Liberty

It would be statistically quite improbable if this board was a representative sample of the human population. I don't think it is. There's a huge sample bias (self-selection). That's like going to your local improv club and finding out that it's mostly composed of extroverts. Not really surprising.

Thank you! I have always wanted to find this statistic because it's frustrating to hear Americans talk about Canadians as the world's most prudent folks. You just cannot have 25% down payments as common place without lots of other problems (given the size of houses globally). This meme about Canadians being financially prudent will be looked back on later with great amusement.

There's a big difference between "flawed", "incomplete", and "sub-optimal" and "meaningless".

But the CAD has already fallen 20-25% from its recent plateau, and even more from its recent peak. At a certain point, imports just cost too much, and we're importing a lot of stuff, while many of our exports are priced in USD anyway (oil, metals, etc). If the fed increases rates 2-3 times and the BoC keeps them where they are each time, the CAD will get slaughtered. I'm no expert on this stuff, but the way I think about it, there's a range within which the CAD is fairly neutral on housing. It's basically kicking the can down the road, not solving anyone's problems but not making them worse. And then out of this range higher or lower, it's bad for housing. If the CAD goes back up too high, this hurts manufacturing and means fewer foreign investments into natural resources and such, which is bad for housing when people lose their jobs and big projects don't get built. If the CAD goes too low, then imports start costing a lot, the cost of what people buy in stores goes up, and that hurts housing directly since people have so little money to spare thanks to their bloated housing costs, they're already tapped out. In other words, if the CAD goes to 0.50 USD, suddenly everybody's food, vehicles and gasoline, electronics, consumer products, etc goes up a lot, and that'll squeeze a lot of people out of their houses that are already twice as expensive as the equivalent US house...

You mean ever? Money will just stay free forever and that's the solution. Case closed. Is that something you want to bet on? Maybe houses will also keep appreciating at multiples of wage growth for a decade or two also, the difference can just be made up of even more debt... Where do you see the CAD vs the USD in 2-3 years if the Fed methodically raises during that time?

Canada could delay, but it won't have a choice but to follow the US sooner rather than later (as always). Otherwise that'll kill the loonie, and even if the BoC doesn't raise rates immediately, the bond market could anticipate it, affecting mortgages. Personally, I'd love it if the BoC went the opposite direction from the Fed and the CAD went down to 0.50 or something, because most of my assets are in USD and my costs in CAD, but I doubt that'll happen. i can't wait for that to happen... US - CAD 0.5 !! I just drooled a little :P

Canada could delay, but it won't have a choice but to follow the US sooner rather than later (as always). Otherwise that'll kill the loonie, and even if the BoC doesn't raise rates immediately, the bond market could anticipate it, affecting mortgages. Personally, I'd love it if the BoC went the opposite direction from the Fed and the CAD went down to 0.50 or something, because most of my assets are in USD and my costs in CAD, but I doubt that'll happen.

I think the coming interest rate hikes, which are now clearer than ever, are pulling demand forward, among other factors.

Pure madness...

http://www.valueplays.net/2015/06/17/ignore-the-buffett-indicator/ Some interesting points, which had also been made before by the Philosophical Economics blog.

The question is: Does the market have to reach bubble proportions before it tanks? The tone today seems to be a relatively new way of thinking about market levels and threats of downturns that I don't recall encountering in the late 70s, or the 80s and 90s. I don't think it does, and I don't think that's what the author is saying. I think he's merely responding to the general calls of bubbles that we've been seeing from some people for years. If people talk of bubbles, it's not weird to look around for them and see what we find, no?

Another interesting piece on buybacks: http://investorfieldguide.com/buyback-extravaganza/

Reminds me of this plumber joke.. Obviously their fee is for knowing when to be in cash and when to invest (and in what). Whether that's worth it for their services is another question, and I don't know the answer, and I'm not familiar with them.

This post has some stuff about how some lenders like Vancity are offering all kinds of crazy products (ie. they give you half of your downpayment at 0.01% interest, etc): http://www.greaterfool.ca/2015/06/14/the-money-changers/ Also: http://business.financialpost.com/personal-finance/mortgages-real-estate/a-third-of-canadians-would-struggle-if-mortgage-rate-grew-by-only-1-survey-finds "A third of Canadians would struggle if mortgage rate grew by only 1%, survey finds" I am debating whether I should get in.. (Toronto) I guess not?!!? It's your decision, it's your money, same as with stocks. But if you're asking me what I would do, especially in Toronto, I would rent (I'm currently renting, and I live somewhere a lot less expensive than Toronto). If you are really itching for a nice place, then rent a luxury condo or house, it'll still cost you a lot less than buying. Put aside the difference for a bigger downpayment down the road and wait for this real estate mania to be over. You never get a good deal when you are buying something that everybody else is buying, especially when they think it'll keep going up fast and can't fall.

Pointless to look at P/E ratios, there is no correlation between P/E ratio and next year or next 3-5 year returns. Shiller P/E has a small correlation. The risk is in earnings going down/margins contracting, not necessarily in P/E ratios contracting. Depends what you're doing. He's not trying to predict all things that can go wrong (such as margins contracting) or forecasting returns, he's taking a back of the envelope look at current valuation, and P/E is a measure of valuation (as flawed as it can be).

http://brooklyninvestor.blogspot.ca/2015/06/in-search-of-stock-market-bubble.html

This post has some stuff about how some lenders like Vancity are offering all kinds of crazy products (ie. they give you half of your downpayment at 0.01% interest, etc): http://www.greaterfool.ca/2015/06/14/the-money-changers/ Also: http://business.financialpost.com/personal-finance/mortgages-real-estate/a-third-of-canadians-would-struggle-if-mortgage-rate-grew-by-only-1-survey-finds "A third of Canadians would struggle if mortgage rate grew by only 1%, survey finds"

The bubble is not only in luxury properties.

http://www.bcrea.bc.ca/docs/economics-publications-archive/2015-06-foreign-buyers-research-report.pdf

http://www.hedgeroll.com/hedgeroll/long-form-interview-with-valueacts-jeffrey-ubben

Finished it. Really enjoyed it, recommended.

https://twitter.com/benrabidoux/status/608612145991938048

That's why it's so surprising that used copies of Klarman's book are selling for what they are!

Extremely good data visualization. Helps you realize the scale of WWII...

You are correct to a point. Art is very personal. But when people start spending $M on movies which look like they are filmed by 3 year olds I think I'll start complaining about that too. :) I might not like every movie, but even Killer Clowns From Outer Space couldn't have been written, directed, and filmed by a 3 year old. Yeah, I'd love to find something I could buy cheap and sell to one of these art collectors for real money. The greater sucker theory. You are mistakenly conflating price and quality. They are quite separate. Anyone can watch Shawshank Redemption or The Godfather for a couple bucks, because there's no scarcity. Yet the quality of those movies is widely considered to be quite high. Art that sells for a lot of money does so because there is more demand than there is supply. Some rich people demand the originals of certain paintings or sculptures from certain "name" artists, and there aren't that many of those going around, so they get quite expensive. And the wealthier art collectors get as a group, the higher prices will go. A quality reproduction will be functionally pretty much the same as an original, so whatever artistic quality there is (or isn't) will be present (and that's subjective, so it's pointless to try to project your tastes on the rest of the world, btw). Art collecting is about something else.