cwericb

I also see that Blackberry share price is up about 60% since the end of March.

Every time I hear someone predicting that autonomous vehicles are just around the corner it makes me seriously question their credibility. The day I see an autonomous vehicle drive through a snowstorm, dodging snow drifts and whiteouts, then perhaps, just perhaps I might believe autonomous cars might have a future. Until then they belong with the Jetsons.

Hold on pete, given the concentration of wealth in the US, one might suggest they have yet to give up their serfs

Excuse me, but WWI started in 1914 and the US finally helped mop up in 1917 when it was almost over. WWII started in 1939 and the US didn’t enter until 1941. If memory serves me correctly I believe there were a few other nations involved in both those wars. Now what other wars do you include in “won many wars”? Vietnam? Afghanistan?

"I am just a poor Canadian who knows more about the US than most Americans.... :-)" Ditto. It is unfortunate that so many Americans don't think outside the box and can't see their country as does the rest of the world.

UCCMAL Your comments on the US military are right on. I also believe that there is a correlation between the end of the draft and the increase in the crime rate in the US, and particularly the rise in gang related activity. At one time the youth in the inner cities were inducted into the military where they found a new family, received excellent training and were given a moral compass.

Americans have always had a rather naive view of themselves in perspective to the rest of the world. One only has to look at the President as an example. Rich? What is rich? Is it strictly monetary? Are you rich if you make a comfortable living, yet a medical emergency could bankrupt you at any time? Are you rich when your murder rate in a single city is multiples of that of whole countries?

Anyone who disagrees with the conservative view now gets called a “Leftie”. Right wing conservatives used to use the word “Commie”. Given the present administration’s Russian connections that terminology now would seem a bit awkward.

" I wouldn’t talk about 15% annualized anymore, nor I have any idea which kind of return should we expect from now on" Ditto

Put me in the camp with those who firmly believe that FFH will continue to do well. As to past performance, I have owned this company for ten years, my initial investment has nearly tripled in value, and I have no complaints. Too many people have been looking at Fairfax almost as some sort of investment fund. It is not. Sure, their investment strategy has been spotty at times, but look at the world wide insurance company they have been putting together in the meantime. Yes, they have made some investment bets that have not paid off. But personally I like to make relatively safe investments with the bulk of my own portfolio so that I can afford take the odd long shot on the side. I see Fairfax’s investment strategy as having been somewhat the same. Their hedges received a lot of criticism and while they may not have paid off, they did serve their purpose - yet a lot of people refuse to acknowledge that. This is an insurance company, I can’t criticize them for buying insurance. If I my house doesn’t burn down, did I make a mistake in buying insurance? We might also remember that Fairfax received similar criticism for their CDS holdings and we all know how that worked out. People tend to focus on Fairfax’s poor investments and ignore the fact that they have also made many successful investments at the same time as they have been putting together a world wide insurance conglomerate. Now they want to concentrate on refining those insurance operations and growing their own business. Prem warned, returns would be “lumpy”. That’s just fine with me. I am in this for the long haul and am excited about the future.

Liberty, I think that is probably the crux of the matter. We are having a national/international discussion on something that is actually very regional. Where I am, probably not that far from you, I would be willing to bet that if the housing market in some of the major cities were to crash, prices in my area would actually continue to increase in value.

Yes Clutch. If you go back to the start of this thread - 5 years ago - some said they were waiting for the imminent correction before they would buy. Unfortunately no one has a crystal ball, but even if we have a major correction sometime in the near future it is unlikely they will find anything cheaper than it was five years ago.

For years I have said that there cannot be such a diversity of property values in one country. I live in a place where our housing prices are reasonable and downright cheap in comparison to TO or Vancouver. However what we are finding now is that people from those cities are beginning to understand that a lot of people no longer have to live close to the center of a large city so long as they have decent cell phone and internet service. We live in one of the top tourist destinations in the world. We are within 2 hours by air from New York or Toronto. We have some of the best golf courses in Canada. We have a very low crime rate. We have some of the world’s best beaches and a decent education system. Our biggest industries range from tech, bio-science and aerospace to basic industries like farming and fishing. Much of our area is serviced by fiber-op and you are never far from a cell phone tower. You can purchase a relatively new 4,000 sq ft waterfront home in an upscale subdivision on one acre of land within 10 minutes of the centre of the city for less than a million bucks. Move a 20 or 30 minutes out and you can have a 10 year old 2,000 sq ft, 4 bedroom waterfront home in a prime area for $300k. However, people have finally realized this and we are experiencing a major increase in immigration from the rest of Canada as well as internationally, especially from China where money seems to be inexhaustible. Given our present housing prices, even if the Canadian market was to collapse our prices here would likely to continue to increase. There is a lot of comfort in that, and in this discussion people seem to forget a basic fact. In the 1950's the world population was 2 billion people. Today it is approaching 8 billion and rising rapidly. People have to live somewhere and for many reasons Canada is exactly where a lot of people want to live.

This is probably ‘small potatoes to most here but these investments have been significant to me. In 1993 I acquired 240 shares of Royal Trustco worth about $2400 CDN. Then they became Gentra Inc in 1997, BPO Properties, (part of Brookfield) in 2004, then BOX.UN - Brookfield Office Properties Canada in 2010 and is now considering a buyout offer from Brookfield Property Partners. Going back that far it becomes difficult to keep the facts straight, but this is my recollection. During the time I held them, along with regular dividends, there have been several “special dividends”. In 2004 they paid out a dividend of about 25%, and one other time I believe there was a special payout of nearly 50% of share value. In the past several years the regular dividends have averaged about 4.5% per year, but combined with another special dividend last year they paid out a total 15.3% for 2016. The original 240 shares have now increased to about 1,000 shares after going through the various buyouts. The shares are presently about $31.50 CDN - about $31,500 total and this number doesn't include some of the special dividends. If the buyout from Brookfield goes through it will be a cash payout and the end of the line for those original shares. There is speculation that the offer may increase before then. The proceeds will either remain in cash for a while or be reinvested into one of the Brookfield entities. I bought Fairfax in 2007 at $228 (today $620)and added through the years and have no complaints. The problem now with long term holdings is capital gains tax. Should Canada increase the rate from 50% to 75% of gains being taxable I will be in trouble if and when I sell. PS. I have also held Royal Bank since 2007 at $48 and it has twice split since then and is today about $97.50. Have added several times since then.

rukawa: “The implication here is that there is a level at which it does not make sense to buy real estate. Even cwericb would have to admit this number exists even though it might be some platonic idea that is never reached in practice. I am curious as to what cwericb number would be for a sane upper limit to house prices? And how he would change the analysis above.” Well don't forget that essentially there is a certain correlation between housing prices and rent and you have to live somewhere. Clutch: No argument. Buying a property other than your principal residence is an entirely different matter. But never forget the fact that gain on one's primary residence is tax free. Viking: “First time housing buyers today are highly leveraged. IF we get a correction of 20-30% first time buyers will get cleaned out.” Not necessarily. First you need a 20% down payment or insurance from CMHC and when push comes to shove, those guys will probably work with you. Second, if my house drops in value by 20% the house doesn’t go away. I still have to live somewhere and either pay a mortgage or rent. Rb “But in reality, house price declines come with long and bone crushing recessions. So if the house price drops you get wiped out financially and you loose your house because you can't afford the huge mortgage payments anymore because you're suddenly out of a job.” If that happens you are probably screwed anyway. Funny, but everyone on this board is a risk taker. Otherwise you wouldn't be investing in the markets which, who knows, could all be a house of cards. But when it comes to your home its right there, its where you and you family live. There is little risk to that aspect and to a certain extent its value is not what it would bring on the market, but how it provides a place for you and your family a place to live. Most certainly we would like to see it escalate in value, and yes, there are risks associated. Sorry but I gotta go

Another point. Should one decide to continue working while having a RIF in place, it is not a pretty picture. Also, after retirement one might like to indulge themselves in a nicer vehicle(s), more travel and other 'luxuries' and hobbies one did not have the time to enjoy previously. As far as reducing car expense is concerned, would you expect to spend your ‘golden years’ sitting around the house all day (or should I say ‘the home’) with the occasional trip to the grocery store in ‘Old Betsy”? Have any of you guys put thought into exactly what you would like to do after retirement? And what sort of budget do you see required for that lifestyle?

Couple of comments : “...they can't keep on moving [taxes] higher.” Agreed but could you be sure to explain that to Justin, just in case? “Moreover, when you get to the point of pulling money out of your RRSP, you will likely not need as much funds as you need now.” Let’s see, if I’m working, I have the weekends, maybe, and a couple of hours every evening in which I spend money. But when if I am retired, essentially 100% of my time is leisure so I have 2 or 3 times the amount of time in which to spend money. And people think they will spend less money when they retire? That's like when I'm fully invested and the market tanks and my broker tries to tell me its really good news because its a 'buying opportunity'. I also still have trouble with the government taxing me on 100% of capital gains in an RRSP vs 50% of my gains outside an RRSP - and THEN on top of that they claw back another $6-7 K OAS. Also remember that after age 71 you do not have a choice as to the minimum amount or timing of withdrawals from that RRSP/RIF. Take the example of an individual selling a summer cottage and incurring a one time substantial capital gain while drawing down a RIF. Not only does he lose his OAS but it also gets reduced for several years after that.

That's an appropriate argument for buying vs. renting. But if you consider real estate as pure investment, why can't we compare it to stock market? Ever trying to live in your portfolio? Although for Toronto in the past 5 years, you'd come out ahead investing in a house (if you took any leverage) vs. investing in S&P500. No leverage, I think it's a wash, ~100% for both investments. While you will pay income tax on 50% of that investment gain, but 0% on the gain on your principal residence. That's no wash. But could anyone have predicted this outcome (not just predicting non-collapse, but skyrocketing of hosue prices)? This is similar to the situation with home computers years ago. A home computer would drop in price drastically as new technology came out almost monthly. Some people went for years with out a computer because it would be cheaper next month. Others simply bought the computer that would do what they needed it to do and ignored the fact that it might be half that price in a couple of months. p.s. If your share drop 30% you might still have same intrinsic value of the business Perhaps, but what actual use is that share to you. Can you live in it? House prices can drop or increase by 90% and you still have the house to live in.

Timing the housing market does not work. Want proof? This thread was started five years ago. Think about it. Had someone deferred buying in 2012 expecting a collapse, that same home could now be 50% more expensive. Purchasing in 2012 instead of renting, one would would have by now: 1) paid down a percentage of his mortgage 2) experienced a substantial gain in the value of his equity 3) had a very nice tax free increase in his net worth On the other hand, the renter would have: 1) helped his landlord pay off his mortgage 2) probably experienced, or will experience an increase in rent payments. Yes this is hindsight. Yes housing prices may take a dip. But investing in a house cannot be compared to buying shares in the stock market. A share is a share. A house is a home. If your shares drop 30% you just lost 30%. If the housing market drops 30% you still have 100% of your home. Also. Comparing the 2007 American housing market with the Canadian housing market is not an equal comparison. There are major differences, and there is much more to the Canadian housing market than two or three cities.

RRSP’s are awful with a few exceptions. Does anyone really think that tax rates will not increase over time? Then to add insult to injury, there is the OAS clawback. At one time when RRSP’s came into being, interest rates were high and many people had invested in GIC’s. But in recent years people have had their RRSP funds invested in mutual funds or the stock market and have been accumulating capital gains rather than interest. But under an RRSP you are taxed on 100% of your capital gains, not 50% as are gains outside the RRSP. So your capital gain taxes are doubled, you will likely lose some or all of your OAS, and then you may be pushed into a higher tax bracket and the tax rates are probably much higher than they were back when you put the money in the RRSP. TFSA’s are much better - as long as you don’t suffer losses.

The thing I'm curious about is whether the electorate would see an increased inclusion rate as a good or a bad thing. Read an article the other day somewhere that mentioned how the capital gains rate was one of the perks designed for the “rich” or “wealthy”. I certainly do not consider myself in either of those categories or even close, but I have built up substantial unrealized capital gains over the years and any increase in the tax rate would be very painful.

They're just softening us up for when they do it.

"BMO - they'll give you $1000 but they deposit it into your BMO chequing account. Want the cash but don't have a BMO chequing account...? Well, I guess you'll just happen to sign up for one now!" That doesn't really bother me too much. CIBC did something like that a few years ago offering Aeroplan points. I took advantage of the offer and then closed closed the account. If more people would do that and the banks would soon stop offering giveaways to get business and compete with rates.

In my very humble opinion, the Canadian Medicare system could be greatly and immediately enhanced by a simple modest deductible - say just $25 per visit with a maximum of $250 per year. Or to put it another way, the price of about two packs of cigarettes per visit. Not only would it stop tens of thousands of frivolous visits to the doctor or outpatients, it would also inject some cash into the system. For those who really can’t afford it, Social Assistance would be paying it anyway.

bizaro86 you might be interested in this from the CIBC website: “The Bank Act requires banks to inform customers in plain language that coercive tied selling is illegal. To comply with the law, CIBC has created this booklet to help you understand coercive tied selling. ... Coercive tied selling is illegal and is prohibited under Section 459.1 of the Bank Act. More specifically, it is against the law for a bank to "impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the bank and any of its affiliates, as a condition for obtaining another product or service from the bank". You cannot be unduly pressured to buy a product or service that you don't want from a bank or one of its affiliates, to obtain another bank product or service.” https://www.cibc.com/en/legal/tied-selling.html PS: All Canadian banks are required to publish the above statement.