Podcast - January 9, 2024
Welcome to a thrilling new episode of the Barenaked Money Podcast, where your favourite financial wizards, Josh Sheluk and Colin White, revisit their predictions from yesteryear! Bonds danced to an unpredictable tune, interest rates whispered secrets of the future, and inflation played hide and seek with your savings. That’s the world Josh and Colin will navigate you through. They’ll dive deep into the enigmatic world of GICs and unravel whether the advice of billionaires can help your financial decision-making.
But that’s not all. Our hosts will turn the spotlight inward, reflecting on their foresight for their own company. Did they hit the bullseye, or did their predictions veer off course?
They’ll dissect their hits and misses with humour, humility, and a touch of genius. Tune in and let the journey begin!
The transcript is automatically generated
Announcer (00:00):
You are about to get lucky with the Barenaked Money Podcast, the show that gives you the naked truth about personal finance with your hosts, Josh Sheluk and Colin White Portfolio Managers with Verecan Capital Management, Inc.
Colin White (00:15):
Welcome to the next very special edition of Barenaked Money. This is year end or year beginning podcast, depending I guess on when we post this. But Josh has a theme for us today that I’m quite excited about. He dug through the archives and went all the way back to last year to find out what we were predicting for this year, and I specifically didn’t do that so that I can give you a live react to everything Josh is about to bring up. So Josh, you’ve been more excited about this podcast than any other podcast we’ve recorded together. I can’t wait.
Josh Sheluk (00:49):
It is a fun one to do. Like we were talking about earlier, I went back, I didn’t remember what I had predicted either, but some of them are funny. Some of them were kind of silly in the moment. Some of them were silly in the moment and somehow ended up still coming true. So that’s the funniest part of all this. But yeah, so I’ll go through what I predicted. I’ll go through how it worked out because we’re big fans of evaluating ourselves and self-reflection here. So we could improve for next year because we will be doing a 2024 predictions podcast and we’ll get your reaction to the results. And I think last year on our results podcast, you graded me. I’m not sure what you graded me on, but I’m sure you’ll come up with a scale or a rubric of some sort.
Colin White (01:40):
I will come up with a scale and it will be different per question.
Josh Sheluk (01:43):
Okay, sounds good. That makes it really tough. Alright, number one here. So my first prediction from last year was that you will be surprised and you will be surprised about being surprised, and this is not you specifically, but it is the royal we as the collective we or the collective you of everybody that’s out there.
Colin White (02:05):
Wow. So which surprise do you want to start with? I mean the amazing breakout month of November that everybody talked about or wait, nobody talked about, and do we want to start there for recency bias? I mean, what was the biggest surprise before November?
Josh Sheluk (02:24):
You know what I was thinking, it wasn’t a super surprising year, was it? I kind of feel like it wasn’t that surprising, but on the other hand, everybody was predicting a recession coming into 2023 and that never happened. So that’s a pretty material surprise right off the bat. Markets did pretty well. Stocks did well, bonds did well. That’s probably surprising depending on who you ask. That November one is a great example because that’s where you’re surprised about being surprised. Like yes, it was a surprising month, but I think nobody would’ve even considered predicting that heading into November. So that was a big one. I remember Israel that conflict over the weekend, and you called me on the Monday and said, shouldn’t oil be up? It’s down. That was surprising. So there were certainly lots of surprises. Were you surprised about being surprised this year?
Colin White (03:25):
Well, no. See, that’s a really high bar for me because I’ve been surprised so many times that I stopped calling it being surprised. What I look for is being startled. I wasn’t startled this year. There was things that were going, oh, that’s odd. Lots of things rose to that level. And again, the oil question is a really great example. Is it surprising that we’re still talking about a war in the Ukraine? Yeah, part of me is still surprised that we’re still talking about a war in Ukraine. I would’ve thought that would’ve petered out, which is particularly bad news. But then there’s the old expression that we’ve successfully predicted 18 of the last three recessions, and that continues to be the case. We’re going to keep talking about it because it’s scary and one will eventually come. But for me, the most, and again, recency bias, the most startling was November.
(04:17):
I mean just one month. And I don’t think that anybody would’ve predicted the double digit equity returns that we’ve seen this year. A year ago. I don’t think we were talking about that. I’m not startled a little surprised that it played out this way given the fact that in January we were pricing in two interest rate cuts in 2023, that didn’t happen. So to be sitting here at the end of the year with no interest rate cuts, and in fact still some uncertainty as to if or when we’re going to see interest rate cuts that we’ve seen a double digit equity returns. That’s surprising or not startling, but it’s surprising. But yeah, I mean the world continues to befuddle. Yeah, reaching back to the Palestinian Israeli conflict, that truly is surprising. I really thought that that was going to be tremendously bad news for markets and good news for oil, and it doesn’t seem to have played out that way even remotely.
Josh Sheluk (05:11):
Yeah, there’s a lot of surprises. I think we’re both of the same mind where we know that there are going to be surprises. So we try not to be surprised about that fact and that flows through everything that we do as investors and advisors on the finance front is everything we do is planning for the unexpected, planning for the surprise.
Colin White (05:37):
I think the converse of that, not counting on certain things happening, if we had begun the year counting on the fact that we would see a recession this year and planned accordingly. Again, the old analogy that I use with the Farmer’s Almanac, if you look at the Farmer’s Almanac and it’s going to be a really dry summer, does that mean you change all your crops to something that only works in dry conditions or they just make sure you lock down access to more irrigation in case you need it? I mean, there’s two different ways to reacting to expectations. One is to kind of lock in. That’s the only way it’s going to happen and the only way I’m going to be successful, the other is to just prudently plan so that if that happens, that you have a way to react to it. Right,
Josh Sheluk (06:18):
Right. Yeah, for sure. So the second one here, this was kind of a layup. Bonds will do better than they did last year, just for context. Well,
Colin White (06:29):
The fact that bonds are actually still trading, I think
Josh Sheluk (06:33):
Yeah,
Colin White (06:34):
Would satisfy that.
Josh Sheluk (06:35):
Yeah. So the reason I say it was a layup is because I was saying that bonds will have a better year than their worst year on record, literally their worst year on record. So it wasn’t a big stretch to say that, but the contrast is very, very startling. 2022, the Canadian bond market aggregate bond market was down 11.7% this year. As of today, it’s up about 7%. It outperformed the prior year by about 18%. As of today, we’re sitting here about a week from the end of the year. So not only did they do better than last year, but it’s actually turned in a pretty solid tidy return for bonds.
Colin White (07:21):
Well, and for people that started the year said, bonds are garbage because they’ve never made me any money. I’m going to do something different. And again, I don’t want to get on the soapbox if I told you so, but I’m on record of making fun of some of the product that came out this year on the long bond space, the cover call writing stuff, the abysmally poor timing of that product launch was truly epic. And I think it deserves a chapter in a textbook somewhere to think that, hey, we’ve gone through this epic sell off and this is where it’s going to stay going forward is, I don’t know, wrongheaded at least.
Josh Sheluk (07:55):
So continuing on the interest rate trend and taking some influence from what you mentioned earlier about interest rate cuts. So I said coming into the year that the terminal rate will be different than expected, and the terminal rate is what the Fed was forecasting for year end or peak interest rates, if we want to call ’em peak interest rates. And in the start of the year start of 2023, the Fed was predicting that the terminal rate, so where interest rates would peak, would be 5%. Now as of today, we’re sitting between five and a quarter and five and a half percent from the fed rate. So this was again, something that was accurate but also pretty easy to predict because I’m basically saying it’s like if I was predicting the temperature a year from now and saying, I don’t know what the temperature’s going to be, but I’m going to predict it’s not going to be exactly zero Celsius and then calling myself. Right. If that came true.
Colin White (09:00):
Oh, no, no, no. Come on now. Don’t call yourself out. I mean, that’s still a legitimate prediction by the way we run predictions for sure. But no, and it’s funny because you say terminal rate, I’m going, I haven’t heard that term in a while. I mean, that’s something that stopped being used. I don’t know how long ago it stopped being used. But yeah, the concept is the same. And I think there’s some belief now that maybe now rates I peaked is the word, but don’t need to go any higher from here to accomplish the stated policy goals. But I mean, that’s still a lively conversation that could stay where it is or not going forward.
Josh Sheluk (09:42):
Yeah. Well, the point of making this prediction last year was to emphasize that the central banks themselves are not really that great at predicting the future when it comes to where interest rates are going to go. So they set the interest rates, but they’re not that good at predicting where they’re going to set them six months a year from now. So as we sit here today, the belief is now that interest rates are going to be cut at some point throughout 2024, and that may come true, but again, I’ll say, here’s a bonus prediction for 2024. We won’t put this as an official one, but the cuts probably are not going to happen exactly like they’re projecting today. There’s going to be more or less in the timing’s going to be different, and I don’t know exactly which side of the ledger it’s going to fall on, but I don’t think it’s going to hit the exact balance that they’re trying to get.
Colin White (10:35):
Well, there’s multiple predictions out there, and I think that prior to what we have to understand, again, the role of a central banker is sometimes the role of being in theater. They’re trying to coerce a certain behavior out of the market that they see to be sustainable. So when they say something and they get a reaction to that, then they don’t have to do anything. So I think it’s wrong maybe to hold them to account, to say everything you say means to me, something you do if you, it’s almost like head faking at somebody. You see if you can make them flinch. Well, if I make you flinch, I don’t need to hit you. I got what I wanted out of that exchange without actually having to throw a punch. So I think it’s maybe unfair, unjust, or not a value to say, well, they talked about raising rates, but they never did. Well, if they talked about it and everybody behaved the way they wanted them to behave, then well, I don’t need to raise rates now. I don’t need to throw the punch they accomplished
Josh Sheluk (11:30):
They wanted. Yeah. This is not to be critical of them. It’s more so to prove the point that even the experts, even the people that are most informed out there, they can’t predict the future. And this shouldn’t be a surprise to everybody, but it does seem to surprise people sometimes.
Colin White (11:48):
Well, because they put a lot of stock on the lower for longer or higher for longer or whatever little catchphrases that come out and they say, okay, I’m going to take that to the bank and I’m going to invest as if that’s true, and they just stop it. I mean, it’s no more true than anything else that’s out there because they reserve and they should reserve the right to react to what’s happening in real time. If things go in a different direction, they should behave differently to think they’re going to put themselves at a set of railway tracks and never deviate from that. Well, I said it, I have to do it. Otherwise I lose credibility. That’s dumb. If new information becomes available, we want them to react to it.
Josh Sheluk (12:24):
Yeah, yeah, that’s for sure. So speaking of experts, this is my favorite prediction.
Colin White (12:31):
I can’t wait.
Josh Sheluk (12:33):
So is the fourth one, Elon Musk will do something stupid this year, but it won’t be more stupid than purchasing Twitter for $50 billion.
Colin White (12:44):
Wow. That’s probably your most out there of predictions because how are we creating crazy?
Josh Sheluk (12:52):
Well, this is what I was thinking about it. I mean, so Twitter, now they’re saying it’s worth, I don’t know, a quarter of what he paid for it, something in that ballpark, but the guy’s got so much money, it doesn’t really matter for him. But now he’s moving into the stage where I question his sanity, not just his business acumen or his decision making, but actually his sanity. Did you see the broadcast? He was on a news network somewhere and he told Bob Iger to go f himself.
Colin White (13:26):
Yeah, yeah. Everybody’s seen that clip. Yeah.
Josh Sheluk (13:28):
Yeah. So while we’re grading stupidity, is that more or less stupid than buying Twitter for $50 billion?
Colin White (13:37):
Well, I think you get into an echo chamber, you get to a certain level where you are detached from reality and that feedback loop is broken, that the world’s giving you feedback and stuff. But I guess I would call you up on one of your assumptions in there. That’s not all his money. He borrow a few billion of that from banks to do the purchase. Isn’t that, isn’t he pissing away other people’s money at this point?
Josh Sheluk (14:02):
It is true. I do think he took on some debt financing to make it happen. I’m imagining that it’s all personally guaranteed somehow, but who really knows? I’m sure there’s probably some way for somebody of that degree of wealth to protect themselves if something goes south.
Colin White (14:21):
Yeah. Well, this is a guy that rolled a joint on Joe Rogan and smoked it, even though he was a federal contractor with NASA, cut himself in hot water. He still makes questionable calls from time to time that are not business savvy.
Josh Sheluk (14:34):
And we haven’t even mentioned some of the racist or anti-Semitic remarks that he’s commented on over the last few months, which maybe are the most stupid thing that he said this year.
Colin White (14:47):
You would think that a guy that was that busy would’ve something else to do with his time, rather getting himself in that kind of trouble. You have a car to build somewhere or
Josh Sheluk (14:55):
A spaceship to build for that matter. Exactly. Literally. Okay. So number five year inflation won’t hit last year’s peak, but it will still really matter for longer term decision making. So just to give some context here, so inflation has, I would say, come down consistently through the year. It’s definitely hasn’t hit the same peak as last year, and that’s definitely had a positive impact on financial markets, but I think inflation’s still super important for making long-term decisions. Would you disagree?
Colin White (15:29):
I might disagree with the characterization, a positive impact on markets. There are those who could argue that it has allowed things to get to an unreasonable level right now, given the bullish indicator and things of that nature. I mean, it’s up yes. To
Josh Sheluk (15:45):
The extent positive into the literal sense that it is higher. Exactly. Okay.
Colin White (15:49):
Exactly. As to whether it’s sustainable, I think is a longer conversation and maybe has exposed more risk. Actually, we had this conversation today with our portfolio management group, how much risk do we have in equities right now given the recent runup? Is it warranted or is it just the optimism based on, Hey, we’re on the right track. Again, I go back to being on a plane when they say, stay in your seat fast in your seatbelts. We haven’t landed yet. We’re kind of at that stage. We’re coming in for a nice landing as long as nobody fucks it up and everybody’s got to sit down and keep their seatbelt on until we land this puppy, and then we can get excited because I think the excitement may be premature.
Josh Sheluk (16:31):
Yeah, yeah. Part of the reason why I put that second piece in there about inflation still mattering over the long term, I think you’re talking about right now, volatility and equity markets. And I think when we talk about risk, generally speaking, not just you and I, but generally speaking, financial professionals, when they talk about risk, they focus a lot on volatility. What is the risk and equities going down next year for, I would say the vast majority of people and far more people than volatility matters for inflation and longevity. Risk matter. If you’re 65, what the stock market does next year is probably not a huge deal. What inflation does over the next 30 years, 20 years maybe it is a huge deal. It’s going to be much more impactful for you. And I think we’ve lost sight of that a little bit when we talk about planning for the future.
Colin White (17:25):
Well, no, you’re right. I think it’s the absolute dominant single data piece going forward that matters. I mean, I think it still has that prevalence and it’s going to, until it gets down closer to that 2% American stabilizes, I think until we hit something, I’ll go and lemme say if it’s below 2.5% and it’s stable, then I think it’s going to become less of a conversation piece. It’s going to become less of a concern, and we’re not that far off of it. So I don’t want to sound dramatic in that it has to get there because I think it’s on its way there. But when it crosses that threshold down closer to 2%, then we can talk it with something else. It’s going to release some oxygen into the room that we can have other conversations with other aspects of risk planning, and it’ll be the less dominant force in the room. I’ll also go on a limb and say, I think it’s on its way there. Naturally, I think Tiff and the Bank of Canada would largely stand behind that right now, their opinion currently is that rates are where they need to be to get this to where it needs to be. They reserve the right to change their mind as they should. But yeah, I think that that’s when it’s going to, well, here’s the follow up question. What’s going to replace inflation is the next thing that’s going to dominate the conversation?
Josh Sheluk (18:43):
It’s probably going to go back to more about economic growth, I think. So to me, what’s really driven markets, both stock and bond markets over the last couple of years has been inflation. As inflation has risen rapidly to a high level, both stocks and bonds sold off pretty aggressively. That was 2022, the 2022 story, as it’s come back under control in 2023, both stocks and bonds have risen quite successfully. So I think the next big picture topic and what’s going to drive markets is it’s going to shift from inflation to growth. And I’m talking about economic growth, GDP, things like that. So while GDP growth is still strong, I think equities can continue to do well, but if you see that waning, then I think that’s going to see a bit of a decoupling from the stock and bond prices, which have moved fairly in unison over the past couple of years.
Colin White (19:43):
I think for me to drill down a little bit more, it’s going to be more about the earnings picture specifically. And I think there’s a danger in that the disconnect and timing between the economic indicators and the earnings is going to cause some fuzziness as to where we actually stand, because I think that the economic indicators are going to be expected to drive earnings. And if the corporate earnings stay strong, then I think that that’s going to be the next focus. But I think that where the opaqueness is going to occur is in the timing as to how when inflation becomes under control, when the GDP numbers begin to change and when that affects the actual earnings numbers that come out. I think all of those timings are going to matter to sentiment at any moment in time, and it’s going to be pretty fuzzy.
Josh Sheluk (20:32):
Interestingly, on a shorter term basis, on a year to year basis, for example, earnings growth and equity returns don’t really have that much correlation if you can believe it. But I think to your point, ultimately earnings growth is going to drive the market higher. That’s what you need over the longer term for sure.
Colin White (20:51):
Yeah. For me, that’s where my eyes go next. Inflation’s under control. The overall economic indicators is good. How’s profitability? I mean, that’s where my eyes are going to go and say, okay, where is that falling right now? And I think that that’ll become a more important indicator that people pay attention to.
Josh Sheluk (21:07):
So sticking with the investment theme coming into the year, I said GICs will not be the best investment for most people this year. And that was quite true as we sit here today. So a one year GIC coming into the year was about 5%. Five year GIC was about 4% with bonds up again about 7% on the year. That’s the broad Canadian market. Stocks are up double digits. Global stocks up 20%, Canadian stocks up 10%. Basically any type of balance portfolio between stocks and bonds this year has handily outperformed gs.
Colin White (21:43):
And the crowd erupts in small round of golf claps for Josh. Yes, yes. Oh God, yes. You were so right. And if you took what, a 4% five year GIC and just stayed market exposed for one more year and then went to cash, you’d be pretty close to break even over five years. So I mean, that’s the magnitude of what’s gone on. And the GICs being the lowest risk end of the market, arguably that’s what you would expect by taking risk over time, you should be rewarded for that. And this is one of the years that taking that risk paid off within a 12 month period. So congratulations for those who listened and stayed the course. Again, for those who had plans to spend money within a year. Yeah, GICs can make perfect sense. If you’re spending money at a certain point in time, they could be a great cashflow planning tool. Very seldom are they a good wealth accumulation tool.
Josh Sheluk (22:38):
Yeah, I was looking at, because I think the impetus for people is like, ah, 5% GIC, that’s pretty awesome. I’m just going to buy that. Why not? I’ll just hold that for five years. I’ll be super happy if I get 5% over five years. But if you look back at the last 30 years or so worth of periods when interest rates have peaked and GIC rates have peaked as well, and it’s hard to know exactly what peak rates are, peak interest rates or peak GIC rates. But even going back to the nineties when GIC rates peaked at like six, 7% for a five-year, GIC, which is higher than they were this time around, even still bonds and stocks individually consistently outperformed those GICs over that five-year period of time. So it might feel like this is a no-brainer now that GIC rates are high, but it kind of gives a little bit of ballast to just about everything when interest rates are high, not just gs. And that’s I think what people miss the point a little bit.
Colin White (23:38):
Well then that is exactly the point. A 5% one year GIC does not exist in a vacuum. It’s gotten there in connection to the rest of the equity markets and the rest of the capital markets, more capital markets than equity markets. Now the capital markets have a certain flavor to them, and when you’re seeing GICs pay this, that means a certain other set of variables are in a certain way, which historically has favored other asset classes at that time. And again, banks and other institutions love GICs, and that’s a very big part of their capital structure. So they’re going to make it very easy to buy. And again, frankly, if somebody’s got a short-term need for cash, GICs can play a role. Again, I think where you’re going to be disappointed is if you’re counting on them for wealth creation compared to other asset classes. That’s where the disappointment is fairly reliably found.
Josh Sheluk (24:33):
Yeah, all this stuff is linked and as you said, the GIC rates don’t exist in a vacuum. And I love people that come to me today and say, if I had to just bought a 5% GIC five years ago, I’d be further ahead than investing in the markets. It’s like, yeah, but that didn’t exist five years ago. It’s like saying if I had have bought Apple Shares 20 years ago, I’d be further ahead. It’s like, I guess at least they existed 20 years ago. GIC is five years ago or 2%.
Colin White (25:00):
It’s like that old expression, if my grandmother had wheels, she would’ve been a bicycle. It’s just no, what are you talking about? It didn’t exist.
Josh Sheluk (25:09):
Yeah. So moving on here. This one I didn’t really know how to evaluate. So number seven, none of the celebrities being sued in the crypto lawsuit will lose sleep over money lost during the crypto bust. I don’t think they’ve lost sleep over it because crypto’s back, I don’t know if you’ve noticed, Solana, I heard today is up 800% this year. Bitcoin’s back everybody’s happy. Again.
Colin White (25:36):
Back to what people are talking about it,
Josh Sheluk (25:39):
It’s up. I don’t know, it’s up, it’s back. It’s
Colin White (25:42):
Talkable. I don’t think Matt Damon’s career has been canceled. I’m still seeing him all the time. So he seems to be well rested. But yeah, again, it’s a Ponzi scheme that’s circling the drain. It’s sort of like the GameStop sagon to keep an eye on games stock. GameStop stock is still trading despite everything. So I mean, these things am radio is still in my car. I mean, there’s lots of things that it’s well passed or best before date that are still around. No, I don’t think anybody’s lost sleep. I haven’t followed to conclusion any of the lawsuits or maybe they’ve been settled, whether Tom Brady’s had to pay out any money or anybody else who was involved.
Josh Sheluk (26:22):
I haven’t heard anything at all, and that’s why I said it’s a hard one to evaluate. So I don’t know if they paid up and it went away or they just lawyered up. And their lawyers are probably pretty good lawyers because they’re multi multimillionaires.
Colin White (26:37):
Well, one of the celebrities, but they were a crypto celebrity was Sam Bankman free. He’s in jail, so he’s not having a good time. So I don’t know if we count celebrities that are celebrities because they were in crypto. He kind of turned that into being a celebrity, so he’s having a bad time.
Josh Sheluk (26:54):
Yeah, that’s an interesting one. I had been thinking specifically when making this question about the celebrities doing ads for this stuff. They had no clue what they were really promoting, and they still don’t. But apparently Sam Bankman free didn’t really know what he was doing either. So a lot of,
Colin White (27:15):
According to the court case, he knew exactly what he was doing. In fact, some of the code that was actually written for his platform was specifically set up to siphon money. So I’m not sure the curly-haired geek thing that doesn’t know what he was doing was really that whole story.
Josh Sheluk (27:29):
I stand corrected, I stand corrected number eight here, there will be more pain for borrowers. What say you
Colin White (27:38):
Being for borrowers? Well, I guess to the extent that you’re borrowing more than you could afford for those who extended themselves, yeah, you’re in a bit of a pickle and you’re watching rates really closely, even if your loan doesn’t renew for another year or two because you’re dealing with the reality that if your loan renewed right now, you would be screwed. So yeah, I think that for sure there’s more pain for people who are net borrowers who are on the younger end of the spectrum. Even if you’re not having to pay the higher rates, you’re looking at the potential for a renewal at a higher rate. And right now it’s kind of macabre in that we need a certain amount of pain to be suffered in order to get the boat in the right direction. But as soon as we’ve suffered enough pain as a society, we can change direction and everybody be good again. So if you’re one of the people that’s going to feel the pain really sucks for you, maybe over the next six to nine months, you’re going to really acceptable collateral losses, you’re going to lose your house. But hey, once you lose your house, that should be about it. Everybody else can keep their house. I mean, we’re kind of going through that phase, I think, into the coming year,
Josh Sheluk (28:49):
And we feel very sorry for those people that are in that position. Not to be too joking about it, but I think I would’ve expected there to be a little bit more pain seen demonstrated at an aggregate level anyway, with rates where they are this year. It seems like you’re seeing an uptick in defaults and what the banks report is non-performing loans and things like that, but it’s not that significant yet. So I’m sitting here today wondering if there’s still more pain to come or if maybe we’ve got by without too much pain at all.
Colin White (29:29):
Well, I mean, the banks came out with their loan loss provisions here just a few weeks ago, and I found it interesting and maybe a little instructive that the amount of loans that were still performing, loans that they were actually taking loan loss provisions against. So typically if a loan’s not performing, meaning it’s beyond a certain threshold of delinquency, it gets put in the pot of things that we’re going to do a loan loss provision for, but they were actually taking hundreds of millions of dollars worth of performing loans and putting them in that category and writing them off. So that to me tells me that one of two things, either the banks were doing the throw in the kitchen sink to make the quarter look as bad as they could make it look, or there’s some really smart people who’ve looked at the numbers and have seen through the upcoming renewals and done a calculation on how many of those are going to go sideways. The optimist to me, wants to believe the second story that this was an actual calculation that was done. The 56-year-old advisor to me probably believes it to be the first one that the banks are just trying to make the quarter look bad so they can make next quarter look better. But there’s still the potential that this is going to get worse before it gets better from a default perspective.
Josh Sheluk (30:42):
So you’re optimistic view, just so I’m clear, is that there’s more loan losses to come.
Colin White (30:49):
Well, my optimistic in that believing that smart people are making smart determinations, smart and putting out into the world accurate information for the purpose of putting out accurate information rather than obfuscating something for other nefarious purposes that really make me sad inside.
Josh Sheluk (31:07):
Yeah, I have a hard time believing that we could get through this debt binge that we’ve been on as Canadians for the last 15 years without a little bit more discomfort than we’ve experienced.
Colin White (31:22):
I share your skepticism and I share your belief that it’s here. Hold my beer, watch this, watch how much money I can borrow. Thing that Canada went on for the last year or last couple of years is really, really epic, and it’s amazing. We could hit this kind of level. So if I live in the world I think I live in, that should result in a lot of pain. Otherwise, maybe I just need to recalibrate. And living that far beyond your means is way. We should all live.
Josh Sheluk (31:50):
You just need to borrow more money. Colin. That’s what I’m hearing.
Colin White (31:54):
Wait till Renee finds out.
Josh Sheluk (31:57):
All right, so number nine here. I said, though there will be about 9,000 stories about billionaires and their wealth this year, and now one of them will help you make smart financial decisions. How many stories did you see this year hit the 9,000 mark?
Colin White (32:11):
Well, probably, well, actually, the most interesting story, speaking of billionaires, the most interesting story I heard was that this is the first year that there were more billionaires made by inheritance than by wealth creation. So that’s an interesting billionaire story for the year, for sure. But yeah, you’re stating a fact. Listening to billionaires talk about how to make monetary decisions for the average person is completely, in fact, it’s probably dangerous. These kinds of things are all situation dependent, and most billionaires who are talking, saying things out loud about giving advice are probably billionaires because they get paid for giving advice in one way or another. You sign up for their program and how to invest in real estate. It’s a free program, and during the free program, it’s a three day pitch on to sign up for their master’s program that for $5,000 will give you all that you need to know to sign up for their super master’s program, which is $20,000, which will put you on a path that you could qualify for the super extra master’s program for $50,000. And you’ll get to sit down one-on-one with this person for 10 minutes as they touch your hand and make you feel good about yourself, and they’ll put you in line for the a hundred thousand dollars epic long-term package.
(33:31):
That’s how the billionaires make money.
Josh Sheluk (33:35):
So we agree that most of these are probably useless. Most of these stories. Charlie Bunger did die this year not too long ago, and I actually think there’s probably some tidbits in there from his life, from his investment approach that would be helpful for some people.
Colin White (33:50):
Oh, listen, some of his stories and parables, yes. I mean, you’d have to look at it through a certain lens and you have to understand where he was when he came up with these expressions. There’s something different about sitting at a table as a multi-billionaire and sitting at a table as a multi thousandaire and make decisions and take risks to keep food on your table versus building your wealth. But entertaining for sure, a different perspective than others for sure, and not dumb for sure, maybe not as relevant as some people would interpret it as. I think that’s where it falls down. It’s not as relevant for people as they would maybe hope or expect it to be.
Josh Sheluk (34:40):
That’s for sure. So the last one here was one that you predicted that 2023 was going to be a remarkable year for WLWP.
Colin White (34:51):
Well, that’s because we knew what was going to happen, right? I mean, we had the choice to do that. So yes, WLWP ended in 2023 and blossomed into a beautiful butterfly. It turned into Verecan. So yes, it was a very big year. Foreshadowing, I guess, was the instrument that I was using last year. So yes, that’s been a big year for us. Do you agree, Josh?
Josh Sheluk (35:18):
Well, all accounts very successful. A huge leap forward in setting ourselves up on a platform for success and our clients for success for years to come. Instrumental I would call it in our growth.
Colin White (35:32):
It’s going to feature prominently in the movie that’s going to be made about us one day.
Josh Sheluk (35:38):
Who’s going to play you?
Colin White (35:41):
Oh, no, that’s loaded. So I have to pick some young up and comer. Who’s the top gun guy?
Josh Sheluk (35:48):
Tom Cruise?
Colin White (35:49):
No, no. The young guy. Tom Cruise. Tom Cruise is too old to play me.
Josh Sheluk (35:55):
I don’t know all the movie stars. You’re asking me a question out of my desk asking me about math and finance and stuff like that. I’ll do just fine pop culture, I’m out.
Colin White (36:03):
Alright, fair enough. No, it is been a good year from that perspective. Very proud of the team. It was a lot of hard work from a lot of very talented people. And yeah, last year I knew it was going to happen. I knew, I guess this a stretch. I really, really, really, really, really wanted it to happen. So it’s kind of nice to sit here and say, yeah, I told you so.
Josh Sheluk (36:22):
Yeah. So I guess wrapping up, we’ll just say a big, big thank you to all of our listeners throughout the year. It’s been an absolute pleasure. Pleasure. Colin and I putting on these podcasts for you and we look forward to many more to come and if you have suggestions, as always, drop us a line. We’ll be happy to accommodate
Colin White (36:41):
Follow and share. We appreciate your input in whatever form it comes.
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