Tech wreck?

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  By Guest Blogger Sinan Terzioglu
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Over the last few weeks nearly half the technology companies listed on the Nasdaq Composite Index have seen market values drop 50% or more.  Valuations of many resembled the enthusiasm the market had before the tech bubble burst in the early 2000s. A rise in interest rates is cited as the reason for sparking the selloff but the reality is even though the fundamentals of many are strong the expectations priced in to their share prices far exceeded intrinsic values.

Year-to-date, the Nasdaq is down approximately 10% so the carnage within the index is not reflected in the overall performance because the mega caps – Apple, Amazon, Microsoft, Meta (Facebook) and Alphabet (Google) – account for over 40% of the index and as a group have held up relatively well.  Some of the large cap names (Meta and Netflix) have recently seen share prices drop by 25% following quarterly earnings results.  Meta’s decline wiped out a record $250 billion in market value in a single day breaking the company’s previous record set in 2018 when it lost over $100 billion.  That’s like losing one of our Canadian banks in 24 hours.  Canada’s Shopify is down by approximately 50% from its all-time high set in late 2021. To be fair, these companies have had phenomenal long term returns since their initial public offerings but that doesn’t matter to those that bought in recently.

The fear of missing out causes many average investors to make irrational decisions and chase asset prices as they soar higher.  We’ve seen this over the last year with meme stocks such as GameStop as well as crypto currencies. We also saw it when cannabis was legalized in Canada in 2018.  Canada’s largest Cannabis company, Canopy Growth, was regularly talked about daily in the media and its share price soared. Now just a few years later the stock is down nearly 90% from its all-time high and we no longer hear about it regularly.  I think the famous quote by Mark Twain is very fitting “history doesn’t repeat itself but it often rhymes.”

Over the last several decades a significant percentage of individual stocks have suffered catastrophic losses and underperformed the market over time yet over the last 100+ years the market has risen substantially because a small percentage of stocks accounted for a large percentage of the gains. Identifying companies that have been great is not difficult but that doesn’t mean they are great investments going forward because expectations priced in may be too high and disruption may be around the corner.  All of the decisions an investor must make such as which security to purchase, when to buy and when to sell all expose investors to risk and lost opportunity costs.

Of the 500 companies in the S&P 500 index in 1955, only 60 were still in the index as of 2017 and the rest either went bankrupt, merged or still exist but have fallen from the top 500.  In 1958 the corporations in the S&P 500 index remained in the index for an average of 61 years and by 1990 that dropped to 20 years and is now forecasted to drop to 14 years by 2026.  At the current rate, about half of the corporations in the S&P 500 index will be replaced over the next 10 years so it is going to get even more difficult to successfully invest in individual securities and therefore it’s more important than ever that most investors should avoid investing in individual stocks.

What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know. An investor needs to do very few things right as long as he or she avoids big mistakes and the easiest way to do that is to stick to diversified funds. The challenge for most average investors is that they work without a disciplined system and allow emotions to drive investment decisions.  At times investors become overconfident, misjudge risk and often think they have identified trends.  They purchase assets because the crowd is buying with little regard of valuations and the actual economics of the underlying business.  They essentially become momentum traders that speculate and speculation doesn’t end well for most. Studies have shown that most speculators are right about 60% of the time whether they trade stocks, currencies or commodities but most lose money over time because their average loser is larger than their average winner.

Since most speculators have a difficult time sticking to a disciplined system of taking losses they inevitably end up losing over time.

How to waste an incredible opportunity

The math of percentages shows that as losses get larger, the returns necessary to recover to break-even increases at a fast rate.  A 10% loss requires an 11% gain to break-even.  A 25% loss requires a 33% gain and a 50% loss requires a 100% gain just to break-even.  Losses of this magnitude in registered accounts like TFSAs are even larger because of the lost opportunity to grow money tax free. This is such a waste of an incredible opportunity and because most average investors think of only the upside they fail to consider the probability and consequences of the downside.  Also, compounded over 20 or 30 years, even just a percent or two in lost earnings can potentially amount to hundreds of thousands of dollars foregone in an investment portfolio.

We have a looming retirement crisis in Canada so it has never been more important to focus on accumulating enough in a conservatively managed portfolio since most of us will not have defined benefit pension plans when we retire.  It’s up to ourselves to ensure we always have cash flow and never run out of money and the best way to prepare is to focus on building your personal pension plan.  We are living longer and costs are continually rising so everyone needs a plan and consistently stick to it so that they are able to fund a retirement that will last at least three decades.  It’s not just cash flow for everyday life but also enough to cover unexpected costs for healthcare, aging parents and assisted living homes.

Everyone’s goals and circumstances are different so what may seem like not nearly enough for someone may be more than enough for someone else.  If you project your annual expenses to be $50,000 in retirement starting at age 60 and you will not have a defined benefit pension then I would recommend aiming to have financial assets of $1M+. CPP and OAS will certainly help but having $1M invested mostly in RRSPs is very different than having $1M in a non-registered and TFSA. The most important thing is to have an understanding of the long term projection based on your spending goals because many are surprised to learn how much of an impact even normal inflation has over time.

Focusing on building your personal pension plan and sticking to only investing in diversified ETFs significantly increases the probability of not losing money over the long term but it also increases the probability that you will own the next group of mega winners that will drive the equity markets higher over the long term.  Why take a chance investing any other way.

Sinan Terzioglu, CFA, CIM, is a financial advisor with Turner Investments, Private Client Group, Raymond James Ltd.  He served as vice-president of RBC Capital markets in New York City and VP with Credit Suisse in Toronto.

122 comments ↓

#1 RC on 02.08.22 at 9:03 am

Thanks Sinan. You make some really good points about staying the course and not letting emotions get the best of us. Individual stocks are like gambling. ETFs for balance.

#2 TerziogluTerritory aka Prince Polo on 02.08.22 at 9:47 am

I came here for a 12-step program on how to deal with greaterfool withdrawal. Found out the first step is to read the newest post. Thanks Sinan!

The beauty of the mega-caps are that they are almost as good at printing $$$ as the central banks are… ;)

#3 Rochdale GM on 02.08.22 at 9:49 am

This advice and information is so crucial, and would have had a huge impact on my financial wellbeing had I been taught this as a young adult. I wish I could find more help and teaching tools to convey this information to my grandkids now in their late teens.

#4 Flop… on 02.08.22 at 9:52 am

Sinai, tell Garth to put more sunscreen on.

He’s burning already…

M47BC

#5 Chris Serran on 02.08.22 at 10:09 am

Meh – individual stocks are not gambling if you use a little discipline. Diversify through a number of sectors, pick profitable companies specifically those that are stable enough to pay dividends. Buy when stock prices are low, and don’t sell if there’s a downturn unless something about your chosen company has changed. I’ve been doing it successfully for about 25 years.

#6 Dharma Bum on 02.08.22 at 10:32 am

Way to many people have their collective heads in the sand when it comes to a lifelong disciplined approach to saving and investing for a secure retirement.

While it’s true that making ends meet has grown increasingly difficult for the average wage earner in Canada, those same wage earners have all to often succumbed to the lure of immediate gratification throughout their day to day lives, and have not been willing to take a serious look at their financial future, and buckled down to make the necessary sacrifices to minimize their long term vulnerability to poverty and destitution in retirement.
People do not realize that the decades fly by in a blink of an eye.
30 year olds believe that “old age” and “retirement” are concepts that do not apply to them because they are so young and have endless years ahead of them, as they squander their earnings on frivolities.
One day they wake up – and suddenly they’re in their 50’s, without any serious money saved and invested.
Panic sets in, and then they try to figure out what they’re going to do within a ten year period to accumulate enough money to retire on when the end of the line – just around the corner now – actually hits.
It cannot be stressed enough. Start saving and investing from the day you receive your first paycheque. Shun frivolous spending. Find enjoyment in pursuits that do not involve rampant consumerism.
Save. Your. Money.
You’re gonna need it sooner than you think. Desperately.

#7 Andrewski on 02.08.22 at 10:38 am

Spot on observation Sinan:
“What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know.”
With so many people who have little to no financial literacy, listening to their BIL, MIL, etc., it’s a recipe for investing disaster.

#8 Nonplused on 02.08.22 at 10:41 am

“Meta’s decline wiped out a record $250 billion in market value in a single day breaking the company’s previous record set in 2018 when it lost over $100 billion.”

This is a clear example of my long stated axiom that “wealth is not money” and that valuations can be nothing more than a mark to market in a spreadsheet. Until you monetize by selling, what the market giveth the market can taketh away.

It is also a good example of why “wealth taxes” are a dumb idea. Aside from the fact that wealth is not money so there is no cash with which to pay taxes unless you sell (and that assumes a ready buyer who is not also selling to pay wealth taxes), how can you determine the “wealth base” on which to pay the “wealth tax” when the valuation can change by 25% in a day and 50% in a week and 100% in a year? Ya to the upside hopefully but also down.

Wealth is not enduring in a world where the next new thing totally changes the paradigm every 10 years. Land might be enduring but we already have property taxes. Realized gains on some asset that has been sold might be tangible but we already have capital gains taxes. But what do you do with the Meta shareholders if say perhaps they had paid “wealth taxes” based on December 31st valuation today? What if they haven’t paid yet but the valuation date is arbitrarily set to Dec. 31st? Do they have to pay wealth taxes based on wealth that no longer exists?

Remember folks, all that wealth you see when you look at your brokerage statement is based on the last trade, not fundamentals. One hopes they are closely aligned, but they usually aren’t, at least not in the short term.

The fact is the “250 billion” in market value Meta supposedly lost never really existed in the first place. It was just a number in a spreadsheet. A mark to market fantasy based on the last trade, which most likely made up less than a fraction of a percent of the float.

This is why investing based on earnings (fundamentals, if you will) used to be the way to go, back when there was some relation between earnings and price. If you were happy with your rate of return at the price you paid, market fluctuations didn’t really matter to you. Those days seem to be gone though.

#9 TurnerNation on 02.08.22 at 11:02 am

The airline wreck:

Control over Travel? Always. Life in a 2nd World Country – with subpar airlines, Government Subsidy Air.
You can fly any airline you wish Comrade! But you are either way screwed.

“The Globe and Mail reports in its Tuesday edition that Canada’s two main airlines continue to slash their schedules and demand that Ottawa roll back COVID-19 travel restrictions to staunch the cash bleed. A Canadian Press dispatch to The Globe says that compared with its plan in mid-October, Air Canada has scrapped 16,617, or 41 per cent, of its scheduled March flights. More cuts may be en route across the airlines, as passengers hold off on ticket purchases until closer to the departure date to ensure pandemic measures do not mar their travel plans”

#10 Doug in London on 02.08.22 at 11:02 am

What can I say? These stocks were way overvalued in the first place, so any any wise person holding these stocks should have taken some profits while they were high. As for the Meta’s decline that supposedly wiped out a record $250 billion in market value in a single day, that’s phantom money that never really existed in the first place so no point getting worried about it.

#11 Shawn on 02.08.22 at 11:05 am

You’re Poorer Than You Think

“having $1M invested mostly in RRSPs is very different than having $1M in a non-registered and TFSA.”

********************
That is absolutely true. And it is seldom if ever mentioned by financial writers that I read. On a personal balance sheet all assets should really be listed on an after tax basis.

“Our” RRSP money realistically should be reduced by 30% to 55% to reflect the share that will go to income taxes.

But it’s not all bad news. Remember that it is far easier to accumulate one million in an RRSP than in a taxable account since 1: The tax refund subsidizes your RRSP by usually 30 to 50% depending on your marginal tax bracket. and 2: The money has grown tax free and importantly 3: let’s face it most of us never would have saved much if not for the incentive of the RRSP tax break.

TFSAs of course are also excellent! In many cases they are similar to an RRSP on an after tax basis.

The fact that $1 million in an RRSP is not worth the same as $1 million in a TFSA or taxable account is a simple fact. It is not however a reason to bash RRSPs which remain an excellent retirement saving strategy.

#12 mike from mtl on 02.08.22 at 11:13 am

It still irks me that cash burning Tesla is in the sp500.

Indeed the big names hold up the index but at least they’re profitable, albeit richly ‘valued’.

#13 Sail Away on 02.08.22 at 11:24 am

#5 Chris Serran on 02.08.22 at 10:09 am

Meh – individual stocks are not gambling if you use a little discipline. Diversify through a number of sectors, pick profitable companies specifically those that are stable enough to pay dividends. Buy when stock prices are low, and don’t sell if there’s a downturn unless something about your chosen company has changed. I’ve been doing it successfully for about 25 years.

——–

Correct. There are many, many companies with excellent longterm records of profitability and stability.

If a company doesn’t meet a strict set of criteria? Don’t invest there. Easy. Indexes are also a fine place.

Case in point: I took positions in four individual miners in August while another poster took a position in a mining ETF. My four are currently +16% with avg. 10% dividend; the ETF is +23% and pays no dividend. Both good choices.

#14 Sail Away on 02.08.22 at 11:25 am

#12 mike from mtl on 02.08.22 at 11:13 am

It still irks me that cash burning Tesla is in the sp500.

Indeed the big names hold up the index but at least they’re profitable, albeit richly ‘valued’.

———

Catch up, Mike. Tesla has been profitable for a long time now.

#15 Kato on 02.08.22 at 11:25 am

Nonplused #8
The fact is the “250 billion” in market value Meta supposedly lost never really existed in the first place. It was just a number in a spreadsheet. A mark to market fantasy based on the last trade, which most likely made up less than a fraction of a percent of the float.
___________________________

Well stated comment. Can someone please tell the CBC and NPR that billions of dollars aren’t thrown in a furnace whenever a stock’s market price dips? After 2009 there was lots of chatter about “where all the money went” when the answer was simply that most of it never existed to start with.

#16 Leroy on 02.08.22 at 11:28 am

A $1m retirement portfolio is best enjoyed outside of Canada. Taxes will be increasing for decades and our medical system will continue to decay without two-tier. Many countries have a much better medical system than Canada and are happy to welcome those with savings. A rule of thumb for retirement in Canada should be to plan for dual citizenship.

#17 crowdedelevatorfartz on 02.08.22 at 11:49 am

Interesting forecast.

I’ll be pumping money into the portfolio for a few years yet.
I’d like my portfolio to sit well above 1 mill to ensure any market swings dont leave me hanging.

#18 Observer on 02.08.22 at 12:05 pm

For those who wish to understand what the supposed Trucker Freedom convoy is really all about, check this out:

https://mrsbrittanybested.com/2022/02/03/rotten-to-the-core/

#19 TurnerNation on 02.08.22 at 12:13 pm

15th? Slow day on the blog.

Want to know the future?

1. 100 million pop

“We advocate for policies and programs that would increase Canada’s population to 100 million by 2100. ”
https://www.centuryinitiative.ca/about/who-we-are

.Former prime minister Brian Mulroney recently called for a government white paper on immigration to support the Century Initiative’s advocacy in favour of a Canada of 100 million people by 2100. May 20, 2021 (policyoptions.irpp.org)

2. Kandos.

– All from streetsoftoronto.com newsletter

.Canadian Tire site in Rosedale could see multi-tower development

.Ontario to build first elementary school inside a Toronto condo

.Another 79-storey condo tower proposed for Yorkville

.This Toronto mall could be replaced by 22 condo buildings

—-
Another day in the Former First World Countries. Will China’s EVs take over?
‘See the USA in a Chevrolet’. Sure, You got it Pontiac:

“Ford Motor Co. tumbled into a bear market after a fourth-quarter profit and sales missed Wall Street expectations. Chief Executive Jim Farley warned of “persistent supply-chain disruptions” limiting its ability to meet strong demand. Reuters reports the Detroit automaker will shutter eight factories in the US, Mexico, and Canada, beginning on Monday as it copes with chip shortages.” (zerohedge.com)

#20 Devil Taco on 02.08.22 at 12:30 pm

We’re going from hurt animals to scenes of car accidents?

Yo, Garth, hope you’re alright and that hurt puppy wasn’t some subliminal indication of an issue.

What you wrote yesterday is just an indication of the division. That’s what it gets you.

We’ve been divided. We’re primed for conquering.

#21 Søren Angst on 02.08.22 at 12:33 pm

Ya, ya.

It’s like whack-a-mole out there.

One diversified ETF stand up, the other sit down. Trade chairs next day.

Not even

yeah oil

not reliable anymore.

Patience the virtue. High dividend ETFs the ticket. So far up YTD thanks to this equation:

Dividends > Change in Market Value.

#22 cramar on 02.08.22 at 12:34 pm

It’s little wonder that the financial illiterate eschews stock market investments in favour of real estate. EVERYBODY understands when the price of housing goes up, and believes it always does. Compared to a stock like Facebook (Meta) when they hear on the news that it looses 25% of its value in one day. All people understand is the following:

Detached homes sales up to an average of $1.1M in Kitchener-Waterloo in January

https://kitchener.ctvnews.ca/detached-homes-sales-up-to-an-average-of-1-1m-in-kitchener-waterloo-in-january-1.5766338

This year of 2022 is shaping up to be a watershed year.

#23 Summertime on 02.08.22 at 12:35 pm

We have many crises in here.

1. completely unaffordable housing – both ownership and rents

2. high taxes, marginal services down to levels to be inferior to many developing countries.

3. expensive food and energy, extremely high cost of living.

4. impossible retirement due to inflated currency but fixed and capped benefits.

5. capped salaries and insane competition for a frankly miserable at best standard of living.

It beats me how the shepple can sustain that and still have a complex of superiority.

We are on road to be surpasses by even countries like Turkey, however funny that may sound to the brain-frozen Canucks.

The food in Turkey – extremely cheap, gas cheaper than in Toronto. As are services, weather etc.

And you know what? Our economic decline is just starting. It would be interesting to see how the rulers will attempt to control the situation but anything short of outright dictatorship sounds highly unlikely to me.

#24 Summertime on 02.08.22 at 12:38 pm

#11 Shawn on 02.08.22 at 11:05 am

All your ‘excellent’ investments will mean nothing in a place where a house is worth 2,3,4,5.. millions and you will need that much in other investments as well in order to somehow retire.

good luck.

#25 Millennial 1%er on 02.08.22 at 12:47 pm

Don’t forget about all the tech bros that were making 400k a year based on stock valuations (half of their income is delimited in company stocks). I have a lot of friends who got completely boned

Meanwhile I, a person with parents who lived through the dot com bubble in California, was wise enough to liquidate all my free stocks as soon as they became liquid to turn them into the much more palatable 100% equity index (I’m risky, but not crazy)

#26 macduff on 02.08.22 at 12:56 pm

Excellent article. It reminds me of when Nortel was the surest thing on the TSX. People were making a fortune on this stock, Nortel engineers were all millionaires, and then one day it came crashing down. There was a sad story of an Air Canada pilot who had all his retirement savings in Nortel, lost it all, and had to work at Home Depot after he left AC.

#27 Søren Angst on 02.08.22 at 1:05 pm

No fun Europa with MIL aircraft tonight.

A gaggle of BEL F16s partying over Dusseldorf. They only come out for the night shift. Must be a Belgian thing.

https://i.imgur.com/aPASawN.jpg

Austria showing some ditsy DA40s then as if by magic, a Eurofighter appears out of nowhere.

https://i.imgur.com/w3q7Ik3.jpg

[NB the great AVB and Ramstein voids of nothingness…as if]

Same void over Latvia where our people are.

And spot the E. European country avoided like the plague by commercial aviation.

https://i.imgur.com/vqPhOJZ.jpg

BUZRD31 USA F-16 took off from AVB over the Adriatic as I took the screen shot, just the one – lost in the fog of aircraft. Was doing +Mach 1 and then they stopped reporting the speed and then the F-16 she is a no more showing up.

No fun.

#28 All lies and manipulated u decide on 02.08.22 at 1:07 pm

Sinan
Most of the tech was priced to perfection.
People lost their marbles.
Valuation always matters in the long run.

Thats why I was warning Saloway the tsla bubbled out and to peal a pile off. It went parabolic.
Meanwhile back at my RE stuff its not in a bubble and it wouldnt matter as it pays me $275,000 to wait.
Never selling. No timing needed. Its the long game.
PS glad to see the very corrupt FB fall on its face.
Cheers

#29 Another Deckchair on 02.08.22 at 1:09 pm

Hey #9 Turner Nation;

You know, of course, that part of the “Greener economy” is to scrap all non-government people-moving by air. You know, people like you and me and Jaguar.

It *has* to be that way. Two references; (I’ve lost a good url for the second, but it was “found” during that GOP26 thing in Glasgow).

1) Air travel must use fossil fuels, for the next couple of decades anyway. Vaclav Smil, Electric Flight:

https://vaclavsmil.com/wp-content/uploads/2021/12/ELFLIGHT.pdf

2) Private Aircraft not counting in the Greenhouse Gas producer count; it came to light during that COP26 and the 400+ private aircraft that the press went on about.

—-

Look, I’m not a Greenie by any means, but mother nature fights back for what is hers. With the riling up of people by seditionists telling them to take their masks off and storm Ottawa, (when the restrictions were coming off soon anyway), the lifestyle changes required to help mother nature “save the planet” would send many of us local yokels into orbit.

(Thank you Garth for showing us that you have to push the scientific-backed direction, even when people are too scared to listen)

#30 Ponzius Pilatus on 02.08.22 at 1:12 pm

Sinan,
Thank you for filling in for Garth, while he’s on his well deserved break.
This blog is a valuable public service.
To lose it, would be a shame.
And it’s FREE!
Even the steerage section has value, but you have to look for it.
Thanks again.

#31 OCCUPATIONal Hazard on 02.08.22 at 1:24 pm

#5 Chris Serran on 02.08.22 at 10:09 am

Meh – individual stocks are not gambling if you use a little discipline. Diversify through a number of sectors, pick profitable companies specifically those that are stable enough to pay dividends. Buy when stock prices are low, and don’t sell if there’s a downturn unless something about your chosen company has changed. I’ve been doing it successfully for about 25 years.

_________________________________________

I completely agree with Chris and the points he has made.

Having said that, I would agree with Sinan and say that only a SMALL percentage of investors (perhaps 5-10%) should dabble in individual stocks. This is an acquired skill and process that takes years to understand. Moreover, you MUST have the knowledge and experience under your belt before you go “whole hog” with individual securities. Until then, there is nothing saying you can’t do both concurrently. e.g. add a new security once per year. And most importantly you must have the time and interest to buy individual securities since you will need to spend hours doing research… which will still end up causing you grief occasionally. Don’t expect to acquire these traits overnight. If you haven’t done this since you were in your twenties, you are playing with fire and should most likely stick with ETFs.

I get upset when the bearded one says that NOBODY should be buying individual stocks.

#32 All lies and manipulated u decide on 02.08.22 at 1:29 pm

#9 TurnerNation on 02.08.22 at 11:02 am
The airline wreck:
=========
Whats shocking is….. why are they still solvent??! High fuel prices always a busness that runs on the margin accept for a couple companies.
How the hell do they pay for the billions in grounded hardware?
You can count on less travel chocies and far more costly.
One engine on a 747 is over $25million.
Just like steak. Most will never live the life we had. Its simple math.
And yes travel is for the ellits in the future.
Best the peons stay home as your hard on the environment.
Thats a fact.

#33 Søren Angst on 02.08.22 at 1:38 pm

Now they are quiet even about the whereabouts of the Navy.

No fun again.

I think the French are pissed off so they joined the Americans and Italians in a naval exercise (Macron in Moscow today and got in effect no concessions from Vlad – take a good look at their faces).

https://twitter.com/KremlinRussia_E/status/1490968270223994883

Operation Neptune in the Adriatic + France = somewhere else in Mare Nostrum?

https://twitter.com/USNavy/status/1490827741234667520

Uncle Sam provides more ra-ra info.

https://www.navy.mil/Press-Office/News-Stories/Article/2925339/american-french-italian-carrier-strike-groups-sail-together-in-the-mediterranea/

Fully expecting to see carriers off the coast of Venezia during Carnevale this year (Feb 12 to Mar 1) or off the coast of Viareggio.

https://www.carnevale.venezia.it/eventi/

https://viareggio.ilcarnevale.com/

————————

Is it true Canada that MOUNTIES are EXECUTING Canada Geese for HONKING????

“Trudeau Orders All Geese Rounded Up And Shot For Honking In Solidarity With Truckers”

https://babylonbee.com/news/trudeau-orders-all-geese-rounded-up-and-shot-for-honking-in-solidarity-with-truckers

SHAME.ON.YOU Canada. Where is PETA when you need them?

And Canada, you are Top of the Pops today at BBC.

https://twitter.com/bsant54/status/1490979595130081280

…what was once a pastoral democracy of reason, no more.

#34 Caffeine Monkey on 02.08.22 at 1:47 pm

Don’t be fooled into thinking you’re smarter than the market. The simplest thing is to buy literally the entire market, like with the Vanguard Total World etf (VT). Throw your money into there, and Bob’s your uncle. Crack a beer and relax.

#35 G on 02.08.22 at 1:48 pm

With the hope the responsible people in Government will listen to this. 34min on YouTube There’s also another from the day before.

Freedom Convoy Preemptive SOS Press Conference Feb.7, 2022 | IrnieracingNews
https://www.youtube.com/watch?v=x6fBFdLGUZw

#36 Cheese on 02.08.22 at 1:50 pm

Still in weed, mostly due to sunk cost fallacy, can’t bring myself to sell it.

#37 Barry on 02.08.22 at 1:51 pm

“but having $1M invested mostly in RRSPs is very different than having $1M in a non-registered and TFSA.” True – an RRSP when morphed into a RRIF at age 71 is taxed as a component of your overall income at each withdrawal. This increases with age. I would say American stocks instead of CDN stocks are the way to go here as there is no 15% withholding tax on yearly distributions and dividends. This moots the income tax period during forced withdrawals after 71. I don’t have an RRSP because I lived overseas but maxed out our combined TFSAs starting from the 2009 inception in CDN stocks with an income stream of $23,000 if we need it. But we don’t so plow it back in until we do. Combined with 12 grand (2X$6,000) contributions every year this has become a significant gain over the years – Presently $360,000 combined market value with an unlikely dividend cut during a market crash given the creditworthiness of our stocks. We could withdraw the tax free TFSA income and still get GIS (around $19,000 for a single person in BC). It doesn’t count. RRSP withdrawals do … however, just sayin’ … that will never happen to us. If we chose to become non residents we would have to liquidate everything EXCEPT our TFSAs. Just couldn’t contribute anything. Also … if your healthy you can hedge your bets with delaying OAS/CPP. As said I didn’t live here so my CPP is $110/year! However I’m delaying OAS until I hit 70 next year when it will be aroung $10,500 (36% premium over collecting at 65). In our case this works but not for everybody.

#38 espressobob on 02.08.22 at 2:07 pm

“There’s a sucker born every minute”, P.T. Barnum I believe? Truer words were never spoken when it comes to day trading in whatever.

Owning the major indices is proving to be a well kept secret most ignore and pass off as nonsense since they seem to know better, which starts off in this comment.

#39 zxcvbnm on 02.08.22 at 2:46 pm

Something big has to happen, there’s too many people on the horizon with unfunded retirements. Combo with CPI being complete fictionalized. Where will all of these people live, and what will they eat? It doesn’t add up.

#40 Dogman01 on 02.08.22 at 2:46 pm

“What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know.”

Great observation, I think it applies more broadly to everything…..assume you do not know.

“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.”
― Bertrand Russell

#41 westcdn on 02.08.22 at 2:58 pm

I renewed my mortgage back early December to a 5 year fixed. I seriously thought about a locked 5 year variable mortgage but, in my opinion, I did not think the benefit outweighed the risk. I missed a cheaper rate by this much.

Then I bought a newer used car. Man, vehicles are expensive these days. The dealer offered what I thought was a fair price so I took it without haggling. It should be good for 5 years and I will try for 8. I kept the old 15 year old pony for hard work. Insurance rep said I would not see any premium change – I will wait and see.

So I am set for the next 5 years. I am okay with the markets. Up 3.5% ytd so I think I will hit my 10% target for the year despite my selling. I have always found it harder to sell than buy. Hey, I need the money for my modest lifestyle and I have never liked unproductive debt.

The home improvements beyond repairs and travel are going to have to wait. I still could use a lottery win.

I was thinking again. Power is retained by instilling fear. Time has proved it. Best to find someone to sacrifice and make an example of what happens what to someone who runs against the narrative. The Chinese have a proverb, “Kill a chicken to scare the monkeys”. Even Genghis Khan was captured early and ended up in a cage where he was taunted daily.

#42 Ilona on 02.08.22 at 3:03 pm

Thank you very much Sinan for a timely reminder! I just created yet another “test portfolio” to have myself entertained paper-trading while I keep our portfolio mostly boring :)

#43 IHCTD9 on 02.08.22 at 3:04 pm

Hey if you own a house and have also managed to save a bit – and live Canada, you can’t lose. If your investments end up tanking – at least your house will be worth millions.

In fact, I expect to make 20+% selling off my used truck and a couple used ATV’s in the spring over what I paid for them years ago.

“with glowing hearts we see [the prices] rise…”

#44 Steve French on 02.08.22 at 3:42 pm

I’m a simple man…

I wake up, prepare a coffee, and open the Greater Fool.

#45 Left GTA on 02.08.22 at 3:57 pm

What about Canadian bank stocks? Would there be a reason not to hold these in non reg account?

#46 NoOneOfConsequence on 02.08.22 at 4:05 pm

A very good reminder.

As a contrary point of view…I have to say that personally I’ve been very fortunate in my single stock picks.

I allocate 50:30 rather than 60:40. The 20 left I use to work individual stocks. That also appeases the gambler in me I guess.

If you stick to things you really know and study…I think there are some outsized gains to be had that an index ETF just doesn’t give you exposure to.

Just a general comment. Probably not for those who don’t invest their time in research.

#47 Faron on 02.08.22 at 4:19 pm

Speaking of tech wreck:

https://www.cbs17.com/news/local-news/dashcam-video-shows-aftermath-of-tesla-plowing-into-nash-county-deputys-cruiser/

Gotta protect the thin blue line.

#48 Sinan Terzioglu on 02.08.22 at 4:20 pm

#5 Chris Serran – Thanks for your comment. Individual stocks with long track records of profitability and bought at sensible prices can certainly work well for those that act like long term investors. That said, I still think most average investors should stick to index ETFs until they have accumulated enough so that they are financially secure for the long term – Sinan

#49 MicroGX on 02.08.22 at 4:22 pm

Thanks for posting today Sinan, valuable insight, a great read!

#50 True Enough on 02.08.22 at 4:47 pm

#10 Doug in London on 02.08.22 at 11:02 am

What can I say? These stocks were way overvalued in the first place, so any any wise person holding these stocks should have taken some profits while they were high. As for the Meta’s decline that supposedly wiped out a record $250 billion in market value in a single day, that’s phantom money that never really existed in the first place so no point getting worried about it.

—————————————————

Unless it was YOUR money and it has now departed into the ionosphere!

#51 JSS on 02.08.22 at 4:49 pm

Hi Sinan, do you see the NASDAQ recovering this year?

#52 Dr V on 02.08.22 at 4:50 pm

Sinan – I still see only 12 comments. You must still have that day job!

That Garth is such a slave driver.

Oops. Can we still say that?

#53 JSS on 02.08.22 at 4:50 pm

Hi Sinan, do you see the NASDAQ recovering this year

#54 Observer on 02.08.22 at 4:53 pm

Ottawa police say about a quarter of vehicles parked in downtown Ottawa as part of the trucker protests have children living in them, and authorities are worried for their safety.

Deputy Chief Steve Bell told reporters Tuesday that 25 per cent of the more than 400 trucks occupying the downtown core have children living inside….

“It’s something that greatly concerns us,” he said. “From the risk of carbon monoxide and fumes, the noise levels … we’re concerned about cold, we’re concerned about access to sanitation, the ability to shower.”

On Monday night, convoy leaders held an “emergency press conference” in which a spokesperson said the truckers would be “willing to sit at a table” with the Conservatives, NDP and Bloc to form a coalition government, as well as sit with the Governor General. They said they have booked a hotel room in Ottawa on Tuesday in an effort to meet with the prime minister.

https://ottawa.ctvnews.ca/mobile/about-100-convoy-trucks-in-downtown-ottawa-have-children-living-inside-police-1.5772103

#55 Barb on 02.08.22 at 4:56 pm

Thank gawd you’re here Sinan.

“Cold-turkeying Garth” is like quitting smoking.

#56 R on 02.08.22 at 5:00 pm

#12 mike from mtl on 02.08.22 :
If you want to be a good investor, you should at least “Google” how much cash does Tesla have on hand.

#57 BCWally on 02.08.22 at 5:07 pm

Great article, most people miss the tax part. Kind of like selling a house and not including the selling fees.
1M in an RRSP in Canada? Yeah, if not more.
See everyone at Lake Chapala, Mexico where a 1M RRSP goes a lot farther.

#58 Linda on 02.08.22 at 5:09 pm

Sinan, I have to say that a ‘looming retirement crisis’ is a bit of a misnomer. Boomers began to turn 65 over a decade ago. The youngest Boomers will reach age 65 in 8 years time & will all of them be age 65+ by 2031. Statistics state some 9 million Boomers were born in Canada so at least half of them should be age 65+ & presumably retired by now. So when does the crisis occur if it has not as yet taken place? What constitutes a crisis? Is there a real possibility that by 2031 many of the already retired Boomers will be out of $ & looking for financial assistance? How does that stack up against the reported high home ownership rate of said Boomers?

#59 Not Stone on 02.08.22 at 5:26 pm

Sinan I must compliment you on your writing. It has gotten much better over time.
Great read.

#60 habitt on 02.08.22 at 5:32 pm

Thank you Sinan for taking time out of your day for deplorables like me. Oh and good post Merci

#61 Sinan Terzioglu on 02.08.22 at 5:57 pm

#45 Left GTA – There is no reason not to hold Canadian bank stocks in a non-registered account so long as you do not have any additional room in your registered accounts. You would also benefit from the Canadian dividend tax credit. Instead of individual stocks though I recommend purchasing a Canadian equity ETF that holds most of the banks because this way you will have a similar dividend yield with lower overall risk and sector diversification – Sinan

#62 Leichendiener on 02.08.22 at 6:03 pm

Back in the day I followed Globe and Mail’s example portfolios. The one that really stood out was Chris Umiastowski’s growth. It was over 400% and largely FAANG. Sinan’s post today is seminal.

#63 Sinan Terzioglu on 02.08.22 at 6:06 pm

#53 JSS – I do see the Nasdaq recovering over the next year. Apple is returning over $75 billion a year to shareholders so their free cash flow per share will continually improve. Microsoft, Amazon and Alphabet are growing their cloud computing divisions at 40%+ annually and their total addressable markets continue to grow so there is years of above average growth ahead. In my opinion, valuations are fair given their above average growth and because they are earning 20-30% on their capital so far above the market average – Sinan

#64 Reality Check on 02.08.22 at 6:09 pm

zxcvbnm on 02.08.22 at 2:46 pm
Something big has to happen, there’s too many people on the horizon with unfunded retirements. Where will all of these people live, and what will they eat? It doesn’t add up.
——————
These are the 72 year old seniors you see every day working in grocery stores, Walmart and Timmies. The golden years.

#65 Sinan Terzioglu on 02.08.22 at 6:10 pm

#58 Linda – Thanks for your comments. Recent surveys have found that over 50% of Canadians are $200 away from insolvency. I’d say that constitutes a looming crisis for those with no savings plan – Sinan

#66 Sail Away on 02.08.22 at 6:14 pm

The convoy protests seem to be multiplying and gaining momentum. After GoFundMe refused to do their one job, nearly $7M USD has now been raised on the GiveSendGo site, so lots of financial support.

Frantic politicians to truckers: ‘Go home! You can’t be here you bad, evil, (list of all possible -ists and isms). Invoking the mighty power of outrage, we insist you WILL leave!’

Truckers: ‘What? Haha. Nope.’ honk

#67 SmallTownSteve on 02.08.22 at 6:22 pm

Know who’s portfolios often beat “actively” traded accounts? Dead peoples. There have been forgotten accounts/lost accounts of dead people that have earned realllllly high rates of return. Talk about set it and forget it!

#68 KLNR on 02.08.22 at 6:28 pm

@#31 OCCUPATIONal Hazard on 02.08.22 at 1:24 pm
#5 Chris Serran on 02.08.22 at 10:09 am

Meh – individual stocks are not gambling if you use a little discipline. Diversify through a number of sectors, pick profitable companies specifically those that are stable enough to pay dividends. Buy when stock prices are low, and don’t sell if there’s a downturn unless something about your chosen company has changed. I’ve been doing it successfully for about 25 years.

_________________________________________

I completely agree with Chris and the points he has made.

spoken like a true gambler.

#69 Linda on 02.08.22 at 6:51 pm

Sinan, I have read those headlines as well. What I wonder is how many of those ‘within $200 of insolvency’ households belong to retirees or those close to retirement. Seems quite possible that the majority of those households belong to younger Canadians who are in full on acquisition stage – for instance, trying to cover the mortgage of RE they paid way too much for. I agree that having so many so close to the line is a crisis, but what I question is whether those in crisis are retirees or about to be retirees. Can’t see how anyone could retire if their income is that close to the line!

#70 Barcino on 02.08.22 at 6:52 pm

Thank you Sinan for filling in on a week day!
Great read. Hope Garth is enjoying his break.

#71 Finally on 02.08.22 at 6:58 pm

Joël Lightbound for PM?

https://nationalpost.com/news/politics/joel-lightbound-full-transcript

One brave MP. It’s a start.

#72 Ponzius Pilatus on 02.08.22 at 7:08 pm

5 Chris Serran on 02.08.22 at 10:09 am
Meh – individual stocks are not gambling if you use a little discipline. Diversify through a number of sectors, pick profitable companies specifically those that are stable enough to pay dividends. Buy when stock prices are low, and don’t sell if there’s a downturn unless something about your chosen company has changed. I’ve been doing it successfully for about 25 years.
——————-
Good for you.
Care to share your secret.
You obviously must be a Contrarian investor.

#73 IHCTD9 on 02.08.22 at 7:08 pm

#54 Observer on 02.08.22 at 4:53 pm

Deputy Chief Steve Bell told reporters Tuesday that 25 per cent of the more than 400 trucks occupying the downtown core have children living inside….

“It’s something that greatly concerns us,” he said
————-

What do you expect them to do?

The reality is, they are doing the best they can given the potential for trouble. The “contain and let fizzle” tactic has more or less worked well when dealing with huge crowds as they usually do fizzle. This one hasn’t yet. I think they only have one viable choice, and that is to try and coerce them to leave, and keep doing what they’ve been doing until they roll out. The authorities have so far been excellent at keeping things cool for such a long time, and I commend them for that. To me they couldn’t have done a better job policing this bunch, especially considering they’re constantly taking flak from city hall.

A new complication is that the whole planet is now watching very closely. Half the big US networks have boots on the ground right there in Ottawa. This protest is being covered globally. There is just zero chance of force being used at this point. They’re going to have to get creative.

Side note: 100% this protest has some big league (foreign?) organizational input.

#74 Ponzius Pilatus on 02.08.22 at 7:16 pm

#16 Leroy on 02.08.22 at 11:28 am
A $1m retirement portfolio is best enjoyed outside of Canada. Taxes will be increasing for decades and our medical system will continue to decay without two-tier. Many countries have a much better medical system than Canada and are happy to welcome those with savings. A rule of thumb for retirement in Canada should be to plan for dual citizenship.
——————-
That’s ok for a single people with no dependents.
Most of us have families to look after.
Can’t just pack up and leave, whenever we feel like it.
You’re probably the kind of person who supports the selfish honking truckers.

#75 fishman on 02.08.22 at 7:23 pm

You see Cheese: If you had paid more attention to me you would have avoided sunk costs in Marijauna. Again, the two rules for surviving on the street.
1/Don’t mess with the regulars.
2/Don’t do your own product.

#76 Ed on 02.08.22 at 7:27 pm

Well it looks like our truckers are making a difference…mandates are starting to tumble…

#77 All lies and manipulated u decide on 02.08.22 at 7:31 pm

#29 Another Deckchair on 02.08.22 at 1:09 pm
===============================
Good one.
Agreed and clearly the plan.
They never mention how much fossil fuels the worlds military’s or cargo ships burns up. Bunker sea crude is rude stuff.
Its mind blowing.
Oils here for ever unless you can do without everything.
Unless the sheeple wake up….and I think they are we are going to be VERY limited on what you can eat and do in the future…
This is one of T2s agenda’s. He’s all in on this.

#78 Ponzius Pilatus on 02.08.22 at 7:36 pm

69 Linda on 02.08.22 at 6:51 pm
Sinan, I have read those headlines as well. What I wonder is how many of those ‘within $200 of insolvency’ households belong to retirees or those close to retirement. Seems quite possible that the majority of those households belong to younger Canadians who are in full on acquisition stage – for instance, trying to cover the mortgage of RE they paid way too much for. I agree that having so many so close to the line is a crisis, but what I question is whether those in crisis are retirees or about to be retirees. Can’t see how anyone could retire if their income is that close to the line!
——————-
Sorry Guys,
But this “ 200 bucks away from insolvency” myth has been around forever.
Maybe the people living on the street.
But all the middle class people I know are all talking about investing in stocks and RE.
Three cars in the drive way.
Kids in UNI.
Maybe you can back your statements up with some reliable stats.
Thanks

#79 Ponzius Pilatus on 02.08.22 at 7:44 pm

#66 Sail Away on 02.08.22 at 6:14 pm
The convoy protests seem to be multiplying and gaining momentum. After GoFundMe refused to do their one job, nearly $7M USD has now been raised on the GiveSendGo site, so lots of financial support.

Frantic politicians to truckers: ‘Go home! You can’t be here you bad, evil, (list of all possible -ists and isms). Invoking the mighty power of outrage, we insist you WILL leave!’

Truckers: ‘What? Haha. Nope.’ honk
———————
Haha
Good one.
If it drives like a Truck, honks like a Truck.
It’s a “Freedom Convoy Truck”.
Time for Human Services to rescue the kids from their irresponsible honking parents.

#80 Josh on 02.08.22 at 7:46 pm

This is why we stick with our GIC’s in our TFSA’s, RRSP’s, RESP’s even with 3.0% to 3.75% rates over the last 12 years or so. We just boost our savings to $35,000 a year and we first started with $5,000 just 20 years ago. We just passed the $600,000 mark this week, no debts, no mortgage, 2 kids 12, 13 now in Ontario, modest house and we are only 38, 39 years old.

Guess what? We are not high income earners, we only earned gross taxable working income of $78,000 last year and work combined 85 hour weeks. We never owned stocks or units in shares, or any other equity position, we did never like even deferred profit sharing plans, work and income should not be together. It is not worth the risk.

#81 IHCTD9 on 02.08.22 at 7:47 pm

#71 Finally on 02.08.22 at 6:58 pm
Joël Lightbound for PM?

https://nationalpost.com/news/politics/joel-lightbound-full-transcript

One brave MP. It’s a start.
———-

Ain’t that a breath of fresh air. Hopefully he won’t be kicking pebbles next week.

#82 Shawn on 02.08.22 at 7:49 pm

Working Well Past Retirment Age?

#64 Reality Check on 02.08.22 at 6:09 pm

zxcvbnm on 02.08.22 at 2:46 pm
Something big has to happen, there’s too many people on the horizon with unfunded retirements. Where will all of these people live, and what will they eat? It doesn’t add up.
——————
These are the 72 year old seniors you see every day working in grocery stores, Walmart and Timmies. The golden years.

*************************************
I’d bet that a lot of seniors that are working are doing it largely by choice.

The money probably pays for extras not necessities.

Many seniors like the extra money plus the fact of being able to contribute to society plus even the social aspect of work.

I’d say the vast majority of seniors are decently well off in this country. It’s the younger people that are getting a raw deal. But even there the more self reliant younger people just get on it with. There’s not a lot of upside to fixating on moaning about how boomers had it better in many ways.

#83 Repurchase Disagreement on 02.08.22 at 7:59 pm

#77

A roadmap for T2/Butts/Carney:

https://www.nature.com/articles/s41893-021-00756-w#article-info

#84 Airfix on 02.08.22 at 8:21 pm

#37 Barry on 02.08.22 at 1:51 pm
Check those OAS numbers Barry, you need 40 years to get the maximum.

#85 crowdedelevatorfartz on 02.08.22 at 8:24 pm

@#72,74,78 Ponzie’s Perpetual Protesting

Nothing positive to say today Ponzie?
Silly me.
No different than any other day in Ponzie world.

#86 april on 02.08.22 at 8:31 pm

#76 – politicians under pressure but not happy about lifting restriction, also may doctors not happy with it… too soon….are you aware of what’s really going on in Ottawa? nothing to do with mandates… very scary.

#87 Flop… on 02.08.22 at 8:36 pm

Garth, I can still copy and paste like a demon while you’re on holiday.

Let’s take a walk down recent tech memory lane.

Geez, they really put the mockers on a few companies like Disney and Coca Cola.

Greaterfool, how do you put a value on that?

Priceless…

M47BC

Top Ten Companies with the Most Valuable Brands ($B) 2018
1. Apple (Technology): $182.8B
2. Google (Technology): $132.1B
3. Microsoft (Technology): $104.9B
4. Facebook (Technology): $94.8B
5. Amazon (Technology): $70.9B
6. Coca-Cola (Beverages): $57.3B
7. Samsung (Technology): $47.6B
8. Disney (Leisure): $47.5B
9. Toyota (Automotive): $44.7B
10. AT&T (Telecom): $41.9B

“Jeff Bezos, the founder of Amazon, once said, “Your brand is what other people say about you when you aren’t in the room.” We might add that if almost everybody is saying great things about you, then you have an extremely valuable brand.”

The World’s Top Ten Most Valuable Brands in 2019
1. Apple (Technology): $205.5B 
2. Google (Technology): $167.7B
3. Microsoft (Technology): $125.3B
4. Amazon (Technology): $97.0B
5. Facebook (Technology): $88.9B
6. Coca-Cola (Beverages): 59.2B
7. Samsung (Technology): $53.1B
8. Disney (Leisure): $52.2B
9. Toyota (Automotive): $44.6B
10. McDonald’s (Restaurants): $43.8B 

“There are signs of life, however, in the brand power of non-tech companies. Iconic brands Disney and Coca-Cola haven’t given up their top 10 spot yet, and Gucci’s brand value increased by over 24% last year. Not bad for a brand founded nearly 100 years ago.”

Top 10 Most Valuable Brands in the World in 2020
1. Amazon: $221B (Retail)
2. Google: $160B (Tech)
3. Apple: $141B (Tech)
4. Microsoft: $117B (Tech)
5. Samsung Group: $94B (Tech)
6. ICBC: $81B (Banking)
7. Facebook: $80B (Media)
8. Walmart: $78B (Retail)
9. Ping An: $69B (Insurance)
10. Huawei: $65B (Tech)

“One of the most interesting things to do is see how rankings change from year to year. Comparing this visual to the one from last year with data from Forbes, most companies saw the value of their brands grow, especially in technology. Amazon was only at $97B and has since catapulted to $221B. But some other companies are clearly struggling to maintain brand value, like McDonalds, which lost billions ($44B in 2019 vs. $37B in 2020). It will be interesting to see how Facebook’s decision to allow carte blanche political advertising will impact its brand value after the 2020 election.”

The World’s Top 100 Most Valuable Brands in 2021

In USD (B)

1 Amazon $683.85 Consumer Goods & Retail 64%
2 Apple $612.00 Technology 74%
3 Google $458.00 Media & Entertainment 42%
4 Microsoft $410.27 Business Solutions & Tech Providers 26%
5 Tencent $240.93 Media & Entertainment 60%
6 Facebook $226.74 Media & Entertainment 54%
7 Alibaba $196.91 Consumer Goods & Retail 29%
8 Visa $191.29 Financial Services 2%
9 McDonald’s $154.92 Food & Beverages 20%
10 Mastercard $112.88 Financial Service

“1. The Big Get Bigger
Starting “strong” can give brands an edge. This is because growth rate is closely correlated with high brand equity. In other words, a strong brand will likely see more growth than a weaker brand, which might explain why companies like Amazon and Apple have been able to hold their place at the top for several consecutive years.
Keep in mind, this doesn’t account for industry disruptors. An innovative company could come out of the woodwork next year and give the Big Tech giants a run for their money.”

#88 All lies and manipulated u decide on 02.08.22 at 8:36 pm

#74 Ponzius Pilatus on 02.08.22 at 7:16 pm
#16 Leroy on 02.08.22 at 11:28 am
A $1m retirement portfolio is best enjoyed outside of Canada. Taxes will be increasing for decades and our medical system will continue to decay without two-tier. Many countries have a much better medical system than Canada and are happy to welcome those with savings. A rule of thumb for retirement in Canada should be to plan for dual citizenship.
——————-
That’s ok for a single people with no dependents.
Most of us have families to look after.
Can’t just pack up and leave, whenever we feel like it.

You’re probably the kind of person who supports the selfish honking truckers.
==================
Dumb comment Ponzi. Too simplified.
Anyone at anytime can do what they like.
Hell I can leave emancipate myself from this OVERTAXed jurisdiction keep all my commercial RE still pilot as the CEO and pay no personal tax and live elsewhere while helping my kids.
Vote with your wallet bro like all other large corporations do.
I support the truckers but not the noise and impeding others.
There is more to the movement then the Vax.
Trudeau crapped on Alberta long time ago.

#89 All lies and manipulated u decide on 02.08.22 at 8:48 pm

Oh and any profanity and Nazi symbols from the truckers needs to be shuddered. Disgusting.

#90 Ponzius Pilatus on 02.08.22 at 8:52 pm

#85 crowdedelevatorfartz on 02.08.22 at 8:24 pm
@#72,74,78 Ponzie’s Perpetual Protesting

Nothing positive to say today Ponzie?
Silly me.
No different than any other day in Ponzie world.
———————–
I leave the positive comments to you.
Don’t wanna encroach on your territory

#91 Dr V on 02.08.22 at 8:56 pm

72 Ponz

“Care to share your secret.”
———————————–

Chris explained it rather well Ponz.

If you dont feel confident, or able to invest the time researching individual stocks, then a dividend yielding index etf should work fine. Vanguard, Invesco, ishares all offer them based on FTSE, NASDAQ, Dow indexes. As they use different metrics, the holdings can differ between them.

But you know that and are just being grouchy, right?

#92 Stealth on 02.08.22 at 8:59 pm

Sinan and upcoming guest contributors thank you.
Garth made exactly the right call.

Welcome back to finances.

Thank you very much

#93 Dr V on 02.08.22 at 9:00 pm

85 fartz

“Nothing positive to say today Ponzie?”
———————————–

Group hug :)

#94 Left GTA on 02.08.22 at 9:00 pm

@ Ponzie Because everyone thinks they are millionaires in their 2 million dollar GTA homes with all their spending on their HELOC! They use the HELOC to buy the SUV’s, and pay for kids uni, they purchase a condo and rent it out. Both the house and the Condo have gone up in value so they also use the HELOC to renovate both properties and go on vacations. But believe me when there is a discrepancy in their pay cheques they go nuts! NO they have no RESPS and they think a TFSA is an investment. They have no idea that you put investments into it. They hate RRSPS because they “lost money” in them back in the 2008 stock crash and believe that the government takes it all away in taxes anyway. They do not know what compound interest is and know more about hardwood flooring. They hold large amounts of life insurance because what if… They brag about investing because they bought crypto and weed stock and now they think they are day traders… Sigh… I am surrounded by all these types. Thank god I have this blog.

#95 tbone on 02.08.22 at 9:05 pm

I have a bmo account with high fee mutual funds that i have ignored since 1995.
It turned 7.15 % net of fees . I continue to ignore .

I have been collecting bank stocks and enb for the last
10 – 12 years outside of my registered account . Now i live off the dividends and cpp .

#96 Ordinary Blog Dog on 02.08.22 at 9:13 pm

Very nice Sinan, good work. I like how you fit it all together and characterized risk.

#97 Left GTA on 02.08.22 at 9:20 pm

@61 Sinan The bank stocks are the only stocks I own. The rest are ETF’s. I do also hold some ZWB. I should probably sell the bank stocks and just hold more ZWB. Thank you for your post today Sinan.

#98 Satori on 02.08.22 at 9:54 pm

#78 Ponzius Pilatus on 02.08.22 at 7:36 pm
69 Linda on 02.08.22 at 6:51 pm
—————————————–
Every store I go to has over 65 year olds doing all the jobs kids use to do in their 20s.

Just look around at all the seniors at home depot, grocery stores, fast food joints, malls, restaurants, deliveries…I picked up take out and three (For Serious!!!) over 80 year olds were working the joint, slowly shuffling to bring out my packaged food and shuffling back to the cash register.

I believe that crisis is already here.

#99 Satori on 02.08.22 at 10:06 pm

#82 Shawn on 02.08.22 at 7:49 pm

Seniors working by choice normally volunteer a few hours. You are right when you said they are supplementing income, it’s because senior poverty has consistently increased in the last 20 years… or maybe their “adult” kids “needed” a Tesla.

https://www.policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2017/04/ccpa-bc_seniors-inequality.pdf

#100 Ponzius Pilatus on 02.08.22 at 10:19 pm

#91 Dr V on 02.08.22 at 8:56 pm
72 Ponz

“Care to share your secret.”
———————————–

Chris explained it rather well Ponz.

If you dont feel confident, or able to invest the time researching individual stocks, then a dividend yielding index etf should work fine. Vanguard, Invesco, ishares all offer them based on FTSE, NASDAQ, Dow indexes. As they use different metrics, the holdings can differ between them.

But you know that and are just being grouchy, right?
————-
Yeah, Maybe.
But I’m tired of Cowboys coming here and bragging.
No one has come here yet and confessed:
My name is John, and I’m a Stock Picker.

#101 mike from mtl on 02.08.22 at 10:26 pm

#14 Sail Away on 02.08.22 at 11:25 am

Catch up, Mike. Tesla has been profitable for a long time now.
/////////////////////////////////////////////////////////

Alright point taken but their EPS is terrible hence their massive overvaluation. Not looking into their figures closely even EPS can be favourably blurred by creative accounting.

My own employer as many publicly traded corps do this all the time, we shift P&L around to the subs. They’re profitable yes but it’s way more complex than a quarterly report can convey.

Fact is they’ve been burning money until around two years ago right around the ARKK and believers crowd blown them to the sky. Leaves much more flexibility given such huge valuations.

Is RY going to be around in 20 years? Yes. TSLA? Doubt it.

#102 NoName on 02.08.22 at 10:32 pm

funny how this sun of ours works…
every 11 years of it throws a fit and it just started in this cycle.

https://www.spacex.com/updates/

Preliminary analysis show the increased drag at the low altitudes prevented the satellites from leaving safe-mode to begin orbit raising maneuvers, and up to 40 of the satellites will reenter or already have reentered the Earth’s atmosphere.

#103 Nonplused on 02.08.22 at 11:00 pm

The Dogs must realize “Dry January” is over:

https://calgary.citynews.ca/2022/02/08/albertas-vaccine-passport-lifted/

To me it makes some sense from a certain point of view. If the vaccines (I am vaccinated) do not stop or even slow transmission, then the only benefit is improved outcomes for those who catch the dreaded covid. That’s nothing to be sneezed at, but at this point I am willing to let the 10% (or 20%) take their chances if they so choose. They ain’t never going to take the vaccine anyway unless they are tied up, held down, and jabbed against their will. Maybe we could get the vets at the zoo to shoot them with a tranquilizer dart or something. But short of that I think it’s high time we leave them to their fate and get on with life.

Anybody else have this problem? My son claims he cannot remember much of anything before covid (BC). Not camping, not skiing, not the zoo, not anything. He knows he’s done those things, but claims he cannot remember. Could it be trauma? Will he get better? Are there others? Is it widespread? Did we just screw up an entire generation? Did we steal their childhood? I’m in my 50’s and I can still remember much of my youth, at least the highlights.

#104 Doug in London on 02.08.22 at 11:04 pm

@True Enough, post #50:
It wasn’t my money because I didn’t hold these stocks and if I did then I would have taken some profits while they were high. What to do with the money? Utility stocks are on sale now.

#105 Observer on 02.08.22 at 11:23 pm

Another reason why you should take the Ottawa protests seriously? Thanks to the wonders of modern technology, fringe groups can have an outsize influence. I’m sure you’ve heard of troll farms: organised groups that weaponise social media to spread misinformation, promote division and influence public opinion. Get this: in the long run-up to the 2020 US elections, Facebook’s most popular pages for Christian and Black American content were being run by eastern European troll farms. According to an internal Facebook report written in late 2019 and leaked to MIT Technology Review, troll farms were reaching 140 million users every month. Three-quarters of these users had never followed any of the pages: they’d had the content thrust upon them by Facebook’s engagement-hungry content-recommendation system.

“Our platform has given the largest voice in the African American community to a handful of bad actors, who, based on their media production practices, have never had an interaction with an African American,” wrote the report’s author, a former senior-level data scientist at Facebook. “Instead of users choosing to receive content from these actors, it is our platform that is choosing to give [these troll farms] an enormous reach.”

After that report was leaked in September, Facebook made a lot of noises about how it was aggressively cracking down on troll farms. Has it followed through on these promises? Meta Platforms, Facebook’s owner, said on Monday that it had removed dozens of scam pages associated with the convoy protest from Facebook; however, there are still a huge number of recently created pages supporting the hauliers, with suspiciously large numbers of followers. Meanwhile, on Telegram, a social network favoured by the right, people across the world are urging each other to replicate the tactics in Canada in their home towns. Canada may not be on the brink of civil war, but what is happening in Ottawa is one small front in a global information war. And the baddies, I’m afraid to say, are winning.
https://www.theguardian.com/commentisfree/2022/feb/08/ottawa-truckers-protest-anti-vaxx-canada

#106 Rosco on 02.08.22 at 11:28 pm

If you guys liked the Liberal Joel Lightbound speech you would love the Manitoba Conservative MP Raquel Dancho speech about 1 week ago in the House of Commons. She is awesome and only 29. I found her on you-tube, sorry can’t link. about 10 min.

#107 DON on 02.08.22 at 11:28 pm

#98 Satori on 02.08.22 at 9:54 pm
#78 Ponzius Pilatus on 02.08.22 at 7:36 pm
69 Linda on 02.08.22 at 6:51 pm
—————————————–
Every store I go to has over 65 year olds doing all the jobs kids use to do in their 20s.

Just look around at all the seniors at home depot, grocery stores, fast food joints, malls, restaurants, deliveries…I picked up take out and three (For Serious!!!) over 80 year olds were working the joint, slowly shuffling to bring out my packaged food and shuffling back to the cash register.

I believe that crisis is already here.

***********

I’m noticing the same on Vancouver Island. Lots of Seniors on the job and the service is great!

Cost of living going up, people living on the streets in just about every small town.

Ponzie, your friends may just represent a small segment of the boomers. The sheer # of helocs and reverse mortgages in use, point to areas of trouble when debt becomes more expensive or unmanageable or the unexpected happens. Seniors going back to work should raise an eyebrow for sure.

#108 Dr V on 02.09.22 at 1:25 am

106 Rosco

https://www.youtube.com/watch?v=pjNifdvjXAI&ab_channel=RaquelDancho

A future CPC leader?

#109 Dr V on 02.09.22 at 1:26 am

100 Ponz

“My name is John, and I’m a Stock Picker.”
————————————–

Now that was actually….funny!

#110 crowdedelevatorfartz on 02.09.22 at 7:40 am

@#98 Satori
“Every store I go to has over 65 year olds doing all the jobs kids use to do in their 20s….

Just look around at all the seniors at home depot, grocery stores, fast food joints, malls, restaurants, deliveries….

I believe that crisis is already here….”

+++

Yep.
But somehow, the elderly Boomers lack of preparation for retirement and their “working ’til they die” will be “spun” into “stealing all the good jobs”.

Even if the kids have no intention of earning money in this new world of Universal Basic Income.

I suspect a majority of menial jobs will be replaced by scanners , AI and delivery worker robots in the next 10 years as the population ages and declines.
Elon seems to be thinking humanoid robot workers may be the next big thing and is investing accordingly.
Hopefully robots will learn how to change adult diapers.

A trip to the grocery store may be a swipe of the smart phone for most in 5-10 years.
One wonders how the sellers of Fruit Loops and “cash register candy bars” will survive when they can’t entice nonexistent shoppers to impulse buy.

#111 Neil Young is gone on 02.09.22 at 8:04 am

“Old Man, look at my life
I’m a lot like you

I’ve become in age
What I despised in youth”

#112 Hathor on 02.09.22 at 8:36 am

“If you project your annual expenses to be $50,000 in retirement starting at age 60 and you will not have a defined benefit pension then I would recommend aiming to have financial assets of $1M+.”

What if you are fortunate to have a DB pension that covers the $50k? What should those financial assets look like?

#113 Grateful in Victoria on 02.09.22 at 8:54 am

Great blog posting.
Thanks.

#114 RyYYZ on 02.09.22 at 9:00 am

#54 Observer on 02.08.22 at 4:53 pm

On Monday night, convoy leaders held an “emergency press conference” in which a spokesperson said the truckers would be “willing to sit at a table” with the Conservatives, NDP and Bloc to form a coalition government, as well as sit with the Governor General. They said they have booked a hotel room in Ottawa on Tuesday in an effort to meet with the prime minister.
====================================

Yeah, that’s fine. A bunch of unelected fringe-right politicos forming a coalition government. And let’s stop calling the organizers of this protest “truckers”. They are not truckers, and truckers have little if anything to do with what they’re trying to achieve. The truckers are useful idiots to these guys.

#115 Observer on 02.09.22 at 11:24 am

#114 RyYYZ on 02.09.22 at 9:00 am
#54 Observer on 02.08.22 at 4:53 pm

On Monday night, convoy leaders held an “emergency press conference” in which a spokesperson said the truckers would be “willing to sit at a table” with the Conservatives, NDP and Bloc to form a coalition government, as well as sit with the Governor General. They said they have booked a hotel room in Ottawa on Tuesday in an effort to meet with the prime minister.
====================================

Yeah, that’s fine. A bunch of unelected fringe-right politicos forming a coalition government. And let’s stop calling the organizers of this protest “truckers”. They are not truckers, and truckers have little if anything to do with what they’re trying to achieve. The truckers are useful idiots to these guys.

^^^^^^^^^^^^^^^^^^^^^^^^^

I was quoting from the article I linked to. Personally I never refer to the occupiers as truckers – the vast majority of whom are against the occupation.

#116 Chris on 02.09.22 at 11:31 am

# 72 Ponzius Pilotus
Chris Serran on 02.08.22 at 10:09 am
Meh – individual stocks are not gambling if you use a little discipline. Diversify through a number of sectors, pick profitable companies specifically those that are stable enough to pay dividends. Buy when stock prices are low, and don’t sell if there’s a downturn unless something about your chosen company has changed. I’ve been doing it successfully for about 25 years.
——————-
Good for you.
Care to share your secret.
You obviously must be a Contrarian investor.

No real secret and not really contrarian, maybe a little against the flow. I contribute regularly, and when a normally strong company is available at a good price I buy some. Spread the buys around sectors and try to buy mostly larger, stable companies with good profits and hopefully growing dividends. When a Canadian bank or insurance company gets hammered down because they missed an earnings estimate by a penny, that’s when I buy. Bought lots in 2008-9 and again just after the Covid crash. Both times wish I had used every spare penny in hindsight. Bought Canadian energy when the price of oil went negative. So, no secret – buy good companies when prices are decent and hold on. Never too much of one company or one sector. I usually have a couple of small gambles on companies I don’t really understand, but this is just for fun and interest. The bulk is invested long term and I don’t really look at them other than when the dividend gets paid.

#117 Pina on 02.09.22 at 12:33 pm

Hey Josh, I hear you. I used to have a bunch of 6% to 7% GICs back in the 90’s, 2000’s but I don’t see that coming back. However, I do agree that the key is the savings rate each year is what is going to build a big pile of money. My husband and I have been saving for years, tried the whole stock market thing and real estate units thing but we can’t sleep at night and simple just stuck with keeping out of debt, paid the house off in 14 years and max out our RRSP, TFSA and reinvest the RRSP tax refunds. This has served us very well as we are now 54 and have now $1.1 million and a $165,000 liquid accounts, short term term deposits. We did not and didn’t, don’t need to take any of our money and the $40,000 compound interest in RRSP, TFSA GICs is building up. We got our EI and are also have a small online business earning $1,500 a month net profit that keeps us busy and kept our finances intact, growing as we both lost our jobs during the pandemic.

We will be getting our early CPP in 6 years so even if we need to spend down our $165,000 short term savings we will still be able to live off $28,000 a year for 6 years and not depend on our online business at all. The early CPP will bring in at least $22,000 a year in 2028 plus our RRSP, TFSA will be at least $220,000 to $240,000 more by 2028. We knew our jobs were in peril from 2019 and acted to make sure we would not be in a downdraft in losing our savings, investments, 25%+ drop.

#118 Jakey on 02.09.22 at 2:10 pm

Pina there, I don’t know about that if inflation rates getting embedded and people expect hat for years, bond rates and GIC rates could easily be 5%+ in coming years.

#119 Linda on 02.09.22 at 3:23 pm

#112 ‘Hathor’ – even if you do have a DB pension (BTW, CPP is a DB pension plan) it is best to have more than one potential source of income for your retirement future. Not a few DB pension plan retirees & members saw their plan disappear when their employer declared bankruptcy – Sears is the most recent example that comes to mind – & even government DB plans can be changed. Saskatchewan provincial employees used to have a DB plan. That was changed to a DC plan quite some time ago ‘to minimize future risk to taxpayers’. Which it did. The pool of retirees still drawing a DB pension has been shrinking as they literally die off; it is estimated that the remaining retirees still receiving a DB pension will follow within the next decade. So if you have the ability to take advantage of funding an RRSP, TFSA & even (gasp) investing in a B&D portfolio get going asap. Nothing like a warm fuzzy blanket of financial security to make your golden years truly golden:)

#120 RyYYZ on 02.09.22 at 3:56 pm

#115 Observer on 02.09.22 at 11:24 am

I was quoting from the article I linked to. Personally I never refer to the occupiers as truckers – the vast majority of whom are against the occupation.
====================================

Sorry, that was in response to the quoted article, I should have made that clear.

#121 VladTor on 02.09.22 at 6:43 pm

Sinan….A 10% loss requires an 11% gain to break-even. A 25% loss requires a 33% gain and a 50% loss requires a 100% gain just to break-even.

************
Excellent!!!! That is what I’ve told so many times to my friends who’s regard themselves as investors. But… it is look like they still not understanding simple math … like thousands others!

#122 Anthony on 02.10.22 at 1:11 pm

Pina, we might see next year, 4% to 5% GIC rates again like back in 2006, 2007, 2008 as inflation is pushing up bond rates, US 10 year is now 2.03%. My uncle and aunt are saving obsessed as they had 3 jobs working 120 hour weeks between them and 3 kids to raise. Nobody in there family is in debt, all university, college paid, great $100,000+ annual salary jobs and they are worth millions after 40 years of not listening to anyone about GIC, savings bonds rates.