Year in the rearview

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RYAN   By Guest Blogger Ryan Lewenza
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As I always do at this time of year, I’m going to review my investment predictions for 2021 to see how I performed. I’ve been doing this exercise for years now, reviewing my investment recommendations and trades in an effort to learn, especially from my mistakes and become a better investor. So let’s get started.

In my 2021 outlook report dated January 16th I was pretty clear and confident that we would see solid gains from the global equity markets this year predicated on: 1) increased vaccination rates; 2) a big economic rebound; and 3) a surge in corporate profitability. Quoting from the report:

“The next few months could be dicey as Covid rates rise exponentially, governments in turn roll back reopening measures and we transition to a new US president and a democratically controlled congress. But if we do see any volatility over the short-term it should prove to be a buying opportunity, as I’m fairly bulled up for this year.

With us being locked up in our homes for close to a year now, record savings and cash balances on hand and our profound desire to get back to normal and do all the things we miss, I believe once we near herd immunity that we’ll see an explosion of economic activity and a big rebound in the global economy.”

Well this played out to a tee with huge job gains (Canada added over 800k jobs during the year for example), the strongest GDP growth in decades (Canadian and US economies are forecasted to grow this year by 5% and 5.5%, respectively) and vaccination rates in most developed countries have risen above 60% (over 80% here in Canada).

Too many people get caught up in the headlines and the fear peddled by the media that they often ‘lose the forest for the trees’ and as long as the economy is improving, especially from an economic recession, then equity markets tend to ‘climb the wall of worry’, which is exactly what played out this year.

What about those corporate profits? From the outlook report:

If I’m correct about this ‘pent up’ demand and a strong economic recovery, this should translate into a big rebound in corporate profits.

Stocks go up by either the multiple (i.e., P/E ratio) increasing or rising earnings. I see earnings growing at double-digit rates this year, which should help to propel the global equity markets even higher this year. Currently, consensus estimates point to S&P 500 earnings increasing by 30% this year. This is really the crux of our bullish call for this year.

Here I was actually too conservative for my estimates of earnings growth this year. While we’re still awaiting fourth quarter results, if those earnings come in as expected, we’ll see TSX and S&P 500 earnings up 92% and 59% yoy, respectively.

Earnings are the main driver of stock prices over the long-run so as earnings surged this year coming in better-than-expected, they help to drive stock prices to new highs and with it, realize our call for strong market gains on the back of higher earnings.

S&P 500 Earnings Have Surged this Year up 59% Y/Y

Source: Bloomberg, Turner Investments

So I got the ‘big picture’ market call correct but what about the rest of my predictions?

Below is a summary table of my key calls for this year with the outcomes. Overall I made 9 key calls for this year and went 7 for 9 or 78%.

My most notable ‘misses’ were my calls for the emerging markets to outperform developed markets and for biotech stocks to outperform. My EM call was derailed due to China’s slowing economy, the Chinese government’s bashing of their tech giants, and fears over their real estate market and Evergrande. The biotech call was off the mark this year but we see a stronger 2022 as there are a number of key drugs from leading biotech firms that are slated to be reviewed/approved by the FDA next year.

In the positive column I got my predictions for higher inflation and interest rates, corporate bonds to outperform government bonds, REITS to rebound strongly, US value stocks to do better, oil and commodity prices to rise and for the TSX to post a better return, all of which played out nicely this year.

So there you have it.

From my lens it was a good year for the markets, our forecasts and client portfolios.

In my next blog I’ll be presenting our 2022 outlook along with our market predictions. Spoiler alert: We’re expecting another year of gains but more moderate returns next year with a lot more volatility. Buckle up!

Our Key Calls for 2021

Click to enlarge. Source: Turner Investments. As of 12/17/21
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

82 comments ↓

#1 crowdedelevatorfartz on 12.18.21 at 11:02 am

78% predictive win.
Well done Ryan!
I look forward to the 2022 predictions.

Time to shovel some more money into the portfolio….

Raining buckets and blowing a gale out here in the lower brainland…..possible snow today.

#2 baloney Sandwitch on 12.18.21 at 11:16 am

It’s been quite a year for the equity market and the vindication for the first phrase of the mantra, “Buy fear, Sell greed”. The second phrase should manifest itself in the next couple of years if not sooner.

#3 willworkforpickles on 12.18.21 at 11:20 am

And all goosed up with massive mindless shiny new monetary infusions. More debt More debt More debt and More debt…pfff – just throw it on the pile.

#4 Shawn Allen on 12.18.21 at 11:28 am

Taxes are for the middle people

Nice story in the National Post about the success of Prem Wata of Fairfax Financial and his love of capitalism and free enterprise – all good stuff.

But an interesting tidbit was that upon his death his controlling interest will go into a Trust so the company can never be taken over.

It’s not clear if he will face a huge tax bill when his shares go into the Trust. I suspect not. It’s probably all been engineered years ago to avoid tax. If there was a huge tax bill he’d likely have to sell substantial shares (or the estate would) and that does not seem to be the contemplated.

I’m not a fan of Prem controlling his company from the grave or avoiding the capital gains tax – which would only be half the tax rate applicable to income in any case.

Meanwhile the more successful middle class people face huge tax on RRSPs at death. Fair becasue that was the deal and because the money only grew so large because of being subsidized by the initial tax break and tax free growth but it’s in contrast to Prem’s situation.

The middle class, even higher middle class, won’t have quite enough to be able to take advantage of Trusts on their non-reg assets. They will pay the capital gains tax upon death.

Their recreational properties will face the capital gains tax.

All power and praise to Prem Watsa for building a huge business and employing people and all. But should he really escape the capital gains tax on death while the middle class generally cannot?

Of course RRSPs should be taxed when not passed on (tax-free) to a beneficiary. That was the deal when you contributed and paid less income tax as a result. Stop whining about the successful (who received no such personal tax gift when they built their companies). – Garth

#5 THE DANDADA on 12.18.21 at 11:56 am

…….with a lot more volatility. Buckle up!

VOLATILITY = VITALITY!

#6 the Jaguar on 12.18.21 at 12:15 pm

“…moderate returns next year with a lot more volatility. Buckle up!”- RL

I did just that yesterday evening. On a Boeing 787-9. The big bird flew me back after a 45 minute delay to ensure 35 peeps from New Brunswick made the gate. Sold out flight. 320 seats.

On landing from my beach holiday at Pearson Airport I was randomly selected for the Covid PCR test. Jaguars are irresistible, after all.
No one asked for proof of the same test I underwent less than 48 hours earlier at my point of departure. No border/immigration officer asked the usual questions.
Just slashed a red marker on my kiosk entry receipt, a sticker on my passport and directed me to a huge line of people also waiting for the ‘nose swab’, everyone madly pulling up the QR code that lead to the test site application and required details of “where did you come from, where are you staying, what are your symptoms, etc.” Nosy Parkers.

Eight officers from Peel Regional Police lined the exit doors in that area, facing the lines of peeps in a watchful manner. Presumably to deal with any explosive meltdown behaviour, but I found myself trying to recall some of Terrell Owens best moves as a wide receiver in the NFL. Was an end run possible? Would I be tackled?
My two travel companions were on a different flight back to Vantown. Neither picked for the random test prior to their connecting flight home. Free to roam the crowded pre-Christmas airport and board a similar packed domestic flight. Go figure.

Maybe Turner Nation is on to something. Something like this:

https://www.youtube.com/watch?v=DeTsQQ22Uwc

#7 TurnerNation on 12.18.21 at 12:17 pm

Things are moving so fast in the Former First World Countries.
– War on Small Business went nuclear in ON, BC, QC.
– Indebeted business further hobbled. The State now runs your business, sets your hours. All holiday parties cancelled. No chance of making money.
– BC, ON need QR codes only in Jan. Yep every human must be put into the Blockchain ,Tracking & Control.

— Supply Chain. Mid January the cross border ‘mandates’ for the truckers come in. The industry is talking about a big decline in drivers, shipping.
It will be a cold winter Comrades. Take faith that Your Government really does care for you. This is for Your Health!

So we will need a UBI in 2022?

https://twitter.com/CFIB/status/1471957073122533383
Dan Kelly @CFIB
My email is blowing up with messages from angry Ontario business owners. One recreation business owner told me his only real income comes from food and drink sales, which have just been banned at his venue.

#8 truefacts on 12.18.21 at 12:26 pm

Ryan,

In baseball, a player that bats .400 (40% success rate) would earn millions of dollars. My bet is you don’t earn millions/year – but a .780 (78%) rate!

Time for you to get a HUGE raise, imho!

#9 WhereToNow on 12.18.21 at 12:36 pm

Thanks for the insight Ryan. There will be a lot of people looking to contribute and invest another $6000 in their TFSA accounts . What sectors or geographic regions are gonna be the winners in 2022 . . . . ?

#10 baloney Sandwitch on 12.18.21 at 12:41 pm

#4 Shawn Allen – To prevent indefinite postponement of tax on capital gains accrued on property in a trust, a disposition of trust assets is deemed to occur every 21 years (referred to as the “21 year rule”), which results in taxes on the accrued capital gain. Also the trust continues to pay income tax on any income earned on assets.

#11 DLT INC on 12.18.21 at 12:45 pm

Garth in your reply to Shawn Allen with respect to his concern about Prem getting away from paying the taxes that regular people have to pay you come across as an apologist for the Aristocracy Class. EVERYONE should be treated equally no matter how rich they are! You are the one whining when you argue that rich people get breaks because they provide so many jobs and already pay most of the taxes. Well, they pay more taxes because they make so much more than anyone else. And as far as providing jobs, how is it that our governments have given so much taxpayer money to them to build their businesses and they never repay us. If we give to the buggers we should demand a piece of their companies just like any other investor. I’m fed up with all this whining from people like you who see nothing wrong with letting the super rich steal, that’s right, steal my money and the money of all other taxpayers and say that’s just fine because they provide jobs. But that’s only because, with the government’s help, they have driven many of their competitors out of business.

Exactly how did this entrepreneur ‘steal’ money from you? What a sad country this has become. – Garth

#12 Dolce Vita on 12.18.21 at 12:55 pm

Excellent.

Though #2 was a ringer since Gov bonds less risky than Corp bonds – like saying is the Pope Catholic?

Omicron will infect nearly everyone so a slowing economy until it has no one left to infect.

Fizzles out by May 2022.

Slow growth until then, recall people not productive when at home self-isolating for 10 days at a time. Also means continued supply chain problems, inflation, etc.

June 2022 onwards should be a gangbuster of a year in the markets. Once over in May 22 Biotech will return to its normal gains.

Also, provided Omicron doesn’t kill a whole lot of people by the weight of its numbers.

#13 DON on 12.18.21 at 1:04 pm

Good calls Ryan.

Do you think with inflation going forward it will be slightly harder to see things clearly or is the fog heavier.

#14 Shawn Allen on 12.18.21 at 1:06 pm

Garth responded about taxes:

“Of course RRSPs should be taxed when not passed on (tax-free) to a beneficiary. That was the deal when you contributed and paid less income tax as a result.”

That’s exactly what I said. I said it was fair to tax RRSPs on death because that was the deal and due to the initial tax refund and the tax free growth. We are in total agreement on that.

“Stop whining about the successful (who received no such personal tax gift when they built their companies). – Garth”

No, I will not stop whining or pointing out when the mega rich escape capital gains tax on death while the vast middle class must pay. I’m free to whine all I want although you are free to ban me from this site if you can’t stand my comments.

Being covetous of successful people is not a virtue. We need more of them. – Garth

#15 Dolce Vita on 12.18.21 at 1:06 pm

#6 TurnerNation

Whine. Bitch. Complain.

That’s all you do.

Tell us what YOU would do different?

Also, since you write/quote BY the “Give me Liberty or Give Me Death” mantra, I’d like to know:

Are you double vaxd? Boosted?

Curious if the DRIVEN SNOW is indeed PURE?

#16 DON on 12.18.21 at 1:19 pm

#9 Dolce Vita on 12.18.21 at 1:06 pm
#6 TurnerNation

Whine. Bitch. Complain.

That’s all you do.

Tell us what YOU would do different?

Also, since you write/quote BY the “Give me Liberty or Give Me Death” mantra, I’d like to know:

Are you double vaxd? Boosted?

Curious if the DRIVEN SNOW is indeed PURE?

**********

TN is a feature on this blog that reminds us of the slippery slope in all matters. Everything else is a show…no need to get sucked in.

#17 Chameleon on 12.18.21 at 1:21 pm

Humans in front of screens is today’s picture?

Another lost opportunity to feature a capybara.

#18 Good work - what is your long term average? on 12.18.21 at 1:25 pm

Good work – this inspires confidence, which is in short supply these days, along with cauliflower and snow tires.

What is your average “got it right” percentage averaged out over 2, 5, and 10 years? Would you be able to compare your rate against others?

#19 Do It Calve! on 12.18.21 at 1:35 pm

#14 Dolce Vita

Dolce, why you grilling TN here?

I thought this blog operated under the premise of freedom of choice and freedom of speech.

Also, why are you asking for private medical information from TN? Has it become commonplace to stick one’s nose into another’s medical records? Since when? Why?

Maybe your questions are not the right ones? Maybe the politicians got you on the narrative and off the scent?

Remember what Mork (of Mork and Mindy) said about the game of politics….

Politics is the art of fooling most of the people most of the time as often as possible.

So much wisdom from that Mork.

Also, did you look into that reclassification of deaths in Italy? It was recently revealed that 97.1% of Italians who passed had significant comorbidities and only 2.9% of Italian deaths can be attributed purely to Covid19.

https://www.factcheck.org/2021/11/scicheck-posts-misrepresent-data-to-falsely-claim-italy-reduced-its-covid-19-death-count/

#20 Ryan Lewenza on 12.18.21 at 1:40 pm

WhereToNow “ Thanks for the insight Ryan. There will be a lot of people looking to contribute and invest another $6000 in their TFSA accounts . What sectors or geographic regions are gonna be the winners in 2022 . . . . ?”

Be sure to check back in for those tips in two weeks. Until then enjoy the holidays and be safe out there! – Ryan L

#21 millmech on 12.18.21 at 1:42 pm

#13 Shawn Allen
If one buys life insurance to pay out estate taxes is that not “tax” avoidance.
Once I retire and no longer have life (estate) insurance through work my sons will be paying the premium to ensure my estate passes to them with no financial issues. I guess this should be disallowed as my estate would be stealing from the government, make life insurance illegal maybe.

#22 Ryan Lewenza on 12.18.21 at 1:45 pm

Don “ Good calls Ryan. Do you think with inflation going forward it will be slightly harder to see things clearly or is the fog heavier.”

Most definitely. The high inflation is the number one risk to the economy and markets. Typically expansions periods, which we started a new one in late 20/early 21, last 6-7 years on average. The high inflation could bring forward rate hikes which could shorten this cycle. Last year my conviction was very high for a solid year. Next year I’m calling for more gains but less of a slam dunk like this year. – Ryan L

#23 Sail Away on 12.18.21 at 1:47 pm

Shawn Allen

Re: Fairfax trust

——–

Shawn, it seems you’re getting all shirty without really understanding, or deliberately choosing not to understand the actualities; feels a lot like strident ‘tax evader!’ or ‘offshore account!’ posts.

A few questions for you:

What is your understanding of taxation of trusts?
How, exactly, will this trust avoid taxes that would otherwise be paid (look into Rule of 21)?
What are Prem’s reasons for creating this trust?
Is there anything that would prevent trustees from dissolving this trust if shares need to be sold to access capital?

#24 Shawn Allen on 12.18.21 at 2:04 pm

#9 baloney Sandwitch on 12.18.21 at 12:41 pm

#4 Shawn Allen – To prevent indefinite postponement of tax on capital gains accrued on property in a trust, a disposition of trust assets is deemed to occur every 21 years (referred to as the “21 year rule”), which results in taxes on the accrued capital gain. Also the trust continues to pay income tax on any income earned on assets.

***********************
Thank you. I was only vaguely aware of that. Somehow we still never hear much about tax receipts from that and we don’t hear of the mega rich ghhaving to sell shares at those times to pay the taxes. Perhaps accumulated earnings in the Trust takes care of it most times.

In any case it is still a 21 year deferral that 99% of the population is not realistically in a position to get.

Garth calls me covetous of the rich. Maybe sometimes but in general I totally respect the really successful entrepreneurs. I ride their coat tails as an investor. I read what they say and learn from them. But if they want to teach me aggressive strategies to avoid income tax, I’m just not interested.

You have bragged here over the years about your $1+ million RRSP and your government DB pension. And yet you claim others are not paying their fair share. Disingenuous. – Garth

#25 Shawn Allen on 12.18.21 at 2:08 pm

Sail Away…

I don’t know the answers to your questions.

I’ve been reading the financial pages for over 40 years and never once read about a mega wealthy Canadian family having to sell ANY shares to pay tax on death of the founder. I find that odd. We do however read about middle class families having to sell the cottage to pay taxes.

When a founder dies no one even seems to contemplate the idea that there might be big taxes to be paid. Strange?

#26 MicroGX on 12.18.21 at 2:17 pm

Awesome! and Thanks for sharing, look forward to how you view 2022 potentially unfolding. Helpful stuff!

#27 TurnerNation on 12.18.21 at 2:19 pm

Life in the Former First World Countries. England, Netherlands, and Canada and why not all of them are going into a hard RESET mode – cancelling Christmas (of course). This is the final one.
It will not be re-opening. UBI 2022.

Ontariowe’s “Re-opening Act” always was a Closing Act. Flip 180 degrees to make sense.
All the old culture must be cancelled Comrades. Are you surprised that hockey arenas (food + capacity) were the first target? March 2020 kicked off our Red Revolution.
Almost back to normal right?


As Jaguar noted going forward travel will involve forced testing under the watchful eyes of armed guards. Making the permanent Sept 11 security seem like a breeze.

Seen elsewhere. New government tender. What did I say back in Q2 2020: this is all about Control over our Feeding, Breeding and Travel/movements. Hence QR codes.

https://buyandsell.gc.ca/procurement-data/tender-notice/PW-21-00979277
“The Public Health Agency of Canada (PHAC) requires access to cell-tower/operator location data that is secure, processed, and timely in addition to being adequately vetted for security, legal, privacy and transparency considerations to assist in the response to the COVID-19 pandemic and for other public health applications. Aggregated indicators derived from cell-tower/operator location data provide insightful information and allow for meaningful analysis on the mobility (or movement) of populations in Canada.”

#28 XGRO and Chill on 12.18.21 at 2:20 pm

#13 Shawn Allen on 12.18.21 at 1:06 pm
Garth responded about taxes:

“Of course RRSPs should be taxed when not passed on (tax-free) to a beneficiary. That was the deal when you contributed and paid less income tax as a result.”

That’s exactly what I said. I said it was fair to tax RRSPs on death because that was the deal and due to the initial tax refund and the tax free growth. We are in total agreement on that.

“Stop whining about the successful (who received no such personal tax gift when they built their companies). – Garth”

No, I will not stop whining or pointing out when the mega rich escape capital gains tax on death while the vast middle class must pay. I’m free to whine all I want although you are free to ban me from this site if you can’t stand my comments.

Being covetous of successful people is not a virtue. We need more of them. – Garth

——–

We need more rich people like we need more CO2 in the atmosphere, and the two are correlated.

#29 KLNR on 12.18.21 at 2:45 pm

@#10 DLT INC on 12.18.21 at 12:45 pm
Garth in your reply to Shawn Allen with respect to his concern about Prem getting away from paying the taxes that regular people have to pay you come across as an apologist for the Aristocracy Class. EVERYONE should be treated equally no matter how rich they are! You are the one whining when you argue that rich people get breaks because they provide so many jobs and already pay most of the taxes. Well, they pay more taxes because they make so much more than anyone else. And as far as providing jobs, how is it that our governments have given so much taxpayer money to them to build their businesses and they never repay us. If we give to the buggers we should demand a piece of their companies just like any other investor. I’m fed up with all this whining from people like you who see nothing wrong with letting the super rich steal, that’s right, steal my money and the money of all other taxpayers and say that’s just fine because they provide jobs. But that’s only because, with the government’s help, they have driven many of their competitors out of business.

Exactly how did this entrepreneur ‘steal’ money from you? What a sad country this has become. – Garth

country is fine. its this comments section that is sad.

#30 Sail Away on 12.18.21 at 2:45 pm

Further to Fairfax, the capital gains are nothing to write home about anyway, with 0% capital ROI over the last 7 years, as well as being at todays share price in 1998.

#31 Quintilian on 12.18.21 at 3:07 pm

#21 Ryan Lewenza
“The high inflation could bring forward rate hikes which could shorten this cycle.”

There many reasons the expansion cycle could come to an early end; higher rates is not one of them.

Central Bankers, can’t raise rates, the monetary policy tool is broken and outdated.

It’s the equivalent of the first generation of Chemotherapy. The cancer died, because the patients did as well.

#32 CJohnC on 12.18.21 at 3:16 pm

You do have an excellent track record. Possibly in looking at your upcoming projections for 2022 you or Garth could address the thoughts in the following column from Vice:

https://www.vice.com/en/article/7kbx9b/the-to-the-moon-crash-is-coming

To me the concerns expressed are very valid

#33 Ponzius Pilatus on 12.18.21 at 3:18 pm

#5
Jag, sorry to hear that you were not treated with the respect that you deserve upon your return to Canada.
But a 2 buck bakshees does not get you very far in Canada.
Thank God.
Hope you enjoyed your cheap booze.

#34 Bezengy on 12.18.21 at 3:29 pm

I predict there are will be lots of discussion in the next year or two over who will be paying more tax. Personally I would like to see the criminals pay up before T2 asks me for another nickel. Tax cheating is a national pastime in this country, full stop. Our CRA and justice system cannot effectively do their job. Courts are simply too busy for starters. As far as tax avoidance, I won’t be throwing any stones at anyone else, although everything I did was legal, in my personal opinion of course. Lots of grey areas, too many if you ask me.

#35 Sail Away on 12.18.21 at 3:34 pm

#24 Shawn Allen on 12.18.21 at 2:08 pm
Sail Away…

I don’t know the answers to your questions.

I’ve been reading the financial pages for over 40 years and never once read about a mega wealthy Canadian family having to sell ANY shares to pay tax on death of the founder. I find that odd. We do however read about middle class families having to sell the cottage to pay taxes.

When a founder dies no one even seems to contemplate the idea that there might be big taxes to be paid. Strange?

———-

I’ve been breathing for 49 years. Doesn’t mean I know more about air than a chemist.

You are going off into conspiracy territory with the leading questions and insinuations, Shawn. Show backup for legitimacy. The cottage example is bad because it is possible for property plus cg tax over time to equal or exceed the value of the property. And you can’t sell 50% of a cottage in any case, which can very easily be done with stocks.

Elon Musk just sold billions in stock to cover his tax obligations.

#36 Stoph on 12.18.21 at 3:36 pm

#51 Cheese on 12.17.21 at 7:09 pm
Only make 35k/yr working at the hospital, car just broke down today, so goodbye Christmas budget. No one in my strata of society will ever have a house, perhaps not even a family, save what you can, balanced and diversified; and try to enjoy life now, because it won’t get any better.

—————————————

Seeing as you’re not happy with your financial future that you foresee, what’s stopping you from getting a higher paying job? It doesn’t sound like you have family obligations keeping you back.

If you have a bachelor degree, it may be worth it to see what’s needed to upgrade the degree to get into accounting. I have a couple friends who got a ‘useless’ degree and they found out they could transition to accounting with only one year of extra schooling.

If you want to continue working at a hospital, why not find out the training needed for different jobs – some may only take a year of schooling and pay 50% more than what you’re making.

#37 Love_The_Cottage on 12.18.21 at 3:50 pm

#28 KLNR on 12.18.21 at 2:45 pm
What a sad country this has become. – Garth

country is fine. its this comments section that is sad.
—-
Agreed, there are a lot of problems in Canada. And nowhere I’d rather live. If you would prefer to go somewhere else the door is that way.

#38 Wrk.dover on 12.18.21 at 4:51 pm

#34 Sail Away on 12.18.21 at 3:34 pm
Elon Musk just sold billions in stock to cover his tax obligations.
_________________________________

Stupid me though Elon sold a billion dollars of stock he hadn’t purchased per se, in spite of tax obligations.

And it felt so good he did it twice…sell high and all that.

#39 Wrk.dover on 12.18.21 at 4:55 pm

I thought I spelled thought

#40 Dragonfly 58 on 12.18.21 at 4:58 pm

Love the cottage, not sure exactly where in Canada you live. But the mention of cottage makes me think Ontario. Out here in the Lower Brainland I was a very happy clam. The climate suits me fine except the muddy yard for months, but that is a small enough thing. Then proprty went nuts. All the $350,000 – $450,000 small hobby places shot up to 2.5 – 3.5 million. Just at about the time we were planning on making the move up. For years the move up cost was at most $50,000 – $60,000 , we just needed to build up equity to the point we could take on another $60,000 in mortgage.
At the moment that move up cost is around 1 million – 1.5 million. And completely out of the question.
I still don’t get why people { from what I have seen primarily but not limited to new Canadians ] are paying these sort of prices.
They are too small for any ” real ” agriculture. Enough for farm tax status in many cases but pretty limited as far as any actual income. And as development properties from what I have seen in my 30 years in the area we are talking 3 or 4 decades at least. Probably more unless something truly earth shaking happins with the ALR situation. Surely there are better ways to invest these sort of sums over this sort of time.
But thats the state of things for the last 5 years or so.
So places like the U.K. look very attractive . Less than 1/2 the cost for similar properties. A very similar culture and climate. Wife and I will be making a trip this Summer to check things out first hand. Covid permitting. Up to 10 years ago I would have never even thought of such a move. But I just can’t see any way of aciving the goals my wife and I have been working towards for the last 35 years otherwise. We don’t want to return to a true Canadian winter with the added risk of wild fire that is a fact of life East of the Coast Mountains. I have lived in both Northern B.C. and Winterpeg so a pretty good idea, wife is Lower Mainland all her life so pretty ice and snow adverse. And neither of us want to breathe smoke for weeks at a time let alone be burned out.
The U.K. looks pretty attractive from what I see online as far as out of the way smallholdings go.

#41 Ontario Lock Down on 12.18.21 at 5:11 pm

Meanwhile, in S. Africa, Omicron continues to smash its way through communities. It is apparently terrifying to watch. Some describe it as a “bomb”.

A local counselor set out the situation in his district in this poignant, and riveting article:

https://news.sky.com/story/omicron-its-like-a-bomb-new-covid-strain-sweeps-through-south-africa-township-but-majority-of-hospital-patients-dont-need-extra-oxygen-12491084

Omicron victims claim to have suffered “the sniffles” followed by “a cough” for periods of up to a week. Some people also complained of headaches:

We met a primary school administrator called Muzi Linda, who tested positive for COVID-19 last week and I asked him to describe his symptoms.

“Well, I’ve had a headache, blocked nose, wasn’t too runny, I’ve been coughing, that was the major one.”

Communities are being laid flat by the new variant. A man located at ground zero of a major outbreak described his symptoms in chilling detail:

“When I asked him how he would rate the severity on a scale 1 to 10, he said: “A ‘4’ honestly, because it wasn’t that bad, only after the first day, I decided to take a pill for my headache but that was it.”

Scary. And it is coming to your neighbourhood soon. Lock up, lock down. Masks on. We can beat this if we stick together.

#42 I don’t know on 12.18.21 at 5:19 pm

31 CJohnC on 12.18.21 at 3:16 pm

If that article had said “everything is perfect and there is nothing to worry about” no one would notice it, click on it, and generate ad revenue.

#43 Kevin on 12.18.21 at 5:23 pm

Great predictions, Ryan. I should have listen more to you!

I’m looking forward to your 2022 predictions. I’d also like to hear your thoughts about Turkey, and how that might impact world markets. Happy holidays!

#44 Tangotan on 12.18.21 at 5:47 pm

Well, enough dumping on TurnerNation. He’s plenty depressing, but so far, he’s been right on everything.

#45 Shawn Allen on 12.18.21 at 6:02 pm

Fairfax and Prem Watsa

#29 Sail Away on 12.18.21 at 2:45 pm

Further to Fairfax, the capital gains are nothing to write home about anyway, with 0% capital ROI over the last 7 years, as well as being at todays share price in 1998.

********************************
That’s a great point. Prem gets a lot of praise but the results are really not that impressive.

Book value gains many years ago came in good part from selling shares way above book value. Smart, but that gain was not from operations.

He is no Warren Buffett. He has been something of a perma bear for a long time.

That said, he has still done incredibly well.

#46 DLT INC on 12.18.21 at 6:07 pm

@#10 DLT INC on 12.18.21 at 12:45 pm
Garth in your reply to Shawn Allen with respect to his concern about Prem getting away from paying the taxes that regular people have to pay you come across as an apologist for the Aristocracy Class. EVERYONE should be treated equally no matter how rich they are! You are the one whining when you argue that rich people get breaks because they provide so many jobs and already pay most of the taxes. Well, they pay more taxes because they make so much more than anyone else. And as far as providing jobs, how is it that our governments have given so much taxpayer money to them to build their businesses and they never repay us. If we give to the buggers we should demand a piece of their companies just like any other investor. I’m fed up with all this whining from people like you who see nothing wrong with letting the super rich steal, that’s right, steal my money and the money of all other taxpayers and say that’s just fine because they provide jobs. But that’s only because, with the government’s help, they have driven many of their competitors out of business.

Exactly how did this entrepreneur ‘steal’ money from you? What a sad country this has become. – Garth

country is fine. its this comments section that is sad.

WELL, Garth, I’ll tell you how the super rich steal money from the ordinary taxpayers. They don’t, of course, do it in a way that most people would ever notice. First off they buy the politicians by donating to their campaigns and wink, wink see to it that they get perks like directorships after their political days are over. And, of course, they spend millions lobbying to get what they want. But the costs of these lobbying efforts are repaid, handsomely when their bought and paid for politicians past laws to see that everything is totally legal. You want an example, well I’ll give you one. How much has our government given to a drug company to come up with a vaccine for covid19. I think it’s something like a billion bucks. Does the drug company have to repay it? I haven’t seen anything that says they do. And did us Canadians get a break on the vaccines when we bought them from this drug company? I heard that we also had to agree not to give or sell any surplus to other countries. I don’t know if this is true but if it is, I find that disgusting. So, are the super wealthy “stealing” our money? I guess if you pay someone else to rob the pantry of their employer who then give it to them, you could say that they aren’t the ones who are doing the actual stealing. After all, they did pay someone for the goods even if it wasn’t the payee’s goods to start with.
I don’t really blame the super rich for seeking to maximize their bottom lines just as long as they don’t try to do it by spunging off someone else.

You just lowered the IQ of an entire blog. Go away. – Garth

#47 BillyBob on 12.18.21 at 6:19 pm

@ #5 the Jaguar on 12.18.21 at 12:15 pm

Hope you got your results in some sort of timely matter. I too had the misfortune of transiting through Pearson during this debacle, although I had an exemption in ArriveCan that automatically granted me the green PHAC sticker on my passport. Sobering to see the lines of people being herded to their tests by an army of officious personnel. Confused foreigners trying to make sense of the process, families being divided as one spouse is excused from testing as the other gets shunted off to the hazmat suits. Watched a CBSA supervisor just lining up the pink stickers on her plexiglass shield to slap on passports. It really does have a dystopian feel to it all.

I was reading that of 280,000 arrival tests done in the last several months (random testing even before blanket testing), the positive rate has been 0.014%. Well duh. Every single passenger would of had to show proof of double vaccination and a negative PCR test to get on their inbound flight.

The arrival testing has absolutely no science behind it, no mention of it, not even a token attempt to cloak it in such any more. Absolutely nothing to do with public health. Just a blatantly obvious disincentive to travel and some kabuki theatre for the gullible. So, thank you for not bowing to such manipulation.

Oh, and cost. LifeLabs (handles testing in the West) bills out at roughly $150/passenger per home test kit. That’s from a respected source within the company. Not sure what Switch Health (the Ontario contractor) charges but I doubt it’s anything much different. The whole thing has the sound of a giant toilet flushing money into the pockets of these companies. And Ponzi tries to make little jokes about corruption elsewhere. Oh fine, maybe it’s not corruption. Just total government ineptitude. Hard to tell the difference, same outcome. Canada really is a joke.

On a happier note, I’m glad you enjoyed the B787-9, I have many an hour at the controls of that beautiful machine. The wing is a piece of sculptured art.

But again welcome back to CYYC – it’s been COLD there, even for Calgary!

#48 Shawn Allen on 12.18.21 at 6:41 pm

We’re Poorer than we think (Most of us at least)

$10 million is the new $1 million.

#49 Adam in Vaughan on 12.18.21 at 6:54 pm

Now is the right time to buy real estate at Fire River, Ontario.

Access to Highway 11 in 1 hour by world class trails, ample green space and prices are rising. Buy now or get locked away!

#50 Nonplused on 12.18.21 at 7:11 pm

#20 millmech on 12.18.21 at 1:42 pm
#13 Shawn Allen
If one buys life insurance to pay out estate taxes is that not “tax” avoidance.

————————————-

How did you manage to muddle up one short sentence so much?

The purpose of buying life insurance to pay taxes is so you can pay the taxes. No taxes are avoided. Not only that, the premiums are expensive, so in essence the person involved is just sort of “pre-paying” the taxes to the insurance company who is then expected to return the agreed amount so the estate can pay the tax.

This strategy is quite popular among small business owners or folks who hold otherwise illiquid business interests. The reason they do it is because the estate cannot sell part of the business to raise money to pay tax very easily, like you might with a portfolio of shares.

Let’s go back to our tow truck driver example. The fellow has built a fleet of 20 tow trucks, a yard, and a shop, but his son is running the business and the intent is to leave the business to his son upon death. He goes and dies, but the government decides let’s say $500,000 in tax is due to appreciation of the buildings and yard. Where does the estate get the money? Sell the shop? But that would impair the business. So you insure against the tax bill, at your own expense.

Seems like a pretty simple and above board thing to get all bent out of shape about if you ask me.

Folks, there isn’t nearly as much cheating going on as you might believe. The rich pay their taxes, in fact they pay most of the taxes that are paid and they pay a much higher percentage of their incomes than you do. The CRA always gets their man.

#51 Sail Away on 12.18.21 at 7:12 pm

#37 Wrk.dover on 12.18.21 at 4:51 pm
#34 Sail Away on 12.18.21 at 3:34 pm

Elon Musk just sold billions in stock to cover his tax obligations.

———–

Stupid me though Elon sold a billion dollars of stock he hadn’t purchased per se, in spite of tax obligations.

And it felt so good he did it twice…sell high and all that.

———–

And there’s absolutely nothing wrong with that. Elon will likely more tax this year than any other person in history.

https://www.google.com/amp/s/www.businessinsider.com/elon-musk-says-pay-more-taxes-than-any-american-ever-2021-12%3famp

Maybe someone can weigh in on the way the rich never pay tax?

#52 Faron on 12.18.21 at 7:36 pm

#49 Sail Away on 12.18.21 at 7:12 pm

Elon will likely more tax this year…

LOL. So easy to garble those apologist talking points. Where’s Clippy when you need him most?

#53 Garth's Son Drake on 12.18.21 at 8:09 pm

Biden will be speaking Tuesday to further crash markets as Monday should be a fun day.

Everything is getting shut down.

#54 Ponzius Pilatus on 12.18.21 at 8:09 pm

Just was sitting down to watch Leafs playing the resurgent Canucks.
Cancelled due to COVID.
Out of 5 games scheduled today, only 2 are going ahead.
Maybe, they have to cancel the season again.
NBA and NFL are in trouble, too.
What is it with these stupid Professional Athletes?

#55 Sail Away on 12.18.21 at 8:11 pm

#50 Faron on 12.18.21 at 7:36 pm
#49 Sail Away on 12.18.21 at 7:12 pm

Elon will likely more tax this year…

——–

LOL. So easy to garble those apologist talking points. Where’s Clippy when you need him most?

——–

After three years of patient waiting, all your dreams have finally come true.

#56 VladTor on 12.18.21 at 8:27 pm

Garth,
I think this discussion with Shawn Allen is useless. The tax system is imperfect and archaic, and not only in Canada. The fact is that everyone, to the best of their knowledge and financial capabilities, uses the shortcomings of the system in order not to pay taxes in full.
Moralists who take advantage of the imperfection of the system and at the same time accuse the system of imperfection behave cynically.

The tax system requires a radical modification.
It takes courageous people to do this.
They are not even on the horizon.

We need new political party OR revolution OR Hyperinflation to push tax system for… I would say in mild manner… for renovation.

#57 crowdedelevatorfartz on 12.18.21 at 8:52 pm

@#45 BillyBob
“The whole thing has the sound of a giant toilet flushing money into the pockets of these companies. And Ponzi tries to make little jokes about corruption elsewhere. Oh fine, maybe it’s not corruption. Just total government ineptitude. Hard to tell the difference, same outcome. Canada really is a joke.”

++++

Sadly it’s the mindless bureaucrats justifying their useless existence…..at the taxpayers expense…..once again

#58 crowdedelevatorfartz on 12.18.21 at 8:59 pm

@#23 Shawn Allen
“Garth calls me covetous of the rich. Maybe sometimes but in general I totally respect the really successful entrepreneurs. I ride their coat tails as an investor. I read what they say and learn from them. But if they want to teach me aggressive strategies to avoid income tax, I’m just not interested.”

++++

The “really successful” entrepreneurs don’t become rich buy squandering money.
If there is a legal tax deferral strategy, why wouldn’t they take advantage of it?

Or they might decide to move their business to a country that appreciates them.

Who’s coat tails would you ride then?

#59 Drinking on 12.18.21 at 9:19 pm

Cannot argue with your success rate under these trying times; my worry is inflation, it really has got out of hand! People are getting very angry about this..

Look forward to your 2022 predictions..

#60 crowdedelevatorfartz on 12.18.21 at 9:43 pm

@#52 Ponzies Pandemic Problem
“What is it with these stupid Professional Athletes?”

++++

Apparently, they’re stupider, and much richer, than you……

#61 IHCTD9 on 12.18.21 at 9:54 pm

#41 Kevin on 12.18.21 at 5:23 pm

….I’d also like to hear your thoughts about Turkey, and how that might impact world markets.
———

I just brought myself up to speed on what’s been going on over there the last few years. Looks like democracy is slipping, and so is the Lira (putting it mildly). Seems to be an ongoing parade of bad decisions by Erdogan. He wants to control their central bank.

Hopefully the Turkish Citizenry gets a new leader asap, this Erdogan fellow looks to be a permanent case of bad news.

#62 Drinking on 12.18.21 at 10:06 pm

The most reasonable voice in Parliament; this guy just gets it!

https://www.youtube.com/watch?v=orGeiX2Dk5o

#63 Ballingsford on 12.18.21 at 10:09 pm

Love my porch! I didn’t grow up in a wealthy family. Now have a home I can call my own. Probably 10 or 20 years till I die. Love sitting outside and watching the sky. Odd shooting star.

I made it though! Not a loser I don’t think.

#64 Faron on 12.18.21 at 10:18 pm

#53 Sail Away on 12.18.21 at 8:11 pm

heyyy, good job. Only 5 comments today. Niiiice.

#45 BillyBob on 12.18.21 at 6:19 pm

it’s been COLD there, even for Calgary!

LOL. Does your “science” tell you that? Maybe stick to your wing-art bub.

#65 I don't know on 12.18.21 at 10:33 pm

#51 Garth’s Son Drake on 12.18.21 at 8:09 pm

If everything is shutting down, then Monday will be really fun indeed, but only if you own tech stocks as yields fall and everyone goes back to scrolling on Facebook and ordering from Amazon on their Apple phone all day.

#66 Ronaldo on 12.19.21 at 1:09 am

#56 crowdedelevatorfartz on 12.18.21 at 8:59 pm
@#23 Shawn Allen

Who’s coat tails would you ride then?
——————————————————————
His hero Buffett.

#67 BillyBob on 12.19.21 at 1:26 am

#62 Faron on 12.18.21 at 10:18 pm
#53 Sail Away on 12.18.21 at 8:11 pm

heyyy, good job. Only 5 comments today. Niiiice.

#45 BillyBob on 12.18.21 at 6:19 pm

it’s been COLD there, even for Calgary!

LOL. Does your “science” tell you that? Maybe stick to your wing-art bub.

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

Errr…been drinkin’ there Fairey? Been unseasonably cold in Calgary the last few days, as measured umm…scientifically. With like, thermometers and such.

https://calgary.ctvnews.ca/blowing-snow-advisory-in-place-for-calgary-as-winter-storm-takes-hold-1.5710745

I realize you’re short of friends, but still a tad needy to try and insert yourself into a conversation you weren’t part of between two civil adults lol.

#68 fishman on 12.19.21 at 1:47 am

So the Jaguar had a little tune up coming back to Canada eh! Yikes! Can’t get home? They won’t let me in!
I know the twinge well. Last month in Washington D.C. And no wingman. Ya, that got my entitled Canadian Citizen attention. That was a first.

#69 under the radar on 12.19.21 at 5:05 am

Taxes on death. – We purchased insurance to pay the estimated CG on death resulting from the deemed disposition on a shareholders death. The premiums were compressed over a ten year period and make the intergenerational transfer of shares much easier as a good portion of the CG will be covered.

#70 Dartboard monkey on 12.19.21 at 7:50 am

#1 crowdedelevatorfartz on 12.18.21 at 11:02 am

78% predictive win.
Well done Ryan!
I look forward to the 2022 predictions.

Time to shovel some more money into the portfolio….

Raining buckets and blowing a gale out here in the lower brainland…..possible snow today.

——————————————————-

And the DUMBsters like this guy suck this nonsense up without question .. like a hoover vacuum

– corporate bonds outperform government bonds –> duh? That’s a pretty safe bet!
– REITs rebound strongly –> were there any fools who didn’t see that coming after the 2020 shellaquing
– We see the lagging TSX doing better –> better than what?
– Value stocks should do better –> better than what?
– The sun will come up in the east tomorrow –> oops, sorry … that one’s mine

#71 crowdedelevatorfartz on 12.19.21 at 9:20 am

@#68 monkey brains.
“And the DUMBsters like this guy suck this nonsense up without question ..”

+++
I used to have a sh!tty investment advisor (like the one you obviously have), and I tired of his endless sales bullsh!t.

Now.
My portfolio is up over 18% in 2021.
Seven figures +

All by listening the preachers of “Balanced and Diversified”.
:)

You?

#72 Stormy Daniels on 12.19.21 at 9:45 am

Well done, Ryan!

(Tell Garth if he’d like another rearview of me, just send $130,000 asap)

#73 crowdedelevatorfartz on 12.19.21 at 9:51 am

Zombie Urbanism…..

https://www.youtube.com/watch?v=Wehsz38P74g

Even little Vancouver and Toronto get a mention.

#74 Gemstone Caboose on 12.19.21 at 10:06 am

My call for 22:

Growthy Value will do just fine.

I’ll sleep well .

Dividends will continue to flow .

It’s never the end of the world

Pass the lube.

ZZZZZZZZZ

#75 Ponzius Pilatus on 12.19.21 at 10:21 am

I believe that in life 50/50 is a good score.
You win some, you lose some.
Based on this, you did very good, Sir.

#76 Dharma Bum on 12.19.21 at 10:22 am

#18 Do it Calve

It was recently revealed that 97.1% of Italians who passed had significant comorbidities…
———————————————————————————————————-

Like choking on 80 lbs. of pasta fagioli mortadella capicolli and bragioli. Mama Mia!

#77 Stone on 12.19.21 at 11:13 am

#69 crowdedelevatorfartz on 12.19.21 at 9:20 am
@#68 monkey brains.
“And the DUMBsters like this guy suck this nonsense up without question ..”

+++
I used to have a sh!tty investment advisor (like the one you obviously have), and I tired of his endless sales bullsh!t.

Now.
My portfolio is up over 18% in 2021.
Seven figures +

All by listening the preachers of “Balanced and Diversified”.
:)

You?

———

I agree with Fartzy. 19.67% ytd for my B&D portfolio. Have learned much from Garth, Ryan, Doug and Sinan. As a result, I get to enjoy consistent high returns with less risk and almost no effort outside of reading this blog. Also, tax minimization along with estate planning.

No mention of your portfolio returns or related topics around, estates, trusts, taxation, pensions, real estate, etc.

#78 Dogman01 on 12.19.21 at 11:29 am

#5 the Jaguar on 12.18.21 at 12:15 pm

Invokes visions of City 17 arrivals

https://www.youtube.com/watch?v=kfTH8FJEjjo

…and for those whom do not like Turner Nation. He may not get the lyrics correct but he sure knows the tune.

#79 Ustabe on 12.19.21 at 12:49 pm

#65 BillyBob on 12.19.21 at 1:26 am

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

Errr…been drinkin’ there Fairey? Been unseasonably cold in Calgary the last few days, as measured umm…scientifically. With like, thermometers and such.

https://calgary.ctvnews.ca/blowing-snow-advisory-in-place-for-calgary-as-winter-storm-takes-hold-1.5710745

I realize you’re short of friends, but still a tad needy to try and insert yourself into a conversation you weren’t part of between two civil adults lol.

You, among others, did in large part create the Faron we now have.

To continue to respond to him, including the faintly homophobic portmanteau of his name is on you.

Your behavior, online, towards Faron is childish and reeks of schoolyard bully. Your concerns about his sexuality and your continued allusions about his sexuality say more, much more, about you than they do about him.

The fact that Faron responds like a child is certainly on him but like the old Frankenstein tale, don’t waste our time moaning about your creation.

#80 Shawn allen on 12.19.21 at 12:55 pm

Ryan the S&P earnings in your chart are now above the trend line. That might be something to think about.

#81 Yukon Elvis on 12.19.21 at 3:38 pm

#5 mark on 12.19.21 at 1:37 pm
What do the most efficient portfolios in history have in common?
+++++++++++++
Time.

#82 Patriot01 on 12.20.21 at 10:40 am

Speaking of Government.While everyone has their own take of this pandemic and Trudeau and his response to it I have just one question and it pertains to the the issue of motive and loyalty. Why is our Deputy Prime Minister a member on the Board of Trustees of the WEF(World Economic Forum)?.This is an organization that calls for the eliminaton of Nation states(which would include Canada) and the establishment of One Centralized Global Governing Body administered by non elected Technocrats.(Sounds like Fascism to me yes!)
Bearing that in mind I ask the reader this:How can one be a member of this organization and at the same time be a a patriotic Canadian promoting the best interest of the Nation State of Canada.Remember the apple never falls far from the tree.I am sure you are well aware of that truism Garth.God bless Canada