clutch

+1 especially for those who have a full time job outside of investing. You also sometimes get information edge that people outside of your industry might not easily realize.

Is anyone here qualified to do so? The presenter certainly isn’t. He has Nobel price in physics based on work done in the 60’s and knows very little about Meteorology, nor is he expert in statistics. To debunk climate change , he would need to go into much more detail than he did in this talk, publish some peer review work in this field etc. To my knowledge, he hasn’t done this. FWIW, i have a PhD in physics but that doesn’t make me an expert in other fields. So, what are you doing here in an investment forum discussing investments when you do not have the appropriate educational qualifications? If only the people who can discuss climate change are climate scientists, why are politicians discussing climate change? Dismissing someone's argument because of their lack of expertise is one hell of a condescending manner that would turn off anyone who might genuinely want to participate in a healthy discussion otherwise -- wasn't that the point of democracy? Of course, maybe the goal is to simply shut down all types of discussion around climate change.

So, did anyone actually watch the video till the end? Why not rather discuss the arguments made in the video?

No idea what you are talking about here. If you have invested in $25 into bitcoin in May 2010, It would have been worth $40 million dollars today. That is a simple fact. Verify this yourself. https://qz.com/1285209/bitcoin-pizza-day-2018-eight-years-ago-someone-bought-two-pizzas-with-bitcoins-now-worth-82-million/ At the time when this article is written it was worth 82 million. Today, the same 10,000 bitcoins are worth, $40 Million dollars. It is quite obvious that Crypto Assets are the best performing asset on a 10-year basis with a huge margin. So, between 2012 and 2013, the price of gold dropped about 25% in a year. Gold is not considered as a store of value? The volatility is greater in case of Bitcoin but I don't think that alone refutes the hypothesis that it could be a store of value.

I never said these other things, you said them. I just posted a list of numbers, and everybody lost their minds. I'd say, a fine display of schadenfreude masked as faux naif.

Yeah, I was posting the numbers showing how much various crypto coins were down since their peak. But you're the ingenious one, citing a common value investing saying with regard to something that can't be valued conventionally (what's the IV based on the discounted future cash flows of this? can you value invest in gold or oil or US dollars/Yen/Euros? What's the return on capital there?), and for something that is clearly not just random short-term volatility. When something is down 98%, it needs to be a 50-bagger just to get back. If the thing you're tracking is moving by that much up and down regularly enough that it can be considered just short-term volatility for that instrument, you're gambling, not investing. I don't think the same things apply to long-term investors and long-term gamblers... I didn't cite any of the value investing sayings here. You are mistaking me with another user. I also would like to post some numbers: VRX (now BHC) : -90% below all-time high FTP (now FGE): -98 below all-time high Why am I posting these numbers? To act like you. 8)

Long term value investor cites short term price fluctuations as indication of long term thesis success/failure I just poted numbers. I didn't make any comments. You did that. Dude, you are one of the most ingenious people I have seen. You knew exactly what you were doing.

Yet that's not what has happened in the past 15-20 years. The difference between incomes and house prices has been bridged by increasing debt. So if we're to get back to the income/salaries trend, a significant correction (or long stagnation) would need to take place. Low interest rate is a big factor here.

Historically, on average, real estate appreciation has pretty much followed inflation with a little extra, no? And there are all kinds of maintenance costs that people often forget to factor in when they cite how much they've made. Most of the return seems to come from leverage, which is fine, but we shouldn't forget that carrying a lot of debt can be a problem (price can fall, hells angels can move next door, houses can have expensive problems, etc). Tax free is nice, but a lot of people invest in tax-advantaged accounts too, and the friction to buying and selling tends to be relatively high, if you're not someone who knows real estate well and can bypass a lot of the fee-takers. To me, buying a house has a lot of non-financial considerations too, so looking at IRRs vs renting is only part of the story. Some people want to be real estate investors and don't mind flipping houses and moving every few years. Personally, I have no interest in that. So if inflation is roughly 2.5%. leveraged at 5x = 12.5%. and since it is tax free it means if you have investment income you need to be roughly returning 25%, unleveraged befote taxes... i think for most average canadians owning a home , one home that is your principal residence is a fairly safe way to generate wealthy over the long term— The leverage isn't free! Would you leverage 5x at 3-4% mortgage rates to return 2.5%? And in Canada, you may have to renew at even higher rates after 5 years... It's not just 2.5% return. The return should include the rent money that either you are saving yourself or getting from other people. Typically, that money cancels out the cost of borrowing + expenses.

Historically, on average, real estate appreciation has pretty much followed inflation with a little extra, no? And there are all kinds of maintenance costs that people often forget to factor in when they cite how much they've made. Most of the return seems to come from leverage, which is fine, but we shouldn't forget that carrying a lot of debt can be a problem (price can fall, hells angels can move next door, houses can have expensive problems, etc). Tax free is nice, but a lot of people invest in tax-advantaged accounts too, and the friction to buying and selling tends to be relatively high, if you're not someone who knows real estate well and can bypass a lot of the fee-takers. To me, buying a house has a lot of non-financial considerations too, so looking at IRRs vs renting is only part of the story. Some people want to be real estate investors and don't mind flipping houses and moving every few years. Personally, I have no interest in that. So if inflation is roughly 2.5%. leveraged at 5x = 12.5%. and since it is tax free it means if you have investment income you need to be roughly returning 25%, unleveraged befote taxes... i think for most average canadians owning a home , one home that is your principal residence is a fairly safe way to generate wealthy over the long term— Also, buying a house with a mortgage is a form of forced saving, which undoubtedly helped many people who otherwise may have just spent all the money or blew them in some altcoin investment. ;D

Why is hindsight bias relevant here? I'm just giving you analysis, not a prediction. I'm not predicting what's going to happen in the future, but pointing out what actually happened in in the last 10 years because I didn't buy your argument that you were better off (only the financial aspect) renting during that time. Remember, you were stating that you were better off based on what actually happened, not based on what you expected to happen. And I'm basically refuting your statement that it's likely to be factually incorrect (never said your decision was right or wrong, which is a different argument). And I push back on the fair comparison question -- because we were talking about buying a home vs. renting. I was comparing two scenarios what a sensible person would do if the person had some cash and was renting. Should they use that cash to make a downpayment to buy a home or just keep renting? Or keep renting and invest that money on the stock market? It's the typical buy vs. rent analysis. And I'm saying that buying would have resulted in a better financial outcome in most cases. Again, that's a fact, not a prediction.

Not sure which region you are in, but this is hard to believe considering that the housing investment would have been most likely leveraged...plus the tax exemption you'd get for the principal residence. I'm near Ottawa. We'd have paid for most of the house with cash, so not much leverage involved. I think the topic raises an interesting question. Leaving aside the intangible value that a "home" can have, choosing which opportunity to invest in and the leverage aspect can be handled as a two-level decision but taking the two decisions together, one could argue that it was (in 2010-2) relatively easy and cheap (leverage aspect) to buy a house using a significant amount of leverage (ie 3:1 or 4:1 debt to equity). Looking back (to the 2010-2 period) and, assuming one would sell today in Toronto, the return on the equity of the purchased home would have been quite rewarding, even taking into account the recent price decline and the return would have been tax-free assuming the principal residence exemption. CAGR of avg MLS transaction price=7-8% The interesting question is what would one do today in Toronto with a sum of money to "invest". I think a fair comparison would be to assume that you would have made enough downpayment such that your monthly mortgage + tax + upkeep etc. equals the monthly rent for a similar house. Then you can compare the return on that downpayment. Based on my rough calculation, in Toronto, you'd have made like 10x the original downpayment if you bought 10 years ago and sold now. Comparing that vs. investing the original downpayment in S&P, despite its good returns, it's not even close. And if it was your principal residence and you could have invested in S&P only via non-tax sheltered account...well that's another 2x in favor of buying the house. In Ottawa, it looks to be about 4x return on the original downpayment based on the same assumption... If you assume you would have bought the house entirely with cash, you should assume that the money you'd have saved from monthly rent would be invested in the stock market and aggregate that return with the return on the house. Not sure which option would have been better in that case -- but it seems extremely silly to not have taken the mortgage with the low-interest rates for past 10 years. Of course, this is all in hindsight. Going forward, investing in any real estate in Toronto does seem crazy right now. However, if it's your principal residence, I'd say just buy it with the mortgage if your total monthly expense on the home does not exceed 30-35% of your after-tax income (and it's not like rent is cheap in Toronto either). I really think nobody can predict what's going to happen to the market in the short term and over the long term you will do fine considering the relatively cheap leverage and tax exemption.

Not sure which region you are in, but this is hard to believe considering that the housing investment would have been most likely leveraged...plus the tax exemption you'd get for the principal residence.

Very well put cwerib, I live in Toronto and can share some perspective as well. I'm in the boomimg tech industry here and there are many of my friends and colleagues who have high paying jobs and are waiting to enter the housing market. So in case there is a small "collapse" I am pretty sure there will be a strong support to hold the market. Remember these people are currently paying somewhat outrageous rent prices in Toronto (there are currently bidding wars in the rental market!!) and the price wouldnt have to drop that significantly to justify buying instead of renting. Also, the stats like household income to housing price can be misleading. It is a definite sign of unaffordability but not as much a sign of bubble. Most of the expensive houses in Toronto are owned by retired (or close) boomers or immigrants -- with the former group having bought their houses 20-30 years ago. Although their house prices increased significantly compared to their income, it's really not like they have stretched their budget to buy and live in their current houses. They would not be in any trouble in the collapse scenario. Of course, the debt to income rario is worrisome. I do think there are also a lot of middle class people who have stretched their budget to own a home and people who are levering up to buy more and more real estate. Those two people will get hurt. But for the former group, if they are forced to sell, im sure there will be a strong support -- from many affluent professionals who are waiting to enter the market -- considering the properties that will be sold are in the low-mid ends. (The scenario im describing may be only specific to Toronto)

+1 I'd say the real question is whether you should just buy it lump sum or DCA over time when you get some cash injection. There is some evidence that even buying it lump sum is better, e.g.,: https://awealthofcommonsense.com/2018/05/the-lump-sum-vs-dollar-cost-averaging-decision/

https://vancouversun.com/news/local-news/troubled-bitcoin-trader-quadrigacx-takes-another-bizarre-turn Bizarre situation at one of Canada's largest crypto exchanges

To me, this strategy somehow resonates with Buffett's stories about how he likes to go through the entire Moody's manual or how he makes a decision to buy / make an offer to a business in a short amount of time (he doesn't need to drag along). On the other hand, I wonder how much the sunk cost bias had contributed to the famous mistakes like Ackman's Herbalife short or Pabrai's ZINC bet... again not just due to the monetary loss but due to the time/energy that they spent on those investments.

One mistake I repeatedly notice from value investors (from both people in this forum and people that I know) is what seems to me the sunk cost fallacy. And I don't mean just not being able to get out of investments that are in loss, but rather due to the time/effort spent. Basically, you need to spend a significant amount of time and effort to study a company and compute the intrinsic value for the company. In fact, you spend more time/effort so that you can increase your confidence in the decision you are going to make -- whether to buy or not buy a particular investment. If you have decided to buy it (and share the investment idea), very rarely you change your mind... even against well-formed criticisms or unfolding events that are counter to your original thesis. You get stuck in the hole that you have dug. At the same time, you do need some conviction to stay committed to your idea and ride out the market volatility. If you had no "bias" at all, you will simply sell at the slightest price movement, bad news, or criticism. Also, you do need to inevitably spend time/effort in studying your potential investment. How do we balance this? Do you have any checks/methods to identify your own sunk cost bias?

Gregmal, for a guy who thinks posting investment returns online is like comparing a dick size, you sure like to boast about your past comments. ;D

oh no :'( RIP

+1 for the above. Also in general, people who think a particular altcoin will have more value than bitcoin due to some technical superiority is completely misunderstanding the "store of value" hypothesis. Gold is not valuable because it is the most useful/noble metal, but because of its history and collective consensus that has been built over time. Same with Bitcoin.

Are you willing to hold it for X period? Because I believe the long term view is the only advantage I have over the active investors.

Interestingly, this year the return statistics for CoBF pretty much resembles the S&P index return, a normal distribution with the mean around -5%. I don't recall such a close resemblance in earlier years. Usually, the reported CoBF members outperformed, if I remember correctly.

My returns (first) are in Canadian and time-weighted. The benchmark returns (second) are for VFV.TO, which is an S&P500 index ETF in Canadian. They are also time-weighted, assuming I buy/sell VFV.TO every time I make a contribution or withdrawal. I think this method of comparison is the most accurate for me, a casual investor who is trying to see if I can beat simple indexing. 2018: -10.8% vs. -2.8% 2017: +6.5% vs. +10.7% 2016: +19.0% vs. +7.7% cumulative: +13.0% vs. +15.9% So, I'm basically underperforming. I have been trying active stock picking for about three years now. I'm giving myself two more years to outperform the index on the cumulative basis or else I will switch back to indexing! 8)

Or just keep on with your professional career if you like what you are doing and find it meaningful. And just say -- what im earning now and what i will have in my retirement are _enough_.