Extremists

Have you noticed the middle’s missing these days?

In politics, libs and cons might as well be commies and Nazis. The globalists are battling the nationalists. Society’s divided between the 1% and the 99%. The Mills have declared war on the Boomers. The #MeToo movement turned men into the enemy of women. And when it comes to financial stuff, the extremism continues. Rates aren’t dropping – they’re going to zero or below. Stocks aren’t just correcting – the market will be destroyed. Toronto bungalows will be $5 million each before long. And money’s finished – to be replaced by cryptos or hunks of gold.

See what I mean? The missing middle. But thinking in extremes sure gets people into trouble.

For example, they mistake routine declines for the End of Days. It goads them into selling at the worst moment, crystallizing a loss when none was needed. It makes people buy stuff that’s already soared in value, whether it’s Bitcoin at $15,000 a pop or particleboard McMansions in 2017. Seeing the world in absolutes makes us sell low, buy high and be ruled by the emotions of fear and greed – of which fear is by far the strongest twin. This blog serves a daily dose. I beseech you, for the love of God,  never to read the comment section.

Well, here’s Jan, with a small example of what extreme thinking can do to you.

Recently caved and bought a house just closed at the end of July 5 yr fixed 30 year am at 2.8%. Wanted to borrow cheap money instead of going clear title, plus I wanted variable but listened to the broker.  My penalty to get out of this brand new mortgage is $2,100. My question to you is should I pay it off and go variable?

Her mortgage is two weeks old and locked up nicely for five years at less than 3% when the inflation rate is over 2%. How can that possibly be a bad deal, worth spending two grand to get out of?

Simple. Rates are going to zero, right, Jan? If people in Denmark can pay nothing for a bank loan, it’s surely coming here, too. Even though the Fed has cut just once after nine increases and our central bankers have done nothing, the money-for-free trope is out there. So Jan wants to go variable. Questionable idea. Rates may not have bottomed quite yet, but they’re not staying in the ditch. In three years she may feel like a genius.

And then there’s Rick. “You’re a moron, Garth,” he generously says. “I just backed the truck up and put everything I’ve got into gold. Your stocks and bonds are dog crap in comparison, and they’re going down for a long, long time.”

True enough, rocks have outpaced equities in the last few months. Recently bullion in reduced Canadian dollars hit a high, even though it sits $400-per-ouce under levels of nine years ago when measured in US$. With interest rates falling and Trump at the controls, gold’s been a temporary safe haven asset. But Rick’s thinking in extremes. Too bad. Always a mistake.

Why?

First, gold is a temporary play. The decade-long track record is one of volatility. Up a mere 2.5% annually over the past five years. The only people doing well are the ones who bought at depressed levels and lock in sales. That’s a tiny fraction of those who own gold (or silver). The typical metalhead buys and never sells – a bad strategy for an asset that pays you nothing, yet can come with real costs.

Second, this surge will end. It’s a time to sell bullion, not buy it. Hedge funds are stuffed with bullion so when prices start to drop this speculation will fuel the descent. Then there’s Trump. Going into re-election, the guy is unlikely to let the China trade war fester, negatively affecting the US economy. As that risk dissipates, so will the price of bullion – just as the Fed throttles back. Hey, look at Tuesday’s action – Trump relented a little on new anti-Sino tariffs and gold choked $30 an ounce.

If you want some bullion exposure, buy an ETF holding the biggest companies trading on the Canadian stock market. That’s enough. And if you own a mess of rocks, unload. That was the advice here in 2011. It was brilliant.

The message is simple. Extremism is costly, almost always emotional in nature and the refuge of people who think Instagram is meaningful. There has probably not been a better time to be alive. No world wars. No pandemics killing millions. No depression. No hyperinflation. No 20% mortgage rates. And Adele still isn’t touring.

Enjoy.

124 comments ↓

#1 I don't agree ... on 08.13.19 at 4:34 pm

my middle is getting bigger all the time.

#2 expat on 08.13.19 at 4:47 pm

Good advice Garth

I see the now common pump and dump on gold juniors is heating up.

#3 Unhinged Trader on 08.13.19 at 4:48 pm

Imagine going through life with the IQ of a magpie and hoarding sparkling minerals…

#4 AL on 08.13.19 at 4:48 pm

A question from someone who has done mostly everything wrong so far.

I have 50K wasting away in a pointless RRSP savings account. (Just got most of it from a contract settlement.) I plan to convert it to 60/40 ETFs as per the advice from this (awesome) blog.
The question: is there anything particular I need to keep in mind when choosing the ETFs, given that it has to remain all within an RRSP acct? Anything I should avoid, any tax implications to keep in mind?
Keep it up Garth! The masses need you. Clearly.

#5 expat on 08.13.19 at 4:51 pm

The start of this rise in gold price was caused by a short speculator who was trapped at 1280.

I mentioned this here a month ago.

That short covering is done now
Fundamentals of gold need to take it to the next pivot.

But be aware – its getting long in the tooth for this intermediate cycle.

(It’ll be fun to hear next quarter who that was but they lost billions)

#6 Macduff on 08.13.19 at 5:03 pm

When my son was almost 1, I bought him a one ounce maple leaf for $650, instead of splurging the equivalent amount on a birthday party for a 1 year old (unbelievably there are people who do this). Today my son has a very nice memento with his birth year, which has appreciated nicely. The way you spend your money or invest is highly individual but I agree that moderation is the overall key to success.

#7 FreeBird on 08.13.19 at 5:09 pm

“Starting June 1, 2020, virtual currency dealers will be required to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)…”

http://www.mondaq.com/canada/x/832796/fin+tech/Enhanced+Disclosure+For+Virtual+Currency+Will+Soon+Be+Mandatory+In+Canada

Revamping Canada’s anti money laundering rules…

https://www.blakesbusinessclass.com/revamping-canadas-anti-money-laundering-rules-whats-new-whats-changed-means-business/

#8 Brian Ripley on 08.13.19 at 5:10 pm

Gold miners will do well if the USD continues to rally and the price of oil continues its path into the seasonal lows… that will create lower operating mining costs.

Meanwhile our Canadian housing costs in U.S. dollars continues to tick down since 2017 which was the end of the FOMO crowd’s desire to go all in and the beginning of the current USD rally.

My chart is up on this: http://www.chpc.biz/canadian-housing-in-usd.html

#9 Shawn on 08.13.19 at 5:11 pm

Yup. This could be a 1996 moment for gold – spectacular false breakout. If I were a short seller I would be short gold and long term bonds.

Follow through day on the Nasdaq today. It’s time to overweight equities. I prefer the US tech (VGT QQQ) but I think even the TSX “goes up”.

I think home prices continue to stagnate / decline in the upper end of the market. Low and mid market will remain moderate.

#10 Shawn on 08.13.19 at 5:13 pm

Trump may have become the first president in history to officially save Christmas.

#11 Debtslavecreator on 08.13.19 at 5:14 pm

Nothing wrong with having some pocket change in silver maples and no more than 5% of your long term portfolio spread between 5-6 royalty companies in the metals st for but for the most part stay away from mining and juniors and having too much in gold outside the system
Not going to help you
Good time to lighten up on the sector even though there’s a good chance at one more spike by the election next year
The ultimate severe crisis tool is being able to grow or acquire food and earn an income in a like minded community

#12 Dolce Vita on 08.13.19 at 5:16 pm

“Have you noticed the middle’s missing these days?”

No dung Sherlock.

1 day on Twitter will tell you that. I subscribe to the Left, Right and feel at times, I’m the only in between. I get heck from both sides of the spectrum – you just cannot win as moderate. You get all these take no prisoners “screamers” that defy decency and common sense. And Television, it’s all sensationalism, whining, conspiracy theory, people crying about the stupidest things and more.

I think that the majority of Canadian’s are not like that at all.

The Silent Majority is, well, just that.

Ciao d’Italia of perpetual heat. Ferragosto in a couple of days and less heat. Thank God for a couple of days below 30 (sans humidex).

#13 Dave on 08.13.19 at 5:23 pm

In the world of Private lenders it is a dangerous game now. Big $$$ have exchanged hands but unlike a bank there is one person on each side of the legal contract. With a down turn in the market – payments are not being made and the value of the land is less then the mortgage.

It’s now kill or be killed scenarios:

https://theprovince.com/news/local-news/dead-angel-with-history-of-bad-credit-got-mortgage-from-charitable-foundation/wcm/4cea223a-4420-47bf-8782-856795b73ef7

#14 Sherry Quintal on 08.13.19 at 5:23 pm

I agree what your saying about extremes but I sure liked that 19.5% Canada Savings Bonds even if inflation was 16% or so. I lost my job just recently at 55 and I am more better off than others with $800,000 RRSP, $75,000 in TFSA’s, no debts and $85,000 in a low cost dividend mutual fund.

I could live off the interest of 3% from a 5 year GIC, dividend income and my $60,000 severance plus probably $18,000 in E.I. over the next 5 years until I am 60 and get my early C.P.P. of probably $10,000 a year. If I do this I would still be able to save or accumulate $100,000 over the next 5 years.

If I don’t find a new job with decent pay I could always do something part-time and boost my savings, accumulated money to $200,000 in 5 years.

#15 Frank Rotiroti on 08.13.19 at 5:35 pm

Great blog.

#16 Yanniel on 08.13.19 at 5:45 pm

“First, gold is a temporary play. The decade-long track record is one of volatility. Up a mere 2.5% annually over the past five years.”

Recency bias Garth? Look at other decades:

Gold CAGR:

1972-1978: 36.08% (could not get data before 1972)
1979-1989: 5.29%
1989-1999: -3.10%
1999 – 2009: 12.65%
2009-present: 4.16% (2019 )

Actually look at the CAGR of the last half a century (1972 – present): 7.44%. Right about the same as the balanced portfolio.

#17 Cottingham a bargain on 08.13.19 at 5:47 pm

Good advice on holders of gold I would say Garth.

Any advice on the historically low valuations being accorded to energy stocks. ? Is it a good entry point on a quality ETF for the space ?

#18 Yanniel on 08.13.19 at 5:53 pm

Actually, I take the last part back “Right about the same as the balanced portfolio.”

I am not sure that was so in previous decades.

#19 Randy Daniels on 08.13.19 at 5:57 pm

Don’t forget the extreme of the entitlement mentality and social programs, socialism which will drown us all in debt and dispair which is most in history never seen before. The world is full of debt junkies and give me free stuff parasites.

#20 The Wet One on 08.13.19 at 6:02 pm

But Garth, I’m in the comment section!

That’s reason enough alone for everyone to peruse the comments at their leisure to partake of my wisdom and knowledge.

:-)

Plus I agree with you.

See?

It’s all good down here in steerage.

;-)

#21 The Wet One on 08.13.19 at 6:05 pm

Also Garth, I don’t post any crazy nonsense like the stuff you noted above. Mostly I talk about, eh, not very much.

Which is pretty harmless, woudn’t you say?

Cheers!

#22 Rico on 08.13.19 at 6:05 pm

“Going into re-election, the guy is unlikely to let the China trade war fester, negatively affecting the US economy.”

This assumes that Trump will actually act in his own best interest.
I wouldn’t be surprised if he cuts off his nose to spite his face when it comes to China.

#23 Steven Rowlandson on 08.13.19 at 6:14 pm

Here is more on the tiny homes from Amazon sans the extremist website.

https://gizmodo.com/the-11-best-tiny-houses-you-can-buy-on-amazon-1819377589
https://www.today.com/home/amazon-sells-tiny-homes-delivery-t117648

No matter how cut rate these dwellings are you still have to put them somewhere and that is not cheap.

#24 PeterfromCalgary on 08.13.19 at 6:21 pm

I am working on a way to turn Justin Trudeau and all Liberal MPs into gold. If I succeed not only will it be good for the economy but our country as well.

#25 Blue angel on 08.13.19 at 6:23 pm

“If you want some bullion exposure, buy an ETF holding the biggest companies trading on the Canadian stock market”…
Like XGD or even MNT but the best play in gold by far it’s FNV or Franco Nevada at least for the last 10 years!

#26 Kamo on 08.13.19 at 6:38 pm

Why does this blog attract so many greedy libertarian misanthropes?

#27 Dom Deets on 08.13.19 at 6:45 pm

The big lesson my friend was taught was the TSX Venture exchange. Back in the highs it reached 3,300 and today it is 587. The resource, commodities super cycle went bust and all the losses piled up. At least he bought in at 900 and got out at 2,000 but most did not double their money.

#28 N on 08.13.19 at 6:45 pm

https://torontostoreys.com/2019/08/what-housing-bubble-toronto/

#29 Midtown Bob on 08.13.19 at 6:46 pm

Last time I looked the PC party under Sheer are in the middle while the Liberals have gone so far left and the NDP are a bunch of dummies.

#30 Penny Henny on 08.13.19 at 6:49 pm

Second, this surge will end. It’s a time to sell bullion, not buy it.-GT 1

If you want some bullion exposure, buy an ETF holding the biggest companies trading on the Canadian stock market.- GT 2

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

All bases covered? Check!

The first statement refers to bullion. The second to a diversified holding of securities including gold producers (companies with actual earnings). Sorry if those are two disparate thoughts and hard for you to process. – Garth

#31 AnonDude on 08.13.19 at 7:04 pm

POTUS blinks and the dragon smells blood.

CBC News: Hopes for trade war truce emerge as U.S. scales back Chinese tariff threat.
https://www.cbc.ca/news/business/us-china-trade-tariff-1.5245092

I guess he say the writing on the wall. Election year + late business cycle, equals defeat.

#32 Bytor the Snow Dog on 08.13.19 at 7:04 pm

I’m in the middle still, even probably considered a bit centre right.

I didn’t leave the left. The left left me.

#33 yvrguy on 08.13.19 at 7:08 pm

Correct. Gold is a temporary play, not a long term hold, and it’s exactly the right time to have 5-7% of physical bullion on your portfolio. It’s not a currency hedge, but a crisis hedge.

We’re about to enter a paradigm shift.

But don’t take it from me, take it from Ray Dalio.

CGL.C.TO is my jam.

#34 NoName on 08.13.19 at 7:12 pm

Gold has a lots of ground to cover to catch up with markets…

10y snp500 dji silv gold
https://imgur.com/a/sa4yA11

5y snp500 dji silv gold
https://imgur.com/a/QHtmMX6

#35 Lee on 08.13.19 at 7:15 pm

Enjoy, yes, but what about AOC? She’ll be comin around the mountain shortly.

#36 HellYeah on 08.13.19 at 7:16 pm

“Extremism is costly, almost always emotional in nature and the refuge of people who think Instagram is meaningful. There has probably not been a better time to be alive. No world wars. No pandemics killing millions. No depression. No hyperinflation. No 20% mortgage rates. And Adele still isn’t touring.”

Those all seem like very positive things for our society. Except Adele not touring. Would love to see her perform in a small (or medium) sized venue. Maybe she could guest blog on what she does with pop-star-earnings in a near-zero interest rate environment?

#37 Damian on 08.13.19 at 7:31 pm

Hey Garth, your whole blog is one absolute. You have a formula and the blog sells the formula. The formula, you say, is to be applied under all circumstances. The world never changes.

Sure it does. Just not the principles. – Garth

#38 Sail away on 08.13.19 at 7:32 pm

#4 AL on 08.13.19 at 4:48 pm

A question from someone who has done mostly everything wrong so far.

I have 50K wasting away in a pointless RRSP savings account. (Just got most of it from a contract settlement.) I plan to convert it to 60/40 ETFs as per the advice from this (awesome) blog.

The question: is there anything particular I need to keep in mind when choosing the ETFs, given that it has to remain all within an RRSP acct?

Anything I should avoid, any tax implications to keep in mind?

——————————————-

Saved money is never pointless. Don’t be in a real hurry to put it into the markets either – there’s a reason Buffett is sitting on $122B in cash right now, and that’s because the markets are very high.

Today might not be the best entry point for equities and bonds. Those wouldn’t be my first choice right now.

#39 Why oh why? on 08.13.19 at 7:36 pm

#34 NoName on 08.13.19 at 7:12 pm

Why don’t you go a little further back. Say. 1999? Let’s see what happens then.

#40 AACI Homedog on 08.13.19 at 7:44 pm

I scan the comments looking for laughs and inspiration.

#41 tccontrarian on 08.13.19 at 7:54 pm

Some comments, if I may…

[First, gold is a temporary play. The decade-long track record is one of volatility. Up a mere 2.5% annually over the past five years. ]

But it does have a 5,000 year history as a unit of monetary value. My ‘bet’ is that it’s going to be around for another 5,000 years (unless we go extinct). This ‘experiment’ with 100% fiat currencies can’t last as is. The GFC was a prelude and precipitated by the extreme leverage built-in.

[The only people doing well are the ones who bought at depressed levels and lock in sales. That’s a tiny fraction of those who own gold (or silver).]

Isn’t this true for any asset? Anyone buying RE these days expecting to ‘flip’ for a profit?
But yes, the best time to be buying precious metals (NOT ‘rocks’!), has passed and now’s time to hold – but I don’t think we’re at a ‘sell’…yet (but getting there). I have however, taken some profits just to be prudent.

[The typical metalhead buys and never sells – a bad strategy for an asset that pays you nothing, yet can come with real costs.]

Ok, we’re not ‘bullion-lickers’ now – we’ve graduated to ‘metalheads’. Progress??

[Second, this surge will end. It’s a time to sell bullion, not buy it… Hey, look at Tuesday’s action – Trump relented a little on new anti-Sino tariffs and gold choked $30 an ounce.]

And in tomorrow’s tweet, where Trump reverses position yet again (part of the act), bullion will regain $50. Sudden gap-down drops are actually quite common in strongest of bull markets in metals. A good omen if you ask me (and no-one asked, I know).

[If you want some bullion exposure, buy an ETF holding the biggest companies trading on the Canadian stock market. That’s enough.]

Yup!

[And if you own a mess of rocks, unload. That was the advice here in 2011. It was brilliant.]

I wasn’t reading this blog in 2011 – so yes, I paid dearly for holding!
But now I know the difference between ‘investing’ and ‘speculating’!

tcc

#42 tccontrarian on 08.13.19 at 8:13 pm

Over my computer monitor, I have these printed out and staring at me every time I sit there. I find them useful reminders of what it takes to succeed in investing.

tcc

* * * * *

“Good decisions come from experience. Experience comes from making bad decisions.”
— Mark Twain

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”

–Benjamin Graham

“Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”
— Sir John Templeton

#43 rv pilgrim on 08.13.19 at 8:15 pm

Long time reader. Have posted a few times – should become a regular with a consistent ‘handle’.
Summer vaca – rv camping in Hubbard’s with the family. Visited Lunenburg. Obligatory photo in front of your beautifully restored bank building. Fishing excursion in the harbor- 2 ‘ugly fish’ and a mackerel. Talked spouse out of buying a $6k painting – victory!
Horse drawn carriage driver points out ‘bank of Montreal bank building built 1907 – end stop’. Indicated that they should highlight the work you have done to restore, and contributions to your community – politically and now through your blog followers. Dunno – perhaps you appreciate a bit of anonymity after years of political life. Thought I would respect your anonymity by not knocking on your door.
In any case – thanks. I am grateful for the regular advice and humour.

Jeez, I had the coffee on… – Garth

#44 Scott Berrington on 08.13.19 at 8:24 pm

I bought 1,000 Canadian maple leafs at $412.75 each back in 1999. I cashed out my RRSP’s of $650,000 and paid my full income taxes on it. MY grandfather cashed in all his GIC’s and bought 300 of them at $185.33 each back in 1975.

Today, I can sell each one for $1,956.25. I will keep them as the next 20 years it will surely be at least $6,500 each. Gold is for kings. All prices I quoted are in Canadian dollars.

#45 crowdedelevatorfartz on 08.13.19 at 8:30 pm

@#43 rv Pilgrim.
I’m right there with you.
Was outside the refurbished BMO and a horse drawn carriage was bearing down on me.
So I had to make a decision.
Meet Garth and demand he install an elevator ……or slink off into the sunset.

On an entirely different note.

I’m not sure whats more extreme.
A Jack Russell Terrier taking a leap of faith over rocks
Or
Another middle aged Quebecer in a Speedo……

#46 crowdedelevatorfartz on 08.13.19 at 8:41 pm

@#24 kamo
“Why does this blog attract so many greedy libertarian misanthropes?”
+++

Its what happens when you become old, bitter and not quite rich enough to hire servants to deal with the unwashed rabble…..now where did I put my pepper spray?

#47 tccontrarian on 08.13.19 at 8:47 pm

#9 Shawn

Follow through day on the Nasdaq today. It’s time to overweight equities. I prefer the US tech (VGT QQQ) but I think even the TSX “goes up”.

= = = =

Seriously? QQQ is on my list to short. I think you may be an invaluable contrarian indicator. Keep sharing your ideas! Oh, and thanks!!

tcc

#48 PastThePeak on 08.13.19 at 8:54 pm

#16 Yanniel on 08.13.19 at 5:45 pm
“First, gold is a temporary play. The decade-long track record is one of volatility. Up a mere 2.5% annually over the past five years.”

Recency bias Garth? Look at other decades:

Gold CAGR:

1972-1978: 36.08% (could not get data before 1972)
1979-1989: 5.29%
1989-1999: -3.10%
1999 – 2009: 12.65%
2009-present: 4.16% (2019 )

Actually look at the CAGR of the last half a century (1972 – present): 7.44%. Right about the same as the balanced portfolio.
++++++++++++++++++++++++++++++++++++++++++++

Thanks for the info & analysis!

A little bit of gold (say up to 5%), acquired over time (not rushing in FOMO, and could be in an ETF for some) seems to be a reasonable hedge / insurance against inflation and fiat currency devaluations. And adds another element of diversification.

I would say an extreme is making the statement that it should never be held…but to each their own…

And for recency bias – this abounds today. Just about everyone only looks at 2009-19 as the equity timeframe of reference. Why not 1999 to 2009? Or the TSX from 2007 to 2017?

The long-term trend has always been up – eventually – but there have been a few lost decades in there…I think the odds of 2020 – 2030 being like the last 10 are low…

#49 NoName on 08.13.19 at 8:55 pm

#39 Why oh why? on 08.13.19 at 7:36 pm
#34 NoName on 08.13.19 at 7:12 pm

Why don’t you go a little further back. Say. 1999? Let’s see what happens then.

ok then, no chart, but i checked gold beat dji adjusted for inflation 1% per anum, but only from 1999-2019.

and if you realy, realy want to make a point use 50 yrs cart dji vs gold
https://imgur.com/a/waqHVQN

or i can use 30 yrs chart to prove my point…
https://imgur.com/a/azlgUGO

#50 Sail away on 08.13.19 at 9:02 pm

#16 Yanniel on 08.13.19 at 5:45 pm

“First, gold is a temporary play. The decade-long track record is one of volatility. Up a mere 2.5% annually over the past five years.”

Recency bias Garth? Look at other decades:

Gold CAGR:
1972-1978: 36.08% (could not get data before 1972)
1979-1989: 5.29%
1989-1999: -3.10%
1999 – 2009: 12.65%
2009-present: 4.16% (2019 )
Actually look at the CAGR of the last half a century (1972 – present): 7.44%. Right about the same as the balanced portfolio.

—————————————-

Wow- so wrong. Either your math or your data is bad.

First and foremost, there is no compounding with gold. What you buy is what you get: 1 oz of gold in 1972 is still 1 oz in 2019.

Second, your AGR (not CAGR, see above) is way off. The 1972-2019 AGR for gold was 2.8%.

Third, real numbers:

$10,000 invested in gold at $400/oz in 1972 would now be worth $36,600.

$10,000 invested in a balanced portfolio (7.44%) in 1972 would now be worth $291,600

#51 Sail away on 08.13.19 at 9:08 pm

Well, this is embarrassing- I was wrong with my previous math, sorry Yanniel.

The AGR of gold was actually 6.8%. $10,000 invested in 1972 (at $65/oz) would now be $220,200.

Sometimes anonymity is nice…

#52 Tim on 08.13.19 at 9:10 pm

@ #4 AL

Good for you to plan to save this money for the future instead of just spending a windfall.

As long as you keep the funds within the RRSP, there are no tax implications to shifting the specifics of what you invest in.

Given the size of dollars here and the fact that it is all within an RRSP (and that you said you wanted an ETF), either the Vanguard 60/40 balanced fund ETF VBAL or iShares equivalent XBAL are good choices for an easy-to-manage 60/40 target portfolio.

You get your dollars spread across over 10,000 individual companies and bonds around the world and get automatic rebalancing, all for about 25 basis points of cost.

#53 Tony on 08.13.19 at 9:14 pm

Re: #4 AL on 08.13.19 at 4:48 pm

Hedge the 60 percent for the 18 months following the 2020 election no matter who wins. Gold and long term bonds should do well AFTER September 2020. If it was my money I’d short gold from the start of May 2020 to the end of September 2020. I’d also hold long TBT from May 2020 to September 2020.

#54 Doug t on 08.13.19 at 9:14 pm

Real estate apparently now will not suffer greatly for the next 25 years and possibly continue to be robust – I was hoping for a 30% drop in Victoria but perhaps I should buy – the world is awash in cheap money and it’s the new norm – MMT here to stay

#55 Tony on 08.13.19 at 9:21 pm

Re: #27 Dom Deets on 08.13.19 at 6:45 pm

It actually was 2,400 back in 1983 when it was the Vancouver stock exchange before it merged with the Montreal stock exchange. I think that’s worse than what cocoa did over the last 36 years.

#56 Flop... on 08.13.19 at 9:23 pm

#115 Flop… on 08.13.19 at 11:40 am
DELETED (at the request of the original Flop)

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

What’s going on with this blog’s comment section.

Have we lost all respect for each other?

Why do we have someone impersonating myself?

Why do we have people disrespecting someone who has died and calling themselves Boom.

Over the years lots of others, Nonplused, Blacksheep, Freedom First, Common Sense, on and on.

One Flop, One Boom, one Freedom First, it’s not hard.

Some were newbies doing it accidentally, some people are just trying to cause trouble for other folk.

I asked Garth the other day off blog if people can’t control themselves is there some mechanism we can set up so once someone claims a name it is done for all time.

I don’t know what the imposter wrote, don’t want to know.

If you can’t think up an original name then you couldn’t have anything else interesting to say.

That’s for sure…

M45BC

Respect the fallen

M64WI

#57 akashic record on 08.13.19 at 9:25 pm

“In politics, libs and cons might as well be commies and Nazis. The globalists are battling the nationalists. Society’s divided between the 1% and the 99%. The Mills have declared war on the Boomers. The #MeToo movement turned men into the enemy of women.”

Enjoy identity politics, the new, better version of class-struggle, working exactly as intended. Pit any group of people against each other, on demand, instantly. Rule the steerage section.

#58 fishman on 08.13.19 at 9:43 pm

Jeez Kamo #26 you nailed me pretty good. Three for three. And here I thought I was kinda unique, kinda special. Outed, just another lumpenproletariat arthritic Gartheretic howling at the moon.

#59 Agreeable Sort on 08.13.19 at 9:57 pm

Hey – you are famous Garth. In Lunenburg a couple of weeks ago golfing and wifey was downtown, she saw your new office building. Asked if she dropped in to thank you, she was too shy and was with others, so she didn’t stop. Maybe next time – what coffee do you want us to bring?

#60 Fred Soloman on 08.13.19 at 10:04 pm

If you could buy a house for $100,000 would you not want 20% mortgage rates? This is what would happen to housing prices if this ever occurred.

#61 akashic record on 08.13.19 at 10:12 pm

#58 Agreeable Sort on 08.13.19 at 9:57 pm

Hey – you are famous Garth. In Lunenburg a couple of weeks ago golfing and wifey was downtown, she saw your new office building. Asked if she dropped in to thank you, she was too shy and was with others, so she didn’t stop. Maybe next time – what coffee do you want us to bring?

Garth used to sell coffee. He drinks scotch. Single malt.

#62 the Jaguar on 08.13.19 at 10:28 pm

Delicious! Fishman uses the word ‘lumpen’, definition being ” (in Marxist contexts) ‘ Uninterested in revolutionary advancement.’ Example “The lumpen public is enveloped in a culture of dependency”.
What a gem. Unexpected from a Mafia Godfather type. I may have to alter my current vision of him prowling around tough neighbourhoods and longshoremen in his armoured Mercedes Benz, (probably with someone held captive in the trunk), while making them an ‘offer they can’t refuse’. Or I could just watch ‘On the Waterfront’ on GooglePlay and decide which character he most resembled in my imagination.

By the way…..the lumpen public is enveloped in a culture of dependency as well as entitlement.

#63 Yanniel on 08.13.19 at 10:45 pm

#48 PastThePeak on 08.13.19 at 8:54 pm -> I fully agree with you.

#50 Sail away on 08.13.19 at 9:02 pm -> I got my data from portfoliovisualizer. The site also did the math. It is free if you want to try it.

I don’t quite get your argument about CAGR. Do you care to explain please? You said “1 oz of gold in 1972 is still 1 oz in 2019.” The same can be said about 1 share of Company X bought in 1972, no?

#64 Doug in London on 08.13.19 at 10:45 pm

All this talk about gold. Don’t you all know that the time to buy gold was 20 years ago in 1999 when it was on sale? Oh no, the time tunnel is pulling me in again! Say has anyone heard that new tune Better Days by Citizen King? How about Praise You by Fat Boy Slim or Livin La Vida Loca by Ricky Martin? Is anyone planning to see the solar eclipse in Europe on August 11? Oh dear, I hope the world doesn’t end when the date rolls over to Y2K. I’m stocking my bunker with food, water, and other supplies just in case.

#65 Jenny Wang on 08.13.19 at 10:47 pm

Hold on! Putin is buying gold so doesn’t that mean we should pile on? And, gold has only outpaced the index, not all equities. Did you see IPL leap on a takeout rumour, or Jimmy Pattisons 82% premium offer for Canfor? How un-Jimmy btw. He must have wanted the company awfully bad. He’s smart, but not perfect historically. But he doesn’t blow his yap about his success so Jimmy’s OK.

I own lots of IPzl, have since $9 bucks, love the divvie, yummy.

#66 Ken from BC on 08.13.19 at 10:53 pm

“The typical metalhead buys and never sells his gold (sic)”. I agree. I bought gold maples years ago and although I could make a tidy profit, I can’t do it. Not because of higher expectations but because I like having it. Weird. Kind of like Gollum and his precious I guess. Anyway, physical gold is a funny thing, once you have some, you have difficulty parting with it, regardless of the rationality of doing so.

#67 Basil Fawlty on 08.13.19 at 10:54 pm

Of course the financial situation has no middle. Interest rates are the lowest in world history. Consequently, bonds, stocks and much real estate are in a bubble. Currently, $15T in sovereign debt has a negative yield. However, if one subtracts inflation from the rest of this debt, real rates are negative nearly everywhere. This is extreme, there is no doubt.
Will it come to Canada? Based on real rates, after inflation is deducted, negative returns are already a reality here.

#68 Smartalox on 08.13.19 at 11:06 pm

Well I don’t know why I came here tonight,
I got the feeling that something ain’t right,
I’m so scared in case I fall off my chair,
And I’m wondering how I’ll get down the stairs,

Clowns to the left of me,
Jokers to the right, here I am,
Stuck in the middle with you
Yes I’m stuck in the middle with you,

And I’m wondering what it is I should do,
It’s so hard to keep this smile from my face,
Losing control, yeah, I’m all over the place,
Clowns to the left of me, jokers to the right,
Here I am, stuck in the middle with you

Well you started out with nothing,
And you’re proud that you’re a self made man,
And your friends, they all come crawlin’
Slap you on the back and say,

Please, please

Trying to make some sense of it all,
But I can see that it makes no sense at all,
Is it cool to go to sleep on the floor,
‘Cause I don’t think that I can take anymore

Clowns to the left of me, jokers to the right,
Here I am, stuck in the middle with you

I read tonight’s post, and for some reason, this song came to mind. The lyrics are fitting, yes?

#69 crossbordershopper on 08.13.19 at 11:11 pm

doing great writing weekly covered calls on the gdx, great liquidity, sometimes i get called, sometimes i dont, im back in, great premium weekly, and i havent bought my long dated puts for protection yet because the trend is strong right now, it will bounce around but not really go anywhere, these underlying stocks are not that expensive. still trying to find cheap option trades other than interactive brokers at .70 a contract. for a canadian account.strock trades 4.95, etf are free trades, so commission is irrelevent, a cup of coffee.

#70 DON on 08.13.19 at 11:17 pm

The Left Wing uses the right side of the brain and the Right Wing uses the left side. EITHER WAY…lop sided thinking.

People need to start forming their opinions based invalidated knowledge…what was old will BE New again.

Gotta wonder if New listing signs will out pace the federal election signs come October.

I can’t wait to bid on a particle board $1, 000, 000 house on a postage stamp lot…I wonder who my greater fool will be when I want to realize my gains and cash out.

#71 DON on 08.13.19 at 11:19 pm

My last post should have read ‘validated knowledge’ and not ‘invalidated knowledge’.

#72 FerrisWheel on 08.13.19 at 11:23 pm

#44 Scott Berrington – You are paying tax twice. Once for cashing in your RRSP and another for the capital gains on your gold coins. Not a great move.

#73 NoName on 08.13.19 at 11:39 pm

Bullion licker sit down before you press play.

https://youtu.be/sHWAsjKsYL4

#74 Hawkeye on 08.13.19 at 11:40 pm

Lets just say you buy a house anywhere in Canada
1. Transfer the title [cost varies 2500 to 50K]
2. Taxes after a year [4K] per year and up]
3. Insurance a year [2K] per year and up]
4.Internet, phone, power, heat, tv,
water [ 8k] per year and up]
5. Up keep is unknown as it can change allow [ 1.5 k]
The above costs are on the low side that is 15.5 K per year which you have to pay first Income tax on then Pst & Gst on. This is a yearly cost that nobody talks about that has nothing to do with your house payments.
KEEP THIS IN YOUR MIND WHEN YOU BUY A HOUSE

CPP Is not what you think paid max into my hole working life collected at 60 I get $ 850.00 per mth [10.2] per year
I do not qualify for old age pension but thats ok maybe someone worse off will get the pension.

#75 fishman on 08.14.19 at 12:43 am

“You don’t understand. I coulda had class. I coulda been a contender. I coulda been a somebody.”

#76 Billy on 08.14.19 at 1:24 am

Never a better time to be alive – but are we in a relative calm before an eventual storm…? (Not worried about Trump-China as much as fallout from Climate Change and unsustainable debt levels down the road…). All the more reason to stay level-headed. Agree that gold is not the answer, but wish there was a better way to preserve wealth now that annuity rates have tanked. Balanced portfolios reduce volatility, but are not immune to sequence of returns risk early in retirement for all those without DB pension plans.

#77 Jay Currie on 08.14.19 at 2:45 am

A couple of thoughts on gold.

First, it looks like we are in a rally. How high, no idea; but likely to beat the numbers in the last rally of 2008-2011 if only because starting at a higher base.

Second, the metal itself (and silver), while it will drive the rally, is going to double at best.

Third, buying gold and silver ETFs is a great strategy to do 3x-4x and people should take a serious look. Same with senior producers.

Buying the dreaded juniors in a rally is a potentially life changing investment (gamble). If the rally runs, so do they. And, no, don’t mortgage the house or take your whole portfolio out of Garth’s tender care. But a bit of “fun money” in three or four well managed juniors will be very lucrative indeed in a serious rally.

And, yes, I have a book about it coming out on the 16th of August. https://amzn.to/2H0r4vt

Short and to the point. Investing in individual juniors is idiotic until it isn’t. Then a few thousand dollars can make a lot of money pretty quickly.

#78 Nonplused on 08.14.19 at 3:19 am

Telling people not to buy gold is like telling them not to buy a Harley or get a tattoo or a boob job. It just isn’t going to change any behavior. Tell them to keep it to 5-10% of the portfolio like you used to. I understand the TSX argument, but many people won’t.

PS my prediction is that gold will test new highs in the next couple of years even in US dollars. Zero interest rates will do that sort of thing. Everything is going to cost a lot more in the future in paper money, and gold will not be an exception.

If you have the money, go down to Costco and buy everything you can store. You will save more money by doing that than any investment strategy can earn you in the next couple of years. It’s small potatoes I know, but the rate of return is about 10%. Inflation on quality items is not 2%. That is the inflation rate on turkey sausages, which nobody wants to eat. Good steaks are approaching $20 a kilo and they just keep going up up up.

#79 Howard on 08.14.19 at 4:18 am

#9 Shawn on 08.13.19 at 5:11 pm
Yup. This could be a 1996 moment for gold – spectacular false breakout. If I were a short seller I would be short gold and long term bonds.

Follow through day on the Nasdaq today. It’s time to overweight equities. I prefer the US tech (VGT QQQ) but I think even the TSX “goes up”.

I think home prices continue to stagnate / decline in the upper end of the market. Low and mid market will remain moderate.

———————————–

Gold broke 6-year resistance and promptly went on an impulse move +$200. That is no false breakout. But yes it is certainly due for a retrace, perhaps a significant one, which is why I sold my HGU.

#80 Howard on 08.14.19 at 4:25 am

#27 Dom Deets on 08.13.19 at 6:45 pm
The big lesson my friend was taught was the TSX Venture exchange. Back in the highs it reached 3,300 and today it is 587. The resource, commodities super cycle went bust and all the losses piled up. At least he bought in at 900 and got out at 2,000 but most did not double their money.

———————————-

Yes, I paid my “stock market tuition” in the Venture exchange several years ago. Good lesson to learn while I was still young. Won’t touch it today. A cauldron of pump and dump schemes, almost like a wild west mentality.

#81 why oh why? on 08.14.19 at 6:35 am

#49 NoName on 08.13.19 at 8:55 pm
and if you realy, realy want to make a point use 50 yrs cart dji vs gold
https://imgur.com/a/waqHVQN
____________________________________________

i assume gold is the yellow line in your chart? which is higher than the DOW/SP, meaning over the last 50 years, gold has beat stocks? is that the point you are trying to make?

#82 dharma bum on 08.14.19 at 7:31 am

“I beseech you, for the love of God, never to read the comment section.” – Garth
——————————————————————–

But that’s where all the good stuff is found. The golden nuggets.

Mama always told me not to look into the sights of the sun
Oh, but mama
That’s where the fun is

https://www.youtube.com/watch?v=yjxbOe7p8C0

#83 Dolce Vita on 08.14.19 at 7:36 am

Well, well, well. We’ll see how StatCan spins GDP in light that all is not well across the Planet economically:

https://edition.cnn.com/2019/08/14/economy/recession-risk-economies/index.html

Moderate me has to admit some Schadenfreude at Deutschland’s recessionary economic woes vs. Populist Italia flat-lining. Yes indeed, some satisfaction against Populist Italia’s naysayers.

Though America doing well and China’s so called slowdown still the envy of the World in terms of GDP growth.

All past recessions have been for varied and non-recurring reasons. As said before, I am astonished that Canada by May of this year had not yet plunged into recession.

We’ll see if Canada catches the economic flu without help from the Americans this time around.

Buongiorno d’Italia.

#84 Mark T on 08.14.19 at 7:52 am

Howard, I bought into the TSX Venture index in 2016 at 527 and sold out at 845 in 2018. I can see it going down to 450 to 465 and that is a time I will buy.

I can see it going up to 675 to 700 by 2020 to 2021. It will be a great profit play.

#85 Robert B on 08.14.19 at 8:04 am

We have to ask ourselves why negatives rates have not stimulated the economies of the world?

So basically they buy a bond get no interest payments but the kicker is you get less money back at the end.

Stimulating the economy will need a lot of helicopters . Just ask Bernanke about those. Current thinking has failed to stimulate the economies . What other choice do we have? Inflate inflate inflate…Gold does have a place in an inflation cycle.

So where does a rich dude invest? Stocks, real estate, hockey cards lol or anything tangible.
Someone mentioned Denmark …..get a mortgage then pay less back at the end of the term. Great for buying a house.

Danes still pay bank mortgage fees, so home loans are not cash-negative. That’s become a myth. As for investing, the point of this post was to prevent people from thinking in extremes, as you are doing. Just stay invested, ignore the bumps and dampen the stress. – Garth

#86 jess on 08.14.19 at 8:16 am

CTA Processing Issue on August 12, 2019: Post-Mortem
07:05 pm, 08/13/2019

Alert
CTS
Service
Market Data Real-time

On Monday, August 12, 2019, beginning at approximately 2:48 PM ET, SIAC observed message gapping over a single Consolidated Quote System (“CQS”) output line. After remediation efforts began, automated alerts at approximately 3:12PM ET indicated that one of the four core SIAC routers in the Mahwah, NJ local data center (“LDC”) had become unstable, causing apparent disruptions to the connectivity of both the Consolidated Tape System (“CTS”) and CQS applications at the LDC.

At approximately 3:16 PM ET, SIAC determined to fail over CQS and CTS to the secondary remote data center in Chicago (“RDC”). Failover to the RDC was initiated at approximately 3:17 PM ET and completed by approximately 3:20 PM ET, at which time CTS and CQS were initially believed to be stable. However, the failover from LDC to RDC was not actually complete, because some CQS and/or CTS applications in the LDC had not shut down automatically as expected, requiring SIAC operations staff to manually shut down the LDC applications that were still running. Meanwhile, SRO participants reported varying intermittent connectivity issues with CTS at the RDC, which persisted into the after-hours trading sessions.

https://www.ctaplan.com/alerts#110000144324

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

The Nexus of Equity Market Structure and Investor Relations: Remarks at the 2019 Annual Conference of the National Investor Relations Institute

Brett Redfearn, Director, Division of Trading and Markets[1]

Phoenix, Arizona

June 3, 2019

https://www.sec.gov/news/speech/speech-redfearn-060319
the U.S. stock market structure now consists of 13 stock exchanges versus 32 Dark Pools ….

fragmentation and speed

trading speed now is measured in millionths of a second, or microseconds, and is moving toward nanoseconds – billionths of a second.

Mahwah, Secaucus, and Carteret, New Jersey. These data centers contain rows and rows of server racks, and vital trading advantages can go to those trading firms that have their machines “co-located” in these racks. In addition, exchanges now sell a spectrum of data products and connectivity services in their data centers that have helped fuel a low-latency arms race. These include proprietary data products with expansive trading information, as well as low-latency connectivity services, such as 40 Gb cross-connects and microwave transmission of data among geographically dispersed data centers. These data products and connectivity services can shave crucial microseconds off of the latencies of competing brokers and trading firms.

The cost of the low-latency data products and connectivity services sold by the exchanges can be substantial. Last year, an industry group submitted a petition for rulemaking to the SEC in which it calculated that the cost of obtaining the fastest data and connections to the major exchanges in 2017 was $194,000 per month.[3] The industry group represented that this was an increase from $72,000 only five years earlier. The rapidly increasing costs of the low-latency arms race raises important questions under the SEC’s governing statute for market structure — the Securities Exchange Act of 1934, otherwise simply known as the “Exchange Act.”

two tiered data /Transaction Fee Pilot etc
=================

#87 John Dimas on 08.14.19 at 8:28 am

So Garth, I am reading up on that Canada interest rates by 2025 to 2026 bond rates will be 3.5% on the 5 and 10 year and 20, 30 year will be 4%? Is this even possible anymore?

#88 Felix on 08.14.19 at 8:28 am

Such a sad but predictable picture.

If that man had a cat, it would never have encouraged him to jump off a cliff. Such stupidity is beneath felines.

But now they are both gone.

Darwin Awards Winners.

#89 Howard on 08.14.19 at 8:32 am

America’s Richest 0.1% Control More Wealth Than at Any Time Since 1929

https://www.youtube.com/watch?v=CubF54nXK7Y

Think this can continue forever? Paradigm shift coming.

And who/what, exactly, is going to shift this? – Garth

#90 Trumpocalypse2019 on 08.14.19 at 8:52 am

Flights cancelled out of Hong Kong.

Chinese military moving in –

“Something extraordinarily bad is about to happen’: Huge Chinese military build-up filmed on Hong Kong border amid airport clashes”

https://www.independent.co.uk/news/world/asia/hong-kong-protests-latest-airport-china-military-response-a9055591.html

Are you wilfully blind? Or do you see what is coming?

The West will be tied in knots over this. Then Russia, Iran and others will move forward with their plans.

Canada will be especially vulnerable to turmoil, due to the massive effects on HK expats living here

August/September. The Season of War.

PREPARE.

#91 Howard on 08.14.19 at 9:21 am

#89 Howard on 08.14.19 at 8:32 am
America’s Richest 0.1% Control More Wealth Than at Any Time Since 1929

https://www.youtube.com/watch?v=CubF54nXK7Y

Think this can continue forever? Paradigm shift coming.

And who/what, exactly, is going to shift this? – Garth

————————————–

The assets of the mega-rich, like anyone else, were inflated by low interest rates and central bank money printing.

Assuming part of the paradigm shift will involve rising rates (impossible to envision now), assets (be they real estate or stock portfolios) will finally come down to earth somewhat while savers benefit from greater return. The wealth gap will start to close albeit slowly.

In addition, voters will demand populist policies that shift the focus away from the mega-rich and in favour of the middle class:
– wealth taxes
– luxury taxes
– lower immigration (lower wage suppression and higher housing availability)
– in the US, further universalization of healthcare
– foreign home buyer bans (already implemented in New Zealand)
– taxing share buybacks

and so on.

Canada will probably be late to the party, as usual, and hold up the globalist paradigm for longer than most.

Imagine there’s no heaven. Above us, only sky… – Garth

#92 Another Deckchair on 08.14.19 at 9:33 am

Hey my buddy #82 Dharma:

“But that’s where all the good stuff is found. The golden nuggets.”

Ask a plumber, the kind that works cleaning out the sewer drain between your house and the street connection, what a “golden nugget” is.

Somewhere we have a video tape of when our sewer got the tree roots cleaned out, in full colour.

;-)

#93 Sandy Westgate on 08.14.19 at 9:35 am

Didn’t a trade war start the great depression? If so then stock markets are going to be crushed. Pension funds especially big government ones like Calpers is going to have to liquidate or cut benefits by at least 30% just to start.

#94 CanadianGrizzly on 08.14.19 at 9:53 am

“The message is simple. Extremism is costly, almost always emotional in nature and the refuge of people who think Instagram is meaningful. There has probably not been a better time to be alive. No world wars. No pandemics killing millions. No depression. No hyperinflation. No 20% mortgage rates. And Adele still isn’t touring.”

Complacency, having an “the trend is my friend, all is good nothing to see here” mentality is just as dangerous. To use a phase from your industry; “Past performance may not be indicative of future results.” We’ve reached peak debt world-wide. The CBs can’t steal with monetary inflation, oh sorry I meant to say stimulate the economy ;-) and are now resorting to negative rates. Just saying. Regardless, I enjoy your blog and the crew from steerage daily. You are brave to offer this open forum. Thanks.

#95 jess on 08.14.19 at 10:21 am

how algo’s AI keep you watching and reinforcing radical views….interesting indeed

promoting the bias and perpetuating conflict

http://www.pbs.org/wnet/amanpour-and-company/video/caleb-cain-and-kevin-roose-radicalization-and-youtube-mzwpco/

#96 Bill Puffle on 08.14.19 at 10:42 am

“First, gold is a temporary play. The decade-long track record is one of volatility. Up a mere 2.5% annually over the past five years. The only people doing well are the ones who bought at depressed levels and lock in sales. That’s a tiny fraction of those who own gold (or silver). ”

———————–

Five years ago, gold was around $1400 in Canadian dollars… today it’s over $2000 in Canadian dollars. Pretty good return, wouldn’t you say?

Why do you always measure gold’s performance in US dollars, but you measure every other financial asset in Canadian dollars? Seems pretty intellectually dishonest to me. Why don’t you ever show your readers gold’s performance in Canadian dollars like you do for every other asset class?

And again, I’m not suggesting people put 100% of their assets in gold. I think that 10% is very appropriate for most people. It’s kind of like financial insurance. It’s a safe haven asset. But it’s also performed very well measured in Canadian dollars. It’s performed well over the last 5 years, 10 years, 15, years, and 20 years. As long as you didn’t buy the peak in 2011 after the huge 10 year bull run, you’re probably pretty happy with your investment.

Gold is always priced in US$. A 10% weighting is excessive, and over the long-term will impair performance and increase portfolio volatility. Wholly inappropriate for most people. – Garth

#97 Jesse on 08.14.19 at 11:14 am

If people want to hold gold, do it strategically. You could follow Ray Dalio’s All Weather Portfolio (notice it’s only 7.5% of the portfolio):

The asset allocation of the portfolio is broken up like this (you can recreate this using US-listed ETF’s):

– 40% long-term bonds ($TLT)
– 30% stocks ($VT [world] or $SPY [US only])
– 15% intermediate-term bonds ($IEF)
– 7.5% gold ($GLD)
– 7.5% commodities ($DBC)

That sucks. – Garth

#98 Blog Bunny on 08.14.19 at 11:49 am

“In politics, libs and cons might as well be commies and Nazis. The globalists are battling the nationalists. Society’s divided between the 1% and the 99%. The Mills have declared war on the Boomers. The #MeToo movement turned men into the enemy of women.”

And Hollywood pours oil on the fire by promoting violence with movies like the Hunt. After watching the trailer, guess who I fantasize about hunting down when I go to sleep at night? And the dumb bimbos during their self-congratulatory award ceremonies keep complaining that we are so full of hate. At least, dogs and rabbits provide unconditional love to keep us sane.

#99 Sail away on 08.14.19 at 11:58 am

#63 Yanniel on 08.13.19 at 10:45 pm

I don’t quite get your argument about CAGR. Do you care to explain please? You said “1 oz of gold in 1972 is still 1 oz in 2019.” The same can be said about 1 share of Company X bought in 1972, no?

—————————————–

The compound annual growth rate assumes profits are reinvested into the company and result in additional return on interest; basically the snowball effect.

The ‘trade-in’ value of a successful company stock will increase over time: in the beginning, one share might essentially be tradable for a company vehicle, but after 50 years of compounding, that one share could be ‘tradable’ for a wing of the company factory.

An ounce of gold will always be an ounce of gold. It won’t compound into 2 ounces of gold.

Does that make sense?

#100 jess on 08.14.19 at 12:22 pm

$500 Billion in Dividends out of the Double Irish with a Dutch twist …
https://www.cfr.org/…/500-billion-dividends-out-double-irish-dutch-twist-bit-help-ber…

2 days ago – The BEA transparently reports the dividends paid by the subsidiaries of U.S. firms in Bermuda and the Netherlands. Bermuda somehow
https://www.cfr.org/blog/500-billion-dividends-out-double-irish-dutch-twist-bit-help-bermuda

#101 Canadian Nationalist Front on 08.14.19 at 12:38 pm

DELETED

#102 Sold Out on 08.14.19 at 12:42 pm

Chalk one up for the women, formerly of the LPC. JWR and JP called it.

https://www.cbc.ca/news/politics/trudeau-snc-ethics-commissioner-violated-code-1.5246551

#103 James on 08.14.19 at 12:50 pm

DOW today -664.78 pts
year to date though shes still +9.81%.
I wish Donald Dumb-ass Trump would keep his mouth shut and just go back to watching cartoons all day. Let the market be the market.
BTW gold pffft……………………
Too heavy to carry when the end days are here ;)

#104 IHCTD9 on 08.14.19 at 12:51 pm

#94 CanadianGrizzly on 08.14.19 at 9:53 am
___

Suggest adding “700 SE” to your handle to achieve greatness and highest honours.

#105 TRUMP on 08.14.19 at 12:56 pm

MONTHS AGO GARTH….. touted how trudeau and the SNC drama was done and over with…. a non-issue.

WELL LOOK NOW!!!!!!

or wait maybe that was bill morneau

Nope. Not me. – Garth

#106 expat on 08.14.19 at 1:05 pm

Well the bloodbath phase is here. Finally!
When the BOC bought back 1 billion in bonds this month that was a trigger for me.

What is important here is why did the BOC buy 1 billion in bonds back?
Liquidity

Why do they need to inject liquidity into a glorious economy.

Because they know something is wrong because, IMHO, a dealer told them so.

The time for a balanced portfolio is never greater.
From what I’ve seen everyone and their dog was 100% invested and we’re complacent about it.
Central banks do not inject liquidity for no reason.
The talking heads on the networks today are freaking out for a reason.
They were talking their books and are facing losses.
These events clean out stupidity.
Watching Fast Money on CNBC was hilarious. They couldn’t stop telling at other.

The down run is not over yet. Stupid money was buying hand over fist this week trying to call bottoms.

Well we see how that strategy worked.

The days of buying dips are over.
The days of selling pops is now the game.

Bear market? It’s up 10% this year. Get a grip. A downturn is inevitable, as we’ve said here for some time. But it’s not arrived yet and is best ignored when it does. Remember – extremism of thought is your enemy. Leads to bad choices. – Garth

The 10 year speaks volumes.

Remember this. Bear markets kill people.
Bear historically last 1/4 of the time from the Bull.
So a 2 year Bear market seems realistic.

Catching knives is gonna hurt slot of people.
After 40 year of this. I can say for now that cash looks great

#107 Danny Boy on 08.14.19 at 1:12 pm

Jesse, I bought the Canada bond last year when rates were much higher. The Canada 30 year I bought for $103.50 and now it is worth $133.25.

My guess is it will reach $137 to $140 and then back off to $123 to $125.

#108 Happy to be Eating on 08.14.19 at 1:23 pm

#14 Sherry Quintal

I’m an adorable big-eyed mix with a little scruff, but easily groomed for show. I’m looking for a human with long range scruples. I can be well-behaved poolside, around expensive decor, or around town—whether visiting friends, your financial advisor, or our fav boutiques. I like bon bons, not too many, and fireside chats. I’m attentive and prefer routines. I’m not a big fan of barkers, though I will rip the ankles off anyone who aggravates you or even looks threatening. I’m 100% faithful on or off leash. With your pragmatism and my amicable charm we can go for long, leisurely walks into the future.
Whadda ya say?

#109 Rasheed Jakula on 08.14.19 at 1:29 pm

I guess if you are in Argentina you are paying 20% mortgage rates or close to them.

#110 JonBoy on 08.14.19 at 1:35 pm

Great blog today, Garth. I couldn’t agree more. I’m sick and tired of everyone being so polarized that they can’t see another perspective or admit that their ideas could be modified slightly and still be reasonable, helpful and more easily implemented and accepted by all.

This “all or nothing” approach to politics (especially) is insane.

On the flip side, people need to learn to leave people alone and agree to disagree. I’m fairly conservative (in general) and yet I put considerable amounts of money into things that mostly liberal people consider to be important. I may lean one way but I’m not an “absolute” conservative.

I’m okay with people that disagree: just don’t try and force me to ACCEPT your viewpoint. I accept that you believe it and have a right to believe it but I don’t have to agree with it. Seems today that if you disagree with someone, you are labelled as being a hater, racist, bigot, sexist or (at best) merely old school. What happened to, “You go your way and I’ll go mine, and we’ll part respectfully as colleagues / friends / acquaintances” ?

#111 IHCTD9 on 08.14.19 at 2:13 pm

#102 Sold Out on 08.14.19 at 12:42 pm

Chalk one up for the women, formerly of the LPC. JWR and JP called it.

https://www.cbc.ca/news/politics/trudeau-snc-ethics-commissioner-violated-code-1.5246551
___

So much for governing “from the heart out”.

What a Twit.

#112 IHCTD9 on 08.14.19 at 2:40 pm

#110 JonBoy on 08.14.19 at 1:35 pm
__

Nobody can convince anybody to think in some way if the subjects are smart enough to think independently for themselves. Canada may not have a ton of folks like these.

Your best bet? Ignore the media, the opinion pieces, the activists, and the parades of victims – and decide what it is that you are going to do. Make a plan and execute. Then limit your media consumption and live quietly – while keeping an ear to the rail.

For me, I can dismiss 110% of all the political/ideological tripe that gets everyone all fired up – so long as I am not paying for it.

You want 63 different public restrooms? No problem, see my neighbour Jack with the bill.

You want to give a Billion to the King of Saudi Arabia for Women’s issues? That’s great, send the invoice to Bob across the street.

You want to bail out GM and Bombardier again? Sounds awesome – see Joe two houses down.

That’s my plan: pay as little as possible to fund all these dumbass ideas. I limit my tax remittances in many different ways. Sometimes politicians help me along (like Trudeau’s CCB bonanza), but mostly it is how we live and how we consume that hammers it home.

This keeps your brain working, brings satisfaction, enjoyment, contentment, eliminates feelings of anxiousness, and increases the mass of your wallet.

win win win win win win win!

#113 Sold Out on 08.14.19 at 2:48 pm

#111 IHCTD9
ter a
Governing “from the heart out”= my heart is a writhing ball of maggots, for sale to the highest bidder.

I can tolerate the usual assortment of bold-faced liars and hypocrites we are given to vote for, but this sort of behaviour – character assassination, gas-lighting while – is

#114 TurnerNation on 08.14.19 at 2:50 pm

Potential BSD here.
Everyone ignore this yield curve and join in a rousing blog dog rendition of Shaddap-a-you-face.

#115 James on 08.14.19 at 3:16 pm

#111 IHCTD9 on 08.14.19 at 2:13 pm

#102 Sold Out on 08.14.19 at 12:42 pm

Chalk one up for the women, formerly of the LPC. JWR and JP called it.

https://www.cbc.ca/news/politics/trudeau-snc-ethics-commissioner-violated-code-1.5246551
___

So much for governing “from the heart out”.
What a Twit.
_____________________________________
Trudeau is nothing more than an incompetent dirty scheming lying putz. OH sorry I just described Donald J Trump, Trudeau is simply incompetent putz and was caught! Carry on. I would actually consider voting for JWR as at least she demonstrated some ethics. Hopefully she will be a right centre independent. Nah who am I kidding, Ill stick with whats his name “Andy”. Its better the devil you know than the devil you don’t know.

#116 Steven Rowlandson on 08.14.19 at 3:25 pm

Re #24. You would have buyers. The Asians and Eurasians love anything in gold or silver.

#117 Steven Rowlandson on 08.14.19 at 3:35 pm

“Hedge funds are stuffed with bullion so when prices start to drop this speculation will fuel the descent.”

More likely collectively the banks and hedge funds have less gold or silver than the foreign currency reserves of the federal government and what they are bragging about is paper assets in the name of gold or silver. The market is reputed to being incapable of telling the difference between real ounces and paper ounces therefore it is likely the governments and financial institutions have paper ounces and IF they have any real ounces it is not enough to do them any good.

#118 crazyfox on 08.14.19 at 3:43 pm

I’ve said it more than once because it bears repeating. Trump is a traitor. If anyone on this site thinks Trump wouldn’t put himself before his country, ask this simple question. Would Trump take the U.S to war or pull out of NATO for a billion dollar bribe? The quick answer is, he’d do it for less.

We have a president with no morality backed by a political party with not much more than Trump himself and the markets are reacting. It’s not just the fear of an engineered global recession where it seems there are no winners, its the fear that its been engineered by U.S. policy through trade at the cost of everyone including the U.S. . I mean, who benefits from a U.S. trade war with China? Who?

There is a dark playbook at work, one that was written years go by Russia. Get a compromised U.S. president elected that Russia can control… someone like Trump to:

– get the U.S. out of NATO.
– weaken the U.S. economically through escalating debt, eroding diplomacy, poor governance and war.
– Get the U.S. to take the world into recession through trade wars.
– remove U.S. navy presence off the coast of South Korea (and nearby Russia), hence North Korean talks with Trump).
– The goal? Russian expansion of its borders.

Putin/Trump is succeeding with all of it. Trump has done everything he can to strengthen the U.S. dollar for the wealth effect it holds. He’s deregulated financials in a bid for higher real estate valuations, he’s deregulated everything across the board leaving the consumer, wildlife and the environment less protected or safe at the expense of short term corporate profits, deregulated the banking industry with the removal of Frank/Dodd regs, he’s done everything he can to strengthen the dollar for short term gain at the cost of long term pain… and Republicans are loving it.

Trump ended the TPP to begin trade wars for no logical reason, pulled out of the Paris agreement to continue the push for the petrol dollar again, to keep the U.S. dollar as strong as possible at the expense of climate change and diplomacy and its all tactical. This isn’t just about the wealth effect a strong dollar buys, its about getting re-elected for power and the ugly motives realized that follow.

Think for a moment. Why is Trump cutting education and health care with now nonexistent infrastructure spending? Long term, you get a nation of unhealthy dummies that move more slowly and production drops, potentially enough to be the fall of an empire hamstrung by debt but Trump doesn’t care about this, its all about the short term strength of the U.S. dollar, more buying power and with it, another election turn fulfilling a dark foreign policy agenda. It doesn’t matter whether U.S. production goes down in the long term because people aren’t educated or healthy, its all about short term wealth and power today. It doesn’t matter how unethical it is to allow overseas tax cheaters to bring money home without taxation or penalty or unethical trade wars the world or military wars with Iran, its all about a stronger currency that buys with it, the next election.

And, if you look at Trump’s policies on the dollar, its worked. In the lens of some, the one’s who “like his policies” and want future Republican power, you know who they are, the ones where money and ignorance is their God, it worked. Where do we go from here? War with Iran that you guessed it, gives the dollar another short term boost at the expense of the federal balance sheet later but we have to protect that petrol dollar climate change be damned. Helps the Republicans in 2020… provides a distraction for Russian aggression… what’s not for Putin to like and with the world slipping into recession and Trump leaving NATO… short term profits and dollar strength is king today and on it will go until we get:

– A world recession from an escalating trade war with China
– A war with Iran next spring/summer in time for the “rally of the flag effect” for the 2020 election pop in polls
– After winning the rigged 2020 election, with the world in economic chaos and recession, Trump pulls out of NATO claiming too much cost.
– Trump pulls naval presence out of Pacific around Korea (and as a consequence, Russia)
-shortly thereafter, Putin invades all nations along its borders with Russian speaking citizens much the same way as Hitler did, “reuniting their people”.
– a diminished U.S.A. battered by war and debt with a sullied reputation and poor government policy and regulation killing productivity, destabilizing economic systems and cycling in recession.

https://www.worldatlas.com/webimage/countrys/europelarge.jpg

Estonia, Latvia, Lithuania, Belarus, Ukraine and Moldova all become a part of the motherland, at least, in Putin’s world. This is the Putin playbook. he’s got his guy Trump in the presidency, pining away to fulfill the plan but its not where this ends, sadly. More war will follow, the threats of climate change worsen and the world, weighed down by overpopulation, pollution, biodiversity loss, deforestation, wildfires and economic instability will become a darker place. The #1 problem of all? A general lack of morality. We see it in our leaders. We see it in our politicians. Sadly, if we look, we see it in ourselves. Just look at the motives behind who we vote for and what we do, we’ll see it there, this easy tolerance for that which we know is wrong. You know… if we look. Otherwise, we’ll dismiss these words with a wave of a hand because it doesn’t cater to our myopic world view, too challenging because it gets in the way of the wealth effect we so worship and desire and the power and advantage we think will come as long as someone else pays the cost. Sound familiar?

#119 bdwy on 08.14.19 at 3:48 pm

yes, extreme is usually bad.

But extreme sales on etf’s is what i live for.
3% off today, not bad.

a few more of these days and i’m a buyer.

vix showing rising fear. bond rates going more extreme daily.

buy low. buy costco too!

#120 LP on 08.14.19 at 3:57 pm

#110 Jon boy

You are a rational man. We’re a little short of people like you on this blog sometimes. Recently I saw a lovely profile portrait of an elderly Indigenous man with a graphic that reads: “Right wing or left wing, it’s still the same bird”. We would all do well to remember that I think.

#121 Sail away on 08.14.19 at 3:59 pm

#118 crazyfox on 08.14.19 at 3:43 pm

I’ve said it more than once because it bears repeating. Trump is a traitor. If anyone on this site thinks Trump wouldn’t put himself before his country, ask this simple question. Would Trump take the U.S to war or pull out of NATO for a billion dollar bribe? The quick answer is, he’d do it for less.

———————————————-

Trump Derangement Syndrome is real. Your entire post is nuts. Why spend that much time conjecturing about purely hypothetical fantasy?

Go help someone.

#122 bdwy on 08.14.19 at 4:06 pm

#121 Sail away on 08.14.19 at 3:59 pm
#118 crazyfox on 08.14.19 at 3:43 pm

Trump Derangement Syndrome is real. Your entire post is nuts.
———————–
and he’s got it bad.
i only read the first 2 sentences , the TDS was glaring

TRUMP***GOD EMPEROR OF THE UNITED STATES***TRUMP

Trump has a LOCK on 2020. how does that make you feel crazyfox?

#123 Shawn Allen on 08.14.19 at 4:20 pm

Canada Pension Plan

#14 Sherry Quintal on 08.13.19 at 5:23 pm

over the next 5 years until I am 60 and get my early C.P.P. of probably $10,000 a year.

*********************
Plan on a bit less than $10,000 at age 60. Max Canada Pension plan is now $1155 per month or $13,855 per year. You need to have paid in the maximum amount for 40 years. Very few will have done that.

The haircut to get it at age 60 is a decrease of 36% so maximum is $8,867.

If you don’t work past 55 you cannot possibly get the maximum.

CPP can be a nice supplement for many people. It’s not huge. But for many people it is an important supplement.

For higher income earners, it should at least cover a car payment, after income tax. And if when collecting,CPP we happen to be in a high income tax bracket, well there are worse problems to have.

I fully support the CPP increases recently announced to be phased in over time. That will be very important for low income people.

P.S. CPP just announced its assets at end of Q2 were $400 billion! That is a pile of money (actually assets)

#124 Vangrrl on 08.14.19 at 8:50 pm

Aww, Malta’s famous pooch diving off the rocks at St Peter’sool. He passed away last year at a good old age- his owner has since adopted a new dog.