Go against the Herd

RYAN By Guest Blogger Ryan Lewenza

I know it doesn’t appear so based on my youthful appearance and washboard abs but I’ve been around the block a few times and one key market lesson that I’ve learned in my 20+ years in the investment industry is to question (and go against when prudent) the herd. I find time and time again that ‘the herd’ or consensus moves in extremes and is often wrong. One day the consensus is predicting a zombie apocalypse and an imminent bear market and the next day everything is unicorns and rainbows.

Most recently the bears came out in droves during the summer, pratting on about a looming recession and that everything is about to go down the tubes. The bears cited things like the inverted yield curve, the slowdown in manufacturing, and Trump’s trade war as supports for their recession call. Like so many times before, this call looks to have been premature and off the mark.

In recent weeks we’ve seen a nice rebound in some key economic releases, which validates our thesis of a slowdown rather than a full-blown, rip-your-face-off recession and bear market.

On the manufacturing side, which has been notably weak in recent months, data is showing signs of a rebound with industrial production bouncing back nicely in August, up 0.6% M/M, beating expectations of 0.2%. A week later we got the Markit Manufacturing PMI, which measures manufacturing activity in the US, and it rose to 51 in August, beating expectations of 50.3. Of course, a few prints don’t make a trend, but it’s possible that the manufacturing sector has seen the worst of it.

Moving over to the consumer side, which represents 70% of all US economic activity, data is also showing signs of strength. One of my favourite consumer metrics – retail sales – rose 0.4% M/M in August, beating estimates of 0.2%. And US housing activity rebounded in August with both housing sales and starts besting economist estimates.

All of these better-than-expected economic releases has led to a surge in the US Citigroup Economic Surprise Index, which has risen to 44.7. This great economic indicator measures whether economic data is coming in above economists’ expectations and when this indicator crosses above the zero line it means that economic data is beating expectations. I love this indicator because it essentially captures the momentum of the US economy and right now is suggesting an upswing.

The US Economic Surprise Index Rises to a One Year High

Source: Bloomberg, Turner Investments

With the better-than-expected economic releases in recent weeks, recession fears have started to abate, and this has led to a rise in US government bond yields. In the chart below I show the US 10-year Treasury yield (lower panel) and the US yield curve (upper panel). The 10-year yield has increased from a low of 1.4% at the beginning of the month to 1.75%. Basically, investors had become too bearish on the economy and the higher bond yields are reflecting the recent improvement in the US economy. As a result, the yield curve (the difference between short- and long-term government bond yields) has steepened, and officially has moved from an ‘inverted yield curve’ to a ‘flat yield curve’. Now this is no reason to break out the champagne and treat yourself to a kobe steak, but it is a positive development for the US economy and equity markets.

US Yield Curve Steepens on Better-than-Expected Data

Source: Bloomberg, Turner Investments

Having done this for a while now I’ve seen numerous examples of herd mentality and the results are almost always the same. The herd gets caught up in the hype and mania of fad stocks or some new hot investment with little attention or analysis of the underlying fundamentals. Then when the hype dissipates and the herd moves on to something else, prices crater. More recently, the pot stocks and bitcoin are good examples of this.

We strongly advised our clients to avoid these areas since the prices were completely divorced from the fundamentals and once the hype faded so would their prices. Below are the price charts of bitcoin and a marijuana ETF and you can see how prices initially rallied on the hype then end up giving away almost all the gains. Bitcoin went parabolic in late 2017 then crashed 80% over the next year. Lately it has staged a rally, but I see round two coming soon. For the marijuana ETF it more than doubled during the initial hype phase but is now down 50% since its peak.

Bitcoin Price Chart

Horizons Marijuana ETF Price Chart

Source: Bloomberg, Turner Investments

So what’s the point of all this Ryan?

Beware of the herd in all its forms and don’t let the excitement of a hot stock or some negative headlines on CNBC cloud your judgement and cause you to make an emotional and often deleterious decision. Instead, have a well-reasoned, disciplined and balanced approach to analyzing the markets and making investment decisions, so in short avoid being caught up in the herd!

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

98 comments ↓

#1 Gavin on 09.28.19 at 1:56 pm

Thanks Ryan. Basically you’re telling us to drown out the noise and not have FOMO?

#2 Flop... on 09.28.19 at 2:05 pm

What’s going on with the abdominal fascination over at Turner Investments?

You guys got ab rollers instead of office chairs?

I like it lumpy and bumpy.

My wife?

Not so much…

M45BC

#3 Flop... on 09.28.19 at 2:14 pm

Hey InFlewenza, were you lurking on here during the week?

Or did Garth have you doing actual work?

I ran this one, but if you missed it you might want to look at this chart…

M45BC

https://howmuch.net/articles/cannabis-stock-prices

#4 Shawn Allen on 09.28.19 at 2:21 pm

So, VBAL or XBAL then?

Imagine investors with anywhere from $10k to say $2 million. Imagine that they happen not to be looking for tax advice or the other services beyond strictly investing. And imagine they are not interested in picking individual stocks or even picking a basket of ETFs.

What would be wrong with them simply holding ONLY say VBAL or XBAL? Set it and forget it?

I mean it might not be the ideal portfolio. But it would have a lot of diversification and a low fee. And given their size and given regulations is there any real risk of iShares or Vanguard failing AND causing a loss on these funds?

If someone came in that situation, would it be quite prudent to say, consider just going all in on VBAL or XBAL? Low fees plus diversification!

Asking for a friend.

#5 Moses71 on 09.28.19 at 2:35 pm

This is why I read this blog. I can usually skip the news and hang on tight to Garthie

You’re creeping me out. – Garth

#6 Brian Ripley on 09.28.19 at 2:36 pm

“…avoid being caught up in the herd!” Ryan

Good advice.

According to my 6 city study on residential sale prices in Canada… the herd has moved further east from Toronto to Montreal: http://www.chpc.biz/sales-listings.html

The animal spirits have also shown up on my absorption rate chart as well… since 2016 Ottawa’s absorption rate (total sales divided by total listings) has rocketed 383% while Vancouver’s has plunged 76% (August data)

#7 Shawn Allen on 09.28.19 at 3:38 pm

When RSPs are bad?

Experts say, don’t invest in an RSP if you might end up eligible for the Guaranteed Income Supplement GIS.

But realistically, how many people who become eligible for GIS ever invested anything? There’d be a few cases perhaps related to divorce or serious illness. But not many?

Some say they should never have invested in RSP in early years at a 30% tax rate because now they face 40% tax on withdrawal. How realistic is that? Besides, if they had not done RSPs years ago (before TFSA existed) would they have not merely spent the money (which would have been only 70% after tax) Better to have the money in retirement now grown (probably doubled or more) and taxed at 40% than to have spend it years ago before growth albeit taxed at 30%? (How many retirees realistically regret that they invested in RSP?)

#8 Greek on 09.28.19 at 4:03 pm

Anybody know where the yield on the HMMJ comes from? As far as I know none of the licensed producers are paying any dividends yet

#9 Andrew on 09.28.19 at 4:32 pm

https://youtu.be/UlJku_CSyNg

What I hear when greaterfool has an article about bitcoin. Kidding aside I don’t blame Garth and his crew for being wary of bitcoin. It may only be after Turner Investment clients come in 5 years and ask why they didn’t get and don’t have exposure that things will change. Perhaps sooner, Garth is pretty sharp. “But mah cashflow”.

Bitcoin’s price on Sept. 25th:

2010: 6¢
2011: $4
2012 $12
2013: $129
2014: $410
2015: $235
2016: $602
2017: $3,776
2018: $6,430
2019: $8,453

Number of days Bitcoin has fallen more than 10%:

2011 – 17
2012 – 6
2013 – 17
2014 – 4
2015 – 6
2016 – 1
2017 – 8
2018 – 9
2019 – 2

Volatility is what we do baby. If you can’t handle the ride don’t get on.

My traditional portfolio is a breeze to sleep at night with after having been in bitcoin for a few years.

Never go all in. Never all at once. Small sleep at night hedge. Do your own research. Go slow.

Have a listen to some other money managers opinions:

https://www.realvision.com/tv/shows/interviews/videos/the-bitcoin-revelation

Ciao

#10 Andrew on 09.28.19 at 4:35 pm

Also this is my traditional portfolio much thanks to the initial knowledge I gained from reading greaterfool. Stay balanced folks!

40% = VFV.TO – MER: 0.08% – Divd:1.64%
5% = VEF.TO – MER: 0.22% – Divd:2.48%
5% = VEE.TO – MER: 0.24% – Divd:2.22%
10% = VAB.TO – MER: 0.09% – Divd:2.60%
5% = VLB.TO – MER: 0.19% – Divd:2.89%
20% = CPD.TO – MER: 0.50% – Divd:5.32%
10% = ZRE.TO – MER: 0.61% – Divd:4.08%
5% = XGD.TO – MER: 0.61%- Divd:0.59%

#11 Ryan Lewenza on 09.28.19 at 4:49 pm

Greek “Anybody know where the yield on the HMMJ comes from? As far as I know none of the licensed producers are paying any dividends yet.”

HMMJ invests in related stocks like ScottsMiracle-Gro which offers a 2.5% dividend yield. So its not a 100% producers. – Ryan L

#12 Shawn Allen on 09.28.19 at 4:50 pm

I never knew that the definition of fascism is:

a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.

***********************************
Trump is not there yet but it’s starting to resemble? It’s enough to be scary? What’s that saying about forgetting history and then repeating it? When is it time for good men (and women) and good countries to stop standing by doing nothing?

This week Trump proposed a move to regiment investors and commerce in the name of nationalism:

“Trump administration officials are discussing ways to limit U.S. investors’ portfolio flows into China in a move that would have repercussions for billions of dollars in investment pegged to major indexes, according to people familiar with the internal deliberations.

“The discussions are occurring as Washington and Beijing negotiate a potential truce in their trade war that’s rattled the world’s two biggest economies and investors for more than a year. They also come as China is removing limits on foreign investment in its financial markets. A U.S. crackdown on capital flows would therefore expose a new pressure point in the economic dispute and cause disruption well beyond the hundreds of billions in tariffs the two sides have levied against each other.

“Among the options the Trump administration is considering: delisting Chinese companies from U.S. stock exchanges and limiting Americans’ exposure to the Chinese market through government pension funds. Exact mechanisms for how to do so have not yet been worked out and any plan is subject to approval by President Donald Trump, who has given the green light to the discussion, according to one person close to the deliberations.

“Trump officials are also examining how the U.S. could put limits on the Chinese companies included in stock indexes managed by U.S. firms, three of the people said, although it’s not clear how that would be done. More Chinese companies in recent years have been added to major indexes that a broad array of investors have access to.

#13 Linda on 09.28.19 at 4:58 pm

I like not following the herd:) I’m thinking the increase in consumer spending in August may have something to do with back to school expenditures. Certainly every shop I was in that had school related supplies in it had parents, children & teachers plundering those aisles. I will note that holiday related goods for Thanksgiving, Halloween & yes, Christmas were already on the shelves & yes, those too were being carried off by early bird shoppers. Besides basic school supplies & holiday decor numerous shops had displays targeting college/university students. Lots of small space storage solutions, interior decor & the like. Seemed to be doing a brisk business there as well.

#14 Bytor the Snow Dog on 09.28.19 at 4:59 pm

Ryan, you and Doug should have a topless blog showdown. We’ll see who’s lyin’.

#15 Don Guillermo on 09.28.19 at 5:19 pm

#12 Shawn Allen on 09.28.19 at 4:50 pm
I never knew that the definition of fascism is:
a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.

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

Drop the “aggressive nationalism” bit and you’ve described Trudeau Jr.

#16 Robert Ash on 09.28.19 at 5:23 pm

If things in the Global Financial System are so rosy, why are we subjected to Emergency Interest rates… Why did the Fed Reserve drop already extremely low, rates and price in all this negativity… If negative interest rates come to North America, then … would it be feasible that people withdraw their deposits, and there is a run on the Banks… at a 12 % reserve rate in Fractional Banking then it wouldn`t take much to start the domino effect… I feel the Fintec Industry should use their collective accumen, to challenge these emergency and artificial Interest rates, and Credit markets… Sorry but the whole system is off balance.. it will probably take a co ordinated effort to move the Credit markets to a logical place… The Nobel quality Economic Theory that has never been tested..was also proven quite wrong in 2008… it was Greenspan, who started this nonsense… so I am not encouraged by even these supposed intellectual geniuses… just does not jibe with common sense… Even the Herd may have this reaction to this anomaly correct… How can the Currency markets in the EU, not affect monetary pairs like the USD, once the printing starts… Time for Turner Investments, to spend some time, asking our Leaders, what is the End Game…

#17 Tannhäuser Gatekeeper on 09.28.19 at 5:25 pm

HMMJ also earns a ton lending its holdings to short sellers. Collecting a divvy earned that way is certainly a contrarian play. Contra-contra?

#18 george on 09.28.19 at 5:29 pm

Nice read !

Your thoughts on emerging markets.eem/acwi on a regression channel has emerging markets 2 standard deviations from normal .seeing value, but this Oct may be glorious or a 2018 repeat,depending on us/China trade meeting outcome!

Thoughts?

#19 aerozone on 09.28.19 at 5:38 pm

Yah, kiddies!
Take those well deserved feddie bucks and buy in Vancouver or Toronto! Everybody wants to be there!

No food or culture in Montreal or Q.C. Boring cities.
No dance or visual arts in Winnipeg or Saskatoon. Blah.
No music or recreation in Edmonton or Calgary. Pffft.

Toronto and Vancouver!!! Go there!!!Buy now!!!

#20 Shawn Allen on 09.28.19 at 5:39 pm

Back to School sales bump?

#13 Linda on 09.28.19 at 4:58 pm
I like not following the herd:) I’m thinking the increase in consumer spending in August may have something to do with back to school expenditures

**********************************
Good thought.But to account for things like the back to school bump and especially the Christmas buying season, consumption reports (and many other reports including employment reports) are always seasonally adjusted. Of course the adjustment will always be imperfect. Maybe this year saw a larger than normal back to school bump. But in any cases such reports are seasonally adjusted to the best ability and judgement of the report issuers.

#21 Shawn Allen on 09.28.19 at 5:43 pm

Fighting Back Against Loss of Freedom

If the New York Stock Exchange (a bastion of free enterprise) were to be ordered to delist Chinese firms it should consider simply shutting down for a week (or a month) in protest and should be joined by all other big exchanges. That might get attention.

#22 Also in Cowtown on 09.28.19 at 5:45 pm

Beware of the herd in all its forms and don’t let the excitement of a hot stock or some negative headlines on CNBC cloud your judgement and cause you to make an emotional and often deleterious decision.

——————————–

Yup, just like the current Climate Hysteria….

#23 Tannhäuser Gatekeeper on 09.28.19 at 6:00 pm

So you know how you can rent a goalie for those… special occasions.

Well — just for this evening — I’ll be a rent-a-bear, just like that. Everything below is true.

I positioned my portfolio for sadness about thirteen months ago. I don’t have an exact 12 month number over all portfolios, but about low 9% to low 10% 12 month return. Up 27% off the December 24th lows.

I’ve traded my plan, and those numbers are in spite of owning such dogs as Cineplex, Dorel Industries and Peyto Exploration. If the market craps out tomorrow, AND I have a big coronary and the wife has to live with a frozen portfolio for a year or two, I’m comfortable with that.

Anyway, if you don’t post model portfolios, and you don’t admit your mistakes, but only occasionally crow about winning calls versus vaguely defined “da’ bears,” then what?

Ritholtz posts weekly bullet points about what was bullish AND what was bearish about the markets for the week — he feels it keeps him honest. End of the year, he does mea culpas examining stuff he got wrong. I can’t recall any mea culpas here. Perfect record?

#24 Shawn Allen on 09.28.19 at 6:05 pm

Getting Distributions Without Profit?

#8 Greek on 09.28.19 at 4:03 pm

Anybody know where the yield on the HMMJ comes from? As far as I know none of the licensed producers are paying any dividends yet

***********************************
Now, that is one excellent question!

I’ve spent the last two days looking at various ETFs. Looking quickly at the info for HMMJ I don’t see an answer.

In general ETF distributions are surprisingly volatile. This one takes the cake for being surprising.

#25 Dave on 09.28.19 at 6:13 pm

Two words. Black swan.

#26 Ryan Lewenza on 09.28.19 at 6:20 pm

Bytor the Snow Dog “Ryan, you and Doug should have a topless blog showdown. We’ll see who’s lyin’.”

Doug runs 5x per week. Trust me, it won’t be me who the topless showdown. – Ryan L

#27 Ryan Lewenza on 09.28.19 at 6:33 pm

george “Nice read! Your thoughts on emerging markets.eem/acwi on a regression channel has emerging markets 2 standard deviations from normal .seeing value, but this Oct may be glorious or a 2018 repeat,depending on us/China trade meeting outcome!”

We like the long-term outlook for EM, particularly India, but this trade war has been weighing on EM equities. Once we get this addressed then I think they will really start to move. – Ryan L

#28 Flop... on 09.28.19 at 6:40 pm

00 pm
So you know how you can rent a goalie for those… special occasions.

Well — just for this evening — I’ll be a rent-a-bear, just like that. Everything below is true.

I positioned my portfolio for sadness about thirteen months ago. I don’t have an exact 12 month number over all portfolios, but about low 9% to low 10% 12 month return. Up 27% off the December 24th lows.

I’ve traded my plan, and those numbers are in spite of owning such dogs as Cineplex, Dorel Industries and Peyto Exploration. If the market craps out tomorrow, AND I have a big coronary and the wife has to live with a frozen portfolio for a year or two, I’m comfortable with that.

Anyway, if you don’t post model portfolios, and you don’t admit your mistakes, but only occasionally crow about winning calls versus vaguely defined “da’ bears,” then what?

Ritholtz posts weekly bullet points about what was bullish AND what was bearish about the markets for the week — he feels it keeps him honest. End of the year, he does mea culpas examining stuff he got wrong. I can’t recall any mea culpas here. Perfect record?

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

Hey Tann, firstly, we normally gain a few interesting posters each year that add value to the conversation, 2019 has been a bit of a lemon in that regard, but we’ve had a few positive interactions and I’ve enjoyed reading some of your posts so you seem to be bucking the trend which is why I’ll try to answer your question.

This is a free blog and they do overall portfolio weightings, but the fine tuning down to all the names I think is normally reserved for clients.

Sometimes they talk about beefing up or cutting back but the actual name of the involved ETF is not usually discussed in the post.

People try to help each other out with those in the riff-raff section of which I’m a proud member.

A few times a year Garth normally writes what his 60/40 is doing and that helps the DIYers find out how they are doing.

I know if I’m within a percent or so then I’m doing o.k

Overall, you have to pay for a lot of things in life and this blog ain’t one of them…

M45BC

#29 Renter's Revenge! on 09.28.19 at 6:40 pm

“So what’s the point of all this Ryan?”

What are you talking about? The more the Ryan the better!

Or did you mean, “So what’s the point of all this, Ryan?” :)

#30 Alessio on 09.28.19 at 6:44 pm

How about them repo loans. Fed buying $70B a day to avoid a crash. But hey I prefer rainbows and unicorns.

#31 Tony on 09.28.19 at 6:50 pm

Re: #27 Ryan Lewenza on 09.28.19 at 6:33 pm

With the impeachment process of Trump started the chances of any trade deal between America and China has just shrunk dramatically. China will wait it out or get the deal of the century with America ending up worse off than before any tariffs were applied to Chinese goods.

#32 Shawn Allen on 09.28.19 at 6:50 pm

HMMJ Distributions

#17 Tannhäuser Gatekeeper on 09.28.19 at 5:25 pm
HMMJ also earns a ton lending its holdings to short sellers. Collecting a divvy earned that way is certainly a contrarian play. Contra-contra?

************************************
That sounds plausible but are lending fees anywhere near high enough and do you have any backup for that assertion from the HMMJ documents?. Its stated objectives don’t seem to anticipate fees from lending.

Investment Objective
Horizons Marijuana Life Sciences Index ETF (“HMMJ” or“ETF”) seeks to replicate, to the extent possible, the performance of the
North American Marijuana Index (the “Index”), net of expenses. The Index is designed to provide exposure to the performance of a
basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry.

*********************
Ryan notes it owns Scotts Miracle Grow with 2.5% dividend. But HMMJ has yielded 7.5% trailing year and indicated forward dividend over 4%. Miracle grow is only 6.8% of the portfolio.

There is not nearly enough underlying dividends to explain where the cash is coming from especially after deducting fees and expenses of the fund. What up? I mean does it have negative expenses due to lending operations?

#33 Bytor the Snow Dog on 09.28.19 at 6:52 pm

Ryan- Somehow I typed “Doug” but I meant “Garth”. He also claims to have chiseled abs.

#34 Question on 09.28.19 at 6:52 pm

What will happen if the charts your using are all wrong and misleading your assessment going forward?

#35 Flop... on 09.28.19 at 7:09 pm

Full disclosure:

I am not a client of Turner Invesments, nor will I likely ever allowed to be after recently trying to shove a firecracker sideways up Garth’s backside in a recent phone call, only to get off the phone and realize it was his wedding anniversary.

Hey Garth, I don’t have the landline anymore.

My anniversary is in December, call me on my cell phone, ranting about how you’re sick of shovelling snow and then we’ll be even…

M45BC

#36 Blackdog on 09.28.19 at 7:45 pm

Intelligent men are so sexy. Comments from a recent CBC article(linked to below), last names dropped to protect the ignorant…err I mean innocent.

Andy: I support O&G

Jeff : Ok Andy, you support oil and gas. Does this mean you support an expansion of the Canadian oil and gas industry, or do you support the use of oil and gas while we transition to a lower carbon economy , or do you just like the look and feel of oil and gas?

Andy: I am in support of expanding O&G in Canada.

Jeff: Ok, thanks for clarifying. So then, I assume you are not concerned about GHG concentrations in the atmosphere. As a critical thinker, how do you feel about the following facts:
1. CO2 and methane are GHGs and a GHG prevents radiation of energy out of a system.
2. CO2 levels have increased from 300ppm to 415ppm from 1950 to present and are now at levels that, according to ice core data, have not been seen in the past 800,000 years.
3. We are currently burning a lot of coal, natural gas, and 100,000,000 barrels of oil ever single day. At the same time, our industrial meat industry around the world releases large amounts of methane.
Given the above three facts, is it possible that our actions may effect the climate?
If it is possible, do you think that this is a risky experiment to conduct on our atmosphere given that a stable climate is required to feed 7 billion plus humans?

Andy: I am not concerned at all by the ppm of carbon dioxide, by the amount of GHGs in the atmosphere or by the requirement to feed 7 billion people.

Jeff: I understand that you are not concerned. I am trying to understand why, given the above facts, you are not concerned.

Andy: I am not concerned because everything has a beginning and an end… and if evolution seeds us out of existence I’m ok with that, but I also have great faith in humanity’s ability to adapt and evolve to situations. What I don’t believe in is a fear-based, alarmist approach that is not based on scientific fact but on political manipulation and control.

Jeff: Ok, I think I am understanding your point. You believe that, yes, we may be changing our climate, but that is ok because we will be able to adapt to any change. Correct? That is not an unreasonable opinion, we have adapted to many things in the past. Why do you say we are using a fear-based approach that is not based on scientific fact? Do you think the facts I presented are not actually facts?

Andy: I don’t have any problem with your facts… I have a problem when governments begin to use the facts for their own political agenda to establish control and dominance over the people.

Jeff: I agree that governments, or any other type of group that has an agenda, could try and manipulate people to make them behave in a way that they would like. In the case of climate change, however, I do not think this is primarily a political issue. Actually, if you accept my facts, this really is about a physical reality. It is possible that our current method of producing energy may lead to climate change. It is true we do not know, absolutely, what type and degree of change, but again, I submit this is a risky thing to continue doing. Therefore, I believe that we should employ the precautionary principle and reduce emissions, just in case the climate scientists are correct. This will take effort, but the way that we accomplish this goal is what becomes a political exercise. The decision to act is not political, it is common sense, in my opinion. As I said, your argument that we shouldn’t worry and just adapt as necessary is not irrational. I disagree with however, because I have looked into the science and believe the risk is too great. Positive feedback loops, such as methane release from melting permafrost could cause runaway warming leading to a greater than 4 degree change in global temperatures. I do not believe this, in itself would cause our extinction, but the cost of mitigating such a change would be astronomically higher than the cost to transition to a low carbon economy. Furthermore, even small disruptions in our global agricultural production could result in widespread hunger. Large numbers of hungry people cause great social disruption and it is this social disruption that is the biggest risk that I see with climate change. You many call this fear based reasoning. I do not. 

Andy: Regardless of your opinion, though, I hope this gives you some insight into why I advocate for reducing our GHG emissions. I am thinking critically, evaluating data and input from many sources, and based on that analysis, I form my opinion. I am open to changing my opinion as new evidence comes forward and am open to alternative perspectives that are rational and based on facts. I hope that all citizens act in this way, whether or not they come to the same conclusions that I do.

https://www.cbc.ca/news/technology/global-climate-strike-kids-1.5300850

#37 SoggyShorts on 09.28.19 at 7:53 pm

#4 Shawn Allen on 09.28.19 at 2:21 pm
What would be wrong with them simply holding ONLY say VBAL or XBAL? Set it and forget it?
**************************
♦Nothing is in USD
♦No REITs
♦No prefs
♦No tax-advantaged splitting of assets between TFSA/RRSP and non-registered
♦Overweight Canada

Still not bad though as far as 60/40 portfolios go. Sadly the 60/40 historically doesn’t hold up as well for really long retirements (like 50-60 years) https://earlyretirementnow.com/2017/12/13/the-ultimate-guide-to-safe-withdrawal-rates-part-22-endogenous-retirement-timing/

#38 Ronaldo on 09.28.19 at 7:55 pm

#7 Shawn Allen

(How many retirees realistically regret that they invested in RSP?)
——————————————————————
For those without a pension other than the OAS and maybe a bit of CPP, I would say quite a few. As an example a single person with no other income than OAS would be eligible for $907 GIS and with OAS $1514/mo.
They are allowed to earn from employment $3500 without clawback to the GIS. In 2020 this increases to $5000 plus 50% of the next $10,000 of income for total of $10,000 without clawback. For each $2 they earn from other sources of income (interest, etc) they are clawed back $1.00 plus any tax payable on those earnings. A minimum of 50% tax. If it is dividend income then they lose 70% because of the gross up plus any tax payable. This is why so many have deferred drawing from their RSP’s til age 72 when they are required to draw a certain amount. This is the very reason that the TFSA is a far better strategy for those expecting to be in this situation at retirement. It is estimated that 1 out of 10 seniors miss out on this entitlement as they are not aware of it as it must be applied for. These individuals pay some of the highest tax rates and are an example of people who drastically are in need of a financial advisor.

#39 acdel on 09.28.19 at 8:05 pm

Good common sense Ryan. Much of which will depend how stupid or common sense prevail in Canadian elections; 4 more yrs of T2 and we are doomed; not a big fan of Trump but he is doing what he said he would, American economy doing pretty well, people are getting back to work, low employment numbers, taking on the biggest fraud economy in the world (China)’ not bad for a dude who did exceptionally well in his TV series; just saying!! Oh, did I mention did not create a single war up to this point!!

#40 Nonplused on 09.28.19 at 8:29 pm

#12 Shawn Allen

On the one hand I agree with you, limiting American cash inflows into China seems anti-freedom. But then the Chinese take that money and use it to steal American intellectual property and jobs. If things keep going the way they are, eventually nothing will be made anywhere in the world except in China, and they can win WWIII by simple stopping exports. Sure, they will suffer severe economic losses if they do that, but money isn’t real so they will just write it off. Including everything they owe to Americans.

Remember, China is a dictatorship. All the money any American individual or firm ever invested in China is subject to the good will of the dictator. Should China ever decide to confiscate it all, they can, and in an instant. I personally wouldn’t have any money there.

PS I can’t believe you implied Trump was a dictator when discussing his dealings with China, which clearly is a dictatorship. Me thinks you may have TDS. There are no minimum wage laws or indeed any labor laws of any kind in China. They work the laborers to the bone for subsistence wages to get those precious American dollars. China is in fact lawless, because the laws they do have are decided by dictators and not consensus. And you are comparing them favorably to Trump? Clearly there is a log in your eye.

#41 short horses on 09.28.19 at 8:35 pm

#8 Greek on 09.28.19 at 4:03 pm

“Anybody know where the yield on the HMMJ comes from? As far as I know none of the licensed producers are paying any dividends yet”

Do an internet search for the terms HMMJ & yield and your first hit will be a globe article that explains this:

https://www.theglobeandmail.com/amp/investing/education/article-a-marijuana-etf-that-pays-a-distribution-is-it-safe/

The proportion paid out that is dividends is relatively minuscule, it’s mostly capital gains, foreign income, and other income, so I wouldn’t be holding HMMJ if you’re looking for a tax-advantaged yield.

#42 Shawn on 09.28.19 at 8:45 pm

I think HMMJ goes to $5

#43 Nonplused on 09.28.19 at 8:55 pm

Ryan,

The MSM is trying to move a recession that should occur in 2021 back to today because they don’t want Trump to win a second term. That’s why there is all the recession talk before it’s happened. When was the last time the MSM actually predicted a recession? They don’t. They are “sell side” financed. They don’t predict recessions. But yet strangely here we are.

About half the people in the US have TDS (Trump Derangement Syndrome) and the other half do not. Half the people in the US see Trump as some sort of devil, and the other half see him as some sort of self made man that speaks truth to power in a sort of New York slang. Who is right? Well probably neither.

But it must be remembered that Trump is just a man, and even if he gets 4 more years he cannot be a “dictator for life”.

I predict Trump will win a second term in a landslide. This time he won’t just smash the electoral college but the popular vote as well. And the reason will be that the American public is getting tired of watching the democrats waste so much time trying to impeach him without any grounds other than they don’t like him and have a majority in the house.

They (the dems) actually have no choice though. They don’t have a candidate they can sell, so the only choice they have is to impeach Trump even if the charges are “trumped up”. Biden is finished due to the Ukraine thing, but was failing badly before. Pocahontas is now in front but she will be so very easy to defeat. Bernie wants to get rid of all billionaires, even the self made ones, actually anyone who has more money than he does, so he’s not going to get any funding for his campaign. The Dems are dead in the water. Impeachment is all they have, even if they don’t have any clear reason.

Maybe they will eventually find a reason to impeach Trump, but so far all they have is “Orange Man Bad”. But they have to go with it because they do not have a candidate. Unless of course Hilary steps back in for a sort of “Weekend at Bernie’s” sort of thing. Ugh. What a disaster that would be.

All you have to do is look at the donation numbers. That’s where people put their money where their mouth is. Trump won last time despite having a lot less money to spend than Hilary did. This time, he’s going in with an avalanche of cash that the dems aren’t anywhere near keeping up with. If the money is any indication, this time Trump actually takes California too. It would sort of be an Alberta vs. Ontario type thing, where rural California tips the tables.

#44 Tannhäuser Gatekeeper on 09.28.19 at 9:05 pm

Shawn Allen“That sounds plausible but are lending fees anywhere near high enough and do you have any backup for that assertion from the HMMJ documents?”

Sorry, I’ve no backup. I read it once in a paper somewhere… Ahh, here it is:
https://www.theglobeandmail.com/investing/education/article-a-marijuana-etf-that-pays-a-distribution-is-it-safe/
I figured that if they’re still paying with no other obvious source, lending must still be the source. They might instead be paying investors their own capital back. Maybe check their tax documents?

#45 will on 09.28.19 at 9:07 pm

i only have one ab. but it’s not gross.

#46 Shawn Allen on 09.28.19 at 9:09 pm

GIS Investors and RRSP withdrawals

#38 Ronaldo on 09.28.19 at 7:55 pm
#7 Shawn Allen

(How many retirees realistically regret that they invested in RSP?)
——————————————————————
For those without a pension other than the OAS and maybe a bit of CPP, I would say quite a few.

**************************
My thinking is that anyone in a position to get GIS probably did not ever earn much and the vast majority of them never invested in RRSP because they had no spare money. You mention “a bit of CPP”. Exactly, they never earned much therefore get little CPP.

#47 Sail Away on 09.28.19 at 9:19 pm

#36 Blackdog on 09.28.19 at 7:45 pm

—————————–

Good, balanced and articulate discussion. Thank you.

#48 Spectacle on 09.28.19 at 9:29 pm

#15 Don Guillermo on 09.28.19 at 5:19 pm
#12 Shawn Allen on 09.28.19 at 4:50 pm
I never knew that the definition of fascism is:
a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.

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

Drop the “aggressive nationalism” bit and you’ve described Trudeau Jr.

—————-Excellent, agree with you both ——-
The the “good faith value” of Canada goes down with every week passing , with current Government. Both inside our borders and worldwide.

The loss of opportunity as the socks- puppet- drama-child continues his destruction. That entitled punk doesn’t hold 1% against a Turner.

#49 Blackdog on 09.28.19 at 9:41 pm

@Sail Away #47,

“Good, balanced and articulate discussion. Thank you.”

You’re welcome. Not so “balanced” though, imo. Jeff is a patient, polite, educator. Hopefully Andy learned something.

#50 akashic record on 09.28.19 at 9:51 pm

Statistically the biggest herd movement direction in the past years was investors moving into index ETFs.

#51 PeterfromCalgary on 09.28.19 at 10:51 pm

Beyond Meat is the new Bit Coin type bubble.

#52 Shawn Allen on 09.28.19 at 11:12 pm

VBAL and or XBAL

#37 SoggyShorts on 09.28.19 at 7:53 pm responded to my question
#4 Shawn Allen on 09.28.19 at 2:21 pm
What would be wrong with them simply holding ONLY say VBAL or XBAL? Set it and forget it?
**************************
♦Nothing is in USD – True for VBAL which hedges the U.S. funds while throry would duggest not to hedge. It appears to me that XBAL does not hedge. So that is basically having U.S. dollar exposure in substance.

♦No REITs – Agreed but the impact is small?
♦No prefs – Agreed but the impact is small?
♦No tax-advantaged splitting of assets between TFSA/RRSP and non-registered – Agreed in theory, except many investors are hard pressed to fill RESP, TFSA, RRSP and may never have a taxable account.

♦Overweight Canada – That’s debatable

Still not bad though as far as 60/40 portfolios go. – Agreed, if someone came along with $50k or whatever and wanted to get started investing on a passive and easy basis but self-directed, telling them look just buy XBAL or VBAL is not exactly poor advice.

#53 Ronaldo on 09.29.19 at 12:13 am

#46 Shawn Allen on 09.28.19 at 9:09 pm
GIS Investors and RRSP withdrawals

#38 Ronaldo on 09.28.19 at 7:55 pm
#7 Shawn Allen

(How many retirees realistically regret that they invested in RSP?)
——————————————————————
For those without a pension other than the OAS and maybe a bit of CPP, I would say quite a few.

**************************
My thinking is that anyone in a position to get GIS probably did not ever earn much and the vast majority of them never invested in RRSP because they had no spare money. You mention “a bit of CPP”. Exactly, they never earned much therefore get little CPP.
—————————————————————
They may not have worked at all and still have had a spousal RSP plus their deceased husbands RSP and no other investments. So now they reach age 65 and eligible for the maximum GIS plus OAS but they won’t draw from the RSP because they get clawed back $1 of their GIS for every $2 of RSP they redeem. That is equivalent to a 50% tax and they could also lose other means tested benefits. There are many other scenarios.
This is only one of them. These are the inequities that resulted in the TFSA being introduced. And this is why many people require the assistance of a real financial advisor and not a mutual fund salesman or [email protected] I’m surprised that a person as knowlegable as yourself would not have clued into this.

#54 High quality Mr dressup on 09.29.19 at 12:44 am

PM material all the way…

https://twitter.com/TPostMillennial/status/1178027994285260800?s=19

#55 Okotoksmatt on 09.29.19 at 5:47 am

I am not sure why the adversion to Scheer. He seems like the only moderate candidate who isn’t proposing massive deficits with wild spending promises. I have met him and him is decent, hardworking and smart.
The doomsday culters want to kill Canadian energy in order to save the world. Scheer’s plan is to invest in technology that can be transfer to China, India and the US. This is much more effective than driving Alberta out of Canada and buying more foreign oil. At least Alberta has environmental laws.

#56 Okotoksmatt on 09.29.19 at 5:47 am

I am not sure why the adversion to Scheer. He seems like the only moderate candidate who isn’t proposing massive deficits with wild spending promises. I have met him and him is decent, hardworking and smart.
The doomsday culters want to kill Canadian energy in order to save the world. Scheer’s plan is to invest in technology that can be transfer to China, India and the US. This is much more effective than driving Alberta out of Canada and buying more foreign oil. At least Alberta has environmental laws.

#57 Rick Fast on 09.29.19 at 8:52 am

Berkshire has the highest cash position as a percentage of holdings, hes selling and building up a huge cash position, a stock market correction is coming in the next year and it might be huge. I wont follow other sheep, but ill follow that trex named Warren

#58 maxx on 09.29.19 at 8:53 am

@ #54

Oh please, I’m only on my second cup of java.

That hallmark, self-satisfied sneer masquerading as a smile comes through like a sonic boom.

#59 MF on 09.29.19 at 9:20 am

#55 Okotoksmatt on 09.29.19 at 5:47 am

It’s not really aversion, it’s just that the media is never kind to conservative politicians.

They are the mean guys who actually balance the books, or at least try. This is not a situation unique to Canada.

I also don’t think anyone is trying to “drive Alberta out of Canada”. That’s complete BS and basically just a childish emotional outburst. There is definitely a lot of lip smacking about the environment and green energy to pander to the Lib, NDP and Green constituencies though. Left leaning parties know they can never win in Alberta, so they don’t even waste energy trying.

MF

#60 Sun is Climate change on 09.29.19 at 9:39 am

Trump plans to kick Chinese listings off the US stick exchanges, love it. I can see the tsunami of value created by repatriating roughly two trillion dollars back to our piggy bank.

This is Trump’s genius move to thwart the globalist a-holes . The world doesn’t need China, the globalists need China to spread their garbage concepts of steal from Western taxpayers. Love the Trump. He’s making me rich.

#61 crowdedelevatorfartz on 09.29.19 at 9:45 am

Perhaps
“The Herd” is watching the political and financial uncertainty in Europe a la “Brexit” and the negative ramifications that may result. Not to mention powerhouse Germany’s 8 consecutive months of negative growth.

Or the slow motion start of Impeachment hearings in the US as we head into an election year.
Unprecedented.
A leader so arrogant as to brush off IMPEACHMENT investigations as he begins his run for the 2020 election.

The last US President to be impeached was Nixon and he was respected far more than the current bully in power.
As and aging Boomer dinosaur I can remember the 1970’s economy after Nixon.
It was dreadful and that was with 8% interest rates that they could lower.
We have no room to lower rates now to “stimulate” purchases of tv’s, cars, and washing machines.
Credit is at record highs. Everyone is maxxed.
Will that mean decades of stagflation a la Japan of the early 1990’s until now? Who knows?
Then toss in China’s slowing economy, corruption, elitist leadership and one a sided press promoting the party line( geez I could almost be talking about Canada) and “the herd” is justifiably nervous.

World wide, govt elections at all levels are being fought tooth and nail to “win” minority, coalition govts. ( the list is endless)
Populist govts promising rainbow sidewalks and Unicorn budgets.

“The herd” doesnt believe anything the media says and has no faith in any of its leaders….world wide.

Call it cynicism or perhaps its the result of being lied to over and over and over with the eventual result that no one trusts anything spewed out by their govt., their “leaders”, their employers, the media thus we end up in the unenviable position to “anti-vote” ….essentially voting for someone, anyone to get rid of the current banana eating, poo flinging monkey sitting in office.

Where’s Apocalypse2020?

Time for my first coffee of the day

#62 NoName on 09.29.19 at 9:48 am

i think all this is getting out of hand…

https://www.scientificamerican.com/article/how-much-air-pollution-is-produced-by-rockets/

#63 crowdedelevatorfartz on 09.29.19 at 9:52 am

@#25 Dave
“Two words. Black swan.”
+++++

That’s four words……inflation?

#64 Irwin on 09.29.19 at 9:53 am

Canada is in a ‘Rivers of Babylon’ era. ie: “How shall we sing the LORD’s song in a strange land?”

https://www.youtube.com/watch?v=thIWc0VQrcM

#65 dharma bum on 09.29.19 at 9:58 am

“Beware of the herd in all its forms…” – Ryan
——————————————————————–

This includes:

Climate change panickers

Global warming paranoia

#metoo

#woke

Veganism

Alternative pronouns

Virtue signalling

Man buns

Vape pens

Anti-aging

#66 crowdedelevatorfartz on 09.29.19 at 9:58 am

@#43 Nonaddition
“About half the people in the US have TDS (Trump Derangement Syndrome)…”
++++

Yes and they put MAGA hats on their Trump blowup dolls before going to bed at night.
Just curious.
Do you take the doll on vacation?

#67 Axehead on 09.29.19 at 10:04 am

Nice word Ryan, deleterious.

#68 crowdedelevatorfartz on 09.29.19 at 10:05 am

@#51 PeterinCowtown
“Beyond Meat”
+++++

Ugh.
The first time I saw a vacuum packaged display of that simulated “pattie” at a large grocery store earlier this summer…….shudder.
It immediately reminded me of the morning after a booze filled, tequlia shooter with draft beer, night, greasy food and the nauseated early morning results.
I will never , knowingly, eat something that looks like a regurgitated splat on a sidewalk.

But thats just me.
Eat you hearts out Millenials….literally.

#69 Ryan Lewenza on 09.29.19 at 10:18 am

Nonpulsed “The MSM is trying to move a recession that should occur in 2021 back to today because they don’t want Trump to win a second term. That’s why there is all the recession talk before it’s happened.”

I’m not buying that argument. Sure some Trump haters are hoping for a recession so it reduces the odds of a second term but the media is talking about recession since: 1) we’re in the tenth year of this economic expansion so we’re due, 2) Trump’s ongoing trade war is weighing on the global economy, 3) the yield curve recently inverted and 4) there’s a lot of external risks right now like Brexit, Iran/Saudi Arabia, Hong Kong, Trade Wars etc. Yes there is a liberal bias in the media and many people want to take Trump down but I don’t believe that’s the main reason for all this recession talk. – Ryan L

#70 Don Guillermo on 09.29.19 at 10:27 am

#55 Okotoksmatt on 09.29.19 at 5:47 am
I am not sure why the adversion to Scheer. He seems like the only moderate candidate who isn’t proposing massive deficits with wild spending promises. I have met him and him is decent, hardworking and smart.
The doomsday culters want to kill Canadian energy in order to save the world. Scheer’s plan is to invest in technology that can be transfer to China, India and the US. This is much more effective than driving Alberta out of Canada and buying more foreign oil. At least Alberta has environmental laws.

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

I totally agree with you but unfortunately many Canadians seem hell bent on tearing this country apart. I think the MSM press has been very effective in linking Scheer to Trump and Ford and Canadians are buying it. I’m not very optimistic for our future.

#71 Shawn Allen on 09.29.19 at 10:52 am

No need to be Rude.

#53 Ronaldo on 09.29.19 at 12:13 am

They may not have worked at all and still have had a spousal RSP plus their deceased husbands RSP and no other investments. So now they reach age 65 and eligible for the maximum GIS plus OAS but they won’t draw from the RSP because they get clawed back $1 of their GIS for every $2 of RSP they redeem. That is equivalent to a 50% tax and they could also lose other means tested benefits. There are many other scenarios.
This is only one of them. These are the inequities that resulted in the TFSA being introduced. And this is why many people require the assistance of a real financial advisor and not a mutual fund salesman or [email protected] I’m surprised that a person as knowlegable as yourself would not have clued into this.

************************
I did not say here was no one in that situation. But in the situation you describe, the widow should still be very happy that money was put into that RRSP and spousal RRSP.

The alternative in at least many cases (and TFSA did not exist) is that the money was simply spent.

50 cents is better than nothing. Also the dollars in the RRSP had the advantage of refunds and would be far more initially than in taxable account assuming same spending and then grew tax free. RRSP was still a wonderful thing here.

People say gee, I wish I had same funds outside of RRSP. Well, the math does not support that considering the refund which subsidises the RRSP savings and the tax free growth. Not to mention the powerful incentive of the RRSP whereby the money was saved rather than spent and then never touched.

And I never argued against financial advice being sought.

Thanks for your closing insult. Guess who it diminishes?

#72 Axehead on 09.29.19 at 11:13 am

Canada is on the verge of serious union crisis. The talk on the street in Alberta is cessation from this union. And no wonder – we can build a railroad but the reality of a pipline is but a promise, a vapour.

#73 crowdedelevatorfartz on 09.29.19 at 11:23 am

Those Krazy Kiwi’s are at it again…..

https://www.reuters.com/article/us-newzealand-shopping-pornography/sunday-morning-shoppers-stunned-as-new-zealand-store-plays-pornography-idUSKBN1WE03S

#74 Shawn Allen on 09.29.19 at 11:33 am

RSP tax resentment often unfounded

Many RRSP investors come to greatly resent the tax at withdrawal.

In large part this is due to a fundamental failure to understand / admit the fact that RSP money is pre-tax money.

Putting $1.00 of after tax money into an RRSP turns it into $1.00 of pre-tax money but the reward is the refund. You got the tax back!

RRSP investors should understand and be constantly reminded that RRSP money is always partially ear-marked for taxes to the tune of usually 30% to 50%. You’re poorer than you think!

Financial advisers and brokers show RRSP money as if it was fully owned by the investor. Not really.

A net worth statement that shows RRSP money as fully an asset with no deduction for expected taxes should get a fail in any accounting course or from any auditor. Yet every financial profile you ever see such as in the newspapers fails to deduct the tax. Fail.

If you get a job paying $120,000 per year gross you can’t plan to spend $10 k per month.

Similarly money in an RRSP is gross pre-tax, you have to pay tax, that was always the deal. And if the math is looked at fairly it is almost always a Good deal. I have gone over the math in detail many times here. In fact if marginal tax rate is unchanged it precisely matches the TFSA deal i.e. zero tax on growth.

#75 Sail Away on 09.29.19 at 11:46 am

#28 Flop… on 09.28.19 at 6:40 pm

…we normally gain a few interesting posters each year that add value to the conversation, 2019 has been a bit of a lemon in that regard, but we’ve had a few positive interactions and I’ve enjoyed reading some of your posts so you seem to be bucking the trend which is why I’ll try to answer your question.

———————————————-

Flop, it seems you’ve appointed yourself as the authority on who is or is not an interesting poster. I’d suggest you’re overstepping again.

At least you’re not trying to control what others do this time, just passive-aggressively insulting anyone who started posting in 2019.

#76 Tannhäuser Gatekeeper on 09.29.19 at 11:48 am

“… it’s just that the media is never kind to conservative politicians. They are the mean guys who actually balance the books, or at least try. This is not a situation unique to Canada.”

Pop quiz:
a) The last time Canada ran a surplus, the Prime Minister was _____, a member of the ____ party.
b) The last time the US ran a surplus, the President was _____, a member of the _____ party.
c) The last time the UK ran a surplus, the Prime Minister was _____, a member of the _____ party.
d) The last time Australia ran a surplus, the Prime Minister was _____, a member of the _____ party.

Three out of four, the last one is a bit of a trick…

When I was a kid, I believed all that BS about conservatives balancing the books. Haven’t seen a lot of it in my lifetime. Quite the opposite, in fact, as they always seem to cut taxes more than spending.

However it does look like Jason Kenney is going to deliver a budget that may tip Alberta back into recession. But don’t worry, he’s got BIG PLANS to balance the books… right around the end of his government’s term.

#77 Ronaldo on 09.29.19 at 11:54 am

Question for Shawn Allen.

A couple both aged 65 divorce. She has never worked. He leaves her with a paid off $200,000 dollar condo and $300,000 dollars. She is now elligible for the maximum GIS supplement of $907.30. Her only other income is her OAS of $607.46. She understands that she can work and earn $3500 without a clawback to her GIS. Next year this will increase to $10,000. She needs advice on how to invest the $300,000 so that it does not result in a clawback to her GIS which at today’s low interest rates (say 2%) is equivalent to having savings of $544,000. She wants to be able to draw from the $300,000 from time to time to supplement her OAS and GIS. She understands that for every $2.00 of other non employment income will result in a clawback of $1.00 for every $2.00 of that income (a 50% tax). She comes to you for advice. What advice would you provide as to what types of investments she should invest in given the above information.

#78 Not So New guy on 09.29.19 at 12:23 pm

The herd is always right except in the extremes.

If you try to go against the general consensus they will crush you but once they get into a mad gallop, then it is best to fade them and/or trade contrarily

That doesn’t mean they are right. It just means they have the trading/economic power to make themselves right until they burn themselves out.

The market can stay wrong longer than you can stay solvent. Knowing this and trading accordingly can make you very successful

In the jungle, you don’t need to worry about the mice stampeding, only the elephants

#79 NoName on 09.29.19 at 12:36 pm

Interesting read, google translate will do the trick for non German speaking people.

https://www.welt.de/wirtschaft/article201106910/Autoindustrie-Elektromobilitaet-kostet-bis-2030-fast-125-000-Jobs.html?__twitter_impression=true

#80 Tony on 09.29.19 at 12:38 pm

Re: #56 Rick Fast on 09.29.19 at 8:52 am

Statistically 2020 should be a good year for stocks with 2021 being a very bad year.

#81 Tony on 09.29.19 at 12:45 pm

Re: #51 PeterfromCalgary on 09.28.19 at 10:51 pm

Alex Vieira is a player in that stock meaning it will have wild swings such as can be seen with Shopify. When he buys and sells you see massive swings in anything he buys or sells.

#82 Shawn Allen on 09.29.19 at 1:05 pm

Danger of Trump

#59 Sun is Climate change on 09.29.19 at 9:39 am said:

Trump plans to kick Chinese listings off the US stick exchanges, love it. I can see the tsunami of value created by repatriating roughly two trillion dollars back to our piggy bank.

This is Trump’s genius move to thwart the globalist a-holes . The world doesn’t need China, the globalists need China to spread their garbage concepts of steal from Western taxpayers. Love the Trump. He’s making me rich.

******************************
This nicely illustrates the danger of Trump. Even if his policies and executive actions do (to some degree) resemble fascism “aggressive nationalism” in this case, the fact is that many aspects of Fascism have a strong allure.

It would be very dangerous to ignore the fact that a large percent of the population can find a fascist leader to be an attractive idea.

And this is why capitalism and democracy gets on thin ice when it fails to guard against too much of the spoils of the economy going to the 1% or even the 25%. The bottom 60% or whatever get legitimately angry and support major change.

When the fascist leader promises to use his power to be on the side of “the ordinary working people” and against the rich, and especially against foreigners, it becomes very alluring.

Fascism: a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.

#83 Retire At 50 on 09.29.19 at 1:10 pm

25 years ago, if one joined the military as an officer after obtaining a university degree would have on a schedule become a Colonel. Rank increases were guaranteed, and a choice of position was offered. The benefit package covered medical, dental and the list was long indeed. The salary today would be $159,204 annually with numerous pension options.

#84 crowdedelevatorfartz on 09.29.19 at 1:13 pm

@#71 Axehead
“The talk on the street in Alberta is cessation from this union….”
+++++

Well.
It would be ironic wouldn’t it?
Alberta separating and Quebec trying to talk them out of it…..

I mean where would all their subsidized daycare money come from after the “Have” provinces left and stopped shoveling billions in “equalization $$$$” to the “Have Nots”?

#85 crowdedelevatorfartz on 09.29.19 at 1:18 pm

@#78 Retire at 50

Rank has it’s privileges…..

But why bother with university …..when you can just sue for compensation…

https://www.cbc.ca/news/politics/sexual-misconduct-military-operation-honour-1.5144601

https://www.veterans.gc.ca/eng/health-support/physical-health-and-wellness/compensation-illness-injury/disability-benefits/benefits-determined/entitlement-eligibility-guidelines/ptsd

#86 Flop... on 09.29.19 at 1:18 pm

46 am
#28 Flop… on 09.28.19 at 6:40 pm

…we normally gain a few interesting posters each year that add value to the conversation, 2019 has been a bit of a lemon in that regard, but we’ve had a few positive interactions and I’ve enjoyed reading some of your posts so you seem to be bucking the trend which is why I’ll try to answer your question.

———————————————-

Flop, it seems you’ve appointed yourself as the authority on who is or is not an interesting poster. I’d suggest you’re overstepping again.

At least you’re not trying to control what others do this time, just passive-aggressively insulting anyone who started posting in 2019.

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

Not wasting too much time on you.

After what you said about Boom.

Yes, you are a lemon…

M45BC

#87 IHCTD9 on 09.29.19 at 1:26 pm

#73 Shawn Allen on 09.29.19 at 11:33 am
——-

All you need if you’ve got a lot in RRSP’S, is a solid plan to unload them at a low tax rate.

I’m thinking part time work starting at 60 for both earners. 5 years of two people withdrawing strategically during this time should put a good dent in them. Transfer over what you can into TFSA’s, the rest into taxable investments.

Our tax returns paid our property taxes and all insurances for many years, some years even more than that – so I consider this as well when I think about the taxes I’ll have to pay someday as well.

Finally, we’ve been filling RRSP’s since our mid 20’s, a decent chunk of the deposits were from tax returns in the early years too – I would expect more than 1/2 the funds in there right now are gains. Our tax rate won’t be anywhere near enough to put a sizeable dent in that.

#88 Shawn Allen on 09.29.19 at 1:34 pm

#76 Ronaldo on 09.29.19 at 11:54 am

Question for Shawn Allen.

************************************
I never give specific advice tailored to individuals. I am not licensed to do so.

My comments that you responded to were along the lines that it would be better for this person to have say $300k in RRSP than to have no investments at all. And I think it would be far more common to have the investments in RRSP. But certainly your scenario is possible.

I am pretty firm in my beliefs on topics and math that I know a lot about. I have never had reason to look much into tax-efficient investments such as return of capital products so I am not a good person to ask.

I have a taxable account in addition to considerable RRSP funds. In that taxable account I try to buy and hold a few quality equities only for long-term gain. Avoiding selling defers tax and lowers the burden at tax filing time. I put no fixed income there. My approach may not be ideal but it suits me for now.

But let’s send our Widow to Ryan and Doug and Garth. This is their area, not mine. Giving personal advice is a lot of responsibility, not to mention the regulations involved.

#89 Tannhäuser Gatekeeper on 09.29.19 at 1:47 pm

“The talk on the street in Alberta is cessation from this union….”

Albertans should consult:
– a map
– the amending formula for the US constitution
– Jason Kenney’s political plans

#90 IHCTD9 on 09.29.19 at 2:08 pm

#82 Retire At 50 on 09.29.19 at 1:10 pm

25 years ago, if one joined the military as an officer after obtaining a university degree would have on a schedule become a Colonel. Rank increases were guaranteed, and a choice of position was offered. The benefit package covered medical, dental and the list was long indeed. The salary today would be $159,204 annually with numerous pension options.

——————

Still a good deal today. My eldest has applied for RMC this fall to become an officer. Start out at 49k at 22 years old, after getting a free degree. Work for 5 years then stay or leave. If staying, pension starts at 43. Decent pay right through even if you don’t go super high in rank.

My neighbour, who is ex-military celebrated his 30th year of retirement this year, after working for 25.

The only problem is they get up to 5000 applicants for 300-350 openings, and the competition is such that you’d better have a 90+% average if you hope to get in. Plus there is the interview and physical requirements on top. Then you need to pass the federal French language test before you can graduate.

Anyone who gets in and makes the CAF their career (as an officer) will be pretty well looked after from the sounds of it.

#91 IHCTD9 on 09.29.19 at 2:23 pm

#74 Sail Away on 09.29.19 at 11:46 am

Flop, it seems you’ve appointed yourself as the authority on who is or is not an interesting poster. I’d suggest you’re overstepping again.

At least you’re not trying to control what others do this time, just passive-aggressively insulting anyone who started posting in 2019.
———-

Well Sail Away, if it’s any consolation; you’re one of my fav new posters for class of 2019!

#92 crossbordershopper on 09.29.19 at 2:51 pm

#76 renaldo
i think the limit on the new canada working benefit next year is $5000 per person not $10,000 its $10,000 for a couple of net income with no gis clawback.
i think this is real socialism at its best, they want retired people who have no money or a paid off house or condo, or half decent money in bank or rrsp to be able to supplement income completely subsidised by the governement or regular taxed people.
so yes, max the tfsa, money grows tax free, take out what you need as you need it by your budget.
draw down rrsp in a tax efficient manor to reduce the annual goverment take take all into consideration, subsidises on pills etc. from provincial governement.
the bigger picture is how can the governement give people free money as soon as they turn 65, till the day they die. and they really other than exist in canada for 40 years get full money. and on top of that they can get some part time gig and make $5 or $10K per couple and still get a full cheque, so in principal a copule can never save a dime, could be a millionaire by owning a paid off house, or never worked for a company to get a pension or saved a penny, and when 65, they can each make about $19K in governement cheques each, plus $10K from a part time gig each which is nothing like 7 hours a week job.
so $50K for a retired couple with no tax and working 7 hours a week, this is where the worped socialist canadian basket case country we have turned into. and could be quite wealthy with a paid for house, think of it, a millionaire couple living quite ok, sure 50K takehome for a retired couple is enough, under most circumstances, even taking prop tax, insurance, auto costs, (prop tax you get 500 back in ontario etc).
garth i think has it wrong, probably because he sells investments, he’s jaded, the primary reason why the system is totally screwed up in canada today is that
education means very little, ask all the educated foreigners coming, saving is a joke unless you “play the market” and accept ups and downs which many people cant accept.
people are skewed to real estate in single family and rentals, because thats all the banks in canada lend against. no one is setting up small business, you get harrassed by the gst people, like really you do a couple hundred grand in sales, and the nazi gst people ask you stupid questions in their audit, like really auditing a small business with 300K canadian in sales?, its a joke they squeeze you for a couple grand they think you short changed them to make it worth there while in a 2019 shake down, well since so few people pay tax the governement goes around and steals from hard working small people, i know personally.
so basically canada is simple, stay poor, own a house, and wait for your government cheque.
and of course spend 6 months in florida, cheap flights from hamilton to orlando, you can live down there quite well on cdn governement cheque well.
weirdest country

#93 Go For More on 09.29.19 at 3:19 pm

Request obtaining a second degree that will apply to military life. Such as law, dentistry, computer science,
pharmacy, medicine, or more. They will pay for it, and bump the rank up to a Major, and he or she must sign an agreement for at least 10 years. Not sure about today, but needs to be checked out.

#94 Ronaldo on 09.29.19 at 3:45 pm

#91 crossbordershopper on 09.29.19 at 2:51 pm

From an Article published April 2, 2019

Changes to GIS clawbacks. There is some good news for GIS recipients starting in July 2020. Currently, GIS recipients can earn up to $3500 of employment income without affecting their GIS pension. However, if they earn more, the GIS is reduced by 50% of the excess earnings. That’s a steep clawback.

Beginning with the July 2020 to June 2021 benefit year, which are based on income earned in 2019, GIS recipients can earn up to $5,000 from employment or self-employment before their GIS is reduced. In addition, 50% of the next $10,000 of employment or self-employment income will also be exempt.

These changes would allow working seniors to earn up to $10,000 more in 2019 while still receiving benefits under the Guaranteed Income Supplement.

http://www.knowledgebureau.com/index.php/news/article/good-news-for-seniors-gis-clawbacks-reduced

#95 SoggyShorts on 09.29.19 at 3:45 pm

#52 Shawn Allen on 09.28.19 at 11:12 pm
VBAL and or XBAL

#37 SoggyShorts on 09.28.19 at 7:53 pm responded to my question
#4 Shawn Allen on 09.28.19 at 2:21 pm
What would be wrong with them simply holding ONLY say VBAL or XBAL? Set it and forget it?
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♦No tax-advantaged splitting of assets between TFSA/RRSP and non-registered – Agreed in theory, except many investors are hard pressed to fill RESP, TFSA, RRSP and may never have a taxable account.

♦Overweight Canada – That’s debatable
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Canada as a % of global GDP is pretty small, the main reasons for having more maple exposure are currency simplicity and tax advantages. If someone only has RRSP&TFSA then exposure to Canada should be significantly less imo.

Someone starting out with say 50K as in your example would be fine with this, but I’d go for more: at least VGRO if not VEQT.

Middle-aged investors following an old “freedom 65” path should probably stick with the 60/40 but anyone wanting to retire early needs greater gains to last them through more years. Presumably, anyone on an early retirement path has good financial discipline so the volatility of higher equity weightings shouldn’t cause panic selling.

#96 tccontrarian on 09.29.19 at 3:56 pm

Finally a post in support of my name- thanx
tcc

#97 Ronaldo on 09.29.19 at 4:12 pm

#87 Shawn Allen

Thanks for your good and honest answer.

#98 Jesse on 09.30.19 at 4:16 pm

#4 Shawn Allen on 09.28.19 at 2:21 pm
So, VBAL or XBAL then?

Imagine investors with anywhere from $10k to say $2 million. Imagine that they happen not to be looking for tax advice or the other services beyond strictly investing. And imagine they are not interested in picking individual stocks or even picking a basket of ETFs.

What would be wrong with them simply holding ONLY say VBAL or XBAL? Set it and forget it?
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VBAL and XGRO are great holds for the long term, CCP has done a write-up on these: https://canadiancouchpotato.com/2018/12/24/ishares-launches-all-in-one-etf-portfolios/

Also, consider MAW104, or MAW105 for non-reg accounts.