Clippings 2016

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Re: Clippings 2016

Post by Profit not Prophet » 21 Nov 2016 20:44

Re the mint story. If he spread his selling to other dealers and maybe more importantly didn't catch up with the one teller with their head screwed on the right direction. Pretty amazing, keystone country sometimes we are.

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Re: Clippings 2016

Post by OnlyMyOpinion » 22 Nov 2016 21:04

2017 TSFA Contribution Limit
I didn't want to start a new thread for a simple question. Hopefully this qualifies for Clippings.
Planning ahead for Christmas gifts :D, I am assuming the 2017 TSFA contribution limit will remain unchanged at $5,500 (i.e. not yet pushed to $6,000 by indexing). I notice the CRA still carries no info while Taxtips says it is $5,500. I think there has usually been an announcement around now. Does anyone know with certainty?
CRA table shows no amount yet for 2017 TSFA limit: http://www.cra-arc.gc.ca/tx/rgstrd/paps ... s-eng.html
TaxTips table showing 2017 limit as $5,500 here: http://www.taxtips.ca/tfsa/contributions.htm

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re: TFSA 2017

Post by Peculiar_Investor » 22 Nov 2016 21:32

OnlyMyOpinion wrote:2017 TSFA Contribution Limit
I didn't want to start a new thread for a simple question. Hopefully this qualifies for Clippings.
Planning ahead for Christmas gifts :D, I am assuming the 2017 TSFA contribution limit will remain unchanged at $5,500 (i.e. not yet pushed to $6,000 by indexing). I notice the CRA still carries no info while Taxtips says it is $5,500. I think there has usually been an announcement around now. Does anyone know with certainty?
CRA table shows no amount yet for 2017 TSFA limit: http://www.cra-arc.gc.ca/tx/rgstrd/paps ... s-eng.html
TaxTips table showing 2017 limit as $5,500 here: http://www.taxtips.ca/tfsa/contributions.htm
Generally the announcement is made via Fact sheets 2016 | CRA and comes in the last few days of November or the first week of December.

Over the past number of years I've maintained the Tax-Free Savings Account wiki page that shows both the contribution limit as well as the Unrounded Indexed Amount, which stood at $5,488 at the end of 2015.

A massive CPI number would be required to cause the number to reach $5751 which would trigger the rounding to the next $500 and a contribution limit of $6000. That's many years away given the CPI track record. I'm guessing that's why TaxTips.ca is comfortable making an early call that the limit won't change for 2017.
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Re: Clippings 2016

Post by Profit not Prophet » 24 Nov 2016 10:33

New York Times book reviews from the smmer

Why Growth WIll Fall

http://www.nybooks.com/articles/2016/08 ... will-fall/

first paragraph of a nice longish review
Robert Gordon has written a magnificent book on the economic history of the United States over the last one and a half centuries. His study focuses on what he calls the “special century” from 1870 to 1970—in which living standards increased more rapidly than at any time before or after. The book is without peer in providing a statistical analysis of the uneven pace of growth and technological change, in describing the technologies that led to the remarkable progress during the special century, and in concluding with a provocative hypothesis that the future is unlikely to bring anything approaching the economic gains of the earlier period.

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Re: Clippings 2016

Post by Park » 02 Dec 2016 20:38

http://investorfieldguide.com/201453por ... -avoid-it/

The link above gives worst case results for 1 year, 3 years, 10 years, 20 years, 30 years, 40 years and 50 years for national stock markets from 1900-1912. Anyone who believes in stocks for the long run should look at this. Out of 20 countries, 8 had negative returns as the worst 50 year scenario. The usual retort would be that war explains those returns, which is a good response. However Sweden, which wasn't in any war during this time, had a worst case 50 year return of 1.1% annually after inflation. And Sweden's worst 30 year return was a cumulative negative 39.56% over 30 years. A common piece of advice is that stocks have never had a 20 year period of negative returns after inflation. That's true for America, Australia and Canada. But it's not true for the other 17 countries. For the 20 countries, the average for worst 20 years return was a cumulative negative 44.76%.

It reminds me of the importance of diversification.

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Re: Clippings 2016

Post by cardhu » 05 Dec 2016 13:27

OnlyMyOpinion wrote:2017 TSFA Contribution Limit
The TFSA limit for 2017 is $5,500 ... the underlying indexed amount is 5,637.14, well below the $5750.01 that would be required for the limit to “round up” to the next increment of $6000.
Peculiar_Investor wrote:I'm guessing that's why TaxTips.ca is comfortable making an early call
I see no evidence that they made an early call … the 2017 limit has been known to be $5500, since about October 21, more than a month prior to OMO's report of having seen it at taxtips … the fact that CRA has not yet communicated this known fact is neither here nor there … they are just a messenger, after all, with no influence whatsoever over the limit.

It'll remain at $5500 for 2018, unless one of two things happens ...
(1) CPI for the next 12-month window increases by at least 2.1%, or
(2) the law changes.

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Re: Clippings 2016

Post by AltaRed » 06 Dec 2016 14:19

RBC released its latest Federal - Provincial Fiscal Report today and it is not a pretty picture. Gov't is collectively racking up debt at an astonishing pace with some jurisdictions close to being 'on the margin' with their debt/GDP ratios.

Added later: What I fear most is governments have been conditioned to inflation and GDP growth bailing them out. They think they can spend their way to growth but I firmly believe this will not be the case. Some years hence, governments will find themselves naked with their clothes "in hock" leaving taxpayers holding the IOUs.
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Re: Clippings 2016

Post by ghariton » 07 Dec 2016 00:10

Here is the slide deck that the Finance Minister is using in his pre-budget consultations.

Not a pretty picture.

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Re: Clippings 2016

Post by AltaRed » 07 Dec 2016 11:50

Thank you George. That is insightful. A perfect setup for justifying a higher debt to GDP ratio. I've put together enough PPT slides in my day to see where that is headed.
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Re: Clippings 2016

Post by Flaccidsteele » 07 Dec 2016 13:25

When we look at the countries with "high" debt-to-GDP, we see that Canada stands alongside Singapore, the United States, the UK, Japan, and France (of course, we also see Italy, Portugal and Greece).

But when we look at countries with the "lowest" debt-to-GDP we see Brunei, Libya, Afghanistan, Algeria, Swaziland, and Estonia. I'm not sure we want to be in this group either.

What makes debt-to-GDP so important? And what is the appropriate amount?
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Re: Clippings 2016

Post by AltaRed » 07 Dec 2016 15:39

The ability to service one's debt is key. Banana republics have low debt/GDP ratios since they have poor credit ratings and cannot incur debt anyway. IT is not so much they don't want too... it is because they cannot.

OTOH, countries with supposedly AAA or AA credit ratings can borrow like crazy. Trouble is, if they get in too deep, too much of their General Revenues would be required to pay interest on debt. IIRC, when Canada almost 'hit the wall' in the '90s, we were told that our borrowing capacity had been reached and we had to get our house back in order.

It is not as simple as that of course because IMF is out there, but a developed country never wants the embarassment of an IMF intervention.
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Re: Clippings 2016

Post by Flaccidsteele » 07 Dec 2016 16:33

Where can we find data on a country's ability to pay the interest on their loans?

What is an appropriate interest coverage? Or do we use credit rating as a proxy for this?
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Doctor asks patients for money for his retirement

Post by Flaccidsteele » 07 Dec 2016 16:37

This article made me look twice.

Vancouver doctor pens letter asking patients for money for his retirement
The two-page goodbye letter from general practitioner Dr. Myron MacDonald announces that he will be retiring this month after 48 years in practice, time that he describes as "a pleasure, not a chore." He ends the letter with a plea for help, explaining that he didn't make much money during his career and has limited savings and no pension.
B.C. doctor criticized after asking patients to help fund retirement
A B.C. doctor has come under fire after asking patients to help fund his retirement through monthly payments or donations.

Dr. Myron MacDonald, a family doctor who works in West Vancouver and is one of the original members of Greenpeace, is planning on retiring but says he doesn't take home much money.
No retirement funds after 48 years? Makes me sad.
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Re: Clippings 2016

Post by AltaRed » 07 Dec 2016 17:24

Try googling World Bank and/or IMF databases. Should be lots to keep you engaged.
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Re: Clippings 2016

Post by ghariton » 07 Dec 2016 17:34

Flaccidsteele wrote:Where can we find data on a country's ability to pay the interest on their loans?
Countries that are sovereign and control their own money can always pay the interest on their loans, provided the loans were made in their own currency. Just print more money. The problem comes when the loans are in a foreign currency (think USD) and the country cannot acquire sufficient foreign exchange. This is a function of a number of factors, such as the trade balance, the capital accounts balance, performance of the domestic economy, popular reactions to austerity measures (think Greece), etc. There is also the willingness of foreign lenders to reschedule and restructure their loans.

For an example of the problems that can arise, look up the very sad saga of Argentina over the last seventeen years. Brings tears to my eyes. :shock:
What is an appropriate interest coverage? Or do we use credit rating as a proxy for this?
That's why the credit rating agencies get the big bucks. Note though that a rating, say a AA, for a sovereign country is quite different from the same rating for a private-sector company. The risks are quite different, and in times of crisis the two will very likely react differently.

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Re: Clippings 2016

Post by newguy » 07 Dec 2016 17:39

Flaccidsteele wrote:Where can we find data on a country's ability to pay the interest on their loans?

What is an appropriate interest coverage? Or do we use credit rating as a proxy for this?
Look up sovereign CDS.
https://www.dbresearch.com/servlet/rewe ... ET_EN-PROD

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Re: Clippings 2016

Post by newguy » 07 Dec 2016 17:44

http://www.journals.uchicago.edu/doi/fu ... 086/689575
Cash transfers have been demonstrated to improve education and health outcomes and alleviate poverty in various contexts. However, policy makers and others often express concern that poor households will use transfers to buy alcohol, tobacco, or other “temptation goods.”
The result surprised me. Paywalled but the abstract has all you need.

I found it in my newsfeed from a new (to me) site. I found all their most popular stories as of now interesting.

-that last one
-one about globalization of services through tech.
-Apple's AI
-100lb filipino gift boxes (personal experience :) )

http://qz.com/popular/

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Re: Clippings 2016

Post by Flaccidsteele » 07 Dec 2016 23:17

newguy wrote: Look up sovereign CDS.
https://www.dbresearch.com/servlet/rewe ... ET_EN-PROD

newguy
Wow very cool. Thanks.
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Re: Doctor asks patients for money for his retirement

Post by SkaSka » 08 Dec 2016 17:19

Flaccidsteele wrote:This article made me look twice.

Vancouver doctor pens letter asking patients for money for his retirement
The two-page goodbye letter from general practitioner Dr. Myron MacDonald announces that he will be retiring this month after 48 years in practice, time that he describes as "a pleasure, not a chore." He ends the letter with a plea for help, explaining that he didn't make much money during his career and has limited savings and no pension.
B.C. doctor criticized after asking patients to help fund retirement
A B.C. doctor has come under fire after asking patients to help fund his retirement through monthly payments or donations.

Dr. Myron MacDonald, a family doctor who works in West Vancouver and is one of the original members of Greenpeace, is planning on retiring but says he doesn't take home much money.
No retirement funds after 48 years? Makes me sad.
Wow. If you have no savings after 48 years on a doctor's salary and are left begging your patients for a handout at the end, that is indeed quite sad. However, this doc has only himself to blame and really gets very little sympathy from me.

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Re: Clippings 2016

Post by fundy48 » 08 Dec 2016 19:29

Perhaps the good Doctor took his Greenpeace involvement too much to heart. Constant begging and pleading of necessity seems to work well for them. :roll:

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Re: Clippings 2016

Post by max88 » 10 Dec 2016 11:43

Spend all your money. Then plead for help. First begin with a targeted group, then move on to everyone (the gvmnt). Nothing new.
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Re: Clippings 2016

Post by BRIAN5000 » 11 Dec 2016 15:30

Several blog posts from this website seem interesting

https://www.factorinvestor.com/blog/201 ... lue-factor

On this aspect, buyer beware. At a PE ratio of 19.0x trailing earnings, Low Vol is currently 34% more expensive than its 52-year historical average, and is right on par with the 19.0x PE ratio of the S&P 500 index. In a recent piece, Rob Arnott, refers to a "Smart beta crash". While it would be impossible to predict such an event, it seems likely that Low Vol stocks are destined to add low return to their low volatility characteristic moving forward.


https://www.factorinvestor.com/blog/201 ... ce-in-etfs

Here's why this matters. I mentioned earlier that $126 billion resides in dividend ETF's. If the stocks occupying the largest weights are the ones that are most commonly held across dividend ETF's, then the massive flows we have seen over the last few years have disproportionately gone into these stocks.
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Re: Clippings 2016

Post by ghariton » 11 Dec 2016 23:04

And you thought your boss makes too much money....

From the New York Times
In the last two years, Stephen A. Schwarzman, the chief executive and a co-founder of the Blackstone Group, received the largest sum. In 2015, he collected just under $800 million, up from $689 million the year before. Of that amount, only $350,000 was his annual salary. He received no bonus.

But you don’t need to be Mr. Schwarzman to earn huge sums at Blackstone, arguably the industry’s most successful firm. Hamilton E. James, Blackstone’s president, received $233 million in 2015, while Blackstone’s real estate chief, Jonathan D. Gray, earned $249 million.

Other prominent firms have produced big payouts as well. In 2013, the biggest winner was Leon Black, the head of Apollo Global Management, who received about $543 million. In 2015, Henry R. Kravis and George R. Roberts, the co-heads of Kohlberg Kravis Roberts & Company, collected a combined $356 million.
I should have chosen another career path...

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Re: Clippings 2016

Post by chufinora » 12 Dec 2016 09:42

ghariton wrote:And you thought your boss makes too much money....

From the New York Times
In the last two years, Stephen A. Schwarzman, the chief executive and a co-founder of the Blackstone Group, received the largest sum. In 2015, he collected just under $800 million, up from $689 million the year before. Of that amount, only $350,000 was his annual salary. He received no bonus.
That is really obscene - in addition from the article "Hamilton E. James, Blackstone’s president, received $233 million in 2015, while Blackstone’s real estate chief, Jonathan D. Gray, earned $249 million." So in 2015 this private equity company paid out $1.3 Billion to three individuals. And they added value to the world how?

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Re: Clippings 2016

Post by ghariton » 12 Dec 2016 12:52

And just how do those private equity firms make all that money? Here's a case study of how Apollo and Metropoulos bought a bankrupt company, Hostess, maker of Twinkies among other delights, for $186 million in cash in early 2013, and how, less than four years later, they sold the company in a deal that valued Hostess at $2.3 billion.

Leon Black, head of Apollo, and Dean Marcopoulos, head of Marcopoulos, made out very well of course -- their management companies collect 20% of all profits. But a variety of pension plans, who had placed money with the private equity firms, did very well too.
The Teacher Retirement System of Texas has invested in the fund that bought Hostess. And that fund has reaped 27 percent net during the three years it owned Hostess, significantly more than the stock market returned in that period.

“You need to get people in whom you trust and who will keep up our fund,” said Fran Plemmons, a former president of the Texas Retired Teachers Association who was a teacher and principal for 25 years. “If they do that, you need to get out of the way.”

Ms. Plemmons said her $31,200 yearly pension allows her to live modestly but comfortably. High returns from private equity investments, she said, help keep pension payments flowing to retired school workers across Texas, which trickles down into the local economy.
Of course, there are also the laid-off former Hostess workers. The company downsized from 8,000 to 1,200 workers and some of those laid off are struggling:
Looking out over those next 15 years, nothing seems guaranteed to Mr. Popovich, the former Hostess worker from Toledo. Right before Thanksgiving, Mr. Popovich was laid off from his most recent job at the solar panel plant.
The idea of searching for work at age 58 is daunting. He has been sending out his résumé, but has not received a call back.

“It’s been four jobs in four years,” he said. “Here we go again.”
Of course, before being bought out, Hostess was in bankruptcy and likely to close down for good. So arguably the private equity firms saved 1,200 jobs. Still, it sucks to be one of the other 6,800.

So, what moral can we draw from all of this?

George
The plural of anecdote is NOT data.

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