Another day. More banks.
Should big news out of Bay Street be a guide to your own investing? Or will you stick your head into a GIC at 4% or 5% for a year, and hope everything’s more serene in a year?
First, the latest results. Yesterday the Blue Bank and the Bluenoser clocked in with lower revenues, seriously bigger reserves for bad loans and a juicy dividend increase. Today TD also reported a lower profit on higher revenues and more than a 20-fold increase in loan loss provisions. Same story at the Royal – higher revenues, lower profits and almost a $1 billion change in its bum-loan fund. And the penguin guys bucked the trend with more cash flow, better profits and only a hundred million more set aside for losses. Both RBC and the CIBC hiked dividends.
What’s the message?
It’s an unpredictable world. TD scrapped its US expansion plans. All the bankers are girding for a potential late-year recession. As we know, mortgage portfolios have been hugely skewed by rising rates. The Big Five are prudently, deliberately planning for increased volatility, lower economic activity and interest rates which not going down much anytime soon. If ever.
So, on the news, RBC and TD stocks took a hit. CIBC gained. As you’d expect. But should you own bank stocks?
The cash flow (dividends) from the bankers is sweet. Ever-increasing. Rivalling GIC returns, of course, but with a tax advantage. Instead of facing interest which is fully taxed, investors can claim the dividend tax credit. So, you get to keep more. (Of course inside an RRSP or TFSA interest is tax-free, but no tax credit is available on divvies.)
The downside is capital value. For example, RBC’s shares were almost $140 in February (when the Bank of Canada paused) and are now close to $120 (when the CB may hike again). That’s a 14% hit in less than a hundred days, which wipes away the benefit of the dividends paid. If the economy turns south, if the Bank of Canada gets macho again, if we get a recession amid an escalating Ukraine war and American political warfare, bank stocks might gyrate much more.
Having acknowledged this volatility, the banks have great long-term performance. They’re money machines. They control your life. You need to own them.
But maybe there’s a better way – especially in days like these.
Buy the index, not the stocks. Investing in the TSX (Canada’s equity market) as a whole means you end up owning all of the major public companies across the whole economy without trying to cherry-pick a few winners (who may end up being losers). For example, while RBC stock lost 14% of its value since February amid turmoil, a major ETF (exchange-traded fund) like ZCN that holds the whole index was down just 5%. Plus it also pays a dividend – currently north of 3%. So, do the math.
Now, what are the ingredients of the S&P/TSX composite index? When you plunk down cash to for an ETF tracking Bay Street, what do you get? How does it compare to holding a bank stock or two?
Actually the bankers make up a huge chunk of the index – almost 32% at present, with the Royal being the top hold. So that’s significant, and valuable exposure. But you also get diversification – which is why the index is a safer, less volatile, more predictable asset to hold than individual stocks.
Energy, for example. That sector makes up close to 20% of the index, headlined by Enbridge. Remember oil is still Canada’s largest export and the entire world runs on fossil fuels. Regardless of what policymakers and greenies want, this will be the case for the rest of your life, and Canada is an energy leader.
But there’s a lot more to own at the same time. Materials – mining, agriculture, fertilizers – account for 14%, and the world needs stuff like lithium (EV batteries) and wheat (your gut). Industrial companies, including the railways, make up 11% of the TSX composite, and have been a backbone of our economy for more than a century. Combine that with high-tech – IT stars like Shopify – which along with communication services (BCE, Rogers) make up 10%.
Rounding out the index are utilities (5%), consumer staples (think Maple Leaf Foods) at 4%, consumer companies (hello, Dollarama) for 3%, real estate (those ever-expanding REITs), and healthcare – the pharma guys that saved our butts during the pandemic.
Does it not make sense to own the entire market, representing the most successful companies across all of these sectors, at the same time? If one part takes a hit (like the banks right now) this will be mitigated by gains in another (like info tach). You can check out sector performance on a site like this.
Should you own a bank?
Absolutely. They’re rocks. But love everything else at the same time. This is not like your marriage.
About the picture: “Thought I’d send an update pic of our now 9 1/2 month old puppy (Great Pyrenee/Bernese/Newfoundlander
To be in touch or send your beast’s photo – [email protected]
106 comments ↓
“But love everything else at the same time. This is not like your marriage.”
Classic, Garth! Thank you for the excellent advice as always.
#145 Sail Away on 05.25.23 at 9:33 am
#146 Sail Away on 05.25.23 at 9:39 am
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IEP off 20% today. Maybe your son can bail you out.
Mining is exploding right now. Lots of high paying jobs and you can live in a smaller town with cheaper real estate (but higher cost for food and other items). Great opportunity for those who are interested.
Thanks Garth!
We bought the main Canadian banks at the March dip. TD and NA are nicely up, but the others are flattish. Happy to hold.
For our May purchase, though… we’d been considering the retail and grocery sector, but it’s not compellingly low. Canada broad market ETF sounds ok-ish, so let’s increase that position.
The Canadian banks will be ok, I guess. Just plodding along. It’s just kinda sad we have nothing like NVIDIA, who’s market cap might just be bigger than all of the CAD banks combined. Land of exceptional, we are not.
Todays Blog paid for by the:
Banks *
Alternative sector performance report:
Quarterly financial statistics for enterprises, first quarter 2023
https://www150.statcan.gc.ca/n1/daily-quotidien/230524/dq230524a-eng.htm?HPA=1
“NIBT for the financial sector decreased by $6.0 billion (-11.3%) in the first quarter. It was down in 6 of the 13 financial industries.”
———————-
The banks will be/are FINE, just not this year.
* I made that up. Though Garth, it sure read like a State of the Union speech for your sector to me.
Not as bad as the sensational MSM headlines about credit loss PROVISIONS that have YET to happen.
For numerical data, go here, click on the Add/Remove data button, click on NAICS, uncheck Total, all industries, expand Total, finance and insurance industries, check the first 2: Banking and Credit Unions and FINALLY click APPLY.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3310022601
NOTHING Armageddon there. Ya, Net Income went down but still positive AND it is cyclical. **
Patience. Golden. 2024.
** PS: Garth’s firms Sector overall down a bit Q1 2023 (click on the Securities stuff per the above), not much. Nowhere near as bad as in Q2 2022 overall. Grain of salt stuff.
From what I read in the Blog from Garth et. al., I’d like to think he’s probably up instead.
Speaking of EVs.
Exxon’s going in on oil big. Net zero carbon 2050 is a pipe dream they say.
Speaking of which the medivac just flew over the house as it does frequently. Jet fuel is like kerosine.
It takes a ton of energy to achieve vertical lift.
Cant wait to see that puppy on batts.
It can fly from Van to here in 25 mins then recharge for 2 hrs while the patient dies waiting to return.
It wont work period. The batteries are extremely heavy and will destroy the performance of the aircraft. These are the most amazing life saving machines. Ive got a lot of hrs in them.
Need more examples on how clueless the powers that be are?
I got a pile.
And Garth yes the world is very unpredictable. Throw AI in for fun and then its going to get REAL interesting!
#2 Faron on 05.25.23 at 1:11 pm
#145 Sail Away on 05.25.23 at 9:33 am
#146 Sail Away on 05.25.23 at 9:39 am
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IEP off 20% today. Maybe your son can bail you out.
——–
:-)
DELETED (Abusive)
Personally I wouldn’t invest in batteries.
Batt technology will change big time. We ain’t there yet.
Ive owned XEG for a a yearish. Nice Div and Oils here to stay.
I sold out when I caught the bounce in ZPR preferreds
I’m not bullish.
I think you need value plays and to be an extremely good stock picking analyst and I am not. I know a couple that are.
My choice for bank stocks is HCAL.TO and BKCC.TO
Are these good?
Scotia is paying a 6.4% yield right now. Why anyone would buy a GIC vs Scotia is baffling. They’re not going anywhere. Scotia is older than Canada isn’t it? great time to buy it. And all of these loan loss provisions will turn to profit later when the expected loan losses they’re all planning for don’t transpire. Prudent, yes. Profitable investment? yes yes!
Own it all – but maybe be very wary of the old Boomer way of working at the office. Downtown office real estate appears to be on the brink of collapse, so watch out for REITs etc. holding those spaces.
Top story today, front page of the Toronto Star:
“Time for the wrecking ball? Report warns Toronto’s glut of empty office towers could last at least two more decades”
https://www.thestar.com/business/2023/05/25/time-for-the-wrecking-ball-report-warns-torontos-glut-of-empty-office-towers-could-last-at-least-two-more-decades.html
“With 40 million square feet of new office space already being built, that means there’s likely going to be an excess until at least 2041….In even the most optimistic scenario, only 15 million square feet of new space is required…”
“We’re going to start to see a tremendous wave of demolition happening. ”
“I think we’re going to start to see 50-storey office buildings being demolished.”
Most of these buildings cannot be converted to residential, so demolition is the likely option.
(And this analysis is without much consideration of the coming tidal wave of environmental needs to reduce commuting as well, which will further gut office spaces.)
Garth, it’s time soon to move out.
Boomers, be part of the change.
Or be run over by it.
Forgot, CIBC did great.
https://markets.ft.com/data/announce/detail?dockey=600-202305250525CANADANWCANADAPR_C3069-1#
Provision for credit losses was lower.
The statistical outlier. Good for them.
ZEB or VCN, I can’t choose wisely.
stand back and ready ?
was it saudi sov.wealth fund who put up the 3.3m to extend that merger?
The controversial merger accounting errors
As SPAC Partner Admits Financial Statements Are Unreliable
https://www.forbes.com/sites/katherinehamilton/2023/05/25/trumps-truth-social-faces-more-trouble-sec-calls-spacs-financial-statements-unreliable-as-stock-faces-delisting/?sh=c6d64371cddb
Stewart Rhodes—the founder of the far-right Oath Keepers militia—was sentenced to 18 years in prison, according to multiple reports,
So if bank dividends are up and stock prices are down … isn’t that the best of both worlds if you’re set up on DRIP and the money is invested for the long term?
The Street smells blood (loan losses, out of control consumer debt?) bank stocks are not in favour. Pass.
——
Tax dollars at work. BC’s ‘health’ system?
Welp in Q2 2020 I did state that every system designed to protect us has been turned against us.
Since, BC fired ~2500 health care workers who had declined one more injections.
Now the permanent “rules”. Gee who’d sign up for this?
Paging Dr. Crowdedelevator, Dr. Baffled, and Dr. Gaslight to the chat.
I mean you may as well ask the A.I. to read off drug company sales scripts, than bother a docktor
“”The Government of BC has passed Bill 36 as the new
Health Professions and Occupations Act (HPOA)
RESTRICTIONS now in place
1. All BC practitioners must now follow Ministry of Health guidelines for their patients or risk penalties including loss of license to practice.
2. Non-compliance with Ministry therapeutic guidelines may result in fines up to $200,000 or $500,000
(corporations) and incarceration for up to 6 months.’
3. Anonymous complaints to the Ministry regarding a practitioner can be publicized & the practitioner’s licence suspended before investigation
4. Ministry agents may now enter a healthcare practice, seize patient charts and restrict access to that facility without notice or court order.
5. Refusal to personally accept all Ministry mandated vaccines and therapies mav result in delicensure.
6. College advisory boards will now consist of government appointees only.
7. All self-regulatory healthcare professions in BC will be supervised and governed solely by the Ministry of Health.
8. The Provincial Health Office may legally adopt regulation codes from foreign countries without notice, justification, consultation, voting or oversight.°
9. The new Health Professions and Occupations Act requires further elucidation of undefined terms used in the Act, such as “false or misleading information”. which will be carried out by the Ministry at its discretion.””
Yogism #98: “When it comes to indexes, I like to keep them in hand”.
Garth and most financial analysts have been telling us for years, the Canadian banks are rock solid. What’s not to like about ZEB.TO? Picked up a little more yesterday and will continue to buy if it drops as no one knows where the bottom will be. It’s currently yielding 5% and the banks are raising their dividends. It also dropped its mer to 0.28. Pay me $$$
Garth is Canadian Jim Cramer ( Buy Buy Buy ,Booyah )
We need an Anti Canadian Cramer ETF
Ticker suggestion: ACC
Of course you should have Canadian exposure. Last year the US market lost 22%. We did vastly better. – Garth
DELETED (Anti-vaccine nut)
The winner of this year’s “Shaddap Your Face” award, to the person best able to gesticulate, while posting real estate information online goes to….drumroll… FLOP.
——–
All the old culture must go Comrades. Our Colour Revolution. Red natch.
.Canada Day celebrations at Nathan Phillips Square cancelled due to ‘resource constraints’ including budget shortfall of nearly $1 billion dollars (cp24.com)
——-
B.C. health care comment seen elsewhere, take it as you will. I blanked out the city name….
“”I work in the ER and a surgical unit in [xxxxxxxx] BC Canada. We have no staff. The hospital is falling apart. No one to take care of the pts. They had to shut down 2 units over the long weekend due to staffing. The paramedics can’t download there pts in the ER because there is no bed available for the pts so they wait in the ER hall for hours. The health care is disgraceful, I can barely stand to work here. I want to leave. It’s so stressful having unsafe pt loads in all units. The public didn’t understand what’s happening. I’m so angry at the government. So many healthcare workers have left for other jobs NOT in health care. And I’m about to. I want to go to the news to let’s the public know what’s really happening. We are Demoralized. They public is angry due to wait times. They yell at us. It’s terrible. The poor pts. Don’t get sick!!!”””
Another great topic Garth.
I’ve often pondered the logic of simply investing in the “dumb” index. I do, to a point.
But how do you separate the out-performance of a particular sector? Perhaps better to invest in sector specific funds. Question then is what weight to assign to them?
So possibly invest in a few sector funds in addition to the index, and re-balance among them. I see ZEB mentioned by blogger “I love dividends”. There is also RBNK which weights according to dividend yield. The utility sector is also well represented by ZUT, XUT and UTIL. UTIL holds some pipelines and telcos in addition to utilities. Simple, mandated weighting in all 3.
There is also a mittful of canadian dividend funds based on indexes from different providers. You would think they would all be very similar, but there are some
surprising differences amongst them.
#155 Bank Stocks on 05.25.23 at 11:34 am
Thanks for the blog Garth
I got so burned on Bank stocks down for two years and dropping
I thought this blog said bank stocks will do well if interest rates rise.
The opposite is true.
Bought at the high sure I get dividends
What’s thoughts how many years till we get back to the highs again?
Obviously the markets knows something about the banks.
We said ‘don’t buy individual stocks.’ Next time, listen. – Garth
_____________________________________
I took the same advice, bought the bank ETF, ZEB.
But….I only put 0.25% of my worldly worth in it.
Another equal amount of each of RY, CM, TD.
So I am Wrk.dover in at banks at 1% invested.
I survive with diversity!
Plus, we had cashed out a 20 or 25% jump in RY within a few months of that advice being handed out, before going back in with the four holds from there on.
#18 TurnerNation on 05.25.23 at 2:26 pm
“3. Anonymous complaints to the Ministry regarding a practitioner can be publicized & the practitioner’s licence suspended before investigation.”
and most of the other points.
_____________________________
I can’t really say if this is communism, STASI from the good old days (or any other equivalent), the 2 minutes hate or a panopticon. Or all of it.
Really disappointing direction. The frogs are boiling.
If the big banks ever go under, or even decentralize away from downtown toronto it will become like Detroit after the big Automakers left.
Imagine those crappy $2 million houses in Toronto going for less than $1000. Of course there would be no electricity or police, would just be a dystopian lawless wasteland. Actually Toronto is already heading in that direction. going to get much worse if Chow is the next mayor. Probably put a bike lane on every road, spend less on police and let crime run rampant, make it impossible to evict tenants.
One way or the other hellhole Toronto is destined to become the next Detroit.
Mrs Flop has 40k in a balanced index fund as the anchor in her TFSA.
To earn my 1% commission, last night I instructed her to exchange 50% of the fund and buy a monthly dividend fund, which is mainly Canadian Banks and the dividend is 6.65, or something around that.
Might get a capital kick at some stage, but with the money she already has in that particular fund, she’ll get around 250 bucks a month flowing in.
Is it a good time to buy Canadian Banks, she inquired?
Dunno, Daddy’s gotta pay for a 50th birthday trip to Hawaii somehow…
M48BC
As I read #20, I was preparing to rebut about the 0.4% fee, but the new 0.28% fixes the problem.
The fee was why I had also cherry picked three banks.
Took a position in TD today. Stock was trading at this price in 2019 and is 35 off the 52w high. If it drops, will add more.
I know stock picking is frowned upon here but these volatile markets create great opportunities to buy fantastic companies on sale. You may not be able to time markets, but individual equities, much easier if holding long term.
The only sector resembling a bull market is big tech, which is comprised entirely of US companies. If you don’t have that in your portfolio, you are better off out of the stock market. The average REIT hasn’t done better than corporate bonds in the last five years; e.g. Pro REIT, hitting 132-week low today, has an average annual total return of just 3.3% for the last five years.
Ho ho … so Royal Bank drops since February. GREAT! Buy more with each dividend payout and wait 10 years. It’s that simple.
#21 Are you serious? Then you haven’t watched Cramer very much nor read Garth’s cautionary tales.
As my Uncle used to tell me “be like Jesus, love them all”.
Electricity prices in Finland flipped negative
Finland went from energy poverty to glut in just a few months
a new nuclear reactor was brought online in April Excessive meltwater — which has caused flood warnings in several northern European countries — is pushing Finland’s hydroelectric plants
=======
fusion power plant
Helion said the plant will be online by 2028, sooner than scientists thought fusion would be viable.
#9 Dolce Vita
DELETED (Abusive)
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THAT was good.
It involved a duck.
All I will say.
Good news that TD is scrapping it’s US expansion plans.
The US will go through a hell of a ride in the next couple of years.
Crazy politics..
Just saying.
BMO is down about 35/37 dollars from its all time high
probably a good buy now. There is a BIO TECH company
called AbCellera in Vancouver and yesterday David Eby
gave this company 75 mil and Francois Phillippe
Champagne our federal minister for industry, tech etc.
gave 225 mil. My wife and I were extremely impressed with Mr.Champagne. He was articulate, informative and wove some humor in his presentation and could switch from French to English flawlessly very enjoyable and easy to listen to.
Rates are going up.
Opec to cut production…..oil sky rocketing….so will inflation.
How much higher will rates go?
@#39 Dave
“Opec to cut production…..oil sky rocketing….so will inflation.”
+++
Gas is $1.88.9 in the Lower brainland today…..
Ponzie sez it’s going to $2.88.9 in August….. but dont tell anyone.
#24 Dr. V on 05.25.23 at 3:03 pm
The utility sector is also well represented by ZUT, XUT and UTIL. UTIL holds some pipelines and telcos in addition to utilities. Simple, mandated weighting in all 3.
_________________________________
I am 0.73% invested in ZUT, since early 2021. Lame divvy @ 3.7%ish. Could have taken about 10% in gain at one point, am down more than the div right now. Safe long hold obviously, but parsimonious on the rental of our dough.
The story of most of my holdings, has been reluctance to grab the 10% when it shows up.
I just missed taking 10% again on my 0.25% in each of BRK.B and WMT, which I bought as Shawn left town.
WMT gave me a div though, and they are both still up.
#33
May but you have been brainwashed and unable to look outside here is basic logic, Cramer and Canadian Cramer teaches HOW to think not WHAT to think.
Here is the list which is not approved
1) 2011 don’t buy Canadian real-estate
2) 2017 don’t invest in crypto
3) Always commodities are bad
My WHAT for you is just think about commodities now you do you HOW
#5 alexinvestor on 05.25.23 at 1:23 pm
The Canadian banks will be ok, I guess. Just plodding along. It’s just kinda sad we have nothing like NVIDIA, who’s market cap might just be bigger than all of the CAD banks combined. Land of exceptional, we are not.
——————————————————-
And not going to be…..
It’s a mindset thing. Cue the lefties moaning that they don’t want to be exceptional, we’d rather be inclusive!
Also need to look long term, perhaps outside the borders?
If the returns (both capital and dividends) are measured in C$, then you really need to look at the denominator, not just the numerator of the equation.
If you get a 5% return but the BoC expands the money supply by 8%, are you really getting wealthier over time?
This is the argument of the hard asset owning folks. The key is liquidity with regard to the global market price, along with returns, given that many hard assets (like gold) don’t make a return, they are just parking spaces.
It’s not an easy game to identify hard assets that earn an ROI. Public companies with solid global sales and market protection are a good bet, but markets can change quickly.
#2 Faron on 05.25.23 at 1:11 pm
#145 Sail Away on 05.25.23 at 9:33 am
#146 Sail Away on 05.25.23 at 9:39 am
—
IEP off 20% today. Maybe your son can bail you out.
—-
This reminds me of a story, which I imagine is same for gamblers as it maybe for investors.
Close friend…his father had a little gambling habit. Enjoyed going to the casino, hitting the $100 slots.
All the time we heard about “won $25,000 today!” or once even “you guys won’t believe it, $100,000 jackpot!”. My friend told me that the casino sent him a the annual tax receipt (this is in the US), and he was booked for $388,000 in loses that year.
Moral of the story? You always hear about the wins, and never about the loses, even when the loses outnumber the wins by such a large amount. Interesting human nature is, isn’t it?
Breaking news! In the United States, banks are being forcibly seized, with the New York City Banking Commission freezing deposits at Capital One Bank and Keybank Bank because both failed to “present plans to eradicate discrimination” in their operations and “are not responsible stewards of government dollars.”
Go figure.
Absolutely false. The city’s deposits are being frozen. The bank is untouched. I will now be suspect of anything you post. – Garth
Looking at the charts this morning and the TSX has been a real laggard. Up 74% since 2000 so 3.24% a year and since May 2008 only up 34% or 2.26% per year.
Some years it outperforms. Some years it underperforms. This is why a global portfolio is ideal since you (and everyone else) has no idea what future conditions and returns will be for each major market. Or did you have a keen insight to share with us? – Garth
Thus spake our lord and savior, John C. Bogle:
1. Select low-cost funds
2. Consider carefully the added costs of advice
3. Do not overrate past fund performance
4. Use past performance to determine consistency and risk
5. Beware of stars (as in, star mutual fund managers)
6. Beware of asset size
7. Don’t own too many funds
8. Buy your fund portfolio – and hold it
Isn’t it true that if bank stocks like TD are seen to be under performing share pricewise that is an opportunity to buy low if one could find a suitable entry point?
Buy when there is blood in the streets.
@#123 Ponzius Pilatus on 05.24.23 at 11:52 pm
#114 Hmm on 05.24.23 at 10:41 pm
@#58 crowdedelevatorfartz on 05.24.23 at 6:02 pm
@#48 Sail Away
I did a Hyak river rafting trip from Chilco lake to the Fraser River over 5 days about 20 plus years ago.
Awesome trip.
Late August.
Skeeters weren’t too bad, salmon were running, Perseids meteor shower, northern lights.
Lots of bears, deer, big horn sheep.
Great trip, crazy rapids, slow floats, salmon jumping all around, no forest fires….the good old days.
+++++++++++++++++++++++++++++++
just got back from a great rafting trip in Jasper.
Folks who live out in Albeerta got it good.
Beautiful part of Canada.
——————
Just back from Banff and Lake Louise.
All that smoke from Northern Alberta.
Not so good.
++++++++++++++++++++++++++++
was in Banff fri/sat. little to no smoke.
Calgary on the other hand…
I am on record as stating we are in dead cat bounce territory on housing.
Sweden is a tad ahead of us.
https://www.theguardian.com/commentisfree/2023/mar/07/sweden-worst-performing-eu-economy-bad-housing-policy
I own banks. Will pick up more soon.
Garth, should we save our gambling cash and expect a sale next week (assuming a technical default down south)?
Isn’t it true that if bank stocks like TD are seen to be under performing share pricewise that is an opportunity to buy low if one could find a suitable entry point?
Buy when there is blood in the streets.
+++++++++++++++
My name is Nobody. I have been buying the Big Six in the dips since Y2K and I drip the divs. I have done ok. I am still buying them. No plans to ever sell them either. No fear.
Great post, Garth.
But, in my opinion, there are other things investors could be completely benefiting from in the coming months/years. Such as health care i.e. long term care, for instance. Or major pharm. Let’s not forget the growing epidemics in depression and diabetes (to name a few) that could be multiplying in our country in the coming years – which may be in the need of meds.
Love your stance on the banks too…controlling us. Shall we dig in to that a little? Credit card debt? Fam’s, already stretched by rising inflation, every spending habit recorded by the big six…? ?
Do you want to make $$$ or do you want to be the nice guy?
Og
#5 alexinvestor on 05.25.23 at 1:23 pm
The Canadian banks will be ok, I guess. Just plodding along. It’s just kinda sad we have nothing like NVIDIA, who’s market cap might just be bigger than all of the CAD banks combined. Land of exceptional, we are not.
______________________________
It is sad, considering the natural resources on tap inside our borders. You would think Canada would have at least 2 or 3 Nvidias. We’ve got lots of government jobs tho so I guess that makes up for it.
Should big news out of Bay Street be a guide to your own investing? Or will you stick your head into a GIC at 4% or 5% for a year, and hope everything’s more serene in a year?
——
With the “new money” that I was not expecting last year I did the GIC 4–5% for a year. Given the current climate, I would do likewise for any “new money”, but current investments I would let ride out whatever will come to be…
#51 – Garth isn’t going to advise you to try and time a buy.
I won’t either, but just moved funds from TDB8150 to cash to see what happens this week and next. Not sure the market will be cheap even after a default….SP is only what, 500 points off ath’s and recession seems likely.
But there are some nice opportunities that will pop up, the beauty of so many people being indexed is how that drags down good companies when markets sell off broadly. I’d bet a lot of money that TD or RY, at these prices, will significantly outperform the TSX over the next decade.
#49 Hmm
just got back from a great rafting trip in Jasper.
Folks who live out in Albeerta got it good.
Beautiful part of Canada.
——————
Just back from Banff and Lake Louise.
All that smoke from Northern Alberta.
Not so good.
++++++++++++++++++++++++++++
was in Banff fri/sat. little to no smoke.
Calgary on the other hand…
———————–
Lucky guy.
We left Thursday morning, cut it short one day.
Tuesday was the worst.
Last thought…..what is the value in buying a GIC when a fund like TDB 8150 has zero fees, is mostly liquid (settles next day) and returns 4.15%, and soon to be more if rates rise.
Best of both worlds, you get to hold a near cash equivalent and get blue chip divvy returns.
#39 Dave on 05.25.23 at 4:17 pm
Rates are going up.
Opec to cut production…..oil sky rocketing….so will inflation.
How much higher will rates go?
*********
Is this news from a couple weeks ago…cause I thought they were no changes in the news this morning.
Driving my Mirror Filler through the backstreets trying to keep away from the freak show that is Oakridge development at the moment, I saw a sign out of the corner of my eye.
“We build beautiful small houses” It stated on the front lawn of an already smaller house.
So, you’re going to replace a wartime bungalow with a new version?
That would be a first since I’ve been here.
Maybe they are just going to do a laneway house at the back?
Will have to have a look tomorrow at a slower pace.
The speed limit is 50, I swear I was doing 49, officer…
M48BC
#46 Bill zufelt on 05.25.23 at 6:04 pm
Looking at the charts this morning and the TSX has been a real laggard. Up 74% since 2000 so 3.24% a year and since May 2008 only up 34% or 2.26% per year.
_________________________________
Plus dividends, which indeed come from 90% of the equities I purchase, specifically because of your valid point, that growth in it’s self is low gain in maple.
The new fangled ‘buyback scheme’/scam is why have happily invested a full 12% of our worldy worth in GIC’s (which are within our TSFA’s.)
Pretty hard to make money, when the companies use YOUR profit to play games that were illegal until they weren’t! But I’m still trying to succeed with 10% of us invested in about 30 equities and 10 ETF’s too, here and Stateside.
I cannot fathom how stock buybacks will increase the TSX, over time
But they conceivably do prop up it this week, dip purchasing in the afternoons.
Which is a Ponzi scheme by definition!
Sounds much like my Balanced Fund. Buy, hold, foggetaboutit.
#44 Theory of Everything on 05.25.23 at 5:46 pm
#2 Faron on 05.25.23 at 1:11 pm
#145 Sail Away on 05.25.23 at 9:33 am
#146 Sail Away on 05.25.23 at 9:39 am
Moral of the story? You always hear about the wins, and never about the loses, even when the loses outnumber the wins by such a large amount. Interesting human nature is, isn’t it?
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Yep. That is exactly correct and on the internet, 10 times worse. Internet with a mega blowhard who fears humility? Unfathomable.
DAX seems to be doing well this year.
Up about 12%.
#44 Theory of Everything on 05.25.23 at 5:46 pm
#2 Faron on 05.25.23 at 1:11 pm
IEP off 20% today. Maybe your son can bail you out.
——————
This reminds me of a story, which I imagine is same for gamblers as it maybe for investors.
Close friend…his father had a little gambling habit. Enjoyed going to the casino, hitting the $100 slots.
All the time we heard about “won $25,000 today!” or once even “you guys won’t believe it, $100,000 jackpot!”. My friend told me that the casino sent him a the annual tax receipt (this is in the US), and he was booked for $388,000 in loses that year.
Moral of the story? You always hear about the wins, and never about the loses, even when the loses outnumber the wins by such a large amount. Interesting human nature is, isn’t it?
——————
Well, to be fair, IEP is not a loss to me. Bought April 2020 as noted here, gained +53% divs, another purchase a couple days ago, now waiting for the turbulence to reverse.
At this point, +53% realized, 0 loss, and waiting patiently. No point in getting all worked up. Time will do it’s thing.
Prime Minister Justin Trudeau has agreed to waive cabinet confidence so that two federal agencies can read the confidential documents David Johnston, the government’s special rapporteur on foreign interference, reviewed as he produced his report on foreign interference.
Up to now, the National Security and Intelligence Committee of Parliamentarians (NSICOP) and the National Security and Intelligence Review Agency (NSIRA) have not been allowed to review cabinet documents.
—————————-
Interesting.
Absolutely false. The city’s deposits are being frozen. The bank is untouched. I will now be suspect of anything you post. – Garth
I noticed the ambiguity soon after. But there is no mechanism on your blog to recall or edit.
Point I was making was that they can freeze funds for noncompliance to their nonsensical whims and fancies.
You posted fake news. You are now in the penalty box. – Garth
#59 DON on 05.25.23 at 8:00 pm
#39 Dave on 05.25.23 at 4:17 pm
Rates are going up.
Opec to cut production…..oil sky rocketing….so will inflation.
How much higher will rates go?
*********
Is this news from a couple weeks ago…cause I thought they were no changes in the news this morning.
—
Mysto?!
WTI was down 3¼ % today.
#65 Sail Away on 05.25.23 at 8:32 pm
#44 Theory of Everything on 05.25.23 at 5:46 pm
#2 Faron on 05.25.23 at 1:11 pm
IEP off 20% today. Maybe your son can bail you out.
——————
This reminds me of a story, which I imagine is same for gamblers as it maybe for investors.
Close friend…his father had a little gambling habit. Enjoyed going to the casino, hitting the $100 slots.
All the time we heard about “won $25,000 today!” or once even “you guys won’t believe it, $100,000 jackpot!”. My friend told me that the casino sent him a the annual tax receipt (this is in the US), and he was booked for $388,000 in loses that year.
Moral of the story? You always hear about the wins, and never about the loses, even when the loses outnumber the wins by such a large amount. Interesting human nature is, isn’t it?
——————
Well, to be fair, IEP is not a loss to me. Bought April 2020
—
That’s the April, 2020 that was 3.5 years ago, right? When caught, you informed us that you made multiple purchases (3.5 yrs ago was pre COVID tanking).
Two step process for you that will solve this:
1) Stop lying
2) See step 1
Or pull your foot out of your mouth and slink off into the night.
Effing clown man. You just proved TOE’s point to a tee.
Enough. – Garth
TSLA files are out. 100GB of internal records revealing the full extent of FSD/Autopilot crashes and the total garbage internal stance toward the customer at Tesla.
SUSPENDED
Father in law turns 82 on the weekend.
Mrs Flop said he’s been here 50 years and never walked the White Rock Pier, so that seems to be the mission.
I look at the map, I see Elgin Hall marked nearby.
Different Elgin Hall, looks like the developers missed one.
Let’s check out the history of this one.
Registered: June 3, 1997
Significance: Historical, Cultural
“Description: One of the oldest community halls in Surrey, built in 1923 in the plain homestead tradition by the Elgin Community Association with land donated by pioneer Dan Johnston.
Protected by Surrey Heritage Designation Bylaw, 1980”
https://www.surrey.ca/renovating-building-development/land-planning-development/heritage-conservation/heritage-sites/south-surrey/elgin-hall
The word pioneer is used in the description and it still hasn’t been knocked down, slackers.
From the secondary link
“HERITAGE VALUE.
The Elgin Hall is valuable to the community of Elgin, and adjacent Mud Bay, for its cultural association with community life and as a testament to community spirit and generosity. Until 1875, Semiahmoo Trail was the only passable land route between New Westminster and Blaine, and with the construction of the Elgin Hotel in 1870 this became an important stop-over point for travellers to and from the United States. The low-lying land in the area flooded frequently, but after a series of dykes were constructed, agriculture became the predominant local activity, spurring a growth in population. In the early years of this rural community, families gathered for social events in various homes, but as the population began to increase in the early 1920s, the need for a larger space for community events became more pressing. “
“CHARACTER-DEFINING ELEMENTS
-interior elements such as fir wainscotting and with horizontal and diagonal tongue-and-groove above; and the original sprung maple floor, packed with horsehair.
I guess they put the horsehair in the floor to give the old timers so extra spring in the dance moves.
Dance class, early high school, I was 11 or 12, after we did the waltzy thing, holding hands with girls who wanted to slap you, after that they always played a Tina Turner song for the free dance.
I used to buck like a bronco…
M48BC
“Nutbush City Limits” is a semi-autobiographical song written by Tina Turner which commemorates her rural hometown of Nutbush in Haywood County, Tennessee.
https://www.youtube.com/watch?v=bpuf6AmQH4M
@#69 Faron
Seek help.
…ish
:-)
Well I’m getting about 10% yield on cost for RY and I own a lot of it…the annuity that keeps on growing.
(For those living off of dividends YOC is the holy grail,sorry)
Thursday is Senior’s DAy at Shoppers with 20% off for being old and wrinkly. Yah! The joy is out of the Shopper’s experience: i.e. PC Angus Burger’s were $14.99 for a frozen pack of 8 now priced at $18.49 and VIM bathroom cleaner was under $4.00 is now hitting $5.99. Shopper’s always was my go-to for cleaners now I will substitute the “Fabuloso” from Dollartree for $1.50. PC Angus burgers are the best in CAnada so will only buy on sale.
Oh, look: Tesla Model Y is the 2023 Q1 bestselling vehicle in. The. World. That seems significant for some reason. I’m sure they’ll soon be bankwupt, because, you know: Fwaud.
https://www.motor1.com/news/669135/tesla-model-y-worlds-best-selling-car-q1-2023/
But it gets even better. Tesla just announced a deal where other brand EV drivers can buy a monthly $12.99 membership to use Tesla’s superchargers. Pretty cool to have access to the best tech, just unfortunate to be doing it in a second-fiddle EV. Tesla owners don’t need memberships of course.
Flop… on 05.25.23 at 9:37 pm
…
Different Elgin Hall, looks like the developers missed one.
Let’s check out the history of this one.
Registered: June 3, 1997
Significance: Historical, Cultural
“CHARACTER-DEFINING ELEMENTS
Dance class, early high school, I was 11 or 12, after we did the waltzy thing, holding hands with girls who wanted to slap you, after that they always played a Tina Turner song for the free dance.
I used to buck like a bronco…
M48BC
===========================
The missus describes white guys dancing as ‘frogs onna stick’.
Cheers, Russ
75 Ed
“(For those living off of dividends YOC is the holy grail,sorry)”
———————————————————–
And doncha just love how those dividends grow over time?
Explain it to the guests at your next social function should finance or RE come up. How it’s tax preferred,
takes no maintenance, beats the snot out of a GIC, and you can even re-invest it if you want.
Then watch everyone change the subject……
‘Officials in Alberta say there has been significant progress in the fight against wildfires in the province due to rain, cooler weather and the efforts of firefighters.’
Another time and place. Bloodied, but unbowed.
https://parks.canada.ca/pn-np/ab/waterton/nature/environment/feu-fire/feu-fire-kenow/photos
Thank you to everyone fighting to protect the homes, families, pets and environment in this province. Amen.
I see too much Canadian bias here, why not buy the SPY500 instead of the TSX? America is more innovative & dynamic, as Buffet said, never bet against America.
ooops…..did I forget this?
https://www.youtube.com/watch?v=L67Ky8Fy3AQ
RE: #56 Mattl on 05.25.23 at 7:54 pm
I won’t either, but just moved funds from TDB8150 to cash to see what happens this week and next.
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Why? You can “leverage” TDB8150 in a regular TD direct investing account. (Doesn’t have to be a margin account)
ie: If you had $10K in TDB8150, and zero cash in your account, you can issue a buy order for $10K worth of ETFs, stocks, etc, BEFORE selling TDB8150. Then right after the ETF/stock trade is filled, you can issue a sell order for TDB8150 which will complete before the settlement date of the ETF/stock.
I do this all the time in my non-margin account.
Maple focus ZWC pays 7+ % pays monthly.
US focused ZWH pays 7 + % pays monthly.
Both hold all the bigs. Agreed, index investing looks positive nowadays. Owning banks a no brainer. Dividends paid regardless of share price. For those who can read a balance sheet, loan loss provisions aren’t a loss. They get added back on the ledger when losses aren’t realized, which they almost always aren’t. BMO ex: is still expanding in the US with the acquisitions currently accretive.
#79 Dr. V on 05.25.23 at 10:59 pm
takes no maintenance, beats the snot out of a GIC, and you can even re-invest it if you want.
________________________________
Just like a monthly GIC payout!
$100 monthly per 25k this year, previously nothing in reality. So, I had none.
Meanwhile banks holds now down, GIC holds rock steady.
Each year is a different situation, everything takes maintenance. Blend and layer. Diligence and administration.
Should I cash out the lower interest cashable GIC in the GIC fleet right now? Hmmmm.
#67
You posted fake news. You are now in the penalty box. – Garth
———————————————————————————————————–
NO SOUP FOR YOU!
https://www.youtube.com/shorts/KAmaJkME2m4
#80 Jag
Thank you to everyone fighting to protect the homes, families, pets and environment in this province. Amen.
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Yessireee!
Heading back againn in a couple of months for another family visit, and will go to Waterton Lakes this time.
https://parks.canada.ca/pn-np/ab/waterton
@#87 Dharma
“Heading back againn in a couple of months for another family visit, and will go to Waterton Lakes this time.
https://parks.canada.ca/pn-np/ab/waterton
++++
Shhh.
Don’t tell Ponzie there’s another spectacular park in Alberta he could have visited….
Snippet: ( page 4 of this morning’s NP. Check out the article title…..Garth is going to have a cow..)
“Revenge of the Laurentian elite.”
National Post26 May 2023Tristin Hopper
Gird your loins! Then there is this: (!!)
‘The plot to cancel Canada Day –
In the course of just a few days, three major Canadian cities have flirted with plans to cancel or scale back Canada Day celebrations — in some cases arguing that such patriotic displays are offensive to minority groups.’
#83 – thanks for that, wasn’t aware that was an option.
#87 Dharma Bum on 05.26.23 at 7:57 am
#80 Jag
Thank you to everyone fighting to protect the homes, families, pets and environment in this province. Amen.
———————————————————————————————————-
Yessireee!
Heading back againn in a couple of months for another family visit, and will go to Waterton Lakes this time.
https://parks.canada.ca/pn-np/ab/waterton
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I highly recommend the hike from Goat Haunt Ranger Station back to Watertown. About 20 km, starting where the boat drops you off in Montana. Grizzly country so bring bear spray. I walked it alone years back with nothing but running shoes and a 4 inch pocket knife. Not the wisest move.
81 Nordman on 05.26.23 at 12:35 am
I see too much Canadian bias here, why not buy the SPY500 instead of the TSX? America is more innovative & dynamic, as Buffet said, never bet against America.
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Not so sure if that is still a sure bet.
But go ahead.
#18 TurnerNation on 05.25.23 at 2:26 pm
The Street smells blood (loan losses, out of control consumer debt?) bank stocks are not in favour. Pass.
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Tax dollars at work. BC’s ‘health’ system?
Welp in Q2 2020 I did state that every system designed to protect us has been turned against us.
Since, BC fired ~2500 health care workers who had declined one more injections.
Now the permanent “rules”. Gee who’d sign up for this?
Paging Dr. Crowdedelevator, Dr. Baffled, and Dr. Gaslight to the chat.
=====================
COMMENT:
BTW is there a link to the list?
In essence, these “rules” harken to MAIDs and Soylent Green.
This will not end well….which is quite clearly by design.
#10 Ed Tunstal on 05.25.23 at 1:44 pm
Personally I wouldn’t invest in batteries.
Batt technology will change big time. We ain’t there yet.
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COMMENT:
IMHO….TPTB are herding us into a situation that will ultimately implode.
Like the health care system is doing a slooowww flush by controlled demolition, by design….they want to starve out the ICE option and then control our lives via the electric grid.
#82 the Jaguar on 05.26.23 at 12:39 am
ooops…..did I forget this?
https://www.youtube.com/watch?v=L67Ky8Fy3AQ
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Good video but it doesn’t capture the real beauty when you are hiking and looking down at all of this. Much different view from above. Spent a couple weeks hiking this country a few years back. One of the most beautiful hiking areas. You can then head down into the US and do Glacier National Park and over to Mount Baker which is an absolutely incredible hiking area. Then there is Wells Gray, the Monashees, Jasper and so many others. This is how my wife and I have spent the past 15 years of our retirement. We’ve also done Switzerland, Ireland and the East Coast trail in Newfoundland which was awesome. Not sure where we will head to next. No life like it.
They told us the great reset was a conspiracy. Now propaganda machine CBC says – maybe it’s a good idea. Garth, didn’t you tell us this was a conspiracy? Global communism, global slavery is at our door. We just need the digital ID, and digital money. But they are working on that too.
https://www.cbc.ca/radio/ideas/great-reset-equitable-capitalism-1.6851812#:~:text=
I come for the great financial advice, I stay for the dog pics. That is a seriously cute dog!
Now that the pendulum has decisively changed direction, it means the invincible Canadian banks stocks will grind down over the next two years during which time a substantial portion the excesses in debt and real estate prices will unwind. The forces of capitalism will blow through the naive notions and sweeping rationalizations about real estate, debt, interest rates and job security. There is no free lunch and the code of conduct for mortgage lending will succumb to the forces of capitalism by making illiquid borrowers into insolvent borrowers regardless as to how strongly they protest. Compared to Americans, Canadians are very slow to head for the exits. Patience is a virtue.
Health tip:
Make exercise easy. Install pullup bars around the office and house, get in the routine of dropping for sets of pushups regularly, do squats when watching tv, schedule a middling intense endurance event every weekend. Some days you’ll feel great, some days terrible.
Just go as hard or as easy as you want but be consistent for days, weeks, months, years. Heck, 1/2 hour of hand to hand combat practice a week equals 26 hours in a year; one minute per day hanging from a bar equals 6 hours in a year.
Exercise increases energy levels. Energy is important for regular and consistent commenting on the Greater Fool Real Estate blog.
#77 Sail Away on 05.25.23 at 10:48 pm
Must be rough having an infantalizing speech impediment so severe it comes across when you type. No shame in it.
If bank shares take a big hit, like energy companies did in early 2020 there’s only one logical course of action. Sell some of your other investments and buy more bank share ETFs. Right now they are down some, but not that much. A tempest in a teapot.
Breaking:
Ron DeSantis Relaunches Presidential Campaign From Inside Burning Tesla
@#100 Sail Away
“Heck, 1/2 hour of hand to hand combat practice …
+++
I believe my friends in Nanaimo would consider that….marriage.
#101 Faron on 05.26.23 at 1:57 pm
#77 Sail Away on 05.25.23 at 10:48 pm
Must be rough having an infantalizing speech impediment so severe it comes across when you type. No shame in it.
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‘Infantilizing’
Our CB is set to pivot on June 7th, abandoning its ‘pause’ status, hiking the benchmark rate a quarter point.
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So the hike is now needed because of the government’s response to the previous hike.
This feels like a dangerous feedback loop that is only getting tighter.
If this dance continues, there is a lot of pain in store for the housing market and likely also the wider economy.
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