Weekend reading

February 16, 20244 Comments

Another blog with insights from my regular readings. And, to start your weekend off with a smile, a few Canadian government financial jokes at the bottom of todays blog.


Words of wisdom

David Rosenberg echoed some interesting thoughts  expressed in my own work covering sentiment indicators Investor complacency suggests a pullback soon – ValueTrend

All of a sudden, the memories of what happened in 2022 (let alone 1990, 2001-02, and 2007-08) have faded out of view. David Rosenberg

“I cannot, in good conscience, advise chasing a momentum-driven market that commands a razor-thin ERP of 70 basis points and an earnings yield that trades at a 50 basis point discount to Treasury bills. I have seen too many of these manias before to count. This has become a suckers’ rally, and while everyone is obviously free to choose what to do, I personally am not participating, and the 20% chunk of my capital that is in the U.S. stock market, well, I have been and will continue to sell into the overvaluation and build liquidity for a better buying opportunity at a later date.

I have been around long enough to know that discipline and resolve are keys to success in the investing world. With the Fed clearly in no big hurry to cut rates, that 5.4% yield on the three-month T-bill looks fat and juicy to me. I believe, especially at a time of peak multiples, in the preservation of capital. I realize that T-bill yields of 5% and bond yields of 4%-plus don’t sound very enticing, but neither does a sub-5% earnings yield on the S&P 500, to tell you the truth, and bills and bonds don’t possess any capital risk.” David Rosenberg

Shiller PE ratio for SPX

The Shiller Price /Earnings ratio is based on average inflation-adjusted earnings from the previous 10 years, known as the Cyclically Adjusted PE Ratio (CAPE Ratio). Chart courtesy of multpl.com.

Kinda looks like we’re nearing the top end of its range, wouldn’t you say?

Who ya gonna believe?

Recent quotes:

“The U.S. federal government’s on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy. So, it is unsustainable.” Jerome Powell


“US budget doesn’t need to be balanced to be on a fiscally sustainable pace.” Janice Yellen



Oh, Canada…

The world is begging for oil and gas from stable democratic states. The Liberals have sought to cripple the oil and gas sector, and rebuffed pleas by allies like Germany and Japan when they came here asking for LNG. The U.S. economy has been growing rapidly – which normally lifts Canada’s economic fortunes. We also have a well-educated population, and the foundation for a strong tech sector, which should have us well positioned to prosper. Yet, we lag behind.” Spencer Fernando, National Citizens Coalition

Canada falling behind: TD Economics report

  • Despite turning in solid headline growth in recent years, Canada has lagged behind the U.S. and other advanced economies in terms of standard of living performance (or real GDP per capita).
  • This underperformance accelerated after the 2014-15 oil price shock and has continued in the wake of the pandemic.  What’s more, little turnaround appears to be on the horizon.
  • There may be a tendency to pin the blame for Canada’s sagging per-capita showing on the country’s rapidly-growing population base given that it has inflated the denominator of the calculation.  However, at the crux of the problem is insufficient growth in the numerator, which in turn is tied to longstanding productivity issues.
  • Regionally, commodity-based economies (Alberta, Saskatchewan, and Newfoundland & Labrador) continue to record the highest per-capita GDP levels, but their status as leaders has come under some pressure over the past decade.  Post-pandemic, only British Columbia and PEI have managed to recover back to 2019 GDP per capita levels.

Government financial jokes

  • Co-Prime Minister Singh approaches Co-Prime Minister Trudeau and asks if he would lend him $20. Co-Prime Minister Trudeau replies “I’m sorry Jagmeet, I only have $10 in my wallet!” To which Co-Prime Minister Singh says “That’s OK, Justin. I’ll take the $10. But don’t forget…you OWE me $10!”


  • Did you know that 4 out of every 3 Liberal Cabinet Ministers can’t do math?

  • The Canadian government spends more effort & money assisting foreign countries than it does its own impoverished people. Hard to believe, but it’s Tru, deau.


  • A robber approaches Justin Trudeau saying “Give me all your money!”, to which Trudeau replies, “Don’t you know who I am? I’m Justin Trudeau!”. The robber retorts, “In that case, give me all MY money!”


  • Trudeau’s appointed Arrive-Can (Arrive Scam) creators wonder why they are being investigated. I mean, all they were doing is sitting around doing nothing…

  • McDonalds just introduced the new “Trudeau/Singh value meal”. You order as much as you want, and the people behind you have to pay for it.


  • Hi Keith,
    You quoted David Rosenberg, but I couldn’t see the date of his comments. Was it in Feb/24?

    Curious. Do you also hold 20% cash again awaiting a pullback?


    • Yes, his quote was from one of his latest research reports (I am a subscriber) from this past week–I think it was from Feb 14 or 15th if I recall correctly–he puts one out every morning– once in a while he lets loose with a rant (something he and I have in common)–as he did in my quote.
      We are around 11-12% cash, and we are entirely value orientated/ no tech in our Equity Platform – a few unique tech names in our Aggressive Strategy (we suspect the nearterm pullback will be short n’ shallow- bigger activity later in year)

    • I laughed at the recent campaign one of our two foolish Co-PM’s (Trudeau) recently made–trying to accuse Poilievre of wanting to Make Canada Great Again.
      Um, yeah, we wouldn’t want Canada to be great again…because, you know, we like like the mess we are in right now and want to keep it that way. He hasn’t noticed that he is the single most hated PM in Canadian history.
      Brian Liley summed Canada’s situation up here: https://youtu.be/KxGDJk3WHg8?si=nj1nR0AhmPtwbdDi


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