ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
April 16, 2021 | Central Banks are Nervous as CPI Soars
Rapid inflation reared its ugly head this month, as the Consumer Price Index hit 2.6 percent gain for the last year. The price increase for energy was closer to 15 percent, while food was almost 4 percent. If the CPI keeps rising at this pace, as some predict, interest rates will rise. What will central […]
April 9, 2021 | Banks Tell Government To Do Something About The Housing Bubble
Canadian banks want the government to take measures to halt the latest surge in home prices. Several bank CEOs and economists are urging the government of Canada to slow the runaway housing bubble where prices are advancing at a 15 percent annual rate after inflation. Will the government make bold moves to halt housing mania? […]
April 2, 2021 | Toronto Condo Investors Worry About Cash Flow
The Toronto condo market is the centre of the Canadian real estate investor world. The amateur investor-landlord makes up as much as 50-60 percent of all condo ownership. As rents have been falling steadily for a couple of years, starting even before the 2020 recession, condo owners are wondering if they should hang on or […]
March 26, 2021 | Population Growth Gets Too Much Credit for Housing Bubble
Canadian population growth gets too much credit for rising house prices. In fact, in Calgary and Edmonton, house prices declined or stayed flat while population grew much faster than the Canadian average. But now Canadian population growth is slowing. Can population growth explain house price increases? Recent data from Statistics Canada show a significant decline […]
March 19, 2021 | Volkswagen Drops the Gloves with Tesla
Volkswagen drops the gloves with Tesla in a direct challenge to lead the EV market by 2030. Herbert Diess, CEO, held a battery day presentation this week, announcing a major push into the EV market, where Tesla has been the leader until now. Will Volkswagen take over Tesla’s number one spot? I thought the hockey […]
March 12, 2021 | Value Versus Growth
The stock market rally on growth stocks that started 12 years ago continued this week. Value stocks continue to lag growth stocks by the widest margin on record. Is it time for value to outshine growth again? Last week I wrote about Berkshire Hathaway and Warren Buffett. Buffett is recognized as one of the greatest value […]
March 5, 2021 | Berkshire Hathaway as an Energy Play
Warren Buffett released his annual letter, reviewing how Berkshire Hathaway (BH) performed in 2020. One interesting portion includes a breakdown of the company’s main assets. There are four main investments which he calls the “family jewels”. These are the railway (BNSF), Berkshire Hathaway Energy (BHE), the property/casualty insurance companies and BH’s ownership of 5.4 percent […]
February 26, 2021 | The Federal Reserve is Both Arsonist and Firefighter
The stance of the Federal Reserve chair, Jerome Powell, as confirmed publicly this week, is for continued support for the economy, as 10 million jobs are still missing. A year ago the Fed lit a fire under prices for assets like stocks with its expansion of credit and extremely low interest rates. At some point […]
February 19, 2021 | A Commodity Super-Cycle
The price of base metals, especially copper and nickel, are known as indicators of future economic growth. While the validity of that relationship is in doubt, it makes sense that base metals would move higher with an expectation for rapid economic growth. Is the recent surge in these metal prices predicting a robust economy? […]
February 12, 2021 | Corporations Are Jumping on the Green Energy Bandwagon
Many corporations are announcing new sustainability or net-zero emissions targets, by a set date, usually 2050. More than 620 companies announced a science-based target in 2020. The total for 2021 will be even higher. As they struggle to meet these targets billions of dollars will be invested to reduce carbon emissions and to purchase offsets. […]
February 5, 2021 | Inflation The Most Likely Outcome
The unprecedented run of increased government deficits continues apace in 2021. Governments and central banks have decided that borrowing for stimulus during the recession is more important than worrying about debt levels. How does this rapid acceleration in debt get resolved? I wrote about the inflation risk in November 2020, suggesting that higher inflation might be a […]
January 29, 2021 | The Biggest Housing Bubbles of all Time
The housing bubble has become enormous in these three countries, and when these bubbles burst, it will be very painful. Canada, Australia and New Zealand continue to defy the odds as house prices move further into unaffordable territory. Are these house prices justified? Source: Bank for International Settlements From 1970 to 2020 New […]
January 22, 2021 | President Biden Goes Green
President Joe Biden plans a serious push into clean energy, with significant acceleration in the adoption of renewable energy in the U.S. The stock market anticipated a Biden win in November 2020, with shares of most companies in the clean energy sector surging far ahead of the broad market. Will President Biden satisfy expectations for […]
January 15, 2021 | Speculative Blank Check Companies Create Billions of Paper Profits
A $12.5 million investment in clean energy earned an “accidental” profit of $200 million from a blank-check company. Here is how that works. Blank-check companies — SPACs or Special Purpose Acquisition Companies — are proliferating, a strong signal that this market has gone wild. Blank-check vehicles are shell companies used to take a private company […]
January 8, 2021 | Grantham Predicts a Crash
Investment guru Jeremy Grantham, founder of a major investment firm based in Boston, delivered a warning this week. He says that the U.S. market is in the late stages of a major bubble. He predicts losses in the stock market comparable to the post-2000 period when the tech-heavy NASDAQ index declined 82 percent over two […]
December 25, 2020 | Things to be Grateful for in 2020
While 2020 has been a very difficult year for all of us, I have learned that taking the time to make a gratitude list is always helpful. Many years ago, I was complaining about things that I felt were not going my way and an older and wiser person said to me, “What are you […]
December 18, 2020 | A Canadian Hydrogen Strategy Could Be a Winner
Canada’s new clean energy plan was unveiled on December 11, 2020. The Hydrogen Strategy for Canada came out this week. Every region of Canada has the potential to produce hydrogen, from several different sources. Will hydrogen play a key role in saving Canada’s energy industry? The Hydrogen Strategy is part of the Trudeau government’s bold […]
December 11, 2020 | Canada Needs an Electric Vehicle Option
Canada risks falling behind in the race to build electric vehicles. Decades of reliance on the Big Three U.S. automakers means that Canada may not have any significant electric vehicle manufacturing capacity when most new vehicles will be electric powered. Is it time for an all-Canadian electric auto? A report from Clean Energy Canada, of […]
December 4, 2020 | Robinhood Traders Recreate the 1999 Market
The popular stock-trading application for new investors, Robinhood Markets Inc, was valued at about $11 billion in August. Launched in 2013, the app allows investors to trade stocks in small amounts for zero commission. Robinhood has captured substantial market share in the online stock trading business, going up against giants like TD Ameritrade and E*Trade. […]
November 27, 2020 | Shopping Malls Put To The Test
The demise of the shopping mall has been a topic of interest for years, but the COVID-19 recession is accelerating those changes. The move to online shopping was well underway before February 2020 but, now that many people are afraid to go outside, online could be the preferred option. This holiday season will be a […]
November 20, 2020 | Tesla Joins The S&P 500
Tesla Inc. will join the S&P 500 index as of December 21. At more than $500 billion in value, Tesla will be one of the most valuable in the index, giving the maker of electric vehicles a ranking in the top ten by size. Since there are many index funds and fund managers that track […]
November 13, 2020 | Higher Inflation Would Test Markets
Higher inflation now would be a genuine surprise to markets. Equities and bonds are priced as if low interest rates, even negative ones, will last for years. But recent data show that inflation might not be dead after all. Could inflation rise? What would happen to markets? In the early years of my career inflation […]
November 6, 2020 | Joe Biden and Stock Market Returns
A “clean sweep” on November 4 for Joe Biden and the Democrats looks increasingly possible. To get a “clean sweep” Biden would win and voters would give Democrats a majority in both the House of Representatives and the Senate. What would happen to stock markets? Jimmy Carter won a clean sweep in 1976, after the […]
October 30, 2020 | Joe Biden and Stock Market Returns
A “clean sweep” on November 4 for Joe Biden and the Democrats looks increasingly possible. To get a “clean sweep” Biden would win and voters would give Democrats a majority in both the House of Representatives and the Senate. What would happen to stock markets? Jimmy Carter won a clean sweep in 1976, after the […]
October 24, 2020 | Tesla Beats Expectations Again
This week Tesla’s latest earnings report revealed impressive results. The profit trend continues to improve, with growing auto production, cash flow and net income. Do Tesla shares make a good investment today? Tesla’s fifth consecutive profitable quarter solidifies a trend that has impressed even the most skeptical analysts. Production from the new China factory showed […]