Archive for May, 2006

In MoneySense Magazine

May 9, 2006

9 comments

I finally got hold of my copy of the May 2006 edition of MoneySense magazine and quickly turned to Page 68 to find the following comments (Thanks Frugal Focus for the heads up!) about this blog:

CANADIAN CAPITALIST (www.canadiancapitalist.com, free): Written by an anonymous electrical engineer in Ottawa, this blog covers the author’s adventures in investing, saving and debt management. Why does he write it? Because he lost a lot of money when the tech bubble crashed and he’s resolved never to fall for Bay Street’s baloney. WHY WE LIKE IT: This smackdown of financial-industry hype will be applauded by anyone who’s trying to build wealth while rising kids and paying off a house.

As you can imagine, I am quite thrilled and honoured by the mention. Thanks MoneySense!

The Canada Child Tax Benefit

May 8, 2006

3 comments

In chatting with friends who have children and a stay-at-home spouse, I find that many of them do not apply for the Canada Child Tax Benefit (CCTB), even though they may be eligible based on their household net income. Let’s say that someone with a stay-at-home spouse makes $80,000 per annum. Also, assume that they make a RRSP contribution of $13,600 every year. Based on their net income of $66,400, they may be eligible for a tax-free monthly CCTB payment of $71.24 for one child under 7 years of age or $50.99 for a child who is over 7 years old.

The Canada Revenue Agency’s website has detailed information about the CCTB program including a benefits calculator. The CCTB is not automatic; you have to apply for the benefit using form RC66 – Canada Child Tax Benefit Application once for every child you have. Don’t automatically assume that you won’t be eligible due to a high income.

Bill Miller’s Market Commentary

May 7, 2006

Comments are Disabled

Everyone is getting into commodities these days. At the lunch table, I hear people discussing about oil, gas, copper, uranium, gold and silver and how they are making a killing on some obscure outfit that is prospecting for natural gas. If you are planning to invest in commodities or even if you are not, check out Bill Miller’s recent market commentary. Mr. Miller cautions that emerging markets and commodities could fall:

Investing is all about probabilities, and just because there appears to be a strong consensus prices are going to keep going up, doesn’t mean that is wrong, or right. The consensus does tend to be wrong at the turning points, being invariably bullish at the top and bearish at the bottom. Remember all the advice to go to cash AFTER the 1987 Crash, since it was clear a depression would follow. Or how “risky” the high yield bond market was in the summer of 2002 AFTER the Enron and Worldcom collapses led to record spreads? I can’t help but be skeptical of the advice to start or increase a position in commodities AFTER the biggest bull move in 50 years.

So, what does Mr. Miller like now? He thinks that US equities and more specifically large caps are particularly attractive.

Today people want commodities, emerging market, non US assets, and small and midcap stocks. Those were all cheap 5 years ago and had you bought them then you would be sitting on enormous gains. But 5 or 6 years ago, everyone wanted tech and internet and telecom stocks, and venture capital and US mega caps. The time to buy them was in 1994 or 1995, when they were cheap. But in 1994 or 1995, people wanted banks and small and mid caps, which should have been bought in 1990, and well, you get the picture.

In other words, don’t chase performance and buy low and sell high. Mr. Miller concludes his commentary by saying:

Given the choice of buying Commodities with a capital C, or buying capital C—Citigroup—at current prices, I’ll take the latter. Check back in 5 years.