Strategic decisions for an uncertain future:
John Nicola, Chairman & CEO addresses several issues facing
high net worth families:
• How will the Liberals’ tax changes affect financial planning for Canadians?
• How will inflated prices impact future returns?
• Are there best practices for navigating the current environment?
Rob Edel, Chief Investment Officer provides an investment roadmap for 2018:
• After a record-breaking period for the S&P 500, what signs might indicate an economic downturn?
• What current events could most affect the economy and investment strategy?
• What should one make of bitcoin, marijuana stocks, electric vehicles, and other hot topics for the upcoming year?
Nicola Wealth CEO John Nicola provides an introduction to dental professionals on investment strategies that go beyond stocks and bonds, demonstrating the integrated possibilities of true wealth management.
Physicians Agent™ Network is the country’s leader in offering real estate solutions to all doctors. Thousands of physicians visit us every month to review loan programs, relocation services and find 5-Star local real estate agents. If you are looking to attract new physician buyers you have come to the right place. We will teach you about leveraging your marketing with the Physicians Agent™ designation that physicians look for when seeking “doctor friendly” REALTORS®.
Greenstone Farm Financing for Northern Michigan - Ben MahlichBill Palladino
This presentation was provided to the Northwest Michigan Food & Farming Network at their council study session on March 20, 2014. It is the property of Greenstone Farm Credit Services. It includes the video of Ben's presentation embedded at the front of the SlideShare deck. You can click the "next slide" arrow to advance to the PPT slides. And here's the YouTube link alone: http://youtu.be/1fy5OANTQu4
Nicola Wealth CEO John Nicola provides an introduction to dental professionals on investment strategies that go beyond stocks and bonds, demonstrating the integrated possibilities of true wealth management.
Physicians Agent™ Network is the country’s leader in offering real estate solutions to all doctors. Thousands of physicians visit us every month to review loan programs, relocation services and find 5-Star local real estate agents. If you are looking to attract new physician buyers you have come to the right place. We will teach you about leveraging your marketing with the Physicians Agent™ designation that physicians look for when seeking “doctor friendly” REALTORS®.
Greenstone Farm Financing for Northern Michigan - Ben MahlichBill Palladino
This presentation was provided to the Northwest Michigan Food & Farming Network at their council study session on March 20, 2014. It is the property of Greenstone Farm Credit Services. It includes the video of Ben's presentation embedded at the front of the SlideShare deck. You can click the "next slide" arrow to advance to the PPT slides. And here's the YouTube link alone: http://youtu.be/1fy5OANTQu4
SAC XIV Accelerating Economic Growth & Innovation through Angel Investing Nov...Elaine Werffeli
Presented at the SAC XIV Finals was this though provoking deck on How women can play a pivotal role in economic growth and Accelerating Innovation through Angel Investing
The SVN organization shares a selection of their featured weekly listings via their SVN | Live Weekly Property Broadcast. Visit http://www.svn.com/svn-live-weekly-property-broadcast if you would like to attend, as we open the Broadcast up to the entire brokerage community.
These slides are the from the Association's annual Economic Summit featuring Economist Dr. Walden, Economic Directors: Dwight, Basset and Alyssa Byrd and Chamber CEO Kim Tesoro from Hillsborough Chamber of Commerce
State of the Property Market In Australia - The Risks and Opportunities for I...First In Finance
The global and local economic factors affecting the property market in Australia. What investor's can do to prepare and how they can take advantage of the current cycle.
This “Buyer Guide” will give you powerful marketing materials to share with clients, and help you simply and effectively explain the current market opportunities to potential buyers.
The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the Q2 2014 Halo Report today, a national survey of angel group investment activity. The report finds median pre-money valuations continuing to climb for the third consecutive quarter reaching $3 million in Q2 2014. Round sizes dropped approximately 40 percent to $600K over the prior quarter when angel groups invested alone, but rose nearly 20 percent to $2 million when angels co-invested with other types of investors.
A Millennial’s Guide to Homeownership | KM Realty Group Chicago, ILTammy Jackson
This is a content-packed guide that offers powerful marketing materials to share with your clients, while also helping you simply and effectively explain the market’s current homeownership opportunities to a booming demographic that often finds itself stuck in the rental trap.
✔️ We Make Real Estate Buying and Selling Easy.
✔️ https://kmrealtygroup.net/
✔️ Let's connect with a real estate professional to discuss your home buying or selling process. ✔️ https://bit.ly/connect-km-realty
Ace Capital Group - Land Banking – a Proven Formula for a Better Retirement. Will You Be Able To Retire Comfortably? What is land banking and how Ace Capital Group helps you to increase wealth.
In our annual Calgary event, held at the Hyatt Regency Hotel, we presented Strategic Decisions for an Uncertain Future:
Mark Therriault, Nicola Wealth Financial Advisor and Partner, addresses several issues facing high net worth families:
• How will the Liberals’ tax changes affect financial planning for Canadians?
• How will inflated prices impact future returns?
• Are there best practices for navigating the current environment?
Rob Edel, Chief Investment Officer provides an investment roadmap for 2018:
• After a record-breaking period for the S&P 500, what signs might indicate an economic downturn?
• What current events could most affect the economy and investment strategy?
• What should one make of bitcoin, marijuana stocks, electric vehicles, and other hot topics for the upcoming year?
In our annual Toronto event, held at the Four Seasons Toronto, we presented Strategic Decisions for an Uncertain Future:
John Nicola, Chairman & CEO addresses several issues facing high net worth families:
• How will the Liberals’ tax changes affect financial planning for Canadians?
• How will inflated prices impact future returns?
• Are there best practices for navigating the current environment?
Rob Edel, Chief Investment Officer provides an investment roadmap for 2018:
• After a record-breaking period for the S&P 500, what signs might indicate an economic downturn?
• What current events could most affect the economy and investment strategy?
• What should one make of bitcoin, marijuana stocks, electric vehicles, and other hot topics for the upcoming year?
SAC XIV Accelerating Economic Growth & Innovation through Angel Investing Nov...Elaine Werffeli
Presented at the SAC XIV Finals was this though provoking deck on How women can play a pivotal role in economic growth and Accelerating Innovation through Angel Investing
The SVN organization shares a selection of their featured weekly listings via their SVN | Live Weekly Property Broadcast. Visit http://www.svn.com/svn-live-weekly-property-broadcast if you would like to attend, as we open the Broadcast up to the entire brokerage community.
These slides are the from the Association's annual Economic Summit featuring Economist Dr. Walden, Economic Directors: Dwight, Basset and Alyssa Byrd and Chamber CEO Kim Tesoro from Hillsborough Chamber of Commerce
State of the Property Market In Australia - The Risks and Opportunities for I...First In Finance
The global and local economic factors affecting the property market in Australia. What investor's can do to prepare and how they can take advantage of the current cycle.
This “Buyer Guide” will give you powerful marketing materials to share with clients, and help you simply and effectively explain the current market opportunities to potential buyers.
The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the Q2 2014 Halo Report today, a national survey of angel group investment activity. The report finds median pre-money valuations continuing to climb for the third consecutive quarter reaching $3 million in Q2 2014. Round sizes dropped approximately 40 percent to $600K over the prior quarter when angel groups invested alone, but rose nearly 20 percent to $2 million when angels co-invested with other types of investors.
A Millennial’s Guide to Homeownership | KM Realty Group Chicago, ILTammy Jackson
This is a content-packed guide that offers powerful marketing materials to share with your clients, while also helping you simply and effectively explain the market’s current homeownership opportunities to a booming demographic that often finds itself stuck in the rental trap.
✔️ We Make Real Estate Buying and Selling Easy.
✔️ https://kmrealtygroup.net/
✔️ Let's connect with a real estate professional to discuss your home buying or selling process. ✔️ https://bit.ly/connect-km-realty
Ace Capital Group - Land Banking – a Proven Formula for a Better Retirement. Will You Be Able To Retire Comfortably? What is land banking and how Ace Capital Group helps you to increase wealth.
In our annual Calgary event, held at the Hyatt Regency Hotel, we presented Strategic Decisions for an Uncertain Future:
Mark Therriault, Nicola Wealth Financial Advisor and Partner, addresses several issues facing high net worth families:
• How will the Liberals’ tax changes affect financial planning for Canadians?
• How will inflated prices impact future returns?
• Are there best practices for navigating the current environment?
Rob Edel, Chief Investment Officer provides an investment roadmap for 2018:
• After a record-breaking period for the S&P 500, what signs might indicate an economic downturn?
• What current events could most affect the economy and investment strategy?
• What should one make of bitcoin, marijuana stocks, electric vehicles, and other hot topics for the upcoming year?
In our annual Toronto event, held at the Four Seasons Toronto, we presented Strategic Decisions for an Uncertain Future:
John Nicola, Chairman & CEO addresses several issues facing high net worth families:
• How will the Liberals’ tax changes affect financial planning for Canadians?
• How will inflated prices impact future returns?
• Are there best practices for navigating the current environment?
Rob Edel, Chief Investment Officer provides an investment roadmap for 2018:
• After a record-breaking period for the S&P 500, what signs might indicate an economic downturn?
• What current events could most affect the economy and investment strategy?
• What should one make of bitcoin, marijuana stocks, electric vehicles, and other hot topics for the upcoming year?
In this annual Strategic Outlook seminar, we will discuss what the markets have in store for 2018, and beyond.
Presenters:
John Nicola, Chairman & CEO
John will address several issues facing high net worth families:
- How will the Liberals’ tax changes affect financial planning for Canadians?
- How will inflated prices impact future returns?
- Are there best practices for navigating the current environment?
Rob Edel, Chief Investment Officer
Rob will provide an investment roadmap for 2018:
- After a record-breaking period for the S&P 500, what signs might indicate an economic downturn?
- What current events could most affect the economy and investment strategy?
- What should one make of bitcoin, marijuana stocks, electric vehicles, and other hot topics for the upcoming year?
On Thursday, May 11, 2017, Nicola Wealth Management hosted their annual Strategic Outlook event featuring presentations by NWM Chairman and CEO John Nicola and Chief Investment Officer Rob Edel.
Grow + Sell Your Business Part Three: Practical Tips To Facilitate a TransactionKegler Brown Hill + Ritter
Presented by Eric Duffee and Michael Shaw, Copper Run Capital, on 10/17 as part of a Four Part Series. This segment of the series offered 8 clear steps to follow in pursuit of facilitating a successful transaction. It covered areas such as securing your assets, awareness of current market trends, a visual analysis of our current market update, and surrounding yourself with the right team.
2022 was generally turbulent for investors, especially those with a traditional stocks and bonds portfolio, who were hit particularly hard by the year’s headwinds. With inflation, Russia’s war with Ukraine, aggressive central bank tightening, and China’s lockdowns driving volatility, global economies have been grappling with rapid adjustments in interest rates, sentiment and valuations. However, while fears of recession loom, there may be some silver linings ahead for agile investors.
The Nicola Wealth Strategic Outlook 2023, which was hosted by President | Client Relationship Manager, David Sung, featured presentations by Chairman & CEO John Nicola, CIO Rob Edel, CFO & Head of Private Capital Bijal Patel, and Managing Director, Real Estate Mark Hannah. Each professional shared their perspectives on the trends that are shaping the investing environment, and how these developments may impact investors and asset classes over the coming year.
November 2018 Economic Minute with Dennis HoffmanShay Moser
The Director of the L. William Seidman Research Institute and Professor of Economics Dennis Hoffman shares the arithmetic on whether 3 percent gross domestic product and above is sustainable and why it matters. Listen to his presentation here: https://news.wpcarey.asu.edu/20181115-question-du-jour-about-gdp-growth
5 predictions for commercial real estate, risk management and lending in 2018. Presented by Dianne Crocker, EDR Insight in her opening comments at the Environmental Bankers Association Conference in Long Beach, CA on January 15, 2018.
Netwealth portfolio construction series: Economic Update with Roger MontgomerynetwealthInvest
Part of Netwealth's portfolio construction webinar series - Roger Montgomery, founder and Chief Investment Officer at Montgomery Investment Management presented to an audience on 22nd February 2017 and shared his views on major economic trends currently affecting local and global markets, stocks and sectors best placed for growth and what investors should look for in 2017.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
12. 2017 in Review S&P 500
2017 S&P 500 +21.8%
+1% Declines
Last
+5% Decline
June 24-27 2016
Feb 2, 2018
404 Days
Average since 1929
92 Days
Feb 8, 2018
-10.1%
2017 S&P 500 +21.8%
1%+ Declines
14. 2017 in Review Canadian and U.S. Yield Curves
Yield Curve
Yield Curve
Dec 31, 2017
Dec 30, 2016
Dec 31, 2017
Dec 30, 2016
0.74%
1.69%
2.04%
1.72%
+95 bps
+32 bps
1.19%
1.88%
2.44%
2.41%
+69 bps
Mar 20, 2018
15. Investment Road Map The Art of Forecasting – Tricks of the Trade
Business Insider Jan 4, 2016
24. Morgan Stanley Research – Sunday Start – What’s Next in Global Macro Dec 10, 2017
Investment Road Map
U.S. Tax Reform:
• Corp rate 35% to 21%
• U.S. Corporations hold estimated $2.6 trillion overseas
• Full expensing of business investment for five years
26. Bad Neighborhood Trump
Source: Financial Times, February 2018
Trade War – China
North Korea
Syria/Middle East
Mueller Investigation
Stormy Daniels
Tomorrows Headlines Hedgeye – Cartoon of the Day – Mar 5, 2018
33. Bloomberg – Feb 3, 2018
Points of Interest Bitcoin: Blockchain
MIT Study: $270 - $317 million raised by ICO’s are
frauds or scams
Charles Kindleberger: “There is nothing so disturbing to
one’s wellbeing and judgement as to see a friend get rich.”
Blockchain
• A secure database, or ledger, spread across multiple computers
Bitcoin
• Digital Global Currency – used for everyday transactions?
• Store of value?
• Bitcoin Energy Consumption Index = Algeria
34. Points of Interest Bitcoin: Useless Etherium Token
Contributions in US$’s - $276,342
Enough to buy 230 televisions!
35. Points of Interest Marijuana
1 Year Cannabis Stock Performance
Barron’s – Mar 30, 2018
Canopy CEO Bruce LintonROB Magazine – Nov 12, 2017
Barely existed 3 years ago
Now dozens of companies
~$30 billion market cap
36. Points of Interest Marijuana
Globe & Mail – Feb 8, 2018Globe & Mail – Feb 8, 2018
Barron’s Mar 30, 2018
60 Private and public companies
Health Canada granted 89 licenses
Feb 1 – 244 more in review stage
Oregon/Colorado – wholesale $0.50 - $2.00
Commodity business
Low barriers to entry
No sustainable advantage
Canada
• Deloitte: After legalization
• $4.9-$8.7 billion market
• Low=rum, High=wine
• Price: $10/gram initially
Constellation Brands
• U.S. $50 billion Market
• Global: $200 billion in 15 years
• Wine: $60 billion
• Tobacco: $75 billion
37. Points of Interest Active vs. Passive Investing
Strategas – Technical Strategy & Analysis October, 2017
Active equity mutual funds
• 2009-2017 $1.0 trillion in
outflows
ETFs - Passive
• 2009-2017 $1.7 trillion in
inflows
• 44% of equity AUM ETFs or
passive mutual funds
Strategas Technical Analysis Research – May 16, 2017
38. Points of Interest Active vs. Passive Investing
Strategas Technical Analysis Research – May 16, 2017
Low interest rates mean more bad companies are able to survive
39. WSJ – Feb 13, 2018
Long time horizon
$1.7 Trillion in Dry Powder
Manager Selection
Points of Interest Active vs. Passive Investing: Private Equity
40. Summary
• Next recession at least 12 months away
• Conditions more challenging during next recession
• Risk asset still attractive in this environment
• Watch for sign of end of the cycle – lower risk exposure
• Avoid investment fads
• Active management to outperform
• We have reached our destinationBusiness Insider – Feb 7, 2018
52. Harbour Towers Hotel & Suites
Acquired: October 2015
Purchase Price: $23.0 M
Hotel Rooms: 196
Pre-Acquisition
• NOI – $1.5M
• NOI Yield – 6.5%
• Occupancy – 62%
• ADR* – $130
Post-Acquisition (2016)
• NOI – $2.0M
• NOI Yield – 8.7%
• Occupancy – 70%
• ADR* – $148
*Average Daily Rate
Acquisition, Victoria
53. Harbour Towers – Value Creation
Multi-Family Rental Conversion
219 New Rental Units
Projected Cost: ~$56.4 M
Projected Value: ~$67 M
Return on Cost: ~19%
Projected IRR: ~17% BEFORE
AFTER
54.
55. Transportation as a Service (TaaS)
• By 2030, 95% of all Passenger Miles will be
by Automated Electric Vehicles (AEVs)
• This will add about $5600 per family in
discretionary spending (10% of income or
$1 trillion)
• There will be minimal production of
Internal Combustion Engines (ICEs) or
individual ownership of cars.
• IO cars will be 40% of the fleet, but 5% of
passenger miles
• AEVs will have a lifetime mileage capacity
between 500,000 and 1 million miles
56. Transportation as a Service (TaaS)
• TaaS will be 4 to 10 times cheaper than
traditional owner driving
• Pre-TaaS companies (Uber and Lyft) drove
500,000 passengers per day in NYC in 2016
• By 2030 passenger cars in the US will drop
from 237 million to 44 million
• 70% fewer cars manufactured annually
• 50% more passenger miles in total at a cost
of $400 billion vs. $1.5 trillion today
57. Transportation as a Service (TaaS)
• Oil demand would drop to 70 million BPD
from what is predicted by the IEA at 110 million
BPD
• Price of oil could drop to $25 and make 50% or
more of North American Oil uncommercial but
still leave us energy independent
• Keystone and Dakota Access Pipeline would be
stranded
• Energy requirements would drop by 80% and
emissions by 90%
• Huge impact on oil industry, autos/trucks, auto
insurance
• Big geopolitical outcomes (impact on Canada?)
58. 39% Saudi Arabia
15% Russia
1% US
5% Canada
Oil Dependency
Cheaper oil
Who needs oil?
10M+ Barrels/Day
59. • When will this occur?
• Winners/Losers?
• Impact on related
products and services?
• Impact on portfolio
mix?
68. Tax Reform 2017
What’s Being Plucked?
• Income splitting of dividends from private corporations
• Increase tax on passive corporate income that could reach 71% when paid
out as dividends
• Pipeline planning that converts dividends to capital gains is prevented
How is the Goose Doing Now?
• Income splitting allowed over age 65 with a spouse
• Otherwise no, unless labour or financial contribution
• Passive rules stay the same except reduction in SBD if passive income over
$50,000/year; more expensive to recover RDTOH in some cases
• Integrated tax on passive income can be as high as 56% in Ontario
69. Tax Reform 2018
Before Tax Reform
• Dividend compensation if SBD
• Income split using dividends and trust
• Accumulate passive assets in CCPC
and recover RDTOH when dividends
paid
• SBD not impacted by passive assets
After Tax Reform
• Salary RRSP/IPP better
• Over 65 on with spouse otherwise
labour or capital
• CCPC still better but try and minimize
taxable passive income
• Start losing SBD at $50,000 of passive
income. 100% gone at $150,000. Does
it make much difference?
74. Expected Return 6% Expected Return 7.5%
• $2.2M portfolio in
private company
• Qualifies for SBD
What is overall tax and
tax rate going forward?
A Tale of Two Taxpayers
Actual 60/40 performance (Morningstar Canadian Neutral Balanced) 4.67%. Actual client performance (NWM Core Composite model) 7.14%.
Jan 1, 2000 to Dec 31, 2017
75. $170,000
$50,000
$23,500
$0 $0
$23,500
Total return Taxable return Corporate tax Impact on SBD Additional tax Total tax
$140,000
$72,000
$34,200
$110,000
$16,500
$50,700
Total return Taxable return Corporate tax Impact on SBD Additional tax Total tax
21% more return, 54% less tax
13.8%
36.2%
77. Saving Corporately $100,000 pre-tax income
$88,000
$73,000
$12,000
$27,000
12% Business Tax 27% Business Tax
Tax
Saving
20% more
to save
78. Assumptions
• Save for 30 years
• 6% after tax return
• Take out income at
retirement as dividends
$7,300,000
$6,100,000
Assets in 30 years
SBD General Rate
20% more
saved
80. Planning Factors
• Corporate assets
• Age
• Business Income
• Spending needs
Planning needs to be customized and will change over time.
81. Planning Options
Tax Efficient Asset Allocation
IPP vs. RRSP
Over Age 50
Prescribed Rate
Loans
Insurance With or
Without Leverage
82. School Tax
• $2000/year at $4M
• $6000/year at $5M
• $26,000/year @$10M (100% increase)
• Not applicable to rental apartment buildings
• Not applicable to commercial/industrial or retail real estate
• Town Hall meeting May 1st 6:00pm St. James Community Square 3214 West 10th
Avenue
83. To Sum
it Up
Good Neighborhood Turning Bad Treading Water?
Disruptive Technologies Managing Tax Reform
84. THANK YOU
This presentation contains the current opinions of the presenter and such opinions are subject to change without notice. This material is distributed for informational purposes
only and is not intended to provide legal, accounting, tax or specific investment advice. Please speak to your NWM Advisor regarding your unique situation. Forecasts, estimates,
and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security,
strategy or investment product. NWM fund returns are quoted net of fund-level expenses. Past performance is not indicative of future results. All investments contain risk and
may gain or lose value. NWM is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required provincial securities’ commissions.
Editor's Notes
Agenda:
Look at what happen last year
Oct 18, 1987 versus Oct 18, 2017 – big difference in activity
Next, we try and map out how we see the economy and markets changing in the short term
As well as some longer term issues we have spoken about in the past that continue to concern us
And finally looking at some specific investment investors should avoid in what we view as a challenging investment environment
Looking at markets last year, first the S&P 500
Returned nearly 22% last year, an exceptional result
But perhaps even more extraordinary was the consistency or lack of volatility incurred to produce that return
In 2017, the S&P 500 only suffered an intra day decline of more than 1% on four occasions., over the past 30 years, the market has typically endured a 1% correction every 7 or 8 trading sessions
There wasn’t a single day in which the market fluctuated more than 2%, typically this happens about 10 times a year.
At no point last year did the S&P 500 didn’t experience a negative return month
Nor did it suffer a draw down of 5% or more. In fact , the last tine the S&P 500 experienced a 5% drawdown was June 2016, and went a record 404 days, until finally on Feb 2, 2018 fell over 5%. On average, the market suffers a 5% draw down every three months or so.
The market continued lower and on Feb 8th had actually decline just over 10% signifying a market correction, but has been working higher. Still hasn’t hit its Jan 26 highs, however.
Will it continue higher and melt up, like it did in January, or continue lower and enter a bear market by falling 20%.
At the very least, market volatility looks to have returned
Canadian stocks in 2017 did not fair as well.
For 2017 just over 9%, but all of this occurred in the last 4 months of the year
Up until September 8th, the market was basically flat.
Canada, not as good a year. More volatile and less return.
Composition of the Canadian market
Financials – worry about housing market
Energy – Western Canadian crude differentials
Don’t have technology
Didn’t have tax reform
The Canadian economy was strong, however, as can be seen in the bond market
The Strength of the Canadian economy last year can be seen in the bond market
With Canadian short rates rising nearing 1% while longer term rates not as much.
This flattening of the yield curve was also evident in the U.S., though short rates didn’t move up as much, only about 70 bps, while longer rates barely moved at all.
Short rates heavily influenced by the central bank
BOC & Fed tightening
Longer term more influence by the market and inflation
This is the conundrum, with the Fed raising, why was 10 year flat?
Fed is starting to normalize interest rates as the economy appears to have finally found its footing
But Inflation not moving recovering, at least not until just recently
Early 2018, see inflation, entire curve move higher in US.
What’s going on?
Market is more volatile
Yield curve moving higher, but still flat
Recession, bear market
Or buying opportunity?
Before giving a forecast on where the markets and the economy are going, we think it fair, in full disclosure, to highlights some forecasting techniques used by the investment communities, tricks or the trade so to speak.
The first is demonstrated by this Dilbert cartoon
Which is make the forecast, which may or may not make sense, sound as complicated as possible so everyone thinks your smart and won’t question your forecast.
Another fine technique is highlighted by the frustration shown in this this Harry Truman quote. Always hedge your forecast and provide at alternative outcomes. Don’t be be definative.
And finally, a variant of this is demonstrated here:
In the words Brian Fantana, The Anchorman – They have done studies you know, 60% of the time, it works every
time.
The Wall Street version of this is actually only 40% of the time
Let me give you an example:
Let’s say you have a non consensus view
You want the credit if it turns out to be right, but don’t want to go out on a limb in case it’s wrong
So you put a 40% probability on it.
If it happens, you take the credit for being of the only people to get it right
If it’ doesn’t happen, you can dismiss it as only having being a 40% probability
We are likely to use some of these techniques tonight.
.
In fairness, however, forcasting is hard. There are many factors influencing the market and the economy, too many quite frankly to be able to confidently state firm predictions for definitive outcomes in the future.
What we hope to do tonight is provide a framework or a path that we can follow, rather than hard dates and outcomes
There are a number of different factors influencing the economy, which could take the market in a number of different directions
Investors have to be prepared, understand the future turns in the economy and be ready to decide on the proper route to take.
In order to do this, we thought we would map out the likely path for the markets, like a traditional road map.
I brought this up with our team and described the idea of a roadmap, and they didn’t know what I was talking about.
Gen-xers and a couple of Millenials, they have never seen or used a roadmap.
They suggested what I was describing was in fact a GPS
Here is an example
It shows the route John and I took to get to Kelowna
4 hour drive, about 3.25 if John is driving, 40 minute flight.
We flew
So I went to our IT group and asked them the make us an investment GPS.
And this is what they came up with……
Start here, the route, and then the finish line,
What it is actually is a chart of the business cycle
Horizontal X axis is time, while Vertical Y axis is sustainable GDP growth, meaning the normal rate the economy can grow at without overheating and incurring inflation.
According to the Federal Reserve, this is currently 1.8%
As we work through the route, or business cycle, as the economy contracts below potential, the central banks starts to cut interest rates and inflation begins to recede. This is a good environment for Bonds, less so for stocks and corporate earnings.
Given the stimulative monetary policy, the economy begins to bottom and slowly start to recover. Stocks tend to start to recover in this environment
As growth picks up momentum and passes 1.8%, inflation begins to move higher again. Higher inflation causes the central bank to start raising interest rates. Higher earnings help stocks, but are partially offset by lower valuations. Bonds struggle
Finally, higher rates cause the economy to roll over, hurting earnings, while inflation remains high. This is bad for stocks and bonds.
So where are we on this route?
The slide provides us a good indicator
The grey shaded areas indicate recession
The red line is the output gap, which is the amount the economy is growing below its potential
Typically the output gap disappears one to two years before a recession, and as you can see here, the output gap has recently disappeared.
This is important, because on our investment GPS, we know the maximum sustainable output for the economy is right here, at 1.8%
Now there are not exact numbers. One or two years is a big spread, and determining the maximum sustainable output for the economy is more art than science, but are pretty comfortable saying we are somewhere in between here and here, which is good news.
Because for a long time, we were literally parked down here.
Interest rates were low, good for valuations
But earnings growth was hard to find with very low economic growth
The bad news with no longer being stalled, however, is we are now beginning to move along the business cycle , and thus we will start to move closer to the end.
Inflation start to increase & interest rates rise
Till finally the economy and the market starts to roll over.
But, we don’t think we are there yet, but the odometer has started
In the mean time, however, this area is actually a very good environment for stocks and other risk assets.
Deflation is no longer a risk
But interest rates are still low
Earning growth is strong
Not too hot such that the central bank has to raise interest rates too quickly
But strong enough such that companies have some pricing power and strong earnings.
Higher inflation and higher interest rates only become a problem later in the cycle
As you see from this chart Stock valuations are highest when inflation is between 0 and 2%, which is roughly where we are.
Even above 2%, but below 4% valuations are still strong.
Same for interest rates, low and rising 10 year yields are actually positively correlated with higher valuations. Historically is only when rates are above 5% do valuations start to contract.
Given the current environment, some believe this is perhaps lower now, maybe 3.5%
Regardless, 10 year yields in the U.S. are still under 3%
This all makes intuitive sense. Interest are moving higher for the right reasons, because economic growth is stronger, but monetary conditions are still stimulative.
This is a good environment for investments
But how do we know when we are reaching the end of the road, so to speak?
There are a number of indicators that are useful in indicating when the cycle is nearing an end.
Probably the best the yield curve.
This chart show the spread between the 10 year treasury yield and the 2 year
The highlighted areas indicate recession.
When the line is falling, it means the yield curve is flattening. 2 year yields are increasing more than 10 year yields (or falling less.
When the line falls below zero, the yield curve is actually inverted, meaning 2 year yields are higher than 10 year yields.
As you can see, every time the we have a recession, it has been preceded by a recession.
This makes sense because once the market concludes the increase in short rates is going to push the economy into recession, investors sell stocks and shift into lower risk 10 year bonds, anticipating lower interest rates in the future
Currently, while the yield curve has been flattening, we are still not close to an inverted yield curve.
This is a key indicator to watch, and one of the reasons the flattening last year was such a concern.
But let’s take a step back
What’s going to cause the central bank to tighten?
Inflation
And wage growth is the key ingrediant leading to sustainable inflation
Again looking at this chart, the shaded area is recession, the key level for wage growth is 4%.
Every recession over the past three decades has been preceded by wage growth spiking up to 4%
But this cycle, wage growth remains well below 4%
Wage growth is a key indicator to watch on your investment GPS
Once the central bank starts to tighten, how do we know when it’s starting to impact companies and their ability to borrow, thus slowing economic grwoth?
credit spread are a good indicator for this.
Again in this chart, highlighted area is recession, you can see rising credit spreads has been a good warning signal.
But so far, spreads have remained quite low.
It’s true the Fed has been raising rates
Since Dec 2015 – 6 times or 1.5%
With 2 more expected in 2018
But monetary conditions are actually still quite easy
Rates are still stimulative, but with the Fed raising rates and reducing the size of it’s balance sheet and reversing the impact of QE, they are slowly removing the punch bowl
Bit as this cartoon show, Trump and the Republicans have arrive with a new punch bowl with tax cuts and fiscal policy
With the Corporate tax rate falling from 35% to 21% earning will go up
In addition an estimated $2.6 trillion held overseas will be taxed at between 8% to 15.5%, but can now be re-patriated and spent in the U.S..
And to help them spend it on capital investments, companies will be able to fully expense business investments for the next 5 years
We can see the impact of this on our Investment GPS
The 1.8% sustainable growth rate we highlighted is not a static number.
It can move up or down, depending on the structure of the economy
GDP growth is essentially population growth plus productivity growth
While population growth isn’t expected to move up, productivity growth can is companies start to invest more, either due to tax reform, or just in response to higher eventual wages.
If this were to happen, as you can see on our GPS, the red line would move up
How much?
McKinsey & Co thinks productivity could increase to about 2.0%
Trump thinks growth could actually hit 4%
If this happens, the whole GPS route shifts up such that there is now more upside to growth before more growth becomes inflationary
And a longer time period before the end of the business cycle
If tax reform and tax cuts might help extend the cycle, a trade war could do the opposite and prematurely drive the economy into recession
As can be seen in this cartoon of Trump pulling the rug from beneath the rest of the world
A recent BAC/Merrill Lynch survey recently highlighted a trade war as the greatest tail risk investors worry about in todays market
Which appears vindicated based on recent actions.
Trump’s strategy
Use Tariffs as a negotiating tool
China is the real target
Trump would like to reduce the US trade deficit (by $100 billion) to appease his base, but the real target is not the low tech manufacturing industries of the past, but the future high value add industries
In 2015 China created the Made in China 2025 program
Which targets 10 key industries China wants to becomes world leaders in
China’s unfair practices requiring US companies to JV & transfer IP and providing subsidies to SOE, especially in 10 priority industries
Trump believes the WTO had been too soft on China
Without tax reform or trade wars , many were thinking a year before the next recession
More optimistically, maybe two years….or longer? Now?
The key is to keep an eye on the indicators.
Our GPS is pretty good on location, not so good on time
But what happens when we reach the end of the business cycle?
Well, the neighborhood changes considerably.
As we have said, the current environment is quite nice. We know it pretty well. We have our GPS on, but it’s a pretty straight road without a lot of turns
The next recession is a different matter.
The neighborhood changes considerable, for the worse. And we don’t know this neighborhood, at all.
What do I mean by this?
They are a likely going to be a number of areas where central banks and investors are going to find themselves in unchartered territory
First – Monetary policy
Again shaded area are recessions
During the past 7 recession the Federal Reserve has cuts rates an average of 500 basis points
With Fed funds current at 1.5% to 1.75% and expected to peak at 3.0%, there is no room for the Fed to cut 500 basis points this cycle
They haven’t allowed themselves enough dry powder to do this
The other alternative of course would be to bring in the other punch bowl, namely fiscal policy, lower taxes and government spending like infrastructure.
Like monetary policy, however, the US haven’t left themselves much dry powder
After the recent tax cuts, the budget deficit is expect to rise to 5% of GDP during the Trump term, higher than any recent administration, and only slightly lower than during the Obama administration burden with the great recession
The deficit has historically tracked the unemployment rate, so fiscal stimulus this late in the cycle is unusual, and doesn’t leave a lot of room to add more in the next recession
For Canada, it’s consumer debt rather than government debt that is the problem
In this chart produced by the BIS
The upper right quadrant shows countries where debt is high, and growing.
Here we see the US before the financial crisis, and where they are now
While Canada has even higher debt, though growth has slowed
Canada is not the only country at risk
Switzerland – Currency
Scandanavian counties
And Asian Influenced Australia and S Korea
Changes to mortgage rules and Vancouver and Toronto home taxes have helped stabalized, but high consumer debt will be an additional headwind for Canada in the next recession, and some of this consumer debt will likely become government debt if there is a housing crisis.
So where does this leave us in the next recession?
Without monetary or fiscal policy to come to the rescue, our GPS sees two possible routes:
Deflation
Which is basically the secular stagnation argument
And to some degree, a continuation of what we went through after the financial crisis
Low productivity Growth
High debt and low interest rates hurt rather than help
On the other hand
Inflation might be the route the market takes
But in combination with a recession, this would actually turn into stagflation
This would likely be the case if the federal reserve gets behind the curve and lets the economy over heat, letting inflationary expectations take hold, before aggressively tightening
Other factors that will play a role include:
Demographics: An aging population reduces spending – supports secular stagnation
But also increases wages given the higher dependency ratio
Automation would likely be deflationary if it leads to job losses
While globalization , or more likely a reduction in globalization, would increase inflation
At the end of the day, governments will need to decide, which makes it hard to forecast
The deflation is likely the consensus pick, but we think inflation is possible
We would put a 40% probability on it.
Now one of the features on most GPS systems is highlight landmarks on your route
They can include useful points of interest like Gas stations
But also some that are less so
These are meant to lure you off your planned route
Tonight, we want to highlight a few points of interest that are showing up on our investment GPS:
Bitcoin
Marijuana stocks
And passive investing, or ETF’s
Here can see the historical price of Bitcoin against other bubble asset, and indeed it appears to be following the same pattern
In discussing the merits of Bitcoin and why is deserves the price appreciation most investors commonly talk about the merits of blockchain, which is the underlying technology platform behind bit coin and all crypto currencies
We agree that blockchain is a promising technology, but you don’t need to own bitcoin for this
Bitcoin is either a digital global currency or a store of value – Neither
Too slow and expensive for transactions, and too volatile
As for a store of value, limited to 21 million tokens, but an unlimited number of other cryto currencies
The mining process to create new tokens is also insanley energy intensive
Most people actually don’t really understand Bitcoin
The real reason people buy it is because it has gone up in price
The greater fools theory, buy in hopes of selling to someone else at a greater price
I like the Charles Kindleberger quote
Other than electricy costs, the near term risk is that it gets regualted
Right now new cryptocurrencies are created through an ICO
Which a cross between IPO and crowdsourcing
Totally unregaluted
MIT study $300 million are scams.
Case in point, our favorite
The Useless Etherium Token
This is from their Website advertissing their ICO
They honestly state that if your going to randomly give money away, their going to take it and buy big screen tv’s
They say it’s not a scam, because they are telling you what they are going to do. Take you money and give you useless token in return
Despite this they raised $276,00
Or as they say enough to buy 230 televisions.
Appropriately , their logo is a hand showing you their middle finger
You don’t need to be there.
The best argument for buying Bitcoin I have heard is that it is a binominal outcome
It will either go to zero, or a million – which is the FOMO argument
I’m fine if my neighbor gets rich. I hope they do and use it to build a new house!
Stick to your route
Next point of interest is the marijuana sector
As can be seen by this chart, it also looks like a bubble
The industry barelly existed 3 years ago, and now has dozens of companies and $30 million market cap I the gold mining sector is only $60 billion
What’s driving this market?
Upcoming legislation to legalize the recreational use. First I the G7
Canada’s easy lisitng requirements
Excess of zommie shell used in reverse takeovers makes canadian markets attractive
In the US, illeagal Federally, can’t raise money
Canopy is the largest company and a good example of the interest in the sector
First pubically listed company
Over a 100% 1 year return
Nearly $7 billion market Cap
Constellation Brands bought nearyy 10%
Like Blockchain, this will be a real industry, but it has likely gotten a bit ahead of itself
This table from a recent Barron’s article shows how most companies are making any mony, but trade at huge valuations based on future demand
We get the demand story
Constellation Brands estiamtes the US market at $50 billion
Global market in 15 years at $200 billion
To put this in perspective Wine $60, Tobacco $75
Canada - $5 – $9B selling at $10/gram
It’s the supply story that would worry us
60 private and public companies
89 licenses
244 more in review
Prices in Oregon/Colorado $0.50-$2.0
It’s a commodity with low barriers to entry and no sustainble adssvantage
But a tomato company – because everyones growing pot
Liquidty is likely behind the flow of capital of both Bitcoin and Marajuana
When liquidity changes, both could suffer
Perhaps not as extreme
We also worry about the amount of money flowing into passive investments
Passive investing is a very viable strategy with low fees, but
As seen in this cartoon, we believe this currently provides an opportunity for active investors given the valuation distortions
As can ben seen on the chart on the right
According to strategas,
There are now more indexes and benchmarks, which are the basis for passive investments, than stocks
equity fund have been flat since 2002
And since the financial crisis have seen outflows of over $1 trillion
ETF’s on the other hand, have grown from about 100 in 2003 to almost 7,000 today
They have added $1.7 trillion since the financial crisis and now out number stocks
When interest rates are zero, it’s is harder for active managers to outperform
Even bad companies are able to survive in the environment
As can be seen in this chart 33% of companies on the Russell 2000 currenty don’t make any money
This is on par with levels typically seen in a recession, not when the economy is supposed to be strong
At least some of these should have gone bankrupt
As interest rates rise, the difference between a good and bad company will become more apparent
Also liquidity will be harder on Passive ETF’s in a bear market
Strategas – 90% of passive strategies are market cap weighted
If investors sell, they are indiscriminatinglt selling
This is particulary dangerous in fixed income where the underlying issues are not as liquid as the ETF that is being sold
In order to avoid the concentration and liquidity risk of passive investing, Private Equity and Private Debt can be very effective strategies. They are perhaps the ultimate active investment
This chart shows the performance between Private Equity and the publically traded S&P 500, but performance isn’t the only attraction
We would in fact assume the lower liquidity in private asset alone would mean they should have higher returns over the long term
Investors have to be comfortable with the longer time horizon
The fact they are not market to market, however, can be an advantage in that they don’t exhibit the same price volatility
Because most funds have to be held for upwards of a decade, investors are less at risk of trading on emotions
And managers can make long term investments in companies and play a meaningful role in their management
It is estimated PE currently has $1 million in dry powder
There are no Private equity/debt benchmarks so passive strategies don’t exist
As with any active strategy
Manager selection is key
Smaller size is better, avoid marge funds bidding up prices
In conclusion
We see open roads and sunny skies in the near term
But going storm clouds on the horizon
The next recession is at least 6 months away, maybe even a lot further
We don’t know exactly when, but the odometer is not started to tick away given the tightening by the central banks
Equities are still attractive in this environment
Interest rates still stimulative and while valuations might not move higher, earning should continue to push stocks higher
Capital investment and higher productivity could extend the cycle
Bonds are more challenge in this environment
The cycle will end, however, and watching the various indicators will help warn when the cycle is over and risk levels need to be lowered
In fact we would not argue this starting the process sooner rather then later
We expecially would avoid investment fads like Bitcoin and Marijuana stocks, which benefit from excess liquidity
And would gravitate to actively managed strategies with less concentrated positioning and are less impacted from less liquid markets
With that ……as for my Tom Tom GPS likes to say, We have reached our destination
Red is best, followed by orange
Yellow and green are basically not feasible
Black dots signify cities of 1 million or more
Very few of those cities line up with orange and red areas, outside of the southern U.S.
All 4 Texas cities (and more specifically west Texas) have solid solar potential
El Paso is in the red, the main 4 Texas cities are in the orange. However, some of the solar fields and Permian basin in West Texas fall within the red zone.
Agenda:
Look at what happen last year
Oct 18, 1987 versus Oct 18, 2017 – big difference in activity
Next, we try and map out how we see the economy and markets changing in the short term
As well as some longer term issues we have spoken about in the past that continue to concern us
And finally looking at some specific investment investors should avoid in what we view as a challenging investment environment