Weekend Reading – Wanting the market to crash, overspending, not showing up and more

Welcome to some Weekend Reading friends – the best from the personal finance and investing blogosphere.  Before I get to the articles I enjoyed this week, I thought I would show you some of the snow I moved this week. First, shovelling snow to get into my car at work.


Next, shovelling my front step to get into my house.

Snow 2

Ah, winter, in Ottawa, good times…

It was certainly interesting to get more than 52 cm (almost 2 feet) of snow in one day!

Back to the personal finance stuff, in case you missed it, I posted a few articles this week:

What will your retirement look like?

My January 2016 Dividend Income Update

My TurboTax Canada giveaway with some great tax tips – so make sure you enter!

Andrew Hallam profiled this investor who wants the stock market to crash.  BTW – stay tuned for my upcoming interview with Andrew.  I recently got a chance to catch up with this Millionaire Teacher and Expat.

Here are some top Canadian dividend paying stocks to consider for your portfolio.

This couple featured in the Financial Post recently are overspending by $30,000 per year.

In 2004, the city council in Cadiz, Spain, put Joaquín García in charge of overseeing construction of a wastewater treatment plant, according to the Daily Telegraph. He visited the office, but finding no work and feeling bullied, he stopped showing up. And no one noticed. For six years.  He still got paid though. 🙂

Looks like Myrtle Beach is trying to lure Canucks south, taking the loonie at par.

GreedyRates lists the best credit cards for 2016.  Included in this list are credit cards that don’t charge a foreign exchange fee on top of your foreign currency charge.  I have one of those cards.

The Big Cajun Man wondered if you have a money buddy.

Our Big Fat Wallet shared some ways to use your tax refund this year.

Boomer & Echo is starting to think about his mortgage renewal.

Amber Tree Leaves was busy answering questions from his wife – about investing in the stock market.

The Simple Retiree reviewed The Essential Retirement GuideI’m reading this book now and I will be giving away a copy on my site soon so stay tuned.

Warren Buffett bought a boatload of Kinder Morgan stock this week, I’ll continue to hold my shares then.

I agree with Kyle Prevost that you don’t need gold in your portfolio.

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18 Responses to "Weekend Reading – Wanting the market to crash, overspending, not showing up and more"

  1. I pity the fool…who has to shovel! I’d post pictures of all the flowers and cherry blossoms out here but that might be insensitive. I might have to mow the lawn this weekend, so it’s not all roses. #westcoastwinter

    re: Spain — not surprising as Spain is a notoriously ill-run country (as are Portugal, Italy, Greece, et al). Reminds me of that dude a few years ago who outsourced all his computer work to China, but got fired for being resourceful and efficient. Guess exploitation is for the employer and not employee. Also reminds me of the bus drivers out here: the senior higher-paid drivers would “sell” their shifts to the junior lower-paid drivers; the senior driver was essentially paid the difference in wages to not work.

    re: Buffett, KM, and you — “Warren Buffett bought a boatload of Kinder Morgan stock this week, I’ll continue to hold my shares then.” This is flawed thinking, in my view.
    Firstly, it most likely was not Buffett who made the buy decision, but one of his money managers. Second, Berkshire (not Buffett) acquired the shares some time in Q4 2015 — not this week. This always happens when BRK releases their reports; the exact same thing happened when the public discovered he bought into Suncor — PRICE POP! Were your thoughts about post-65% decline KM last week as excited as post-BRK buy this week? Third, it’s biased to agree with only the portions of Buffett/Berkshire investments that support your own investment decisions. BRK also utilizes leverage, trades options, buys private equity, holds a lot of cash, and has zero index funds — does your portfolio? Thing is, at this point, both Buffett and BRK are institutional investors, they have completely different investment strategies and goals than an individual or household. Both you and Buffett will hold KM, but very likely for different reasons (e.g. BRK are holding for profit, already 15%; you are most likely holding in hopes of erasing losses).

    re: Gold — I think Kyle and I have discussed this point a long while back. First off, I’ll point out that Jeremy Siegel’s comparisons of gold vs. other financial assets is hugely flawed: “A dollar invested in the following assets in 1802* would have been worth the following amounts in 2001 (adjusted for inflation): Stocks: $599,605; Bonds: $952; Bills: $304; Gold: $0.98”

    From 1802-1968, gold was currency in America. For almost 85% of Siegel’s data range he’s saying, “A dollar of cash invested in a dollar of currency…”. It’s deeply ignorant and a blatantly misleading point; the price was controlled by the government, not the open market. It was also illegal to own large sums of gold. Would you buy stocks if the government dictated the absolute price and said you could own a maximum of ten shares? For a factual review, how did gold fare against stocks from its date of release, 1968, until now? Presented as annual returns: stocks 9.87%; gold 7.3%; inflation 4.1%.

    *Prior to the invent of the full S&P index fund in 1978 there was no cost effective manner in which to buy stock in every component, yet another massive hole in Siegel’s theory, but I’ll let it slide for sake of comparison.

    Buffett bought a lot of silver back in the late 1990’s, citing “equilibrium between supply and demand was only likely to be established by a somewhat higher price”. He’s also speculated on copper in the late 1970’s. To eschew speculation of gold, he’s being either very forgetful or hypocritical.

    Second, gold has a price, a market, and liquidity, thus it has value. Whether it is over or undervalued, I have no idea. Considering that most above-ground gold is “hoarded” (i.e. stored indefinitely), I would say most of gold’s price is comprised of irrational factors (fear, greed, etc.). Kyle is correct in that gold is not for investing, but speculating. In that respect, the average investor — not the DIY PF blogosphere, but the financially ignorant people who still let the big banks put their money into proprietary mutual funds — should not consider gold in any shape or form.

    That said, there is no problem utilizing gold as a trading instrument based on that premise — human irrationality. If human nature were a classic portfolio, it would be at least 60% irrational, 40% rational. You can invest all you want in human rationality (fundamentals, innovation, etc.), but I’d say there is far more money to be made from the irrational side, and if you ignore that then you are missing a very large chunk of opportunity. If not, then why would an Goldman Sachs bankster start a virtual gold store? He is definitely not losing money (1% fee for being the middle man).

    I’ve been churning silver on a personal level (opposed to a professional level) since 2009; I still make a healthy stock-market beating annual net profit. Fear is very present and valuable. Precious metals are not for investing or hedging, they are for crisis situations (thanks to the 24/7 media noise for keeping us in crisis mode!). What’s that ancient Chinese saying about crisis and opportunity?

    It’s also amusing that farmland is stated as a non-speculative anti-gold play when the past decade-plus has witnessed a huge degree of greed-driven speculation (vs. gold’s fear-driven speculation). Full disclosure: I’ve profited from farmland.

    Have a great weekend!

    1. Yes, lucky you from the West coast 🙂

      I’ve never lived in Spain, only visited. We loved it there.

      I think long-term KMI is a great company to own, regardless if the Oracle owns it or eventually sells it. My comment was tongue in cheek – just because someone else owns a stock doesn’t mean it’s the correct asset for me.

      Regarding gold I see it as a bad long-term investment because it is very speculative. Never owned it and never will except indirectly via indexed ETFs.

      Enjoy your weekend SST!

  2. As you know Mark we are in Myrtle Beach for the winter and to date we have not found one restaurant, one retail outlet or anywhere where they are offering discounts to Canadians. We can’t even find one person who knows anything about it here! Just thought your readers should be wary —

  3. Enjoyed Amber Tree story. good response.
    I’d like to hear from some of your readers who are looking Back not Forward. The view is much different as is our perspective. We tend to look more at the mistakes we made or recognize what worked best, regardless of those so called studies or cliches, like “most investors don’t beat the market”
    Been in AZ for so long we forget how much snow falls at times.
    Thanks Mark

    1. LOL, re: Been in AZ for so long we forget how much snow falls at times.

      Thanks for the future blogpost suggestion Cannew, I’ll see what I can do to drum up some articles on that front. Looking back and being reflective is a good thing.


  4. Thanks for the mention Mark. Geez you have a lot of snow there. It’s been around 7 degrees and manly sunny for like 10 days. I’m sure the snow will make it here in March though. Have a good weekend


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