Investment fads

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RYAN   By Guest Blogger Ryan Lewenza
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What a complete and unmitigated disaster the FTX collapse/bankruptcy is for investors and the broader crypto market. But I guess this shouldn’t be that big of a surprise. How many of these half-baked and cockamamie investment fads have we seen over the years that often end in total collapse, a trail of tears and torpedoed portfolios? It seems like every few years we get one of these overhyped and dubious investment crazes, that invariably blowup on investors. This is the focus of today’s blog.

What is FTX and what happened?

FTX is/was a crypto exchange company, which provided a platform to its customers to buy and store different cryptocurrencies. Started in 2019, FTX had over a million users and was the third-largest crypto platform by volume, just prior to its collapse.

FTX was founded and run by Sam Bankman-Fried (SBF) who’s 30 years old, a former quant analyst at an investment firm and a graduate from the prestigious MIT University.

Sam was an ambitious guy who not only started a crypto exchange company, he also created and managed a large hedge fund called Alameda Research. In the early crypto days SBF got into trading cryptocurrencies after he spotted how Bitcoin traded at different prices across different countries and platforms and developed an arbitrage trade making a nice profit with little to no risk (i.e., he would buy the cheaper Bitcoin in one market and sell it at a higher price on another market).

As SBF got a taste for big trading profits he started to get more aggressive making bigger trades and investments in the crypto markets. Then, like every other hedge fund blowup and bankruptcy, he starts to add leverage to the hedge fund, taking on huge loans. Strike one.

Additionally, through his FTX trading firm he created a new crypto currency or token called FTT. Unbeknownst to investors, customers and regulators, he held lots of the FTT token in his hedge fund, which was a big conflict of interest and showed how intertwined his different businesses actually were.

As the crypto markets came crashing down this year, so did SBF’s investments in the hedge fund, with losses accumulating in the billions. To cover up his losses he then secretly transferred billions of dollars in customer funds and FTT tokens from client accounts at FTX, to his hedge fund. Strike two.

News of the losses at Alameda became public and then strike three! The whole house of cards for SBF came crashing down. Overnight we learned that his hedge fund had lost billions of dollars, that SBF and the hedge fund had loans outstanding that led to margin calls, that SBF had defrauded customers of FTX by transferring assets to his struggling hedge fund, and that essentially it was all one big Ponzi scheme.

FTX was then forced into Chapter 11. SBF lost billions (it’s estimated that he lost $16 billion almost overnight) and he stepped down as CEO. Now SBF is in the crosshairs of multiple US agencies and if what has been widely reported, he’ll likely be sharing a jail cell for his purported fraud with Elizabeth Holmes, former CEO of Theranos.

Bitcoin Price is in Free-fall

Source: Stockcharts.com, Turner Investments

Next up on our list of highly questionable investment fads is the controversial portfolio manager, Cathie Wood, and her Ark Innovation Fund. She was a ‘rock star’ in 2020 as her high growth and innovation stock holdings like Zoom and Robinhood soared higher during the pandemic.

But, like so many other ‘one trick pony’ portfolio managers before her, her fund has come crashing back down to earth, along with people’s perception of her investment acumen and stock picking skills.

Many believed that Cathie had developed a novel investment approach and possessed an uncanny ability to uncover these ‘innovative’ stocks that would transform the world and deliver huge returns, but in reality, she simply benefited from an ephemeral period of certain growth stocks rallying during the pandemic and the record low interest rates.

Now, as rates have moved higher and pandemic stocks like Zoom, Shopify and Draftkings have deflated, her fund has fallen harder than Kanye West’s (sorry ‘Ye’) career and net worth. As seen below, the Ark Innovation Fund is down 75% from its 2021 peak and 60% this year.

Basically all the gains that she made in 2020 have been erased, much like Bitcoin, which coincidently she’s heavily invested in, and even once predicted that Bitcoin would hit $1 million by 2030. That was a doozy of a call.

My misgivings with Ms. Wood and her stock picking is: 1) she pays too much attention to the potential earnings growth of her holdings and not enough attention towards valuations (her stocks trade at nosebleed valuations); and 2) she employs little to no risk management, in my view.

I’ve been in this industry a long-time and have seen these ‘flash in a pan’ PMs who have a blowout year, with people then extrapolating these gains forward. But, all too often, the PMs are unable to re-create their incredible success, and I believe Cathie Wood will likely fall into this camp.

Her stocks and fund have been crushed this year so she could see a trading bounce, possibly on a peak in interest rates, but I think her best days are behind her along with the investment fad of her Ark Innovation Fund.

ARK Innovation Fund down 60% this year

Source: Stockcharts.com, Turner Investments

Finally, and closer to home, I would be remiss if I did not bring up the marijuana craze following the legalization of cannabis a few years back. Just like every investment fad there was huge hype around the burgeoning sector, with tons of companies sprouting up, investment dealers bringing these questionable firms to market, and many investment firms creating new vehicles and ETFs to capitalize on this huge investment ‘opportunity’. Below I chart the Horizons Marijuana ETF and you can see how it’s performed over the last few years. Not so good!

Well, like all the other fads this has fallen far short of the incredibly high expectations, resulting in big losses for most investors.

The point of today’s blog is not to sling mud (well maybe a bit) at SBF, Cathie Wood or Horizon’s Marijuana ETF, but rather to caution readers and investors that more often than not, these overhyped and highly speculative investment fads end up imploding with investors losing their shirt. So avoid this and stick with balanced portfolios. It’s not sexy but it gets the job done.

Horizon Marijuana ETF is Down 44% this year

Source: Stockcharts.com, Turner Investments
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.

 

120 comments ↓

#1 LewenzaCountry aka Prince Polo on 11.19.22 at 9:50 am

So what you’re saying is, it’s a good time to get in to the Horizons Marijuana ETF? Just kidding!

#2 THE DANDADA on 11.19.22 at 10:01 am

During a bull-market everyone’s a genius!

During a bear-market we get to find out who’s been swimming naked as the tide goes out.

#3 Emma Zaun - GreaterFool Unpaid Intern #007 on 11.19.22 at 10:22 am

Geez Ryan, now we have to start work at 9 am on a Saturday to moderate the deplorables just for you?

Why can’t you be a slacker like Garth and sleep in til the late afternoon?

Enjoy the strikes if you plan on taking over after Garth’s retirement next year.

We are quiet quitting today and will be filing a grievance.

Emma Zaun
Shop Steward
CUPE (Canadian Union of Peelers and Exhibitionists)

#4 crowdedelevatorfartz on 11.19.22 at 10:23 am

150 years ago these Snake Oil salesmen would travel the country by horse and wagon selling their lotions and potions to the gullible rubes.
now?
We have the internet.
Same snake oil salesmen.
More rubes.

Speaking of bluster and hype.
Seems Elon’s threats have backfired.

https://ca.news.yahoo.com/twitter-loses-payroll-department-other-152735044.html

People are only scared for so long then they either fight back…or walk.

#5 Sail Away on 11.19.22 at 10:25 am

Thanks for the cautionary tales, Ryan.

Investment fad=bad. This goes right to Buffett and Graham’s ‘institutional imperative’, where every other institutional investor is doing it, so the party expands. Heck, the pension funds dove right into ganja and crypto, when they have no reason whatsoever to chase outsized gains.

#6 Dolce Vita on 11.19.22 at 10:29 am

That was pretty good Ryan. Crypto stuff is like talking Greek to me, but learned a bit more today. Thank you.

As for Cathy and 420 investors looking for that 1 big get rich quick play … it doesn’t pan out unless you are an exceptional market timer which in the end, does not exist.

Old School, fine by Paleo me.

—-

#70 Shawn yesterday

Lost that BoC link and now I have it back, thanks.

—-

HE’S … BAAACK … not only in 2024 but soon to be on Twitter.

https://twitter.com/elonmusk/status/1593767953706921985

anointed in Latin

https://twitter.com/elonmusk/status/1593769469741932544

every Righty in the Cosmos chiming in with support

https://twitter.com/elonmusk/status/1593893237873201152

And the Amygdala Hijack Karens of the World out in full force as well … and they’re calling Musk “Space Karen” – the NERVE

https://twitter.com/tweetysoph86/status/1593776539208122370
https://twitter.com/alistaircoleman/status/1593962700044144640
https://twitter.com/KarensDovesong/status/1593802595323514880

—————-

Never a dull moment from the Excited States of America. Love it!

#7 mike from mtl on 11.19.22 at 10:34 am

What’s your thoughts on BMO collaborating with Ms. Wood ARK investment firm to offer their proven ‘success’ to Canadian sucker..err.. investors?

#8 Sail Away on 11.19.22 at 10:43 am

crowdedelevatorfartz on 11.19.22 at 10:23 am

Seems Elon’s threats have backfired.

—————

Not at all. His superteam needs nothing- live, sleep, work, eat at the office, and follow Elon’s lead.

Don’t believe the faddies on the Twitter extinction bus. Most of them are unemployed with angst and time on their hands, wordily complaining about Twitter… on Twitter :-)

#9 Dolce Vita on 11.19.22 at 10:44 am

Quietly and under the radar (for today) Dutch court finds 3 men guilty, ALL RUSSIAN, in the downing of Malaysia Airlines Flight 17 (MH17/MAS17), 283 passengers and 15 crew were killed.

Link in my Tweet to more extensive discussion by Ukraine Defense on Instagram.

https://twitter.com/bsant54/status/1593875051543023616

For the Immediate Gratification Crowd …

Igor Girkin – 51-year-old is a colonel in Russia’s Federal Security Service (FSB)

Girkin’s subordinates, Major General Sergey Dubinsky and Leonid Kharchenko. A fourth suspect, Russian national Oleg Pulatov, was acquitted due to a lack of evidence.

The men remain fugitives and are believed to be in Russia, which is unlikely to extradite them.

Detailed read by Reuters …

https://www.reuters.com/world/europe/judges-rule-murder-trial-2014-downing-flight-mh17-over-ukraine-2022-11-17/

—————

NICELY DONE The Netherlands.

8 years it took, still, better late than never.

Now to catch them?

#10 Andrewski on 11.19.22 at 10:46 am

“One struggles to find the words to describe the FTX debacle”!

https://biv.com/article/2022/11/christine-duhaime-wild-ftx-ponzi-scheme-touched-vancouver

#11 Dark ages are descending when there's no energy on 11.19.22 at 10:47 am

You can’t be a man and avoid being a judge. It is part of the deal. And yes, the scale of sovereignty is downsizing as democratic, communist and globalist oligarch government loses credibility and is seen as being increasingly part of the problem or even criminal.
It is a process that occurs whenever we have a fall of empires or even the onset of a dark age. Leadership downsizes from large scale government down to something local or even personal. This is the real political reset. Basic government is the father as head of his home and family and eventually scales up from there.

Tell Garth it’s coming in the WEST SOONER THAN YOU THINK

#12 Dharma Bum on 11.19.22 at 10:48 am

It seems like every few years we get one of these overhyped and dubious investment crazes, that invariably blowup on investors. – Ryan
—————————————————————————————————

Ryan, you neglected to mention the massive homegrown fraud perpetrated by one of Canada’s very own native sons, none other than David Sharpe and his Bridging Income Fund.

Canadians and other investors were defrauded out of billions.

The story has been largely buried by the Canadian media.

https://www.investmentexecutive.com/news/from-the-regulators/court-approves-78m-distribution-from-bridging-fund-to-institutional-investors/

#13 MC on 11.19.22 at 10:50 am

Very nice comparisons and views of each of these fads – in contrast would be nice if you could have thrown up a latest graph of a B&D portfolio to punctuate the solidity of going that way.

Good entry today, though.

#14 Lionel on 11.19.22 at 10:51 am

Bankruptcy filings revealed that SBF didn’t employ a single accountant.

#15 Bezengy on 11.19.22 at 10:53 am

I miss the good ole days of smoked filled rooms in Timmins with the ticker tape machine scrolling along. Old guys declaring “this one is gonna fly, mark my words”. No internet either, you had to check the newspaper or call in by telephone to get your quotes. Drove the receptionist crazy. Lots of folks wiped out buying gold stocks, with some taking it very personally as I recall, if you know what I mean.

As far as SBF, lots of ruined lives here. Let’s hope the prison sentence reflects that.

#16 Paddy on 11.19.22 at 10:55 am

I’ve invested in all the recent fads and got out early as the asset increased in value, for example I bought canopy growth at 7$ and sold at 14$, made a bit of money and got the hell out. Was I shocked when it went to the mid 70’s$ in price…you bet. I guess what I’m saying is you can dip your toes in but don’t go for a swim. People who go full retard(sorry for the expression) and bet the farm on these fad investments deserve to get hosed.

#17 Tony on 11.19.22 at 11:06 am

One of the fads that did work out was laser vision correction with the excimer laser. I remember all the listed stocks on the Vancouver exchange and the worst one of the entire lot went up tenfold. Most went one hundredfold.

#18 Dolce Vita on 11.19.22 at 11:17 am

#44 Yukon Elvis yesterday

Don’t get me wrong, I’m rooting the for Big 5 Cdn banks as well (1 of my ETFs heavy into Cdn Financials) but bank dividends are not going to save you, not even cushion the blow – maybe save RBC …

YTD Stock Price Return/Dividend Yield

BNS -24%/6%
TD -10%/4%
CIBC -15%/5%
RBC -3%/4%
BoM -6%/4%

RBC the best but honestly, a measly 1% for the year … that’s sad, so sad. Mind you, compared to BNS they’re ROCK STARS.

https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

Go Cdn Big 5 Banks Go!

My Cdn Financials ETF needs a helping hand. So get it together, like yesterday (well, except for you BNS, Divine Intervention is what you need).

#19 Bubbles on 11.19.22 at 11:22 am

Thank Ryan
Like I noted last blog.
#240 Bubbles on 11.19.22 at 5:07 am
#214 Sail Away on 11.18.22 at 11:38 am
#225 Faron on 11.18.22 at 1:05 pm
Lol

I grabbed some weed way back. It went parabolic and I pulled the chute.
.com too. Watched the bros go down on that also.
The more hype….that faster I run from it.

#20 earthboundmisfit on 11.19.22 at 11:26 am

ARK Innovative Capital Destruction Fund.

Anyone know if the U.S. has an extradition treaty with Argentina? (asking for a friend)

#21 Bubbles on 11.19.22 at 11:36 am

#11 Dark ages are descending when there’s no energy on 11.19.22 at 10:47 am

YES we on the same page…I’m well studied on the energy complex as an engineer…
Governments are getting in the way and losing all credibility.
I could write a book on the failures I’m seeing presently.
Killing off fosil fuels BEFORE we have viable alternatives and each geographical local needs it’s own design.
It’s insane and exacerbating the poor, middle class and retirees on fixed income affordability.
Trudeau maybe one of the worst people for managing this front….the evidence of clear.

#22 Doing my Part on 11.19.22 at 11:37 am

Thanks Ryan, well written, informative, and enjoyed as morning reading.

#23 Linda on 11.19.22 at 11:42 am

What catches my attention is that the asset allocation within the hedge fund run by SBF was apparently not transparent, since it was ‘unbeknownst to investors, customers and regulators’ that he held tokens of FTT within said fund. How is this possible unless SBF didn’t report those assets were being held? Which of course along with other actions such as moving $ from one fund to another to cover losses means he deliberately defrauded investors.

One can understand why a lot of folks eschew investing given the above story just keeps being repeated. SBF is just the most recent of a lengthy list of ‘rock star’ fund managers gone wrong.

#24 David McDonald on 11.19.22 at 11:48 am

Thanks for the summary of the bitcoin disaster. Garth has repeatedly warned of the danger. I wonder how Poilievre made out.

#25 Jason on 11.19.22 at 12:05 pm

Honestly I do speculate with about 5% of my portfolio. I bought some ARKK recently, and also a bit of META when prices dropped after last earnings. But these are tiny positions, and it’s money I can (and usually do) lose.

#26 Ponzius Pilatus on 11.19.22 at 12:10 pm

#14 Lionel on 11.19.22 at 10:51 am
Bankruptcy filings revealed that SBF didn’t employ a single accountant.
—————-
Would not have mattered.
Most accountants cannot tell the difference between Bitcoin and a bean.
Reminds me of the Mortgage Backed Securities debacle in 08.
The bank auditors had no clue.

#27 Timmy on 11.19.22 at 12:12 pm

I wonder how much the rage farmer Skippy Cryptoman Poilievre lost?

#28 Ponzius Pilatus on 11.19.22 at 12:14 pm

All I can say is:
Caveat Emptor.

#29 Ryan Lewenza on 11.19.22 at 12:20 pm

mike from mtl “ What’s your thoughts on BMO collaborating with Ms. Wood ARK investment firm to offer their proven ‘success’ to Canadian sucker..err.. investors?”

Yeah I saw that and thought the timing was interesting with this blog. We’re big users of BMO ETFs and believe they have a great product offering but we’ll be avoiding these for our clients. – Ryan L

#30 Ryan Lewenza on 11.19.22 at 12:24 pm

Linda “What catches my attention is that the asset allocation within the hedge fund run by SBF was apparently not transparent, since it was ‘unbeknownst to investors, customers and regulators’ that he held tokens of FTT within said fund. How is this possible unless SBF didn’t report those assets were being held? Which of course along with other actions such as moving $ from one fund to another to cover losses means he deliberately defrauded investors.”

I agree and from what I’ve read he was not transparent about his holdings and may have even falsified his reporting documents. I think he’s going down and he better have a good lawyer. – Ryan L

#31 TurnerNation on 11.19.22 at 12:27 pm

For all those, foaming over AQN.TO. It will end up another Vermillion Energy. Dividend cut, and languishing in the single digits.
ETFs for the win: ZWU.TO 8.2% yield.

——

Yoo-hoo @Faron.
Type this search into Google.

astrazenica + “long covid”

(In this case the first result offered to you is your best result harhar. No wonder Kanada appears to be some kind of test zone — avec Curfews — for our heath, natch. Sheeple will follow anything in Prav….err I mean CBC State Broadcaster)

#32 Yukon Elvis on 11.19.22 at 12:33 pm

#18 Dolce Vita on 11.19.22 at 11:17 am
#44 Yukon Elvis yesterday

Don’t get me wrong, I’m rooting the for Big 5 Cdn banks as well (1 of my ETFs heavy into Cdn Financials) but bank dividends are not going to save you, not even cushion the blow – maybe save RBC …

YTD Stock Price Return/Dividend Yield

BNS -24%/6%
TD -10%/4%
CIBC -15%/5%
RBC -3%/4%
BoM -6%/4%

RBC the best but honestly, a measly 1% for the year … that’s sad, so sad. Mind you, compared to BNS they’re ROCK STARS.

https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

Go Cdn Big 5 Banks Go!

My Cdn Financials ETF needs a helping hand. So get it together, like yesterday (well, except for you BNS, Divine Intervention is what you need).
+++++++++++++++
Nothing looks good when the market is at or near bottom. But this is when I like to buy. I get paid to wait and drip the divvys and the picture changes drastically when the markets normalize. I have zero worries about the Canadian banks, pipelines, telecoms, and railroads.

#33 Dr V on 11.19.22 at 12:43 pm

Thank you for the summary on SBFs shenanigans

And this little pun…

“…tons of companies ‘sprouting’ up”

Ha-ha!

#34 Old Boot on 11.19.22 at 12:46 pm

DELETED

#35 Yukon Elvis on 11.19.22 at 12:53 pm

#18 Dolce Vita on 11.19.22 at 11:17 am

#44 Yukon Elvis yesterday

Don’t get me wrong, I’m rooting the for Big 5 Cdn banks as well (1 of my ETFs heavy into Cdn Financials) but bank dividends are not going to save you, not even cushion the blow – maybe save RBC …

YTD Stock Price Return/Dividend Yield

BNS -24%/6%
TD -10%/4%
CIBC -15%/5%
RBC -3%/4%
BoM -6%/4%

RBC the best but honestly, a measly 1% for the year … that’s sad, so sad. Mind you, compared to BNS they’re ROCK STARS.

https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

Go Cdn Big 5 Banks Go!

My Cdn Financials ETF needs a helping hand. So get it together, like yesterday (well, except for you BNS, Divine Intervention is what you need).
++++++++
Example : I bought TD in the last “trough” at $60 paying 6% div. Td is currently at $89 in this “trough” and they are still paying me 6%. I bought also bought BNS in the last “trough” at $65 paying 6%, currently at $69, still paying me 6% to wait. I’m ok with that. Markets always recover.

#36 Victor Llearna on 11.19.22 at 1:01 pm

Sam Bankman-Fried is a very appropriate name.
First he was a man making huge Bank, then it all fell apart and he got Fried.

#37 Phylis on 11.19.22 at 1:10 pm

#7 mike from mtl on 11.19.22 at 10:34 am
What’s your thoughts on BMO collaborating with Ms. Wood ARK investment firm to offer their proven ‘success’ to Canadian sucker..err.. investors?
Xxxxxx
I heard she was rebranding it to SUB.

I do wonder what the next fad investment will be?

#38 Balmuto on 11.19.22 at 1:21 pm

Thanks for the synopsis on FTX, Ryan. About as good as I’ve read anywhere on the subject.

But crypto has been through worse and recovered. FTX was nowhere near as important to the crypto market as MtGox was when it went under:

“ Mt. Gox was a bitcoin exchange based in Shibuya, Tokyo, Japan.[1] Launched in 2010, it was handling over 70% of all bitcoin (BTC) transactions worldwide by early 2014, when it abruptly ceased operations amid revelations of its involvement in the loss/theft of hundreds of thousands of bitcoins, then worth hundreds of millions in US dollars.”

Seventy percent. Then worth hundreds of millions. And yet look where Bitcoin is today.

https://en.m.wikipedia.org/wiki/Mt._Gox

#39 Ponzius Pilatus on 11.19.22 at 1:22 pm

Investment fads?
Did anyone mention TESLA?
The recalls are piling up.

#40 David on 11.19.22 at 1:22 pm

You forgot to mention that SBF was the second largest donor to Democratic Party candidates in the recent US midterms (exceeded only by George Soros).

https://cointelegraph.com/news/sbf-has-been-a-significant-donor-in-us-midterm-elections

How is that relevant to the blog theme? – Garth

#41 crowdedelevatorfartz on 11.19.22 at 1:29 pm

…and in the delusional Province of BC…..

https://www.alaskahighwaynews.ca/fort-st-john/did-you-feel-the-earthquake-6110781

TWO , yes two earthquakes near Ft. St. John, BC yesterday.

Why is that important?
Because.
The massive, multi billion dollar, way over budget, way behind schedule SITE C DAM is right next to Ft. St. John.

Yep.
The geniuses in govt built an earthen dam in a known earthquake zone and they decided against several geological and engineering reports to build the dam on shale, not bedrock.
Shale is known to revert back to mushy clay when it is exposed to water and pressure.
Something a massive dam provides in great quantities.

Sounds like an Easy Bake Oven recipe.
Just add water, shake and stir….

#42 Faron on 11.19.22 at 1:33 pm

Thanks for the run-down on profitless garbage Ryan. The New York Times’ “The Daily” podcast has a great summary of the rise and fall of FTX. Also, one of the people trying to restructure the remnants of FTX also worked on the Enron collapse. Says FTX was a shambles. Far worse than Enron.

A price/inflow/outflow analysis shows that Cathie Woodchipper has destroyed ~$10 Billion in investor capital owing to her pumping and prominence right at the highs. TSLA is one of her big holdings.

Elizabeth Holmes gets 11+yrs in prison.

It’s egregious that regulators only really kick into gear when number go down. Where was the SEC all along? When will they wake up to the numerous, ongoing TSLA frauds?

#43 chalkie on 11.19.22 at 1:50 pm

Good article Ryan as a refresher mindset, to stay away from things that if it sounds too good to be true, it is – but for some reason, some people never learn from history.

Bre-X Minerals Ltd., often referred to simply as Bre-X, was a Canadian gold mining company that infamously defrauded investors by falsifying gold samples and mis-stating its available gold reserves.

As for the Ontario Pension Fund, I would have guessed they would have learned their lesson from the Bre-X scandal, but not so, they were also taken big time in 1997.

Calgary based company:
From a peak valuation of over $6 billion Canadian dollars, Bre-X’s shares collapsed and the company soon filed for bankruptcy.
Among the many victims of the Bre-X scandal were Canadian pension funds such as the Ontario Teachers’ Pension Plan and the Quebec Public Sector Pension Fund, which faced combined losses of over $150 million CAD.

The Bre-X fraud unraveled rapidly beginning March 19, 1997, the geologist Michael de Guzman reportedly committed suicide by jumping from a helicopter in Indonesia.
A body was found four days later in the jungle, missing the hands and feet, surgically removed, a story that we never ever got the true facts from, how do you jump with no hands or feet?

I remember the Bre-X scandal, it never ended well for a lot of wealthy people and some run of the mill folks.

On the week of the crash, I remember one billboard sign outside of a restaurant in Toronto saying, one large coffee for a 100 Bre-X shares, it was quite funny for the readers, but I am sure it was not so funny for the investors.

Research the stories on Bre-x, they are quite interesting.

There is a sucker born every second, so there are always lots of people available to swallow FOMO, before you know it, they are part of a scandal entrapment.

Quote of the day: If money is your hope for independence, you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability to say, I saw that coming.

#44 Ustabe on 11.19.22 at 1:58 pm

#8 Sail Away on 11.19.22 at 10:43 am

crowdedelevatorfartz on 11.19.22 at 10:23 am

Seems Elon’s threats have backfired.

—————

Not at all. His superteam needs nothing- live, sleep, work, eat at the office, and follow Elon’s lead.

Don’t believe the faddies on the Twitter extinction bus. Most of them are unemployed with angst and time on their hands, wordily complaining about Twitter… on Twitter :-)

How soon will you be putting this management strategy into place in your business?

Musk is turning out to be the Milli Vanilli of billionaires.

#45 Penny Henny on 11.19.22 at 2:14 pm

What do you think about Shroom stocks?
https://www.wealthsimple.com/en-ca/learn/guide-to-psychedlic-stocks

You’re a fun guy.

Jokes aside, very educational post on FTX. Thank you

#46 Dolce Vita on 11.19.22 at 2:19 pm

Ryan, I know you’re into this whole FTX debacle but there are some important updates you and others here might like.

1. Enron bankruptcy overseer John J. Ray III new CEO of FTX: “Never in my career have I seen …”

etc.

Juicy stuff.

By “Joe Blogs” on YouTube. He’s pretty good, well, sometimes he gets into a very academic Economics diatribe best summarized as:

Death to Russia.

I think it’s a great up to the minute account of what is happening with FTX. Less Greek to Paleo me. I like it ’cause he has an English accent, thus, authoritative.

Here it is …

CRYPTO – FTX $32 Billion Collapse is Worst in USA History as no Cash, Cryptocurrency or Records
4 hours ago

https://www.youtube.com/watch?v=to2SY2Kf5mQ&t=0s

Enjoy?

#47 wallflower on 11.19.22 at 2:23 pm

John Ray:
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented.”

#48 Cheese on 11.19.22 at 2:24 pm

I am guilty of purchasing HMMJ and Tilray, I keep it in the TFSA/Cash account as a reminder not to be an idiot in the future; capital losses for the cash account is the only silver lining.

If only lithium would recover from goldman sachs latest hit piece.

#49 espressobob on 11.19.22 at 2:52 pm

There are three types of investors,

Some who do their homework.

Others, let pros do it for you.

And those who are blinded following the blinded.

This never gets old.

#50 Dolce Vita on 11.19.22 at 3:33 pm

Off Topic

I don’t what France did to pi$$ of Italia’s Mom at Large PM Giorgia Meloni (that has tamed Salvini and Berlusconi – no easy feat), but they did.

For those that think OLD STYLE COLONIALISM is dead, think again.

Even Righty, Veteran Navy intel officer Jack Posobiec had this to say:

“Holy shlit” – obv wording to avoid Twitter Jail.

Have a watch, she just tears France a whole new rear orifice (English subtitles accurate enough) …

https://twitter.com/JackPosobiec/status/1593977153581826048

So much for …

Liberté, Égalité, Fraternité.

#51 Elon haters on 11.19.22 at 3:37 pm

I’m enjoying all the yokels telling us how Elon is failing and Twitter is going to die.

Tells me immediately who to add to my scroll past list.

#52 Elon haters pt 2 on 11.19.22 at 3:58 pm

The attitudes of some of this generation are astonishing to see.

If I was 25 instead of 65 I’d be begging Elon to let me work at Twitter. I’d probably do it for min wage (as some well credentialed engineers have offered publicly to do.)

I imagine the biggest problem he will have is wading through the hundreds of thousands of job applicants from people who see a once in a lifetime opportunity.

Maybe I’ll apply: retired financial guy with time on his hands who doesn’t need the money. He must need financial people too, right?

#53 Habsfan60 on 11.19.22 at 4:07 pm

Now that was your best guest post that I have read. First person review of the fads, I benefitted from your view given your experience.

And to think this blog is Free??

#54 If I may on 11.19.22 at 4:07 pm

If a bank is robbed, do we blame the bank or the bank robber?

#55 ogdoad on 11.19.22 at 4:36 pm

Testament of human biology….where there’s an expectation of growth, emotions kick in, like greed (very powerful – can’t get enough hugs, for example)…

Expectation of loss? Fear. Kinda like why no one wants a house anymore….Loss, for certain. Sucks for home owners. Noses scraping the pavement. For a loooong time….ouch!

Can you sell sentiment? Probably, if you’re duped enough to buy it….oh right, that’s us!!! What? We ARE losers in this society? (Full. dis. If you don’t have a yacht and a super car and are (or are planning to) go to space….LOSER!!)

BTW, I’m sure Costco sells something that’ll appear to help with your problem…sale ends tomorrow, better hurry!!!!

Og

#56 @J on 11.19.22 at 5:06 pm

#43 chalkie on 11.19.22 at 1:50 pm
Bre-X Minerals Ltd., often referred to simply as Bre-X, was a Canadian gold mining company that infamously defrauded investors by falsifying gold samples and mis-stating its available gold reserves.
——————————————

My wife consulted at Bre-X through a tech consulting firm for about 3 or 4 months, just prior to them blowing up. We were actually thinking of investing a bit in Bre-X, but after the first week of my wife working onsite, we knew that the company was probably going to collapse and did not put a dime into it. Phew.

The shenanigans she witnessed at Bre-X seem to mirror what’s going on at FTX.

#57 @J on 11.19.22 at 5:16 pm

“cockamamie” – Ryan

This post was worth it just to read that one delicious word :)

I used to keep a list of private Canadian real estate “investment” schemes that blew up. There seemed to be roughly 2 or 3 per year. People who put their money into these companies tended to lose all of their funds.

I was one of those fools, very early in my investing career. Put my money into a group that turned out to be criminal in their handling of the funds. Through a series of fortunate events, I got my money back after a 5 year process. I paid though in opportunity cost and inflation.

What a learning experience. It’s almost a good thing that this happened early on. The pain of the fumble spurred me to develop better critical thinking skills.

#58 sje on 11.19.22 at 5:34 pm

Ryan or Garth, Can you provide your views on the carbon credit market and/or exchanges?

#59 CryptoMillionnaire on 11.19.22 at 5:44 pm

Crypto has seen much worse times.

I remember first hearing about Ethereum in the comments here in 2016 when it was 10 USD a coin.

It’s been almost 7 years and most of the commenters here have been perma crypto bears since then.

Today in 2022, during the latest crypto apocalypse, Ethereum is worth 1200 USD a coin.

Some people here are pointing at crypto holders and screaming “losers!” while in fact they have themselves missed a one in a life time opportunity.

Bizarre.

#60 Don Guillermo on 11.19.22 at 5:48 pm

I worked a few years in Europe as a consultant to Enron. The division was the Enron Engineering and Construction Co. (EECC). We were an even mix of Americans and Brits with a couple of Canadians sprinkled in. We were disconnected from the shenanigans going on in the Houston and London offices. EECC specialized in Combined Cycle gas fired power plants around the world. The first project was in European Turkey (Thrace) and then on to SE Poland about a 100 km west of where the missile landed a few days ago. Both countries were trying to get into the EU and these projects were to show they were moving away from coal power. We were scheduled to move to southern Spain next (on the Strait of Gibraltar) for a 4 year assignment which would have been EECCs largest project to date. Before Spain started Enron collapsed. I was disappointed of course but being a contractor didn’t suffer financially. Most of my colleagues were Enron staff and lost everything. They were all loading up on Enron shares and were worth millions on paper. Most had big homes, fancy cars and tons of debt. One colleague told me he barely had enough left for a good night out in Middlesbrough.

#61 Sail Away on 11.19.22 at 5:50 pm

Dear Diary: We took advantage of today’s fine weather to hike Mt Mark via the Horne Lake Hustle. Similar to Mt Benson in prominence, difficulty and transit time, it also offers stunning postcard views from rocky promontories near the summit. Snowless trail on the sunny south-facing slope!

#62 Meh on 11.19.22 at 5:57 pm

There is simply too much money in the system Ryan. Plain and simple. Print trillions upon trillions for decades with nothing to back it up except worthless numbers on a computer screen, and you have $50,000 hockey cards, $1 million dollar comic books, $700,000 guitars, $3 million cars, $500,000 Nintendo video games, $10,000 Taylor Swift tickets (gag), and billions upon billions gambled daily in the crypto scam space and meme stocks. The list goes on and on.

Central banks worldwide are to be held accountable to even facilitate anything like this, blindly and willfully. Absolutely criminal. We’ve learned nothing since, 1929, 1987, 2001, 2008 and I’m sure we will be right back at it, after the damage that awaits after the unprecedented raging storms building in the world economies as we speak.

Turn the spigots off, have people actually do or produce something for a living, shut down the modern day casinos, and this garbage all goes away, instantly.

#63 Faron on 11.19.22 at 6:06 pm

BMO collab with Cathie Woodchipper. Profitless garbage plus ongoing QT. That said, ARKK is sitting at its COVID low…

https://www.bmogam.com/ca-en/investors/campaign/ark/?ecid=us-CPNNOV2022GAM1-KMBMO33

#64 Linda on 11.19.22 at 6:09 pm

#43 – given that Mr. de Guzman was sharing the helicopter with a couple of officers of the local militia – Suharto & family were the rulers at the time & they were supported by the armed forces in that rule – I’d say it was a pretty safe bet Michael ‘suicided’ the same way various opposing Russian oligarchs have done under Putin’s rule – with a little help from their ‘friends’.

#65 mark on 11.19.22 at 6:33 pm

$10 billion in losses and strangely not a thing of value was lost.

#66 baloney Sandwitch on 11.19.22 at 6:33 pm

I find it strange that the crypto bro’s do not trust the “gubmint” or any institutions like banks but are perfectly OK with storing their bitcoin is these fly by night exchanges. Wow, even gulls are not that gullible.

#67 Steven Rowlandson on 11.19.22 at 6:49 pm

The chickens have indeed come home to roost….
I am surprised it took this long to become obvious how dodgy cryptos really are. Electronic currencies are subject to those who control the computers and their agendas.

#68 Quintilian on 11.19.22 at 7:01 pm

he’ll likely be sharing a jail cell for his purported fraud with Elizabeth Holmes, former CEO of Theranos.

Don’t he wish.
But I doubt his cell mate will be that pretty.

#69 Quintilian on 11.19.22 at 7:13 pm

#59 CryptoMillionnaire on 11.19.22 at 5:44 pm

Today in 2022, during the latest crypto apocalypse, Ethereum is worth 1200 USD a coin.

NO that is not what is worth. It is what the next greater fool is willing to pay, but eventually there will not be a greater fool to buy, and then we will find out how much it is actually worth.

#70 Ronaldo on 11.19.22 at 7:19 pm

Crypto is a ‘delusion,’ says Buffett
Buffett and Munger argue bitcoin’s value is purely the product of speculation.

“Bitcoin is ingenious but it has no unique value at all. It doesn’t produce anything. You can stare at it all day and no little bitcoins come out. It’s a delusion, basically,” Buffett said in a 2019 interview with CNBC, adding it’s like “rat poison” for investors.

“What you hope is someone else comes around and pays you more money later on, but then that person has the problem. In terms of value, it’s zero.”
————————————————————–
Always felt that way about it. Never invested in the stuff.

#71 crowdedelevatorfartz on 11.19.22 at 7:27 pm

@#54 You may not
“If a bank is robbed, do we blame the bank or the bank robber?”

+++
If the Bank robs it’s depositors….we blame the bank.

#72 Ponzius Pilatus on 11.19.22 at 7:57 pm

#62 Meh on 11.19.22 at 5:57 pm
There is simply too much money in the system Ryan. Plain and simple. Print trillions upon trillions for decades with nothing to back it up except worthless numbers on a computer screen, and you have $50,000 hockey cards, $1 million dollar comic books, $700,000 guitars, $3 million cars, $500,000 Nintendo video games, $10,000 Taylor Swift tickets (gag), and billions upon billions gambled daily in the crypto scam space and meme stocks. The list goes on and on.

Central banks worldwide are to be held accountable to even facilitate anything like this, blindly and willfully. Absolutely criminal. We’ve learned nothing since, 1929, 1987, 2001, 2008 and I’m sure we will be right back at it, after the damage that awaits after the unprecedented raging storms building in the world economies as we speak.

Turn the spigots off, have people actually do or produce something for a living, shut down the modern day casinos, and this garbage all goes away, instantly.
—————-
Agree with you.
But it’s not gonna happen.
Stupidity and Greed are woven into our Jeans.

#73 AK on 11.19.22 at 8:03 pm

“What a complete and unmitigated disaster the FTX collapse/bankruptcy is for investors”
===========================

You mean gamblers.

#74 Ronaldo on 11.19.22 at 8:10 pm

I actually did quite well because of BreX. A couple fellas (brothers) who had inherited quite a hoard of silver in the form of half dollar and dollar coins pre 66 decided they wanted to invest in the high flying BreX stock and wondered if I was interested in buying their hoard. Silver was around $5 oz. at the time. I said sure, and offered them $4.00 per oz. Well, we all know what happened and I still have their hoard now worth 7 times what I paid in actual silver content but since they are in coin form and are collectable, they are worth 1/2 that much again. I hope they learned their lesson.

#75 Don Guillermo on 11.19.22 at 8:28 pm

2 Ponzius Pilatus on 11.19.22 at 7:57 p

Agree with you.
But it’s not gonna happen.
Stupidity and Greed are woven into our Jeans.
******
You should try Kirkland jeans.

#76 DDR Kampfgruppen Rosa Luxemburg on 11.19.22 at 8:40 pm

Doesn’t Bankman-Fried translate to free bankman?

During the pandemic I’d over hear newbies at my workplace hailing crypto. My hunch – new fangled BS. I kept my trap shut. They didn’t know what they’re talking about.

Thanks Ryan for your knowledgeable & informative post.
Don’t think too many are going to pull the wool over your eyes.

#77 Doug t on 11.19.22 at 10:12 pm

FIAT = whaaaaat? A government relying on what? It’s not backed by anything concrete…… except faith? Of course crypto is a fledgling and will eventually be worldwide but hey come on we all are in the casino and playing by the House Rules lol

#78 Nonplused on 11.19.22 at 10:15 pm

Well, the one thing about an “exchange” is that no more money can come out of it than goes in. That was always the problem with Bitcoin. It is designed as a mechanism of exchange, not as an investment. It was meant to have some value obviously or it wouldn’t be useful as a medium of exchange, that value being derived from scarcity and the “work” required by banks of GPU’s spinning arcane formulas and burning up the coal to produce the Bitcoins.

But it was never meant to be an “investment”. The so-called “scarcity” of it was all it had going for it from that perspective. The original investors who burned the coal and bought the banks of GPU’s were to see their efforts rewarded by having earned cash they could spend, but that’s about it.

But that’s not what happened. Instead, people started hording Bitcoins. Buying Bitcoins they did not intend to spend. In a way, totally going against the whole point of the thing.

It would be analogous to buying a big ol’ stack of money and putting it in your safe on the hopes that it would go up in value. We all know it don’t.

So how do these “coins” go up in value, then, if they are not being circulated as currency? From where was the billions created? Ah, the magic of “mark to market” accounting. The source of my phrase “what the spreadsheet giveth, the spreadsheet can taketh away”.

Say there are 1,000,000 coins on the exchange (or shares, or whatever). The price is $1 so the total value of the coins or shares is $1,000,000. But then some joker comes along and buys one coin for $2. Suddenly that is your mark to market and the coins are now worth $2,000,000! Nice! That was easy. A 100% gain and it only took $1 more, or $2 in total, to create an extra $1,000,000 of “wealth” in the ether your computer runs on. I’m surprised we aren’t all rich! All we need is a few people to be assigned the job of bidding up shares at settle and we can create “wealth” ad nauseum. Sometimes you can even borrow against it. Elizabeth Warren wants to tax it. Everyone is jealous of it. They start calling you “the richest man in the world” and wonder why you don’t solve world hunger. Stuff like that.

But the problem comes when you try and convert that new found wealth into actual money for solving world hunger (or contributing to Democrat campaigns in FTX’s case). You’ve got to find a large group of buyers who want in at $2, or you can’t sell. What if all the people who might pay $2 have already bought, and they have no more money to spend? Or what if they just sobered up? Well, your screwed. And if you are forced to sell for whatever you can get, everyone is screwed.

Remember folks, if you can’t figure out how the wealth is being created, it probably isn’t.

At least with something like Tesla you can say “look, they make neat cars and sell a lot of them, and the future is electric” (if you believe that). One can look at Apple and all the money that comes in from iPhones. There is a “value add” there, where they make something they can sell for more than it cost them to make it. There is a “wealth creation” in that there are now iPhones where before there were only Blackberries.

But Bitcoin? When I say “buy all the things”, I mean things.

#79 Doug t on 11.19.22 at 10:19 pm

#61 sale anyway

and this has what to do with anything here ? Nobody cares

#80 crowdedelevatorfartz on 11.19.22 at 10:20 pm

@#72 Ponzie’s Palate
“Stupidity and Greed are woven into our Jeans.”

+++
Are those like Levi Genes?
Only the cheaper Wal-Mart version?

#81 Doug t on 11.19.22 at 10:22 pm

#61 sail away

Dear Diary: I got out of bed today and managed to not be an obnoxious self absorbed person meh

#82 Ponzius Pilatus on 11.19.22 at 10:56 pm

#75 Don Guillermo on 11.19.22 at 8:28 pm
2 Ponzius Pilatus on 11.19.22 at 7:57 p

Agree with you.
But it’s not gonna happen.
Stupidity and Greed are woven into our Jeans.
******
You should try Kirkland jeans
——————
I buy all my clothes at Costco,
Small selection, but can’t beat quality and price.
And I wear the Kirkland Logo with pride.

#83 Russ on 11.19.22 at 11:13 pm

Doug t on 11.19.22 at 10:22 pm

#61 sail away

Dear Diary: I got out of bed today and managed to not be an obnoxious self absorbed person meh
==========================

Nope.

Look what happened.

Today doan look good. Better luck tomorrow. :)

Cheers, R

#84 Don Guillermo on 11.19.22 at 11:30 pm

at 10:20 pm
@#72 Ponzie’s Palate
“Stupidity and Greed are woven into our Jeans.”

+++
Are those like Levi Genes?
Only the cheaper Wal-Mart version

########
I was thinking the Kirklands would be a fashion statement in Surrey. Definitely would trump the Walmart sweats

#85 millmech on 11.19.22 at 11:54 pm

#64 Linda
They believe he is still alive, the corpse that was found after two days in the jungle was decomposed beyond recognition, not too hard to buy your way out of trouble.
Reminds me of the Canadian crypto guy Gerald Cotton that “died”of Crohn’s disease and was cremated without an autopsy and yet money is still leaving the account that only he had keys to.

#86 Jas Becoz on 11.20.22 at 12:28 am

If you smoke a reefer b4 looking at the Ganja ETF chart, the fall looks real slowwwwwww. As for that FTX feller, at least he will get a decent haircut once he gets to the Big House

#87 Sail Away on 11.20.22 at 12:36 am

#81 Doug t on 11.19.22 at 10:22 pm
#61 sail away

Dear Diary: I got out of bed today and managed to not be an obnoxious self absorbed person meh

—————

Congrats! If you can do it again tomorrow, that’ll be two solid days in a row.

#88 Faron on 11.20.22 at 1:24 am

#79 Doug t on 11.19.22 at 10:19 pm
#61 sale anyway

and this has what to do with anything here ? Nobody cares

#81 Doug t on 11.19.22 at 10:22 pm
#61 sail away

Dear Diary: I got out of bed today and managed to not be an obnoxious self absorbed person meh

Sail Away’s behaviour is cringeworthy. Lucky for Garth, the rest of us have self-control. Factoring Dr V thinking he and nonplused are “blogging” when they comment here and the circus is in full swing.

#89 Tom from Mississauga on 11.20.22 at 1:32 am

For ridiculous investments nothing beats Caisse Depots $5B Jebel Ali port purchase in June. You know, where the Iranians are doing target practice on commercial shipping with their new drones. Bonne chance getting maritime insurance!

#90 PeterfromCalgary on 11.20.22 at 1:43 am

The entire idea of bit coin and other cryptocurrencies was the cut out financial intermediaries by relying on the block chain. When a transaction is requested a block is created and sent out to all nodes. The nodes validate the transaction and receive a reward for the proof of work. The block is added to the existing block chain and the transaction is complete.

The entire purpose of the block chain was to make financial intermediaries or cryptocurrency exchanges like FTX unnecessary. So it puzzles me that cryptocurrency exchanges exist at all.

#91 fishman on 11.20.22 at 1:54 am

#43 Chalkie Interestingly enough the Bre-X crew first asked the Howe St. cowboys to run their pump & dump. That meant the likes of Murray Pezim or Harry Moll had to give the OK before it hit the street. They sent a mining guy to check it out in Indonesa. He thought the drill cores were being salted, so the VSE wouldn’t list Bre-X & took a pass. You go to jail for fraud, not for exuberant promotion.
Vancouver promoters couldn’t believe Toronto listed them on the TSE. When the big boys back east all bought in they were flabbergasted. The VSE had the most sophisticated crooks & shysters in the world as far as mining promotion. How was it possible for such amateurs to run such a huge pump & dump back east? Billions of dollars because a guy has a file & a wedding ring? Its sorta like this FTX thing. The protagonists were simple & naive, yet they bamboozled the experts.

#92 Geographic George on 11.20.22 at 2:42 am

I’m within 5% of our last highs, yes it’s been rocky. At one point I was down 11%…..and yes ..I’m one of those damned *stock pickers*. I’m glad you mention risk mgmt, that’s a cornerstone along with diversity. I once ran a shop as a strategist , my clientele was the entertainment/ film industry, and seriously, those people are so emotional in their financial lives I eventually just dumped them, the fees were a waste of time. I made a lot more money just just focusing on my own trades, with a lot less stress. These days I buy profitable companies that pay dividends and show margin expansion through aquisition. I don’t have a single position at risk. Why would anyone feel the need to do that? Stock picking is not a risky business, anymore than you think the major companies servicing your every need are suddenly going to explode. And BTW, why are central government’s buying historic tonnage of gold? And, do you think paying reparations to third world countries will improve the macro economy?

#93 Jerry Mander on 11.20.22 at 4:22 am

Do you feel better? I certainly don’t. Overnight we turned the corner on sustainable development ( which was the original excuse for industry taxation then aka climate change because the word association created more hysterics) and are now being subjected to reparations ie : loss and damage payments to undeveloped nations.

Several more iterations were born over 60 years as undeveloped nations continued to ‘undevelop’ . I have to understand it now, they were waiting for us developed countries to go insane. How did they know?

I guess you know that China and India are officially developing nations and will qualify for aide under the new scheme? What a grand farce.

In a parallel timeline western countries spent 2000 years cooperating and building, fighting and soul searching a civilization into existence. Our wealth and development is stained with our own blood far more than any other.

But here we are, paying reparations on our back breaking work in order to “develop while the others guys did nothing. Stan Lee was right, all nations must have their own secret powers. Find Wakanda and tax them too.

My grandfather came to Canada to work a farm and lived in a sod hut raised out of the bleak prairie. He bust his butt every day. He’s likely spinning in his grave knowing he could have done nothing and ended up in the same spot on the blue shores of Sharm-el-Shiek.

#94 under the radar on 11.20.22 at 5:47 am

12 – Watching Coco fall through her ill-advised participation with the Sharpe’s and Mizrachi. Don’t be surprised when the One goes into receivership.

77 – Fiat currency, the ability of Government to tax.

#95 Stock Market Speculator on 11.20.22 at 6:33 am

I bought about $30K total worth of BTCX-B.TO spread across 3 RRSP portfolios. I’m down 60-65% so far. Nothing heard from Mike Novogratz so far on what the state or how leveraged these funds are.

I wonder now is the BTC even being there at Galaxy or is it all magic fairy dust?

Too late to sell my remaining positions?

Can anyone shed any light or has heard about the state of Galaxy Digital Holdings?

I thought Novogratz was a professional and straight shooter NOT in the same class as SBF.

Ryan, help!

#96 Ryan Lewenza on 11.20.22 at 9:17 am

Doug t “FIAT = whaaaaat? A government relying on what? It’s not backed by anything concrete…… except faith? Of course crypto is a fledgling and will eventually be worldwide but hey come on we all are in the casino and playing by the House Rules lol”

I disagree here. A country’s currency is backed by its tax base and the overall economy. Yes it’s backed by the full faith and credit of the government, but the government is then backed by 38 million Canadians for example, who produce over $2 trillion of GDP, by our solid Canadian banks, pipelines, railways, ports, buildings etc. I agree there is way too much government debt but it’s not backed by nothing. – Ryan L

#97 crowdedelevatorfartz on 11.20.22 at 9:50 am

@#91 fishman
Ahhh the good old VSE.

As a Barron’s Magazine Editor once said on Good Morning America. ( after a VSE “stock” made headlines in the mid 1980’s for its plummeting failure.)
“If someone from the VSE calls with a stock tip. My best financial advice is….Hang up.”

#98 crowdedelevatorfartz on 11.20.22 at 10:11 am

Joe Biden turned 80 years old this weekend.
If he runs for a second term and wins he will finish his second term at 86 years old.
Some people are lobbying that anyone older than 75 years old shouldn’t be allowed to run for the Presidency.
I think that’s wise, considering the pressures of the job.
However taking Donald Trump into consideration.
They should also have a rule that anyone with an IQ lower than 75 can’t run for the Presidency

#99 Sail Away on 11.20.22 at 10:14 am

Re: Twitter

First, it’s very much alive. Highest user counts ever and lots of advertisers. Fact.

Stephen King tweeted yesterday: “As Mark Twain might have said, “The rumors of Twitter’s death are greatly exaggerated.”

Second, a big initiative happens today: the best World Cup coverage anywhere. Kicks off now.

We are watching a business restructuring masterclass in real time. Fascinating. All those folks that left are the next gen of missed opportunity ‘Couldas’ as their compatriots willing to work become the new operaters of an amazing company. The world’s two most sought-after engineering jobs are currently with SpaceX and Tesla. Twitter will join the list.

Watch, learn, and most important… enjoy!

#100 Bubbles on 11.20.22 at 10:51 am

#39 Ponzius Pilatus on 11.19.22 at 1:22 pm

TSLA (I never owned it because it was impossible to put a real value on it)
Need I say….just another valuation blown up.
It went parabolic and I told my mates to run. They didn’t of course. It will be a Wong time to see it highs again. 5 years? God knows. Go Paliton! Go Ballard!
Sailaway did ya blow it out last winter?
Never fall in love.
Markets are dangerous as hell unless you have a solid proven plan…

#101 Ponzius Pilatus on 11.20.22 at 10:56 am

#97 crowdedelevatorfartz on 11.20.22 at 9:50 am
@#91 fishman
Ahhh the good old VSE.

As a Barron’s Magazine Editor once said on Good Morning America. ( after a VSE “stock” made headlines in the mid 1980’s for its plummeting failure.)
“If someone from the VSE calls with a stock tip. My best financial advice is….Hang up.”
———————
Unless it was Murray Pezim.
Legend.
Canadian Mining Hall of Fame.
Hemlo Gold mine.

#102 Austen Tayshus on 11.20.22 at 11:04 am

What kind of jeans do you wear? I’ve never seen stupidity and greed included with Levis.

#72 Ponzius Pilatus on 11.19.22 at 7:57 pm

#62 Meh on 11.19.22 at 5:57 pm
There is simply too much money in the system Ryan. Plain and simple. Print trillions upon trillions for decades with nothing to back it up except worthless numbers on a computer screen, and you have $50,000 hockey cards, $1 million dollar comic books, $700,000 guitars, $3 million cars, $500,000 Nintendo video games, $10,000 Taylor Swift tickets (gag), and billions upon billions gambled daily in the crypto scam space and meme stocks. The list goes on and on.

Central banks worldwide are to be held accountable to even facilitate anything like this, blindly and willfully. Absolutely criminal. We’ve learned nothing since, 1929, 1987, 2001, 2008 and I’m sure we will be right back at it, after the damage that awaits after the unprecedented raging storms building in the world economies as we speak.

Turn the spigots off, have people actually do or produce something for a living, shut down the modern day casinos, and this garbage all goes away, instantly.
—————-
Agree with you.
But it’s not gonna happen.
Stupidity and Greed are woven into our Jeans.

#103 Bubbles on 11.20.22 at 11:10 am

#61 Sail Away on 11.19.22 at 5:50 pm

Doug t = correcto
Who cares take your EGO away.
Just like your TSLA stock sailed away.

Also Doug t…
peoples luck could be mistaken for brains. But only by themselves.

BTW looking at many charts….no Santa Claus rally. Big bad bear still lurking. ZPR preferred back to bear market lows.

#104 Bubbles on 11.20.22 at 11:28 am

I think…the rate of change is increasing on the problems of present day.
This is massively exacerbated by government policy’s over the past 2 decades…
The system could fail or reset…nothings off the table.
Sovereign debts, continued money printing although less now.
Inflations slowed maybe a bit but will still persist and that cost compounding effect is something few can keep up too.
I bought 3x10ft 6inc pvc pipes and 2 wye fittings. And most places don’t even have stock…$450!

I personally own business’s that peeps need even if the economy gets smashed.
The easy buttons in the review mirror.
The governments of the day are complete failures.
They provide free ponies not tuff love…and that folks, is the recipie for disaster.
This was all predictable.
IMHO it’s just a matter of time.
Have a contingency….reduce your debt.

Nothing last forever…everyone piles in at the top..
Not me.

#105 Love_The_Cottage on 11.20.22 at 11:41 am

#99 Sail Away on 11.20.22 at 10:14 am
Re: Twitter

First, it’s very much alive. Highest user counts ever and lots of advertisers. Fact.
_______
Who’s providing these ‘facts’?

I deleted my account this morning.

#106 crowdedelevatorfartz on 11.20.22 at 12:02 pm

@#101 Ponzie’s prerusal

Just one of many stories connected to the VSE in its heyday.

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjzmfq1nb37AhWSHzQIHeE6CD8QFnoECBsQAQ&url=https%3A%2F%2Fwww.nsnews.com%2Fhighlights%2Fvancouver-cold-case-files-high-rolling-couple-disappeared-in-1994-or-were-they-murdered-4225608&usg=AOvVaw0jWw308I5ydimj0TYIOZlz

#107 Sail Away on 11.20.22 at 12:07 pm

#100 Bubbles on 11.20.22 at 10:51 am

TSLA (I never owned it because it was impossible to put a real value on it)

Sailaway did ya blow it out last winter?
Never fall in love.

—————

Well, here’s rundown. Just showing big moves here, although had many smaller pickups at dips as well including one last week. Just the one sell so far:

2013: took a position
2021: sold 50% of my original position for 48x profit because it matched my age
Also 2021: re-invested my sold profits at a dip
Currently -36% from 2021 reinvestment and +3100% from initial position.

So yes, negative for the last year plus. Sometimes investing goes like that. No plans to sell as fundamentals are the best they’ve ever been.

#108 Kirkland Jeans on 11.20.22 at 12:13 pm

Admit it, if you are buying clothes at Costco or WalMart you have given up.

That’s not necessarily a bad thing, might even be a good thing.

I admit a bit of envy for George Costanza’s velour sweat suit. I’m not quite there though…..yet

#109 Starlink on 11.20.22 at 12:17 pm

Now if only I had an in with a VC firm so I could buy into Starlink.

I think that might turn into Elon’s biggest cash cow.

I do have shares of GOOGL which owns 10% of Space X, the only way I can figure for a little guy like me to get in on it with Elon.

#110 Bubbles on 11.20.22 at 12:43 pm

#107 Sail Away on 11.20.22 at 12:07 pm

Copy that. Always sell lots on parabolic moves.

#111 Old Boot on 11.20.22 at 12:53 pm

#91 fishman on 11.20.22 at 1:54 am

#43 Chalkie Interestingly enough the Bre-X crew first asked the Howe St. cowboys to run their pump & dump. That meant the likes of Murray Pezim or Harry Moll had to give the OK before it hit the street. They sent a mining guy to check it out in Indonesa. He thought the drill cores were being salted, so the VSE wouldn’t list Bre-X & took a pass. You go to jail for fraud, not for exuberant promotion.
Vancouver promoters couldn’t believe Toronto listed them on the TSE. When the big boys back east all bought in they were flabbergasted. The VSE had the most sophisticated crooks & shysters in the world as far as mining promotion. How was it possible for such amateurs to run such a huge pump & dump back east? Billions of dollars because a guy has a file & a wedding ring? Its sorta like this FTX thing. The protagonists were simple & naive, yet they bamboozled the experts.

—————-

I met an old colleague of the Pez in his later years. He had impeccable VSE credentials – he started out running the dice games on the water taxis that ferried steel-workers around Burrard Inlet during the construction of the 2nd Narrows.

Graduated to pit boss in local gambling rings, was banned from Vegas for card counting, made his living promoting penny stocks on the VSE, and spent his retirement collecting prohibited weapons and managing his paranoia.

The VSE was a colourful collection of crooks, but I doubt he needed the LAW rockets for his home security system.

#112 Shawn on 11.20.22 at 1:12 pm

$50,000 hockey cards?

#62 Meh on 11.19.22 at 5:57 pm
There is simply too much money in the system Ryan. Plain and simple. Print trillions upon trillions for decades with nothing to back it up except worthless numbers on a computer screen, and you have $50,000 hockey cards, $1 million dollar comic books, $700,000 guitars, $3 million cars, $500,000 Nintendo video games, $10,000 Taylor Swift tickets (gag), and billions upon billions gambled daily in the crypto scam space and meme stocks. The list goes on and on.

*****************************
What I like about rich people paying huge dollars for collectibles or Taylor Swift tickets is that it recycles money (purchasing power) from people who apparently have too much of it to others that maybe don’t have enough.

If a random person snags a couple of Taylor Swift tickets for $200 and sells them for $10,000, that’s great. I applaud it.

There is at least a little bit of “trickle down” wealth in the the world of collectibles and that’s a good thing.

Unfortunately it’s also often the mega rich recycling money among themselves. But maybe that’s harmless enough.

#113 Triggerman on 11.20.22 at 1:15 pm

#88 Faron on 11.20.22 at 1:24 am

Sail Away’s behaviour is cringeworthy. Lucky for Garth, the rest of us have self-control. Factoring Dr V thinking he and nonplused are “blogging” when they comment here and the circus is in full swing.

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

Back it up there, “science” man. You sneer and snipe when Saily reacts to any mention of Musk. Yet even the slightest mention of SA and you’re on it like a fat kid on a Smartie. Logic fail to throw stones when you’re the triggered one. Maybe he’d quit baiting you if you quit gobbling down his, uh, bait, so eagerly.

And if your man-crush on SA isn’t mega cringe-worthy I don’t know what is. I guess there really is someone for everyone.

#114 SOMETHINGS UP!! on 11.20.22 at 1:30 pm

What’s the point of raising interest rates?

Homes aren’t going to pullback to pre-covid or prices from 10 years ago.

Who is going to sell at those prices unless their forced to?

Prices of everything else still going up!

Consumers still consuming.

So what’s the point?

#115 Ustabe on 11.20.22 at 3:00 pm

Musk’s 12 hour poll that resulted in Trump being reinstated on Twitter got me pondering.

Google up “Twitter fake followers audit” for what might be my source.

Low # fake followers is 25%. Medium is 41%. High is 57%.

Elon has 70% fake followers.

So out of 115 million followers fully 81 million are fake, leaving him with 34 million actual, real, responding and posting followers.

oh, and Ponzi, toss out a baited hook and its always the same fish get caught. Ever notice that?

#116 VladTor on 11.20.22 at 4:59 pm

DELETED (Anti-immigrant)

#117 Ronaldo on 11.20.22 at 7:56 pm

#111 Old Boot on 11.20.22 at 12:53 pm

The VSE was a colourful collection of crooks, but I doubt he needed the LAW rockets for his home security system.
—————————————————————
Boy oh boy, was it ever. Remember the mid 60s early 70s well playing the VSE Pezim stocks which numbered many. Used to go down to the exchange some noon hours to watch the action when they had the young guys running around taking orders and marking them on the board. One of the regular jokes I recall was, “who is the most knowlegable person at the VSE?” The elevator operator.

#118 Meh on 11.20.22 at 9:06 pm

#112 Shawn on 11.20.22 at 1:12 pm
$50,000 hockey cards?

#62 Meh on 11.19.22 at 5:57 pm
There is simply too much money in the system Ryan. Plain and simple. Print trillions upon trillions for decades with nothing to back it up except worthless numbers on a computer screen, and you have $50,000 hockey cards, $1 million dollar comic books, $700,000 guitars, $3 million cars, $500,000 Nintendo video games, $10,000 Taylor Swift tickets (gag), and billions upon billions gambled daily in the crypto scam space and meme stocks. The list goes on and on.

*****************************
What I like about rich people paying huge dollars for collectibles or Taylor Swift tickets is that it recycles money (purchasing power) from people who apparently have too much of it to others that maybe don’t have enough.

If a random person snags a couple of Taylor Swift tickets for $200 and sells them for $10,000, that’s great. I applaud it.

There is at least a little bit of “trickle down” wealth in the the world of collectibles and that’s a good thing.

Unfortunately it’s also often the mega rich recycling money among themselves. But maybe that’s harmless enough.

——————-

$50,000 hockey cards?

Sorry I meant $3.75 million.

https://www.google.com/amp/s/www.espn.com/nhl/story/_/id/31521805/wayne-gretzky-rookie-card-sells-375-million-shatters-record-hockey-card%3fplatform=amp

This kind of money should not exist.

#119 CAG on 11.21.22 at 9:49 am

Next fad – HYDR (Hydrogen ETF)… Boom then Bust. World has gone crazy.

#120 Peter in AB on 11.22.22 at 2:54 am

Nice article Mr. Fluenza, but you did not quite capture the level of criminality perpetrated by Scam Bankrun-Fried.

He printed his own stablecoin, backed by nothing but promises, hopes and dreams, THEN put the uncollateralized self-minted SHITCOIN on his balance sheet and took loans of REAL ASSETS against it…