SharperDingaan

A good chunk of that 13% is the Air B&B crowd; multiple properties cross-mortgaged against each other, running a negative carry every month, that is financed via a HELOC. More than a few were also laundromats; all else equal if they are not refinanced, when the mortgages are eventually called in, multiple houses will hit the market at the same time. Probably high-up on the BoC wish list. Most GIC's are now paying 3-4x what they were even 18 months ago; and at times it's often worthwhile to cash-in the old low rate GICs, pay the penalty, and reinvest in new high rate GIC's. Yield chasing not only diminishes, it gives the BoC a lot of extra 'security' as well (domestic income spent domestically). Of course if you're an analyst/reporter with < 10 years experience, this is all brand new to you! Opportunities to play the 'spin' The only 'structural' thing here is yield curves, returning to their historic term premium and normal shape; to get there is a matter of draining liquidity overall (raise the curve), and draining in the longer term faster than in the shorter term (raise term premium). The mystery is how soon, and how fast .... look to how many of the big borrowers have been terming debt out, and trying to borrow whatever they can Over the long-term, Toronto/Vancouver continues to gentrify, those who can't afford it move out, and we have hybrid work from home as a routine thing. 'Go' buses/trains move over to hybrid and full electrification; public transit networks branch out from rail lines, and improve connectivity/reliability. Via Rail electrifies from Windsor through Quebec City, and becomes part of upgraded electric grid. The middle-aged with kids move to the 'burbs, the 'aged' and the 'young' move downtown as costs come back down. Not a lot different than it is in most other global cities. SD

Agreed re Vancouver/Toronto. Toronto supply remains tight primarily because boomers aren't downsizing, newer buyers are being propped up by family, and most all new builds were pre-sold before they came to market. While higher interest rates is pushing some property into the market, it is primarily going to the 1st quartile of new immigrants. Where owners of new builds weren't able to maintain commitments (common), construction of the new build just wasn't initiated. The tipping point will be when the Air B&B landlords are forced to sell their empires; a while yet. Thing is, it's also a very narrow market, Calgary and Edmonton are quite a bit different. Nothing prevents a 'partnership' buying a house there, and renting it out; kids on the property ladder early, using the various tax plans available Should o/g came back at some point, and Alberta booms again, so does the value of the house. Obviously, property is mostly a 'mind-set' thing; but keeping an 'open mind' could take you a long way. We hold our 'cash' in T-Bills, UBS/CS, and BTC; we're also aggressive, so not for everyone. Look at the Purpose ETF's and their ETF options on the Montreal Exchange SD

This is press spin; the reality is that 'structurally higher interest rates' will only be temporary. Simply 'cause as more people get forced into selling their homes because the mortgage is no longer affordable, that rise in supply will rapidly lower house prices. More cash going to debt service, and less borrow capacity from the lower housing value, lowers spend, lowers employment, and lowers the interest rate. The real question is how best to use the deliberate 'spin' of 'highest interest rate in 20+ years'; versus 'the end of record low interest rates', and 'return to historic interest rates'. Canadian banks will do very well, but there are a lot of better alternatives. Normal curve restoration, extended real estate loan provisioning, CBDC, fintech, etc. are still to come, and will take at least a decade to flush through. While all though that time electric grids are being rebuilt, transport fleets moved over to electric, and lower income housing being built/re-built in mass, etc. Not a bad thing. SD

Conceptually, it's actually a very smart solution. Off-shore wind is limited to the shallow continental shelf, is stationary, and the cost of under-sea cabling to bring the power to a fixed point on-shore. This kicks off changes in floating wind power generation, ability to move the power itself closer to where it is needed, and ability to offload to wherever there are power-jacks and grid; enormously valuable in temporary coastal disaster relief. SD

Sadly, I have to save these, and it works much much better on the Swiss (UBS/CS) Too much of this gets you assassinated. SD

Add the cost of working (taxes, clothes, transport, etc.) to the cost of paid childcare per child, and most mothers would be far better off staying at home; especially if the plan is for more than one kid within 2-3 years. However, mention this to your spouse, and you are very quickly a dead man! It takes a lot of courage to buck the crowd, and it is especially hard for a 'super-women'. Social conditioning exists for a reason, and the powers-that-be get highly annoyed when too many people take the red pill. A few 'bolshies' is healthy; a swarm of them just screws up your day! https://en.wikipedia.org/wiki/Red_pill_and_blue_pill https://www.thefreedictionary.com/bolshie SD

Just to make this very clear ... The risk here isn't the bank, it is the sudden transfer in ownership of IB's share of the bank. The strong possibility that it temporarily rocks the market. I suggest Riksbank as the bank is systemically important, experienced, and well placed to orchestrate a subsequent share sale. Typically the event itself draws a lot of negative press, and a short period of 'phony bank', before greed kicks in. Puts to capture the initial announcement, immediately rolled into long calls right afterward. However, you still need to live while all this takes place; hence staying under deposit insurance caps, and keeping a higher cash balance on hand. Experience. SD

Agreed, there is nothing like witnessing sheriff auctions; to drive home the importance of always having your downside covered. The upside is that you also become very good at exploiting the positive side of risk, and it has served us very well. Sadly we're already committed to UBS/CS, and will be in there for at least the next year as the various spin-offs go to market. Pretty sure we're going to do very well; if only because the Marx Brothers need to clear the egg of their faces, and can only do it by 'guaranteeing' very successful spin-offs. We have saved tens of thousands of jobs in our banking industry, we have the strongest banks in the entire world, 'swiss finish', etc., etc. ...... You might want to keep more cash on hand; check the guaranteed deposit maximums in Sweden, move funds around to get under them; and invest in some long dated puts. When things happen they will happen fast, and most likely over a weekend. Given the chocolate makers poor experience expect to wake up to the Riksbank as a majority partner, and a healthy option gain. Could pay off a mortgage Take care. SD

The Iceland reference was to highlight some key facts ..... What happened in Iceland was very bad; however Icelanders are hard asses, and told their creditors to f*** *** with their demands. This is what we will pay, take it or leave it; your choice. Hissy fits and 'dire' threats all over; yet a decade later ? it's still the same major banks, and house prices are 3x higher than they were. Sh1te happens, there is disruption, but it doesn't really change anything. Each nation has its own peculiarities. Iceland has that large pool of expat 2nd home purchasers. Sweden has that 140 year+ mortgage amortization and 'structured' loans - whatever issues we have today can be relieved at a higher cost in a later term. Identical to the Icelandic this is what we can pay, take it or leave it; inclusive of the hissy fit - it would just execute differently in a Sweden than in a Iceland. Of course, not great if you own shares in a major Swedish bank. But if even the major Icelandic banks did not go under despite a much worse disruption, would it not also be reasonable to expect much the same of the major Swedish banks? And .... if an enterprising lad had puts on those banks and had borrowed in Krone against a Swedish property to invest in US T-Bills ... wouldn't this disruption be an opportunity ? Possibly measured as ownership of an additional property !! Then look at the land of high mountains and chocolate .... Lots of disruption, used to be two big banks, then there was one ... now maybe its back to two? (meet the new boss, same as the old boss!). Most would have to conclude that this is the norm, not the exception. And if so .... Sweden is an opportunity! Different strokes. SD

You might find it useful to look at Iceland ... the Iceland financial crises was 2008-2011 https://guidetoiceland.is/history-culture/how-to-purchase-property-in-iceland-a-homeowner-s-guide https://tradingeconomics.com/iceland/housing-index The index shows a level of roughly 225 through the financial crises; today it is about 700. 3.11x over 11 years .... seem familiar? The guide makes the point that it's hard to buy real estate in Iceland unless you have Icelandic connections, and that most of the price rise is attributable to Icelanders working abroad buying their 2nd home in Iceland. The familiar leave, make your money elsewhere, and return to a fully renovated and paid off house in a low cost of living community ... the more you need a nearby hospital, airport, infrastructure, etc. the more you pay ..... seem familiar ? House prices only fall if mortgagees can no longer cover the cost, everyone has to sell, and all at the same time. Very, very unlikely in Iceland as prices are held up by repatriation dollars and relatively few with mortgages. It might look a little different in Sweden, but it is hard to see it being much different than Iceland. Just keep an eye on how many residents you see walking around with options/investment textbooks. It doesn't work out too well !! SD

Typically the more dense the medium the faster the transmission speed, and the less energy absorption there is; in close-up application, the collector is working primarily off energy absorption, and echo reflection from disturbances. The detectors signal feed is calibrated to what is expected, the exceptions amplified, and then run through an algorithm to determine potential attribution. Drill 2-3 holes, put the detectors in both the holes and on the surface, and you can get a localized computer generated 3D interpretation with minimal disturbance. While the tech is not overly precise, versions of it have been in European use for decades as a means of detecting unexploded bombs. In archaeology, bones show up as a hard echo return. As there is more space to work with in remote locations, emitters can be on the surface and using a much more powerful signal, whilst detectors can be either on the surface (some distance away) or in the substrate itself. Were this o/g you would use the geophysics to find oil/gas traps in the sediment layers, and estimate what is there; thereafter if it is promising, it would be drilled to prove if you're correct or not. The value-add is in the interpreting algorithm; the emitters/detectors used to generate/collect signal are old technology. And as with all AI, the more data that you can train it on the better it gets. The tech that we were using could detect iron vs concrete vs plastic pipes, eliminate aluminum cans and shrapnel, and draw 'interpretive' 3D maps of piping, foundations and underground anomalies, adjusted for land slip over the years. Bomb craters and graves showing up as undefined black blobs. SD

Keep in mind that where you live has a lot to do with this view. We have a great many UK acquaintances who are depressed ... almost entirely because they live in the UK. Lots of reasons .... high inflation, high interest rates, too much debt, widespread mismanagement, debasing pound, loss of EU status, yada, yada. Yet ..... despite such a terrible environment .... almost nobody is willing to get on a plane? ... and leave for greener pastures ?? There are a lot of very good invitation-only private UK companies for sale, going for a song; simply because the founders want to partner up, cut back on their involvement, and train up a successor. They are tremendous opportunities, and we have a nephew in such a partnership. During our London property re-development, we used seismic detection to assess ground stability net of land disturbances (heavily bombed area during WWII) and burial sites. Small diameter directional drilling, placement of a seismic vibrator in different sections of the bore, and an electronic detector. As seismic waves travel differently through voids/disturbances vs solids, the time differences can be used to both locate the disturbance in 3D, and estimate its shape; very useful when council planning requirements are an issue. Some discussion later, and we're using the technology for burial detection in flooded areas (Canada's residential schools), and geo-locating dinosaur bones in bogs/sedimentary basins. The nephew being on two digs this season. SD

The reality is that the 'west' is a waning global power, and 'China' a rising one; both sides use propaganda to rally the troops. However everyone has to live somewhere, and propaganda is just another cost of living. The other reality is that the more scorpions in the bottle the safer it is for everyone. When done well; dictators rise on heaps of skulls, to be replaced by global powers every decade. Defense spending develops/drives new technologies, diplomats talk, peace and trade prevails, and the world is a pretty good place. But same as with wildfires, if the accumulating fuel isn't periodically burnt off (ongoing regional wars/conflicts); when the fire eventually happens ... it now burns everything. Sadly, extended periods of peace breed complacency, which triggers the next conflict; about every 70 years for a Europe. Leadership changes, and the concurrent death/destruction lays the groundwork for the next 50 years of rebuilding and prosperity. Ukraine, elimination of Putin, yada, yada ... The present day lower-level 'West' vs China conflicts are actually a good thing. The pushbacks will find a norm, and ambitious men/women on both sides will work the shadows the same as occurred throughout the cold war. Both sides benefit from the military spend and technology acceleration. It really means more things produced at home, and higher prices than we currently pay (inflation). During the cold war the 'west' did not rely on product made in Russia, so why would you expect the 'west' to rely on cheap product made in China today? SD

Just keep in mind that capex investment is often deceptive; and Exxon is a good example. What is Exxon actually doing? It continues to buy back stock in a big way, and has chosen to accelerate maintenance expense instead of having to pay the money out as 'windfall' taxes. Where is that additional capex going? Primarily into things that either reduce depletion/reduce production costs/lengthen reserve life, or enhance ESG reporting (lower emissions, etc.). Why? The more extractable oil there is the lower the cost/bbl, and the better the ESG; the less pressure on Exxon to sell 'dirty' assets, at a deep loss. X% of net income before tax, about equal to the incremental capex. Smart. SD

You might want to look at hard economics, and not press releases. We are entering a world when there will be a lot less oil usage, as energy consumption moves away from both internal combustion engines, and plastics; the major users of oil. Over the long-term; less demand, on the same supply adds up to a lower future price, and a shut-in of all fields with a marginal variable cash cost/bbl above that future expected price. An off-shore field is economic, primarily because it is both prolific and expected to have a long life; either because of low decline rates, or ability to tie into additional nearby reserves at low cost. You need to add the interest cost on the development debt/expected life/expected annual bbl output, to the variable cash cost/bbl; if it is above that future expected price the field is uneconomic, and not developed. But if you are a major, and you collectively stop developing new off-shore fields (i.e. discipline), supply shrinks and that future expected price will be higher than it otherwise might have been. The existing off-shore fields that you already produce from will be able to produce for longer, you will not have to finance anything much more than maintenance capex, and you can use the massive cashflow savings to pay down debt, buy back shares, pay dividends, etc. Exactly what we see happening today. At the same average oil price; a field with a 25 year reserve life will typically have a payback period of < 10 years, and will be highly profitable from then on until roughly the last 5-8 years of expected life. At which point profitability will sink according to the cost of secondary and tertiary recovery, divided by the expected life extension (35-25 years). Of course the reality is that oil prices will move up/down, and the field will either boom or shut-in as price changes. There is lots of undeveloped oil in the world. It is just not economic to produce, and is becoming even less so as we all move to alternative sources of energy. The mindset of 'we have to develop it' .... just isn't true anymore, the world has moved on. SD

Hate to tell you this, but those fields are not coming into production for a very long time, if ever; ongoing development will be kept marginally above the annual lease requirement, but that's about it. Simply because the majors will run down their existing fields (20-40 yr+ lives at current technology) first, and then assess whether the development of this field (in an EV world) is even required. Keeping it in the ground, serves everyone a lot better. SD

SA used a much higher average oil price for budget purposes, and can be expected to act accordingly. Longer term supply/demand clearly favors higher prices; whereas todays pricing is largely a paper oil manufacture, with contracts held for physical being met primarily out of SPR's and ship-to-ship delivery. Western SPR's are dwindling, Asian SPR's are rising. It is a simple thing to co-operatively slow down ship-to-ship delivery for a time, let Asian refiners draw down their SPR for a bit, and sell their resultant refined product at much higher prices. NA and Europe are in summer driving season, and the suck on refined product inventories has already begun. Russian runs on Chinese banking platforms, gets paid in Yuan, and will do as its told. SD

There is a big difference between very smart (fragile) and very adaptable (anti-fragile). As a species we're even more adaptable than venereal disease and cockroaches, both of which have proved near impossible to completely wipe out, and hence are everywhere! The ghetto thing is a good example; no matter your might, it is near impossible to peacefully keep people in a ghetto under worsening conditions; they riot, they cut off heads, they storm national capitals etc. and with a little manipulation - overthrow the existing order. They adapt ... the 'authorities of the day' pay the price .... and they call in tomorrows dictator to put the disruption down. Following which there are a rash of terminal 'accidents'; time at the top is a limited term engagement. Adaption. SD

Couple of other things .... Ghost towns are the 'norm' - not the exception; every time a mine is played out, a material employer closes, a natural resource is depleted (trees, fish, etc.), an existing technology is made obsolete (family farm, etc.); we just don't like to recognize that change is inevitable. The whole sustainability, reduce/reuse/recycle movement is a counter-culture reaction; produce sustainably, and there will be a lot less of this. A Canada routinely has more job openings that it has applicants, often because of skills mismatch; stability is enhanced under combined automation and immigration, but it means a very different looking Canada. Canadian culture adapts with the changing times (breathes), and diversity demonstrate its promise; not a bad thing. But in a China/India with a lot of young people in need of a job, automation = mass unemployment = civil unrest = repression; add the mass migration of climate driven change and you get the next crop of Stalin's, Hussein's, Marcos, etc. Great for the weapons and drug businesses, not so much for everyone else. Yeast in a diminishing sugar solution rapidly dies, as the food runs out and level of toxicity(alcohol) increases. In human terms; lower birth rates as kids cost more/start later in life, and higher death rates from both climate driven change and poorer health. Humans are not special, however we're at the top of the food chain because we are the most adaptable. Point? This plays out differently, dependent upon where you live, and if you are able ... you migrate to where the grass is greener. Obviously, the more of that greener grass in your neighborhood, the better off you will be. SD

A different approach .... Calculate what you would pay in MER per $1M of Assets Under Management; assuming 1.5%, it's about 15K/yr/million [1Mx1.5%]. Spend 5-10K every 1-2 years for a report, an asset mix, and a once-off investment recommendation assuming no further asset mix rebalancing for 12-24 months. Thereafter; have either your PA, or investment designate make the trades, and get out of the way. The higher the AUM, the more cost effective the approach. Repeat, reliable, once-and-done business also makes you very attractive to the fee-only advisor. Systematic 3rd party objectivity, and ability to acclimatize/train successors are bonus. Common practice amongst wealthier families where there is little interest/ability, and not limited to purely the 'investment' realm. Pre-nuptial agreements, trophy wives, heiresses, significant-other training, etc. It requires a change in mind-set, and it works very well SD

A few 'investment' words from an accounting 'heretic' ... coming up on conventional 'retirement' in a few years. 'Investing' is nothing more than managing the chequebook. Run your business/life well and there will be ongoing positive cashflow from operations, to put into either growing the business, or paying back to yourself. You can grow the business as cashflow allows, borrow/repay to expand the business quicker, or borrow/acquire to achieve scale, efficiencies, and diversification; and along the way, you will have to hire and rely upon people. As an 'investor' you get rich by trading the shares of companies managed by other people, as an 'accountant' you get rich by building/running those companies. For proof, look at the traditionally ethnic big trades and building companies in your community... and who owns them. The good accountant, plans today for where the company should be 4 years out, and executes according ('Strategic Planning' in MBA school). The accountant brings independent thought, a longer term mindset, expectation of continuous change/cyclicality, and a plan by which to grow todays tiny enterprise into something much mightier. Add an investment background to this (CFA) and you get both very good risk management, and ability to take on the inherently risky without the commensurate inherent risk. Todays fleet of 1, becomes tomorrows 3, and 8 the day after. The good accountant is also a master at the accounting 'fiddle'. That 'how to knowledge' allowing a rapid 'look through' the numbers to reality, ability to detect 'smell' many quarters away, and ability to assess the essentials on little more than a napkin. It's often very entertaining, and if there's also an options market .... both refreshing and very rewarding! Accounting and finance are friendly rivals, but different 'tribes' on either side of the same coin. Each sings its own song and manipulates popularity metrics to its own ends. Your first few 'jobs' will set your 'circle of competence'; simply because to invest successfully in sausages, you need to have worked in a sausage factory. At the entry level, that factory could be anywhere in the world, so take advantage; whether you choose to stay in that industry, or move on - that 'inside' knowledge stays in your head. Thereafter, YOU are the critical asset; and the more effectively that you can apply your toolkit, the more valuable you are. Demonstrate the chops/ability, and the money will find you; there are lots of investment dollars in the world, but talent? ..... not so much! Good luck! ... after your first million, habitually donate something sizeable to a charity every year. SD

PPR is failing, has uneconomic production spread all over, and is trying to do 20%+ dilution at 9 cents - when the shares routinely trade for less than this. As/when PPR sells chunks of their production; the related tax pools will go with the asset sale, and the desired production will very likely be available for a lot less per flowing bbl. SD

The most a fund will offer is a annual NCIB, and a trolled stink bid; the expectation being that if you need money, you are going to borrow it from the fund, and pledge your holdings against the loan. You will discover that at best a bank will only give you up to 40% of the market value, and that if you really need out; depending on the volume, you will be accepting a discount of 20-40% to market. You will also discover that as soon as you try to sell even a few shares, you will automatically tank the share price by 10%. SD

Some good names in this thread .... but a few cautions learnt the hard way. Stick with the names on the senior exchanges, and nations with better investor protections. Those higher listing requirements/protections both save your ass, and give you a deeper market to trade against. When the sh1te occasionally hits the fan, dog sh1te exchanges often go 'no bid'. Easy to get it in, hard to get out. Until there is a 'liquidity event' to sell into (who knows when), you are relying on dividends and interim sales of stock. You are not going to be swing trading, there will not be an options market to sell into, and you need all the interim shares you intend to sell - on day 1. You are liquidating over time. Look hard at the alternative; crypto ETF's. Disliked by many because it is both crypto, and volatile; however there is both a daily market, and if you have 'accredited investor' status; you should also be able to access CME Bitcoin and Ethereum options. Much easier to swing trade, you have the ability to earn premium income on your indirectly owned BTC/ETF, and price change happens much faster. There is also growing evidence that BTC/ETH is poorly correlated against US treasuries. Different strokes for different levels of risk/expertise. Good luck! SD

The reality is that long-term thinking is almost strictly a learned behavior, and somebody had to guide you; sadly for most it means having to derive it yourself, if you ever get it at all. However even if you have a guide, it doesn't mean the horse will take to it. A lot of folks take the view that 'they don't need to'; 'cause you're doing a far better job at it than they ever could, and it's your thing - not theirs. Ultimately it comes down to what makes you happy; and for most, the time horizon is the here and now. What am I saving it for? is a hard sell, when in the future I could well end up with dementia and beyond caring, if I even live that long (Keith Richards!). The same decision a retiree has to make when he/she has more money than they will ever need over their remaining lifetime; spend it, enjoy yourself and live longer as a result - or just fondle it and be a hermit? People will make mistakes, and it is their right to do so. Aside from some minimum guard rails (safety net) to mitigate the collective harm, let the market 'clear'. SD