Uccmal

I have a question. When calculating the SWR, does the equity in one's primary residence get included?

Your wrong and I can prove it. I have been arguing with stupid people for years and winning.... Ooops

"Build a man a fire and he will be warm for one night. Set a man on fire and he will be warm for the rest of his life." - Sir Terry Pratchett "Sometimes I feel like I am the lowest thing on earth... kind of like whale shit" anon

Contrarians.....

I hate Bell, hate Rogers, and would probably hate Telus, Comcast, and Verizon. Own some Bell stock because nearly all Canadians are a customer of Bell, or Rogers, whether they know it or not. Hate: Sears Canada although it is getting difficult to hate a non-entity. Love: Starbucks & Chapters - I must with the amount of time I spend there.

Better? Nah, You'll need the ice cream though looking at this map: https://www.ncdc.noaa.gov/teleconnections/enso/indicators/sea-temp-anom.php The really dark spot is the El Nino. Looks very strong. I did a term paper on El Nino/SO at school in the very late 80s.

cripes Eric, You need a hair cut and shave.......

What should governments do? I think they need to stay out of the way at this point. Getting rid of subsidies across the board for all energy types would be a start. I think there is enough inertia in the system to allow market forces to sort out what is best and where. Fossil fuel producers complain that alt energy is subsidized while conveniently ignoring their own subsidies directly through tax breaks, and indirectly through infrastructure spending. Easier said than done since most non-Us utilities are government run.

I have a hard time swallowing this argument because the utilities could simply green this up with utility-scale battery storage. Only run the natural gas and coal generators during peak load times or when the sun doesn't shine (night time). Charge the batteries during those hours. Deplete the stored energy in the batteries when clouds pass overhead and solar production drops. This eliminates the need to have wasted coal energy running 24/7 in the background. You can fire up the natural gas/coal generators when it looks like the batteries are nearing depletion of their charge. The problem with bureaucracies such as Germany is they are thinking this all wrong. Everyone's thinking is still caught in centralized power being the best way. In some cases such as Germany, or Canada it probably makes sense to use Nukes and Fossils, but there are lots of areas where solar makes more sense. In some areas fossil fuels make no sense. In Page Az, there is a huge coal fired power plant that was built to create jobs 50 years ago. It makes no sense to use coal in that area of Az. where it rains about 20 days a year for an hour or two at a stretch. People all over the world are operating off the grid with solar power and car batteries. During the day, they charge the batteries. A few car batteries then drain off into the compact fluorescents. They will get even more mileage with LEDs. Keep the cell phone charging during the day. As storage improves, jump started by groups like Tesla, local power makes more and more sense.

Huh?

I dont think insurers are cheap in this scenario, unless they have done a great job hedging against higher rates. Look for alot of mark to market losses this quarter unless bond prices reverse.

I dont know where the idea of not paying attention to the macro came from. It is certainly not the way I see Buffett, or most other value investors. In my mind it is more important than ever before to follow macro trends with the increasing speed of creative destruction. I dont know what to make of the article on S&P leverage. Mostly what it says to me if anything is that companies are not in a hurry to increase production capacity. I also think the effect of low interest rates on juicing the economy is now suffering the law of diminishing returns. I bet that jacking the interest rates a little would go further to juice the economy than the status quo. After the initial shock, of course.

Great find. Those commercials are classics. Great commercials indeed. We do have the Jacob Wohls of the world in this cycle, which may be more pernicious. Main Street could still feel burned from 00 and 08, but if their money has now gone to Mr. Wohl and wirehouse brokers investing in ETFs, is that much different? Obviously my Wohl reference is tongue in cheek, but I do worry about increased ETF activity and the unintended consequences of hot money. A couple of points. First, that we're even comparing this to 99/00 as "it's not as bad as it was then" should give folks pause. Second, I remember 07 as well, and the issue there was moreso related to leverage than initial valuations once shit hit the fan. Buyouts using either internally generated funds or via debt left those companies with little margin for error - and we're certainly seeing the same depletion of cash from balance sheets to fund buybacks today. The ETF activity is going to be a stress point at some point for sure. We know from experience that when the market tanks and people look at their ETFs, many are going to bail, exaggerating the effect. At least with mutual funds there are stop gaps in place, with an advisor, and redemption fees in the way of liquidation. With ETFs, many of those schooled in buy and hold are going to panic, and out they go with the push of a button.

James, I have noticed similar things. I had just gotten started investing in 1996 when Greenspan made his "irrational" exuberance comment. In retrospect I now understand why value investing was so difficult back then. Excepting Berk. which reached a multi-year low around or on the same day that the Nasdaq topped out. This year in Toronto there weren't many ideas. I have been getting progressively more wary of the markets. If a stock doesn't pay me a good dividend, that appears sustainable, its out. I have sold virtually all of my Leaps, exited much of my US financials. In short I have been deleveraging continuously for months now. Sooner or later I think we are in for a brief bear market (I would think sooner is the operative). I see it as being similar to 2000-2001 when the broader economy is not so seriously affected. God only knows what is going to trigger it this time: Greece exit? Russia doing something dumb? Oil prices going up too much? UK exiting the EU, voluntarily? China? We'll never know until later.

Very slightly off topic but related. My concern is that RRSP and Lira is treated as income, and is fully taxable, when it gets withdrawn. I have moved from adding money to my RRSPs to deliberately not adding to them. Whatever is in there will grow until its withdrawn organically. A retired board member pointed this out to me. He had direct experience with withdrawing RRSP money and watching it get taxed away. Viking, have you ever crunched the total tax implications of adding funds to your RRSP. It may have made sense when I had work income, but it doesn't now. As in, the tax refund I get now is minimal, but the tax I pay when I withdraw it may be significant. The question then becomes: Will I be able to compound my tax sheltered accounts at a rate greater than what I will pay down the road. I am not sure of the answer to this. There is alot of moving parts, not the least of which is the government which may go after the big RRSP honey pot with more vigour in the future.

As I recall, one of the tough realities with a defined pension plan is that if you choose NOT to commute it and just take the regular pension, once you have been paid the commuted value, the plan owes you nothing. If you have a spouse, your spouse will continue to receive your pension, generally at two-thirds the amount (not including any bridge benefit). So, in reality, let's say you have a $500k commuted value pension at age 54 and your pension is $40k/yr. After 12-13 years of receiving the pension, and you die, then the pension plan owes you nothing. If your spouse is still alive, they would get 2/3's (depending on which option you take, if you have one). In the above scenario, if you commuted it and transferred the value to a LIRA and took the same amount indexed to inflation, you would still have $200k in value after 13 years if you earned 6%/yr. If you are single and dead, that potential value/asset is gone. Another thing that is rarely discussed is the annual limits that you are allowed to take on LIRA's. You can have a huge balance but it is restricted on how much you redeem annually. In my opinion, being single and/or unhealthy heavily favours commuting your pension. Being married, healthy and thinking you will live until you are 90 makes keeping the pension a good idea. Basically, it isn't an easy, straight forward no-brainer decision. If you knew your future rate of return if you manage it yourself, it would be a lot easier. Ourkid, If its a meaningful amount perhaps you should contact a pension expert before you sign anything. There is one group in TO that runs some ads, and has periodic articles in Canadian Money Saver - Ian Burns and Shelley Johnson (not an endorsement as I dont know them). It is pretty specialized.

Hi ourkid, Yeah, With my first pension I hadn't worked long enough to make it worth keeping until I was 60, or whatever. When I left 14 years ago, the legislation hadn't been changed yet. Finally, 9 years ago, I transferred $23,000 to a Lira, which is now worth around 100,000. I have always run it conservatively, with no options and no leverage. I can start drawing on it in 5 years, if I can find a way to keep the taxes down. My second pension has a much larger commuted value - It would be taxed at about 11% if I commute it. If I leave it alone, I can start drawing it at 60, in ten years. There are health benefits attached, If I leave it there. The pension plan is an arms length trust so its as safe from the employers prying hands, as anything else. I suspect I will leave it and treat it as a long term backup fund. The commuted value will increase continually. I dont know the rest of the details yet, as I just quit a month ago, and have yet to receive any paperwork. Overall, nice problems to have. My vote at your age is for a Lira, contingent upon what others have said about health benefits etc. I am guessing you wont get these due to time needed in the plan, if there are any.

I believe that you are overestimating humans and underestimating the technology. So we disagree. We will see pretty soon though. We see, or we dont see. I never said impossible. I have seen some amazing technological advancements in my short life. I just dont think the technology is anywhere near reliable enough, and wont be for a long time. From my perspective, only you can win this bet, as there is always tomorrow. Kind of like making a bet on if there is an afterlife.

This is a common argument and I believe people keep repeating it without really thinking about it. Perhaps you should ask yourself what happened when GM had faulty ignition switches and work from there. The exercise of building driverless cars will have lots of spinoffs. As for driverless cars in mass usage, I am doubting it more and more. Not ever, but in the medium to long term. I can see their use in less complex systems such as one way highways, where the cars join a "train" and exit on an off, and go back under human power. At this point and in the foreseeable future humans are simply much better at handling tasks with multiple layers of complexity and feedback. One weak wireless connection, or one single blue screen of death and all hell would break loose on the Average urban street. When they can negotiate one day without accident in an Indian, Bolivian, or Nepalese city I will be convinced. No one has found the disappered Malaysian Jet, so far - my faith in technology is limited.

I doubt you will see much change in Royalty structure or taxes in light of Us competition. Typical over reaction by the media. Canadian governments always backtrack on their promises. The NDP might even reign in some of the government spending, and cronyism, that is the result of a government too long in power. BTW - I am not an NDP fan, just pragmatic. Alberta has managed to piss away their oil windfall just like every other oil state in the world. It's unfortunate because a big chunk of the oil sands investments are being cancelled permanently, by the big players, due to the competition, cap and trade, and the regulatory burden.

Some much for expert predictions: http://www.bloomberg.com/news/articles/2015-04-29/these-titans-of-oil-are-experts-at-making-bold-predictions

The group here is definitely not representative. Most people still use cable. Further to that, nearly all households still bring their service in through a wire, fibre optic or other. The big utility providers still own the wire that provides your high speed internet and you pay cable type rates for your internet. The Rogers, Bell, and AT&Ts of the world have grown rather than shrunk in the last 20 years. They seem much more prepared than Kodak, for constant technological change. Even when everything goes wireless, my guess is these companies will still make a bucket of money since they all have satellite or cell towers already.

I would argue that you should be a politician. Basically all Buffett has done is found a really inefficient and incredibly difficult way to tax people and use the resulting taxes to fund health care, foreign aid etc. The same thing Buffett did is accomplished much more effectively by taxing people and funding things through government. One Deng Xiaoping is equivalent to a thousand Warren Buffett's. I enjoy this forum but sometimes I feel like everyone on here is going 120mph and I'm struggling to go 25mph. I have absolutely no clue what this means. Now that I have met you Nate, that means I am going about 10 mph.......

Wow, Lots of great thoughts on this topic. You'll know you've made it (whatever that means) when your holdings drop by your annual pay over a week, or in my case by 5 x my annual pay in March of 2009. Its like getting drunk. Great on the way up, terrible on the way down. But, It moves from stomach churning to mildly annoying. It all boils down to experience: - For three years running my annual income taxes started to eat up most of my annual pay (partly a function of trading often) - My portfolio has fluctuated many times (at least a dozen) by my former wage in a week. The comment about lottery winners is interesting. They dont learn to handle money along the way, whereas we do.

I agree that Canadian treatment of divvies as you described make them more attractive than in US. Regarding divvies vs cap gains vs downturns: so you have to pick companies that pay divvies and won't stop paying them during the 50% market downturns. This limits the investable universe quite a lot. Are you sure you are not sacrificing long term returns if you do that? Cause if you do, you might win the battle but lose the war: you get divvies now, but have problems 10-20 years down the road when your portfolio has not grown enough. E.g. if I had to buy KO or JNJ for divvies and divvie payout security, I'm not sure I'd be happy with their future return (although I might be wrong and the return might be fine). While on the other hand JPM might satisfy divvie payout and possible future growth but probably has lesser divvie payout security. Anyway, it does depend on a personal situation and personal portfolio. Your solution might work perfectly fine for you. I don't think there is a single right answer. Take care I concur. It is different in every case. During the financial meltdown, and the Great Depression a lot of companies didn't cut their dividends. Overall, there may be a 20% cut which is manageable in MY greater context.