Go Back   Alberta Outdoorsmen Forum > Main Category > General Discussion

Reply
 
Thread Tools Display Modes
  #2281  
Old 06-09-2022, 09:32 PM
Dean2's Avatar
Dean2 Dean2 is offline
 
Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,043
Default

Map maker

Your bonds will always yield the same. That is my whole point. When interest yields get to 6% your 3% bond will have a value exactly half of what it was when u bought it at 3. That is precisely why I am saying the value of bonds has a really big drop yet to happen. You have to pay tax annually on the interest but if you can live on 3 percent yield, after tax, that is one thing, but it would be twice as easy to live on 6 percent.

I have also has a number of pms from guys worried about the fact that many of the best dividend paying stocks are close to their all time highs. TRP, ENB, PPL are at all time highs and folks are worried that if they buy at these levels the values may go down. So the question is, are you buying for capital appreciation or because you want the 4 to 6 percent dividend for income to fund your retirement costs. If you are buying it for the dividend, as long as you are buying stocks that aren't going to reduce the dividend, like banks, pipelines, telecoms or utilities, it really doesn't matter what the share price does in the short term. What you are trying to do is buy the cashflow from the dividends. Lower share price is always better but if it drops short term it is just a chance to buy more at a discount. The other advantage is dividends get much better tax treatment than interest. The first 49,000 of dividends, per person is basically tax free. It takes roughly a million dollars to earn that level of dividend income but if you earned 49,000 in interest you would pay a min of about 25% in tax. Hope this helps.
Reply With Quote
  #2282  
Old 06-10-2022, 07:01 AM
mac1983 mac1983 is offline
 
Join Date: Mar 2016
Location: Peace Country
Posts: 575
Default

What effect will there be on the oil co's if Trudeau brings in the Excess Profit Tax that seems to be happening in Europe and the States?
__________________
Raised on the farm in the bush and on the rigs...
Reply With Quote
  #2283  
Old 06-10-2022, 08:36 AM
Dean2's Avatar
Dean2 Dean2 is offline
 
Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,043
Default

Quote:
Originally Posted by mac1983 View Post
What effect will there be on the oil co's if Trudeau brings in the Excess Profit Tax that seems to be happening in Europe and the States?
I won't get into just what bad tax policy these types of taxes are but the Feds already put one on the Banks, so it would not surprised me to see Trudeau do that. It will of course affect the speed they can increase the dividends or buy back shares so it would slow the increase in share prices.
Reply With Quote
  #2284  
Old 06-10-2022, 08:48 AM
fishtank fishtank is offline
 
Join Date: May 2010
Location: edmonton
Posts: 3,848
Default

Us inflation at 40 year high… probably be 50 year high the next announcement
Reply With Quote
  #2285  
Old 06-10-2022, 08:54 AM
Dean2's Avatar
Dean2 Dean2 is offline
 
Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,043
Default

Quote:
Originally Posted by fishtank View Post
Us inflation at 40 year high… probably be 50 year high the next announcement
Yes, inflation, rapidly rising interest rates, check out current posted mortgage rates on the broker thread, and fear of recession, or worse yet, Stagflation are having a lot bigger negative effect on the short term action in the market than pretty much anything else right now. Add to that the shortage of workers, and in skilled trades that is becoming a very real constraint on many companies, and you have the makings of high inflation for a lot longer. Turns out free money isn't free after all.
Reply With Quote
  #2286  
Old 06-10-2022, 11:49 AM
tranq78 tranq78 is offline
 
Join Date: Sep 2013
Location: Edmonton & Hinton
Posts: 513
Default

Quote:
Originally Posted by Dean2 View Post
Yes, inflation, rapidly rising interest rates, check out current posted mortgage rates on the broker thread, and fear of recession, or worse yet, Stagflation are having a lot bigger negative effect on the short term action in the market than pretty much anything else right now. Add to that the shortage of workers, and in skilled trades that is becoming a very real constraint on many companies, and you have the makings of high inflation for a lot longer. Turns out free money isn't free after all.

Libs stay in power with support of NDP. Their deal is spend spend spend to stay in power. Result is 10 years of inflation. That was under Pierre Trudeau. $1,000 in January 1970 is worth $100 by 1980.

Canadians wouldn't do that again, will they? Nobody can be that dumb. Pierre's son getting together with the NDP to stay in power, and spend spend spend? Naw, not a chance that will ever happen.

What's next, wage-and-price controls? Naw, never going to happen either. I know this for a fact because Pierre said he would never do that when he campaigned for re-election.

Reply With Quote
  #2287  
Old 06-11-2022, 07:35 AM
bdub's Avatar
bdub bdub is offline
 
Join Date: Jun 2011
Posts: 3,713
Default

Quote:
Originally Posted by fishtank View Post
Us inflation at 40 year high… probably be 50 year high the next announcement
I wish I knew how to post chart images on here easily.

These are the links to historical US inflation data and the Cleveland Feds latest nowcasting data. The nowcasting data will give us an idea on next months reading out on July 13th. I can tell you right now that June's nowcasting numbers are telling us that June's numbers will likely come in higher than May numbers if the rest of the month continues along the same trend.

If you look at the CPI tables you can see the progress of US inflation data through the years. 1969-72 was the first warning shots of inflation. By 1973 inflation was up to 11%. It then stayed elevated but lower until the the 1979-1981 period where it peaked and the Fed Funds rate was raised enough to crush demand. That is a long period of time to get inflation back under control. It isn't going to be easy and Central Banks are miles behind the curve.

There is a major difference between the 70-80's period and now. Debt. The low interest rate environment from 2008-9 till now has caused massive bubbles. It isn't going to take much of a rise in rates to crush consumers and everyone else and bring demand down. Supply is still screwed though, rates don't help with supply, only the demand side of the equation.

https://www.bls.gov/cpi/#tables

https://www.usinflationcalculator.co...-1913-to-2008/

https://www.clevelandfed.org/our-res...owcasting.aspx

https://www.bls.gov/news.release/pdf/cpi.pdf
__________________
There are some who can live without wild things, and some who cannot. Aldo Leopold
Reply With Quote
  #2288  
Old 06-11-2022, 07:55 AM
bdub's Avatar
bdub bdub is offline
 
Join Date: Jun 2011
Posts: 3,713
Default

Quote:
Originally Posted by mac1983 View Post
What effect will there be on the oil co's if Trudeau brings in the Excess Profit Tax that seems to be happening in Europe and the States?
This is a disastrous proposal and just goes to show the lack of any basic understanding of how markets work by these leftist clowns. They want to make it even less attractive for companies to invest in bringing on more production. But the Oilcos are a good scapegoat for their screwed up policies.

Funny how they don't think of taxing the excess profits of big tech?
__________________
There are some who can live without wild things, and some who cannot. Aldo Leopold
Reply With Quote
  #2289  
Old 06-13-2022, 07:16 AM
Dean2's Avatar
Dean2 Dean2 is offline
 
Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,043
Default

If you are looking for good news don't read the rest of this post. I usually only post bits of Charlie's newsletter, but this one was worth putting all 9 pieces in. I only pasted in a couple of the charts, if you want to see all the charts click on the link.

https://compoundadvisors.com/2022/9-...monday-6-13-22

1) Tightening in a Bear Market
During the last 8 bear markets, the Fed responded with easy money every single time (rate cuts, QE, etc.). This year they’re doing the complete opposite, tightening monetary policy and expected to continue to do so for the remainder of the year. We haven’t seen a hawkish Fed during a bear market since the early 1980s under Paul Volcker.


The bond market is now pricing in at least a 0.50% rate hike (50 basis points) at each of the next 5 FOMC meetings:
-June (this week): 50 bps hike to 1.25%-1.50%
-July: 50 bps hike to 1.75%-2.00%
-September: 50 bps hike to 2.25%-2.50%
-November: 50 bps hike to 2.75%-3.00%
-December: 50 bps hike to 3.25%-3.50%.
2) The Elephant in the Room
Why is the Fed expected to continue hiking rates in spite of the weakness in markets?
The elephant in the room, which is that they remain far behind the curve.
The US Inflation Rate now stands at 8.6%, its highest level since December 1981.
The big difference between now and then?
In December 1981, the Fed Funds Rate was over 13%; today’s it’s still below 1%.
Powered by YCharts

Where are prices rising?
Everywhere. Here’s the breakdown of price increases in the latest CPI report…


Once again, shelter (the single biggest component of CPI at 33% of the Index) inflation is being wildly understated (@ +5.5% YoY increase) with rents up 15.4% over the last year and home prices up a record 20.6%. Which means that the true inflation rate is much higher than 8.6%.



3) A Decline in Prosperity
US wage growth has now failed to keep pace with rising prices for 14 consecutive months. This is a decline in prosperity for the American worker.
Powered by YCharts

All of the US wage growth since the start of the borrowing/printing binge has been a mirage, up 11.9% in nominal terms but down 0.6% after adjusting for higher prices.


4) The US Consumer Has Never Felt Worse
The US consumer sentiment index from the University of Michigan goes back to 1952. It has never been lower than it is today.
Powered by YCharts

In a new Wall Street Journal-NORC poll, 35% of Americans said they were not satisfied at all with their present financial situation, the highest level of dissatisfaction recorded since the poll began in 1972.


What’s driving this negativity?
Inflation, inflation, inflation.
A constant reminder has been the price of gas, which crossed above $5.00 per gallon in the US for the first time ever (note: national average).


In a poll I conducted last week, 59% of respondents said the US economy is already in a recession…


5) The Worst Year for Bonds in History
The US 10-Year Treasury bond is on pace for its worst year in history with a loss of 12.8%. Entering the year, the 11.1% decline in 2009 was the largest ever.


In the fixed income space, there’s been no place to hide this year with the exception of Treasury bills ($BIL ETF)…


The combination of weakness in stocks and weakness bonds has led to a difficult year for diversified stock/bond portfolios.
A 60/40 portfolio of the S&P 500 and 10-Year Treasury Bond is down 15.7% year-to-date, on pace for its worst year since 1937.


Here are the largest annual declines for US 60/40 with data going back to 1928:
1) 1931: -27.3%
2) 1937: -20.7%
3) 1974: -14.7%
4) 2008: -13.9%
5) 1930: -13.3%
6) The Housing Affordability Collapse
Spiking mortgage rates coupled with skyrocketing home prices has led to a collapse in the affordability of housing.
The median American household needed 38.6% of their income to afford payments on a median-priced home, the highest percentage since August 2007.




7) The Iron Rule of Financial Markets
John Bogle once said that reversion to the mean was the “iron rule of financial markets.”
Two recent examples of that…
a) Commodities ($DBC ETF) up 89% over the last 16 months versus a 72% loss for the ARK Innovation ETF ($ARKK ETF).
Powered by YCharts

b) Exxon Mobil ($XOM) gaining 183% since it was removed from the Dow in August 2020 versus a 37% decline for Salesforce ($CRM) which was added to the index.


8) Crypto Correction Continues
Bitcoin is now down 66% from its high and at its lowest level since December 2020.


Dogecoin, a favorite among meme traders, is now down 93% from the Musk SNL peak.


9) The Unwinding of Excesses
The US Federal Budget Deficit has moved down to $1.1 trillion, its lowest level since March 2020. The Deficit peaked at $4.1 trillion in March 2021. We now have declining deficits and declining money supply, an unwinding of excesses that will be painful in the short run but good for the economy and the prosperity of the nation in the long run.


---
And that’s it for this week.
Have a great week everyone!
-Charlie
Reply With Quote
  #2290  
Old 06-13-2022, 08:02 AM
Dean2's Avatar
Dean2 Dean2 is offline
 
Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,043
Default

Not a good day to look at your portfolio. Even the Energy stocks are taking a hammering. Bank shares, a long with everything else are off too. There are only 8 stocks on the whole TSX that are in positive territory this morning. Inflation and fears of just how high rates are headed is spooking the herd. No fun seeing 3% wiped off the board in half an hour, but good part is, makes buying stuff cheaper, and the dividend yields are better at these prices. Looks like my standing partial order for RBC at $125 may finally fill.

Last edited by Dean2; 06-13-2022 at 08:28 AM.
Reply With Quote
  #2291  
Old 06-13-2022, 09:15 AM
DiabeticKripple's Avatar
DiabeticKripple DiabeticKripple is offline
 
Join Date: Feb 2012
Location: Blackfalds
Posts: 6,945
Default

Quote:
Originally Posted by Dean2 View Post
Not a good day to look at your portfolio. Even the Energy stocks are taking a hammering. Bank shares, a long with everything else are off too. There are only 8 stocks on the whole TSX that are in positive territory this morning. Inflation and fears of just how high rates are headed is spooking the herd. No fun seeing 3% wiped off the board in half an hour, but good part is, makes buying stuff cheaper, and the dividend yields are better at these prices. Looks like my standing partial order for RBC at $125 may finally fill.
Yep last 2 days have been brutal.

A slow steady climb was nice to see, all erased in 2 days.
__________________
Trudeau and Biden sit to pee
Reply With Quote
  #2292  
Old 06-13-2022, 10:28 AM
ironicbrew ironicbrew is offline
 
Join Date: Sep 2013
Posts: 27
Default

The index is always climbing. Buy and hold, minus recently it's been up up to ~20% year over year until a bit of a slow patch recently
Reply With Quote
  #2293  
Old 06-13-2022, 09:09 PM
bdub's Avatar
bdub bdub is offline
 
Join Date: Jun 2011
Posts: 3,713
Default

Rate decision by the Fed on Wednesday. 50 basis points for sure, if not 75 already baked in. USD DXY is steam rolling many currencies going from 95 at the beginning of the year to 105 today. Japanese Yen is getting killed, their mmt debt party is over. Panic selling of everything today, yield curve flat/inverted at different maturities and oil/gas not even budging should tell you something.
__________________
There are some who can live without wild things, and some who cannot. Aldo Leopold
Reply With Quote
  #2294  
Old 06-13-2022, 09:41 PM
roper1 roper1 is offline
Moderator
 
Join Date: Aug 2012
Location: Strathmore
Posts: 5,620
Default

Corrections & full-blown recessions come & go. Is there any way to avoid a recession this time around ? Because they are a part of the financial cycle, maybe we're better off cranking the interest rate & re-starting the economy.

Always bearing in mind the pain the middle class will suffer in a downturn.
__________________
If you're not a Liberal when you're young, you have no heart. If you're not a Conservative when you're old, you have no brain. Winston Churchill

You can, you should, & if you're brave enough to start, you will. Stephen King
Reply With Quote
  #2295  
Old 06-14-2022, 05:54 AM
bdub's Avatar
bdub bdub is offline
 
Join Date: Jun 2011
Posts: 3,713
Default

Quote:
Originally Posted by bdub View Post
Rate decision by the Fed on Wednesday. 50 basis points for sure, if not 75 already baked in. USD DXY is steam rolling many currencies going from 95 at the beginning of the year to 105 today. Japanese Yen is getting killed, their mmt debt party is over. Panic selling of everything today, yield curve flat/inverted at different maturities and oil/gas not even budging should tell you something.
Should also have mentioned the 126 mllion bbls of oil the Biden Admin has released from the Strategic Petroleum Reserves since the start of the year, 7-8 million bbls/week.
__________________
There are some who can live without wild things, and some who cannot. Aldo Leopold
Reply With Quote
  #2296  
Old 06-14-2022, 04:01 PM
KGB's Avatar
KGB KGB is online now
 
Join Date: Jan 2014
Location: Edmonton
Posts: 5,612
Default

We are officially in a bear market and just entered the actual recession. Welcome to decline, compliments of your federal government! Have a nice day….
Reply With Quote
  #2297  
Old 06-16-2022, 07:20 AM
Fisherdan Fisherdan is offline
 
Join Date: Aug 2012
Location: Calgary
Posts: 346
Default

Quote:
Originally Posted by Dean2 View Post
Not a good day to look at your portfolio. Even the Energy stocks are taking a hammering. Bank shares, a long with everything else are off too. There are only 8 stocks on the whole TSX that are in positive territory this morning. Inflation and fears of just how high rates are headed is spooking the herd. No fun seeing 3% wiped off the board in half an hour, but good part is, makes buying stuff cheaper, and the dividend yields are better at these prices. Looks like my standing partial order for RBC at $125 may finally fill.
I think today might be your day! That is some discipline.
Reply With Quote
  #2298  
Old 06-16-2022, 07:56 AM
fishtank fishtank is offline
 
Join Date: May 2010
Location: edmonton
Posts: 3,848
Default

So yesterday was green market anticipate the baked in interest of 75pts . The slide continues today another week of lost , Canada look to follow the 75pts interest raise. Pain are start to show there are lot more people moving…
Reply With Quote
  #2299  
Old 06-16-2022, 08:13 AM
Dean2's Avatar
Dean2 Dean2 is offline
 
Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,043
Default

Really ugly day so far, another 3% trim. That makes us 11.5% off the previous high portfolio value we hit just a couple of weeks ago. May fill the RBC $123 dollar partial order today too, the 125 filled this morning. As much as it is tough to see the portfolio value drop, if you are picking up top quality, dividend paying companies with pricing power, you know you are just building in more upside for when this turns around, and it will. Bear markets don't last forever.




Last edited by Dean2; 06-16-2022 at 08:20 AM.
Reply With Quote
  #2300  
Old 06-16-2022, 08:47 AM
DiabeticKripple's Avatar
DiabeticKripple DiabeticKripple is offline
 
Join Date: Feb 2012
Location: Blackfalds
Posts: 6,945
Default

Best thing to do is just not look right now.

Starting to squirrel some cash away anticipating a long term rebound. Thinking of VOO
__________________
Trudeau and Biden sit to pee
Reply With Quote
  #2301  
Old 06-16-2022, 09:15 AM
fishtank fishtank is offline
 
Join Date: May 2010
Location: edmonton
Posts: 3,848
Default

Time to average down …might see S&P @ 350 …
Reply With Quote
  #2302  
Old 06-16-2022, 01:38 PM
KGB's Avatar
KGB KGB is online now
 
Join Date: Jan 2014
Location: Edmonton
Posts: 5,612
Default

Pure bloodbath! Even oil companies are down quite a bit….
Reply With Quote
  #2303  
Old 06-17-2022, 09:32 AM
Drewski Canuck Drewski Canuck is offline
 
Join Date: May 2007
Posts: 3,953
Default

Very ugly morning in the markets, even oil co's are getting hammered. However, the price of oil is holding steady so the Co's profits are remaining strong and the price forecasts for oil are still in the $140 / barrel range for the summer - fall.

This has been a very volatile market. Alot of Crypto currencies are being hammered and I have to wonder if there are margin calls forcing the liquidation of holdings that are in the black to make up for the margin calls being triggered by the market slide.

Drewski
Reply With Quote
  #2304  
Old 06-17-2022, 09:34 AM
Dean2's Avatar
Dean2 Dean2 is offline
 
Join Date: Dec 2008
Location: Near Edmonton
Posts: 15,043
Default

Quote:
Originally Posted by KGB View Post
Pure bloodbath! Even oil companies are down quite a bit….
It really is a blood bath. Portfolio is now sitting at 13% down from recent all time high but I am still buying pieces here and there. Anyone who bought in the last couple of months is going to be a little spooked but as long as you bought top quality stocks and no bonds, it will be fine in the longer run. Like I have said before, had you bought RBC or TD at its highest point in a fiscal year, you are still ahead 12 months later. Guy has to look at the longer term, despite the recent savaging, still up 12% from March 16, 2021 and 21% since Feb 2, 2021.

Drewski - the sell off of the stocks that have gained is definitely being accelerated by margin calls on Crypto, but also on a raft of other stocks, particularly Tech. When you see oil stocks and pipelines dropping you know there is something besides value, driving the bus.

The level of margin and short positions in the market a month ago was at an all time high. With the Fed reducing liquidity there is that affect on top of it all. Rising interest rates are making margin positions a lot more expensive on a monthly basis as well.

Last edited by Dean2; 06-17-2022 at 09:42 AM.
Reply With Quote
  #2305  
Old 06-17-2022, 10:43 AM
KGB's Avatar
KGB KGB is online now
 
Join Date: Jan 2014
Location: Edmonton
Posts: 5,612
Default

Dean, I think buying right now can wait for another month…. I don’t think we are nearly close to the bottom of this. I am well aware of trying to time the market issue but there is no good news on a horizon as of today. Inflation isn’t slowing down, interest rates will keep going up and the economy is slowing down. The stock market is in a bear market already and the economy is definitely entering the recession. Here in Alberta we probably won’t feel it as bad as other places due to the oil and gas production been ramped up.
I sold about 20% of my portfolio a few months back. I ended up buying Ensign Energy a few weeks back…. Bad move! Since I got that stock, it was going nowhere but down! Damn!
Reply With Quote
  #2306  
Old 06-17-2022, 11:30 AM
DiabeticKripple's Avatar
DiabeticKripple DiabeticKripple is offline
 
Join Date: Feb 2012
Location: Blackfalds
Posts: 6,945
Default

So what does a guy do with a fixed rate mortgage expiring next year?

Better to pay the $2500 penalty to remortgage now before the rates get too high?
__________________
Trudeau and Biden sit to pee
Reply With Quote
  #2307  
Old 06-17-2022, 11:39 AM
NKP NKP is offline
 
Join Date: Feb 2013
Posts: 301
Default

Quote:
Originally Posted by DiabeticKripple View Post
So what does a guy do with a fixed rate mortgage expiring next year?

Better to pay the $2500 penalty to remortgage now before the rates get too high?
I'm wondering the same...
Reply With Quote
  #2308  
Old 06-17-2022, 11:49 AM
marky_mark marky_mark is offline
Banned
 
Join Date: Mar 2009
Posts: 5,701
Default

Quote:
Originally Posted by DiabeticKripple View Post
So what does a guy do with a fixed rate mortgage expiring next year?

Better to pay the $2500 penalty to remortgage now before the rates get too high?
Run the numbers in a mortgage calculator
I’m would be betting that if you paid the penalty you will be further ahead
Reply With Quote
  #2309  
Old 06-17-2022, 12:08 PM
Positrac Positrac is offline
 
Join Date: Apr 2013
Posts: 3,281
Default

Quote:
Originally Posted by marky_mark View Post
Run the numbers in a mortgage calculator
I’m would be betting that if you paid the penalty you will be further ahead
We were a year away and it was much cheaper to pay the penalty and go fixed for another 5 years. We had locked in for 120 days when the rates were 3.23 for a 5 year fixed mortgage. In the end because of some good advice from Dean2 we ended up getting the penalty and related fees waived after a it of negotiation. Now, we are also in the middle of selling one house and buying another and have all our investments through RBC so they may have done for us what they may not do for everyone and with rates being well over 4% for a 5 year fixed savings may not be the same.
Reply With Quote
  #2310  
Old 06-17-2022, 12:22 PM
EagleEyes EagleEyes is offline
 
Join Date: Apr 2017
Posts: 182
Default

Been selling off what profits i have left and moving into some more cash. Bear markets don't last forever but I cant see much for good news in the next couple of weeks. I will hopefully start DCA on some of my higher quilty stocks soon. Been a hard week. Good luck to everyone else hopefully you find some deals for the future.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 01:31 PM.


Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.