip) soon?
Don’t eat out…Starve the Beast

2%…keep repeating that govt propaganda.

5min BNN clip with :

Toronto chef Mark McEwan: Inflation is hitting Canadian restaurants hard

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

#58 dharma bum on 07.29.19 at 8:42 am

Internal Combustion Engines will be the primary means of powering personal vehicles for at least another 30 years.

Gasoline will continue to be the fuel of choice.

It will take a subsequent 30 years (i.e., 60 years from now) for the transition to electric vehicles becoming the main type of personal transportation, mainly because of the time and money it’s going to take to develop the super-fast recharging technology (i.e., recharge a battery in under 5 minutes) and charging station infrastructure (having charging stations at least as ubiquitous as gasoline stations are today).

You read it here folks.

#59 Another Deckchair on 07.29.19 at 9:17 am

#55 Captain Uppa

“Stop trying to outsmart and start BEING smart.”

Reply #1.

Yep. Sure. We have some accounts we manage, and others managed by a fund manager. No, not (yet?) Turner Investments.

The fund manager enjoys our conversations when we meet. Why? Because I learned (am learning) about investing and associated products, I can ask questions that make sense.

If you read what Garth and Co. writes about the 2018 downturn, they had to hand-hold people. Us? Meh- it’ll come back.

I do look at the account balances in our self-managed stuff almost daily, and try to see how everything moves, and what moves it. (e.g. USCAD exchange rate) Or, “CPD is up/down, why?”

I do expect to eventually hand over management of all accounts to someone else once my education is up to snuff.

#60 Another Deckchair on 07.29.19 at 9:26 am

#55 Captain Uppa

“Stop trying to outsmart and start BEING smart.”

Reply #2.

Getting interested in investments started when approaching that “Freedom 55” age, and I took the time to look and see where 20 years of investment at one company faired.

And, I mean, I had a GOOD look. Partner is very good with numbers, and I’m not bad myself.

When I found the 2.5% management fees in one account, alarm bells started going off. Showed it to partner, who went through the stack of account statements, and agreed with my synopsis.

Transferred to an on-line broker, I could mimic the (little) trading and save the 2.5% fee. What the company manager did was not much, from following the paper trail. I could (and, do) about the same without their fee.

If only I had taken the time to REALLY look when “freedom 45” or even “freedom 35” came around, we’d be a lot further ahead than we are now.

Sigh – live and learn.

#61 NoName on 07.29.19 at 10:18 am

#58 dharma bum on 07.29.19 at 8:42 am
Internal Combustion Engines will be the primary means of powering personal vehicles for at least another 30 years.

Gasoline will continue to be the fuel of choice.

It will take a subsequent 30 years (i.e., 60 years from now) for the transition to electric vehicles becoming the main type of personal transportation, mainly because of the time and money it’s going to take to develop the super-fast recharging technology (i.e., recharge a battery in under 5 minutes) and charging station infrastructure (having charging stations at least as ubiquitous as gasoline stations are today).

You read it here folks.

Thay coud power city buses fearly easily with electricity, buy using combination of betteries and capacitors, but they so bend to use trains and street cars for multiple time cost, with lot more sporadic coverage…

abb has decent technology alredey developed.

https://www.greentechmedia.com/articles/read/abb-sells-first-order-for-15-second-bus-charging#gs.stiqkd

Here is bus charginh 600KVA under a min.
https://www.youtube.com/watch?v=LCNi0qK2m4g

#62 NoName on 07.29.19 at 10:21 am

and this

https://www.youtube.com/watch?v=qrmZwCe0x9I

#63 Captain Uppa on 07.29.19 at 10:47 am

>>#60 Another Deckchair on 07.29.19 at 9:26 am
#55 Captain Uppa

“Stop trying to outsmart and start BEING smart.”

Reply #2.

Getting interested in investments started when approaching that “Freedom 55” age, and I took the time to look and see where 20 years of investment at one company faired.

And, I mean, I had a GOOD look. Partner is very good with numbers, and I’m not bad myself.

When I found the 2.5% management fees in one account, alarm bells started going off. Showed it to partner, who went through the stack of account statements, and agreed with my synopsis.

Transferred to an on-line broker, I could mimic the (little) trading and save the 2.5% fee. What the company manager did was not much, from following the paper trail. I could (and, do) about the same without their fee.

If only I had taken the time to REALLY look when “freedom 45” or even “freedom 35” came around, we’d be a lot further ahead than we are now.

Sigh – live and learn.>>

Oh of course in no way am I promoting to be ignorant, uneducated and uninitiated in investing. I should have been more clear.

I was more referring to the people who believe they can outsmart the pros.

You should absolutely look at the fees and credibility of those managing your money.

0.5-1% is all you should be paying.

I have never encountered a fee-based advisor charging 2.5%. You must have been shackled inside a mutual fund prison. – Garth

#64 Shawn Allen on 07.29.19 at 10:50 am

Restaurant and Inflation and Solutions

#57 TurnerNation on 07.29.19 at 8:36 am said:

Toronto chef Mark McEwan: Inflation is hitting Canadian restaurants hard

***********************
I saw that BNN interview. The chef / owner mentioned that most restaurants scrape by with an average 5% (of sales) profit to the bottom line and he was closer I think he said to a more reasonable 10%. He said they used to charge for bottled water but now no one orders adn tht is lost revenue.

There are two “third rail” things about restaurants that could lower prices and/or increase profits.

1. They could charge for water. There is obviously a cost for staff to serve water. There may be little incremental cost. But on an overall basis there is a cost as it takes staff time to serve water and the glasses have to be cleaned. But woe to the first restaurant to try this. The masses are convinced they have a right to free water and that charging for it represents rampant greed. (But charging a 300% or more markup on wine just to pour it in a glass is fine. The restaurant association could band together and implement charging for water. But free refills could remain. Free refills on soft drinks are another questionable area both for health and profits.

2. Tips. The really untouchable third rail. Owners are getting 5% of sales as profit while staff are collecting 15 to 20% or more on top of their wages! In most businesses handing cash to staff would be considered a bribe or something and staff would get fired for accepting it. Restaurant staff benefit from this custom that dates back to when only the very rich traveled and servers were living in true abject poverty. It’s just weird. And the restaurant owners are aiding and abetting it with debit machines that rudely suggest tips often starting at 15% and going to 25%. When minimum wage went to $15 in Ontario, no mention of cutting back on tipping. Instead tipping is spreading. Yet we don’t tip the grocery store cashiers. Most don’t tip full service gas station attendants (one told me so yesterday). It’s all just a weird and expensive custom. Restaurant association could band together and suggest that with higher wages this could at least be trimmed. Or raise prices a little and eliminate tipping. Again 15% plus for staff on top of wages while the owner gets 5% profit! Cue the attacks on me for even daring to mention this. By the way I generally tip 20% but I scratch my head why. For anyone on a tight budget, especially young people, I suggest 10% is fine (and nothing if the service is really poor)

When I owned restaurants the tips were all pooled, evenly distributed to front house and kitchen staff, and added to T4s. Anyone who didn’t like it was invited to leave since, as a former federal revenue minister, I would not condone cash payments and tax evasion. I was not Mr. Popularity. – Garth

#65 Stan Brooks on 07.29.19 at 11:03 am

Bonds.

Derivative of the worthless constantly depreciating northern peso managed expertly by BoC who ‘monitors it closely’.

Yielding 1.46 % yearly on 10 years coupon with official yearly inflation 2-2.5 %, unofficial 8 % +.

Where do I sign?

GoC bonds form a small part of the FI component of a portfolio, and are owned for stability, not yield (how many times do I have to say this?). They are combined with corporates and provincial debt, as well as preferreds. Overall yield is about 4.6%. – Garth

#66 Ponzius Pilatus on 07.29.19 at 11:13 am

#58 dharma bum on 07.29.19 at 8:42 am
Internal Combustion Engines will be the primary means of powering personal vehicles for at least another 30 years.

Gasoline will continue to be the fuel of choice.

It will take a subsequent 30 years (i.e., 60 years from now) for the transition to electric vehicles becoming the main type of personal transportation, mainly because of the time and money it’s going to take to develop the super-fast recharging technology (i.e., recharge a battery in under 5 minutes) and charging station infrastructure (having charging stations at least as ubiquitous as gasoline stations are today).

You read it here folks.
—————-
I’ll agree with your e-cars vs. Internal combustion, in general.
However, it depends of which part of the word you’re talking about.
You’re scenario will probably play itself out in the USA and many parts of Canada, where urban sprawl and the love of driving alone will continue.
China, Europe and many other parts, not so much.
As I have mentioned many times, the real revolution will be the conversion from single occupancy to mass transit and other form of environmental friendly transportation (including yes biking).
Bullet trains are already crisscrossing the EU and Japan and China making them a viable alternative to short distance plane travel.
Densification rather than urban sprawl will be the motto.
Dedicated bus lanes will zip passengers past the dinosauers still clinging to their F-150s.
It’s not Utopia, it’s happening in the Lower Mainland right now.
The much derided bike lanes over the Burrard Bridge are becoming very successful.
Translink is on the right track.
Sorry, Fartz, did not mean to ruin your nice trip to the east coast.

#67 Ponzius Pilatus on 07.29.19 at 11:25 am

Regarding the discussion on restaurants, there is a restaurant in Vienna, Austria that has a buffet where you can eat as much you want and only pay as much as you want.
Been in business for 15 years.
And don’t forget no tipping in Austria and Germany.
And now cue Billy Joel’s Vienna.
“when will you realize, Vienna waits for you”
https://m.spiegel.de/wirtschaft/wien-im-restaurant-deewan-zahlt-jeder-so-viel-er-will-a-1278160.html

#68 Jesse on 07.29.19 at 11:25 am

#55 Captain Uppa on 07.29.19 at 7:19 am
Too many armchair investors around. Too many armchair everything around.

I have a 60/40 balanced portfolio run by people who know what they are doing.

You don’t perform your own hernia surgeries, do you? Stop trying to outsmart and start BEING smart.

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

MAW104 is the only fund I trust. For DIY I’d recommend a 60/40 portfolio of ETFs like: VTI/VXUS/BND (I’m bearish on Canada).

#69 Stan Brooks on 07.29.19 at 11:33 am

GoC bonds form a small part of the FI component of a portfolio, and are owned for stability, not yield (how many times do I have to say this?). They are combined with corporates and provincial debt, as well as preferreds. Overall yield is about 4.6%. – Garth

No problem with corporate debt.

But government debt at 1.46 %, a pretty much guaranteed loss?

I see only 2 cases for it:

1. expectations of future rate cuts that drives current/old bonds higher.
2. ‘insurance’ on larger sums not covered by deposit insurance.

Both are very bad cases, it seems big money wants insurance against ‘the unlikely case of…..’ SHTF.

#70 Sail away on 07.29.19 at 11:39 am

#55 Captain Uppa on 07.29.19 at 7:19 am

Too many armchair investors around. Too many armchair everything around.

I have a 60/40 balanced portfolio run by people who know what they are doing.

You don’t perform your own hernia surgeries, do you? Stop trying to outsmart and start BEING smart.

————————————————

I run an engineering company, and some of the best solutions are suggested by contractors. This is because they are looking at a problem every day and thinking about ways to fix it, giving their full attention to the issue at hand. They know exactly what they can do with their tools.

Portfolios can be the same. Nobody else cares as much as you do about your money.

On the other hand, some of the worst disasters come about from a contractor proceeding without guidance.

Moral of the story? Learn everything you can and operate in your area of knowledge, but get professional advice when needed.

#71 Watch Everything on 07.29.19 at 12:11 pm

The bank in Toronto made a mess for me with a transfer of funds. I called on Sunday, and told the guy to check my branch account. The format was not familiar, and too much money was there. Now we are talking about 5 guys who didn’t know what they were doing, and not my fault. Today, went online and the page is familiar, but need to phone, and execute the correction – no problem. I sent in the mail a $3,000 check to another branch bank payable to me, and endorsed it for deposit only sent on July 15th. Its missing, and must make another call soon. Two different banks at play now, and this has never happened before, but no fraud can be detected.

#72 Ponzius Pilatus on 07.29.19 at 12:22 pm

Real man are linear.
Homo Linearus we are for sure.
Thinking in increments. That’s what our brains are good at.
And that’s probably a good thing, because if we find out that the product of overpopulation is not linear (as assumed in popular science), but exponential, it may be too late to matter.

#73 Jesse on 07.29.19 at 12:39 pm

#72 Ponzius Pilatus on 07.29.19 at 12:22 pm

And that’s probably a good thing, because if we find out that the product of overpopulation is not linear (as assumed in popular science), but exponential, it may be too late to matter.
*******************************

Populations are dropping Ponz, Europe and Japan are dying, as is Canada and the US.

#74 Shawn Allen on 07.29.19 at 1:02 pm

Garth’s Smart Approach to Tips

When I owned restaurants the tips were all pooled, evenly distributed to front house and kitchen staff, and added to T4s. Anyone who didn’t like it was invited to leave since, as a former federal revenue minister, I would not condone cash payments and tax evasion. I was not Mr. Popularity. – Garth

******************************
At my family’s restaurant, tips were always pooled to everyone involved in the work. Used to be all cash decades ago. I think tips as a percentage of wages are way up now.

Given that background, I have never considered the tip to be for the server only. I always thought tips should be shared.

Our business never put the amounts on T4.

These days with most of the tips being collected electronically, restaurant owners probably have more responsibility to track it to T4s and they probably have a role in how they are divided up to staff.

#75 Kevin on 07.29.19 at 1:13 pm

Thanks for the post, Garth. Disappointed with the no threaded comments, as it forces readers to read through the good stuff and the crap (AKA conspiracy theorists, pro-Trump drivel, etc.) :(

If there are others like me, I just search for “Garth” in the comments to see his replies, they’re usually the only ones worth reading.

#76 jess on 07.29.19 at 1:39 pm

shadow banking should we be worried?
https://www.london.edu/lbsr/shining-a-light-on-shadow-banking

————-
a usb key –
https://www.icij.org/investigations/mauritius-leaks/watch-how-mauritius-leaks-got-started-and-what-we-found/

https://www.icij.org/investigations/mauritius-leaks/inside-the-firm-at-the-heart-of-mauritius-leaks/

#77 n1tro on 07.29.19 at 1:41 pm

#75 Kevin on 07.29.19 at 1:13 pm
Thanks for the post, Garth. Disappointed with the no threaded comments, as it forces readers to read through the good stuff and the crap (AKA conspiracy theorists, pro-Trump drivel, etc.) :(

If there are others like me, I just search for “Garth” in the comments to see his replies, they’re usually the only ones worth reading.
—————
How’s reading “Garth” replies work in threaded comments? You still have to search and read through the thread to get the context. Must be a real chore to use the scroll wheel to skip the crap (AKA climate change, pro-Trudeau drivel, etc.) :(

#78 Powell on 07.29.19 at 1:42 pm

US debt isn’t a problem

Sorry not sorry

“What is right about America just totally dwarfs what’s wrong with Washington. 535 people are not going to mess up 315 million over time. I know it.” – Warren Buffett

https://www.marketwatch.com/story/buffett-us-debt-on-its-own-not-a-problem-2013-01-20

……..

really Leo? is that why BOTH the previous Fed (Yellin) and current Fed have urged/testified to congress about the need for fiscal responisilibity .That with rising debt levels come rising interest outlays on sadi debt. Leaving less monies for other outlays

uou know more then the Fed?….didnt think so

#79 MF on 07.29.19 at 1:56 pm

64 Shawn Allen on 07.29.19 at 10:50 am

Do you depend on tips to put food on the table?

Tipping allows for tons of people to make a living who would otherwise be living in poverty. It’s not always some kid living at home who is your server, it’s a parent struggling to survive. Server salaries are below minimum wage.

How about we call your source of income “weird” and let you starve?

MF

#80 Dissident on 07.29.19 at 2:04 pm

This made me lol – “I just put on my helmet and hip waders when I visit below decks, and that seems to work.”

#81 Shawn Allen on 07.29.19 at 2:33 pm

Tipping?

#79 MF on 07.29.19 at 1:56 pm
64 Shawn Allen on 07.29.19 at 10:50 am

Do you depend on tips to put food on the table?

Tipping allows for tons of people to make a living who would otherwise be living in poverty. It’s not always some kid living at home who is your server, it’s a parent struggling to survive. Server salaries are below minimum wage.

How about we call your source of income “weird” and let you starve?

MF

***************************************
Thanks for making my point. You did it well.

I trust you always slip some cash to all minimum wage workers such as the clerks in every retail store.

When you ask for help finding something in a department store, I’d suggest minimum $2.

And you said:

“Server salaries are below minimum wage.” That sentence contains a contradiction and in which province is there a lower minimum wage for servers? Also, in what other industry do customers make up for low wages like that.

Real Estate Agents are mostly starving. I’d suggest minimum of a $100 tip every time anyone gets shown a house by a real estate agent.

Selling cars is tough and many starve at it. See if the salesman will accept $500 extra as a tip when you buy a car. Maybe he will get you a better deal that way. Don’t tell the dealer owner though.

#82 T on 07.29.19 at 3:05 pm

#79 MF on 07.29.19 at 1:56 pm
64 Shawn Allen on 07.29.19 at 10:50 am

Do you depend on tips to put food on the table?

Tipping allows for tons of people to make a living who would otherwise be living in poverty. It’s not always some kid living at home who is your server, it’s a parent struggling to survive. Server salaries are below minimum wage.

How about we call your source of income “weird” and let you starve?

MF

—–

Restaurants should pay living wages, period, and not allow tipping. Menu prices would rise accordingly, but then we wouldn’t have the numerous issues which arise from our tipping culture. Servers just aren’t paid or respected enough and it’s time for change.

#83 T on 07.29.19 at 3:05 pm

#79 MF on 07.29.19 at 1:56 pm
64 Shawn Allen on 07.29.19 at 10:50 am

Do you depend on tips to put food on the table?

Tipping allows for tons of people to make a living who would otherwise be living in poverty. It’s not always some kid living at home who is your server, it’s a parent struggling to survive. Server salaries are below minimum wage.

How about we call your source of income “weird” and let you starve?

MF

—–

Restaurants should pay living wages, period, and not allow tipping. Menu prices would rise accordingly, but then we wouldn’t have the numerous issues which arise from our tipping culture. Servers just aren’t paid or respected enough and it’s time for change.

#84 TurnerNation on 07.29.19 at 3:58 pm

For all the VET.TO touts I’d seen your swagger and then set an alert at $20 price level. Nothing done.
Down she goes.

#yieldhound

#85 Tim Gorgine on 07.29.19 at 4:51 pm

They don’t want tipping to stop because they are supposed to include it in their income and pay income taxes, C.P.P., E.I. etc. Many brag at getting $200, $300 a week without paying income taxes, C.P.P., E.I..

They should get the $14 minimum wage in Ontario and whatever it is in the rest of each province so they can pay income taxes, C.P.P. E.I. etc. like the rest of us do on all our income.

#86 Shawn on 07.29.19 at 4:51 pm

They’re cutting rates globally. Don’t kid yourself the BOC will cut once or twice this year.

Nope. – Garth

#87 Shawn on 07.29.19 at 4:58 pm

Bonds and bond proxies (preferred shares, REITS, utilities, cons staples, low volatility) are wildly overvalued relative to the S&P500. When the Fed cuts and signals more cuts are coming they will get hit hard.

#88 Shawn on 07.29.19 at 5:06 pm

It’s looking a lot like 2012 again.

#89 Shawn on 07.29.19 at 5:08 pm

If the BOC doesn’t cut this year they’ll end up cutting twice in 2020.

#90 Shawn Severin on 07.29.19 at 5:10 pm

The 2% Canadian inflation # is none sense. Over the next few months data will come out to dispel this.

#91 maxx on 07.29.19 at 5:28 pm

@ #27

Fascinating….we were talking about this very thing yesterday. Makes you wonder what the world will be like in a few decades. Or so.

Tx for sharing.

#92 maxx on 07.29.19 at 5:31 pm

@ #27

Sorry….meant @ #30

#93 Shawn on 07.29.19 at 5:42 pm

I wouldn’t be betting on a higher $CAD here either. History shows that when the FED begins to ease (recessionary or non), it’s unfriendly to the $CAD.

Okay, Shawn, time to back away from the keyboard. You have no idea what you’re typing. – Garth

#94 maxx on 07.29.19 at 6:01 pm

@#64

Har-har, har-dee-har-har! Any restaurant that charges for water deserves everything it gets. Staff are already “bonding” with customers and schlepping food to the table anyway.

If the restaurant assn. cartels its butt to charge for the stuff, people will simply tank up before going in.

As for the cost of sticking glasses in with the balance of the crockery, pull the other one. A fraction of a penny per unit, including dish soap and energy, is a ridiculous stepping stone to profit.

They will LOSE customers.

Perhaps the lot of them ought to focus on healthier eats and more imaginative approaches. Subway turned it around big time:

https://markets.businessinsider.com/stocks/subway_financeinvestment-stock

as did this amazing guy:

https://www.telegraph.co.uk/food-and-drink/features/worlds-ethical-bar-london-pub-aiming-eco-friendly-socially-conscious/

The most profitable restaurants today are coffee shops of all stripes because people can still get out and enjoy at very little cost.

#95 Boris Dalavor on 07.29.19 at 11:24 pm

The place I work at does not let us keep tips and does not encourage it. We get paid every week, $16 an hour+5% vacation pay and we get a monthly $25 a week bonus when we work everyday of our shift that week.

I like it better this way because I am making straight $800 a week net pay.