bizaro86

Love: Car2Go - Smartcars all over my home city at low by-the-minute pricing Hate: Coca-Cola - A long time addiction was very, very hard for me to break

Definitely, it's not like the last folks running the place were doing a bang up job, which is why there was such a large shift. The market definitely reacted this morning though, with all the big oil companies down ~4-5% when I first checked.

Yeah, this would be like Texas electing not a Democrat for Governor and house, but a 3rd party way left of the dems.

I wasn't sure if this was best in the Penn west thread or the Canada housing prices thread, so I started a new one. They have promised a royalty review, which probably reduces capital spending in the oil patch in the short term. I'm more interested in how it affects real estate prices in AB, whether that plus low oil starts a bit of a panic. The conservative party they replace has ruled for 44 years, and Alberta has never elected a party to the left of the incumbents.

So, I was thinking about this thread yesterday when I saw an unusual piece of real estate advertised in my local area. Did you pursue this further? How did it work out?

That I would like to know. I've had mistakes in my RSP and TFSA in the past, and it sucks. TFSA I get being disappointed about, but if you have to have a loser RRSP is better than non-registered, imo. You've already taken a full deduction against the invested capital against income, which is better than a capital loss that you would get non registered. Or look at it backwards. If you have a big gainer in your RRSP, you pay tax at the regular rate when you withdraw. Not ideal, but nobody complains about gains. However, if you have a big gainer in a non-registered account, you pay at the capital gains tax rate, which is 50% less.

Uccmal, how did you get TD to give you a HELOC up to 80% of total LTV with your first mortgage NOT being with TD (i.e., with First National)? In my very recent experience, every big-5 Canadian bank refuses to go second on a property with first mortgage that is not with them, including TD (had a phone conversation with them). The only firm that agreed to do it was Home Capital group, but they cap total LTV (first+HELOC) at 65% of appraised property value. They'll do it if they think they have a chance at making you a relationship customer. My banker moved to RBC for awhile, and I took a new 1st mortgage on one rental and a second (behind a Scotiabank first) on a different rental. They had no problem doing it, and pushed hard to get the second as well, which I was planning to combine with the Scotia first mortgage.

I would go so far as to say that you need to be able to estimate rents yourself. I wouldn't buy a stock where I didn't have an idea what the earnings were, and I certainly wouldn't buy a rental property where I couldn't estimate the rents within $100/unit/month with high confidence. I think RE investing is very much like value investing. The money is in the purchase. If you can buy something at a strong rental yield, below its current fair market value, dealing with the day-to-day BS will work itself out.

This is why some sort of car sharing should end up being the default car ownership option, imo. I don't enjoy anything about owning a vehicle, if I could walk to the end of the block and be sure one was there I would absolutely sell my vehicle and do that instead. (Or definitely once my kid is out of his car seat, which is non-trivial to install)

Interesting. I'm exactly the opposite. I tend to not buy stuff, because it depreciates at a fast schedule, and ends up worthless. However, I tend to buy much more travel than the average person of my income, because the value I associate with it (memories) are timeless and last forever. The not spending on stuff (cars, gadgets, etc) funds the travel and increased savings compared to the average.

If you do, please come back and post your thoughts/findings. This is a very interesting topic and a good mental exercise, imo.

I think it's also worth noting that some of the causation might be backwards. (or, say, inverted ;) ) For example, the price of oil is down because of increasing supply. Countries that export oil (Canada, mexico, brazil, indonesia, etc) have their exports and terms of trade slashed, so their currencies depreciate against the USD. There is definitely some part of the price drop that is currency related, which cushions the blow slightly for producers outside the US. My employers costs (like my salary) are mostly in CAD, while its revenues are in USD. So although the lower price of oil has hurt badly, the price of oil in CAD hasn't dropped quite as precipitously.

One good option is DLR/DLR.U, which is an exchange traded fund traded on the TSX. It's assets are only US dollars, so it tracks the currency. It trades in both $C (DLR) and $USD (DLR.U).

From the comments, it sounds like this was a pretty interesting life story. As I'm always very interested in the stories of people who achieved success in an unconventional way (those stories typically have more to teach us, imo) I'd appreciate it if you'd consider putting it back up. I wasn't around from 8PM-4AM (the times originally posted and edited by my computer's clock), so missed it.

Yes. But I also wouldn't want to compete with a bunch of really smart people with borderline-unlimited capital...

My wife and I have RRSPs at Scotia Itrade and RBC Direct investing. The only differences I've noticed: convertible debenture commissions are $9.99 at RBC, and more at Scotia ($24.99 iirc). RBC will allow you to hold US dollars in your RRSP, scotia doesn't. (Convert using Norberts gambit, don't pay them to do it). Scotia gives me free level 2 quotes for Canadian stocks.

Thanks everyone! I do use IB, and the margin this position is using up is annoying, but not critical. I've had the position since well before they declared bankruptcy, as the overvaluation was pretty severe, even pre oil price drop. What I don't want to happen is end up paying for borrow on a worthless stock I can't cover for 2 years as a court case drags on. It seems likely that it should trade OTC somewhere after delisting from NASDAQ (March 3rd)? Similar to TWA's situation, I kind of want to capture all the profits from what was a pretty good call if I can, but intellectually I want to make the right decision. It's funny you mention AAMRQ, I looked at that when it first went under, and bought the exchange traded bonds which eventually converted (they had a margin of safety and the stock didn't, imo). While the stock was a 30 bagger and the bonds were only a 8-10 bagger, the bonds didn't trade, which probably saved me from taking profits too soon.

I have a short position in Ivanhoe Energy, which recently entered creditor protection. The stock trades on both the TSX (IE) and NASDAQ (IVAN). The TSX has already halted, but Nasdaq hasn't. I think quite strongly that the stock is worthless, as there is a material amount of both secured and unsecured debt, and the assets are worth $0, even if oil prices improve. However, the stock is still holding on at ~$0.40. I'm happy to time arbitrage the situation and wait for the shares to be cancelled, but I'm not sure I understand the mechanics of how that works. If the stock is cancelled/doesn't trade, would I be able to/required to deliver the shares I borrowed?

Do they allow U.S. dollars to be held inside registered accounts like RBC? They do allow CAD and USD to be held inside registered accounts, but no other currencies. So you limited to investing on Canadian and US markets in those accounts. Also their standard $10 minimum fees per month applies for accounts below $100k. rb Interesting. Can the minimum $10/month fee for small accounts be covered by trading in other accounts? IE 3 total accounts (non-reg, RRSP, TFSA) spending a total of $30/month across the accounts? My TFSA is pretty inactive, and I'd prefer not to pay a minimum commission on it. Do you know whether market data subscriptions count against the minimum?

I bought a bunch of RE in 2009-2013, and sold more than half in 2014 as prices here were high. IMO buying RE makes sense when the return you will make assuming reasonable repairs/vacancy expenses and no appreciation exceeds a reasonable stock market return. Advantages are leverage and potential to buy under market value, which gives a margin of safety. Of course, leverage is risky, and because RE investments are sometimes larger than stock investments, people often get very concentrated. Ask yourself, how would this investment due in a bad recession in my area.

And no discussion of the forward strip which doesn't see oil getting back to $100. It is under $70 out to 2024. If you think it's going back to the moon it should be relatively easy to make a killing by speculating on futures. I have also yet to see anyone say the words "permanent loss of capital". I've experienced what I consider a permanent loss of capital in oil investments recently. I had a couple of distressed debt positions in companies I thought would muddle through/raise new capital, with the assumption that oil prices would be at strip or slightly below. When they got destroyed, those leveraged producers got killed, and will likely all declare bankruptcy with near 100% losses on their debt.

Anything that has lots and lots of leverage, of any kind. Asset management and real estate both leverage off of other people's money (different kinds, same idea). Software and retail are both network effect types of leverage. Oil and gas has many billionaires, but the leverage there is operating. Drilling an oil well/play can be a "lottery ticket" type operation, where success is multiples of investment and failure is a zero. Of course, many oil and gas billionaires are more financial operator types anyway, where they've bought cheap assets at various times, as opposed to drilling their way to wealth.

Do tanks really run on gasoline? I've always assumed they ran on diesel, like large industrial engines. It would certainly be more efficient...

Thanks Sculpin, that's a very interesting idea. How are you valuing Cline? They look pretty distressed if you just look at the financials. Do you have an opinion on the quality of the mine and technical or price assumptions necessary for it to be worth enough to cover the debt?

In that situation they would have $135MM USD of first lien debt and $260MM CAD of second lien debt remaining. Which is still an awful lot for a company that did ~4MM of EBITDA in their most recent quarter. They still would end up in CCAA unless operations improve. They do have some low hanging fruit at their first project, but they need $18MM in capex to drill the next phase of wells. The company has huge operating leverage, so if they are able to make even small improvements they'll be able to make the payments on the 1st and 2nd lien debt, but I don't see the debentures getting paid in full under any scenario. I don't mind the conversion before the december payment scenario, because I think the equity would still have some turnaround/option value, and the converts would own essentially 100% of the company in that situation. This definitely fits the speculative criteria at the top of the thread, which is why I haven't written it up for the forum.