Damned lies

DOUG  By Guest Blogger Doug Rowat

.

Hockey used to be so easy.

Long ago, how good an NHL player was could be summed up with two data points: goals and assists. Maybe throw in penalty minutes to get a flavour for a players’ toughness and you had all you needed. In the past, the cartoons on the backs of hockey cards actually meant as much as the ‘data’. It was a simpler time.

O Captain, My Captain

 

Source: Google Images

Today, of course, the game has changed enormously. I now have to Google almost every advanced hockey statistic: Corsi, Fenwick, deltaSOT, DIGR, GVT, LAEGP, etc. For that last one, even Googling it—Location-Adjusted Expected-Goals Percentage—doesn’t help me.

Simply put, hockey stats have become so complex that they’re a complete mystery to most fans.

However, I despair any NHL general manager who ignores these metrics and attempts to build a team based purely on ‘gut feel’ or scouting reports. To be successful these days, general managers have to crunch numbers. And most NHL teams now employ full-time data-analytics specialists.

This data-driven approach to hockey is, of course, not dissimilar to portfolio management. For instance, it might feel like a bear market or recession is coming, but how I feel isn’t useful in terms of making an accurate forecast. The data must confirm my suspicions. Similarly with ETF selection, the numbers HAVE to support the inclusion of new positions in our portfolios, just as advanced hockey stats must justify, say, the selection of a particular draft pick.

To illustrate, let’s start with some broad, hypothetical forecasts: a bearish view of the energy sector and expectations for more overall market volatility. Therefore, we want to reflect these views with our choice of a Canadian equity ETF. Naturally, data analysis is also involved in making these broader forecasts, but let’s take the bigger-picture conclusions for granted and focus purely on the next step: the ETF selection itself. This process might be similar to a general manager who concludes that he needs a new second-line center, but must now make the correct trade or call-up from the minors.

Let’s also assume that it’s a simple swap: a Canadian equity ETF that we currently hold for another Canadian equity ETF that better reflects our new outlook. In this case, we need an ETF that fits with our overall thesis of a negative energy-sector outlook and expectations for more market volatility.

We typically begin with some simple screens in Bloomberg to narrow the enormous ETF universe—there are, for instance, more than 800 Canada-domiciled ETFs trading in the market presently. However, once we’ve refined the universe, then the more detailed one-on-one comparisons can begin. These initial comparisons might look something like this, first based on the ETFs’ energy-sector exposure and longer-term volatility:

ETF point-by-point comparison – step 1

Source: Bloomberg, Turner Investments

The point-by-point comparisons would continue until a fuller picture is realized. We look at more variables than what are shown below, but the below gives a rough example of the comparative process. The preponderance of ‘green’ for the potential replacement ETF suggests that further investigation is definitely warranted:

ETF point-by-point comparison – step 2

Source: Bloomberg, Turner Investments

Ultimately, we might end up with a short-list of 2-3 replacement candidates. The next steps would be to read more about these ETFs (websites, prospectuses, etc.) and contact each of the ETF providers to ensure that there aren’t any hidden features that we’re unaware of. It’s also useful to make all the ETF providers aware of the other options that we’re considering. This allows them the opportunity to punch holes in their competitors’ arguments, which sheds even more light on the best potential candidate.

More often than not, the ETF we select will be the correct choice, but regardless of the outcome, it’s a defensible selection, one well supported by the data and due diligence.

We also don’t lose sight of the fact that talking to real people at the various ETF companies can be just as important as the number-crunching. Getting their insight, which is largely unbiased because we’ve developed good long-term relationships, provides additional valuable information.

The data analysis itself will only take us so far. The perspectives of real people matter too.

And proof that numbers aren’t everything? I recently had a chance to meet the guy on the hockey card. And meeting one of the greatest Maple Leaf captains of all time?

Well, it’s hard to put a number on that.

Rowat meets Sitt

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

 

81 comments ↓

#1 Dharma Bum on 01.11.20 at 9:33 am

Fyrst

#2 Slowly Boiling Frogs on 01.11.20 at 11:00 am

Go Leafs Go!

#3 Ponzius Pilatus on 01.11.20 at 11:24 am

Still too much old school thinking in Canadian hockey.
They paying 6 mill for an old war horse like Lucic.
Can’t skate but he plays with his heart, they say.
Has a presence in the dressing room, they say.

#4 TurnerNation on 01.11.20 at 11:34 am

A weekend hockey post. A week or two before this article I called it on this blog, that hockey is the next cultural battlefield/under attack. They bought out the big guns a week or two later in the WSJ. (It’s great knowing that DNA no longer matters in anything. Say, so why then are our elites bent on us mailing in ours?)

“Diversify or Die: The National Hockey League Has a …
https://www.wsj.com › Sports › NHL
Dec 15, 2019 – Now the Akim Aliu allegations have forced the NHL to confront a problem … On Wednesday, The Wall Street Journal reported that, as a new player … general managers would now have mandatory annual diversity education”

— The recent news events everyone is talking off. Someone I know an addict to his devices and ‘news’ feeds for many years slowly woke up this week. He admitted this week that they are just mocking us now. Total BS being fed. He gets it. That the ‘news’ isn’t a global mil-intel project would be a surprise to fewer and fewer these days.

#5 Dogman01 on 01.11.20 at 12:31 pm

The endless battle between System 1 thinking and System 2 thinking.
Thinking fast and thinking slow. – Just read the book.

17 x 24 – Your fast brain (system 1) knows the answer is not 2253 and not 124, but could be 504.
You slow thinking (system 2) is lazy and does not want to be engaged and it takes up all of your attention.
Most people shut down their system 2 and that is the world of entertainment, gossip and most popular entertainment.

Ultimately though all decisions are made as a leap of faith or else you are condemned to paralysis by analysis.

#6 David Colquhoun on 01.11.20 at 12:34 pm

Nice picture. Very cool.

#7 Westcdn on 01.11.20 at 1:05 pm

I mentioned a while back that I converted my RSP into a RIF basically to save fees at the ripe age of 60. I am winding it down as fast as I can tax efficiency and moving the money to my non registered account and TFSA. I want to give my daughters so avoiding death tax on my RIF matters. I have a small mortgage but money is so cheap I am in no hurry to pay it down.

I am a DYI and play in grounds that EFT managers are prohibiting by mandate. The rewards are great but punishments are severe. I am now looking for quarterly reset preferred shares. It is an area free of big money lizards. It is the ground I look for. Most days it works out… sometimes it doesn’t.

My sister died. I worry about her daughter but she is strong. I wonder what value is an average guy – like me.

#8 Shawn Allen on 01.11.20 at 1:34 pm

RIF and windown strategy

#7 Westcdn on 01.11.20 at 1:05 pm

I mentioned a while back that I converted my RSP into a RIF basically to save fees at the ripe age of 60. I am winding it down as fast as I can tax efficiency and moving the money to my non registered account and TFSA.

********************************
The fees in a RIF are lower? What fees? My RSP has no fees except $10 trading fees.

So in RIF at 60 you are required to make withdrawals, right? What was the advantage of that.

If winding down you are taking out more than the required annual amount.

What is your marginal tax rate on the extra withdrawals.

I would say RRSP wind-down is no tax efficient for people still working or those getting a good pension. In those cases they are already in too high a tax bracket to do a wind-down.

I am not a fan of RRSP wind-down for most people but it may make sense when there is little to no other income between ages 55 and 65 say and/or where longevity is not expected. It might make more sense for a single person since the expected longevity of the last of a couple to die is longer than for a single.

I am sorry to hear about the death of your sister. For those of us around your age and above mortality is indeed a looming risk.

#9 Sold Out on 01.11.20 at 2:08 pm

A very persuasive argument against DIY investing. How many of us have the time, patience, interest, and mastery of emotion to analyze portfolio selections with this degree of rigor?

Chalk one up for professional money managers; no matter how highly one might think of their own abilities, it would be nearly impossible for an amateur investor to put this much research into their choices.

If it were a matter of just going through the process described above once, then forgetting about it while the money rolls in, we amateurs may be able to pull it off. It’s the fact that this process is continuous that makes it onerous and fraught with opportunities to make bad decisions.

I’m too old to make bad decisions with money. I think I’ll leave mine with pros.

#10 Oakville Rocks! on 01.11.20 at 2:21 pm

Hey Doug,

I am just now working my way through Annie Duke’s Thinking in Bets. I picked it up on your recommendation in your blog post on decision making. It is a great book and well worth a read, for anyone, but perhaps more so for anyone running a business (regardless of Ms. Duke’s ethical lapses).

Thanks! Book recommendations, sources for additional information/ideas are always a welcome addition to the blog.

#11 IHCTD9 on 01.11.20 at 2:24 pm

#8 Shawn Allen on 01.11.20 at 1:34 pm
——

Most of our retirement funds are going to be in RRSP’s unfortunately, and the wife has a pension just to complicate things further.

The only way we can see unwinding efficiently in our case is a half decade or more of part time work. 3 days per week, while drawing down the RRSP’s at the same time.

Still won’t be enough (especially for Ms. IH), but it would be a nice dent effected, while also having a nice 4 day weekend semi retirement phase.

After that, we’ll just have to take our tax lumps…

#12 IHCTD9 on 01.11.20 at 2:43 pm

#9 Sold Out on 01.11.20 at 2:08 pm
——

Yep, some things are worth paying for. Auto body work and drywalling are also good examples, you can’t do this stuff just once, you have to do it all the time to get good (and fast) at it. It’s an “art”, no one does a good job the first time (or the second, third etc…)

For the cost of having a Pro handling your portfolio, it’s a no brainer. You only have to screw up big one time, and you are starting over again. Emotions also play a role when handling your own cash, these can lead many to destruction.

Some folks may have a natural inclination for investing and love the process – these folks may do well on their own. I’m not one.

I do great at mechanical and construction stuff, but I’m old enough to know what I can’t do…

#13 Stone on 01.11.20 at 3:15 pm

The hockey card says “PRINTED IN CANADA”. Wow! Now that’s something special. Something done in Canada that doesn’t relate to banking, real estate, or insurance. Who knew…

#14 FreeBird on 01.11.20 at 3:18 pm

Great picture.

When your spouse likes to watch the investments and look for new buy low sell high opportunities (more payoff) while ignoring other metrics it’s good to have a cooler head whose full time job is to do just that between them and the nest egg. So I can sleep at night. Looking for the next big score is great in sports and even business but not your investments. (Works with the blog theme today)

#15 Andrewski on 01.11.20 at 3:33 pm

Doug, thanks for sharing how you choose, due diligence rules.

#16 Ed on 01.11.20 at 4:18 pm

The world needs more Sittlers…men were men and all that.

#17 Yukon Elvis on 01.11.20 at 4:53 pm

Adele reportedly told two fans that she’s lost around 100 lbs in weight, calling her transformation a “crazy positive experience.”

The 31-year-old singer made headlines last week when she was seen on the beach in Anguilla showcasing a noticeably slimmer frame as she holidayed alongside pals Harry Styles and James Corden.

During the vacation, Adele dined at a beachside restaurant, where she got chatting to two fans who asked her about her new look.

“Adele came over and sat down next to me and my friend and was like, “So what can I do for you girls?'” fan Lexi Larson told People. “We were so excited. We were talking to her for a little while, and then she got Harry Styles to come over and sit with us also. We took a picture with Harry, and we talked to them for 15 minutes probably.

“She said she lost something like 100 lbs and that it’s such a crazy positive experience. She seemed so happy, and she looked amazing. She seemed really confident.”

According to reports, Adele has been following The Sirtfood Diet, which encourages you to eat sirtuin activator foods that suppress the appetite, and taking reformer pilates classes to help her shed the pounds.

#18 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 01.11.20 at 5:04 pm

Good old Darryl!

When he joined the Make Believes, they were just 3 years past their last Stanley Cup.

Now it is 53 years since they’ve won. :(

His talent and leadership were sabotaged by the incompetence of the team’s ownership, the new ‘normal’ for all things Toronto. Darryl, Lanny, Borje were all shown the door.

Now the team has dumped its latest coach and will be doing another make-over con job soon, convincing its pathetic fans to just wait “a few more years” (AGAIN!)for the franchise to be rebuilt.

LOL!

That little kid in the top picture could probably outplay the whole team today.

Today the GTA is no longer a haven for sports excellence, or excellence of any kind.

But if you want to be a murderer (“Hit and run” specialists are the new breed there this year) or a delusional real estate investor/scammer, then it’s still the place for you.

Toronturds and GTAHoles, you embarrass all of Real Canada.

#19 Where's The Money Gone Greedeau? on 01.11.20 at 5:27 pm

Re: #20 This Just In on 01.09.20 at 5:13 pm
One thing that is going to slow condo tower sales , new and resale units, is rapidly expanding insurance costs.
It’s hit the west coast with figures in hundreds of percent’s increase.
Abbotsford example on 2 year old 26 story condo, insurance for total unit, jumped from 66k to almost 600K. Tenants faced with 3K levy and double condo fees to $600 a month. Numerous other examples. Whether this is a west coast rip off or not this trend is likely to hit the condo industry. Particularly towers as costs of claims has escalated as insurance based on total building not just your suite. The bigger they are the higher the risk. Not even thinking about years to come when all that glass starts leaking….

https://www.abbynews.com/news/abbotsford-high-rise-condo-owners-see-780-per-cent-insurance-hike/
+++++++++++++++++++++++++++++
Leaking glass, the least of the worries, what about all the water that is trapped in the walls during construction.
The water pours in while the stud walls are put up, then they come in and board up over those. Thus the makings of a lot of mould growing in those walls.
I saw it while I was installing the windows in those buildings, with the windows helping to direct the water into those walls while we went from floor to higher floor. I can remember bosses wanting us to caulk in the water in the window wall, even imploring us to try to seal under a half inch of water! Absolutely hilarious!
At least a single family house has only 2-3 floors of those bad walls.
That was back before some building code changes regarding the construction of those windows but it has still not addressed the tarping of said buildings to stop water ingress while construction takes place. Costs too much you see, and cuts into profits.
I have been in finished buildings where the leaks in the lower floors came from the upper floors and would fill 5 gallon buckets in seconds. With the rain in Vancouver you will never stop the mould in any new building not closed up before the rains come.
You would never get rid of the moisture unless you completely stripped the floor of all walls and rebuild.
I would NEVER buy a condo in a tower, let alone a 2-3 story one.
Insurance rates and taxes to skyrocket when people start to realise that all their medical conditions were caused by these shoddy building practices and the city inspectors allowing these transgressions while getting their wallet padded.

#20 Doug Rowat on 01.11.20 at 5:44 pm

#10 Oakville Rocks! on 01.11.20 at 2:21 pm

Hey Doug,

I am just now working my way through Annie Duke’s Thinking in Bets. I picked it up on your recommendation in your blog post on decision making. It is a great book and well worth a read, for anyone, but perhaps more so for anyone running a business (regardless of Ms. Duke’s ethical lapses).

Indeed, poker teaches valuable lessons. In particular, not bemoaning bad luck and wallowing in self-pity.

Poker, like investing, doesn’t have certain outcomes, only more likely ones. So, it’s not the result that matters, it’s whether or not you made the correct decision.

–Doug

#21 Ustabe on 01.11.20 at 6:02 pm

#9 Sold Out on 01.11.20 at 2:08 pm
…I’m too old to make bad decisions with money. I think I’ll leave mine with pros.

Me too. Additionally to being old I simply don’t have the time. I run the kids group of a local Streamkeepers outfit. I sometimes am asked by the local Economic Dev folks to help out a new business owner and that can morph into a couple of months (why do they never seem to have a competent business plan?), I have involvement in two ongoing things, one seasonal, one year round. Both profitable! Friends call for help or companionship. Planning our travel…in the books, a month long excursion this summer up to Yellowknife and the whole lower area of NWT. In the first stages, river cruises in or around Croatia.

Plus watching hockey. Mt Canucks have a couple of real treats playing their first seasons, along with some solid complimentary players.

All of us have our “go go” years. All of us will enter our “go slow” years and hopefully then our “no go” years and then pass sometime in our “where did everyone go years.”

As someone creeping into my go slow years my advice is do not waste your go go years.

#22 Lead Paint on 01.11.20 at 6:03 pm

#17 Yukon Elvis on 01.11.20 at 4:53 pm

Posting celebrity news about Adele should definitely get you banned.

#23 Where's My Money Hidden Greedeau? Costa Rica Or In Bill's Chateau on 01.11.20 at 6:07 pm

Re: #54 Deplorable Dude on 01.10.20 at 7:51 pm
Another stealth ‘tax’ in BC?….ICBC is now requiring that you register all potential drivers of your car. Your premium now potentially gets whacked depending on the driving record/age of these listed drivers.

And someone mentioned carbon tax….why the hell do we get this added to our electric bills in BC?? 90% of our power is hydro generated. Just about the most cost effective and clean power option available.
+++++++++++++++++++++++++
They add it to the electric bills because then everyone, including renters who usually get their heat and hot water paid, will then pay up. Cast the biggest net, trap the most fish…..

#24 espressobob on 01.11.20 at 6:08 pm

Passive index investing across the board by way of market capitalization is a proven method over time of matching overall performance.

Some sectors in an individual index may suck until they don’t.

Why try to time it? Just saying.

#25 Bezengy on 01.11.20 at 6:24 pm

Wind down strategy? I’ve been thinking about this as the last thing you want to do is kick off with a pile of cash inside your RSP and then let the government take nearly half. Minimizing your tax burden is complicated as far I can tell. Too many variables to be totally accurate. I think the government is going to be cashing in big time from those take too long to make their withdrawals.

#26 MF on 01.11.20 at 6:25 pm

#18 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 01.11.20 at 5:04 pm

Oh no not this guy again.

He’s this blog’s version of SARS.

Shows up randomly, poops everywhere, then mysteriously retreats back to whatever jungle he came from.

MF

#27 Bezengy on 01.11.20 at 6:29 pm

Forgot to mention. When I was a kid I sent #27 a letter and told him he was my favourite player. He sent me a signed picture. Those were the days.

#28 MF on 01.11.20 at 6:43 pm

Yukon Elvis

-Should have been an instant ban right there.

How dare you speak that name around here?!

Next thing you know we are going to hear updates on Drake.

MF

#29 Sail Away on 01.11.20 at 6:51 pm

#12 IHCTD9 on 01.11.20 at 2:43 pm
#9 Sold Out on 01.11.20 at 2:08 pm
——

Yep, some things are worth paying for.

For the cost of having a Pro handling your portfolio, it’s a no brainer. You only have to screw up big one time, and you are starting over again. Emotions also play a role when handling your own cash, these can lead many to destruction.

———————————–

Agreed… sort of, and with lots of caveats.

My issue is that many supposed pros are not very good. It’s only when you personally understand investing that you know who’s good and who’s not.

I had an absolute disaster of a ‘pro’ managing my money 15 years ago. Long story short: since then, nobody touches my family’s money but my wife and me. Doing this was our best move.

As you say, not everyone has the interest in managing their own investments. If you do have the interest, are of at least average intelligence, and willingly do lots of research/tracking, it might be for you.

Otherwise, you can’t go wrong with Garth’s team. You can go very far wrong with other teams.

#30 Sail Away on 01.11.20 at 6:58 pm

#24 espressobob on 01.11.20 at 6:08 pm

Passive index investing across the board by way of market capitalization is a proven method over time of matching overall performance.

Some sectors in an individual index may suck until they don’t.

Why try to time it? Just saying

——————————

Well, you don’t want to buy in at the absolute top frenzy. I will never ever buy at a 52 week high. Hence, I’m not buying index these days, but have bought significant preferred shares.

Choosing an entry point is prudent.

#31 acdel on 01.11.20 at 6:58 pm

Go Flames Go! But will admit that Sittler was one of the great ones! Enjoyed watching him play, like Lanny, Orr, Esposito; could go on forever! If only I had held on to my old hockey cards which always came with bubble gum!

Informative blog today, thanks!

#32 Sail Away on 01.11.20 at 7:04 pm

#17 Yukon Elvis on 01.11.20 at 4:53 pm

Adele reportedly told two fans that she’s lost around 100 lbs in weight…

According to reports, Adele has been following The Sirtfood Diet…

—————————

As always, my advice is:

1. If you’re fat and want to lose weight, stop eating. You’ll lose weight. No diet needed.

#33 crowdedelevatorfartz on 01.11.20 at 7:06 pm

@#98 Sold Out
“…instead of wishing that everyone else be dragged down to your level of misery….”
+++++

Misery?
Hardly.
Just tired of forking out 10’s of thousands of $$$$ every year in taxes that I see urinated against a govt wall.
And then hearing the govt employees of every level bitch and moan about how “hard” they have it.
Wanna see hard ?
Quit YOUR job and go work in the private sector.
I actually said that to govt employees over the past few year when they complained about their jobs.
“You can always quit and go work in the private sector!”
Crickets.
Govt. employee navel gazing wont last there.
The “meetings to discuss previous meetings”…pfft.
The endless emails back and forth “cc”ing everyone and anyone to pretend the issue at hand is actually important.
50% of govt administrators could be fired tomorrow and no one would notice.
And defined benefit pensions? What the hell IS that?

If anyone in the public sector expects Sympathy from private sector workers …… especially when they go on another strike for even more money and generous benefits……give your head a shake.

#34 Reality is stark on 01.11.20 at 7:08 pm

Some statistics don’t lie.
As I have said all along look out for large increases in property taxes. Garth’s article yesterday only vindicated my predictions.
No real wealth has been created in the last decade.
The government goosed the non-productive real estate sector with quantitative easing. People have been borrowing against the sector to maintain their lifestyles as good manufacturing jobs disappear replaced by minimum wage distribution jobs.
The feds are forced to give less to the Provinces and the Provinces give less to municipalities. The municipalities go back to the real estate well to suck back the artificially created wealth.
If you want to learn why this is all smoke and mirrors read Dr. Kurt Richebacher’s articles written prior to the USA real estate crash to understand the principles.
After 2008 there should have existed political will to cut public sector wages by at least 10% to reflect the new economic reality. Instead public sector wages steadily increased which is pure insanity.
All we have now are outrageous public debts which become tomorrow’s taxes. Property taxes.
No real wealth has been created.
However there has been a transfer of wealth in percentage terms from the private to the public sector which has been decidedly unproductive.
You have been fleeced.

#35 Yukon Elvis on 01.11.20 at 7:12 pm

#22 Lead Paint on 01.11.20 at 6:03 pm
#17 Yukon Elvis on 01.11.20 at 4:53 pm

Posting celebrity news about Adele should definitely get you banned.
……………………….

Everybody loves her and the dietary advice is Golden.

#36 crowdedelevatorfartz on 01.11.20 at 7:13 pm

Doug.
Interesting analogy and great photo.
Keep up the good work.

#37 Sold Out on 01.11.20 at 7:29 pm

#12 IHCTD9 on 01.11.20 at 2:43 pm
#9 Sold Out on 01.11.20 at 2:08 pm
——

Yep, some things are worth paying for. Auto body work and drywalling are also good examples, you can’t do this stuff just once, you have to do it all the time to get good (and fast) at it. It’s an “art”, no one does a good job the first time (or the second, third etc…)

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

I would only admit this on an anonymous site, for reasons of preserving my own sanity, but I’m pretty good at mudding/sanding. Don’t get me wrong, I loathe doing it, and I’m not fast, but can do a creditable job if required. Boarded, taped,mudded, sanded and painted my own house. Never again, though. Patching is all I can bring myself to do. Finishing a closet would probably make me cry, now. Vile job.

#38 Figmund Sreud on 01.11.20 at 7:38 pm

On somewhat related topic, … on ETFs managers:

The Hidden Dangers of the Great Index Fund Takeover

The Big Three—BlackRock, Vanguard, and State Street—are the most important players in corporate America. … The S&P 500’s total return was a thumping 31.5% in 2019, and a fund that passively tracks that benchmark delivered almost all those gains, minus a tiny fee—perhaps just …

https://www.bloomberg.com/news/features/2020-01-09/the-hidden-dangers-of-the-great-index-fund-takeover

FWIW.

Best

F.S. – Calgary, Alberta.

#39 MF on 01.11.20 at 7:43 pm

#33 crowdedelevatorfartz on 01.11.20 at 7:06 pm

I’ll bite.

If public sector workers weren’t paid a livable wage and had no benefits do you think the system would function better?

MF

#40 Lead Paint on 01.11.20 at 7:49 pm

#33 crowdedelevatorfartz on 01.11.20 at 7:06

Excellent comment. I love it when government employees argue they deserve to keep or enhance their golden salary/pension/benefits/job security etc., to avoid a race to the bottom for ALL workers. Who do they think is paying for all their perks?

#41 crowdedelevatorfartz on 01.11.20 at 7:59 pm

My my.
Seems it took 3 days for the Iranian military to realize they were missing 2 surface to air missiles…..
Be interesting to see how this plays out.
Unpopular govt.
Unpopular Leaders.
Previous demonstrations ruthlessly crushed.
Will this be the impetus for the Iranian people to finally kick out their theocratic dictatorship?

#42 espressobob on 01.11.20 at 8:02 pm

#30 Sail Away

Rebalancing, or taking profit from one asset class and piling it into another usually proves shrewd.

Prefs are out of vogue for many due to their underperformance for the past few years.

Love rate resets. Bring on more downside, please.

#43 Yukon Elvis on 01.11.20 at 8:04 pm

#28 MF on 01.11.20 at 6:43 pm
Yukon Elvis

-Should have been an instant ban right there.

How dare you speak that name around here?!

Next thing you know we are going to hear updates on Drake.

MF
……………….

You aint’ nuthin’ but a hound dog.

#44 #33 crowdedelevatorfartz on 01.11.20 at 8:05 pm

You have probably never worked for a private sector organization with tens or hundreds of thousands of employees. Lots of slackers hiding in plain sight. You need to read Kevin O’Learys autobiography and read about his time when he sold his software company to Mattel, with a management contract. His complaints about the employee behaviour at that long running private sector company read like a critique of government workers. It has a lot to do with the size of the organization. Private sector superiority in similar sized organizations has a lot of myth to it.

#45 Grunt on 01.11.20 at 8:08 pm

Forget the stick analogy. Think AI bot.

Bay (Bear) St. Toronto history the skinny:
Clearing land of timber resources used to fire brick kilns and heat.

Railroad from the lake industrialization and manufacturing.

Information age and condo market, home shopping.

What resource, what technology is next to surface?

#46 crowdedelevatorfartz on 01.11.20 at 8:17 pm

@#33 MF
“paid a livable wage ”
+++++

Please define a “livable wage” as opposed to the endless union leadership demands for more more more…
As my grandmother used to say about greedy people.”Much always wants more.”
Once, just once, I’d like to see a union leader stand up and say, “We already have great pay and benefits, we dont need to negotiate this time around.

Tell you what.
Go on a years sabbatical (I hear it very popular among you govt types) and do your same job in the private sector…tell your bosses you want to “learn” new things.
That way , when you return, your above average salary and benefits will kick right back in….

#47 MF on 01.11.20 at 8:58 pm

#46 crowdedelevatorfartz on 01.11.20 at 8:17 pm

I don’t work for the government but a close family member does. The majority of government salaries are around the 40-50k/year and contract.

Majority of younger workers say the private sector is where the money is. The older ones lament a previous time when the salary was enviable.

A livable salary is one that allows for the position to be filled by people who are competent and care. Just look around the world at the levels of corruption in places where government salaries are pitiful and people can be bought and paid for proof of what happens when they aren’t.

I think you are stuck in 1990 with this issue. I would rather a competent, caring, teacher, police officer, or nurse who is not underpaid and values her job taking care of me instead of someone who works like a minimum wage worker with no vested interest.

How about you?

MF

#48 James on 01.11.20 at 9:02 pm

crowdedelevatorfartz guy said:

If anyone in the public sector expects Sympathy from private sector workers …… especially when they go on another strike for even more money and generous benefits……give your head a shake.

++

You’ll be enjoying this year then!

Looks like Ontario will be having high school, elementary, public and catholic teachers on strike within about ten days or so.

The Toronto city workers’ contract has also expired and they are voting on a strike this month, probably picketing soon since the city has a big budget hole to fill.

Then some Ontario government workers may follow suit as well as in BC and some other provinces.

2020 is looking like the Year of Public Sector Strikes!

#49 mike from mtl on 01.11.20 at 9:03 pm

#38 Figmund Sreud on 01.11.20 at 7:38 pm
On somewhat related topic, … on ETFs managers:
//////////////////////////////////////////////////////////////////////

Read some quarterly earnings reports and you’ll see the top holders are almost always the corp’s founders / c-suite staff, then pension funds, large shareholder individuals, some mutuals. It’s not often you see a passive ETF anywhere near the top shareholders.

Normal passive ETFs for the time being are not at all in danger of sequestering the market. Mutuals are already there if you’re so concerned.

#50 Doug Rowat on 01.11.20 at 9:13 pm

#27 Bezengy on 01.11.20 at 6:29 pm

Forgot to mention. When I was a kid I sent #27 a letter and told him he was my favourite player. He sent me a signed picture. Those were the days.

Plus you’re comment #27. C’mon. How’d you pull that off?

–Doug

#51 crowdedelevatorfartz on 01.11.20 at 9:27 pm

@#33 crowdedelevatorfartz
“You have probably never worked for a private sector organization with tens or hundreds of thousands of employees. Lots of slackers hiding in plain sight. ”
++++

Ladies and Gentlemen .
An angry public sector worker to lazy or stupid to invent their own name.

FYI “Lazy Guy”

Yes I worked for SNC Lavalin after they purchased our company.
Thousands of workers.
A huge portion of the management are “retired” govt sector workers.
( a total conflict of interest when the govt workers “retire” and then work for the very same company they were responsible for overseeing. But thats another issue……)
Arrogant, entitled, stupid and lazy were but a few adjectives to describe former govt managers in the private sector…….

I walked after 1 year.
Walked away from 20 years seniority, 5 weeks holidays, share options, pension and with my integrity intact.

I couldnt handle the stupidity.
I now am making twice the salary with huge performance bonuses.

#52 Axehead on 01.11.20 at 10:12 pm

Very cool Doug. My hockey hero has always been Orr. Sittler was someone to watch. A real leader.

#53 Ustabe on 01.11.20 at 10:27 pm

@crowded:

When multiple folks try and tell me something I usually sit a bit and think on it.

I certainly bide my time for a bit before I double down and basically prove their points.

A small percentage of any workforce will be dead weight. It is far less of an issue than you make it out to be yet your personal recollections and the impressions you hold from wherever that you are sharing here seem only designed to inflame and argue.

Try bringing some solutions, not more problems.

You will never get an invite to Garth’s private Patreon forum this way.

#54 Boris Corbyn on 01.11.20 at 11:18 pm

#13 a few years back I bought shampoo at Target in the US, it was manufactured in Canada.
A week before I had bought American made shampoo in Walmart in Canada.

So we still make shampoo. Or at least did 6 years ago.

#55 SoggyShorts on 01.11.20 at 11:44 pm

#32 Sail Away on 01.11.20 at 7:04 pm
#17 Yukon Elvis on 01.11.20 at 4:53 pm

Adele reportedly told two fans that she’s lost around 100 lbs in weight…

According to reports, Adele has been following The Sirtfood Diet…

—————————

As always, my advice is:

1. If you’re fat and want to lose weight, stop eating. You’ll lose weight. No diet needed.

***************
I like Neil DeGrasse Tyson’s reasoning: Weightloss is just math: calories in minus calories used. It is impossible to perform an action without energy, so if you eat less energy than you use it has to come from your body’s stored energy. (paraphrased)
Also, absolutely worth watching:
https://www.youtube.com/watch?v=lQ6-nCLeDsI

#56 mark on 01.12.20 at 12:06 am

Have to admit the older I get the less I care about kicking the wheels of new funds. Though after a year when everything went up 20%+ you’re hardly interested in greener grass.

#57 Ponzius Pilatus on 01.12.20 at 12:14 am

Obviously, Fartz never played or coached hockey.
That’s why he never learned to accept defeat with respect.

#58 crowdedelevatorfartz on 01.12.20 at 12:29 am

@#53 Ustabe
“Try bringing some solutions.”
++++
Here’s a quick easy one….

Less govt employees = lower taxes????

As for never being invited to Garth’s “private patron form”….. I’m sure I’ll survive.

#59 Sail Away on 01.12.20 at 12:36 am

#53 Ustabe on 01.11.20 at 10:27 pm
@crowded

Try bringing some solutions, not more problems.

You will never get an invite to Garth’s private Patreon forum this way.

————————–

No astute investor shouldvever deal with Patreon, since they take 10% off the top.

#60 Sail Away on 01.12.20 at 12:42 am

#26 MF on 01.11.20 at 6:25 pm
#18 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 01.11.20 at 5:04 pm

Oh no not this guy again.

He’s this blog’s version of SARS.

Shows up randomly, poops everywhere, then mysteriously retreats back to whatever jungle he came from.

MF

——————————

You ever hear of the Seagull Management Strategy?

They fly in, shit all over everything, make a lot of noise, and fly away.

#61 Sail Away on 01.12.20 at 12:48 am

#50 Doug Rowat on 01.11.20 at 9:13 pm
#27 Bezengy on 01.11.20 at 6:29 pm

Forgot to mention. When I was a kid I sent #27 a letter and told him he was my favourite player. He sent me a signed picture. Those were the days.

Plus you’re comment #27. C’mon. How’d you pull that off?

–Doug

—————————

It’s so implausible as to be almost… magical. Who is Bezengy really?

#62 Keeping the Faith on 01.12.20 at 12:50 am

Hi Doug,

Great post & thanks again for bringing interesting perspectives to the discussion with a healthy dose of creativity!

Something I have wondered about for a while when it comes to filtering ETFs is this:
When considering currency exposures, your team suggests 1/4 exposure to green backs.

Q: What is the recommended exposure to international currencies that are not the USD?

An example would be something like a Vanguard unhedged CAD VDU.
Or should all international ETF exposure be CAD-hedged like in a Vanguard VEF?

Thanks for your help & great topics!

#63 crowdedelevatorfartz on 01.12.20 at 8:10 am

@#57 Ponzie Pilot
“That’s why he never learned to accept defeat with respect.”
++++
I’m small potato’s.
It took Germany two world wars to figure that out.

Brave of you Ponzie to take a shot after every one else has piled on….. :)

#64 crowdedelevatorfartz on 01.12.20 at 8:35 am

Another year another expensive Govt inquiry to tell the taxpayers what we already knew….

https://www.citynews1130.com/2020/01/11/dozens-expected-testify-demanded-dirty-money-inquiry/

The hearings begin in BC in Feb. are expected to wrap up in Dec and a report ‘sometime in May of 2021…”

All to tell us Lower Mainlanders that “international money was laundered in BC” …the shock and disbelief among our elected officials will be palpable.

And , of course, all the politicians will stand up and say they are shocked that this could happen here.
Something MUST be done.

Then they will pass even more outdated and ineffective Laws which criminals and their lawyers will find loop holes around or totally ignore…because, well, they’re criminals…..
Kinda like the new proposed Liberal handgun ban in cities and possibly the entire country…. the criminals dont care about bans and Laws….they ignore them.

Thats why they’re called criminals.

#65 Bytor the Snow Dog on 01.12.20 at 9:26 am

#53 Ustabe on 01.11.20 at 10:27 pm sez:
“@crowded:

When multiple folks try and tell me something I usually sit a bit and think on it.

I certainly bide my time for a bit before I double down and basically prove their points.

A small percentage of any workforce will be dead weight. It is far less of an issue than you make it out to be yet your personal recollections and the impressions you hold from wherever that you are sharing here seem only designed to inflame and argue.

Try bringing some solutions, not more problems.

You will never get an invite to Garth’s private Patreon forum this way.”
———————————————————————————–
I was a public servant and boy oh boy the stories I could tell. However the situation I was in was unique and I don’t wanna dox myself.

I retired, got bored, and went to work for a non profit. It’s worse! That said, I have no beef with what individual employees make but Fartz has a point about there being so many useless eaters. Then there’s the fact that a certain segment of society wants to bubble wrap the world and thus we get bogged down with rules and regulations that need staff to enforce them.

PS- Garth has a private forum and I wasn’t invited! Preposterous!

#66 Dharma Bum on 01.12.20 at 9:32 am

“…but regardless of the outcome, it’s a defensible selection…” – Doug
——————————————————————–

The operation was successful, although the patient is dead.

#67 Doug Rowat on 01.12.20 at 9:42 am

#62 Keeping the Faith on 01.12.20 at 12:50 am

Hi Doug,

Great post & thanks again for bringing interesting perspectives to the discussion with a healthy dose of creativity!

Something I have wondered about for a while when it comes to filtering ETFs is this:
When considering currency exposures, your team suggests 1/4 exposure to green backs.

The 20-25% USD exposure is purely a portfolio diversifier. USD also has a certain utility because many clients have US-dollar business expenses (or at least vacation in the US).

However, playing currency direction on an on-going basis is pointless. Something I’ve written about often:

http://www.turnerinvestments.ca/pdfs/Currency-Conundrums-JUNE2016-final.pdf

For example, investors in 2002 hoping to capitalize on further Canadian dollar weakness, which on the surface seemed likely because there was a previous decade of strong downside momentum, are still waiting for that trade to be in the money–18 years later.

So, if it’s this difficult to time the simple CAD/USD pair, don’t even bother trying to do it with international currencies.

–Doug

#68 Doug Rowat on 01.12.20 at 9:50 am

#66 Dharma Bum on 01.12.20 at 9:32 am

“…but regardless of the outcome, it’s a defensible selection…” – Doug
——————————————————————–

The operation was successful, although the patient is dead.

Clever. And a mischaracterization of my point.

It’s a long season. We lose games, but long term, we have a winning record.

–Doug

#69 MF on 01.12.20 at 10:25 am

#58 crowdedelevatorfartz on 01.12.20 at 12:29 am

Like many, you mistakenly believe that all government tax revenue is spent on salaries and employees.

I’ve posted here many times already that the majority of spending from government goes towards benefits like OAS, child tax etc.

This sounds more like a personal beef than anything based on evidence.

..and answer my question at post 47 lol.

MF

#70 Sail Away on 01.12.20 at 10:51 am

#63 crowdedelevatorfartz on 01.12.20 at 8:10 am
@#57 Ponzie Pilot

“That’s why he never learned to accept defeat with respect.”

——————————-

Brave of you Ponzie to take a shot after every one else has piled on….. :)

——————————-

Ponzie waited until you were down and hurt before running out, taking a kick that mostly missed, and running back to safety.

Granted, it wasn’t totally safe since the dirndl slowed him down, but fairly non-risky.

#71 Sail Away on 01.12.20 at 11:04 am

#55 SoggyShorts on 01.11.20 at 11:44 pm
#32 Sail Away on 01.11.20 at 7:04 pm
#17 Yukon Elvis on 01.11.20 at 4:53 pm

Too fat? Stop eating.

——————————-
I like Neil DeGrasse Tyson’s reasoning: Weightloss is just math: calories in minus calories used. It is impossible to perform an action without energy, so if you eat less energy than you use it has to come from your body’s stored energy. (paraphrased)

——————————-

Logic is beautiful.

The fact that so many people willfully choose to ignore basic physics and instead embark on all these crazy schemes to lose weight is very telling. Even otherwise smart people.

What’s the other thing people want? To be rich. Again, instead of taking proper steps to achieve that, they embark on crazy schemes.

Here’s my take: if you want to lose 10 lbs, and have the willpower to stop eating until getting there, you have great likelihood of achieving your other life goals.

#72 baloney Sandwitch on 01.12.20 at 11:41 am

Indexing was supposed to get away from all that stock picking but looks like we are back to square one. Now we are employing FA’s (pardon me, Portfolio Managers) to pick ETF’s. Funny, somethings never change.

There are about 800 ETFS available in Canada. If you want to pick a few, we’re not stopping you. – Garth

#73 Damifino on 01.12.20 at 11:57 am

#37 Sold Out

Boarded, taped, mudded, sanded and painted my own house. Never again, though. Patching is all I can bring myself to do. Finishing a closet would probably make me cry, now. Vile job.
———————————-

I’ll say. Imagine when interior walls were created with wet plaster hand-smeared over lath with a trowel. Try doing a ceiling that way. It took serious strength, skill and a tolerance for toxic mud.

Those dudes would have thought they’d died and gone to heaven if they simply had to tape pre-manufactured wall board. In fact, most of them already have died. As far as going to heaven, I’d like to think so.

#74 JWD on 01.12.20 at 11:59 am

1979 Gretzky rookie card – had about 9 cards. A few in perfect condition. Mom gave them away among a shoe box full in the 80’s without telling me…. still stings.

#75 JWD on 01.12.20 at 12:07 pm

Great photo Doug!

#76 Figmund Sreud on 01.12.20 at 12:26 pm

#49 mike from mtl on 01.11.20 at 9:03 pm

Normal passive ETFs for the time being are not at all in danger of sequestering the market. Mutuals are already there if you’re so concerned.
_______________________________

If I have any concerns, it is concentration of those who control vast assets – asset managers.

Here is, for example, but a short list of top non-banking firms managing trillions – as of latest available figures – 31/12/18, in €: BlackRock has €5.25 trillion assets under management, Vanguard €4.26 trillion, State Street €2.20 trillion, Fidelity €2.10 trillion, BNY Mellon €1.50 trillion, …

… the titans of world finance!

Source: IPE.com

FWIW

F.S.

#77 Sail Away on 01.12.20 at 12:46 pm

#72 baloney Sandwitch on 01.12.20 at 11:41 am

Indexing was supposed to get away from all that stock picking but looks like we are back to square one. Now we are employing FA’s (pardon me, Portfolio Managers) to pick ETF’s. Funny, somethings never change.

There are about 800 ETFS available in Canada. If you want to pick a few, we’re not stopping you. – Garth

——————————-

Indexing is, of course, different than ETF’ing. I don’t think the Turner crew ever claimed to be pure index people.

It is funny that index-tracking ETFs have become what they’ve become, though.

#78 CD on 01.12.20 at 1:33 pm

Hi Doug,

You bring up some interesting parallels here between ETF selection and hockey analysis… can’t say that I would have made these connections prior to reading this post.

Did you happen to catch the Leafs vs. Oilers game earlier this week? They are calling McDavid’s goal a candidate for goal of the year.

“More often than not, the ETF we select will be the correct choice, but regardless of the outcome, it’s a defensible selection, one well supported by the data and due diligence.”

Epic pic.

#79 BigAl (Original) on 01.12.20 at 2:17 pm

#33 crowdedelevatorfartz on 01.11.20 at 7:06 pm
@#98 Sold Out
“…instead of wishing that everyone else be dragged down to your level of misery….”
+++++

Misery?
Hardly.
Just tired of forking out 10’s of thousands of $$$$ every year in taxes that I see urinated against a govt wall.
And then hearing the govt employees of every level bitch and moan about how “hard” they have it.
Wanna see hard ?
Quit YOUR job and go work in the private sector.
I actually said that to govt employees over the past few year when they complained about their jobs.
“You can always quit and go work in the private sector!”
Crickets.
Govt. employee navel gazing wont last there.
The “meetings to discuss previous meetings”…pfft.
The endless emails back and forth “cc”ing everyone and anyone to pretend the issue at hand is actually important.
50% of govt administrators could be fired tomorrow and no one would notice.
And defined benefit pensions? What the hell IS that?

If anyone in the public sector expects Sympathy from private sector workers …… especially when they go on another strike for even more money and generous benefits……give your head a shake.

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

I’ve worked both, and own a business now.

The endless meetings to discuss meetings is true. I had to just get out when they adopted their policy of handing control over to the millenials – senior manager and director positions to 20-30 somethings. Miserable, toxic workplaces with kooky, creepy ‘stepford wives meets Handmaids Tale’, unethical and amoral types of personalities. Layers upon layers of bureaucracy administered by hugely underqualified staff and leaders. Pay wasn’t that great – private sector has better pay and benefit plans with larger companies. And trying to move ahead or applying for another position was a nightmare – a resume and cover letter wasn’t enough – each time you filled out this highly bureaucratic questionnaire with each question requiring a 500 word answer AND providing a ‘concrete example’, PLUS your cover letter and resume. For each job posting, they then have to pull a team off of their normal work just to assess all the bloated answers. I remember one job where my application totaled over 8000 words – just stupidity. Pension is really nothing a reasonable person can’t do on their own, and you can’t bequeath the govt pension if you die early so ‘poof’ it just disappears.
My advice to anyone is to avoid a government career or any ‘career’ actually and just start your own business. If you’re high skilled, you can sell that. If you’re low-skilled, instead of working for Molly Maid or something, put an ad out there (maybe work for them for a while to learn the basics, but with the goal of starting your own). If you have a talent, start talking to agents and figure out what you need to do. If you have some cash but no ideas go talk to some franchises. I remember a mentor was giving me business advice when I was starting up. I thought there was too much competition and asked him about it. I’ll never forget, it was an epiphany for me when he said these words: “Competition? F— competition” and simply continued on.
My simple advice to anyone, DO NOT WORK IN GOVERNMENT. The public hates you and your life in cubicle-land will be a weird one.

#80 stage1dave on 01.12.20 at 5:45 pm

Good stuff, Mr. Rowat…always enjoy the hockey analogies, the 77/78 o pee chee card just a bonus!

Another analogy, one that may or may not be relevant…his rookie card is in the 70/71 opc set, and I collected that all winter long. Strangely, even being a Leafs fan, I dont remember searching out his card…all us kids were chasing Magnusson, Clarke, and (believe it or not) Dale Tallon! Everyone had him pegged as the next Orr. And some guy named Perreault, but he went to Buffalo…huh? All RCs in this set, btw.

Fast fwd 50 years, and having raw and graded sets of this issue I’ve found out initial perceptions didnt hold out real well. The big money is pointed at Perreault in higher grades (2K + in psa 8) because he’s a top row card on the sheet and simply cant be found centered. And those bloody checklists everyone just threw away…Magnusson & Tallon, not so much.

Plus, I find myself continually chasing hi grade copies of Howe, Hull, and Orr in all these sets to this day…which is something that hasn’t changed since I was pulling cards in the schoolyard 5 decades ago.

Guess some things never do change!

#81 Stealth on 01.12.20 at 6:37 pm

Doug,

I believe that described etf selection is called portfolio tilting or implementation of thereof.

Question is does tilting work over the long run, meaning does it add value after fees as opposed to plain vanilla etf tracking a major index? (VTI, VCN , XEF etc)

I am not arguing either way , want to know if there is such comparison or information.

Thank you.