Don’t be distracted

  By Guest Blogger Sinan Terzioglu

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North American equity markets are down ~13% from all-time highs set in February and the US market is up year-over-year.  Many wonder how this is possible given the current environment.  A client recently asked me:

“Do you think it’s a good time to invest, after such a strong 30% bounce from the lows.  The economy’s a disaster and I don’t see much to be excited about over the next year, especially with a second wave of the virus coming in the fall.”

I hear this a lot.  Yes, there’s uncertainty right now.  Clearly, 2020 earnings will be down substantially but companies (and the equity market as a whole) shouldn’t be evaluated based on a single year’s numbers.  Investors should be modelling at least the next several years of cash flows and discount them at an appropriate rate, to derive a fair value.  The equity market has discounted the sharp contraction in earnings for 2020 and is now looking forward to 2021 and beyond, expecting a return to growth.  As in 2008-2009, the enormous amount of monetary stimulus being injected by the global central banks has brought back a lot of confidence.

“Warren Buffett didn’t actively buy stocks in the turmoil and his cash pile is over $130 billion,” another client says. “ Isn’t this bearish – he expects another significant pull back in the market?”

Sure, but Berkshire Hathaway is far more than just an equity market investor.  Buffett’s company is one of the world’s largest insurance businesses and owns dozens of companies in many industries – Geico, Dairy Queen, Duracell, Benjamin Moore, See’s Candy and the second largest US railway company BNSF Railway.  The value of these privately-controlled businesses totals hundreds of billions and when combined with the ~$200 billion equity portfolio the cash pile doesn’t seem as significant.  In fact, Berkshire Hathaway can be viewed like a balanced and diversified portfolio as it holds growth assets, safe fixed income assets (preferred shares, bonds) and cash/cash equivalents.

Berkshire is exposed to a lot of risk in its insurance business and various operating businesses so it must always keep a fair amount of cash on hand.  A number of years ago Warren Buffett said he’d always keep at least $20 billion in cash, just in case of catastrophic events and potential insurance claims.  Now that Berkshire is much larger the minimum cash balance he wants to keep is likely higher.  Also, over the last few years Buffett has said that he is looking for an elephant sized acquisition and recently indicated that he would happily spend $50+ billion if the right deal came along now.

During the 2008-2009 financial crisis I read a lot of Warren Buffett’s shareholder letters.  My favourite came in 1994:

We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen.  Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.

But, surprise – none of these blockbuster events made the slightest dent in Ben Graham’s investment principles.  Nor did they render unsound the negotiated purchases of fine businesses at sensible prices.  Imagine the cost to us, then, if we had let a fear of the unknown cause us to defer or alter the deployment of capital.  Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak.  Fear is the foe of the faddist, but the friend of the fundamentalist.

A different set of major shocks is sure to occur in the next 30 years.  We will neither try to predict these nor to profit from them. If we can identify businesses similar to those we have purchased in the past, external surprises will have little effect on our long-term results.

In the last 26 years we certainly have had shocks, yet the greatest businesses in the world continued to grow and become stronger.  Markets have endured the bursting of the tech bubble, the 2001 terrorist attacks and the 2008-2009 financial crisis.  Despite the roller coaster ride they recovered from losses and went on to make new highs.  As Buffett said, there will be more shocks over the next 30 years so we shouldn’t let a fear of unknowns delay investing our capital.

Our Canadian ETFs hold Canada’s largest banks which along with the market have come under a lot of pressure lately.  The banks have been paying dividends every year since the 1800’s – through both world wars, the Great Depression, countless recessions and all sorts of economic shocks they have never missed a payment on their common shares.  Our US ETFs own the world’s most profitable corporations such as Apple, Amazon, Microsoft, Alphabet (Google), Facebook, Visa, MasterCard and Buffett’s Berkshire Hathaway.  Most are still growing at above average rates which is incredible given their size.  Both Amazon and Alphabet were started out of garages a little over 20-25 years ago.  Alphabet now generates more than twice the revenue of IBM.  These sorts of companies are benefitting from the new normal and represent a large chunk of the US markets. The digital transformation is still in its early stages and many new companies will emerge and grow to become market leaders over the next number of years.

I was recently asked to speak with a few young adults about investing and where to start.  I asked them: “if I offered you a job for the next 30 days and you could choose between receiving $100,000 daily, or being paid $0.01 for your first day and doubling your pay each subsequent day, which would you choose?”

Earning $3,000,000 in a month sounds like a no brainer especially when one considers that option two would only result in earning $5.12 on day 10 and $5,243 on day 20.  But, when you look at the earnings of $2,700,000 on day 29 and $5,400,000 on day 30 the explosive growth is evident.  I believe you can make a world of difference for younger generations by teaching them about compound growth early on and ensure they focus on the long term.

Equities are the only asset in which a portion of your return is automatically reinvested for you.  Basically, companies do the heavy lifting for the owners.  As they earn, a portion is reinvested in the business, resulting in a rapidly compounding gains especially if a company is able to earn an above average rate of return.  Coupled with a lot of time and patience, this is what made Warren Buffett one of the wealthiest people in the world.

Approximately 80% of the gains in the S&P 500 over the 20th Century resulted from the collective earnings of companies in the index being reinvested.  Many think changes in valuation played a big part but if you bought the S&P 500 around the time the Spanish Flu started in 1918 during its lowest P/E multiple of 5.3 and sold it at its highest P/E valuation of 34 in 1999, the compound annual return would have been over 10% (including reinvested dividends).  Less than 3% of that came from the substantial increase in valuation while the remainder flowed from the reinvesting of retained earnings.

In October of 2019 Bank of America said 60-40 portfolios are dead.  The thesis was that because bonds yields are so low, portfolios would need more stocks exposure to make up for lower returns.  The report highlighted that there were over 1,100 global stocks paying dividends above the average yield of global government bonds.  Many of these high yielding dividend stocks are in the energy sector which has obviously come under significant pressure resulting in dividend cuts.

We argued then that we don’t hold bonds to collect interest but to protect investors. Clearly the market turmoil in March highlights why this approach works.  The most important thing in investing is risk management.  Balanced and diversified portfolios have this built into them and while they are not immune to periods like this they hold up much better than all-equity portfolios.  Like we said then, why mess with an approach that has always worked.

The world will move on and the global economy will grow again.  Keep your focus on your long term goals, continue investing when you can, ignore the noise and most importantly don’t be distracted.

Sinan Terzioglu, CFA, CIM, is a financial advisor with Turner Investments, Private Client Group, Raymond James Ltd.   

107 comments ↓

#1 Flop... on 05.24.20 at 10:09 am

Welcome to GreaterLocks, Canada’s number one hairdressing blog.

Said I’d jokingly report back if any price gouging took place,here’s the tale of the tape.

Pre-virus it was $9 for a men’s haircut.

That was undervalued for Vancouver prices, but there is a little bit of competition in that particular area.

Got some buddies that pay over $20 and go every few weeks for the short back and sides look, with a bit of length on top.

I only go probably four times a year, so with shaving gel and a pack of razors, my total grooming bill for the year wouldn’t top sixty bucks.

Yesterday the price had been raised to $11, she wore a mask and face shield, I just sat in the chair thinking what the heck happened to my face.

I lashed out and gave a $2 tip.

I took a mask, just in case I was asked to wear one, but I was not, the ones that go around your ears make it plausible, but the n95 masks that have straps that fit on the back of your head would only get in the way.

I recommend wearing a N95 mask if you want the Adidas Cut.

Three stripes on the back of your head…

M45BC

#2 SOMETHINGS UP on 05.24.20 at 10:12 am

We often hear the term “THIS TIME IT’S DIFFERENT”. Usually when we hear this it’s true but it’s not different enough to really matter or make a difference.

But……. this time IT’S VERY DIFFERENT ENOUGH TO MATTER!!

#3 Novac on 05.24.20 at 10:16 am

1st thing: welcome Sinan!

#4 Grateful in Victoria on 05.24.20 at 10:16 am

Excellent post. And very timely.
Thank you.

#5 Novac on 05.24.20 at 10:21 am

Tuner Investment’s turget portfolio includes 15% preferreds in the 40% fixed income allocation. Additionally, on the last Tuesday call, high yield bonds were mentioned as a future diversifier in that categofy as well. How far can you tweak the 60/40 portfolio (essentially for yield and, maybe, correlation) and still have it: (i) act like the traditional 60/40 portfolio; and (ii) provide the “protection” of 40% bonds?

#6 Blog Bunny on 05.24.20 at 10:37 am

Thank you Sinan for this great post.

#7 Trudeau’s Magic Money Machine on 05.24.20 at 10:37 am

Don’t worry………..there’s lots to go around. As long as everyone keeps believing in me it will be okay.

#8 KNOW IT ALL on 05.24.20 at 10:54 am

IT’S INCONCEIVABLE TO THINK that the current financial system will endure for eternity.

With that said the investing community will also be tested as the building blocks that they have based their decisions on for so long is now crumbling exponentially.

Everything PRE-COVID will not be the same POST-COVID.

The Gen-X/Y/Z club are all of a sudden turning to coin trading systems and trust rather than fiat currencies and broken governments for bartering and investing.

If your foundation changes then so will everything you have built on-top of it.

Welcome the CRYPTO-CURRENCY markets and reap the rewards of the evolution of the next finance system.

#9 VicPaul on 05.24.20 at 11:01 am

Thank you Sinan, well written and supported piece.
I also felt it was important to show my kids early on how compound interest works – they are Millenials with portfolios. This was a favourite, simple visual.

*Build a million by 65
Starting age Daily Savings Monthly Savings Yearly Sav

20 $2.00 $61 $730
25 $3.57 $109 $1304
30 $6.35 $193 $2317
35 $11.35 $345 $4144
40 $20.55 $625 $7500
45 $38.02 $1157 $13,879
50 $73.49 $2,235 $26,824
55 $156.12 $4749 $56984

It’s just easier to start earlier, but Flopper at 45 could do it by sockin’ away $14k/y. Just takes discipline (and an extra 14k/y).
Get’r done you Tasmanian devil*!

(*this statement not intended to be a nationalist slur, but a simple, friendly poke).

M56BC

#10 joblo on 05.24.20 at 11:15 am

Lesson learned:
Buy CDN Financials sit back, collect dividends and relax.

#11 baloney Sandwitch on 05.24.20 at 11:24 am

Good post. You need to enjoy the compounding process, not many do. They want their toys, now. Their Harley’s, F150’s or whatever all on payment plan or leases. In fact before teaching compounding, they have to learn the marshmallow principle.

#12 Do we have all the facts on 05.24.20 at 11:27 am

I have some difficulty in understanding how forcing Canada into a depression could ever be good for the value of equities. The trillions of dollars being injected into economies around the world only makes sense if this investment triggers corresponding growth of the GDP.

Some companies are obviously benefitting from the current crisis but their gains pale in comparison to the carnage Covid 19 has caused to the global economy.

Canada seems on the road to increasing their money supply by more than $300 billion while their GDP could decline by as much as $400 billion in 2020. The impact of such a massive and abrupt shift in our debt to GDP ratio has yet to be seen or evaluated by the rest of the world.

We cannot, and should not, ignore basic economic metrics. Increasing money supply without economic growth never ends well. We need more than a belief that every crisis will be followed by a recovery to compensate for the magnitude of the change to our debt to GDP ratio in 2020.

Our cherished reputation for sound fiscal management is in jeopardy and our Federal government seems oblivious to the consequences. Inflation offers no exemptions when the metrics of a countries economy become shaky.
In the 1980’s and again in 2018 Argentina ignored all warning signs and hyperinflation quickly followed a rapid increase in money supply.

Canada may be different from Argentina or Zimbabwe but we are bound by the same economic metrics.

Isn’t it time we began looking at ways to invest the trillions of dollars sitting in pension funds to stimulate essential expansion of Canadian GDP. Why is our government only offering to guarantee mortgages. Why not offer a guarantee to investments designed to expand all components of our suffering GDP.

We have lots of investment capital that could be used to reboot our economy. It seems foolish not to apply this capital more effectively.

What Canada seem to lack is a sense of urgency over the current state of their economy. All is not well and our economy will not recover without the development of clearly defined strategies.

The era of complacency has come to an end. It is time to put our “common wealth” to work.

#13 Fused on 05.24.20 at 11:30 am

http://www.mortgagebrokernews.ca/news/bank-of-canada-to-drop-qualifying-rate-329853.aspx

#14 Great stuff on 05.24.20 at 11:32 am

Garth should have you write more often!

#15 Great Gatsby on 05.24.20 at 11:38 am

how did your 60/40 portfolio perform during the 1970’s and early 1980’s during the bond market collapse and stock bear market?

#16 Flop... on 05.24.20 at 11:48 am

#9 VicPaul on 05.24.20 at 11:01 am
It’s just easier to start earlier, but Flopper at 45 could do it by sockin’ away $14k/y. Just takes discipline (and an extra 14k/y).
Get’r done you Tasmanian devil*!

(*this statement not intended to be a nationalist slur, but a simple, friendly poke).

M56BC

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

Hey VP, I hear ya, as one of the cellar dwellers on here down the bottom of the ladder.

I’ve already done my TFSA donation for this year.

I have a little room left for a dip, so I could go back again later this year.

Also I have an Australian portfolio that I have been feeding small monthly payments into since I was 18.

Sent another batch of money over to that to drip earlier this year as as well.

Won’t get to a million, but I’m more concerned about not ending up under a bridge.

When I started working at 15 and not long after had to do some paperwork for the fund, I ticked 55 as the selected retirement date, which seemed a long way off.

I could work until I die but I could have a meagre retirement at age sixty, which is my plan that I am trying to execute with the help of my wife.

Three examples from different areas of my life help shaped this plan.

My Dad, retired, sold everything, moved to a tropical destination and got diagnosed with cancer shortly after.

Boom, the guy from Wisconsin on here was trying to steer me to a more comfortable retirement, passing on his experience to me and encouraging me not to be so conservative, also did everything right to have a long and comfortable retirement.

Gone too soon, at 64

To the other extreme, one of my former employers Billionaire Paul Allen, that proves that money doesn’t care.

I was once told that the art installation we were installing in his garden had a purchase price of two million pounds.

I was careful.

Wow, what a life, from the outside.

Gone at 65.

This guy had it all.

Except health…

M45BC

#17 Reality is stark on 05.24.20 at 11:48 am

The reason you build wealth is so that you can pay more tax at a later date.
What is the point in spending money now (let’s say you earn $80,000 and pay $40,000 in total taxes) when you can delay enjoyment and make $120,000 and pay $80,000 in total taxes later?
That’s the beauty of our situation where we borrow our way to prosperity. Today’s debts become tomorrow’s taxes. Since public service wages are sacrosanct we are committed to outrageous borrowing.
Do you believe RE-MAX that says no drop in real estate prices or the head of CMHC that says in 3 months 20% of mortgage holders will be choosing deferrals and prices will drop by as much as 18%?
When the mayors in unison declare that they need more money or bankruptcy is imminent do you think they are joking? None of them talk about cutting wages.
They want more tax money. A LOT MORE TAX MONEY.
I realize that most Canadians do not believe there is a difference between borrowing a trillion to achieve a 5% gain in the equity markets or borrowing 10 trillion to achieve the same gain. It is beyond their capacity to comprehend.
If equities recover everything is rosy. If the dollar hits 20 cents most Canadians would think everything was completely normal.
Borrowing has consequences. The equity markets don’t tell the whole story.
Anyone who believes in peak tax is mistaken. Their is no end to our government’s commitments to increase all forms of taxation extremely rapidly when the downgrades start.
Watch out for exponential property tax increases.
When you delay your gratification everyone else can prosper by taking the results of your labour.
That is your motivation.
Do you feel better now?

#18 Gino on 05.24.20 at 12:00 pm

But the only reason the markets and economy keep bouncing back is result of trillions of money printing whenever there’s a crash or crisis. 2000, 2008, 2016, 2018, 2020. If you expect the economy and great companies to continue to be profitable and sustainable then you must also expect deeply indebted consumers and fake money printing to continue indefinitely.

#19 Timely! on 05.24.20 at 12:05 pm

Thank You Sinan
Great post well diversified in ideas!
Finally someone putting Buffet cash into prospective, yes I bet he’s nervous about insurance!
To be honest I am so totally confused about investing right now!!!!
I read Druckenmiller and his says never seen a market like this and he’s not investing, to Pinnock we have chops ahead, To we have the buy of a lifetime, and then to a common sense post like yours! Thank you!

I totally agree fear of the unknown is greatest right now. And I see it daily here in peoples posts. I also see some weird fear Mongrels.

I learned a great lesson from my father. In the 80s I went to him and said look at BNS it’s $10 and pays a 10 percent dividend. He said never gamble in the stock market. But I said you bank at BNS. He said buy GICs
Anyway my mother and him bought GICs and google the rates if you want, they were between 10 to 15 percent for a five year GIC from 1980 to 1985. Even some periods in the 90s it was over 10 percent. well my parent bought them every year. Technically the rule of 72 in other words the money double every 5 to 7 years depending on the interest rate.

So the moral of the story i wish I bought BNS in the 80s
As I wish I had a calculator to compare the two, but I am positive BNS won in the long term.
And now I am worried sick Should I buy banks?
as we have not seen the full extent of loan losses. I even interpreted this blog as saying blood on the streets from people deferring mortgages to business unable to pay rents to empty office towers, structural unemployment Government debt out of control.
People will not travel or dine in restaurants.

So it’s hard to see a recovery in the near future.
Banks could go much lower on fear and of course on lower earnings
So yes I am overwhelmed with information and fear of the unknown is top of my list for how and what to invest?
Banks are either the buy of the century or a dog for years to come.

Cheers have a great weekend

#20 Dog holding the book on 05.24.20 at 12:09 pm

Thanks for a great post.
Garth, question for you
If I expand the picture I can just make out the words after the crash On the left page.
Is that your book ha ha
I read it and it’s one of your better ones for lessons.
Enjoy your weekend.

#21 crowdedelevatorfartz on 05.24.20 at 12:26 pm

Interesting blog subject Sinan.
I agree that investing long term is the wisest strategy.
However.
Being the pessimist I am, I think 2021 will still be a bleak year in the markets.
China flexing their new muscles as their economy contracts, then add a dash of US sanctions… a recipe for further economic uncertainty.

https://ca.reuters.com/article/businessNews/idCAKBN2300I9

Perhaps the military industrial complex’s of the US and China can reboot the economies of the world……

https://www.latimes.com/world-nation/story/2020-04-10/coronavirus-doesnt-deter-chinas-aggression-in-south-china-sea

#22 FreeBird on 05.24.20 at 12:39 pm

“ if I offered you a job for the next 30 days and you could choose between receiving $100,000 daily, or being paid $0.01 for your first day and doubling your pay each subsequent day, which would you choose?”
——————
Will use it and credit this post. At the very least it plants a seed. S/b part of basic financial literacy (for all ages) and basic life skills course. Wonder what ‘adults’ would say incl parents to see how it effects kids. More effective in our digital world then ‘would you rather have a $200 wallet or $200 to put in it?’ esp if the wallet is a smart phone.

#23 TurnerNation on 05.24.20 at 12:48 pm

Ace Goodheart from yesterday a good acquaintence of mine I saw every few weeks, he was spending 2 weeks each month in the heart of New York city, up until recently. For work etc. He’s very big in a large ethnic community down there, tons of social events, parties, weddings, weekend trips you name it. The people he knows affected? Two.
One is over 70 years old. Basically two people go the flu this winter and recovered.

So…don’t be distracted by what’s unfolding in our cities. Bottom line all cities are moving into the new UN model into 2021:
– Vancouver said it was going BK early on.
– Calgary cut its bus routes, makes it hard for businesses seeking workers coming to work.
– Toronto is cutting transit times and even an entire short subway line.
– All big cities began closing roads to car traffic. (Part of the wind-down on transportation, I mean airports are empty now)
– Would they introduce severe tolls on regular driving, keeping people confined in the cities? All under the guise of the ‘green movement’? Why do you think all new cars have GPS and Wifi…this new technology is to be our new master. But hey you can stream 5x faster

– Property rights: it was planned these are to be taken away in the end. But how? It’s right in front of you.
– Renters and squatters own your house now. Not one government or legal system has come forward in support for property owners. And they will not.
– We are seeing leaders and Mayors slowly floating new ideals, limited work days , this and that. Watch closely our lives are being re-made each day. Little by little. Think: enforced poverty; limited rights of travel.

– Property taxes: will slowly errode home equity.
I said this in January, below.
In rural areas if/when they cut services, and raise taxes, people might have to flee into the UN cities into cramped condos. What was the one type work which was not ordered shut down in March? New condo/home construction. They need it.

From Jan:
_______________
#6 TurnerNation on 01.12.20 at 2:20 pm
Things will speed up SO fast in 2020-2021 to roll out the plans. Nobody will come to your door and take away your property no. They’ll just take 5-10% of its value away in Tax each year, and empty home tax, land transfer tax, capital gains on sales taxes (stay tuned!), carbon taxes. In a down market this would prove fatal.

They are actively flooding your neighborhoods with ‘homeless’ (drug addicts spent by the State) and “respite centers” and “Safe [sic] injection sites. Need I mention again the State is our drug dealer? Try it, they own the online Weed trade too

#24 TurnerNation on 05.24.20 at 1:03 pm

^ my point just now saw this from yesterdays’ bog.
Rural areas likely to be shut down, people herded into cities. Wait till insurance companies begin denying coverage…OH your rural fire hall closed? Too bad.
Entire areas could become wastelands.

If you remember only one thing it is this: every mayor is on board. Every city is moving in the same lock-step script, world wide. Don’t believe me just watch

The lockdown and ‘distancing’ will continue until small business is WIPED OUT. I already spoke with one such owner, 1/2 their store cannot be re-opened due to ‘distancing’ requirements. This is UN-enforced poverty.

https://vancouversun.com/news/local-news/covid-19-how-rural-b-c-communities-are-coping-with-economic-fallout/wcm/034de26c-5dd4-4c43-8e38-6b30cf07ee1e/

“In larger cities, revenue comes from parking, sometimes a hotel tax, recreation centres and libraries, but smaller cities can’t rely on those streams and rely solely on business and residential property taxes.”

#25 WTF on 05.24.20 at 1:14 pm

Book your elevator ride you suspender snapping Turner Investment dandies :-)

https://www.bnnbloomberg.ca/rules-for-toronto-s-bankers-wear-a-mask-book-elevator-rides-1.1439934

#26 TurnerNation on 05.24.20 at 1:18 pm

New videos of anit lockdown marches in Toronto. Appears a good sized crowd. Of course the top 30% of income earners are away at cottages and cabins or on trips I am sure.
This crowd might be the average people, soon to enjoy forced UN-poverty. 40-hour work weeks? Naw you go down to 30 hours. No benefits either (this is a trick fast food companies employ, keeps hours low enough and no employee benefits need apply)

https://www.youtube.com/channel/UCFnm7oQPDYhXA-JnXmCszdQ

#27 Cottagers STAY THE HELL AWAY! on 05.24.20 at 1:19 pm

All the selfish jerks who came up this weekend are idiot southern hillbillies, no more, no less.

You wonder why the COVID numbers are on the increase in Ontario? People like YOU.

Want to do something this weekend involving needless travel? Try crossing the border to enjoy Memorial Day in the USA.

Good luck. Maybe they’ll arrest and jail you.

Just.

Stay.

Home.

#28 Alex on 05.24.20 at 1:40 pm

Great article putting everything into perspective. Interesting reading about how these companies are doing the heavy lifting for you and reinvesting their gains…good way to look at it.

#29 not 1st on 05.24.20 at 1:42 pm

Hold on to your hats because Canadian banks are about to make history.

#30 Sinan Terzioglu on 05.24.20 at 1:46 pm

Novac “Tuner Investment’s turget portfolio includes 15% preferreds in the 40% fixed income allocation. Additionally, on the last Tuesday call, high yield bonds were mentioned as a future diversifier in that categofy as well. How far can you tweak the 60/40 portfolio (essentially for yield and, maybe, correlation) and still have it: (i) act like the traditional 60/40 portfolio; and (ii) provide the “protection” of 40% bonds?”

Thanks for your post. The fixed income bucket of the portfolio can be tweaked quite a bit between government bonds (domestic and international), corporate bonds (investment grade and high yield) as well as preferred shares. We are able to adjust the duration as expectations for interest rates change and as you noted initiate/increase exposure to various fixed income securities such as high yield where we see good value and an attractive reward-risk. As always we are diversified in all asset classes and position size responsibly – Sinan

#31 not 1st on 05.24.20 at 1:49 pm

#27 Cottagers STAY THE HELL AWAY! on 05.24.20 at 1:19 pm


Next weekend I am staying with you. That’s cool right?

#32 not 1st on 05.24.20 at 1:57 pm

#12 Do we have all the facts on 05.24.20 at 11:27 am

A depression with stifling govt control, regulation and overreach might not look that different from free market capitalism, revenue wise.

Might be easier to squeeze it out of you than for you to earn it and pay your share.

#33 VicPaul on 05.24.20 at 1:57 pm

#16 Flop… on 05.24.20 at 11:48 am
#9 VicPaul on 05.24.20 at 11:01 am
It’s just easier to start earlier, but Flopper at 45 could do it by sockin’ away $14k/y. Just takes discipline (and an extra 14k/y).
Get’r done you Tasmanian devil*!

(*this statement not intended to be a nationalist slur, but a simple, friendly poke).

M56BC

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

Hey VP, I hear ya, as one of the cellar dwellers on here down the bottom of the ladder.

*********

Whoa Flop, it was not meant to place you anywhere on any socio-economic wrung – merely your age and what it would take in savings to make the mill – I feel you know that.
Your points about your Dad, Boom And Mr. Allen all well taken – health, family and the freedom to choose are the defining goals in my life.

No disrespect implied or intended, my blog friend.

M56BC

#34 Ed on 05.24.20 at 1:58 pm

Currency wars, Trade Wars, Greatest Depression and finally Hot War III… Wake up everyone. The Banking Collapse is probably just more New World Order Control.

#35 JacqueShellacque on 05.24.20 at 2:27 pm

Hi Sinan,

In some ways I’m with you on the value of holding bonds. Indeed my own bond holdings actually did well through the Feb 20th peak – March 23rd trough timeframe. So certainly they did cushion my losses (which were mostly drops in preferreds and REITs), so in theory they did what they’re designed to do.

But….if the purpose of bonds is for protection of the portfolio, it seems odd to me to hold what amounts to 20% of it in cash if no capital gain can be expected. Aren’t there easier, cheaper ways to protect a portfolio, like by buying far out of the money puts against the big equity indexes, which can be done for peanuts, leaving more to invest?

#36 Eco Capitalist on 05.24.20 at 2:32 pm

@ #20,

Ron, Hermione and Mad Eye Moody? That’s one of the Harry Potter books. Mr. Turner and company deal with a different kind of wizardry.

#37 Howard on 05.24.20 at 2:38 pm

The Buffet excerpt states clearly what to do, and it isn’t what you are advoacting.

He says to purchase “fine businesses at sensible prices”.

Not ETFs. He’s saying to do the research and buy undervalued businesses/stocks individually.

#38 Triplenet on 05.24.20 at 2:43 pm

#9 VicPaul

This is a “simple” set of the 6 functions of one dollar. There’s only 6.
Also known as the 6 functions of 1.
These simple algebraic formulas cover every form of present and future values.
Remember, for Canadian mortgages – function 6 – you must use Canadian tables. American mortgage calculations are different than Canadian tables.

Fot the future value formula – function 2- you can actually write it out and teach them.

http://businessstatistics.us/resources/functions-of-the-real-world/six-functions-of-a-dollar/

#39 Apocalypse2020 on 05.24.20 at 2:53 pm

34 Ed has it right.

“Currency wars, Trade Wars, Greatest Depression and finally Hot War III… Wake up everyone.”

The disturbance in Hong Kong will fuel international conflagration.

Trump will plunge in ratings as Covid Stage 2 takes hold later this summer.

He will seize the chance to distract and deflect his critics.

China will be Target #1.

Promising millions of jobs for soldiers and weaponry makers.

War by Labour Day.

PREPARE

#40 Statsfreak on 05.24.20 at 2:56 pm

Another superb post, thank you Sinan :)

#41 RE:Cottagers STAY THE HELL AWAY! on 05.24.20 at 3:23 pm

For #27 Cottagers STAY THE HELL AWAY! – dude you should be in a nuthouse, why you are allowed to post here is beyond me..lol

No more lockdowns please!

The first one has turned out to be a disaster foisted on us by ignorant “experts” and cowardly politicians.

On whom did we place our collective trust? The WHO who shills for Chinese evildoers.

‘Scientists’ who created models so far removed from reality that they should be stripped of any credentials they have.

And our policy makers who constantly keep moving the goal posts as to no longer have our trust. Plus the never ending contradictions on how the population should react.

This will be no worse than the flu then it’s a deadly virus 10 times worse than the flu.

No pandemic then pandemic. No masks then masks. Flights from China OK then not OK.

No handshakes but sex with strangers OK (i.e. Fauci’s advice).
Dr. Fauci says you can hook up with a Tinder match who doesn’t have symptoms, but only if you’re ‘willing to take a risk’

Go ahead and mingle then social distancing and lock yourself up in your home.

And then the farce about who is an essential and a non-essential worker.

Hospitals will be overwhelmed and then they ended up with empty wards.

Flatten the curve and then we can’t open up until we have a vaccine (there won’t be a vaccine…ever. it’s another hopeless scam).

And then the death sentences meted out to our elderly in those closed environments we herd them into for many to live out their last few lonely years.

Watch in the near and far future how the politicians and “experts” will be patting themselves on their collective backs bragging about how they saved us from ourselves…which is exactly as I predicted

#42 Flop... on 05.24.20 at 3:47 pm

#33 VicPaul on 05.24.20 at 1:57 pm
#16 Flop… on 05.24.20 at 11:48 am
#9 VicPaul on 05.24.20 at 11:01 am
It’s just easier to start earlier, but Flopper at 45 could do it by sockin’ away $14k/y. Just takes discipline (and an extra 14k/y).
Get’r done you Tasmanian devil*!

(*this statement not intended to be a nationalist slur, but a simple, friendly poke).

M56BC

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

Hey VP, I hear ya, as one of the cellar dwellers on here down the bottom of the ladder.

*********

Whoa Flop, it was not meant to place you anywhere on any socio-economic wrung – merely your age and what it would take in savings to make the mill – I feel you know that.
Your points about your Dad, Boom And Mr. Allen all well taken – health, family and the freedom to choose are the defining goals in my life.

No disrespect implied or intended, my blog friend.

M56BC

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

That’s o.k V.P, I felt no disrespect, only a gentle ribbing with a teachable purpose.

Due to injury I have only been making 35k for the best part of the last decade.

Some of the guys I work with make more due to more hours but don’t save anything for retirement.

I am not setting any records but I have invested at least a small amount in the markets every year since 1992.

Feast or famine.

Even when I backpacked around the world I ensured the payments continued.

My wife and I are pulling in the same direction, that helps.

She makes roughly the same, with better benefits that I get to enjoy, dentist chiro, etc.

She had been feeding her RRSP for a long-time, also making an effort and so in that regard we are a good match and don’t often argue about money.

Since I have been on here, I encouraged her to dial back the RRSP, start up a TFSA and then gifted her some money.

Garth once listed ten golden investment rules and I went down the list and broke just about all of them except the one about not lending money to someone you are not sleeping with.

One out of ten reminds me of my school marks, but I’m not infatuated with retirement, if I get there, there will be some savings but not at the expense of a reasonably lived life.

One of my main hobbies is travel, not always compatible with heavy savings but we have modified things the last little while to give me and my wife something to look forward to.

We used to go to Europe every Spring now we have been concentrating on the States.

For Xmas and Spring Break, when my wife is scheduled to be off work we target 7 or 8 places that we would like to visit and go to the one that is the best deal.

Christmas time you can get screaming deals by flying out Xmas Eve and come back New Years Eve, because the people that that travel around that time already want to be at their destination by then.

By not having a certain destination on a certain date helps over-paying at the marked -up Spring Break time too.

Lots of little things like this help keep the cost down.

Last trip stayed at a four star in Corpus Christi on the water for a song.

Summer trip is usually camping which is a cost effective way to have a holiday.

I guess my main point is we have one eye on the future and one eye on the present.

Also thanks for the GAP code support.

When I started doing it with Boom’s support, one of the things we talked about was how we can’t sign off with our signature, so it’s just a way with a little bit of information attached to say “Yours faithfully” “With Regards”or whatever, no harm is meant by my words , even when you are teasing someone.

Life is brief.

Let’s have some fun with it…

M45BC

#43 Ed McNeil on 05.24.20 at 4:00 pm

Everyone makes reference to Warren Buffett as being the epitome of financial acumen, and perhaps he is. He is also 88 years old, so what is the point of it all? Who would see the necessity of chasing money around at his age? Greed has no time limits, I guess.

#44 willworkforpickles on 05.24.20 at 4:05 pm

For those looking to invest a little but don’t want too much risk I have the perfect company going forward for you. I have been watching Tilt Holdings since it began. Loaded up last month finally at 0.18 cad – (150,000 sh)-trading symbol TILT on the CSE….Currently sitting at a grossly undervalued 0.475 cad. Or 0.32 US on the OTC Symbol TLLTF.
It ranks 5th on the top 5 cannabis company earners list.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj1rNrim83pAhVimnIEHagzCHYQFjAAegQIARAB&url=https%3A%2F%2Fwww.newcannabisventures.com%2Fcannabis-company-revenue-ranking%2F&usg=AOvVaw1ftnXkbZglIhkJaXtpLLFW

#45 Sinan Terzioglu on 05.24.20 at 4:12 pm

JacqueShellacque “In some ways I’m with you on the value of holding bonds. Indeed my own bond holdings actually did well through the Feb 20th peak – March 23rd trough timeframe. So certainly they did cushion my losses (which were mostly drops in preferreds and REITs), so in theory they did what they’re designed to do.”

But….if the purpose of bonds is for protection of the portfolio, it seems odd to me to hold what amounts to 20% of it in cash if no capital gain can be expected. Aren’t there easier, cheaper ways to protect a portfolio, like by buying far out of the money puts against the big equity indexes, which can be done for peanuts, leaving more to invest?

– Purchasing far out of the money puts on the indexes can certainly be used to protect a portfolio but it’s not easy as it would require you to continually ensure your delta risk is in fact adequately protected by the purchased puts. Also, there is still a big risk in timing and when to roll into new puts to ensure your risk is properly managed at all times. If your protective puts are close to expiration and a sell off comes but your strike is still much lower the puts wouldn’t protect you at all because there would be no intrinsic value in them and little value in theta (one of three components in an options value) so this is the part where one would need to ensure they are actively monitoring their delta exposure at all times otherwise they may not have the protection they think they have. Bonds can be trimmed and proceeds can be used to purchase equities on weakness. This is a far easier way of managing risk. – Sinan

#46 The Real TRUTH on 05.24.20 at 4:17 pm

Low VOLUME on the comments today.

EVERYBODY must be out spreading that COVID around.

2ND WAVE… HERE WE COME!!!!

#47 willworkforpickles on 05.24.20 at 4:21 pm

Regarding Tilt Holdings in my last post. Previous reported earnings 3rd qtr last year were $46million US.
4th qtr earnings —yearly earnings—1st qtr 2020 earnings are due out soon. Expectations exceed $50millionUS each qtr . By comparison, the other top 7 companies on the list greatly exceeds the undervalued share price of Tilt Holdings currently. Tilt is expected to begin catching-up after the next release. Too much to say or put down here about it. Check it out.

#48 Lost...but not leased on 05.24.20 at 4:31 pm

Not sure if mentioned…

Zero Hedge had article about people taking their pogey cheques and trying to play the stock market, and throwing the whole shebang out of whack.

One play was Hertz Car Rental…which has apparently filed for bankruptcy(which Zero Hedge had predicted)…

The fall out will be the Used Auto market will tank due to Hertz liquidating inventory.

#49 Sinan Terzioglu on 05.24.20 at 4:32 pm

#37 Howard “The Buffet excerpt states clearly what to do, and it isn’t what you are advoacting.

He says to purchase “fine businesses at sensible prices”.

Not ETFs. He’s saying to do the research and buy undervalued businesses/stocks individually.”

– We do extensive research of what is under the hood of ETFs. For example, we have been very selective with our investments in the Canadian markets by avoiding ETFs with exposure to oil and gas producers. Our Canadian ETFs hold many ‘fine businesses’ such as Intact Financial, Fortis, Waste Connections, Brookfield Infrastructure Partners and the Canadian banks. All of these businesses have very wide moats, predictable earnings and long histories of dividend growth. Their management teams are very good capital allocators and they all do substantial business outside of Canada so there is good geographic diversification. While Buffett has been a stock picker even he says most people should buy index funds. He even instructed the trustee who will be in charge of his estate to invest 90% of his money into a fund that tracks the US market for his widow. – Sinan

#50 MF on 05.24.20 at 4:37 pm

#12 Do we have all the facts on 05.24.20 at 11:27 am

A couple days ago you posted that the WHO was instructed to label all influenza deaths as covid 19 deaths.

Where is the proof?

MF

#51 Paul on 05.24.20 at 5:34 pm

#50 MF on 05.24.20 at 4:37 pm
#12 Do we have all the facts on 05.24.20 at 11:27 am

A couple days ago you posted that the WHO was instructed to label all influenza deaths as covid 19 deaths.

Where is the proof?

MF
————————————————————————————————
No proof but one thing it looks like Covid 19, cured pneumonia and the flu. At least no one is dying from it.

#52 Zed on 05.24.20 at 5:39 pm

The big concern is how the Federal government going to end paying people to stay home?

How will the PM going to manoeuvre his way out of the Emergency programs? Stick to the initial 4 months, warn people:” that’s it”

We cannot wait for a potential “second wave”. Let’s go back living and see what happens.

#53 Steve French on 05.24.20 at 5:42 pm

Yo Smoking Man:

What’s up with all the tornado warnings on your twitter account?

Tornados. What’s up with that?

Steve O.

#54 Oakville Sucks on 05.24.20 at 5:43 pm

I personally took all my money out near the peak. I have no trust in the stock markets these days because of all the shenanigans. Do you realize 90% plus is being bought by the central banks for the purpose of market manipulation. There is no open free market anymore. Just a manipulated and artificially propped one.

#55 Do we have all the facts on 05.24.20 at 5:49 pm

# 50 MF

Look up International Guidelines for Certification and Classification (Coding) of Covid 19 as a Cause of Death

April 16 2020

I am 72 and live alone and I have no idea how to tag on a website to my contributions when using my new IPad. To lazy to go to my 15 year old desktop.

#56 Oakville Sucks on 05.24.20 at 5:50 pm

Buffet is given too much credit. Do you people think you’re privy to the same information he has? NOT A CHANCE IN HECK! Do all the research you want it won’t help.

He has a license to insider trading.
He has connections and power to do as he pleases. He’s the DRAKE and Ariana Grande of the Stock Markets!

#57 Tulip on 05.24.20 at 6:01 pm

#16
Health always Trump’s wealth.

#58 espressobob on 05.24.20 at 6:19 pm

Have used either growth or dividend ETFs for years. Global exposure by way of market cap weighting has been a darling.

Trim profit occasionally on the way up and buy in when things go south, yup that works.

No market timing. Im not smart enough to outwit Mr. Market. Wouldn’t even try.

Often wonder why anyone attempts to do so?

#59 no blog for old men on 05.24.20 at 6:39 pm

@#16 Flop… on 05.24.20 at 11:48 am
#9 VicPaul on 05.24.20 at 11:01 am
It’s just easier to start earlier, but Flopper at 45 could do it by sockin’ away $14k/y. Just takes discipline (and an extra 14k/y).
Get’r done you Tasmanian devil*!

(*this statement not intended to be a nationalist slur, but a simple, friendly poke).

M56BC

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

Hey VP, I hear ya, as one of the cellar dwellers on here down the bottom of the ladder.

I’ve already done my TFSA donation for this year.

I have a little room left for a dip, so I could go back again later this year.

Also I have an Australian portfolio that I have been feeding small monthly payments into since I was 18.

Sent another batch of money over to that to drip earlier this year as as well.

Won’t get to a million, but I’m more concerned about not ending up under a bridge.

When I started working at 15 and not long after had to do some paperwork for the fund, I ticked 55 as the selected retirement date, which seemed a long way off.

I could work until I die but I could have a meagre retirement at age sixty, which is my plan that I am trying to execute with the help of my wife.

Three examples from different areas of my life help shaped this plan.

My Dad, retired, sold everything, moved to a tropical destination and got diagnosed with cancer shortly after.

Boom, the guy from Wisconsin on here was trying to steer me to a more comfortable retirement, passing on his experience to me and encouraging me not to be so conservative, also did everything right to have a long and comfortable retirement.

Gone too soon, at 64

To the other extreme, one of my former employers Billionaire Paul Allen, that proves that money doesn’t care.

I was once told that the art installation we were installing in his garden had a purchase price of two million pounds.

I was careful.

Wow, what a life, from the outside.

Gone at 65.

This guy had it all.

Except health…

M45BC
///////////////////////////////

ain’t that the truth.
health is the real wealth.
enjoy the ride, it can be a short one for some.

#60 Ordinary Blog Dog on 05.24.20 at 6:40 pm

I don’t know why everyone is worrying? Budgets balance themselves – right? Whatever the bill is for all this, divide it by the number of taxpayers, and ask them to pay their share. Taa daa, balanced! We should get part of the bill by , well don’t worry about that, it is coming. And we will have deficits for awhile, don’t worry, be happy.

This is sarcasm, literally, the views are not necessarily those of the author ….

Except, nice piece Sinan. This is the opinion of the author.

#61 Uncle Charlie on 05.24.20 at 6:43 pm

#12 Do we have all the facts on 05.24.20 at 11:27 am

A couple days ago you posted that the WHO was instructed to label all influenza deaths as covid 19 deaths.

Where is the proof?

MF

————————————–

I think this might be what ‘do we have all the facts’ was referring to.

https://www.cdc.gov/nchs/data/nvss/coronavirus/Alert-2-New-ICD-code-introduced-for-COVID-19-deaths.pdf

It was re: the 2nd code added for death certificates. Personally, I wouldn’t say it says to label all influenza deaths as covid 19. It does however give doctors the ability to classify a lot of deaths as being from COVID, where the cause was only assumed, not based on confirmed tests.

“Should “COVID-19” be reported on the death certificate only with a confirmed test?

COVID-19 should be reported on the death certificate for all decedents where the disease caused or is
assumed to have caused or contributed to death. Certifiers should include as much detail as possible based
on their knowledge of the case, medical records, laboratory testing, etc. If the decedent had other chronic
conditions such as COPD or asthma that may have also contributed, these conditions can be reported in Part
II. (See attached Guidance for Certifying COVID-19 Deaths)”

I don’t have an opinion either way on this one. Quite a few doctors have spoken up about it, but how often deaths have been classified as COVID incorrectly is anyone’s guess.

#62 Should have stayed working ... on 05.24.20 at 6:43 pm

talked to my ex boss the other day. 200ish employee company. He said that twice as many employees have now won the lottery (over 500 large) than got Covid this year.

#63 NoName on 05.24.20 at 6:59 pm

@Dr V

Do you think I couldn’t work out that 4*10 is 40?

#64 NoName on 05.24.20 at 7:09 pm

@leased but not last

Used car sales are around 40m last year big 4 car rental havre combined around maybe 2m, cars. If anything it’ll put pressure on new car sales not used.

#65 conan on 05.24.20 at 7:32 pm

For now, I am scared of the second wave from Covid. As soon as I realize it is a non issue, then I will pull the trigger.

#66 Barb on 05.24.20 at 7:38 pm

Sinan, great example of compounding! Thank you.

On banks, I found it surprising the IMF recently suggested banks should stop paying dividends.

#67 Abolitionist on 05.24.20 at 7:47 pm

Canada’s increasing departure from the rule of law makes us a questionable investment environment:

https://twitter.com/TomTSEC/status/1258791629814747138?s=19

#68 NoName on 05.24.20 at 7:50 pm

Oakville definitely sucks but who am I to say that, I live in Hammer…

I often aks people that preise buffalo what his father did for living, didn’t get correct answer yet. I am. Afraid to say that older I get bigger sinik I become…

#69 Lost...but not leased on 05.24.20 at 8:11 pm

#64 NoName on 05.24.20 at 7:09 pm

WuDTever..

Dis Ain’t JuRy Dooty…

WHudt ULtiMUUTly ShaaKKKZzt DoWWn

is..drummmRoLe..

WHudt ULtiMUUTly ShaaKKKZzt DoWWn

now bakk to yerr BBQ with Phartzy…Flop and rest of GF clownzzz…

#70 MF on 05.24.20 at 8:19 pm

61 Uncle Charlie on 05.24.20 at 6:43 pm

Thank you for the link!

That report says a few things. I can’t say whether this is routine or not because I’m not sure what normal protocol is under these circumstances (nove viral pandemic).

But we can comment on what that email doesn’t say.

What that report (has there been updates since March?) does not say is that all influenza deaths should be reported as covid19 deaths, as was reported by that poster clearly implying that covid19 deaths were being “fluffed” up artificially.

MF

#71 Drinking on 05.24.20 at 8:23 pm

Ten of millions of jobs lost and yet the market is holding strong with printed money; this is not going to end well!

#72 Sydneysider on 05.24.20 at 8:41 pm

#26 TurnerNation

Thanks for the link. CBC seems to have “missed” this protest, perhaps due to excessive focus on HK protests.

#73 Vaccine on 05.24.20 at 8:48 pm

Been reading allot on Vaccines, maybe we will maybe we won’t. Time will tell with billions invest and over 100 companies in the race, who knows. Pleas be Canada and dam to the yanks. Gosh did you read about the Canadian company that can make vaccines there biggest production facility is in the states, I can just see 3m masks all over again.

I was wondering what people thought what if???
What if there is no vaccine, yep you don’t know where this is going.
What’s the alternative?
So I put on my thinking cap and what if there was a 100 percent accurate Covid test in minutes? Not a foot long swab either.
My point is we could all travel if we got tested and certified before we travel, tested leaving the airport and tested again at arrival destination.
I know an Ottawa company had one, but it’s since been recalled, but hot Dam this must be the investment of the century.
Am I the only one thinking this way?

#74 Oil,Stocks on 05.24.20 at 8:50 pm

Interesting comment you made Sinan about no oil ETFs in portfolio, the conference call a few weeks ago said we run on oil and this is set to rise.
So has the investment portfolio changed at Turner investments.
I actually agreed oil will be going up as soon as they are able to unload all those floating ships.

#75 Dr V on 05.24.20 at 8:54 pm

63 No name – not sure. maybe you got stuck on 5 X 8!

#76 crowdedelevatorfartz on 05.24.20 at 8:58 pm

@#64 NoName
” last year big 4 car rental havre combined around maybe 2m, cars….”

+++++

Minus a few thousand rental cars in Florida……

https://www.cnn.com/videos/us/2020/04/06/fl-rental-car-lot-fire-orig-vstop-bdk.cnn

#77 Do we have all the facts on 05.24.20 at 9:13 pm

# 61 Uncle Charlie

My concern was that Covid 19 is certainly very contagious and has spread far and wide. In Canada well over 80% of all deaths attributed to Covid 19 were associated with long term care facilities.

The average death rate for all citizens over the age of 65 is 39.6/1000. In Ontario there are more than 2,500,000 citizens 65 years or older and it would be reasonable to expect an average of 8,250 deaths per month from all causes.

Under the WHO guidelines Ontario has attributed 2,030
deaths to Covid 19 since March 11 2020. This is an average of 810 deaths attributed to Covid 19 per month.

Given that a significant number of Ontario citizens who are 65 years or older have come in contact with the Covid 19 since February 2020 it seems reasonable to suggest that the primary cause of death for a significant number of the 2,030 deaths being attributed to Covid 19 would have been listed differently if the WHO directive on Covid 19 had not been issued.

It would be useful for a group of professionals to review all 2,030 deaths attributed to Covid 19, including over 1,600 deaths associated in long term care facilities, to determine a more accurate picture of the primary cause of death.

Simply having the Covid 19 virus in your system is not a death sentence for any age group. I remain curious why any death where the Covid 19 virus is detected is being recorded as a Covid 19 death and contributing to fear amongst the general population.

In Ontario
.

the

#78 Do we have all the facts on 05.24.20 at 9:40 pm

Memo to MF

Might I suggest you point your “fluff” metre at the right target.

All I pointed out to another contributor was that even if another form of coronavirus was the primary cause of death Covid 19 was to be listed as the primary cause of death if a laboratory test confirmed mere presence of the Covid 19 virus. That is what “contributed to” means

This direction from the WHO seems very clear. Why is this so hard for you to grasp.

#79 The Limited Sage on 05.24.20 at 9:50 pm

It’s hard to ignore the noise of the money printer going brrrrrrr

#80 The Limited Sage on 05.24.20 at 9:50 pm

It’s hard to ignore the noise of the money printer going brrrrrrr.

#81 NoName on 05.24.20 at 10:21 pm

Hey least, check that keyboard of yours and while you are at it
press play.

https://youtu.be/0sLpWVekMbs

#82 Faron on 05.25.20 at 1:18 am

#76 crowdedelevatorfartz on 05.24.20 at 8:58 pm

Minus a few thousand rental cars in Florida……

——-

Florida man, at it again.

#83 Brent Gisling on 05.25.20 at 3:00 am

Sinan, you are referring to, as I refer to it as. “ migration of the quantum”. You’re right of course, the world is not coming to an immediate end, only the prospects of change are slip sliding into an unknowable and a perhaps beligerant future.

Chartists, Analysts and Navel Gazers have mastered the art of looking backwards. And hats off to those guys who defeated Hitler, Stalin, survived the tsunami and Maurice Strong. But what if we don’t win against the Trudeaus, Butts, Clinton’s and Merkel , UN, George Soros, May, Suzuki, etc etc this time and suicidal tendencies become economy killing legislation.

It’s not certain that the depression were swirling into isn’t going to kick into something much worse than we’ve ever seen before. The Marxist ideology demands the extinction of capitalism .

The extremists among them have in the past performed admirably along those lines and killed school teachers, doctors, anyone who had an education. Under Gerald Butts who says Alberta won’t become Canada’s “Killing Field”. Is Brother Number One a guy previously named Justin? We don’t know.

This depression is not a function of any business cycle , it is a mildly dangerous virus being blown out of proportion so that the instigators of change and the wrecking balls of a new cultural revolution can begin driving people into the fields. Prince Charles recent faux pas suggested forcing young Brits on social assistance onto collective farms.

Don’t count on this depression being similar to any other. The political forces behind the crash aren’t the Nazis of old, or even the Jim Jones messiahs . Theses new guys want you dopey, dumbed down and agreeable to change. But you might. It like the change you get. We might even be seeing the break up of Canada into UN controlled micro states where democracy isn’t there to impede the NWO from confiscating your assets.

Hey, you voted for this event, sober up and watch the show.

Keep a few gold coins and a BTC wallet handy.

#84 Ganga Kaur on 05.25.20 at 5:22 am

DELETED

#85 NoName on 05.25.20 at 7:22 am

#11 baloney Sandwitch on 05.24.20 at 11:24 am
Good post. You need to enjoy the compounding process, not many do. They want their toys, now. Their Harley’s, F150’s or whatever all on payment plan or leases. In fact before teaching compounding, they have to learn the marshmallow principle.

What marshmallows bolognie test?

https://www.google.com/amp/s/www.businessinsider.com/marshmallow-test-of-self-control-may-not-be-correct-2018-5%3famp

#86 BillyBob on 05.25.20 at 7:40 am

#43 Ed McNeil on 05.24.20 at 4:00 pm
Everyone makes reference to Warren Buffett as being the epitome of financial acumen, and perhaps he is. He is also 88 years old, so what is the point of it all? Who would see the necessity of chasing money around at his age? Greed has no time limits, I guess.

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

Your snarky little sniping is misplaced. Most likely envy but I’ll be charitable and assume it’s just ignorance.

Buffett from all accounts has lived frugally his entire life. A regular house (in Omaha!!), car, intends to give away most of his fortune when he passes. He’s made absolute fortunes for many, many other people. (You have done…what?)

Hardly greedy.

“The Ultimate Luxury
Warren Buffett’s definition of personal success and luxury, revealed during an interview with CNBC, provides some insight into his philosophy. “Success is really doing what you love and doing it well,” Buffett said. “It’s as simple as that. Really getting to do what you love to do every day – that’s really the ultimate luxury…Your standard of living is not equal to your cost of living.”

And what Buffett loves to do every day is work at Berkshire Hathaway.”

https://www.investopedia.com/articles/financialcareers/10/buffett-frugal.asp

He does what he enjoys for a living. I relate to this. It’s not always about money.

#87 Kevin Stewart on 05.25.20 at 8:01 am

Hey Sinan
Enjoyed the blog. I never check my investments.I
I leave that up to my investment guy, and I am confident that he has my back. He thinks just like you.

#88 the Jaguar on 05.25.20 at 8:03 am

Wow. Like Wow. Those photos from Trinity Bellwood Park in Toronto. Beyond the pale. Like flies swarming. Mayor Tory advises the ones he spoke to were intelligent and had jobs, etc. They just don’t think social distancing applies to them.
Look no further for the great divide between the Millennials and O.K. Boomers. And this is what some so proudly state is ” Change, be part of it or be run over by it” or some such nauseating nonsense.
So glad I don’t have to live in the GTA.

#89 Tater on 05.25.20 at 8:20 am

#9 VicPaul on 05.24.20 at 11:01 am
Thank you Sinan, well written and supported piece.
I also felt it was important to show my kids early on how compound interest works – they are Millenials with portfolios. This was a favourite, simple visual.

*Build a million by 65
Starting age Daily Savings Monthly Savings Yearly Sav

20 $2.00 $61 $730
25 $3.57 $109 $1304
30 $6.35 $193 $2317
35 $11.35 $345 $4144
40 $20.55 $625 $7500
45 $38.02 $1157 $13,879
50 $73.49 $2,235 $26,824
55 $156.12 $4749 $56984

It’s just easier to start earlier, but Flopper at 45 could do it by sockin’ away $14k/y. Just takes discipline (and an extra 14k/y).
Get’r done you Tasmanian devil*!

(*this statement not intended to be a nationalist slur, but a simple, friendly poke).

M56BC
———————————————————–

Amazing to me that on a bog about personal finance, not a single person picked up that these numbers are wrong. They assume an annual rate of 12%, which is much higher than the return on just equities over the past 100 years.

A diversified passive portfolio, after fees will be closer to 7%. This also assumes you have all the holdings in a tax-free account, as cap gains on re-balancing would further erode the return. Here’s the actual yearly numbers for 7%:
20 – 3,500
25 – 5,100
30 – 7,300
35 – 10,600
40 – 16,000
45 – 24,400
50 – 40,000
55 – 73,000

If you don’t know how to calculate this, it means you either need a professional like Garth to help you, or you better get to learning.

#90 Phylis on 05.25.20 at 8:38 am

#41 RE:Cottagers STAY THE HELL AWAY! on 05.24.20 at 3:23 pm
Thankyou so much for a wonderful visit! We’ll be back very soon.

#91 TurnerNation on 05.25.20 at 8:55 am

#83 Brent Gisling – the global govt has always been here. The curtain has finally dropped. Flag waving has passed, even sports cheering has been eliminated during this cultural revolution. 24/7 State Covid programming is all we get. They give us two choices:

– Turn against yourself, you ideals and freedoms and lock yourself in a cell, masked and muzzled standing on your Freedom Mark every 6-6-6-feet apart. This is normal! You may now transact commerce.

– Turn against others, lock them into a cell or snitch.

** Rule #1: when freedoms are taken away we never get them back in the same fashion.
After Sept. 11 (another event designed to take away travel rights) you could fly again but now risk being added to a secretive and un-contestable No Fly List. Behave..or else.
– Then we were told one guy’s actions resulted in 7 billion people having to remove their shoes while checking in. Forever.
– Then we were told of a big scary plot, and overnight, no debate or vote, liquids were banned on board. Worldwide.
– Then the nude body scanners came.

All these events are little tests on our level of compliance. The scary part, all came into force overnight, no vote, globally. This was the global government…20 years ago they showed their hand. Were you watching? Are you now?

————-
– From that same guy the massive police presence in that same park..the one which was used in the the CTV kissing fake news segment (to gauge our reactions) mentioned here.
Off to the new world older gulag for re-education: https://www.youtube.com/watch?v=DDKN5rHm9SU

#92 BrianT on 05.25.20 at 9:20 am

#43Ed-it isn’t greed with Buffett at this point-when a guy is that old anything that takes him out of that “88 year old guy” ageism cage is fun-he still gets to play the game-they haven’t forced him out like everybody else at that age.

#93 Dharma Bum on 05.25.20 at 9:25 am

I keep thinking that this must be a weird dream and that once I wake up, I can tell everybody about it.

They would think I was on some wild hallucinogenics.

#94 CDC Updated Covid19 Fatality Rate on 05.25.20 at 9:43 am

Why were we locked down, for nothing really… just for the flu.

CHINA WON EASILY BY BETTING ON THE STUPIDITY OF WESTERN GOVTS…lol

https://reason.com/2020/05/24/the-cdcs-new-best-estimate-implies-a-covid-19-infection-fatality-rate-below-0-3/

That rate is much lower than the numbers used in the horrifying projections that shaped the government response to the epidemic.

The CDC also estimates that 35 percent of people infected by the COVID-19 virus never develop symptoms. Those numbers imply that the virus kills less than 0.3 percent of people infected by it—far lower than the infection fatality rates (IFRs) assumed by the alarming projections that drove the initial government response to the epidemic, including broad business closure and stay-at-home orders.

AGAIN: WHY DID THE WESTERN GOVTS DESTROYED THEIR ECONOMIES?

ANSWER: BECAUSE THEY ARE STUPID AND THERE ARE NO PEOPLE IN GOVT WITH CRITICAL THINKING SKILLS.

#95 YVR Expat on 05.25.20 at 10:25 am

#27 Cottagers STAY THE HELL AWAY! on 05.24.20 at 1:19 pm
All the selfish jerks who came up this weekend are idiot southern hillbillies, no more, no less.

You wonder why the COVID numbers are on the increase in Ontario? People like YOU.

Want to do something this weekend involving needless travel? Try crossing the border to enjoy Memorial Day in the USA.

Good luck. Maybe they’ll arrest and jail you.

Just.

Stay.

Home.

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

Cottage country sounds nice, I’m thinking of flying to TO and driving up there. Maybe take a trip to the Blue Mountains.

“Cottagers STAY THE HELL AWAY!” can you recommend a good restaurant or bar?

#96 BrianT on 05.25.20 at 10:51 am

#88Jag-Mayor John Tory is a sad joke-there is zero evidence anyone has ever caught this virus outside from a stranger-some experts think it is basically impossible unless you pay someone to stand next to you while you cough and spit on them.

#97 BrianT on 05.25.20 at 11:00 am

#91Turner-Yes-the private plane crowd who own the politician puppets somehow have not been inconvenienced (they get to totally bypass it) all this “necessary” intrusion. Their servants get to line up at the stores and if their grand parties are limited to 5 or is it 10 now guests I am Santa Claus.

#98 TurnerNation on 05.25.20 at 11:02 am

#88 the Jaguar no worries everybody is totally healthy as they were in Jan/Feb/March before the media campaign. 99.99% of people. The sickness is mainly in people’s heads- and care homes – at this point.
Ask around, I do, no one reports knowing anyone sick. The case #s on TV? Who knows accuracy and what purpose they serve.
Most of Canada has 0 cases…impossible for something so contageous eh.

#99 Don Guillermo on 05.25.20 at 11:24 am

#98 TurnerNation on 05.25.20 at 11:02 am
#88 the Jaguar no worries everybody is totally healthy as they were in Jan/Feb/March before the media campaign. 99.99% of people. The sickness is mainly in people’s heads- and care homes – at this point.
Ask around, I do, no one reports knowing anyone sick. The case #s on TV? Who knows accuracy and what purpose they serve.
Most of Canada has 0 cases…impossible for something so contageous eh.
*********************************
I finally know someone first hand that tested positive. He just turned 50 and was down for a 24 hour bout of what he normally would have thought was the flue. His wife convinced him to get tested. By time the results came back positive he was feeling almost normal. His wife then went for testing and also came back positive. She said that she had little or no symptoms. Most people would probably have not bothered being tested over this (including myself) and wouldn’t show up in any stats.

#100 BrianT on 05.25.20 at 12:02 pm

The latest is that now even grifter Fauci has publicly admitted that the fatality rate for this virus is even less than that of the flu for the under 60 population. Just mindboggling.

#101 IGV on 05.25.20 at 12:29 pm

Not only is Buffet not buying he is a net seller of securities.

Just keeping the fact straight as his one slide at his investor shareholder meeting showed.

securities bought during last quarter: $426M
securities sold during last quarter: $6.5 Billion

Not “sitting on cash”.
He is SELLING and raising cash.

#102 the Jaguar on 05.25.20 at 1:27 pm

@#99 Don Guillermo on 05.25.20 at 11:24 am

Covid: People who have underlying health conditions such as cardiac, hypertension, diabetes or are ‘obese’ should be concerned. Obesity is a welcome mat to the other three. It explains why the elderly are the ones who are at risk because except for the ‘outliers’, most people over age 60 have one or more of those conditions and their immune systems tire treads are wearing out.
It also explains why statistics are supporting poorer outcomes for some ethnicities. The UK and USA and capture those statistics and the media has been reporting on them. Different folks are more prone to certain medical issues, i.e. caucasian folks get more cataracts, right?. The other issue is low vitamin D serum levels. Apparently statistics show those who get sick or die almost uniformly have/had low vitamin D levels. Some people are lactose intolerant. Milk is a fortified source of vitamin D. You can read all about it here:

https://www.thelancet.com/journals/landia/article/PIIS2213-8587(20)30183-2/fulltext

Maybe all those ‘kids in the park’ have high levels. Or maybe sitting in their parents basements on their cell phones all day might mean they are not getting enough sunlight.

#103 MF on 05.25.20 at 1:28 pm

Do we have all the facts on 05.24.20 at

-It’s not hard for me to grasp.

I understand very well what you were trying to say. You made a statement that I thought required some proof. Now we know that proof ranges from none-existent to tenuous at best.

MF

#104 the Jaguar on 05.25.20 at 1:28 pm

OH…and taking “medications’ sometimes kicks the crap out of your vitamin D levels.

#105 Do we have all the facts on 05.25.20 at 1:59 pm

All we asked for was an honest assessment of the facts before jumping of the ledge. We knew from past experience that coronavirus flues posed a threat to the elderly with compromised immune systems but minimum risk to the general population.

It was the WHO that convinced the world that Covid 19 was different and could claim millions of lives if drastic measures were not taken. Better to be safe than sorry became a mantra for most world leaders.

Well the truth is emerging and it would appear that concerted efforts to protect the most vulnerable from Covid 19 could have saved thousands of lives and trillions of dollars in economic damage.

I for one am embarrassed how easily hundreds of millions of people gave up their basic rights on a faulty projection. Now we have this chatter about a second wave claiming more lives.

When are we going to start believing factual evidence instead of hysterical projections of impending doom

posed

#106 Don Guillermo on 05.25.20 at 3:08 pm

#101 the Jaguar on 05.25.20 at 1:27 pm
@#99 Don Guillermo on 05.25.20 at 11:24 am
Covid: People who have underlying health conditions such as cardiac, hypertension, diabetes or are ‘obese’ should be concerned. Obesity is a welcome mat to the other three. It explains why the elderly are the ones who are at risk because except for the ‘outliers’, most people over age 60 have one or more of those conditions and their immune systems tire treads are wearing out.
It also explains why statistics are supporting poorer outcomes for some ethnicities. The UK and USA and capture those statistics and the media has been reporting on them
****************************************
I agree. It still seems like the best approach would have been to focus the extra support on seniors and the compromised. I believe another issue with various ethic groups is they are more likely to have the elderly living with their children as apposed to senior homes.

“CDC now confirms that death rates from COVID-19 are in the same ballpark as the flu, for all age groups”

https://realclimatescience.com/wp-content/uploads/2020/05/Image781-down.png

#107 Nottawa Housing Bust on 05.25.20 at 3:16 pm

To those critical of others for gathering in groups or not obeying social distancing, feel free to continue to comment on social media. If that is what si required.to raise your self esteem then so be it.

But consider what will you do when everyone falls in line. Who will you bully to achieve your ego boost.

Now enough of this, just watched the Eval Siddall interview with Pierrre Polievre. He mentions their estimates of up to 9 billion in defaulted mortgages through CHMC. That’s 9 billion. That’s the head of CHMC saying that at least x amount of people will lose their house. Think about that.