Too much

John’s a lucky guy. At 32 he’s got a $1 million house (no mortgage) plus $800,000 in cash and liquid investments. Yup, inherited. He and his fiancée are getting married in 2020 and with a combined income of $90,000, hope to save a third of it annually. No debt.

“Your blog is a national treasure,” he says. “Thank you for your insightful and colourful commentary.” And that MSU earns him our pre-Yule attention. Here’s the ask:

“I’m concerned about the everything bubble and it’s really hard for me to know what to do. I’m a value investing aficionado and voracious reader, and I have people coming up to me and asking for advice. I don’t know what to tell them because I’m unsure myself about what to do. There aren’t many bargains out there. I am in a very fortunate position and am grateful for everything that’s been given to me. But I don’t want to mess it all up. What do I do?”

Is this a dangerous time to be invested? Should a 30s dude with the better part of two mill just sit on cash for a few years until the future reveals itself? After years of big gains have we reached some kind of financial zenith? Is the reckoning or a big reset inevitable?

Well, wow, 2019 has been outsized. Global stocks added about $10 trillion in worth. Commodity prices jumped. Even bonds piled on the profits. American stocks have gained 30% when you include dividends. Toronto’s up about 20%. Emerging markets made bank. And look at the FANG stocks – Apple up 77%, FB ahead 57%, Google gained 30% and Netflix added 24%.

A boring, more predictable, lower-vol balanced & diversified portfolio added 13%. Lately every asset class seems to be on the rise, and right around the globe – even in China, Russia, Greece, Ukraine or Brexit-addled Britain.

Why? Rampant speculation? The last great gasp of greedy capitalism? Or is this all justified. A precursor of what’s to come?

Well, John. Look at some of the drivers behind the gains. Like Trump. He’s the most pro-business, pro-growth, pro-profit president in memory. His legacy might be high inflation, an increased wealth divide, climate change denial and a society more prejudiced, divided and dumbed-down than ever, but, man, he’s crack cocaine to investors. Lower corporate taxes, less regulation and beating up the Fed have all helped fuel markets and drive unemployment to record low levels. Consumer confidence brims, so in an economy where 70% of the GDP derives from household expenditures this is the result. Half of Americans love Trump. Half hate him. He’s a personal boor and impeached. But he sure makes people spend.

Speaking of the Fed, 2019 saw central banks turn on a dime from being hawks to doves. Rising benchmark rates, surging bond yields and that scary inverted yield curve thing ended when the Fed dropped the cost of money three times and decided to jam more stimulus into an economy that didn’t need it. Jobs were plentiful and markets at record highs, but the gas was poured on anyway.

Meanwhile corporate profits have continued to drive the price of financial assets. After a few years of record earnings, expectations were low – and they were shattered. When companies make money, stocks go up. Duh.

More stimulus came through fiscal measures (governments) at the same time monetary stimulus (central banks) was happening. China stepped up and took aggressive actions to mitigate the damage caused by Trump’s trade war, for example. Growth in that country next year is expected to top 6%. And speaking of that, the US president has done the inevitable, scaling back on his nationalist, protectionist, America-first rhetoric as he seeks more trade agreements prior to the November election. Witness the new NAFTA.

Meanwhile the uncertainty surrounding Brexit is lifting, following the thumping Tory election victory this month. More turmoil will ensue, but the rules are becoming clearer. Just what investors wanted. Together with the Washington-Beijing thaw, the two major clouds over the global economy are lifting, or at least brightening. And, as mentioned Mr. Market thinks Trump will be re-elected.

So, John, these are some of the reasons everything’s going up.

But all is not ponies and hugs. You may not be pickled in debt, but legions of people are. Governments can’t balance their books any better, either. Ottawa’s sliding deeper into the red and Trump will have a $1 trillion deficit soon. Global debt is at record levels, just like Canadian households. Rates that have been too low for too long have certainly helped inflate asset values and turn reasonable people (and countries) into loan-snorting addicts.

So the inevitable conclusions are (a) stay invested but (b) be careful.

It sounds like you’re now a ‘value investor’ who seeks out beat-up stocks to speculate on. Two words of advice: stop it.

You’re a teacher with an inherited wad of dough, not a financial analyst who – in a pricey market – shouldn’t be making those kinds of bets. Markets may be setting up for years more of eye-popping results, but along with that will come high volatility, emotional angst and the chance of making some spectacular mistakes. Besides, with a NW of $1.8 million at age 32, why would you be flipping equities, sucking up risk and looking for supersized returns? Just build a boring ETF-based portfolio with lots of balance and look forward to having $14 million by the time you retire.

She’ll love you even more for not being a cowboy. Trust me.

 

89 comments ↓

#1 Derek R on 12.22.19 at 1:51 pm

Yup. The outlook is quite good at the moment.

#2 Andrewski on 12.22.19 at 1:54 pm

Great synopsis Garth. John, heed Garth’s advice and you’ll be sitting pretty.

#3 Shawn Allen on 12.22.19 at 2:15 pm

Stan’s Polite? Response

#66 Stan Brooks on 12.22.19 at 12:52 pm
#60 Shawn Allen on 12.22.19 at 11:31 am

Incredible ignorance and stupidity:

https://www.bankofcanada.ca/wp-content/uploads/2010/06/mackleme.pdf

The new core CPI measure (hereafter simply “core
CPI”) excludes the eight most volatile of these 54
components from the total CPI and then adjusts the
remaining components to remove the effect of changes
in indirect taxes.2 The eight components excluded are
fruit, vegetables, gasoline, fuel oil, natural gas, intercity transportation, tobacco, and mortgage-interest costs.

****************************************
So Stan first claimed that CPI excludes food and energy. Presented with evidence to the contrary he basically said he meant core CPI.

Okay, yes there are core measures.

Now above he switches from the official Statistics Canada CPI to one used by the bank of Canada.

Okay, well anyhow Stan believes what Stan wants to believe. Hopefully few are listening to his rants.

People can whine about being victims or they can get on with winning in their life. Choices.

#4 Keith on 12.22.19 at 2:47 pm

Commenters who love Trump’s accomplishments, and there is stuff to love, barely or never mention the trillion dollar deficit, at what could be the peak of the cycle, despite more than full employment. The economic growth, which peaked at over four percent just hit 2.3 last month, proving that the tax cut looks more like a hit of crack cocaine than a long term growth driver. Good luck growing the economy out of that deficit.

Meanwhile in Canada, comments on Trudeau almost never fail to mention the deficit in Canada, which is proportionally a fraction of the American deficit, even though there is record low unemployment including the oil patch jobs crisis, and economic growth that is hanging tough even with the low price of oil and the far lower deficit. All depends on the spin.

#5 Sold Out on 12.22.19 at 2:49 pm

I hope he inherited from grandparents, not his parents. If his parents are both deceased, it suggests longevity is not a family trait; he may wish to only work for another decade, then cash out with 3+mil. 14 million at 65 sounds great, but do you risk dying in the harness and leaving a young, rich widow?

#6 Alessio on 12.22.19 at 3:00 pm

Markets and Company profits are going up due to fake money being injected into the system. There is nothing organic about the last decade. Remember a crash can mean revert things quickly while profits took a decade you can lose it all in a day.

So don’t invest. See how that works out. – Garth

#7 Everything is better in USA! USA! on 12.22.19 at 3:04 pm

Its simply beyond me to understand how crazy are Canadians about buying houses. Most are financially illiterate to understand financial markets. Garth is right. How do you guys even afford to buy clothes and food after paying for the mortgages, taxes?

#8 Shirl Clarts on 12.22.19 at 3:13 pm

Garth didn’t specify, but i think his 14 million projection involves selling the house and renting. Wife won’t like that too much and before too long you’ll be cashing it out to buy a house again.

#9 Indigirl on 12.22.19 at 3:15 pm

And to protect your money, get a prenup or cohab agreement!! And be sure to keep your assets separate and traceable. No co-mingling. At all. Life and relationships are uncertain.

#10 andre demers on 12.22.19 at 3:22 pm

FANG is for Facebook, Amazon, Netflix and Google…just saying !

#11 andre demers on 12.22.19 at 3:27 pm

Trump is impeached by the democrats, what a joke !

#12 Leo Trollstoy on 12.22.19 at 3:29 pm

Trump has been good to my financial assets

Which means Trump has been good to my family

Trump wins easily in 2020

EC landslide. Just like 2016

#13 Leo Trollstoy on 12.22.19 at 3:39 pm

#4 Keith on 12.22.19 at 2:47 pm
Commenters who love Trump’s accomplishments, and there is stuff to love, barely or never mention the trillion dollar deficit

You’re not paying attention if you don’t hear it mentioned

Here: Warren Buffett mentions it too:

“Government deficits don’t matter” – Warren Buffett

https://www.axios.com/warren-buffett-national-debt-6fa22c24-bc40-4cda-8895-973605ea465a.html

#14 Stan Brooks on 12.22.19 at 4:05 pm

So don’t invest. See how that works out. – Garth

According to Shawn Allen there is deflation so why worry?

Money apparently constantly increases in value, there is no inflation, interest rates of 1.75 % are very high and everything is rosy in this land of opportunity. Combined with the best education, health care system and the wisest politicians around. In the whole wild world.

It is not one of the coolest winters, no, it is 25-30 and it feels great while naked in a bathing suite outside.

Cheers,

#15 Tccontrarian on 12.22.19 at 4:05 pm

Being in cash is also being ‘invested’ (in a currency or currencies of your choice,). The only way to not be invested is to own nothing of monetary value! Truly sad that I have to point that out on a financial blog, no less.
The vast majority of U.S. stocks have not recovered their September 2018 highs, and by that measure, the bull market is over. Mr Market is like a top class boxer: he will jab repeatedly to make you think that that’s the only weapon to worry about… then, when least expected, an upper-cut to the chin and it’s all over. The Dow, the Semiconductors, the FAANGs etc. are the ‘jabs’ while the Russell is already signalling of the real danger.
Ignore at your peril.

TCC

#16 Dominoes Lining Up on 12.22.19 at 4:09 pm

The 2019 boom year and the economy is hard to figure for me right now.

Spending the last few days going from store to store looking for Christmas gifts and food, the crowds are there but things really seem to be down in terms of buying.

Just went to a few big grocery stores today, and there are hundreds of unsold poinsettias and other seasonal plants and gifts on display.

Even turkey prices have been reduced to the kind of rock-bottom rates you usually only see after January 1. Never have I seen that before.

Something is happening with retail……

#17 Ray on 12.22.19 at 4:26 pm

2019 has had strong growth from the lows of Dec 2018. However,the SPY was 290 at the beginning of Oct 2018 and recovered to 290 in the beginning of Oct 2019. It was basically sideways for the year and has grown about 7% net from Oct 1018. I think 2020 will be a power year, because the markets may keep the growth momentum of 2019 going, and not have the deep hole of Dec 2018 to climb out of.

#18 Barb on 12.22.19 at 4:29 pm

John should focus on what’s truly important.

Garth et al’s sage advice gave me and my family peace of mind.

A very Merry Christmas and thank you to Garth and Turner Investments, Dorothy and that spectacular pooch Bandit.

Be well, all ye merry gentlepeople.

#19 TurnerNation on 12.22.19 at 4:37 pm

Get out of the GTA. This chart indicates sh00tings have doubled under the current UN-backed Mayoral regime. I mean he has time to frolick and jest with rag queens on camera but when it comes to crime he and the stuffed-shirt police chief simply blame ‘guns’.
It’s like blaming car crashes on cars. Pssst look closer at the reasons. It’s people and drugs. Ask the chief why his force never arrests mid and top level kingpins. The top line time on the city budget, is they.

https://pbs.twimg.com/media/EMW40B6WwAIzFQx.jpg

#20 Bezengy on 12.22.19 at 4:43 pm

Have a good friend who cashed out when the tse hit 7000. Said he would buy back in when the market crashed. He just retired at 67, about 10 years behind schedule. All that lost opportunity to make serious cash, what a waste.

#21 Brian Ripley on 12.22.19 at 5:00 pm

You may not be pickled in debt, but legions of people are. Garth

My household debt chart with overlays of GDP, Foreign Direct Investment and Balance of Trade is up with the latest data:

http://www.chpc.biz/household-debt.html

Some people say the stock market is not the economy; I suppose then, the economy is not the stock market.

The text on my chart makes the assertion that:

1) The widening spread between total household debt and household mortgages means we are borrowing even more to maintain lifestyle.

2) Foreign Direct Investment OUT higher than IN over the last 20 years means Canadian companies are investing outside of Canada to get a better return on Capital and Labour. For every $1 of investment coming in to Canada, $1.47 leaves (full year 2018 data).

3) The chronic negative Canadian Balance of Trade means that OUR debt obligations continue to provide more stimulus to offshore than onshore producers.​

Who cares as long as paper assets continue to increase in value.

Well another paper asset is asserting itself: the USD.

On my Housing chart comparing values in CAD and USD:

http://www.chpc.biz/canadian-housing-in-usd.html

… the housing price peak in Vancouver and Toronto happened in +/- July 2017 and since then, house prices have been eroding but the USD/CAD ratio has been ticking up since then. That is putting pressure on consumer price inflation on U.S. or U.S. denominated imports as opposed to just asset inflation.

The Total CPI plot on my Real Long Interest Rate chart since June 2017 is up 90% (from 1% to 1.9%)

No big deal yet, but as up-ticking costs eat away at the ability to spend on essential items (Shelter, Food, Health, Education AND DEBT), the result is that discretionary spending plunges.

That can be seen in a chart highlighting the 2008 crash posted by Cullen Roche here:

https://www.pragcap.com/the-collapse-in-discretionary-spending/

“The chart … shows how much real per capita (to account for differing rates of population growth over time) discretionary services expenditures fell from their previous peak… The drop in discretionary services expenditures in the last recession (2008) was much more severe than in previous recessions: the nearly 7 percent fall from the peak is more than double the percentage decline in the early 1980s recession (the previous “champion” in this dimension).” Cullen Roche, June 2011 observation

Today at record paper asset values, a 7% drop in discretionary spending would put a lot of people out of work at the margins of the “economy” and the “stock market”.

#22 espressobob on 12.22.19 at 5:11 pm

Global index investing has advantages over shorter term options like sector, commodity, value etc. This requires personal attention. That sucks.

Sure, It’s as boring as hell riding the diversified wave. All that annoying rebalancing and a lack of interest in the daily moves one sees on the morning news.

Maybe that’s the point?

#23 Millenium Trout on 12.22.19 at 5:43 pm

https://www.bnnbloomberg.ca/we-ve-never-said-that-snc-ceo-denies-head-office-jobs-threats-1.1232025

Trudeau openly and blatantly lied again, how sad. Trumps impeachment has been based om here say and double speak, yet Trudeau is an outright liar, that’s a fact, how sad.

I see a big Bernie Sanders win coming . He’ll choose Hillary as running mate. What were witnessing in the market melt up is the end of money, rich selling in to the rally, cashing out, a classic dupe. In that eventuality money will lose all value. The smart money has already gone to bitcoin and sovereign gold. Cuba has long been held up as an example by the Laurentian Elites as the ideal. Doctors and Juice Stand operators both make the same wage. There’s no hope for any future, the planet is dying, why bother?

#24 Eddie on 12.22.19 at 6:07 pm

If S&P 500 corrects to 1000 region from 3000 region, it will be 60% correction. But looking at chart and trade war, I m inclined to see the market going down to 1000 region.

#25 Treasure Island CEO - 59,495,432,88 Offshore on 12.22.19 at 6:59 pm

It is hard to imagine much gains in 2020 after the rise experienced this year. Another 10-20% on top of this year? Maybe another 5%.

Usually the big gains come off after the big dips providing the illusion that big gains were had, when in reality nobody jumped in with all they had at the bottom to achieve 13% growth this year. Most got 4%. At least it wasn’t negative.

#26 Nonplused on 12.22.19 at 6:59 pm

I hope John has a prenup, unless the money came from his fiance in which case I hope she has one.

———————

“He’s (Trump) a personal boor and impeached.” Have you seen him at a rally? The man is a comedic genius and knows how to work a crowd. Even his tweets are often funny. He can be pretty rude though.

And he hasn’t been impeached (although he will be probably in the new year and then acquitted). All that has happened so far is that the house has voted to approve “articles of impeachment”, the real trial doesn’t start until Pelosi delivers the articles to the senate for trial. She says she won’t until she agrees to the format of the trial, but the house does not tell the senate how it conducts its business, so I think that is malarkey. More likely she will deliver them in the new year so as not to disrupt the holidays. I think that is probably wise. Nobody wants to deal with that crap right now. This way all the democrats across the land can have a merry Christmas and sleep soundly with the knowledge that Trump is going down and put off reckoning with the fact that the senate will not acquit until the new year.

The senate will have to find 20 republicans to vote for impeachment to carry the motion and that isn’t going to happen. The charges are “trumped” up balderdash and everyone knows it. It is a political show and that is all it is.

But I guess the Dems had to come up with something. If they can’t take Trump out before November, he’s almost certain to deliver the Republicans a landslide.

Interesting trivia: 1/2 of all presidents that have been impeached embarrassed queen Hillary. If Trump is impeached that will make it 2/3’s.

#27 WUL on 12.22.19 at 7:47 pm

#23 Millenium Trout on 12.22.19 at 5:43 pm

There’s no hope for any future, the planet is dying, why bother?

+++

When I become a Hallmark greeting card writer, can I use this?

Thx in advance.

WUL

#28 Katherine on 12.22.19 at 7:57 pm

Yup nonplussed, John definitely needs a prenup. He can keep all the inheritance if the marriage fails, but once married the matrimonial home is considered owned by both even though one party did not contribute financially. I learned this the hard way.

#29 Mattl on 12.22.19 at 7:57 pm

Trump’s legacy will be massive debt. That is the gift he is going to leave Americans, 8T in new debt obligations.

Would we be okay with socks running 150 billion deficits if it came with tax cuts or corporate welfare? Trudeau is a financial nightmare and he is down right tight compared to Trump.

I’m loving 16% after fees this year but look out when this asset bubble pops. At some point the US will have to get the deficit under control. Taxes will have to go up, they can’t run Trillion dollar misses forever. And what happens when things turn for the bad?

This won’t end well

#30 IHCTD9 on 12.22.19 at 8:02 pm

If John lives in Ontario, his inheritance is mostly safe, especially since he isn’t married yet.

If he he blows some of it on a matrimonial home though, that changes.

Also I believe the investment proceeds thereof would be divisible should there be a divorce.

J needs to call Garth, get set up, then forget about it and keep the new wife happy. Just the 800k would be over 4 mil at 65 without ever putting a dime into it. Plus he’ll be getting that sweet DB teachers pension on top.

Talk about made in the shade, this one is a no brainer.

#31 GRG on 12.22.19 at 8:19 pm

Keith on 12.22.19 at 2:47 pm
“Commenters who love Trump’s accomplishments, and there is stuff to love, barely or never mention the trillion dollar deficit, at what could be the peak of the cycle, despite more than full employment. The economic growth, which peaked at over four percent just hit 2.3 last month, proving that the tax cut looks more like a hit of crack cocaine than a long term growth driver. Good luck growing the economy out of that deficit.

Meanwhile in Canada, comments on Trudeau almost never fail to mention the deficit in Canada, which is proportionally a fraction of the American deficit, even though there is record low unemployment including the oil patch jobs crisis, and economic growth that is hanging tough even with the low price of oil and the far lower deficit. All depends on the spin.”

Your comparison misses the fact the USA has something no other nation has. The “exorbitant privilege” (Valéry Giscard d’Estaing’s phrase) of its own currency being the international reserve currency.

Canada, on the other hand, is an increasingly indebted and uncompetitive economy. And the way we are compensating for that is the same way we always do…with the exchange rate of the Loonie.

Any wonder food prices (as just example) are rising noticeably faster than the official inflation rate? Look how much of it we import, especially in winter.

Only the nitwits in this government could have come up with a Minister of Middle Class Prosperity/Ministre de la Prospérité de la Classe Moyenne as an antidote to chronically poor policy choices.

Owe Canada

#32 mike from mtl on 12.22.19 at 8:32 pm

#17 Ray on 12.22.19 at 4:26 pm
2019 has had strong growth from the lows of Dec 2018. However,the SPY was 290 at the beginning of Oct 2018 and recovered to 290 in the beginning of Oct 2019. It was basically sideways for the year and has grown about 7% net from Oct 1018..
////////////////////////////////////////////////////////////////////

Exactly. The YTD charts will look stellar for 2019 even though it’s highly misleading. As usual most of the gains at least for the sp500 are basically AAPL, AMZN and MSFT. “Value” and commodities continues to be unloved.

Not complaining that the ‘markets’ appear to the risk free return compared to the bond market, but let’s be real that this is all manufactured.

Garth, hope your Christmas card to the FED is in the mail, otherwise you’d be writing a very different post.

#33 Jager on 12.22.19 at 9:19 pm

What is Globalism?

In the absence of any official (consolidated) policy statement you should know the simple truth.

Globalism in its complete manifestation may be defined as a blend of various elements of Communism and Fascism melded within a framework of Technocracy.

e.g. Future faith will be in Mother Earth. Nothing less and nothing more. “All veneration to Mother Earth” will be the underlying dictum. Failure to adopt will result in ever increasing privation of social and carbon credits. e.g. Ever decreasing quotas of sustenance, energy and communication. You will simply be turned off.

The policy of concealment of course is deliberate.

Remember gentle reader. You are held in various levels of contempt and considered a mere cog (easily replaced) in their aspirations of rebuilding a disoriented world into their neo-dystopian vision.

#34 BS on 12.22.19 at 9:25 pm

Keith on 12.22.19 at 2:47 pm
Commenters who love Trump’s accomplishments, and there is stuff to love, barely or never mention the trillion dollar deficit, at what could be the peak of the cycle, despite more than full employment. The economic growth, which peaked at over four percent just hit 2.3 last month, proving that the tax cut looks more like a hit of crack cocaine than a long term growth driver. Good luck growing the economy out of that deficit.

Meanwhile in Canada, comments on Trudeau almost never fail to mention the deficit in Canada, which is proportionally a fraction of the American deficit, even though there is record low unemployment including the oil patch jobs crisis, and economic growth that is hanging tough even with the low price of oil and the far lower deficit. All depends on the spin.

Keith at least learn the basics on how the two countries differ. In the US the congress controls all spending. In Canada the Prime Minister controls all spending.

Trudeau also is the one who botched the pipeline situation which caused the oil patch jobs crisis you seem to think we should give him a break for.

Trumps tax cuts and reduced regulation have increased tax revenue in the US though greater economic activity. Trudeau’s tax increases and increased regulation have reduced tax revenue in Canada.

#35 The Bruce on 12.22.19 at 9:52 pm

Volatility is low. Markets top when exuberance becomes irrational. almost everyone is in. Full on FOMO. Like houses in Canada. Look out below.

#36 Ronaldo on 12.22.19 at 9:59 pm

While we worry about our carbon footprint here is what China has done in the past 4 years.

https://www.railjournal.com/freight/china-opens-1813km-heavy-haul-railway/

A high speed heay haul railway line 1813 km long capable of handling 200 million tonnes of coal annually.

And we can’t even get approval to build a friggin pipeline. We are so doomed.

#37 Sam on 12.22.19 at 10:22 pm

Here: Warren Buffett mentions it too:

“Government deficits don’t matter” – Warren Buffett

………..

haha….just print money!!…negative rates here we come

this Leo T fool swallowed the cool aid

#38 Ronaldo on 12.22.19 at 10:33 pm

#25 Treasure Island CEO

Usually the big gains come off after the big dips providing the illusion that big gains were had, when in reality nobody jumped in with all they had at the bottom to achieve 13% growth this year. Most got 4%. At least it wasn’t negative.
—————————————————————–
My balanced and diversified portfolio was down 18.1% in 2008 and gained back 19.3% the following year followed by 8.5%, -3.6, 7.9, 13.3, 11.1, 5.1, 7.6, 9.7, -2.9 and up 14.25 ytd. I expect probably a 8 to 10% gain next year followed by a negative year in 2021. And I don’t plan to bail anytime soon.

For those who didn’t panic and bail in December last year will have done well provided they were in the right investments.

#39 Long-Time Lurker on 12.22.19 at 10:59 pm

>…snooping around for repo market clues….

Benn Eifert
@bennpeifert
Dec 10

There is lots of chatter on the Zoltan piece on money markets into the end of the year. I want to highlight one bit of critical background. People ask “Why are these repo market stresses happening now, when there are excess reserves in the system?” **there aren’t**…

…Before Basel III, payment systems cleared on credit – banks could run whatever debit they needed intraday, and then settle up at end of day in the money markets.

Now, banks have tight intraday liquidity requirements, cant run intraday debit balances, and G-SIBs have to pre-fund outflows. So they need to hold a large quantity of “excess reserves” in order to manage those fluctuations and constraints.

“Excess reserves” in quotes: they’re excess relative to technical reserve requirements, but *not* excess relative to management of LCRs and resolution liquidity needs. A large bank could have 100bn of “excess reserves” but not have a dollar available to lend in repo markets….

https://twitter.com/bennpeifert/status/1204426446732578816

#40 TurnerNation on 12.22.19 at 11:00 pm

Have any of the blog dogs tried this Orwellian site? It needs your full personal details. Likely recording everything you say for your Social Credit Score.
WrongThink.

https://ca.nextdoor.com/

Nextdoor is the world’s largest private network for neighbours. Nextdoor enables truly local conversations that empower neighbours to build stronger, safer and happier communities.

Building connections in the real world is a universal human need.

Nextdoor is a privately-held company based in San Francisco with the backing of prominent investors including Axel Springer, Benchmark Capital, Bond, Greylock Partners, Kleiner Perkins and others

#41 Keep rentals or invest? on 12.22.19 at 11:15 pm

Hello garth and bloggers. I have 3 rental property’s paid for
#1- 2 Suites – 3650/month total
#2- 2 suites – 2000/month total
#3- 2 suites – 3000/month total
So 8,650/month minus 20% =6,920.00/net month
Renters are a pain in the ass
Is it better to sell now and invest in etfs/stocks
Total value if I sell in my pocket is 1.1 mil
I’m 45 years old and live by vernon bc
Thank you

#42 Keith on 12.22.19 at 11:20 pm

@#31 BRG
@#34 BS

U.S. federal debt to GDP ratio 100% and rising.
Canada federal debt to GDP ratio 31% and falling.
Canadian federal balance sheet far superior. If U.S. tax revenues were up, with more than full employment the deficit would be nowhere near a trillion, give your head a shake.

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm

Pretty sad.
It’s x-mas time and every one bragging about how they made a killing on the stock market.
How about bragging about how you helped out at the food bank or the salvation army.
Pretty sad, indeed.

#44 Debt is forever. Nobody is paying it back. on 12.22.19 at 11:34 pm

As Alan Greenspan put it – debt can forever be repaid by printing money. Empirical evidence: The US Fed since forever, more noticeable since 2004.

Nobody is paying it back. It is called WWIII once the can can’t be kicked anymore.

Now, I need to square up with Garth:

You said oil is not an asset class, yet JPM Asset Management just released a 20-year annualized performance chart of asset classes up until this year and oil is one of them performing at 7% annualized since 1999.

#45 Millenial Trout on 12.23.19 at 12:20 am

#27 Will. Sure, but I think you’ll have to fight Greta’s carpet baggers speech writers. I’m horrified that adults in positions of authority, like our pathetic PM, are perpetuating the myth that all life on planet Earth is ending, , within the decade, and allowing this extremist propaganda, to scare kids into despair, depression , hopelessness and suicide.

Merry Christmas all, it may be our last so start an affair with the dumpster divers harvesting cans in the alley. What does it matter? You’ll never live to find love anywhere. It’s over fool.

https://www.cnbc.com/2019/12/22/robert-shiller-trump-effect-could-drive-record-rally-through-2020.html

In Trudeau’s new dictatorship the lies of government supercede any accuracy. “We have tools” sounds like what Mao quipped when he announced the ” true justice comes only from the barell of a gun”. I don’t know why we even have elections when dictators like Trudeau sup in the lap of American globalists and perform an anti-citizen agenda.

But who cares, it’s all over, go to Vegas, blow the mortgage, living is an illusion.

#46 Dumb Wealth on 12.23.19 at 12:48 am

Nothing HAS to happen in the future. The future doesn’t care what happened in the past. But if you have decades, the odds are in your favour.

Even doing nothing (i.e. putting the cash into a savings account) is a decision that requires an evaluation of risk.

Diversification is your friend.

#47 Nonplused on 12.23.19 at 2:04 am

#28 Katherine

Yup there are lots of things to learn when you get to the lawyer’s office, and Dog forbid you get to court.

Many of the folks in my generation have been through this once before, including me, so I have some idea as to how it works. For instance when I got divorced, I just gave my ex-wife the house as we didn’t have a lot of equity anyway and she wanted it, with the stipulation that she had to get me off the mortgage before I would release my title. Her dad cosigned and got me off title and I lost a bunch of money, but not as much as a Toronto land transfer tax. It would have been worth it at twice the price.

When 2 people start out with nothing, I think the divorce laws sort of work. But when one party brings in significantly more money than the other, either through hard work, investment success, or inheritance, they most definitely do not. You should only bring out proportionately what you brought in. the problem is that the laws were written to protect “stay at home moms”. Years ago some account had to be made for the stay at home mom’s contribution. Times have changed.

Child support enforcement also kind of sucks, even though the laws are better now than they were pre-1996. It’s supposed to maintain the child’s standard of living. But if the payer’s income goes up, so does the child support even if the parent with custody won’t let the kids visit. But if the payer’s income goes down good luck getting relief. They have something called “imputed income”. The judge assumes you aren’t working as hard as you could just to avoid child support so you get to pay the same even if you don’t have a job. It’s nuts.

In some jurisdictions especially in the US they will put people in jail for not paying enough child support even if they don’t have a job. Then, while you are in jail, they will continue to calculate “arrears” even thought you are in jail and can’t possibly work. The system is crazy.

Back to your point, my friend handled it I think as best as one could for his second marriage. He ring fenced his financial assets as one should because he already had 2 children and didn’t want their inheritance diverted. But he and his new wife went 50/50 on the new house. He was able to pay his half cash but she needed a mortgage for her half, which she pays herself (she has a good job). So if there is a breakdown in this marriage, depending on how the court intervenes, they will both get half the sales price but it is up to her to discharge her own mortgage. My friend is not a cosigner. The bank doesn’t have anything on him, just her. I suppose if the house is less than her mortgage they probably have the right to take the whole house, but that is unlikely. He has limited his losses although some could still occur.

It is an unfortunate state of the world we live in, where when getting married you don’t think about love anymore, but how bad the losses will be and how to mitigate them. No wonder so many people are saying “why bother?” The courts have turned marriage into an old country song. Sometimes life does imitate art.

——————–

For you young people out there, both men and women, the situation has become that you cannot get hitched up with a less able or less willing horse. You’ll be towing that wagon all by yourself long after your partner has disconnected from the wagon and gone off to the pasture.

#48 slick on 12.23.19 at 4:13 am

he needs more than financial advice, he needs family law advice.
Get the house and investments in your own name, and keep it there. That includes RSP, and TFSAs.
$800K in investments should add about $50/year into those portfolios. Purchase blue chip dividend payers, and DRIP all of it.

Keep your eyes open, you may need someone to be tasting your food.

Then sit back, enjoy the ride with the new wife. Travel and tip well. Trying to squeeze it all in when you are old, just plain sucks. Remember you are in the top 1-2% of richest people in the world, maybe top 10% in this country.

#49 under the radar on 12.23.19 at 4:38 am

For his age John is in an enviable position and if he is prudent he can live comfortably . However , should he make a series of rash purchases or poor investment choices all his good fortune could be erased. Be very careful, there are a lot of vipers out there.

#50 Stan Brooks on 12.23.19 at 5:51 am

#42 Keith on 12.22.19 at 11:20 pm
@#31 BRG
@#34 BS

U.S. federal debt to GDP ratio 100% and rising.
Canada federal debt to GDP ratio 31% and falling.
Canadian federal balance sheet far superior. If U.S. tax revenues were up, with more than full employment the deficit would be nowhere near a trillion, give your head a shake.

This is called wishful thinking…. Sigh.

1. Total government debt here is 90 % of GDP, federal debt is meaningless as the majority of services are provided at provincial level.

https://tradingeconomics.com/canada/government-debt-to-gdp

2. US private debt is 196 % of GDP

https://tradingeconomics.com/united-states/private-debt-to-gdp

Canadian is 266 % of GDP.

https://tradingeconomics.com/canada/private-debt-to-gdp

Whose total debt is higher is the ask?

What is worse is the trend of increasing deficit and debt here combined with refusal to deleverage.

So take that head out from that but and look around.

Cheers,

#51 Gravy Train on 12.23.19 at 6:19 am

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm
“Pretty sad. It’s x-mas time and every one bragging about how they made a killing on the stock market. How about bragging about how you helped out at the food bank or the Salvation Army? Pretty sad, indeed.” My policy is to save and invest 10% and also donate 10% of my gross income. How does that sound to you? :)

#52 Steven Rowlandson on 12.23.19 at 7:57 am

“It sounds like you’re now a ‘value investor’ who seeks out beat-up stocks to speculate on. Two words of advice: stop it.”

Sounds about right. Words to the wise.
If you don’t physically control an asset in these markets you don’t really own it, have control over what price it is sold at or if it is sold at all.
You will fall prey to short sellers…. You have to have physical control. You have to have security of capital. You have to have the possibility of income and or a capital gain. Remember real estate is just a place to live and should be treated and defended as such. It must not be an investment or you will deprive others of a place to live by driving up the general price of real estate.

#53 Stan Brooks on 12.23.19 at 8:38 am

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm

Part of my charity work is to inject some sanity into the brains of the ‘I know it all’ debt junkies with complex of superiority, it is actually much more difficult, painful, costly and ungrateful than pure plain vanilla donation to a charity.

Plus you get a lot of vibes that drive you towards heavy drinking in order to retain sanity, I think Smoking Man is in the same boat but much farther ahead in terms of training and alcohol endurance…

Cheers,

#54 Ktown on 12.23.19 at 8:47 am

The part I don’t get is why do you need to shoot for $14M when you already have financial security. Once you calculate how much you need for the rest of your life and you have a get out of jail card in your hand – why keep rolling the dice for more? You could potentially lose your get out of jail card.

#55 Keith in Rio on 12.23.19 at 8:47 am

Or better yet John, get an iron clad pre-nup, use condoms ALL THE TIME, and consider investing outside of the country in a blended portfolio of currencies and government bonds.

Choose a warmer and more convenient place with a much lower cost of living, learn a second or third language, get permanent residency and even a second passport and LIVE YOUR LIFE.

You will soon be living in an expensive and cold third world country. Might as well be warm and cheap.

#56 Remembrancer on 12.23.19 at 8:48 am

#46 Dumb Wealth on 12.23.19 at 12:48 am
Nothing HAS to happen in the future. The future doesn’t care what happened in the past.
—————————————————-
First sentence has a wealth of insight, second is plain dumb…

While indeed “what’s past is prologue”, the future (or at least some of the future’s inhabitants) does give a damn if for instance you planted a rose garden or buried barrels of cancer causing toxic waste next to that reservoir…

#57 Dharma Bum on 12.23.19 at 9:21 am

$1.8 million inheritance at 32 years old?

So, like, who died?

“They say I shot a man named Gray
And took his wife to Italy
She inherited a million bucks
And when she died it came to me
I can’t help it if I’m lucky”
– Bob Dylan

John can’t help it if he’s lucky.

Anyway, just stop it already with all the “market is gonna crash and we’re all gonna die” crap.

Regardless of forthcoming circumstances, all John has to do is to keep investing his savings continually and systematically for the next 30 or so years (in a balanced and diversified portfolio of ETFs and broad based blue chips a la Garth) and not even think about it. Period.

He will have millions and millions of dollars.

Lucky bastard.

#58 Sam on 12.23.19 at 9:23 am

Stephanie Kelton, the academic and Bloomberg columnist who has emerged as the biggest champion of MMT, spoke at a gathering hosted by the Canadian Association for Business Economics in Kingston, Ont., earlier this year. But the New Democratic Party didn’t talk about it in the election campaign, and the chattering classes are mostly quiet, even though MMT has become something of a sensation south of the border.

https://mmtincanada.jimdofree.com/

hit the link, worth reading.

#59 IHCTD9 on 12.23.19 at 9:51 am

#47 Nonplused on 12.23.19 at 2:04 am

For you young people out there, both men and women, the situation has become that you cannot get hitched up with a less able or less willing horse. You’ll be towing that wagon all by yourself long after your partner has disconnected from the wagon and gone off to the pasture.
___

The kids already got the message if the latest stats are any indication.

Those Men and Women who are similarly well educated and employed are marrying each other today. These unions are contributing to the drop we are seeing in divorce rates (among millennials). They’re holding it together better than those in the past.

Well educated Women are now more desirable to Men for marriage than those who are less educated – this is the first time this has been the case since the stat was first collected.

Pretty much everyone else (outside of certain Religious/Cultural communities) looks to be passing on or delaying marriage in favour of shacking up or living single.

Anecdotally, this sentiment for dual incomes ran fairly strong in my peer group back in the early 90’s already. None of my buds wanted a “stay at home Mom”. BOTH partners had to work. All of them did end up working too.

I think marriage in the future will be for a smaller and smaller group – and these unions will experience less and less divorce.

#60 crowdedelevatorfartz on 12.23.19 at 9:51 am

@#43 Ponzie Pilates
“How about bragging about how you helped out at the food bank or the salvation army.”
++++

Sorry Ponzie.
I’m too busy working to “help out at the food bank”.
I’m too busy making money and paying huge tax bills year after year and watching our 3 levels of govt blow it on everything BUT the Food Bank.
If the starving masses could eat a Rainbow Sidewalk they’d all be fat, well fed, and our problems would be solved.
Then we’d just be handing out warm clothes and free cell phones this time of year.
Then free transit passes ( your fave).
Perhaps free rent? A free electric car?
Why stop there?
Everyone needs a vacation.
Hawaii? Mexico?
Why not.
Homeless people deserve a tan.
But no.
It would never end.
So.
You go work twice as hard at the food bank for me would ya and tell the volunteers Crowdie’s thinking of them..

#61 IHCTD9 on 12.23.19 at 9:57 am

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm

How about bragging about how you helped out at the food bank or the salvation army.
____

Ponzie, you know you are not supposed to brag about doing that kind stuff…

#62 n1tro on 12.23.19 at 10:24 am

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm

How about bragging about how you helped out at the food bank or the salvation army.
————-
I’m sure if we look at past posts, you can be quoted as saying…

“I’d gladly pay more taxes for (insert Liberal socialist scheme)…”

but in reality they are just virtuous words right?

Can’t shame me into feeling guilty for trying to make the best for my family.

#63 Mattl on 12.23.19 at 10:30 am

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm
Pretty sad.
It’s x-mas time and every one bragging about how they made a killing on the stock market.
How about bragging about how you helped out at the food bank or the salvation army.
Pretty sad, indeed.

————————————————————-

Strange take. Financial independence allows one to be able to give more, be it time or money. Let’s say Wifey doesn’t have to work so can donate 50+ days a year.

In good times, donations are up. Tax revenues are up. If the market turned and the wife had to work, those donated days disappear. If I lose my job, not much I can do for my neighbor.

You following how this all works? Rising tide does float most boats and donation numbers support it.

#64 crowdedelevatorfartz on 12.23.19 at 10:44 am

I’m thinking the economy may be worse off than people think.

The last Friday before Christmas and I had to head to Vancouver Island for work.
9am sailing.
The ferry was only 3/4 full of cars….
Spoke to the crew about the empty lanes on the car deck.
” Unusually slow this year”.
The hotel I was in was half empty.
“Very slow this Christmas”

Came back last night to Vancouver on the ferry.
I pulled in to the ticket booth at 2:30 pm to catch a 3pm sailing…. only 50% sold half an hour before sailing on a beautiful 9 cel sunny afternoon.

People aren’t traveling this year….
Reasons?
Anyone’s guess.
But I’m thinking major debt might have something to do with it.
2020 could be a real hoot in the Canuck economy.

#65 Sail Away on 12.23.19 at 10:55 am

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm

Pretty sad.
It’s x-mas time and every one bragging about how they made a killing on the stock market.
How about bragging about how you helped out at the food bank or the salvation army.
Pretty sad, indeed.

—————————————–

A finance site seems like an appropriate place to talk about money.

Are you getting like Flop and trying to passive-aggressively control what people write?

#66 Yukon Elvis on 12.23.19 at 10:56 am

#55 Keith in Rio on 12.23.19 at 8:47 am
Or better yet John, get an iron clad pre-nup, use condoms ALL THE TIME, and consider investing outside of the country in a blended portfolio of currencies and government bonds.

Choose a warmer and more convenient place with a much lower cost of living, learn a second or third language, get permanent residency and even a second passport and LIVE YOUR LIFE.

You will soon be living in an expensive and cold third world country. Might as well be warm and cheap.
………………….

Keith. You da man.

#67 Mattl on 12.23.19 at 11:03 am

#63 Crowded:

As part of my job I track same store sales (SSS) across about 10% of Canadian merchant locations. SSS have been shrinking since Dec 2017. Typically we see 2.5% YOY growth, 2019 is tracking -3%. These are not large retailers, mostly SMB.

What I can’t account for is how much of this decline can be attributed to large online retailers so take it fwiw. But my instinct is people are gripping their wallets tighter.

Auto, boat and RV sales seem to indicate same.

#68 Sail Away on 12.23.19 at 11:05 am

#45 Millenial Trout on 12.23.19 at 12:20 am

I’m horrified that adults in positions of authority, like our pathetic PM, are perpetuating the myth that all life on planet Earth is ending, , within the decade, and allowing this extremist propaganda, to scare kids into despair, depression , hopelessness and suicide.

But who cares, it’s all over, go to Vegas, blow the mortgage, living is an illusion.

—————————————-

If living is an illusion, why are munchies so delicious? You know you don’t have to write when you’re knee deep in ganja?

#69 Ponzius Pilatus on 12.23.19 at 11:15 am

#62
You following how this all works? Rising tide does float most boats and donation numbers support it.
———————
This rising tide adage is not being born out by facts.
People on the yachts will still piss on the people living in the row boats below.

#70 leebow on 12.23.19 at 11:17 am

#41 Keep rentals or invest?

I had very similar numbers. I sold for a number of reasons.

1. Too much work that I do not enjoy: complicates taxes, contractors, tenants, paperwork. If you take it as a job or enjoy that type of activities, it’s another story. However, I do not.
2. I made enough appreciation. It was time to move on and let someone else prosper.
3. I’m not afraid to invest in stock markets, worked in the investment industry for a long time and have a certain expertise.
4. Most importantly, opportunity cost – I have better things to do. Things that I enjoy much more and that utilize my skills efficiently.

It’s probably not about the numbers. Think deeply whether you want to do that or not. For me, the answer came naturally one day. As a stoic and a minimalist, I intend to give up all material possessions.

#71 Shawn Allen on 12.23.19 at 11:39 am

Same-Store Sales Down?

#66 Mattl on 12.23.19 at 11:03 am
#63 Crowded:

As part of my job I track same store sales (SSS) across about 10% of Canadian merchant locations. SSS have been shrinking since Dec 2017. Typically we see 2.5% YOY growth, 2019 is tracking -3%. These are not large retailers, mostly SMB.

What I can’t account for is how much of this decline can be attributed to large online retailers so take it fwiw. But my instinct is people are gripping their wallets tighter.

Auto, boat and RV sales seem to indicate same.

*******************************
That is good information.

As you say, part is may be tighter wallet, part is switch to online. And part may be switch from smaller retailers to larger.

Costco reports same-store sales monthly for Canada and they are running at 5% adjusted for gasoline price fluctuations (cue Stan to go on tilt). Costco is constantly growing share at someone’s expense.

In Q3 Canadian Tire 2.4%, Sportchek 4.6%, Marks 1.2%

So, some are doing well, but still your information is something to be concerned about.

#72 Ponzius Pilatus on 12.23.19 at 11:39 am

#63
Surprised you don’t complain about the cost of the ferry ride.
Must have set you back 250 bucks.
As a senior I get on free.
Thank you Horgan.

#73 Sail Away on 12.23.19 at 11:45 am

#57 Dharma Bum on 12.23.19 at 9:21 am

John can’t help it if he’s lucky.

Anyway, just stop it already with all the “market is gonna crash and we’re all gonna die” crap.

Regardless of forthcoming circumstances, all John has to do is to keep investing his savings… and not even think about it. Period.

He will have millions and millions of dollars.

Lucky bastard.

———————————–

Oh, we’re all going to die. Count on it.

John is only lucky if he has a mindset that allows him to enjoy his bounty. Otherwise it’s just extra stuff over and above his needs. Sort of like having five cows when you only need two.

As Notorious B.I.G. says, “Mo money, mo problems”

#74 Blog Bunny on 12.23.19 at 11:59 am

”So don’t invest. See how that works out. – Garth”

My grandparents never invested. They stopped working at 80 (hobby business) and now a decade later, they are still living from their pile of savings. At 90, I do not see the point of starting them on something they do not understand, but the erosion of their purchasing power over one decade has been substantial. That’s right. Only 10 years. Please do not make the same mistake.

#75 Shawn Allen on 12.23.19 at 12:02 pm

Too Much Debt?

Money which is created by credit which is debt is, has been, and will continue to be the grease of the economy.

This has been the case since the invention of money. Monetary credit and debt were invented at the same time as the invention of money.

Predictions of financial doom were also invented at around that time. Occasionally it comes true.

But the trajectory remains ever more money, credit and debt.

Do no bet on this ending. Ever.

#76 Sail Away on 12.23.19 at 12:11 pm

#68 leebow on 12.23.19 at 11:17 am

As a stoic and a minimalist, I intend to give up all material possessions.

—————————————–

This site is an interesting place to find a minimalist Stoic.

#77 Crazed and a little confused on 12.23.19 at 12:12 pm

Hi garth,
I kinda followed your advice and have preferred shares etf and bond etf. I have 5 reits, 2 are slightly down and 3 are up. Luckily the down ones are just down about $1 and the up ones are more than a dollar. Its still capital gains. Then i have individual stocks . Mostly blue chip like exxon, apple and pzifer. Just recently sold mcd and bristol meyers and rebought nividia … fear of missing out.

Anyways though your advice on investing has been helpful. Real estate in the lower mainland has been quite s bit better investment . So i hope you understand you were wrong in that assessment. I read your books ” greater fool and money road ( great read) ” your prediction for increase interest rates were way off. These low rates are the norm. I agree they are stupid but they have stayed this low for over s decade and will so indefinitely. CASH is trash has made real assets skyrocket.

Food prices also are high. MY point is overall the better investment if the % rates are low. Before i sold my shares recently. I was getting about $ 600/ month anf $4000/ 3 months. Which more than covers my rent. But it id also because i chose high dividends stock and catch it as it falls. Yep i buy and sell and it falls to get more shares and then do a final sell when its high. Like mcd i sold it at $191. Though it still higher. I bought [email protected] $54. Held it for 9 years collect dividends all the way.

So the readers who see my post. Listen to garth advice to a point . Everyone is different in their situation. I do regretting now buying real estate but i also know i havd to sell the place to realize my gains thus where would i live. I have over $500 k in my portfolio tfsa/ rrsp and invest giving about 4% return every year and taxed very modestly covering all my rent. Will the stock market crash maybe yes. Who knows..
But the 500 k will only buy me 1 bd condo here. Such is what i deal with here in lower mainland of bc

#78 Mattl on 12.23.19 at 12:12 pm

I’d suggest those Canadian Tire and Marks numbers are not that strong either – at or below inflation. They should be able to hit 3-5% YOY with simple price adjustments.

Costco @ 5% is impressive, as a supposed price leader they may be benefiting from tighter wallets.

#79 Crazed and a little confused on 12.23.19 at 12:18 pm

I meant real estate is the better investment if interest rates are low. And the rates will remain low for a very long time

#80 Blog Bunny on 12.23.19 at 12:23 pm

#43 Ponzius Pilatus on 12.22.19 at 11:27 pm

It’s x-mas time and every one bragging about how they made a killing on the stock market.
How about bragging about how you helped out at the food bank or the salvation army.

————————————————————-

Ponzie, with the amount of taxes we are paying and the taxageddon that Garth keeps predicting, I am proud to say that we gave nothing to charity this year. Let Trudeau worry about that. We only support what Liberals hate: my ethnic community’s traditional church.

#81 Shawn Allen on 12.23.19 at 12:35 pm

Same Store Sales

#75 Mattl on 12.23.19 at 12:12 pm
I’d suggest those Canadian Tire and Marks numbers are not that strong either – at or below inflation. They should be able to hit 3-5% YOY with simple price adjustments.

Costco @ 5% is impressive, as a supposed price leader they may be benefiting from tighter wallets.

******************************
The Canadian Tire banners were mostly higher year to date. Q3 a little weaker. Q4, who knows? They do not reveal price versus volume. They cannot simply increase prices 3-5% annually. Many of their goods as IDTCH (or whatever) like tools are subject to deflation.

Costco must strike fear into the heart of all its competitors.

In another category Tim Hortons has struggled with slight negative same store sales I believe.

#82 Remembrancer on 12.23.19 at 1:52 pm

#78 Shawn Allen on 12.23.19 at 12:35 pm
Costco must strike fear into the heart of all its competitors.
—————————————————
That and of course WallyMart. Is there any data on Costco memberships? i.e. are they growing potential customers per se along with same store sales or getting more of current members? Not sure which would be scarier, probably the latter?

Not scientific, but local Marks at least seems to have been having sales the whole 4Q so far, though that’s one place where if you’re paying retail, you need to wait for a day of the week ending in “Y” , there’s almost a perpetual sale on so is harder to track I imagine…

#83 Sail away on 12.23.19 at 2:00 pm

#63 crowdedelevatorfartz on 12.23.19 at 10:44 am
I’m thinking the economy may be worse off than people think.
The last Friday before Christmas and I had to head to Vancouver Island for work.
9am sailing.
The ferry was only 3/4 full of cars….
Spoke to the crew about the empty lanes on the car deck.
” Unusually slow this year”.
The hotel I was in was half empty.
“Very slow this Christmas”
Came back last night to Vancouver on the ferry.
I pulled in to the ticket booth at 2:30 pm to catch a 3pm sailing…. only 50% sold half an hour before sailing on a beautiful 9 cel sunny afternoon.
People aren’t traveling this year….
Reasons?
Anyone’s guess.
But I’m thinking major debt might have something to do with it.
2020 could be a real hoot in the Canuck economy.

—————————————

Here are the reasons, Fartz:

1. Ferry use is low because most people have upgraded to Helijet and float plane
2. Hotel was only partially filled because it’s a budget hotel and some jerk keeps farting in the elevators. Most people are in luxury accommodation this year.

You’re welcome. Merry Christmas!

#84 Tony on 12.23.19 at 6:54 pm

Re: #6 Alessio on 12.22.19 at 3:00 pm

Remember they haven’t destroyed the U.S. dollar yet that’s why you don’t want to be short U.S. stocks. Of course very shortly after the 2020 election interest rates will fall into the negative category and the U.S. dollar will be destroyed.

#85 Sandro Cordi on 12.23.19 at 8:02 pm

You want to stop debt overload, obsession, sickness. It is easy. Put a 5% annual debt tax.

You have a $1 million dollar mortgage, pay $50,000 a year just to have that mortgage every year. The 2.5% or 3% mortgage annual rate plus CMHC and other fees, costs etc. is all extra as it stands.

Since you guys don’t want to raise interest rates which was the whole purpose of keeping speculation down and keep a more modest, gradual, sustainable debt level of Canadians, this is the hammer that is needed.

#86 Where's MY Moolah Greengo???? on 12.23.19 at 9:39 pm

On a tangent:
https://www.straight.com/news/1335566/bcsc-authorizes-settlement-agreements-securities-act-violators-who-profited-special
Make your own decision on why Vancouver lost its X-change….
BCSC really never amounted to more than a feebly applied band-aid to the west coast capitalist supplicants everywhere. Insiders welcome….

#87 Sail Away on 12.24.19 at 12:36 am

#7 Everything is better in USA! USA! on 12.22.19 at 3:04 pm

Its simply beyond me to understand how crazy are Canadians about buying houses. Most are financially illiterate to understand financial markets. Garth is right. How do you guys even afford to buy clothes and food after paying for the mortgages, taxes?

——————————-

That’s some interesting grammar for a homegrown US American. I’m guessing your country of origin is… India. Amirite?

#88 Wayne-o on 12.24.19 at 12:39 pm

Merry Christmas, Garth. Was reading an article on CNN on burnout from meeting daily postings/videos on YouTube. Taking a long break is the only cure and I implore youto take a vacation from your daily blog so you too can avoid burnout. I would hate to miss reading your messages if that should happen.

#89 Ken on 12.24.19 at 1:27 pm

Boom! Mic Drop.
There’s a reason they’re called trolls.
That guy is just a douche.
Thanks for the valuable and still free advice.
The blog rocks.