They shoot stocks, don’t they?

DOUG  By Guest Blogger Doug Rowat

.

When I started in this business prior to the dot-com bubble I had some vague sense that share values declined, but I had almost no concept that a company could actually go bankrupt. This was the late 90s and share prices simply didn’t just go to zero.

Naively, I assumed that if a company was publicly listed and that millions of investors had ownership then the company had legitimacy and therefore wouldn’t fail. I also assumed, even more naively, that for a company to be publicly listed it must have been thoroughly vetted. Was I ever in for a wake-up call.

Below is the dramatic rise in Internet company failures as the tech sector became irrationally speculative. Sadly, I would have owned a few of these.

Internet company failures

Source: Michael Mauboussin (“More Than You Know: Finding Financial Wisdom in Unconventional Places”)

To a much lesser extent, I received another reminder of bankruptcy dangers as the wildfires raged this fall throughout California. The big westcoast utility PG&E, which was recently forced to intentionally black out most the San Francisco Bay area because of the forest-fire danger, has seen its share price plunge 69% y-t-d. It now sits on the cusp of complete failure. But, amazingly, PG&E has already filed for bankruptcy once this year and did so as well in 2001 in the wake of the Enron scandal. It’s already a two-time loser. No pun intended, but how many times will investors allow themselves to get burned? PG&E was removed from the S&P 500 earlier this year.

According to a recent Innosight report, the average life span for a company in the S&P 500 has been about 33 years. However, by 2027 this number will fall to just 12 years. In fact, S&P 500 company life spans have been steadily declining for decades.

Now, naturally, some of this longevity decline is due to factors that may be favourable for investors such as takeovers, but the reduced life spans are also frequently a result of bankruptcies—a rapid failure of companies to adapt to new, disruptive market forces. The rise of Amazon, for instance, continues to wreak havoc on the retail sector. According to the same Innosight report, at least 21 US retailers filed for bankruptcy protection in 2017 including chains such as Toys R Us, The Limited, Payless, and Gymboree. And a recent BMO report further highlights that there were more bricks-and-mortar store closures (as measured by total square footage) in 2017 than in 2008, which, of course, was the heart of the financial crisis.

Bankruptcies are always a fact of life, but if you over-concentrate in the wrong sectors then your investments are in even more danger. Are you listening cannabis investors?

The overall number of bankruptcies obviously increases during recessions, but what investors should be aware of is that there’s a constant randomness (if that can be considered a phrase) to bankruptcies even during strong economic periods. In fact, even when the economy is good, bankruptcy levels can spike for seemingly no reason. It’s just part of the natural cycle of the economy. In other words, don’t be lulled into complacency with your stock portfolio just because the economy is stable. Your odds don’t particularly improve in terms of avoiding a complete corporate failure just because the economy is doing well and the overall market is trending higher (see chart).

Bankruptcy landmines lurk everywhere and overall economic strength often doesn’t reduce their numbers. Bankruptcies have a life of their own.

S&P 500 (orange line) vs the Bloomberg Bankruptcy Index (white line): Even with the economy and markets humming along, bankruptcy levels can spike at any time

Source: Bloomberg

Remember this if you’re trying to make a living through speculative stock-picking. A broad-based ETF, in contrast, doesn’t even skip a beat if an individual company goes belly up because the ETF will own many more companies that have weathered the storms, handled the competition and succeeded.

If you want to more easily step over the dead bodies strewn throughout the corporate world, own an ETF.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.

 

113 comments ↓

#1 Dharma Bum on 11.16.19 at 10:14 am

Cover the board.

#2 Don Cherry - Realtor on 11.16.19 at 10:19 am

You people – sheesh! I feel like that guy in the picture today, stabbed in the head by all the SJWs out there!

You people told me that I could just go into real estate. You people said anyone can do it, just go get a license. Well, I haven’t sold anything all week! Nobody in Brampton has even called me! I don’t wear a visor, I wear a poppy. I let dogs in my office. What’s wrong with you people?

You people gotta help me, like not that backstabbing wuss Maclean. Come buy a house, or at least give me another idea for a job!

You people listening, or what?

#3 TurnerNation on 11.16.19 at 10:33 am

For yesterday’s blog: it’s happening, our own colour revolution in this soon to be 2nd world country.
Red it is.

The poor are being set upon the rich. Nasty printed messages left all over a tony area.

The cause? Climate Change of course. Yes Climate change can do all that! This is the beginning of WW3 on several fronts: black vs white. Rich vs poor. Young vs old. West vs East.
The global elites got us fighting each other.
But there was nooo interference in our last election right? So soon we see.

In reality these local leftists care only about their supply of weed, to get like totally baked. Progress

https://www.victoriabuzz.com/2019/11/oak-bay-residents-find-fliers-on-vehicles-accusing-them-of-contributing-to-climate-crisis/

#4 Derek Ross on 11.16.19 at 10:36 am

Gotta love those ETFs!

#5 Andrewski on 11.16.19 at 11:00 am

Thanks Doug, a good reminder to have a portfolio that is diversified.

#6 VicPaul on 11.16.19 at 11:01 am

I’ve come to learn that your prudent advice to diminish risk through diversified holdings is logical and sensible….you just don’t hit any homers that way. And so, while the bulk of my instruments are index etfs (thank you Garth, Doug, Ryan, Sebastian), 20-30% is high-risk/high-reward “flyers” and divvy payers – I’ve run some senarios whereby my db pension/TFSA/RRSP should sustain me and mine…so a little playmoney to catch the next floater (Teck in 2008 @$4…to $42 in example – no one likes a braggart) can be crazy fun!
M55BC

#7 VicPaul on 11.16.19 at 11:16 am

#108 Cottingham a bargain on 11.15.19 at 8:10 am

Jessica Allen’s comments about “ white boys” in hockey being “mostly bullies “and “not very nice “ garners crickets for outrage from the comments section.

Hmmmm

*************
Thank you for raising a very pertinent point – one that the Identity Politikers would smother you for. I understand this is not the forum for this discussion – but greater outspoken messaging needs to be heard from regular everyday white people who are tired of being racially marginalized based on past behaviours of others – the media’s decades long social-engineering experiment (watch commercials closely – white male generally butt of the joke). A pernicious ideology pushes these agendas. Let’s all be critical thinkers (to the best of our ability – we’re not all equal…sorry).
My view? I can see your face…show me your character.
M55BC

#8 NoName on 11.16.19 at 11:36 am

Hey farts how is this for climate change???

A 51-year-old man has been charged with lighting an out-of-control fire in the NSW Northern Tablelands in order to protect a cannabis crop.

https://7news.com.au/news/crime/man-charged-over-out-of-control-nsw-fire-c-559717.amp?__twitter_impression=true

#9 Figure it Out on 11.16.19 at 12:08 pm

LOL. There was a website that documented dotcom failures in real time. I wanted to ask Doug how far into things he was when he heard about it, but — as the site name contained one of the classic English profanities — I guess Garth’s site has a filter for pearl-clutchers and those who refuse to bowdlerize things with odd spelling and punctuation.

People who were there will know what site (R.I.P) I am referring to.

#10 SoggyShorts on 11.16.19 at 1:14 pm

#123 Millennial Realist on 11.16.19 at 8:17 am
That graph shows beautifully that when the Boomer Cons get into power, debt explodes. The 1% get richer, everyone else gets the shaft.

The lie of Conservatism. It’s a Scheer fraud.
**************
Lemme guess, when the next con government gets in and inherits a 25b annual deficit you’ll blame them for that as well?

Learn how the real world works or get run over by it.

#11 espressobob on 11.16.19 at 1:20 pm

Pot stocks took a hit, go figure? Shit happens all the time. Being a global index investor has the advantage of owning corporations by market capitalization and weighted accordingly in an ETF.

The TSX composite finally broke new ground above 17k. No complaints here.

As a retail investor why would I want to play with fire?

#12 Sail Away on 11.16.19 at 1:25 pm

Out of favour companies are sometimes out of favour for a reason… and sometimes not. I enjoy picking through the detritus; results include both bankruptcies and great returns.

Here’s an example of some companies in trouble last year, and subsequent action:

SNC- up 76% from 52 week low
Tesla- up 100% from 52 week low
MAXAR- up 200% from 52 week low
KHC- up 25% from 52 week low
FRED- bankrupt

Buying these companies can be similar to the early Buffett strategy of picking cigars with one puff left from the gutter. I’d never actually suggest someone do this, but personally enjoy it greatly.

#13 Damifino on 11.16.19 at 1:41 pm

In the summer of 2000 I owned $3k worth of common shares in ‘Group Telecom’. By mid-2002 the ‘investment’ had completed its long, painful march to zero.

Yep, exactly zero. Nada, Zilch, Bupkis.

I had trouble getting the ‘asset’ to disappear from my portfolio for a while. They said it was because the shares had no value and thus couldn’t be sold.

Group Telecom remained listed in my statements for quite some time. I believe I authorized their ‘donation’ to some organization, and finally, they disappeared.

Group Telecom was, I think, a subsidiary of a gas line installation company (or something). Essentially, they dug long trenches. The business plan was simple: throw some fiber optic cable in your trench, and presto! You’re a telecom provider. Didn’t end well.

#14 Dave on 11.16.19 at 1:45 pm

Is China’s debt on the brink of collapse or just slow down in their economy?

#15 Blacksheep on 11.16.19 at 1:48 pm

Blackdog,

#84 “You have issues if you think your out of context, copy/paste job proves man-made climate change is not real and that NASA is a man-made climate change denier.”
—————————–
1) The climate is changing.

2) I, never discus in my posts, if current climate change, is man made, or naturally occurring.

3) NASA, never discusses in my posts, if current climate change, is man made, or naturally occurring.

4) The quote from NASA’s website clearly explains:

“Unfortunately, such a margin of error is much too large for making a reliable forecast about climate changes”

5) NASA is stating:

We cannot predict future global temperatures. Full stop.
—————————–
#86 “but that doesn’t necessarily mean they have a particularly high IQ or critical thinking skills.”

1) Yes, the last bastille of a failed on line debate, your opponent attempts to get personal.

2) Some food for thought Blackdog, we’ve been going back and forth a few times with our comments, yet none of the other climate defenders on this blog, has jumped right in, to correct my non critical thinking?

3) They have let you flounder, by yourself…Why do you think that might be? I mean far to many, aggressively jump all over a comment, that runs tangent to their own personal beliefs?

4) Because they understand, It’s pretty F-ing hard to argue with the clear and straightforward statement, on NASA’s website…

5) So I hope this outcome causes you and them, to maybe be just a tad less critical of others, when someone’s opinion, does not always parallel their own.

Thanks for the civil debate.

#16 not 1st on 11.16.19 at 1:53 pm

Hope you didn’t invest in the cannibas space. Wont be long before that’s back under restrictions.

https://www.cbc.ca/news/health/cannabinoid-hyperemesis-syndrome-underdiagnosed-canada-1.5362007

#17 Millennial905er on 11.16.19 at 2:09 pm

Anyone care to explain the difference between passive and active ETFs? Michael Burry seems to think the former is a ticking time bmb.

#18 espressobob on 11.16.19 at 2:09 pm

#11 Sail Away

Hindsight is 20/20. Picking individual stocks or sector plays remains a mystery forthose that profess in foresight, never seem to get it right.

Funny how that works?

#19 SoggyShorts on 11.16.19 at 2:24 pm

I learned an insanely expensive lesson on stock picking very early.

The first 10k in my TFSA was put into a mining company based on some 4th hand information from the old man’s drinking buddy that sounded almost like Insider trading. Stock went from $2 a share to $0.10
Yep, i was that young and dumb. Now at least I’m not as young.

That hurt, but it hurt a lot more when I realized that the same 10k invested in the s&p 500 over the next 50-60 years of my life would have been worth $300,000-$600,000

The idea that “I’m young so I can afford to gamble since I have time to recover” is a dangerous one.

#20 Flop... on 11.16.19 at 2:31 pm

Hey Dolce Vita, I know you don’t post anymore but I’m sure you are lurking.

Hoping you can give some local intel.

There is a rumour going around that anyone that has purchased real estate in Venice recently is underwater.

Can you confirm this…

M45BC

#21 Sail Away on 11.16.19 at 2:35 pm

After mulling over the whole Don Cherry poppy panic, I find it ironic that so many people who haven’t served in the military, and are often in fact dead set against their children serving, are the first to expound on the duty of remembrance we owe to the ‘brave soldiers who so selflessly gave the ultimate sacrifice, and etc..’. And, in the case of Cherry, point a finger of shame at anyone not wearing a poppy.

Without military service, Cherry has no right to shame anyone for not wearing a stupid poppy. It’s not his place.

As a vet, it annoys me.

He shouldn’t have been fired for it, though. That was done by more non-vets signalling their truly heartfelt support… as long as they or their families don’t have to serve, of course.

#22 Sail Away on 11.16.19 at 3:06 pm

#17 espressobob on 11.16.19 at 2:09 pm
#11 Sail Away

Hindsight is 20/20. Picking individual stocks or sector plays remains a mystery forthose that profess in foresight, never seem to get it right.

Funny how that works?

————————————-

Yes, agreed. To guard against sometimes unconscious hindsight cherry-picking, I keep a running spreadsheet in Google Docs I’ve named ‘Boom-Bust’ listing all buys, sells, returns, watches, etc. that is shared with a dozen or so friends and colleagues.

There are bankruptcies, one 12-bagger, and everything in between. The research into actually buying involves far more than just a precipitous drop, but that is one of the criteria.

I’ll never recommend anything but all are welcome to make their own choices. Every now and again someone will treat me to lunch, but nobody’s allowed to be angry over the wrong choice.

Tax loss selling season is usually good for another 10-15% drop in beaten-down stocks and there are a handful on the watchlist.

#23 Blackdog on 11.16.19 at 3:23 pm

@Blacksheep, my apologies for insulting your intelligence in my last comment to you. That was rude of me.

Regarding your suggestion that you were just trying to have a “civil debate” with me, sorry, but it didn’t seem to me like that was what you were trying to do.

May I suggest that regarding the particular piece of text from the cloud climatology project that you asked me to analyze, you ask the author who wrote it or a climate scientist. I’m not an expert in the subject matter.

Cheers

#24 SoggyShorts on 11.16.19 at 3:35 pm

#15 Blacksheep on 11.16.19 at 1:48 pm

4) The quote from NASA’s website clearly explains:

“Unfortunately, such a margin of error is much too large for making a reliable forecast about climate changes”

5) NASA is stating:

We cannot predict future global temperatures. Full stop.

***********
That is just your interpretation of what NASA is saying. Personally I interpret it as them saying they can’t reliably forecast.

Just like the weatherman gives you a % chance of rain or a range of temperatures. He can’t promise rain and exactly 12 degrees at noon, but he can say with a very high level of certainty that it will not be minus 40 and snowing.

Now we all (hopefully) know that weather =/= climate, but in this case I believe that the same holds true for both.
I.e. NASA’s statement means that they cannot reliably forecast a rise of 1.8 degrees over the next decade, but that does not mean that they can’t extrapolate some information and still conclude that we are on track to raise the global average annual temperature.

#25 Blackdog on 11.16.19 at 3:41 pm

@Blacksheep,

Oh, one other thing, regarding: “So I hope this outcome causes you and them, to maybe be just a tad less critical of others, when someone’s opinion, does not always parallel their own”, according to the overwhelming majority of climate scientists, man-made climate change and its extreme threat to life on earth as we know it, is not a matter of opinion, it is a fact.

#26 Bruce Allen on 11.16.19 at 3:51 pm

CN laying off. Bombardier in Thunder Bay let another 500 go last week, just yesterday, a major employer in my town announced it is closing for good at the end of 2020, put 350 out of work, a potential major employer in London has canceled plans to open up a huge new greenhouse, placing the land back on the market. The downtown area and local mall are devoid and empty of any traffic. Absolutely dead. Except for the Dollarama, Giant Tiger, and Walmart of course. People love cheap.

Meanwhile, a big trucking firm over in the UK is on the verge of collapse, my relative in Alberta said all his buddies have been laid off, marriages are falling apart, foreclosures have soared, we’re being taxed to death for every stupid thing imaginable, there’s a mental health and opioid crisis right across this country, while the world debt has now exceeded $250 TRILLION. The planet is awash in red ink.

But, BUT–stock markets are soaring. That’s always a good sign. Right, RIGHT? Come on, we’ve gotta keep this party going at any cost, so fire up those presses and keep on printing those pretty pieces of paper we so lust after…

Don’t know about anyone else, but increasingly, I don’t trust my government. I don’t believe what our elected representatives are telling us from time to time, and I’ve reached that point in life where I’ve become pretty cynical and jaded by it all. I’ll say this much: I’m glad I have no stake in the outcome, nor do I have an emotional or vested interest in any of this garbage.

Rally on…

#27 espressobob on 11.16.19 at 3:54 pm

Active versus passive ETF?

Market timing management trying to beat a benchmark index that is passive. The majority never do.

Time proven.

#28 Yanniel on 11.16.19 at 3:56 pm

#118 crowdedelevatorfartz on 11.16.19 at 8:02 am
@#92 Yanny
“PS: I am a Millennial.”
++++

Yes, I suspected as such.
The whining about how slow the comments “sluggishly” loaded was the first clue.
Hence my self deprecatory comment about “Boomers” infesting the sight.

I’m curious as to what the children of Millennials will be called……
The Damned?

—-

“ The whining about how slow the comments “sluggishly” “

You are still missing the point. I was trying to help Garth by making him aware of what I perceived to be a technical issue on his blog that might have gone unnoticed otherwise.

I’ve never had the luxury of been whiny. Born without father to a teen age girl in a third world communist country. Immigrated as a skill worker to this wonderful place. learned a second tongue. Got a blue collar job when I arrived and from there all the way to be a Senior Engineer. Never got help from government or any others. Zero debt. Financially responsible. I am having my own kid and I am getting zero from that child benefit. And yes, and I am in the 60% that pay net income taxes. That’s a very short summary: no time to whine for this millennial.

#29 Joe Schmoe on 11.16.19 at 3:58 pm

As the wise Roman Craig once said:

“Sometimes you make 300% sometimes 200% or 100%…take the good with the bad”

#30 Dutchy on 11.16.19 at 4:04 pm

#2 Don Cherry – Realtor

I understand that Trump is looking for an immigration advisor.

#31 Blackdog on 11.16.19 at 4:11 pm

@Blacksheep, ooops, one more one more thing, regarding: ” It’s pretty F-ing hard to argue with the clear and straightforward statement, on NASA’s website. ”

You mean like this statement: “The current warming trend is of particular significance because most of it is extremely likely (greater than 95 percent probability) to be the result of human activity since the mid-20th century and proceeding at a rate that is unprecedented over decades to millennia. ”

https://climate.nasa.gov/evidence/

#32 oh bouy on 11.16.19 at 4:33 pm

@#21 Sail Away on 11.16.19 at 2:35 pm
___________________________________

fella’s ignorance finally caught up with him.

#33 tccontrarian on 11.16.19 at 5:07 pm

“Naively, I assumed that if a company was publicly listed and that millions of investors had ownership then the company had legitimacy and therefore wouldn’t fail. I also assumed, even more naively, that for a company to be publicly listed it must have been thoroughly vetted. Was I ever in for a wake-up call.” DR
—————————-

Been there, part of the learning curve – which tends to be steep in the early stages (hopefully, it flattens out over time). I call those 100% losses as “tuition fee” – euphimistically.

Now, I try to use the pro blackjack players’ approach: make the losses as small as possible, and the wins as large as possible.
So, even at 50-50 win/loss ratio (in frequency), will produce net gains.

Seems like a winning strategy…

tcc

#34 Highlander on 11.16.19 at 5:13 pm

(#22) Hey Sail Away, care to share a view only link to your boom-bust doc?

#35 Dave on 11.16.19 at 5:16 pm

I’d certainly avoid buying oil stocks….Long term doesn’t bode well, due to so many factors.

Subscribing to a newsletter for almost 10 years and none of my stocks have gone bankrupt. My return is about 9 percent over 9 years, and my fees are about $700/yr for a portfolio of about a million.

#36 Dave on 11.16.19 at 5:19 pm

“Lemme guess, when the next con government gets in and inherits a 25b annual deficit you’ll blame them for that as well?

Learn how the real world works or get run over by it.”
—————-
The last Con PM, Harper racked up the biggest deficit of any PM in Canadian history, despite record hi commodity prices….follow your own advice

#37 BS on 11.16.19 at 5:20 pm

Naively, I assumed that if a company was publicly listed and that millions of investors had ownership then the company had legitimacy and therefore wouldn’t fail. I also assumed, even more naively, that for a company to be publicly listed it must have been thoroughly vetted. Was I ever in for a wake-up call.

Sounds like an expensive wake up call. I feel sorry for anyone you were advising when you “started in the business”. You make the nice lady at the bank look like a financial genius.

#38 SunDays on 11.16.19 at 5:28 pm

#11 Sail Away

Hats off to having the stomach for ‘cigar butt’ investing. Value investing has been difficult in the last 10 years.

This is from Prem Watsa’s, Chairman of Fairfax (aka. Canada’s Warren Buffett) latest letter to shareholders:

Total Return on Investments
2009-2013 -> 4.4%
2014-2018 -> 3.1%

Link to the Letter (Page 19):
https://s1.q4cdn.com/579586326/files/doc_financials/2019/2018-Shareholders-Letter.pdf

#39 crowdedelevatorfartz on 11.16.19 at 5:41 pm

@#28 Yanny too much info (aka whining).

Soooo?
Is Greta an uber achiever like you?
The next Elon?
Build a better solar panel and all that?
It doesnt really matter, just so long as the child pays their taxes and CPP to keep me rolling in Boomer pension heaven….

#40 crowdedelevatorfartz on 11.16.19 at 5:43 pm

@#8 Noname
“A 51-year-old man has been charged with lighting an out-of-control fire in the NSW Northern Tablelands”

++++

Thats a tough way to BBQ koalas……..

#41 Remembrancer on 11.16.19 at 5:45 pm

#9 Figure it Out on 11.16.19 at 12:08 pm
People who were there will know what site (R.I.P) I am referring to.
———————————–
Ahh, that clever turn of phrase site name based on Fast Company. Yep, a clever monitor of the tech industry, I was sad to see it itself fade away…

#42 Flop... on 11.16.19 at 5:49 pm

This blog is not a matter of life and death.

It is much more important than that…

M45BC

#43 Doug Rowat on 11.16.19 at 5:56 pm

#6 VicPaul on 11.16.19 at 11:01 am

I’ve come to learn that your prudent advice to diminish risk through diversified holdings is logical and sensible….you just don’t hit any homers that way.

We model ourselves after Ichiro Suzuki not Barry Bonds.

–Doug

#44 BillyBob on 11.16.19 at 5:57 pm

#28 Yanniel on 11.16.19 at 3:56 pm
#118 crowdedelevatorfartz on 11.16.19 at 8:02 am
@#92 Yanny
“PS: I am a Millennial.”
++++

Yes, I suspected as such.
The whining about how slow the comments “sluggishly” loaded was the first clue.
Hence my self deprecatory comment about “Boomers” infesting the sight.

I’m curious as to what the children of Millennials will be called……
The Damned?

—-

“ The whining about how slow the comments “sluggishly” “

You are still missing the point. I was trying to help Garth by making him aware of what I perceived to be a technical issue on his blog that might have gone unnoticed otherwise.

I’ve never had the luxury of been whiny. Born without father to a teen age girl in a third world communist country. Immigrated as a skill worker to this wonderful place. learned a second tongue. Got a blue collar job when I arrived and from there all the way to be a Senior Engineer. Never got help from government or any others. Zero debt. Financially responsible. I am having my own kid and I am getting zero from that child benefit. And yes, and I am in the 60% that pay net income taxes. That’s a very short summary: no time to whine for this millennial.

I just wanted to weigh in to defend Yanniel.

I knew EXACTLY what he was getting at yesterday with his reference to the slow-loading response to postings. I’ve had it myself. You compose your comment, hit the Submit button, and the system stalls with no response. You’re not sure it it’s sent, so you reload the browser and try again and get the “It looks like you’re posting duplicate comments” message. If you have some idea about how servers work, you realize your comment sent and chill. For most, they’re not sure if it worked.

It’s simply a function of a slower server, latency in the connection, perhaps at times of peak loads or one not properly configured for the amount of visitors this site gets. Don’t care, it’s a free site and our host is not obligated to pay a fortune to have an Amazon-level of service. But the point is, all he was trying to do was bring it to Garth’s attention and got an uncharacteristically rude response from our host that totally missed the mark by a zillion miles. It happens.

But for other posters to then take the opportunity to pile onto the Millennial meme, (“whining” etc) well that’s just weak. Nothing I’ve ever seen from this poster suggests he fits the stereotype whatsoever and reading between the lines, if more millennials were like him we’d be a whole lot better off.

So from a Gen X’er, how about Eff off and cool it on the attacks?Completely misplaced. Just as tiresome as that Millennial Realist loser.

#45 Sold Out on 11.16.19 at 5:59 pm

My earliest impression of the safety of investing one’s hard earned funds in equity markets was coloured by my exposure to the old VSE. You know, where your stock broker/coke dealer was in cahoots with his stock pumper/tax dodger buddy. People think the RE market in YVR is like the Wild West – ha! The VSE was legendary for its shenanigans. Collapsed under the weight of its own malfeasance.

#46 Ustabe on 11.16.19 at 6:01 pm

Found myself reading this at 3am.

Long one, some big words and even bigger thoughts.

https://www.theguardian.com/world/2019/nov/14/the-great-american-tax-haven-why-the-super-rich-love-south-dakota-trust-laws

#47 Ponzius Pilatus on 11.16.19 at 6:14 pm

RE: PG&E
These corporate sleaze bags were featured in the Oscar wining movie Erin Brockovich.
Streaming on Netflix.

#48 Yanniel on 11.16.19 at 6:21 pm

#81 Loonie Doctor on 11.15.19 at 8:45 pm
#62 Yanniel

We use this income splitting strategy. My pay check goes into our joint account from which we live.

My wife’s goes to her own separate account in her name only. She invests from that account in her own separate investment account. That investment income is attributable to her. The downside is that it is hers and if she died it doesn’t just automatically become mine immediately like it would if we had a joint investment account. We have radically different income levels. So, for us the tax savings is a bigger concern than that.
-LD

——

Thanks LD.

#49 Ponzius Pilatus on 11.16.19 at 6:22 pm

Never understood how these Internet companies with no profit could command billions in market valuations.
It shows that Mr. Market is not always right.
Or am I wrong?

#50 Gravy Train on 11.16.19 at 6:39 pm

#15 Blacksheep on 11.16.19 at 1:48 pm
“Some food for thought Blackdog, we’ve been going back and forth a few times with our comments, yet none of the other climate [change] defenders on this blog, has jumped right in, to correct my non critical thinking?” I’ve long ago given up on the idea of trying to convince everyone to listen to the climate scientists; rather, I point out that solar photovoltaics and wind turbines are good investments that save everyone money on energy costs. Whether I’ve ‘moved the needle’ at all on alternative energy usage is moot. :)

#51 crowdedelevatorfartz on 11.16.19 at 6:50 pm

I’m beginning to think….it wasnt the Boomers that created this mess….
Its the Millennials breeding like Wascally Wabbits…

https://www.worldometers.info/world-population/

#52 Lost...but not leased on 11.16.19 at 7:00 pm

#49 Ponzius Pilatus on 11.16.19 at 6:22 pm
Never understood how these Internet companies with no profit could command billions in market valuations.
It shows that Mr. Market is not always right.
Or am I wrong?

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

This is like pro sports teams…
EXAMPLE:Indy Colts NFL team owner was offered around $ 2 Billion..

The logic is there is no logic…its a hell game that will continue..every current and future owner knows this illogical inflation will continue

#53 oh bouy on 11.16.19 at 7:03 pm

@But for other posters to then take the opportunity to pile onto the Millennial meme, (“whining” etc) well that’s just weak. Nothing I’ve ever seen from this poster suggests he fits the stereotype whatsoever and reading between the lines, if more millennials were like him we’d be a whole lot better off.

So from a Gen X’er, how about Eff off and cool it on the attacks?Completely misplaced. Just as tiresome as that Millennial Realist loser.
_______________________________________

hilarious. you of all commenters telling folks to cool it with the attacks. lmao.

#54 Sail Away on 11.16.19 at 7:07 pm

#34 Highlander on 11.16.19 at 5:13 pm

(#22) Hey Sail Away, care to share a view only link to your boom-bust doc?

————————————–

Sure. Email [email protected].

#55 Damifino on 11.16.19 at 7:07 pm

#50 Gravy Train

You may find the link below interesting. You needn’t watch the video, just check out the second graph down the page which seems to directly contradict your statement…

I point out that solar photovoltaics and wind turbines are good investments that save everyone money on energy costs

https://industrialprogress.com/fossilfueldebate/

#56 crowdedelevatorfartz on 11.16.19 at 7:09 pm

@344 BillyBob
“So from a Gen X’er, how about Eff off and cool it on the attacks?Completely misplaced. Just as tiresome as that Millennial Realist loser.
+++

Fair enough. The idea I’m in the same troll-scape as Millennial Surrealist is a cold slap to wake me up.
My apologies to Yanniel.

God knows with the amount I post I have gone through the “looks like you posted that before” message many many times.
Didnt really upset me too much.
Patience is a virtue ….. i finally learned in my Boomer-age 50’s
But back to the really important question.
You’re a gen-X?

#57 oh bouy on 11.16.19 at 7:13 pm

@#46 Ustabe on 11.16.19 at 6:01 pm
_____________________________________

back to feudalism we go.

#58 Yukon Elvis on 11.16.19 at 7:26 pm

Pope Francis, who has made the environment a signature cause of his pontificate, said he was strongly considering adding the category of “ecological sin” to the Catholic Church’s official compendium of teachings.
https://moneymaven.io/mishtalk/economics/pope-proposes-new-sin-thou-shalt-not-destroy-the-harmony-of-the-environment-XBp1z-kj202jU1piaRQxLA/

#59 crowdedelevatorfartz on 11.16.19 at 7:27 pm

@#53 Oh Bouy
“hilarious. you of all commenters telling folks to cool it …’
+++++
Sorry my maritime aficionado….but

Many years ago i learned……

Do NOT piss off the pilot…

#60 Nonplused on 11.16.19 at 7:38 pm

I would argue that ETF’s are just as exposed to bankruptcies as the over all market and they still affect returns, the main advantage being that the exposure to bankrupt companies is not as disastrous as “having all your eggs in one basket” can be. The secret to starting over is having some money left with which to start over, and ETF’s and a balanced portfolio minimize the risk you’ll lose it all at once on a sure thing like Telsa. Or Nortel. Or Bre-X. Or PG&E.

I remember reading stories about people who had lost everything when Bre-X collapsed, because it was literally the only stock they owned. But I wonder how many of them actually put the family savings in at the top, rather than had experience wild gains and then had that paper wealth wiped out.

Even Doug Casey has admitted that Bre-X was his first big win, but that was because he got in early, smelled a rat before the crowd, and got out, not because he got in. The key metric with Bre-X, even before people started jumping out of helicopters and moving to Bermuda, way before the “salting” scandal came to light, was that even if the enormous amounts of gold claimed to be in the deposit were already above ground in bar form and sitting in a warehouse waiting to be sold, the company was still overvalued. No mining costs were included. People were just drawing a line on a chart. This is what a bubble looks like. We have many examples today, like Tesla of course, but also WeWork, Uber, AirBnB, and many others. These companies appear to have no road to profitability, and certainly no level of profitability that would support current valuations. Shareholders are pricing in a tremendous amount of “growth”. But how fast can a company like Tesla actually grow when their #1 market can’t keep the power on and the rest of the automakers are gunning for them? It looks like Tesla’s most profitable venture will be charging stations so people can recharge there Nissan Leafs because they got out in front of that market. But the rest of the company his headed for bankruptcy.

Bankruptcies can happen to any company that uses leverage to expand. I worked for a large US power producer that went from strong earnings to chapter 11 in just a few years because of the shale gas boom. They had a lot of legacy coal plants that were no longer competitive once natural gas prices collapsed (coal and gas compete in the electric market). Normally you would expect that coal prices would go down too but they had a few long term contracts and the mines would not renegotiate, so chapter 11 it was. The mines shot themselves in the foot because the contracts were the first thing dismissed by the judge. The thing is the company had to be maintained as an ongoing concern (in other words the power plants had to remain functional) because they were critical to the US power grid. So the mines sucked all the money they could out of the company, the company filed chapter 11, and the contracts were ditched. This was during good economic times.

All of this will, I predict, cause another 2001 California style energy crises at some point in the future. Natural gas storage is limited, whereas coal can just be piled up outside the plant for use it the winter. That coal isn’t being piled up so much anymore. What that means is that if it gets cold, once the gas pipes are at capacity, there won’t be enough power. Screwed by the government again.

Trump was right about the coal industry, even though he fell through on his promise to revitalize it and the mines are still closing. There simply isn’t at present enough generation from other sources to meet peak demand without coal. But yet coal is unprofitable due to regulations and over-drilling shale. A shock is coming, and this time it won’t affect just California and New York.

As a sort of aside, the California energy crises in 2001 wasn’t caused by Enron, although they certainly took advantage of the situation and exacerbated it for their own profit, using some dirty tricks that were not envisioned by the regulators. Enron had some smart people working for them, and they saw right through the new regulations. It was as if they had been given permission to pillage. So here is what really happened: The California GOVERNMENT was convinced or decided that the power market should be deregulated and de-integrated, so companies like PG&E were forced to sell off their power plants to non-regulated companies. That wouldn’t have been so bad but then they were also made to buy their power on a newly created “spot” market (i.e. you buy the power on the day you are using it without long term contracts). Even that wouldn’t have been so bad except for the final edict from government, which killed them: PG&E (and others) still had to sell the power to customers at a fixed price preset before the crisis. A classic naked short. Do you think the people who invented the weather derivative wouldn’t see this coming? The problem was that with retail prices fixed, customer demand would not respond to the pricing pressure that was occurring in the wholesale market. Demand did not fall, even when Enron, Reliant, and others reduced supply through “plant outages”. PG&E had to pay extortionate prices for power but could only charge a low fixed rate. It quickly bankrupted them, in just one season. 4 months from profitability to bankruptcy. Yes, you can say that what Enron and Reliant did was evil, but the government of California created those conditions where it could happen themselves. This was probably the first experience I had that convinced me that government interference in a functioning market can only lead to woe and sorrow. Many pensioners lost their livelihood. The prosecution of Enron did not return it to them.

My biggest fear with ETF’s and the market in general, is what if there is an even bigger entity out there hiding in the shadows that aims to take down not just one company like Enron did to PG&E, but all of them at once? I have more than one example in my experience where a market moved well outside normal valuations because a guy with a billion dollars and leverage behind him could move the market, and then not know he was painting his own mark to market. But then somebody else with a billion behind him would come in and destroy the party.

You have to be like Doug Casey, and realize when your own investment is distorting the market, and play it accordingly. Right now this is pretty much all stocks, because everyone is just pumping money into ETF’s. There will be a major correction. But the balanced portfolio will leave those who survive with money to buy the lows.

A further side note: I wonder if ETF’s are actually facilitating the frauds like Tesla and Uber. I mean all you really have to do is get listed and that tasty EFT money just starts flowing in, and the higher the stock price goes, the more tasty ETF money you get. No sane financial analyst would buy Tesla, but I think the ETF’s have to. When the company does finally collapse, the lenders get a nation-wide charging network courtesy of the now penniless shareholders. Yes, folks, Wall Street is filled with devious minds that think exactly like that. Many of them used to work for Enron. Why go into the high risk business of building electric cars when you will face competition from Nissan, BMW, Volvo, Ford, GM, Toyota, even probably Hyundai, and maybe Chinese entrants, when instead you can own all the charging stations? These people are not stupid. But they see 2 or 3 moves further than the rest of us can on the chess board.

#61 Gravy Train on 11.16.19 at 7:49 pm

#55 Damifino on 11.16.19 at 7:07 pm
“You may find the link below interesting. You needn’t watch the video, just check out the second graph down the page which seems to directly contradict your statement…” Alex Epstein? Really? So you won’t mind, then, if I continue to pay just the basic charge of $22.75 on my bimonthly power bills? :)

#62 Nonplused on 11.16.19 at 7:59 pm

Oh and I forgot my side beside the side point. I wonder if PG&E would have allowed their infrastructure to decay to the point they were starting wildfires if they had not been eviscerated in 2001 by the policies of the California government in 2000, and before and since. If sparks sometimes happen, shouldn’t you clear the brush below the lines? But bankrupt companies have a hard time coming up with the money to do that. But even if PG&E had the money, they weren’t allowed to anyway due to environmental legislation. A few dried out bushes are more important now than raging forest fires. (PS Trump was right about that too.)

Something is deeply, deeply wrong with California. I don’t remember a major forest fire being blamed on power lines anywhere around here. Or anywhere else for that matter. Even the great North East blackout, supposedly set in motion by a power line hitting a tree, didn’t start a fire.

#63 Sail Away on 11.16.19 at 8:03 pm

#15 Blacksheep on 11.16.19 at 1:48 pm

2) Some food for thought Blackdog, we’ve been going back and forth a few times with our comments, yet none of the other climate defenders on this blog, has jumped right in, to correct my non critical thinking?

—————————–

Mostly because we (well, me anyway) lost interest in your personal feud. Can’t you two just go in a phone booth and settle this?

#64 Ponzius Pilatus on 11.16.19 at 8:16 pm

#52 Lost…but not leased on 11.16.19 at 7:00 pm
#49 Ponzius Pilatus on 11.16.19 at 6:22 pm
Never understood how these Internet companies with no profit could command billions in market valuations.
It shows that Mr. Market is not always right.
Or am I wrong?

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

This is like pro sports teams…
EXAMPLE:Indy Colts NFL team owner was offered around $ 2 Billion..

The logic is there is no logic…its a hell game that will continue..every current and future owner knows this illogical inflation will continue
—————
I think this is more like Uber rich owners having too much money and ego.
I was thinking more how unproven companys like Uber go public and immediately their market values go bananas.

#65 Doug Rowat on 11.16.19 at 8:29 pm

#37 BS on 11.16.19 at 5:20 pm

Sounds like an expensive wake up call. I feel sorry for anyone you were advising when you “started in the business”. You make the nice lady at the bank look like a financial genius.

I was advising no one. I was answering phones on the trading desk, running to the food court to get the traders their lunch and picking up dry cleaning for the SVPs.

No learning curve ever for you BS? Draining 3s like Steph Curry the second you got drafted?

–Doug

#66 crowdedelevatorfartz on 11.16.19 at 8:30 pm

@#62 Nonplused
“Something is deeply, deeply wrong with California. I don’t remember a major forest fire being blamed on power lines anywhere around here. Or anywhere else for that matter.”
++++

Thank the litigious society we live in…….

Your other previous comments in #60…..very interesting

#67 DON on 11.16.19 at 8:30 pm

As mentioned by others above, the stories of layoffs are surfacing more so lately. TECK Resources in BC was also in the media recently. World economy slowing down…is the US-China Trade Warming too late? Jobs are still being advertised in other disciplines, but you gotta wonder for how much longer. Local government postings are slowing down and property tax increases are coming, the majority of revenue for most municipalities. Conditions that brought on the boom seem to be languishing. Word travels faster these days.

#68 Blackdog on 11.16.19 at 8:38 pm

@Sail Away,

Sad you don’t care about what is arguably the most important issue of our times. Excuse me for getting passionate about it. Just the way I am. I care.

#69 Shawn Allen on 11.16.19 at 8:43 pm

PG& E

#62 Nonplused on 11.16.19 at 7:59 pm
Oh and I forgot my side beside the side point. I wonder if PG&E would have allowed their infrastructure to decay to the point they were starting wildfires if they had not been eviscerated in 2001 by the policies of the California government in 2000, and before and since.

**************************
I was involved with utility regulations for 26 years including 12 working for the regualtor.

PG&E issues definitely include poor regulation.

There is a “deal” in utility regulation. Reasonal profifits and low risk as long as the utility is prudently run. Pretty easy.

Most utilities are EAGER to upgrade equipment becasue they earn a percent return on assets invested to serve customers. More assets, more profits.

I am pretty sure California has broken the deal and shafted the utility share owners more than once.

#70 DON on 11.16.19 at 8:44 pm

#63 Sail Away on 11.16.19 at 8:03 pm

#15 Blacksheep on 11.16.19 at 1:48 pm

2) Some food for thought Blackdog, we’ve been going back and forth a few times with our comments, yet none of the other climate defenders on this blog, has jumped right in, to correct my non critical thinking?

—————————–

Mostly because we (well, me anyway) lost interest in your personal feud. Can’t you two just go in a phone booth and settle this?
******

My thoughts exactly.

Can’t you guys just agree that Humans are polluting our air, water, land and work to clean that up. The Earth’s climate and geology are continuously changing, there is evidence of it. The current thought is that 4 billion years from now our Sun will burn out regardless of humans and earth. We are affected by the universe around us, which are affected by other universes. Problem solved – let’s solve the recycling crisis as a first step.

#71 Shawn Allen on 11.16.19 at 8:46 pm

On Bankruptcy

I don’t mind a certain amount of corporate debt. But I have long said that a company with no debt will seldom ever go bankrupt. That’s been my experience over the past 30 years. It’s difficult to go bankrupt if you have no debt.

#72 NoName on 11.16.19 at 8:46 pm

#64 Ponzius Pilatus on 11.16.19 at 8:16 pm
#52 Lost…but not leased on 11.16.19 at 7:00 pm
#49 Ponzius Pilatus on 11.16.19 at 6:22 pm
Never understood how these Internet companies with no profit could command billions in market valuations.
It shows that Mr. Market is not always right.
Or am I wrong?

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

This is like pro sports teams…
EXAMPLE:Indy Colts NFL team owner was offered around $ 2 Billion..

The logic is there is no logic…its a hell game that will continue..every current and future owner knows this illogical inflation will continue
—————
I think this is more like Uber rich owners having too much money and ego.
I was thinking more how unproven companys like Uber go public and immediately their market values go bananas.

zero dude got chart for that, money part.
https://twitter.com/zerohedge/status/1195452176107278336

#73 Shawn Allen on 11.16.19 at 8:50 pm

ETFs

Encana is changing its “domicile” (registered address, not head office) to the U.S. for the sole reason to get into the American ETFs which they think will increase their share price.

Stocks should determine the value of ETFs. Not the other way around. A bit of a sign of danger.

#74 Shawn Allen on 11.16.19 at 8:57 pm

Share Holder:

This term should never be used. Instead, insist on being know as a share owner. A share holder sounds transient. That is reality in many cases but those who intend to own for a longer term should insist on being addressed as share owners. Or just owners.

If Investor relations thanks you “for your interest” in a company you own shares in then thank them back for being part of your hired help. The will endear them to you.

Jeff Bezos at Amazon calls those who own Amazon shares, Share Owners. That’s the only example I know. Jeff is right. Well, Buffett is another example, he calls owners partners. Buffett is always right in things like this.

#75 SoggyShorts on 11.16.19 at 9:47 pm

#36 Dave on 11.16.19 at 5:19 pm
“Lemme guess, when the next con government gets in and inherits a 25b annual deficit you’ll blame them for that as well?

Learn how the real world works or get run over by it.”
—————-
The last Con PM, Harper racked up the biggest deficit of any PM in Canadian history, despite record hi commodity prices….follow your own advice
***********
Please tell me you’re not talking about the guy who got us through the great recession? You can’t be serious…

#76 Sail Away on 11.16.19 at 10:11 pm

#68 Blackdog on 11.16.19 at 8:38 pm
@Sail Away,

Sad you don’t care about what is arguably the most important issue of our times. Excuse me for getting passionate about it. Just the way I am. I care.

——————————-

That’s your opinion. Always remember that.

#77 not 1st on 11.16.19 at 10:12 pm

Baffinland lays off 586 contract employees, halts planned work

https://nunatsiaq.com/stories/article/baffinland-lays-off-586-contract-employees-halts-planned-work/

#78 Blackdog on 11.16.19 at 10:20 pm

@Don #70, Your make a good point. People need to work together to fight man-made climate change, rather than debate the science behind it. Thank you.

#79 Linda on 11.16.19 at 10:23 pm

Excellent post & a timely reminder that the only certainty in life is death & taxes:). Seriously, even good, stable companies can get blown out of the water by the speed of events. During the 2008 GFC not a few respected firms went underwater because their funding suddenly vanished & loans were called due. These were not companies taking foolish risks, just hapless bystanders who were in effect collateral damage due to circumstances beyond their control.

#80 Nonplused on 11.16.19 at 11:18 pm

#73 Shawn Allen

Encana’s head office and e-suite has been co-located between Denver and Calgary since the Tom Brown acquisition. It was only a matter of time before they moved the head office since they were already moving all the capital. There is no point drilling in Alberta anymore, the pipes are full.

#81 Steven Rowlandson on 11.16.19 at 11:19 pm

Now that cannabis is legal and there is indeed a lot of money invested in production and distribution has it occurred to people that too much emphasis has been put on the whole thing since it is unlikely that there will be significantly more users than there were when cannabis was illegal. Has the underground economy in drugs disappeared? Not likely. So the risk is that there will be a limit to new customers and existing users will still be supplied by those that deal in drugs unless the legal suppliers can compete when it comes to price and quality.

#82 Lorne on 11.16.19 at 11:25 pm

#75 SoggyShorts on 11.16.19 at 9:47 pm
#36 Dave on 11.16.19 at 5:19 pm
“Lemme guess, when the next con government gets in and inherits a 25b annual deficit you’ll blame them for that as well?

Learn how the real world works or get run over by it.”
—————-
The last Con PM, Harper racked up the biggest deficit of any PM in Canadian history, despite record hi commodity prices….follow your own advice
***********
Please tell me you’re not talking about the guy who got us through the great recession? You can’t be serious…
…….
Oh, you mean by juicing the real estate market with ridiculous 0% down and 40 year term mortgages….so that the common folk can no longer afford to live in many areas of the country. Brilliant!

#83 Nonplused on 11.16.19 at 11:42 pm

#66 crowdedelevatorfartz

I had some really good seats for the energy debacles over the years. When the kids are fighting, you don’t really know what’s going on unless you are in the playground and saw it for yourself.

One other thing I learned while working for the unnamed US power company is how often they press the start button on these giant generators and it just won’t go. Everything from a cracked turbine blade to ice in the cooling intake, to at times LOF (lack of fuel). How can you have a freaking lack of fuel? You’ve had all summer to set this up. This gave Enron and Reliant perfect cover. No long term contract, so no penalties. Wouldn’t you know it we’ve had a boiler tube problem and can’t run for 4 days.

One of the features of deregulation was a drastic reduction in maintenance. A lot of these plants don’t run for years at a time, only under peak conditions, especially the oil burners (which are usually located close to the market and only run when the temperature is extremely cold). And then they might only run for a few days. They used to get standby money, but now they don’t. So the owners increasingly looked at them as sunk costs as they still had to keep the lights on, fuel in the bunker, and pay the staff. Well, costs had to be cut somewhere, and maintenance took a big hit. I mean if it hasn’t run in 3 years why spend money on it? But then the cold front comes in and it takes a week to get the thing running and by that time the cold front has gone out, so even if you fix it, it might not run. Meanwhile power prices go from cents to 100’s of dollars.

The power companies seldom make a lot of money off the price spikes, because they have to forward sell their power at fixed prices in order to obtain the credit to buy their fuel. The banks make all the money off these orchestrated events, because they are on both sides of the hedging. Then, when the company goes bankrupt, guess who has the title to the plants themselves? The banks. They keep title to the plants, keep the original management in place to keep them running, lay off a bunch of people, shaft the shareholders leaving them virtually nothing, shaft the supply chain, shaft other lenders and bondholders, and then carry on next week as if nothing had happened.

And then management comes in and screws everything up. One particular oil burner I am familiar with, during the last big power spike in New York they burned through all their fuel (they store the oil in huge tanks on site). So they brought in a few barges of bunker oil at elevated prices, but they hedged it by selling power forward. Prices then came down but all was good because they had their hedges, right? Wrong. Management took all the money from the hedges into income in the current year even though they didn’t use the oil. So now it looks on the books like they have all this expensive oil in inventory. The brainiacs from the business schools wanted to actually drain the tanks and sell the oil to reduce the “carry cost”. Ok Mr. economist, what do we do the next time a cold front comes in then? A barge of oil isn’t exactly next day delivery.

Too many politicians and lawyers and economists. That’s what ails the nations. When engineers run things, sure the base price is a bit more but you never get a price spike or a brown out.

#84 WUL on 11.16.19 at 11:51 pm

Off topic, but relevant on the Don Cherry contretemps.

Hometown Hockey with Ron MacLean and Tara Slone is in Fort McMurray next weekend.

I’ll be there. Waving to you all dressed as a Springer Spaniel. Dawgs and all that.

Must viewing. I’ll be the short, grey haired guy looking like a lawyer in a dog costume, six piece silk suit and mukluks.

Speaking of stocks going to zero…

WUL

#85 cowtown cowboy on 11.17.19 at 12:07 am

#65 Doug Rowat on 11.16.19 at 8:29 pm

#37 BS on 11.16.19 at 5:20 pm

Sounds like an expensive wake up call. I feel sorry for anyone you were advising when you “started in the business”. You make the nice lady at the bank look like a financial genius.

I was advising no one. I was answering phones on the trading desk, running to the food court to get the traders their lunch and picking up dry cleaning for the SVPs.

No learning curve ever for you BS? Draining 3s like Steph Curry the second you got drafted?

–Doug
Don’t let pin heads like this guy get to you Doug…they’re always the smartest guy in the room…

I’ve made numerous mistakes in my ‘investing’ career, like selling Nortel at $120 and then buying it back again and riding it down to 0…I still have the share certificates that I should frame and mount on my wall for whenever I think I’m smarter than the rest, I’ve had numerous O&G stocks disappear on me in the last few years..but I can at least blame the gov’t for part of that…

Keep up the good work, you’ve helped save me from losing all my money!

#86 Dumb Wealth on 11.17.19 at 12:08 am

The first step to becoming a good investor is to first realize that you’re a bad investor. This will help lose the overconfidence and thus any large speculative bets.

I suck at investing…so I remove unsystematic risk from a portfolio by diversifying.

https://dumbwealth.com/how-to-become-a-better-investor/

#87 Yanniel on 11.17.19 at 1:00 am

#44 BillyBob on 11.16.19 at 5:57 pm

Thank you. You explained my thinking better that I could.

#56 crowdedelevatorfartz on 11.16.19 at 7:09 pm

No need for apologies. This drink is to your health.

#88 SunDays on 11.17.19 at 2:17 am

#71 Shawn Allen on 11.16.19 at 8:46 pm
On Bankruptcy

I don’t mind a certain amount of corporate debt. But I have long said that a company with no debt will seldom ever go bankrupt. That’s been my experience over the past 30 years. It’s difficult to go bankrupt if you have no debt.

————-

Torstar Corp has an ok balance sheet and still circling the drain. We will see what happens.

https://www.bnnbloomberg.ca/torstar-suspends-dividend-until-at-least-late-2020-stock-plunges-1.1339909

#89 BillyBob on 11.17.19 at 4:26 am

53 oh bouy on 11.16.19 at 7:03 pm
@But for other posters to then take the opportunity to pile onto the Millennial meme, (“whining” etc) well that’s just weak. Nothing I’ve ever seen from this poster suggests he fits the stereotype whatsoever and reading between the lines, if more millennials were like him we’d be a whole lot better off.

So from a Gen X’er, how about Eff off and cool it on the attacks?Completely misplaced. Just as tiresome as that Millennial Realist loser.
_______________________________________

hilarious. you of all commenters telling folks to cool it with the attacks. lmao.

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

So – you choose a post I defend someone with as the one to respond to – I take it you don’t have the chops to debate one you consider an “attack”? :-)

It’s true I have no problem with calling people out for their whining or misinformation, Millennials/Boomers, whomever, I don’t discriminate. But I’ve never generalized about entire demographics. I’ve met too many good/awful people in my life from every conceivable place on every possible spectrum to do that. It’s intellectually lazy.

Hence I consider posters individually and I’ve never seen Yanniel complain, quite the opposite. Seems a pretty accomplished individual. I had the same issues he did with the site and pointed it out. Intended as an FYI, nothing more.

One of the things I like about crowded fartz guy is he doesn’t take himself too seriously (duh) and doesn’t have a problem with cheerfully admitting he may have misjudged.

Could use a little more of that these days, hmm?

#90 Remembrancer on 11.17.19 at 7:35 am

#70 DON on 11.16.19 at 8:44 pm
Can’t you guys just agree that Humans are polluting our air, water, land and work to clean that up.
——————–
Ahh, good one Don, slipping into a human-driven climate change debate with the “clean up pollution” gambit. A position which is indefensible to oppose and equally important; the multi-verse angle is a new twist though, well done on that sir. I nominate you for the non sequitur trophy of the day… (a soapstone carving of a drowning polar bear with a six-pack ring around its neck strangling it at the same time btw).

#91 crowdedelevatorfartz on 11.17.19 at 8:54 am

@#83 Nonplused
“One particular oil burner I am familiar with, during the last big power spike in New York they burned through all their fuel (they store the oil in huge tanks on site). So they brought in a few barges of bunker oil at elevated prices, but they hedged it by selling power forward.”
+++++

Interesting.
I worked for a company that decided a decade or so ago that buying cheaper “interruptable supply” Natural Gas for their boilers was a great idea.
Until, a few years later,a record cold snap hit the Lower Mainland and the gas supply was cut off.
Noninteruptable gas is for hospitals, schools, etc AND people that pay the higher price. Gotta love smart meters that can shut your supply off with a computer click.
Anywho.
With 8 duel fuel boilers that could also run off home heating oil we sucked an 18 wheeler tanker dry every two days…( something about a record cold snap that does that).
With the added benefit that the home heating oil burns dirtier than Nat gas and fouls the heat exchangers in the high efficiency boilers faster.
So every day, one boiler would have to be shutdown, torn apart and cleaned.

I’m sure one group of accountants were patting themselves on the back for the ‘savings” when interruptable fuel was purchased while another group of accountants were freaking over the extra labour to clean the boilers…..
Geniuses all.

#92 NoName on 11.17.19 at 9:02 am

#78 Blackdog on 11.16.19 at 10:20 pm
@Don #70, Your make a good point. People need to work together to fight man-made climate change, rather than debate the science behind it. Thank you.

People kind everything, and man made climate change in Same sentence… Sounds like line taken from komunisam how to TXT books.

That is funny.

#93 NoName on 11.17.19 at 9:43 am

Interesting table from 2008 mit study environmental impact vs profesion vs income vs energy. i just ont know how comma patient fits in all that, but anyways its there. I wonder how long before great unplugging begins…

Look at those soccer moms, more income but less carbon foot print than ingenners…

Iam thinking ultimate goal is to be budist monk or homeless if you would like to save planet, definitely not to be progolfer.

https://imgur.com/a/eoIJl9H

#94 not 1st on 11.17.19 at 10:14 am

How bad is our leadership under Trudeau? Well so bad that our trade with the worlds largest democracy India has fallen by more than half since his costumed fiasco.

We should be selling them commodities hand over fist. They want nothing to do with Canada so long as woke boy is in there.

Things are so bad that a respected former PM had to be hired to go salvage something of the trade. India is the next china and we should be all in with them.

https://www.cbc.ca/news/canada/saskatchewan/sask-hires-harper-asian-trade-1.5360660

Wonder how many progressive SJW we will have when the country is in a depression in a few yrs. 905 really screwed Canada good this time. They can own it.

#95 Shawn Allen on 11.17.19 at 10:39 am

Why are interest rates so low?

I have posted my own conclusion (based on much reading and financial education) that low interest rates and huge debt implies we also have huge savings. It’s a wealth gap issue. The (pick a number) 10% are flush with savings that are loaned to the 90%. The nature of bank money creation (which creates deposits owned by the 10% and loans owed by the 90%) facilitates this.

Enough of my views. I mean I am no recognized well renowned expert (except to the long-time readers here). Here is how the renowned expert Ray Dalio sees it:

“Money is free for those who are creditworthy because the investors who are giving it to them are willing to get back less than they give. More specifically investors lending to those who are creditworthy will accept very low or negative interest rates and won’t require having their principal paid back for the foreseeable future. They are doing this because they have an enormous amount of money to invest that has been, and continues to be, pushed on them by central banks that are buying financial assets in their futile attempts to push economic activity and inflation up.”

#96 Doug Rowat on 11.17.19 at 11:02 am

#86 Dumb Wealth on 11.17.19 at 12:08 am

The first step to becoming a good investor is to first realize that you’re a bad investor.

Correct. And just because I’ve seen Laurence Olivier in Marathon Man doesn’t make me a dentist.

With investing, if your tooth hurts, go to an expert.

–Doug

#97 Ponzius Pilatus on 11.17.19 at 12:05 pm

#83
you’re making a good case for privatizing utilities.

#98 Damifino on 11.17.19 at 12:11 pm

#61 Gravy Train

Alex Epstein? Really?
—————————–

That sounds vaguely Ad Hominem. Anyway, Epstein got the data and the graph from Samuele Furfari.

https://www.desmogblog.com/samuele-furfari

Have you got any insights arising from a criticism of the data or its conclusions rather than its presenter?

#99 SoggyShorts on 11.17.19 at 12:16 pm

#82 Lorne on 11.16.19 at 11:25 pm
#75 SoggyShorts on 11.16.19 at 9:47 pm
#36 Dave on 11.16.19 at 5:19 pm
“Lemme guess, when the next con government gets in and inherits a 25b annual deficit you’ll blame them for that as well?

Learn how the real world works or get run over by it.”
—————-
The last Con PM, Harper racked up the biggest deficit of any PM in Canadian history, despite record hi commodity prices….follow your own advice
***********
Please tell me you’re not talking about the guy who got us through the great recession? You can’t be serious…
…….
Oh, you mean by juicing the real estate market with ridiculous 0% down and 40 year term mortgages….so that the common folk can no longer afford to live in many areas of the country. Brilliant
‐——————–
Yeah, it and other measures worked. Or wouth you rather that those “common folk” all lost their jobs?
And by ” many areas” of the country you mean 2, right?

“The Conservative government of Stephen Harper remained in power with an increased minority after the federal election of 14 October 2008. During the campaign, the Conservatives promised to keep the federal budget in balance, and its fiscal update of 27 November outlined measures to restrain spending in order to avoid going into deficit. Subsequent economic and political developments — including an attempt by opposition parties to form a coalition government — forced the Conservatives to back away from this position. The Harper government introduced a budget on 27 January 2009 that included a two-year stimulus program, mainly on infrastructure spending”

What would you or your beloved non-con government have done about the financial crisis of 2008?

#100 Lost...but not leased on 11.17.19 at 12:18 pm

#95 Shawn Allen on 11.17.19 at 10:39 am
Why are interest rates so low?

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

Because we will likely never see high interest rates. The economy has cornered itself with no wriggle room.

Like housing market..people would borrow at say 3%…flip and make double digit returns.

Works well till it doesn’t.

#101 Ponzius Pilatus on 11.17.19 at 12:18 pm

#91
ok. let’s promote engineers to CEOs and see what happens.
Can’t even fix a crack in a Richmond community pool.

#102 Ronaldo on 11.17.19 at 12:35 pm

#45 Sold Out

My earliest impression of the safety of investing one’s hard earned funds in equity markets was coloured by my exposure to the old VSE. You know, where your stock broker/coke dealer was in cahoots with his stock pumper/tax dodger buddy. People think the RE market in YVR is like the Wild West – ha! The VSE was legendary for its shenanigans. Collapsed under the weight of its own malfeasance.
————————————————————-
Yep. Got caught up in that as well at a very early age. Remember “The Pez”?

Apparently stock brokers had a ‘sucker list’. I think maybe I was on that list as got suckered a couple times. Live and learn. Luckily I learned early.

https://www.vancourier.com/community/vancouver-special/downtown/downtown-defunct-vse-had-colourful-history-1.385377

#103 Ponzius Pilatus on 11.17.19 at 1:02 pm

Just read up on WeWork and Softbank.
Just makes my blood boil.
——-

On September 24, 2019, it was announced that Adam Neumann would step down as CEO of the company due to backlash during the IPO process.[68] In a statement, Neumann responded, “While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive.”[69]

Neuman’s exit package was valued at US$1.7 billion, with $970 million for his remaining shares, a $185 million consulting fee and a $500 million in credit to assist him to repay his loans to J.P. Morgan Chase.[70]

#104 DON on 11.17.19 at 1:08 pm

Just to be clear on the climate change thoughts.

I agree that humans are contributing to climate change to some degree. All I am saying is that we have a pollution issue and we should focus on that which is an immediate crisis. By cleaning up our environment we are providing a service to all living creatures on this planet and to future generations. Can we get off oil, coal, wood etc – obviously not yet, but science is progressing and will continue to do so. Just like the Earth will continue on it’s own cycles.

Arguing about whether or not humans are pushing the climate over the tipping point is preventing us from getting off the couch and cleaning up our own ‘back yards’.

Observation: Even the most remote beaches are littered with plastic. On one extended hike I spent a half hour picking up plastic, bottles etc and collected a large pile and I only covered about 300 ft of beach front. It was disheartening, the Ranger told me that there is too much to deal with. So they stack it in the bush, leaving it there.

So we are basically we are standing in our own garbage/shit arguing whether or not we are impacting our environment.

The carbon tax is used for what exactly? If the funds are going directly to clean up our current mess than so be it…but I have yet to see or hear about it. Would love to be wrong on this one.

#105 Mr Fundamental on 11.17.19 at 1:22 pm

Hooray, more love for ETFs! Stock picking is for suckas.

#106 Russ on 11.17.19 at 2:19 pm

DON on 11.17.19 at 1:08 pm

Just to be clear on the climate change thoughts.

I agree that humans are contributing to climate change to some degree…

The carbon tax is used for what exactly? If the funds are going directly to clean up our current mess than so be it…but I have yet to see or hear about it. Would love to be wrong on this one.

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

The B.C. carbon tax goes into general revenue. The Feds tax the B.C. carbon tax as a “Goods” or a “Service”. This to goes to general revenue.

I hope that helps, ’cause it sure don’t help me.

Climate change has been monetize. All levels of government, science community, protest organizations and many others benefit from increasing the urgency in the people’s minds.

It is desirable if you make money off the meme by elevating the action to DevCon 3, crisis level.
Review history and you will see this type of action used in the Cold War, War on Terror, 9/11 travel, etc.

So, what can we do about it as investors, especially the one percenters?

BTW, check out the ice core samples analysis going back millions of years. A spike in atmospheric CO2 levels ALWAYS precede an ice age.

But this time it’s different!

Uh huh.

#107 Tony on 11.17.19 at 3:00 pm

Re: #102 Ronaldo on 11.17.19 at 12:35 pm

All you had to do was buy up everything when it dropped to one cent or one half a cent. This still worked after the index peaked around the 2,400 level in 1983. At least we got to see what happens to a stock market index that wasn’t manipulated to the moon and the stars like the U.S. market today.

#108 David on 11.17.19 at 3:10 pm

Cannabis stocks IPO’s were entirely based on some ground floor opportunity hype for companies with no record of generating profits or paying dividends and the hopes of cashing in on some multi billion industry. The whole legalisation and stock market listed LPs was a failure waiting to happen. It was never a supply issue as it was falsely assumed. There were already likely thousands of Mom and Pop informal grow ops and vendors functioning untaxed and unregulated for decades. The online market makes it even tougher for the exchange listed LPs to make money.
One of the best things investors should do is always ask themselves about good reasons NOT to invest. Whatever happened to Blackberry and Nortel?

#109 Leo on 11.17.19 at 3:18 pm

@Blacksheepdog I think you are the same person arguing with yourself.

#110 David on 11.17.19 at 3:19 pm

Ronaldo, the old VSE was Canada’s answer to the NASDAQ pinks. The market was called politely weak form efficient, mostly thinly capitalised shell companies with few if any assets and low trading volumes. People promoting things like precious metal extraction windfalls for investors was one of the big things.

#111 Tim on 11.17.19 at 3:39 pm

How do you define an expert Doug? If most portfolios are just fancy index funds creating zero above market returns long term.

#112 Gravy Train on 11.17.19 at 5:02 pm

#104 DON on 11.17.19 at 1:08 pm
“Just to be clear on the climate change thoughts.[…] The carbon tax is used for what exactly?” It’s used for my carbon tax credits and rebates. Thanks. :)

#113 Gravy Train on 11.17.19 at 8:17 pm

#98 Damifino on 11.17.19 at 12:11 pm
“That sounds vaguely ad hominem.” I was referring to his credentials, not his character or motives. Can you explain to me how a philosopher is qualified to talk about climate science? Thanks.

“Anyway, Epstein got the data and the graph from Samuele Furfari.” Has the graph been peer-reviewed? Have the data been verified? Are there alternative explanations for the results? Is there general agreement among the scientific community?

“Have you got any insights arising from a criticism of the data or its conclusions rather than its presenter?” I don’t feel qualified to interpret the results or its conclusions, so I’d prefer to see a peer-reviewed analysis by scientists before drawing any conclusions. I can tell you that my nominal after-tax annual rate of return on my solar panels is 12.81%, and my payback is 8.5 years, so I’m certainly acting in my best interest.