Better days

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DOUG  By Guest Blogger Doug Rowat
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Given the social and economic dumpster fire that has been 2020, I take glimmers of hope where I can find them.

As a portfolio manager, I naturally focus on a long list of fundamental factors that may drive equity markets—corporate revenue and profit outlook, balance sheet strength, valuations, government and central bank stimulus, interest rate policy and, particular to this year, the progress (or lack thereof) in containing Covid-19.

But sometimes a part of my outlook is determined simply by a few strong trading days or—even better—a few strong months, particularly if they occur in the midst of a market crisis. Is such nascent positive momentum a certain predictor of future market success? Of course not. But it’s certainly worth considering.

History has shown that an unusually strong quarter, or even several unusually strong trading days, signals a shift in market sentiment, which often sparks an extended rally. Let’s start first with what a few really good market days could be telegraphing.

The table below shows the 15 best single-day returns for the S&P 500 Index since 1960 and its subsequent price performance over ensuing short- and long-term periods. Note that these good days usually occur close to the heart of a market crisis and the subsequent index price movement over future time periods is virtually always positive. The takeaway is obvious: strong market days have something very clear to say about shifts in market attitude and where markets may head in the future. Thus far in 2020, there have been five trading days that would have made this list, including two days in March where the S&P 500 had one-day gains of greater than 9%.

S&P 500 performance following its best single days

Source: First Trust; returns annualized, price performance only (no dividends).

Now, let’s shift focus to quarterly returns. As we know, the second quarter of this year was a scorcher with the S&P 500 gaining a whopping 20%, making it the fourth-best quarter for the index since 1950. What might this strong quarterly return suggest about what comes next?

According to SunTrust Advisory, following the top 10 quarters since 1950, the S&P 500 has climbed EVERY time in the next quarter with an average gain of 8%. For those who have been paying attention to market performance thus far in July and August, this perfect record looks set to continue. And with respect to S&P 500 performance one year after a blow-out quarter? The S&P 500 was higher one year later after nine of these 10 best quarters with an average gain of 15% and a median gain of 17%.

Of course, markets never track the past exactly and risks abound. But the early momentum we’ve seen since March is encouraging. As noted investor Gil Penchina once explained it: “momentum begets momentum, and the best way to start is to start.”

So we’ve started. And I believe that markets are far from finished.

*     *     *

And finally, examining the actual fundamentals in detail will be a subject of a future blog, but I’ll leave you with this chart. Needless to say, the massive amount of global stimulus and its divergence with financial asset prices supports our bullish outlook into next year:

Global liquidity growth vs world financial asset prices (US$ terms, 1981-2020)

Source: CrossBorder Capital; liquidity is defined as all cash and credit available to financial markets including liquidity provided by central bankers.

*     *     *

And finally (for real), it’s that time of year again when hurricanes get the continuous nightly-news treatment. While no one would argue the damaging and often deadly consequences of hurricanes, what I’ve always questioned is the disproportionate amount of attention that they receive in the financial media. Every year, this kind of imagery gets plastered across the business newsfeeds:

It’s the end of the world… or is it?

Source: Bloomberg

However, as I point out every year, the actual consequences of hurricanes to markets are negligible. Fear always generates viewership, but keep the below table in mind when the frightening hurricane newsflow continues over the next few months:

While hurricanes always make the financial news, they don’t actually impact markets

Click to enlarge. Source: Bloomberg, National Oceanic and Atmospheric Administration, Turner Investments. Total return shown. Damages not adjusted for inflation.
Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.

 

88 comments ↓

#1 SnowOwl on 09.05.20 at 8:59 am

Good morning, Doug.
What is your opinion on building a position in value stocks right now? Please?

#2 Reality is stark on 09.05.20 at 9:02 am

The positive thing about Covid is that employers now realize that they can cut wages by 25% with few ramifications. As stagflation takes hold we need to be internationally competitive in a worldwide price declining marketplace.
People have yet adjusted to reality in this country. Wages will decline substantially and taxes need to rise significantly as governments will NOT cut costs under any circumstances (remember they have the army).
We are passive voters.
Get used to it.
Go out and buy that overpriced house. If you fail you can still count on our government to bail you out in the end by increasing GIS by clawing back others OAS.
Socialism is fairness after all. It rewards bad decisions.

#3 the Jaguar on 09.05.20 at 9:03 am

Analysis in the National Post this morning on why Erin O’Toole won the leadership. Political junkies can vulch.
Page A4.

#4 crowdedelevatorfartz on 09.05.20 at 10:53 am

Well done.
Another easy to read and understand financial article and with charts!
Go have an extra special coffee with chocolate sprinkles…you’ve earned it.

#5 Catalyst on 09.05.20 at 11:03 am

Thanks for the data driven post. Data is tough because you can find a stat for everything. Does this mean that hurricanes are a strong generator of growth if 1 year after the S&P generates on average double the 1 year S&P gains? I would think not unless it renovation spending and rising commodity prices as a result.

#6 Chris Donovan on 09.05.20 at 11:45 am

Reality is stark, wait until they want to turn the narrative and crash all debt laden markets, equity markets etc. with much higher interest rates. The low interest rate game is all the central bankers, governments, people in power have to give stupid people lots of money and their friends in high positions.

It may seen far away but when it happens, it will make 2008 real estate foreclosures, bankruptcies and government, corporate debt woes in Ireland, U.S., Spain, Greece, Italy, Portugal, etc. seem like a joke. It will be impossible to accept just like COVid-19 days now.

Socialism, communism is poison and always works out badly as they know it is their great tool to destroy countries, societies with their social and financial engineering. Better days are a dream and are not coming back.

#7 Dogman01 on 09.05.20 at 12:01 pm

This guy is Minster of Natural Resources of Canada?

@SeamusORegan

Sep 3
Alberta is hydrogen.
Alberta is batteries.
Alberta is carbon capture technology.
Alberta is geothermal energy.
Alberta is electric vehicles.

https://twitter.com/SeamusORegan/status/1301548329520824322?s=20

I know of no one in Alberta involved in this stuff, does this stuff make a profit?
How many people work in these industries in Alberta?

But Oil & Gas, I know plenty of people here whom have made their living off it.

How come Canada keeps importing Saudi energy?

Now I suspect the Liberals intention is to create an Alberta Federal WEXIT party to drain off the Conservatives support , (to divide is their hallmark) but I suspect Butts will overplay his hand and create a referendum here, which will achieve 50%+1 handily.

#8 Don Guillermo on 09.05.20 at 12:07 pm

#3 the Jaguar on 09.05.20 at 9:03 am
Analysis in the National Post this morning on why Erin O’Toole won the leadership. Political junkies can vulch.
Page A4.
*************************************

Very interesting read. Thanks!

#9 DON on 09.05.20 at 12:08 pm

#136 Nonplused on 09.05.20 at 3:05 am

#146 DON on 09.04.20 at 11:21 am
“If you are WFH on a computer. It can track you.”

And that would be different from a WFW computer in what way?

************
There is no difference…was just pointing out that most people cannot just screw around at home without consequences.

#10 Don Guillermo on 09.05.20 at 12:27 pm

Interesting article about LAPD letting all their green BMW EV’s go. Doesn’t seem to have helped LA air quality much. Maybe an analogy is obese people drinking diet coke.

“The cars didn’t wind up doing much of the outreach they were intended for, a CBS Los Angeles investigation from January 2018 found. Instead, they sat, rarely used. If they were used, CBS Los Angeles said they were used for non-police business, such as visiting nail salons and picking folks up for lunch.”

#11 PBrasseur on 09.05.20 at 12:28 pm

There is a huge hurricane coming it’s called: The Democrats!

#12 mycomicshop on 09.05.20 at 12:32 pm

9/15 days are from the same event… ie the 2008/9 collapse.
2/15 from 1987
2/15 from 1998 and
2/15 from 2002

so. statistically, not significant. nothing pre-1987?

and liquidity vs equities? nothing pre-1981? you know, when world liquidity was skyrocketing and stocks were collapsing? that doesn’t fit the theme, does it?

#13 Reasonable on 09.05.20 at 12:50 pm

The “Global liquidity growth vs world financial asset prices (US$ terms, 1981-2020)” is up to the 1st quarter of 2020 only. What would it look like up to this month? I think that yellow line may have already caught up to the red (with a little pull back the last 2 trading days).

#14 joblo on 09.05.20 at 1:08 pm

DELETED

#15 DON on 09.05.20 at 1:09 pm

#126 the Jaguar on 09.04.20 at 11:20 pm

@#44 Guelph Guru on 09.04.20 at 4:45 pm
‘Something fundamental has shifted underneath. I’ve learnt over years to pay attention to the subconscious and it’s telling me something is not right. ‘ +++

Certain readers of this blog will know this to be akin to a passage in ‘Fate is the Hunter’. Ernest K. Gann.

Not everyone is gifted with higher levels of intuition, but an extremely valuable gift it is, and it can be developed to higher levels. Some have it in spades. It can also be a burden, but one has to overlook that.
Well, enough said.

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

I call my little voice…Higgie Baby.

Last October my wife was thinking about changing jobs. i had a feeling that by March the choice would be made for her.

Yup it was. Did i know all the specifics? Not a chance. If I did, I would be collecting my lottery winnings on a weekly basis.

Similar to the feeling you can get when you are alone in the forest, and the hair stands up on the back of your neck. You get that feeling that you are being watched or stalked.

I feel that there is more pain coming and logic AND current events are leading the way. What exactly? Who knows. How we are all affected will vary.

#16 Doug Rowat on 09.05.20 at 1:12 pm

#12 mycomicshop on 09.05.20 at 12:32 pm
9/15 days are from the same event… ie the 2008/9 collapse.
2/15 from 1987
2/15 from 1998 and
2/15 from 2002

so. statistically, not significant.

—-

In aggregate, and based on the psychological impact of each event on investors, quite significant. But I already pointed out that this was only one of many factors that we look at.

—Doug

#17 bdwy sktrn on 09.05.20 at 1:25 pm

catching up on yesterday and this just caught my eye;

In Vancouver sales were *20 times higher than the 10-year average… Both detached and attached houses saw sales *more than double from the same month a year ago.”

sounds super for 604 owners but maybe a typo?

i get 20% and 36% from the rebgv data.

thanks for the best blog in the country.

#18 Masks really do make some people more attractive on 09.05.20 at 1:38 pm

#7 Dogman01 on 09.05.20 at 12:01 pm
This guy is Minster of Natural Resources of Canada?

@SeamusORegan

Sep 3
Alberta is hydrogen.
Alberta is batteries.
Alberta is carbon capture technology.
Alberta is geothermal energy.
Alberta is electric vehicles.

https://twitter.com/SeamusORegan/status/1301548329520824322?s=20

I know of no one in Alberta involved in this stuff, does this stuff make a profit?
How many people work in these industries in Alberta?

But Oil & Gas, I know plenty of people here whom have made their living off it.

How come Canada keeps importing Saudi energy?

Now I suspect the Liberals intention is to create an Alberta Federal WEXIT party to drain off the Conservatives support , (to divide is their hallmark) but I suspect Butts will overplay his hand and create a referendum here, which will achieve 50%+1 handily.

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

I’d say it’s a good thing someone is looking out for Alberta’s best interests, because Kenney is going to be the death of you.

Wexit is a non-starter; you can all hold your breath until you turn blue, but Alberta is going nowhere.

https://vancouversun.com/opinion/columnists/varcoe-alberta-burned-for-billions-in-energy-investment-gambles/wcm/e47cf488-da11-4989-9f00-d64609f6898f/

#19 Don Guillermo on 09.05.20 at 1:43 pm

#9 DON on 09.05.20 at 12:08 pm
#136 Nonplused on 09.05.20 at 3:05 am

#146 DON on 09.04.20 at 11:21 am
“If you are WFH on a computer. It can track you.”

And that would be different from a WFW computer in what way?

************
There is no difference…was just pointing out that most people cannot just screw around at home without consequences.
******************************************

If you were a WFH employee and were tracked from St Jean beach on St. Barths they might question your focus (or your salary)

#20 BillyBob on 09.05.20 at 1:50 pm

Y’know, I agree with the whole “it isn’t different this time” theme in most spheres because we as humans at any given point in history…just aren’t that special. But in the area of economics how can we state with a straight face “it isn’t different this time” when multiple factors like debt, QE, RE values and so on….are at their highest levels in history?

Is never-before-seen no longer a possible definition of “different”?

#21 Camille on 09.05.20 at 1:54 pm

Thank you Doug. Being positive is priceless. The asset price vs liquidity is very bullish, and looks undeniable.
The “other” info is not so clear to me (statistics are very tricky). So much of that data is for 87 and 08; a big drawdown, with many one day moves up, and a big recovery. Yes that’s true. Now, five comparable one day up moves, and a big recovery (happened). I take it you’re saying year later, for example, market will be up, not down.
Combined with so much liquidity, we should be up, you’re saying. And the hurricane info is also so true.

#22 mike from mtl on 09.05.20 at 2:00 pm

History is meaningless without context. Bonds pay basically nothing, debt has never been cheaper, so the only things left with any sort of return are RE and public stocks. With the Fed going by their usual playbook, rates are not going up for years, possibly the rest of the decade – s&p500 will be fine.

Also thank goodness Tesla was not permitted to be listed in the sp500; a venture capital hobbyist corp disguised as a legitimately profitable business. Guess Standard & Poor’s saw through their accounting trickery to be even considered.

#23 Herkunft on 09.05.20 at 2:06 pm

Thanks for another great post, Doug! Very informative and backed my data.

#24 PBrasseur on 09.05.20 at 2:38 pm

Aren’t we already in stagflation, deep in recession with prices, especially housing going up,sounds like stagflation to me and frankly that is what should be expected considering today’s governance. Just the beginning in my opinion.

#25 DON on 09.05.20 at 2:46 pm

#19 Don Guillermo on 09.05.20 at 1:43 pm
#9 DON on 09.05.20 at 12:08 pm
#136 Nonplused on 09.05.20 at 3:05 am

#146 DON on 09.04.20 at 11:21 am
“If you are WFH on a computer. It can track you.”

And that would be different from a WFW computer in what way?

************
There is no difference…was just pointing out that most people cannot just screw around at home without consequences.
******************************************

If you were a WFH employee and were tracked from St Jean beach on St. Barths they might question your focus (or your salary)

***********

Agreed!

One could attempt to leave the work computer at home and go through a foreign VPN service and remote into the work computer with another device while on the beach in Hawaii.

May take them a little longer to figure it out. lol

Sales jobs/ consultant jobs may be the best job categorues for work on the beach. Or anyone dealing with clients.

Lots of folks access databases in the course of theie working day and those activities can be or are logged. There are ways to see if people are doing there work if an employer really wants to dig deeper.

#26 TurnerNation on 09.05.20 at 2:53 pm

While we are being distracted what’s behind the curtain.
Blockchain! That fully developed system, that we use for…nothing. Nothing at all. Not money, real estate deals nor stock certificates. But why then?

I bet the UN Global Government will reveal this Blockchain as our Global ID chip, alongside say Bank of Canada’s new E-currency. Ask why the Queen’s Banker Sir Blog Dog Carney was dispatched back to Kanada. For middle class prosperity or…?

The Blockchain will house and track:
1. Your DNA (they already had us mail it in avec a fee, and are swabbing like crazy. E.g. Iceland’s CV “testing” firm is a Genetics company. (Control over our breeding).

By the way the anticedent or trigger for this rollout likely could be war or the default of sovereign debt. Recall they first collapsed Iceland, in 2008 GFC, sort of a isolated testing bed. It worked.

2. Your social credit score.
3. Your Global UBI Stipend.
4. Your food credits.
5. Certificate of Vax ID (the COV-ID. Catchy name) required for all travel, even leaving the house. The UN Smart Cities are blanketed by 5G and soon, sensors. Public area Temperature scanners do the job in 20
milli -seconds or less
6. “Health” records. Sure they really care about our health…sure…

By the way you know why Sweeden received not as much collective punishment as us? They have already submitted to the New System:

“Thousands Of Swedes Are Inserting Microchips Under Their …www.npr.org › 2018/10/22 › thousands-of-swedes-are-ins…
Oct 22, 2018 – Jowan Osterlund holds a microchip implant in Stockholm in 2017. … So many Swedes are lining up to get the microchips that the country’s main …”

>> This is really simple: our tax slave farmers will control our Feeding, Breeding and Movements. As any farmers controls his livestock. Google Lockstep. Every country, every city is on board and rolling out the same plan. But we need useful idiots to enforce it socially, the gaps in the A.I. We need the “go home” and “wear your mask” yellers. The media Programming will take care of this. Already has.

Stay tuned: SEPTEMBER is Harvest Season. The New Green Deal our global governmental actors soon will reveal – Un-Free Land – will being stripping us of Assets.
The bankers also want our land. Tenants are allowed squatting rights now, step 1 toward removal of private property. Taxation will be Step 2. Climate Audits will be Step 3. No wonder the new CV laws allow for seizure of private property.

#27 Uncle Al Sinclair on 09.05.20 at 3:08 pm

#122 ImGonnaBeSick on 09.04.20 at 10:03 pm
#111 Uncle Al Sinclair on 09.04.20 at 8:51 pm
#84 ImGonnaBeSick on 09.04.20 at 6:51 pm
I always find it embarrassing when people include their house in their networth…
——————————————————————–
Is it embarrassing to you when they sell their principal residence in the GTA for example and pocket $2 million capital gains free?

—-

Nope. Then it’s not embarrassing. But most people die in their houses… So…
—————————————————————

What house mon ami? I know several buddies in Toronto that have sold out and pocketed north of a million to move to areas of Ontario where housing costs are much less. This trend will continue…

#28 Uncle Al Sinclair on 09.05.20 at 3:11 pm

#118 MatterOfFacts on 09.04.20 at 9:22 pm
#69 Uncle Al Sinclair
—————————————————————-
Ace can you believe this post above??? This is absurd. I defy you to show me a SFH sale in the GTA from 2017 that is selling for less today. Patent nonsense. Read Ace Goodheart’s posts and see what is actually happening. I know first hand from a sale in August that blew 2017 out of the water. A home on the same street, that was renovated to the nines in 2017 sold for $250k less than a home this August that had no renovations done in the since it was built 30 years ago.
———————————————————
HouseSigma has a category dedicated to houses that are “sold below bought”. Fair number of properties selling for less than last purchased in 2017. These are the same property so there is no need to compare it to the house down the road. This category includes nice houses in nice neighborhoods. So stop popping the housing viagara, take off the blinders and look at facts. Not everyone wins in real estate even in today’s crazy market.
————————————————————–

Maybe in areas of Canada where house prices haven’t gone up. HouseSigma is reporting Toronto??? Please, show me one SFH in Toronto that was bought in 2017 and selling for less today. Just one per favor…

#29 TurnerNation on 09.05.20 at 3:14 pm

#6 Chris Donovan sounds like we will get along great on this pathetic weblog ;-)

Liked and subbed. (Opps wrong site.)

#30 Handsome Ned on 09.05.20 at 3:24 pm

#15 Don
Re: little voice. I’ve had that feeling many times in the bush, saved me from walking into a sow grizzly with cubs onetime. I believe all humans have these 6th senses just like our fellow animals. Anyone who has had a dog knows this. Not heeding your little voice can get your face ripped off.

#31 In Garth, Not God We Trust on 09.05.20 at 3:26 pm

#15 DON on 09.05.20 at 1:09 pm

“I feel that there is more pain coming and logic AND current events are leading the way. What exactly? Who knows. How we are all affected will vary.”
——————————————————————-

Who knows?? Who knows?? How long have you been reading this blog?? I will tell you who knows what is coming and it is the bearded mystic sage, all knowing, all wise oracle from Lunenberg, financial tea leaf reading prognosticator without equal, lone voice of reason crying out in the financial wasteland of Canada, former Minister of National Revenues, straight arrow politician in a swamp of swindlers, NYTimes bestselling author, soon to be recipient of the prestigious Order of Canada, canine lover, loyal and devoted husband of Dorothy for half a century, Harley riding badass, great humanitarian and last but not least, all round jolly good fellow. That’s who knows!!!

#32 Whackonation on 09.05.20 at 3:38 pm

#26 TurnerNation on 09.05.20 at 2:53 pm
While we are being distracted what’s behind the curtain.
Blockchain! That fully developed system, that we use for…nothing. Nothing at all. Not money, real estate deals nor stock certificates. But why then?

I bet the UN Global Government will reveal this Blockchain as our Global ID chip, alongside say Bank of Canada’s new E-currency. Ask why the Queen’s Banker Sir Blog Dog Carney was dispatched back to Kanada. For middle class prosperity or…?


Keep at it tiger… you got them on the run… all we got is you and the orange dude to save us…

#33 ImGonnaBeSick on 09.05.20 at 3:53 pm

#27 Uncle Al Sinclair on 09.05.20 at 3:08 pm
#122 ImGonnaBeSick on 09.04.20 at 10:03 pm
#111 Uncle Al Sinclair on 09.04.20 at 8:51 pm
#84 ImGonnaBeSick on 09.04.20 at 6:51 pm
I always find it embarrassing when people include their house in their networth…
——————————————————————–
Is it embarrassing to you when they sell their principal residence in the GTA for example and pocket $2 million capital gains free?

—-

Nope. Then it’s not embarrassing. But most people die in their houses… So…
—————————————————————

What house mon ami? I know several buddies in Toronto that have sold out and pocketed north of a million to move to areas of Ontario where housing costs are much less. This trend will continue…

—–

That’s just climbing up and down the property ladder… You sell your dump in Toronto, get 1.3m before fees, move to more house, then you die and leave it to your kids… All the while pretending you were a millionaire when you were just some schlump who slummed it in Toronto for a decade. You were never a millionaire, your house pays no dividends, and creates liabilities. Putting on the airs of millionaire by including your house, I find embarrassing… Much more impressive to see a couple commas in your investment accounts then having a real estate agent tell you what you’re worth… I never asked you to agree with me.

#34 Drinking on 09.05.20 at 4:00 pm

Good charts and article!

Now I have to deal with a very obnoxious magpie that is drunk on berries that will NOT SHUT UP!

#35 Nosferatu on 09.05.20 at 4:01 pm

Doug,

What do you guys (you/Garth/Ryan) feel about Buffet doing ostensibly “crazy” things he’s never done before – and explaining why he’s doing them? Is it possible there is a fundamental paradigm shift coming that will make him right on being wrong (earlier) about Gold?

https://medium.com/the-ascent/warren-buffetts-recent-explanation-of-how-money-now-works-is-the-most-important-in-history-2e45461a5969

thanks

#36 DON on 09.05.20 at 4:04 pm

@ Handsome Ned

A friend recently sent me a video of a cougar chirping like a bird. Instantly i was taken back to the one incident in particular when i heard that sound and just thought it was a stellar jay.

Grizzly bear and babies…yikes!

#37 paulo on 09.05.20 at 4:06 pm

Interesting Macro Economic story: Friend whom runs a small it contracting outfit, usually has about 6 to 10 contractors to complete contracts. they are usually about a year from start to finish customers are mid to large retail or bank related.
So during the shut down my friends lease came up for his modest office space in the young egglinton area paying about 45/sf ++ he did not renew the lease and moved up north some 270km from toronto along with selling his home in the big smoke for big bucks he is in good shape. comes along the current contract that he secured by way of competitive bid , and was able to retain his sub contractors at a average of 50% of previous cost of talent due to obtaining lower cost work from home subs, not living in the GTA that he correctly figures has become non competitive due to the sky high cost of living therein he is but one of many that are leaving the GTA area none of his previous contractors living in the gta area where successful in obtaining new contracts the future is real and stark for many

#38 DON on 09.05.20 at 4:18 pm

@#31 In Garth, Not God We Trust on 09.05.20 at 3:26 pm
********

lol

@Doug R…Thank you for the analysis.

#39 the Jaguar on 09.05.20 at 4:50 pm

@#30 Handsome Ned on 09.05.20 at 3:24 pm
#15 Don ( Higgie Baby) —-

Yes, that ‘little voice’ is very sensitive to impending danger. I once listened to it when a colleague who had been ‘let go’ by the firm returned one day and though he sat quietly displayed inconsistencies in behaviour which led to my sounding the alarm, police arriving and discovering firearms and other bad things in his household. Another time on a ferry to the Island of Elba (Italy) I was certain I encountered a killer, but evaded his interest in me and sped to the hotel as though Hannibal Lector was on my tail.
Jaguar would make an excellent police witness.
Sorry Doug to have hijacked your content with this thread. I might consider surrendering one of my Roberto Clemente cards to appease you, but the selection process may be protracted…..

#40 JSS on 09.05.20 at 4:59 pm

Any predictions for the tsx? The gap between s&p500 and tsx is enormous

#41 Kevin BC on 09.05.20 at 5:10 pm

Thanks Doug as always, great work!

Re: Global liquidity growth vs world financial asset prices (US$ terms, 1981-2020) chart, what’s the correlation coefficient (r) value of this? it looks almost 1 (100%).

#42 Bdwy on 09.05.20 at 5:40 pm

#106 Nonplused on 09.03.20 at 10:03 pm

#91 Don Guillermo on 09.03.20 at 8:33 pm

As expected, good response and most likely a successful approach. Cheers

———————————–

Well we’ll see. PS he’s failed his learner’s license 3 times so far but that don’t mean I give him any help unless he asks except make sure he has the study materials…

……
By learners i assume you mean the written test , the book is all u need for passing . Not hard.

The “N” test, or the first road test, has a very high failure rate at least here in Vancouver. As does the second/final road test. Kids need a bit more than the book plus experience for this one. They are very picky.

My kid had hundreds of hours on city and hwy, was an excellent driver. Safe as can be. But a couple lessons w a professional driving instructor (who used to be an examiner) just before the test was essential to passing as i never taught to shoulder check before farting for example.

Just a tip for them…on the final test they steered her into what was about to become a bus lane. Student must be changing lanes fast without instructon here.

#43 Doug Rowat on 09.05.20 at 6:05 pm

#39 the Jaguar on 09.05.20 at 4:50 pm
@#30 Handsome Ned on 09.05.20 at 3:24 pm
#15 Don ( Higgie Baby)

Sorry Doug to have hijacked your content with this thread. I might consider surrendering one of my Roberto Clemente cards to appease you, but the selection process may be protracted…

—-

If a Mike Trout rookie card is now worth US$4 million, it might be time to liquidate all your Clemente cards.

—Doug

#44 Nonplused on 09.05.20 at 6:17 pm

I think it would be more fair to say the markets already price in hurricanes because they are an annual occurrence. If the markets are truly a “discount mechanism”, this is what one would expect. I’m not sure they are in the short run though. Right now they seem like more of a popularity contest with the FAANGs+T getting most of the love.

In any case I expect Powell will make good on his inflation targets, so companies that have pricing power should do better than cash (a lot better).

We have the makings of an inflationary storm at least in the short term. Money isn’t real, it is a means of facilitating the exchange of real goods and services. For it to have value something must be produced to be exchanged. But what we have right now is trillions being handed out across the world to people who aren’t producing anything. That means more money chasing fewer goods and services. That has to be inflationary, and that may be the real reason Powell has said the Fed plans to accommodate above average inflation for some time. To stop it he would really have to jack up rates, which there is no political will for in the middle of a pandemic where so many people are out of work.

I’ve often argued that the government can’t bail anyone out because they don’t have any real money, save what they take from the people in taxes or borrow. So what the process will look like is that we all will shoulder the costs of the bailouts through higher inflation and possibly higher taxes.

Anyway real assets do well during inflation, cash does not.

Anyway to put the bailouts in perspective, Alberta all by itself since 2000 has sent enough money to Ottawa to cover the covid bailouts nationwide. So we probably only need to devalue the dollar by, I am guessing, 10-15%, to cover them. At that point everything will be repriced to account for all the new money. It’s not the end of the world.

#45 Nonplused on 09.05.20 at 6:25 pm

PS. I read an interesting article today that argued that universal social programs are usually found in countries that have a high level of production and thus not much demand for them. As you look at countries with lower and lower levels of production there tends to be less and less government assistance even though the need is higher. So the secret to say something like UBI is full employment so that hardly anybody needs it.

#46 Nonplused on 09.05.20 at 6:48 pm

#25 DON on 09.05.20 at 2:46 pm
#19 Don Guillermo on 09.05.20 at 1:43 pm
#9 DON on 09.05.20 at 12:08 pm

I don’t see the rationale for companies paying less for WFH. They pay the minimum they can and attract the talent they want now. That is the whole mission of the HR department, to pay as little as they can but still get the job done. They aren’t charities.

But if they can ditch the downtown real estate, it is a big win for them. They have been trying to do it for years. Back before the computer everyone had an office with a door and stacks of paper in there and a lock if they were dealing with confidential stuff. Then the computer came and they got rid of the offices and stuffed us all into cube farms. Now with the internet the next logical step is to send everyone home and use vpn. What they are going to do with all the unnecessary office space I don’t know but long term that is a landlord issue, not the company’s.

WFH is better for everybody. It save corporations money which raises profits and keeps prices lower, it saves the environment by cutting commuting and duplication of utilities, and it saves the employees a considerable amount of their short lives current spent sitting on the train. It may even save the cities money because they don’t need to build so much infrastructure to handle the morning rush. In the days of high energy costs and concern about global warming it seems like a win-win.

My wife has been working from home for about 4 years, and her compensation has gone up, not down. We had to spend some money making her office “professional” because all her employer would give her was a laptop and a phone, but I think it paid for itself in less than a year just on commuting expenses.

It is the way of things. Society evolves towards efficiency. Every dollar that can be squeezed out of the provision of goods and services is then available for something else that enhances the human experience. I don’t think we’ve run out of ideas on how to do that yet.

#47 the Jaguar on 09.05.20 at 7:20 pm

@#43 Doug Rowat on 09.05.20 at 6:05 pm. Liquidate? Where are my smelling salts….I feel the vapours coming on. It can’t always be about the ‘money’, Doug. An example of this is the Smeagol/Gollum character in Lord of the Rings and the ‘Precious’. Roberto Clemente, Luis Tiant, Minnie Minoso, and of course the ‘special collection’ which I’m not going to mention.
I have to go now. There’s a weather advisory out for southern Alberta and I have to get into the bunker and secure all the entry and exit doors.
Jaguars can move between worlds because they are at home both in the trees and on the ground, maybe even underground…….

#48 willworkforpickles on 09.05.20 at 8:32 pm

It’s common for many market players with not too many years experience to become victims of delusional focusing and fatal decision making.
They don’t at all think so until far more losses than wins eventually tell them so.
Grandiose delusions of one’s own importance and financial worth are reaching endemic levels and are about to take a turn for the worse for real estate dreamers and investors caught up in the flurry (sellers of late not particularly included)…
There are those who have blinded themselves to reality with such selective thinking that dismiss the possibilities for anything that could affect the continual rise of real estate prices .
Into 2021…two things will come about to shatter the rose colored glasses they wear.
Whatever your strategy to cope into the future may be, don’t be too trusting of what the Fed or BoC projects beyond any given quarter…especially now!
International rumblings of change are in the air like have not been seen that will have the Fed and BoC dancing like puppets on a string before long.
Translation:…long story short…
Interest rates 2021…up…
Real Estate 2021…down…

#49 Uncle Al Sinclair on 09.05.20 at 8:33 pm

#27 Uncle Al Sinclair on 09.05.20 at 3:08 pm
#122 ImGonnaBeSick on 09.04.20 at 10:03 pm
#111 Uncle Al Sinclair on 09.04.20 at 8:51 pm
#84 ImGonnaBeSick on 09.04.20 at 6:51 pm

That’s just climbing up and down the property ladder… You sell your dump in Toronto, get 1.3m before fees, move to more house, then you die and leave it to your kids… All the while pretending you were a millionaire when you were just some schlump who slummed it in Toronto for a decade. You were never a millionaire, your house pays no dividends, and creates liabilities. Putting on the airs of millionaire by including your house, I find embarrassing… Much more impressive to see a couple commas in your investment accounts then having a real estate agent tell you what you’re worth… I never asked you to agree with me.
—————————————————————–

You are missing my point. When my buddies sold their Toronto home they bought less house in terms of price, not in terms of sq footage, views, countryside, etc. Did you miss the part where they pocketed $1 million plus?? They got beautiful homes in away from the GTA when they retired, pocketed over a million and still have a house. I can assure you, as others have pointed out on this blog, that their gains in the past 20 years have beaten the financial markets because they were all capital gains free. Do you think renting a home in the GTA is cheap? Your house expenses are dwarfed by rental expenses on a comparable home. Also, slumming it in Toronto? I live off the Credit River in Mississauga that has scenery that can match any spot in Ontario. Gorgeous views onto a beautiful river surrounded by multi million dollar homes. You call that slumming??

#50 the Jaguar on 09.05.20 at 8:55 pm

Last post from the Bunker for those blog dogs who love Art Berman as I do. For oil and gas interested parties…

https://www.peakprosperity.com/off-the-cuff-the-coming-oil-shortage-of-june-2021/

Interesting what he has to say about the rig count down from 600 to 150, the measurement of how far we have come back since Covid based on the important bi-products such as kerosene oil fuel and diesel and its relationship to GDP, and US being down from about 13 million barrels a day to about 5 million by June 2021. Also, some interesting thoughts starting at about: 40:00 on this hour long interview.

They both tend to ramble a little, but many kernels of wisdom as always. It’s a long weekend, and what else do you have to do. lol!

#51 the Jaguar on 09.05.20 at 8:57 pm

That should have been Kerosene ‘Jet’ fuel.

#52 Billy Buoy on 09.05.20 at 9:01 pm

Be grateful….Since Greenspan financial planners could do no wrong.

I hope they get a chunk in commissions as well.

Their fingers broken from pressing the PRINT button since the 80’s are in need of replacement.

#53 NoName on 09.05.20 at 9:29 pm

https://www.apartmenttherapy.com/kevin-costner-hearhere-app-36815383?amp=1

Here is a one travel app for road warriors… Made by Kevin Kosner himself, who eles watches a yellowstone?

#54 Ponzius Pilatus on 09.05.20 at 9:32 pm

#46
Obviously you are an engineer or a technocrat, who’s never studied “organizational behavior”.
And, btw, you still have not got it.
Organizations that focus on efficiency rather than effectiveness don’t survive very long.
Because sooner or later, the pawns jump out the window.

#55 KNOW IT ALL on 09.05.20 at 10:01 pm

DOUG,

Your not OLD enough to have experienced what kind of pain a Pandemic of this size can deliver to the entire global economy.

Differentiate the stock markets from the real economy. That’s where your analysis needs to be.

#56 Nonplused on 09.05.20 at 10:12 pm

#54 Ponzius Pilatus on 09.05.20 at 9:32 pm

Oh contraire, Mr. Pilatus, it is you who has not got it. You cannot pay an inefficient worker very much. You cannot drive an inefficient car as far. You have to charge more for tickets if your airplane is not efficient. If you hand build cars you cannot sell them because nobody can afford to buy them. Inefficiency = waste, and waste is not good.

Efficiency makes us all richer. And I am not sure what the difference is between efficiency an effectiveness. Something has to be more effective to be efficient.

#57 ImGonnaBeSick on 09.05.20 at 10:44 pm

#49 Uncle Al Sinclair on 09.05.20 at 8:33 pm
#27 Uncle Al Sinclair on 09.05.20 at 3:08 pm
#122 ImGonnaBeSick on 09.04.20 at 10:03 pm
#111 Uncle Al Sinclair on 09.04.20 at 8:51 pm
#84 ImGonnaBeSick on 09.04.20 at 6:51 pm

That’s just climbing up and down the property ladder… You sell your dump in Toronto, get 1.3m before fees, move to more house, then you die and leave it to your kids… All the while pretending you were a millionaire when you were just some schlump who slummed it in Toronto for a decade. You were never a millionaire, your house pays no dividends, and creates liabilities. Putting on the airs of millionaire by including your house, I find embarrassing… Much more impressive to see a couple commas in your investment accounts then having a real estate agent tell you what you’re worth… I never asked you to agree with me.
—————————————————————–

You are missing my point. When my buddies sold their Toronto home they bought less house in terms of price, not in terms of sq footage, views, countryside, etc. Did you miss the part where they pocketed $1 million plus?? They got beautiful homes in away from the GTA when they retired, pocketed over a million and still have a house. I can assure you, as others have pointed out on this blog, that their gains in the past 20 years have beaten the financial markets because they were all capital gains free. Do you think renting a home in the GTA is cheap? Your house expenses are dwarfed by rental expenses on a comparable home. Also, slumming it in Toronto? I live off the Credit River in Mississauga that has scenery that can match any spot in Ontario. Gorgeous views onto a beautiful river surrounded by multi million dollar homes. You call that slumming??

—–

Heh… Tell you what, I’ll make you a deal. You keep on enjoying your little shack of a house on your nothing lot. You’ll get to pretend with your friends that you’re all millionaires while you struggle each month to make your mortgage payments, and hope to hell nothing breaks down this year… I’ll sit in my corner of the world and just be embarrassed for you.. how about that?

#58 Doomsday Preppar on 09.06.20 at 7:22 am

Doug, I don’t see how you can compare market trend and activity from the 1960’s with recent times, what with the advent of online brokerages, day traders, algos and robos etc…
Markets have been propped up by printing presses for too long, and I predict that your firm’s “ stay balanced, stay the course” approach will be proven foolish, greatly, in the not too distant future.
Sadly, I have no strategy to offer other than hoarding cash and getting to the storm shelter before the hurricane hits.
Thanks for the blog though…

#59 Gravy Train on 09.06.20 at 7:35 am

#56 Nonplused on 09.05.20 at 10:12 pm
“[…] And I am not sure what the difference is between efficiency an effectiveness. Something has to be more effective to be efficient.” Not even close. Efficiency is doing things right. Effectiveness is doing the right things. Do you see the difference now? :P

#60 Ace Goodheart on 09.06.20 at 8:24 am

I remember back in 2008. Lehman Brothers had just failed. The USA was collapsing economically. You could see the fear in traders’ eyes as they watched the carnage from the floor of the market.

Them the US government announced it would be bailing everyone out.

Hope reappeared. Everyone was happy again.

It would be OK. The government was printing money and flooding the system with it.

We were all saved.

I remember the look in people’s eyes then.

What followed was the worst global economic recession since the great depression.

I see that same look now in Canadian eyes as our government “saves us” by printing money.

If the only thing an economy has going for it, is free, freshly printed money, that economy is in trouble.

#61 The Big D on 09.06.20 at 8:32 am

#2 Reality is stark on 09.05.20 at 9:02 am
The positive thing about Covid is that employers now realize that they can cut wages by 25% with few ramifications. As stagflation takes hold we need to be internationally competitive in a worldwide price declining marketplace.
People have yet adjusted to reality in this country. Wages will decline substantially and taxes need to rise significantly as governments will NOT cut costs under any circumstances (remember they have the army).
We are passive voters.
Get used to it.
Go out and buy that overpriced house. If you fail you can still count on our government to bail you out in the end by increasing GIS by clawing back others OAS.
Socialism is fairness after all. It rewards bad decisions.
——————————————————–
But the teachers union boss assured us that nobody took a pay cut because of Covid. That’s why they shouldn’t

#62 Uncle Al Sinclair on 09.06.20 at 8:58 am

#57 ImGonnaBeSick on 09.05.20 at 10:44 pm

Heh… Tell you what, I’ll make you a deal. You keep on enjoying your little shack of a house on your nothing lot. You’ll get to pretend with your friends that you’re all millionaires while you struggle each month to make your mortgage payments, and hope to hell nothing breaks down this year… I’ll sit in my corner of the world and just be embarrassed for you.. how about that?
—————————————————————-

And I will keep enjoying you making absurd assumptions about people you don’t know. You seem to think everyone is up to their eyeballs in debt and slumming it. I have been mortgage free for 30 years, own financial assets and multiple properties. Meanwhile I will slumming and enjoying my view of the Credit River…

#63 Burn! on 09.06.20 at 8:58 am

#57 ImGonnaBeSick on 09.05.20 at 10:44 pm

———————————————

Major burn from ImGonnaBeSick Uncle Al. Quit while you’re ahead.

The Credit River? Lmao are you kidding me, is that supposed to impress anyone? Better sell my villa in Tuscany. Very appropriately named considering the fact that it’s surrounded and polluted by a bunch of debt saves.

#64 Phylis on 09.06.20 at 9:05 am

#56 Nonplused on 09.05.20 at 10:12 pm
“[…] And I am not sure what the difference is between efficiency an effectiveness. Something has to be more effective to be efficient.” Not even close. Efficiency is doing things right. Effectiveness is doing the right things. Do you see the difference now? :P

So, you can’t be effective unless you are efficient, lest you be effectively inefficient and what would be the point of that?

#65 MF on 09.06.20 at 9:25 am

3 Burn! on 09.06.20 at 8:58 am

Nah I’ll give it to Uncle Al here, but ImGonnaBeSick had some good points.

I’ll talk about my parents who are older boomere born in Toronto. GTA home paid off in full from the start in 1993 (worth whatever million now). And a seven figure investment portfolio they built up over the years. Also a good pension plus cpp and oas.

They did everything right, and have no desire or need to move to a small town.

So yes, younger generations have been completely thrown under the bus, but there are some people out there that are sitting pretty from good choices and aren’t debt slaves by any means.

MF

#66 Doug Rowat on 09.06.20 at 9:26 am

#58 Doomsday Preppar on 09.06.20 at 7:22 am

Sadly, I have no strategy to offer other than hoarding cash and getting to the storm shelter before the hurricane hits.

—-

I’ve already told you how overrated hurricanes are.

—Doug

#67 MF on 09.06.20 at 9:29 am

61 The Big D on 09.06.20 at 8:32 am

Good.

That’s what it’s like living in a first world country where the Government sticks to its previous union agreements.

MF

#68 Doug Rowat on 09.06.20 at 9:46 am

#55 KNOW IT ALL on 09.05.20 at 10:01 pm

DOUG,

Your not OLD enough to have experienced what kind of pain a Pandemic of this size can deliver…

—-

Only NOW have I been able to get my Porsche serviced. Haven’t I suffered enough?

—Doug

#69 Dharma Bum on 09.06.20 at 9:46 am

#53 No Name

Who else watches Yellowstone?
——————————————————————–

I do. It’s my favourite show. Guilty pleasure.

Problem is, I binge it, so after 3 or 4 nights, I have to wait over a year for the next season.

The end of this season was torture…….cliffhanger.

Well, at least I have next season to look forward to.

Yellowstone – it’s like Dallas on steroids.

(Although Montana is the setting, it’s actually filmed in Utah.)

#70 Ace Goodheart on 09.06.20 at 9:51 am

Canada is now confirmed to be being run by a “woke” government.

This should keep you all up at night.

The basic tenets of the “woke” movement sound very similar to the main speaking points of a lecture given by Fidel Castro.

Amongst the brilliant, neo Marxist ideology is this shining beacon of “We-ness”: The remaking of Canada’s energy industry.

Gone are the old GDP stabilizing, enormously profitable stalwarts oil and gas.

Their replacements will be government run, government subsidized “green energy” programs.

Want to run such a program?

You need to show your devotion and dedication to the principles of being “woke”.

Wokesters hate private property. They claim it promotes systemic racism. Canadians do not have constitutional property rights.

Can you see this going well?

Canada has a parliament. It doesn’t sit anymore. Legislative debate doesn’t happen. We have a system of central control. Decisions are not debated anymore.

Trudeau vowed to “check in with parliament” every so often, just before he prorouged it, shutting down the committees that were investigating his government’s behavior in relation to the “We” fake charity brothers.

Instead of debate, there will be “check ins”.

China does a similar thing, with its puppet legislature.

#71 crowdedelevatorfartz on 09.06.20 at 10:30 am

@#42 Bdwy
“…Just a tip for them…on the final test they steered her into what was about to become a bus lane. Student must be changing lanes fast without instructon here….”

+++++

My experience with Lower brain Land drivers is…..they are getting worse as the years go by.
Exorbitant ICBC rates will back me up on that statement.
When was the last time you saw a driver use their turn signal to…..turn? Or a turn signal to lane change?
Everyday there are crashes on the Knight St bridge. The #1 Hwy east of The Port Mann Bridge……every…. damn….. day has at least one and usually three.

P.S.
Who farts when they shoulder check to lane change? Thats sick!

#72 crowdedelevatorfartz on 09.06.20 at 10:35 am

@#58 Doomsday Prepper
“Sadly, I have no strategy to offer other than hoarding cash and getting to the storm shelter before the hurricane hits.
+++++

You just make sure you have lots of cooking spices stored away.
Nothing quite as sad as the spectacle of a prepper without any pepper.

Sorry dogs……. It begged to be typed.

#73 Gravy Train on 09.06.20 at 10:56 am

#64 Phylis on 09.06.20 at 9:05 am
“So, you can’t be effective unless you are efficient, lest you be effectively inefficient and what would be the point of that?” I’ll give you an extreme example, Phylis, so you and Nonplused can get the point. (Hopefully.)

If you and Nonplused team up to produce widgets, and you make them in the best possible manner with the least waste of time, energy and money, then you’re efficient in your use of resources. But if there’s no market for widgets, then you’re not effective in achieving your purpose, and producing the expected or intended result—which is to maximize profit.

Get it now? Or do I have to send you both to the back of the class? :P

#74 crowdedelevatorfartz on 09.06.20 at 11:22 am

“Only NOW have I been able to get my Porsche serviced. Haven’t I suffered enough?

—Doug”

+++

Oh the inhumanity, the injustice ….. Porsche owners should be applying for a Govt grant….. but Trudeau still owns his Dads’ vintage porsche convertible so I guess that would be another conflict of interest investigation.

#75 Uncle Al Sinclair on 09.06.20 at 11:23 am

#63 Burn! on 09.06.20 at 8:58 am
#57 ImGonnaBeSick on 09.05.20 at 10:44 pm

———————————————

Major burn from ImGonnaBeSick Uncle Al. Quit while you’re ahead.

The Credit River? Lmao are you kidding me, is that supposed to impress anyone? Better sell my villa in Tuscany. Very appropriately named considering the fact that it’s surrounded and polluted by a bunch of debt saves.
—————————————————————–

I’ll give you credit for the pun cowboy. However, the Credit River seems to impress those multimillion dollar mansions that back on to it. I know, I know, they’re all losers and up to their eyeballs in debt….

#76 Phylis on 09.06.20 at 11:27 am

Then your effective widget is magical. I have no problem being in the back of the class!

#77 Don Guillermo on 09.06.20 at 12:21 pm

#74 crowdedelevatorfartz on 09.06.20 at 11:22 am
“Only NOW have I been able to get my Porsche serviced. Haven’t I suffered enough?

—Doug”

+++

Oh the inhumanity, the injustice ….. Porsche owners should be applying for a Govt grant….. but Trudeau still owns his Dads’ vintage porsche convertible so I guess that would be another conflict of interest investigation
****************************************

Vintage Mercedes convertible I believe. Poor mans Porsche ;)

#78 kothar on 09.06.20 at 12:23 pm

FAANG stocks are outsized component returns now of NASDAQ and potentially other ETF’s that are index following. How does one diversify a portfolio when such heavy weighting in just these companies?

#79 Dogman01 on 09.06.20 at 12:28 pm

#18 Masks really do make some people more attractive on 09.05.20 at 1:38 pm

Have to agree, Alberta has had 40 years of Conservative “stewardship” and the verdict is in, FAIL.

40 years of pretty good times and no plan for a future. Some conservatives are beginning to recognize this:
Alberta is a financial disgrace. https://calgaryherald.com/opinion/columnists/smith-alberta-is-a-financial-disgrace-we-need-to-hit-the-reset-button

Problem is the Liberals will further doom us with their ideologically “Woke” driven plans (#70 Ace Goodheart on 09.06.20 at 9:51 am).

Management is doing things right.
Leadership is doing the right things.

The reality is that fossil fuels are going to continue to increase in use in the world. So all Canada’s doing by destroying its own industry is giving those production barrels and that opportunity to countries that don’t have the ethical system, and that don’t have the human rights system and that don’t have even the production efficiency of Canada.

Canadians blocking Canadian energy to instead use Saudi Energy is NUTS.

“Those in Alberta who are thinking separatist thoughts, and who have separatist feelings, are doing so only because they have been driven, reluctantly and in sorrow, to the thought that separation might be the only way to achieve fair dealing from a careless national government and a blithe indifference from centrist mentalities.” – Rex Murphy

As displayed by @SeamusORegan Tweet.

#80 WTF on 09.06.20 at 12:56 pm

Buyers Regret in USA

https://www.businessinsider.com/real-estate-is-a-bad-deal-amid-the-pandemic-2020-9

#81 baloney Sandwitch on 09.06.20 at 1:02 pm

The oracle of omaha (Warren Buffett) just spent $6 Billion $ buying up Japanese conglomerates i.e., Marubeni Corp. , Mitsubishi Corp. , Mitsui & Co. Ltd. and Sumitomo Corp. He used very cheap japanese debt to buy the stock. These companies are heavily into commodities with global reach and very much active in developing countries. I think that is a huge bet on inflation as well as the fact that he sees the US dollar going down.

#82 Gravy Train on 09.06.20 at 1:21 pm

#76 Phylis on 09.06.20 at 11:27 am
“Then your effective widget is magical. I have no problem being in the back of the class!” Your effective widget is one that sells at an adequate profit—irrespective of the efficiency of its production! Am I just beating a dead horse? I’d clearly have been drummed out of the teaching profession! :P

#83 crowdedelevatorfartz on 09.06.20 at 1:51 pm

@#77 Donny G
“Vintage Mercedes convertible I believe. Poor mans Porsche ;)”

++++

You are correct.
A Mercedes it is.
My mistake.
Poor Justin has to suffer the indignity of driving a “used” car.
Or as a Mercedes dealership out here refers to them as “Select pre-owned vehicles”……

#84 MF on 09.06.20 at 1:55 pm

#81 baloney Sandwitch on 09.06.20 at

Buffett has been wrong in the past, but yes it’s a good bet. Inflation has been way above whatever is reported for a decade or more anyways.

Since the fed went out an actually admitted it last week it’s clear they:

1) are terrified to raise rates (can’t)
2) are desperate to inflate all the debt away. The same debt that accumulated because of their poor policy decisions in the first place.

MF

#85 Burn! on 09.06.20 at 2:35 pm

#75 Uncle Al Sinclair on 09.06.20 at 11:23 am
#63 Burn! on 09.06.20 at 8:58 am
#57 ImGonnaBeSick on 09.05.20 at 10:44 pm

———————————————

Major burn from ImGonnaBeSick Uncle Al. Quit while you’re ahead.

The Credit River? Lmao are you kidding me, is that supposed to impress anyone? Better sell my villa in Tuscany. Very appropriately named considering the fact that it’s surrounded and polluted by a bunch of debt saves.
—————————————————————–

I’ll give you credit for the pun cowboy. However, the Credit River seems to impress those multimillion dollar mansions that back on to it. I know, I know, they’re all losers and up to their eyeballs in debt….

—————————————

Seriously Uncle Al, the Credit River? Who in the blue hell even knows or cares what or where that is on this planet besides you absolute local suckers? These “multi million” dollar homes you speak of…what would these pressed conflake boxes be worth in any other part of the world that are renowned, are relevant, have quality construction, world class services and climate, have actual transit and infrastructure and sane real estate prices where owners aren’t royally ripped off by high school drop out realtors and a criminal cartel of drug habit supporting banks? Ya I thought so.

I live in the Scarborough bluffs Hill Crescent area where my home went from $388K in 1998 to now well over $2million, surrounded by many other “multi million dollar homes” and you’ll never hear me bragging. I’m big enough to admit that the values are a sad, undeserving and an international joke. And we actually have a subways and new rapid transit unlike “Need More Credit River” again, whatever/wherever the heck that is, without the 5 figure property taxes.

You’re delusional dude I’m sorry.

#86 BC Doc on 09.06.20 at 2:38 pm

The kids are(n’t) alright:

https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/

Tough times.

#87 Uncle Al Sinclair on 09.06.20 at 3:52 pm

Burn! on 09.06.20 at 2:35 pm

Seriously Uncle Al, the Credit River? Who in the blue hell even knows or cares what or where that is on this planet besides you absolute local suckers? These “multi million” dollar homes you speak of…what would these pressed conflake boxes be worth in any other part of the world that are renowned, are relevant, have quality construction, world class services and climate, have actual transit and infrastructure and sane real estate prices where owners aren’t royally ripped off by high school drop out realtors and a criminal cartel of drug habit supporting banks? Ya I thought so.

I live in the Scarborough bluffs Hill Crescent area where my home went from $388K in 1998 to now well over $2million, surrounded by many other “multi million dollar homes” and you’ll never hear me bragging. I’m big enough to admit that the values are a sad, undeserving and an international joke. And we actually have a subways and new rapid transit unlike “Need More Credit River” again, whatever/wherever the heck that is, without the 5 figure property taxes.

You’re delusional dude I’m sorry.
—————————————————————

This whole conversation started with someone claiming that a house is not to be considered part of one’s net worth. Well it is as has even been pointed out by Captain Garth when his advice to someone recently was to sell for $2 million in Toronto and go to London and buy for $700k in a Rosedale like area and pocket $1.3 million. Sounds like that qualifies for a financial asset to me. Who the hell cares about what you think of Toronto. It became the 3rd largest metropolis in North America doing something right. The GTA has been supremely good to me and I’ll take my neighbourhood any day of the week. The only joke here is you cowboy.

#88 Steven Rowlandson on 09.07.20 at 8:32 am

Given the limited incomes in the real world most mortgages are unpayable anyway. All home prices and rents are unpayable because they are too high relative to income. The 6 digit incomes Garth likes to talk about are the exception not the rule. Your typical working class Canadian makes minimum wage plus or minus a bit and gets 0 to 44 hours a week. Next to the cost of living he is in a world of crap and needs a $200,000 income supplement per year or a 90% plus cut in the cost of homes, rents and vehicles. Something has to be adjusted because right now the working man cannot pay. We are effectively in the 1930’s thanks to Covid-19, wage repression and the real estate market.