# Financial Post wants to know who has the biggest...TFSA



## DavidJD (Sep 27, 2009)

So they are looking to see who in Canada has done the best above $25,000. I would like to know this and how they got there. If you are a contender, follow this link 

Do you have TFSA bragging rights?


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## CanadianCapitalist (Mar 31, 2009)

DavidJD said:


> So they are looking to see who in Canada has done the best above $25,000. I would like to know this and how they got there. If you are a contender, follow this link
> 
> Do you have TFSA bragging rights?


Financial Post is late to the game. We had a TFSA bragging rights thread around the New Year with quite a few members managing to convert $25,500 to $40,000 or more. Too bad, I can't find it now


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## DavidJD (Sep 27, 2009)

I could not find that thread either. However I think the FP will have wider reach.

In my opinion, these forums discover content that is repeated in blogs then in main stream media.


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## jamesbe (May 8, 2010)

I'm up to $35,500 in one  Not stellar but with just the top banks/telcos and such I'm happy!


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## Dibs (May 26, 2011)

DavidJD said:


> I could not find that thread either.


http://canadianmoneyforum.com/showthread.php/14717-If-your-TFSA-is-maxed-at-25-500-how-are-you-doing


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## CanadianCapitalist (Mar 31, 2009)

Dibs said:


> http://canadianmoneyforum.com/showthread.php/14717-If-your-TFSA-is-maxed-at-25-500-how-are-you-doing


Thanks Dibs!


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## andrewf (Mar 1, 2010)

The winner will be someone who took a high risk, highly leveraged bet and had it work out.


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## Eclectic12 (Oct 20, 2010)

andrewf said:


> The winner will be someone who took a high risk, highly leveraged bet and had it work out.


Depending on one's timing ... I'm not sure the leveraged is required or that high a risk.


Buying TCK-B around Mar 2009 at under $4/share and selling around Feb 2011 at over $60 would have done a nice job for one's TFSA.

Similarly - MFC around Mar 2009 for just over $7 and then sold around Aug 2009 for over $23 would have been a nice boost as well.


Cheers


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## none (Jan 15, 2013)

Eclectic12 said:


> Depending on one's timing ... I'm not sure the leveraged is required or that high a risk.
> 
> 
> Buying TCK-B around Mar 2009 at under $4/share and selling around Feb 2011 at over $60 would have done a nice job for one's TFSA.
> ...


Buying TCK-B at $60 and holding now would have killed your TFSA. I don't think your point is valid.


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## purple.platypus (Dec 10, 2012)

Yeah, the leveraged part only tells us how you got the money in the first place; it has no direct bearing on how it performs afterward.


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## Four Pillars (Apr 5, 2009)

Eclectic12 said:


> Depending on one's timing ... I'm not sure the leveraged is required or that high a risk.


Andrew isn't saying that all people who took higher risks have the largest TFSAs - he's saying that the biggest TFSAs will be from investors who took big risks (which could include leveraging) and made the right choices.

You could probably say the same thing for a contest as to who shrunk their TFSA the most (but didn't make the right choices).


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## Barwelle (Feb 23, 2011)

none said:


> I don't think your point is valid.


Why not? Eclectic's point was just to say that if you had spectacular timing, you *could* have a massive TFSA with out leveraging or taking on high risk (like investing in penny stocks etc, I imagine).

Just like you say that if you had horrible timing, you *could* have a fraction of the 25,500 accumulated contribution room in your TFSA.

Both points are valid.


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## Eclectic12 (Oct 20, 2010)

none said:


> Buying TCK-B at $60 and holding now would have killed your TFSA. I don't think your point is valid.


Let me get this straight - if you timing was different on TCK-B, your TFSA is killed, right?


Or for that matter - how many stocks could one buy in 2011 that doubled or better compared to those bought around Mar 2009?


My point is that with the TFSA coming into being in 2009 and the 2008 market crash - compared to someone turning 18 today, there were lots of stocks on sale. With a broad market on sale, there is less need for high risk & leverage to multiply the TFSA value. 


Cheers


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## Eclectic12 (Oct 20, 2010)

purple.platypus said:


> Yeah, the leveraged part only tells us how you got the money in the first place; it has no direct bearing on how it performs afterward.


If it's a TFSA - as I understand it, the only way leverage comes into play is through the investment. So if it's a leveraged investement - the leverage is in play as long as one owns the investment. So the leverage will have a direct bearing for better or worse.


Cheers


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## Eclectic12 (Oct 20, 2010)

Barwelle said:


> Why not?
> 
> Eclectic's point was just to say that if you had spectacular timing, you *could* have a massive TFSA with out leveraging or taking on high risk (like investing in penny stocks etc, I imagine).


Exactly.

If one buys a "risky" penny stock that doubles or one buys a blue chip stock that also doubles - at the end of the day as long as one sells to cash in the gain, the gain is the same.



Cheers


*Edit:* Part of my point as well is that Mar 2009 was a spectacular bargain.


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## Eclectic12 (Oct 20, 2010)

Four Pillars said:


> Andrew isn't saying that all people who took higher risks have the largest TFSAs - he's saying that the biggest TFSAs will be from investors who took big risks (which could include leveraging) and made the right choices.


... and I'm saying that the market *was* on sale in Mar 2009, this is not so clear cut.


Without setting a time frame & identifying the growth of the largest TFSA - I can't think of an easy way to tell.


Cheers


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## Toronto.gal (Jan 8, 2010)

none said:


> 1. I don't think your point is valid.
> 2. Buying TCK-B at $60 and holding now would have killed your TFSA.


*1.* His point is most definitely valid!

*2.* But, why would anyone have bought it at $60? :hopelessness:

Considering the TFSA has only been around since 2009, let's start from there:

- in early 09, the stock was trading under $5, 
- by late 2010, the stock was trading in the $60's [reaching $61+ in early 2011]
- but just a couple of months prior, the stock was in the $40's.

So anyone who would have bought the stock at $60, was not thinking clearly, ie: should have waited for a correction.

I have done extremely well by buying solid stocks that had been in the trenches [MFC being my classic example], and got lucky doubling [&more] certain jr. plays & other more volatile stocks, ie: ANS/DND.


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## Jon_Snow (May 20, 2009)

54k


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## Eclectic12 (Oct 20, 2010)

andrewf said:


> The winner will be someone who took a high risk, highly leveraged bet and had it work out.





Four Pillars said:


> Andrew isn't saying that all people who took higher risks have the largest TFSAs - he's saying that the biggest TFSAs will be from investors who took big risks (which could include leveraging) and made the right choices.


With more time to think about it - I suspect we are all wrong.


Wouldn't those who used the 1% penalty to their advantage or those using low volume stocks/swaps be the biggest winner?


For example, if one over-contributed $200K, bought something that doubled in say six months and then paid 1% per month that the over-contribution existed penalty and withdraw the $195K. The net result is that they pay $200K x 1% x 6 = $12K penalty but are left with a TFSA of $400K - $195K - $12K = $193K. Bear in mind that the $193K is tax free going forward.

Their stock has the same gain as someone who obeyed the rules but the extra cash of the over-contribution multiplies the TFSA dramatically.

I would suspect that that this multiplier effect accomplished successfully one or two times (I forget how long people had before the gov't stopped this) is going to be difficult so someone following the rules to catch up to. [Unless the $193K goes into investments that tank spectacularly ... :rolleyes2: ]


The gov't listed this as one reason for changing the penalties so I am reasonably confident that some did this for spectacular gains. However I suspect we won't be seeing any statistics reported on how much of a gain was achieved this way.


Cheers


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## humble_pie (Jun 7, 2009)

in the january/13 tfsa report thread that CC refers to, there were 4 tax frees in the 40k plus range. Numero uno at 48k plus had mostly benefited from - as i recall from 2009 - a single well-chosen TSE stock that performed to a dream. It was a northern regional airline. 

numero due with north of 45k had owned more than a dozen cherry-picked small caps, most or all of which had done well during the time period - however short - that they were held in the tax-free.

numero tre, north of 41k, was Eder. I can't recall any details of Eder's tfsa portf, but he has never struck me as a single-penny-stock/ultra-high-leverage/cowboy kind of investor. Smart is what i would call Eder.

numero quattro was numero uno's wife with 40k. No information on holdings.

definitely not in the above-mentioned thread was a cmf forum member whose tax-free had super-soared into the 100k range. As i recall, his wife's as well.

alone among these 5 shining stories, mister 100k winner had invested in a typical vancouver penny mining stock. In his case, it was a silver miner. He'd happened to buy it on its initial rocket launch. So although his was indeed a pure case of luck with leverage, the other 4 tfsas mentioned above were all the result of good portfolio management imho.


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## none (Jan 15, 2013)

Toronto.gal said:


> *1.* His point is most definitely valid!
> 
> *2.* But, why would anyone have bought it at $60? :hopelessness:
> 
> ...


Well sure it's 'valid' but it's silly. Obviously if you bought a stock low and sold high your TFSA would go up. That's not terribly insightful.

Why not make a list of perfect stock timing form 2009 til now - how is all that useful? It's not.

PS Market timing generally doesn't work out very well - hence there are stock brokers.

The only way to guarantee to make large returns over short periods of time is through insider trading which is illegal.


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## none (Jan 15, 2013)

Barwelle said:


> Why not? Eclectic's point was just to say that if you had spectacular timing, you *could* have a massive TFSA with out leveraging or taking on high risk (like investing in penny stocks etc, I imagine).
> 
> Just like you say that if you had horrible timing, you *could* have a fraction of the 25,500 accumulated contribution room in your TFSA.
> 
> Both points are valid.


Just not terribly insightful.


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## Toronto.gal (Jan 8, 2010)

Indeed management would have been a key factor.

I read over and over about people buying high, and though _none's_ example may have been just that, there were probably those that bought stocks high, and without even thinking about the disadvantages of a TFSA, ie: not being able to claim capital losses. 

There have been bargains galore in the last 4 years, even for those playing it safe.


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## Toronto.gal (Jan 8, 2010)

none said:


> Well sure it's 'valid' but it's silly. Obviously if you bought a stock low and sold high your TFSA would go up. That's not terribly insightful.


What was silly is the example you gave! 

And you missed the point that I was trying to make. I didn't say anything about buying at $4 and selling at $60. Read my post again.


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## Eclectic12 (Oct 20, 2010)

none said:


> Well sure it's 'valid' but it's silly.


Why? 
Do you know who has the biggest TFSA & how they did it? 

It would be nice to see the numbers instead of what to this point is our best guesses, based on the few who have been willing to post their results.




none said:


> The only way to guarantee to make large returns over short periods of time is through insider trading which is illegal.


Odd ... I don't recall talking to any insiders in 2009 who helped arrange for eight of twelve stocks purchased to be up between 80 to 230% two years later, ignoring dividends and cash distributions.

My personal favourite was sold to pay off my mortgage early. It paid cash distributions back to me totalling 45% of the cost and then was sold for a 2.7 times the purchase price.


There is such a thing as recognising bargains and "most boats are lifted by the tide".


*Returning to topic:* As I've stated up thread, I believe only the gov't of Canada knows who managed to end up with the largest TFSA by using the 1% penalty to their advantage.


Cheers


*Edit:* I missed this part ...



none said:


> Obviously if you bought a stock low and sold high your TFSA would go up. That's not terribly insightful.
> .


*shrug* - My point is that if in my limited DIY time, I was looking at those stocks at those times and chose not to pull the trigger. I suspect there were others also looking at these stocks who did.

Or were you thinking I was scanning random stock charts to look for big gains instead of real world choices?


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> I don't recall talking to any insiders in 2009 who helped arrange for eight of twelve stocks purchased to be up between 80 to 230% two years later, ignoring dividends and cash distributions.


There is the point!

But if you would have waited to buy when the stocks were already up by 100%, 200%, 300%, etc., or as in the TCK example, had waited to buy after it rose from $4 to $60, then you could not blame the poor performance on the stock/markets.


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## none (Jan 15, 2013)

Eclectic12 said:


> There is such a thing as recognising bargains and "most boats are lifted by the tide".
> 
> *Returning to topic:* As I've stated up thread, I believe only the gov't of Canada knows who managed to end up with the largest TFSA by using the 1% penalty to their advantage.
> Cheers


That is one way to look at it but it's frequently employed (as it is being here) to do some revisionist history to make lucky guesses look like brilliant stock choices.

Although I don't believe in the efficient market hypothesis in it's most extreme sense there is quite a bit of truth in it.

If anyone had any real information that a stock was going to increase 15x in 2 years, it would be reflected in the price and the stock wouldn't be able to go up 15x.

I'm happy you have been fortunate in the past.


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## humble_pie (Jun 7, 2009)

none said:


> That is one way to look at it but it's frequently employed (as it is being here) to do some revisionist history to make lucky guesses look like brilliant stock choices


none what has come over you?

i'm closely familiar with this forum's top 4 tfsa reports that i just mentioned upthread. The over-100k, the 48k, the 45k & the 41k. These tfsas were all discussed many times, as they were in progress, ie as the trades were actually being carried out. Long before you ever got here.

of the 4 taxfrees, only one involved a lucky guess. There's no reason for anyone to be spiteful or accuse false claims.

perhaps it would be better to acknowledge that cmf forum has some interesting investors?

oh & all of the cmf high-performing tfsas were 100% legit. No shady techniques, just good investment management.

the 100k winner came back to the forum a year later to discuss whether he should use his tfsa gains to take early retirement, which was something he had dearly longed to do for several years. Early retirement did, in fact, become his choice, so his story was win/win all the way.


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## none (Jan 15, 2013)

humble_pie said:


> none what has come over you?
> 
> i'm closely familiar with this forum's top 4 tfsa reports that i just mentioned upthread. The over-100k, the 48k, the 45k & the 41k. These tfsas were all discussed many times, as they were in progress, ie as the trades were actually being carried out. Long before you ever got here.
> 
> ...


Higher risk = potential higher returns. For the people who's TFSAs are so high there are many people who used the same criteria to choose stock and did much more poorly. Market timing generally doesn't work very well.

To being it back to housing ( ) people who foolishly invested all of their money into housing in Canada recently made an absolute killing - despite all the signals pointing that housing should correct.

I believe that anything more than 1-2% over index can largely be attribute to luck. This belief is of course supported by theory and empirical evidence and is the foundation of the couch potato approach to investing.


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## Eclectic12 (Oct 20, 2010)

none said:


> That is one way to look at it but it's frequently employed (as it is being here) to do some revisionist history to make lucky guesses look like brilliant stock choices.


What revisionist history?

The two examples used were considered in 2009 and the twelve stocks mentioned were the sum total of my stock purchases in 2009.




none said:


> If anyone had any real information that a stock was going to increase 15x in 2 years, it would be reflected in the price and the stock wouldn't be able to go up 15x.


Maybe and maybe not. 

It was pretty much widely known when I bought Hudson's Bay years ago that the prime downtown real estate HBE owned was conservatively worth $8 a share so that buying at $9 a share meant the entire retail business for $1 a share - yet the market in general ignored it for months until better retail numbers were reported.

A Canadian company with forty years where only *one quarter* was not profitable, with a long history of successfully buying other companies & merging them into their operation smoothly - should have been off the charts and on everyone's radar yet I was able to buy it before two 2:1 splits plus rising stock prices gave me a 500% profit at sale.


Information being available to the market does not drive the share price - the ask/bid and sales do.


And that's where timing comes in play as well from an investor psyche perspective.

I was looking at TransCanada Pipe years ago - after they'd cut their dividend and before there was enough time for management's debt reduction plans to have a significant impact. The current trading price of $10 / share with a reduced dividend of something like $0.68 looked good. I'm sure many existing shareholders who had already paid over $18 / share were concerned and hesitant to put more money in. The result was missing out on three years later a share price of $24, with an increased dividend of something around $0.84.





none said:


> I'm happy you have been fortunate in the past.


Thanks ... I hope you do well too.


Cheers


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## andrewf (Mar 1, 2010)

Barwelle said:


> Why not? Eclectic's point was just to say that if you had spectacular timing, you *could* have a massive TFSA with out leveraging or taking on high risk (like investing in penny stocks etc, I imagine).
> 
> Just like you say that if you had horrible timing, you *could* have a fraction of the 25,500 accumulated contribution room in your TFSA.
> 
> Both points are valid.


Buying Teck at $4 was essentially buying a call option on whether they would be forced to liquidate. Teck got very lucky--they were out of cash in a liquidity crisis. This was an incredibly leveraged bet.


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## andrewf (Mar 1, 2010)

Eclectic12 said:


> With more time to think about it - I suspect we are all wrong.
> 
> 
> Wouldn't those who used the 1% penalty to their advantage or those using low volume stocks/swaps be the biggest winner?
> ...


I'm pretty sure CRA went after people who attempted to game the TFSA over-contribution penalty in this way.


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## andrewf (Mar 1, 2010)

Look everyone, my point is that if we were to look at all TFSAs in Canada (not just the handful that divulged on CMF), I'm pretty confident that the largest one belongs to someone who took a flyer on a risky stock. Not that it means anything, post-hoc. It's the same with those stock picking contests. Your best bet to win is to pick very volatile stocks. People who pick stocks that are less risky but have high expected returns will never be at the extremes. But picking the boring, high expected return stocks is what you should be doing, not placing bets on highly speculative stocks that may even have negative expected return. Moshe Milewski wrote a piece on this topic. 

In other words: I don't care who has the largest TFSA. I would not want to emulate that person. They got lucky. It's the same as buying a lottery ticket. One average, you're turning $1 into 50 cents, but it's always the guy who won who looks like a genius. The correct strategy is not to buy lottery tickets.


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## none (Jan 15, 2013)

andrewf said:


> Look everyone, my point is that if we were to look at all TFSAs in Canada (not just the handful that divulged on CMF), I'm pretty confident that the largest one belongs to someone who took a flyer on a risky stock. Not that it means anything, post-hoc. It's the same with those stock picking contests. Your best bet to win is to pick very volatile stocks. People who pick stocks that are less risky but have high expected returns will never be at the extremes. But picking the boring, high expected return stocks is what you should be doing, not placing bets on highly speculative stocks that may even have negative expected return. Moshe Milewski wrote a piece on this topic.
> 
> In other words: I don't care who has the largest TFSA. I would not want to emulate that person. They got lucky. It's the same as buying a lottery ticket. One average, you're turning $1 into 50 cents, but it's always the guy who won who looks like a genius. The correct strategy is not to buy lottery tickets.


I'm glad to not be the only ones who believes this (and does my best to try to live to this - although I sometimes fail).


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## Eclectic12 (Oct 20, 2010)

andrewf said:


> I'm pretty sure CRA went after people who attempted to game the TFSA over-contribution penalty in this way.


The announcement of the proposed changes to the TFSA rules did say:



> The proposed amendments are to *apply to transactions that occur after today*. The Government will introduce legislation at an early opportunity.


http://www.fin.gc.ca/n08/09-099-eng.asp


So if you mean those intentionally over-contributing on or after Oct 16th, 2009 - then yes. That leaves nine months plus that as near as I can tell - only the potentially paltry 1% per month penalty can be applied.

Unless you've got an article or reference that says otherwise?


The TFSA started Jan 1, 2009 and the gov't proposed changes with an effective date of Oct of the same year (subject to the legislation passing). My experience is the gov't likes to debate such changes so if they reacted that fast - it leads me to believe there was significant money involved.


Cheers


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## Eclectic12 (Oct 20, 2010)

andrewf said:


> Look everyone, my point is that if we were to look at all TFSAs in Canada (not just the handful that divulged on CMF), I'm pretty confident that the largest one belongs to someone who took a flyer on a risky stock. .


Fair enough.

To be clear - I've changed positions in that I believe that the largest TFSA is going to belong to someone who used the 1% penalty to their benefit before the gov't changed the TFSA penalty rules, effective Oct 16, 2009. 




andrewf said:


> In other words: I don't care who has the largest TFSA. I would not want to emulate that person.


I thought the thread was about who had the largest TFSA and how they did it. 
Emulation or not is one's personal choice. :biggrin:


Cheers


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## Toronto.gal (Jan 8, 2010)

andrewf said:


> 1. the largest one belongs to someone who took a flyer on a risky stock.
> 2. Your best bet to win is to pick very volatile stocks.
> 3. They got lucky. It's the same as buying a lottery ticket.


*1.* Most likely, but not necessarily.
*2.* Volatile does not always = highly speculative/risky.
*3.* Luck plays a part, of course, but it's not 100% luck the way you & others make it sound.

*none:* if you agree with Andrew, how come you invested in a jr. oil play? Just asking.


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## humble_pie (Jun 7, 2009)

Eclectic12 said:


> I thought the thread was about who had the largest TFSA and how they did it


right, thread is about the biggest tfsa


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## none (Jan 15, 2013)

Toronto.gal said:


> *1.* Most likely, but not necessarily.
> *2.* Volatile does not always = highly speculative/risky.
> *3.* Luck plays a part, of course, but it's not 100% luck the way you & others make it sound.
> 
> *none:* if you agree with Andrew, how come you invested in a jr. oil play? Just asking.


To repeat myself: *"I'm glad to not be the only ones who believes this (and does my best to try to live to this - although I sometimes fail)."*.

And I agree with andrew because he's right.

Anyway, you make it sound as if you shoot all aces all the time. I went through the APPL thread and to me you came off as the cheer leader that climaxed into GOBS absolute ruin. Good job on that one.


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## humble_pie (Jun 7, 2009)

couch potatoes like to lament how roughly 50% of investors will do worse than an index while anybody who does better is only a lucky freak.

one never sees a tuber acknowledging the 50% of investors who do, in fact, outperform an index.

none, you've mentioned you have a 3-year-old. Are you going to teach this toddler to aim for 50% pass rate, nothing more? not to bother with school because the probability is that his scholastic achievement will only be par or less?

are you going to restrict him from all sports on the grounds that he should not hope to win, will never be champion? he'll only be mediocre so no need to try?


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## none (Jan 15, 2013)

Perhaps you should ask whether I want my son to live his life on evidence and scientific thinking rather than myth?

Studies have shown that an index investor will beat 90% of active investors over 10 years (or close to that - I'm heading out for FRIDAY beers -it's been fun). Do I want my kid to score in the top 10% - absolutely!

Have a good weekend everyone!


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## humble_pie (Jun 7, 2009)

none said:


> ... GOBS absolute ruin


forum members - particularly hothead newbies & the overstoked - are taking such vile potshots at Gob these days.

wiser investors know that he was never seriously harmed. He had begun buying AAPL shares a long time ago, when it was still in the low 300 range. His cost base was low & he made an incredible amount of money.

at some point in 2012, Gob decided to split off a tiny tranche of capital as a pilot project in options trading. He thought - most correctly - that he would best learn options by actually trading them. He planned well. To sever the new options account from the mother broker account, he encapsulated it at a different house, at Interactive Brokers, injecting 20k. Later he was to inject another 20k. 

at all times, Gob's original investment account was safe. Today, it looks as if its AAPL value is up 50-60% from cost base 3-4 years ago.

the new options account burned like a roman candle, then fell. Of course, every single investor in AAPL shares lost money, so it's useless to focus on GOB. Very roughly, i think he might have lost $20-25k. This was less than 10% of his invested wealth. A 10% loss is what options trading does. Parties who cannot live with the volatility should stay many fathoms away from options.

none i would appreciate it so much if you would refrain from crowing at Gob. He was an extraordinarily talented young man, barely 25 years of age, who gave a great deal to cmf forum. We miss him, we wish him nothing but the best in all of his life.


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## humble_pie (Jun 7, 2009)

none said:


> Studies have shown that an index investor will beat 90% of active investors over 10 years


what studies? there aren't any

this is such a preposterous remark that one might think you're fairly far gone in the beer already ...


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## Toronto.gal (Jan 8, 2010)

none said:


> 1. Anyway, you make it sound as if you shoot all aces all the time.
> 2. I went through the APPL thread and to me you came off as the cheer leader that climaxed into GOBS absolute ruin. Good job on that one.


*1.* Pretty much {I can count the bad ones with one hand}, because I buy the 'boring' stocks [the majority], and on the risky side [the minority], I have been lucky for sure, but I do my research & only buy very cheap.

*2.* You have been talking to Squash it seems. AAPL was/is one of my many boring stocks I bought between 2009 and 2010; currently I'm up by more than $250/per share last time I checked, and collecting $3.05 div. per share, or thousands per year, and telling you only since you mentioned the above, so how is that 'absolute ruin'? Since when is buy & hold 'absolute ruin' in your opinion? Does it really make you feel better to talk about members that have left the forum, even before you joined? Does it make you feel better that others may have failed, is that it? 

You will never find me buying stocks at a year high, let along multi-year or all time highs, like the example you noted with TCK. I am primarily a long-term investor who DRIPs where is possible to do so, and all I have tried to do, is give you constructive criticism a couple of times, unlike you, who's been nothing but critical and rude to anyone who dares bring up the subject of RE.


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## andrewf (Mar 1, 2010)

humble_pie said:


> none, you've mentioned you have a 3-year-old. Are you going to teach this toddler to aim for 50% pass rate, nothing more? not to bother with school because the probability is that his scholastic achievement will only be par or less?
> 
> are you going to restrict him from all sports on the grounds that he should not hope to win, will never be champion? he'll only be mediocre so no need to try?


This is intellectually dishonest.

Edit: To spell out why I said this, expecting to do average academically, does not mean to expect to fail courses 50% of the time. It means to achieve a grade of what--80%? An education is not zero sum. My learning more does not mean someone else needs to learn less. Investing for alpha is zero sum however--for you to beat the market by $1 means someone else has to trail it by $1, before costs. 

Of course, you know that education is not zero sum and trading is, which is why I said this was an intellectually dishonest argument. It's incorrect on the face of it.


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## andrewf (Mar 1, 2010)

Also, there's something to be said for not subjecting children's brains to repeated concussions or even milder head trauma. The evidence is mounting that bashing little brains over and over is not a good idea. Maybe less hockey, football, or soccer (headers) and more running, swimming, etc.?


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## Belguy (May 24, 2010)

humble_pie said:


> what studies? there aren't any
> 
> this is such a preposterous remark that one might think you're fairly far gone in the beer already ...


http://www.nerdwallet.com/blog/investing/2013/active-mutual-fund-managers-beat-market-index/

Try Googling 'indexing versus active management studies' or similar.


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## Eclectic12 (Oct 20, 2010)

Anyhow - returning to our regularly scheduled thread ... I think I know why the gov't moved so fast and have a simple illustration of why there likely are big gains for those that over-contributed to their TFSA.

When the gov't proposed the changes - they wanted the public on their side so their example talked about huge gains & the benefit this had for a paltry 1% per month penalty.
Running a few numbers made it clear that only modest gains are needed to make this worthwhile.


If I use the highest and the lowest prices from March 2009 for the Triax Diversified High Yield Trust, where $200K is contributed to the TFSA (i.e. $195K over-contribution) and it is held for three months. The net result is that where the TFSA contribution limit was $5K, after paying the penalties - the over-contributor ends up with a high of approximately $26.4K and a low for $21.9K in their TFSA. 

The kicker is that this is _*for a $1 per unit gain*_.

The only "tax" being paid is the 1% penalty and after the over-contribution is removed plus the penalty paid - whatever the net proceed amount works out to is tax free going forward.


Investors who kept to the $5K contribution limit would need investments that grew by 5 or 4 x ... just to keep pace.



Cheers


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## Squash500 (May 16, 2009)

humble_pie said:


> forum members - particularly hothead newbies & the overstoked - are taking such vile potshots at Gob these days.
> 
> wiser investors know that he was never seriously harmed. He had begun buying AAPL shares a long time ago, when it was still in the low 300 range. His cost base was low & he made an incredible amount of money.
> 
> ...


 IMHO Gob's major mistake was having total tunnel vision about AAPL. How do you know for sure that Gob made a ton of money on AAPL? How do you know for sure that he was barely 25 years old? This is an anonymous forum after all. 

Here's the CMF thread I started about John Paulson. http://canadianmoneyforum.com/showthread.php/15484-Even-the-experts-can-be-wrong

HP according to your logic....I shouldn't have started this thread about John Paulson...who I would think might just be a bit more talented an investor than GOB....LMAO.


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## Squash500 (May 16, 2009)

Toronto.gal said:


> *1.* Pretty much {I can count the bad ones with one hand}, because I buy the 'boring' stocks [the majority], and on the risky side [the minority], I have been lucky for sure, but I do my research & only buy very cheap.
> 
> *2.* You have been talking to Squash it seems. AAPL was/is one of my many boring stocks I bought between 2009 and 2010; currently I'm up by more than $250/per share last time I checked, and collecting $3.05 div. per share, or thousands per year, and telling you only since you mentioned the above, so how is that 'absolute ruin'? Since when is buy & hold 'absolute ruin' in your opinion? Does it really make you feel better to talk about members that have left the forum, even before you joined? Does it make you feel better that others may have failed, is that it?
> 
> You will never find me buying stocks at a year high, let along multi-year or all time highs, like the example you noted with TCK. I am primarily a long-term investor who DRIPs where is possible to do so, and all I have tried to do, is give you constructive criticism a couple of times, unlike you, who's been nothing but critical and rude to anyone who dares bring up the subject of RE.


 Tgal I totally see your point. However if you had sold your entire position in AAPL when it hit it's 52 week high of $705 then you would have really been laughing all the way to the bank. IMHO AAPL might not ever get back to $705?


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## humble_pie (Jun 7, 2009)

Squash500 said:


> IMHO Gob's major mistake was having total tunnel vision about AAPL. How do you know for sure that Gob made a ton of money on AAPL? How do you know for sure that he was barely 25 years old? This is an anonymous forum after all



this is the trouble with pushy newcomers who start shooting off their mouths without doing their homework. Gob had a long history in cmf forum. All the details about which you are trying to pick yet another argument appear in his archived messages.

as i posted just upthread - to repeat, since apparently you failed to understand - Gob had an old & strong position in AAPL shares. In late 2012, these would have declined on paper, exactly as did everyone else's.

like many other parties in cmf forum who began accumulating shares in AAPL some years ago, Gob has an impressive gain today.

in 2012, for the sole purpose of carrying out an option trading pilot project, Gob split off a tiny portion of capital & lodged this with Interactive Brokers. He generously shared his option trades & his thoughts in real time, something that is rare & greatly appreciated by other option traders.

Gob's option thread soon became one of the most popular cmf forum has ever seen. It remains a colourful & instructive teaching classic today, for students who are smart enough to use their time & energy to learn.


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## Toronto.gal (Jan 8, 2010)

none said:


> I went through the APPL thread and *to me you came off as the cheer leader* that climaxed into GOBS absolute ruin. Good job on that one.


You must have been bored to death to have been checking my & GOB's posts in the AAPL thread, and I guess I was bored this morning, too.

From the 1,924 posts in the AAPL thread, and *in the 9 month period that GOB was active in such a thread, I responded to exactly 8 posts of his,* and in neither post was I encouraging him nor cheering him in any way, as he knew way more than I did, so your false accusations are just that, *FALSE.* Maybe you want to read the posts again: #457/666/971/982/1008/1123/1292/1468. 

While reviewing the entire AAPL thread, did you also happen to notice that GOB posted first time on May 24/2011 when the stock was trading in the low $300's, and that the stock more than doubled a year thereafter? You think he didn't make any money in that time period given his knowledge of Options? You have no way of knowing all that is/was in his portfolio, so to assume 'absolute ruin', is ridiculous, and besides, it would be none of your business.

http://ca.finance.yahoo.com/q/hp?s=AAPL&a=04&b=24&c=2011&d=09&e=1&f=2012&g=d&z=66&y=264

You should be on this forum to learn and help others if you can, not to offer empty criticism. Good job on that one! :rolleyes2:

*'Any fool can criticize, condemn and complain - and most fools do.'
*


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## Toronto.gal (Jan 8, 2010)

Squash500 said:


> *1.* However if you had sold your entire position in AAPL when it hit it's 52 week high of $705 then you would have really been laughing all the way to the bank.
> *2.* IMHO AAPL might not ever get back to $705?


*1.* Don't feel sorry for me; I have been laughing all the way to the bank with other riskier beauties in the tech sector, such as AMD/BB/NOK, which I purchased @ $2+/$2+ and $7 respectively in 2012/2013 [with these I did book profits for obvious reasons].

I already explained to you before why I didn't sell the shares that I purchased 3+ years ago. Also, you're assuming that I had a crystal ball & knew that $705 would be the high before its collapse and inevitable correction. CRA would also have been laughing all the way to the bank with me had I sold my shares at over $500 profit per share, LOL. 

We all knew the stock would correct at some point after its spectacular rise, that had been a no-brainer, but I personally did not expect such a correction to happen in 2012, not after the numbers that had been posted that year, and even when the quarter before the stock began collapsing had been a 'miss' per analysts, the results had nevertheless been impressive: 'iPhone unit sales reached 26.0 million, up 28 percent from the year-ago quarter, and the company sold 17.0 million iPads, up 84 percent year-over-year. Apple sold 4.0 million Macintosh computers, a unit increase of 2 percent over the year-ago quarter. The company also sold 6.8 million iPods, representing a 10 percent unit decline year-over-year.' 

The shares had also not reached my selling target, which I had revised a couple of times I must admit. 1st time I almost sold in the high $200's, so I'm glad I kept them & prefer to remember that figure than the $700+.

*2.* Only time will tell, and I and AAPL have that IMHO; in the meantime, I'm collecting the richest dividend around, which I'm not DRIPping, but allocating to other non-tech stocks that I'm sure will be around 20+ years from now.

Keep in mind that big corrections give good opportunities as well, ie: accumulating/trading, etc.

*Edit:* I should have noted that I had steep [realized] losses with RIM in prior years, but I managed to recover all.


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## Dmoney (Apr 28, 2011)

On top of the overcontribution strategy, was there not some concern about swapping assets in and out of the TFSA, or non-arms length transactions?

For example, I buy 5,000 shares of XYZ... from myself (buy in TFSA from an unregistered account) for $5,000. But wait... the shares are worth $10,000 and are sold in open market.
Rinse and repeat. 
I think there was talk at some point of people with MONSTER TFSAs... in the $700K-$800K range.

The way I see it, with the overcontribution strategy, you have to find something that will return more than 12% annually, but there's no guarantee. You could just as easily make money as lose money. With the other approach, you control both sides of the transaction, and are taking a loss in a taxable account (write it off) and a gain in the tax free account.


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## humble_pie (Jun 7, 2009)

Dmoney said:


> On top of the overcontribution strategy, was there not some concern about swapping assets in and out of the TFSA


swapping was the real offense. By may of 2009 - five months after tax-free accounts debuted - a handful of swappers had driven their tfsas into the $1 million range. How? with montreal-traded LEAPs options, which have spreads of $3-$4-even-$5 between bid & ask.

swappers of that era were allowed to pick their price anywhere between bid & ask. So it was very simple. Every night they swapped options in at lowest possible price, for example 3.65. Times 10 contracts means the tfsa would pay out cash of $3,650.00 into the investor's margin account & collect 10 option contracts in return.

the following night, investor would swap the options out, choosing highest possible price, which might be $7.10, for example. Out would come the options into margin, in would go $7,100 into the tax free account. Look, Ma! Investor's tax-free had just jumped in value by $3,450 ... that is, investor had just transferred $3,450 from taxable account into an account that would remain tax-free forever. 

the following day, repeat with 20 contracts ... then 40 or 50, etc.

i don't quite know how they got beyond a million dollars by may 2009, but they did. A little birdie told me about all this.

first, the minister of finance outlawed tfsa swapping. But soon, they realized that swapping could be done in rrsp with thinly-traded stocks that had huge B/A spreads. So they outlawed that, too.


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## larry81 (Nov 22, 2010)

humble_pie said:


> He generously shared his option trades & his thoughts in real time, something that is rare & greatly appreciated by other option traders.
> 
> Gob's option thread soon became one of the most popular cmf forum has ever seen. It remains a colourful & instructive teaching classic today, for students who are smart enough to use their time & energy to learn.


reminded me of this:
http://tech.fortune.cnn.com/2013/03/04/apple-zaky-bullish-cross/


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## Eder (Feb 16, 2011)

Toronto.gal said:


> *1.*
> 
> 
> 
> ...


I sold my 500 AAPL at $18 because I could not see them ever hitting $40 again...hold them suckers Tgal


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## andrewf (Mar 1, 2010)

It was easier when AAPL was much smaller market cap. Everyone who was predicting that they would hit $1 trillion market cap failed to realize that each doubling is harder than the last.


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## humble_pie (Jun 7, 2009)

larry81 said:


> reminded me of this:
> http://tech.fortune.cnn.com/2013/03/04/apple-zaky-bullish-cross/



larry there's no similarity whatsoever between Gob & andy zaky.

Gob never had any hedge fund. He never advised anyone. He never received or even hinted at the idea of receiving one thin dime from anybody for his commentaries. 

all Gob ever did in his option thread was report what trades he was doing & why, in real time. Exactly like you did yourself with your 100k bet on suncor, larry.

ie the real similarity is between live trade reporting from Gob & live trade reporting from yourself, larry.

right before our eyes, cmf forum members have lost far more money from listening to miserably failing stock pumps like doKtorEdmonton - his 100% failure rate includes touting gasfrac, poseidon, catch the wind, automodular, oncolytics, orbite, balmoral & a host of others - all of which plunged to near-bankruptcy after doKtor's pumpster campaign - than any cmf forum member was ever influenced by an intelligent young man named GOB.


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## Toronto.gal (Jan 8, 2010)

andrewf said:


> It was easier when AAPL was much smaller market cap. Everyone who was predicting that they would hit $1 trillion market cap failed to realize that *each doubling is harder than the last.*


Sure! 

However, AAPL was getting close to the $1 trillion mark with the approx. 940 million shares at $705.07 in 2012, so the $1T mark predictions had not been all that unrealistic back then; after all, it did reach a near $700B mark [I believe] as of the Sept./2012 high.

Imagine the 'iNBT' [next best thing(s) were as wildly successful as the current iGadgets. The world markets are huge, and I believe there is room for a few, not just one or two big names out there.

Where is Goldfinger when you need him. :biggrin:

*Eder:* ouch! Must hurt for sure. :frown: And yes, I'm definitely 'holding them suckers' as I doubt this company has run out of ideas just yet. 

Going back to the subject of TFSA, those with high balances did not get there by buying AAPL @ $700 nor TCK @ $60.

Given my time horizon, I use TFSA for aggressive growth, and once I reach my goal, I'll let the dividends do 1/2 the work. By aggressive, I don't mean penny stocks, though I invest a % in jr. companies and buy as low as possible.


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> Exactly like you did yourself with your 100k bet on suncor, larry.


And as I recall, he got a little greedy waiting patiently for a war, that made him see 1/2 his unrealized gains go puff. :biggrin: Been there as well Larry, not with SU, but with others like BHP [in my case 100% of profits]. :stupid:

Bottom line, we ALL make mistakes, but we learn from them & can also learn from the mistake of others without the need to ridicule anyone.


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## lonewolf (Jun 12, 2012)

Bottom line, we ALL make mistakes, but we learn from them & can also learn from the mistake of others without the need to ridicule anyone.[/QUOTE]

The more contradictions one can remove from thier thinking the fewer the mistakes.
Quote from lonewolf


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## larry81 (Nov 22, 2010)

humble_pie said:


> larry there's no similarity whatsoever between Gob & andy zaky.


I was mostly referring to the "failing in love with apple syndrome'


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## larry81 (Nov 22, 2010)

Toronto.gal said:


> And as I recall, he got a little greedy waiting patiently for a war, that made him see 1/2 his unrealized gains go puff. :biggrin: Been there as well Larry, not with SU, but with others like BHP [in my case 100% of profits]. :stupid:


Yes, finally i sold my SU position for a profit of 20,800 CAD$ including div. This might seem awesome but the same 100k put in VTI for the same period would have netted a profit of 37,000 USD$ !

It's a good thing that i also hold a boat of VTI


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## Toronto.gal (Jan 8, 2010)

larry81 said:


> 1. profit of 20,800 CAD$ including div....same 100k put in VTI for the same period would have netted a profit of 37,000 USD$
> 2. It's a good thing that i also hold a boat of VTI


*1.* With SU, your Sept./2011 $100K investment, had increased to around $140K in just 5 months [$37+]. VTI had increased to around $119K in same time period [$70+]. 

*2.* Indeed, as of last Friday, the above is almost the reverse, ie: VTI = around $141K while SU = $118K.

*Lonewolf:* you seem to have many quotes. :biggrin:

Investing is not 100% scientific, and in fact, different strategies can achieve similar results.

What's not contradictory, is that investing = having a plan/discipline/reading a LOT.


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## Eclectic12 (Oct 20, 2010)

Dmoney said:


> On top of the overcontribution strategy, was there not some concern about swapping assets in and out of the TFSA, or non-arms length transactions?


Yes ... though not knowing the mechanics or any amounts - I hadn't evaluated these. :chuncky: 




Dmoney said:


> The way I see it, with the overcontribution strategy, you have to find something that will return more than 12% annually, but there's no guarantee. You could just as easily make money as lose money. With the other approach, you control both sides of the transaction, and are taking a loss in a taxable account (write it off) and a gain in the tax free account.


I see your point about risk and controlling both sides of the transactions.

However, bear in mind that I picked the example I did because I was looking at that stock with a high degree of confidence it would rise eventually. It was simply an example that huge gains weren't required. Changing the numbers such as amount over-contributed will reduce the return needed. It's the same as if one uses the same example with the investor waiting for a $2 gain - which means double the sheltered money.




Dmoney said:


> I think there was talk at some point of people with MONSTER TFSAs... in the $700K-$800K range.





humble_pie said:


> swapping was the real offense. By may of 2009 - five months after tax-free accounts debuted - a handful of swappers had driven their tfsas into the $1 million range.


With these kind of numbers - likely this is the winner for the largest TFSA. 

Most willing to post around here are indicating $40K through $100K - so the swaps look like they clearly beat everyone else. :biggrin:

Likely a $700K through a $1M TFSAs are going to beat everyone for some time to come.


Cheers


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## humble_pie (Jun 7, 2009)

Eclectic12 said:


> With these kind of numbers - likely this [the million dollar tfsa swap jobs] is the winner for the largest TFSA.
> 
> Most willing to post around here are indicating $40K through $100K - so the swaps look like they clearly beat everyone else. :biggrin:
> 
> Likely a $700K through a $1M TFSAs are going to beat everyone for some time to come.


but eclectic, it's the million dollar jobs that the CRA announced it was auditing a while ago. Those tfsa owners might lose some of their crafty gains.

by contrast, the cmf forum tfsas in the $40k range through the solitary $100k all got there on their own legitimate steam. The tax authorities won't bother these.


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## Eclectic12 (Oct 20, 2010)

Might is the key word. 

I suspect that if the gov't could have made the 100% gain penalty retroactive to Jan 1, 2009, it would done so in the announcement instead of using the "effective today" clause. I haven't seen any discussion on why they chose the date of the announcement, which is interesting considering the changes hadn't been voted on.


As you correctly identify - those who followed the rules and did well can rest assured they will keep their gains as long as the TFSA sticks around.


Cheers


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## humble_pie (Jun 7, 2009)

Eclectic12 said:


> I suspect that if the gov't could have made the 100% gain penalty retroactive to Jan 1, 2009, it would done so in the announcement instead of using the "effective today" clause. I haven't seen any discussion on why they chose the date of the announcement, which is interesting considering the changes hadn't been voted on.



not that poor pie would know anything, but best guess is that your point is well taken.

i don't see how tax authorities could really disallow the $1 million swap jobs. The swappers broke no laws or regulations in effect at that time. There was no tfsa jurisprudence & presumably no private rulings.

i guess the swap jobs got away with it! because otherwise it'll be a doozy for the tax lawyers to litigate ...


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## Eclectic12 (Oct 20, 2010)

humble_pie said:


> not that poor pie would know anything, but best guess is that your point is well taken...
> i guess the swap jobs got away with it! because otherwise it'll be a doozy for the tax lawyers to litigate ...


Unfortunately - it does not seem easy to find any definitive followup info. So at this point - I also don't see how anyone except those who didn't react quickly enough to the proposed changes could be affected.

It certainly would have put what would seems to be significant money back into the gov't coffers *if* the revised rules could be applied all the way back to Jan 1, 2009. With incentive like that - I'm thinking it took strong advice from some legal types to say "you'll only lose in court so why throw good money after bad?".


Cheers


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## andrewf (Mar 1, 2010)

I think it would be appropriate the impose a tax on TFSA's with excess balance. I don't think the government should let people who gamed the account to transfer orders of magnitude more than intended into it should be allowed to stand. Of course, it was probably done by connected elites who have the ear of the government.


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## humble_pie (Jun 7, 2009)

absolutely, tax everything that moves!

do u have a capital gain on you pipeline shares?
or profit in bank shares that u are keeping for you old age?
tax em back into the stone age!

did u defy fundamental couchlam & dare to beat a stock index? 
tax u so bad you'll beg for a public beheading instead!

see, couch islamists are fine but everybody else is gaming the system!

all our financial troubles are being caused by filthy ragged nose-bleeding outlaw traders who somehow have the rapt ear of gummint mandarins!


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## andrewf (Mar 1, 2010)

I don't know what you're ranting about, HP. 

Apparently the government agreed that such transactions should not be allowed. I think they made a mistake by not making the rule retroactive. If they are going to allow it to stand that people transferred arbitrary amounts into their TFSAs, they should give everyone the same ability.


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## humble_pie (Jun 7, 2009)

i agree. Gummint should equalize the situation.

gummint should open the cheating spigot now & restore swap permission for 5 months. 

all canadians could then carry out exactly the same kinds of rapid-value-enhancing TFSA swaps as the handful of millionnaires that the cra caught in 2009.


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## andrewf (Mar 1, 2010)

[deadpan]That's not the ideal solution but I respect your viewpoint.[/deadpan]


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## CanadianCapitalist (Mar 31, 2009)

andrewf said:


> Apparently the government agreed that such transactions should not be allowed. I think they made a mistake by not making the rule retroactive. If they are going to allow it to stand that people transferred arbitrary amounts into their TFSAs, they should give everyone the same ability.


I think making new rules retroactive are a bad idea. The folks who used swaps to increase the TFSA limits did those transactions that were clearly legitimate then.


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## andrewf (Mar 1, 2010)

Closing the barn door after the right horses have fled? I'm sure it will never be investigated, but I expect this was heavily exploited by insiders.


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## humble_pie (Jun 7, 2009)

that's the whole point. It *is* being investigated.


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## Eclectic12 (Oct 20, 2010)

andrewf said:


> Closing the barn door after the right horses have fled? I'm sure it will never be investigated, but I expect this was heavily exploited by insiders.





humble_pie said:


> that's the whole point. It *is* being investigated.


I'd say it *was* investigated as the TFSA rules were changed to give another option beyond the 1% penalty quickly.
Now that there are more options - I'm sure any current attempts to do this *are being* investigated & a more effective penalty applied.


I suspect the question came up for making it retroactive, where the legal advice was that it would be difficult to win in court. 
Unless one is in a dictatorship where whatever those in power decides goes - I can't think of any legal grounds that would allow penalties to be increased retroactively.


An imperfect analogy is speeding in a 40 Km zone at 60Km, paying the ticket of say $90 and then having the gov't decide six months later that more needed to be done to protect the neighbourhood kids so that there is an additional ticket of $2K ticket to pay. 


Cheers


*Edit:* I would expect all kinds of people to complain about, if not protest, arbitrary changes in penalties.


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## DavidJD (Sep 27, 2009)

I kinda regret posting this thread.


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## Eclectic12 (Oct 20, 2010)

DavidJD said:


> I kinda regret posting this thread.


It didn't stick to the lines of what you were interested in?


Cheers


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## HaroldCrump (Jun 10, 2009)

So we should make the anti-swap laws retroactive to trap the small handful of millionaires that executed these swaps in the first few months of 2009?
How much tax recovery are we talking about?
Hundreds of Ks? Millions? Billions?
Is it worthwhile to spend more bureaucracy time to make these laws retro-active, deal with the ensuing lawsuits by the rich millionaires, and spend more tax payer money on this?

There was a loop hole, it was quickly identified, and promptly closed by the govt.
IMO, the govt. can spend the resources of the CRA, RCMP, etc. in more productive ways to recover taxes.


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## DavidJD (Sep 27, 2009)

Eclectic12 said:


> It didn't stick to the lines of what you were interested in?
> 
> 
> Cheers


Expected more advice on how folks had made large gains, what had not worked, some tips like that. Things people could adopt and get the TFSA up!


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## Sampson (Apr 3, 2009)

DavidJD said:


> Expected more advice on how folks had made large gains, what had not worked, some tips like that. Things people could adopt and get the TFSA up!


I think the comments about high risk investments are the best way to get the big gains.

All the approx. $40k accounts simply benefitted from fortuitous timing. You could have invested in almost anything and had returns or 20%+ per annum had you bought on the first day of each calendar year.

There is nothing special about the TFSA either. The same investments in a different account would be just as spectacular.


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## Eclectic12 (Oct 20, 2010)

DavidJD said:


> Expected more advice on how folks had made large gains, what had not worked, some tips like that.
> 
> Things people could adopt and get the TFSA up!


To the degree asked - I think it's been answered. Some went with high risk/leverage such as penny mining stocks. Some went with what looks like mid or small cap stocks.
It sounds like you want more detail.

The challenge is that the individual investor's knowledge/comfort level is going to affect the possibilities. Already comfortable and following penny mining stocks? Then that's one way. Same with mid or small caps. Bottom line is that whatever is invested in - has to have great growth.


Now for smaller, more predictable gains and especially where one is short of cash to contribute to a TFSA - I like contributing a solid, long term investment during a downturn. Doing this in early 2009 avoided a $3 a share capital gain as the stock was transferred at just above cost to avoid the superficial loss rules. By nine months later the share price had gained $4 from the transfer price, ignoring the dividends.

It's not stellar like a shooting star mining stock but as I didn't have the cash anyway - I'll take it and it's effect on my TFSA.


Cheers


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## Eclectic12 (Oct 20, 2010)

Sampson said:


> I think the comments about high risk investments are the best way to get the big gains.


Agreed.



Sampson said:


> All the approx. $40k accounts simply benefitted from fortuitous timing. You could have invested in almost anything and had returns or 20%+ per annum had you bought on the first day of each calendar year.


I doubt this, especially as one moves away from early 2009. 

For one example - BNS fits in early 2009 but I'm not so sure that buying in the years after is close to 20%. For another example, co-workers who bought in Mar 2009 managed to lose money when they had their best chance of everything going up.




Sampson said:


> There is nothing special about the TFSA either. The same investments in a different account would be just as spectacular.


When comparing to an RRSP - what's special about the TFSA is being able to access the money quickly, without tax implications.
When comparing to a taxable account - what's special is the lack of taxes (except US dividends withholding taxes).

In terms of the investment gains - yes there is nothing special as the gain is the same in other other account.


Cheers


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## Sampson (Apr 3, 2009)

Eclectic12 said:


> When comparing to an RRSP - what's special about the TFSA is being able to access the money quickly, without tax implications.
> When comparing to a taxable account - what's special is the lack of taxes (except US dividends withholding taxes).


I'm not saying that the TFSA is not beneficial, but simply strategies that produce large (very large in this case) returns are not account specific. What works in one will work in the other. What you take home after CRA get's their hands on the proceeds is a different story.


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## Toronto.gal (Jan 8, 2010)

Sampson said:


> *All* the approx. $40k accounts simply benefitted from fortuitous timing.


I would not say that all good investments were the result of just accidents or pure luck. For example, would you say that buying MFC @ $10 had been just luck?

TFSAs have a not so spectacular side as well that investors should keep in mind, as one can't claim capital losses, and also, the contribution room would be gone with the wind in said scenarios, which could take a long time to make up, so an investor without much experience, would have to be careful with their risky plays.

For those with more moderate to conservative, and even low tolerance, they, too, could see significant growth also [assuming that 10%+ would be considered 'significant' to some], but without necessarily gambling. In fact, it's quite possible to do very well by simply recognizing the solid value plays in bargain territory [not falling knives], ie: those with limited downside but lots of upside/recovery potential. 

As an example, anyone that may have recognized good value when MFC was trading at around $11 at the beginning of 2012, would now be up by more than 50% since then [21.54% for those that may have bought at the beginning of 2013 @ $13+].

A $5K investment example in MFC: 

- Jan. 2012 - $5K : $11 = 454 shares
- June 2013 - 454 shares x $16.59 [took the day's high] = $7,531.86
- $0.13 dividends x 454 shares x 5 quarters = $295.10
- total investment: $7,826.96
- total profit: $2,826.96 [or almost 1/2 a TFSA's annual contribution limit]
- total shares, if dripped, would have increased to 476 from 454 [based on quarterly prices from March/12 to March/13 @ $13.12/$10.62/$11.99/$12.87/$15.12]

That decent $2K, $3K profit, etc., can double faster than you think!


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> 1. *The challenge* is that the *individual investor's knowledge/comfort level is going to affect the possibilities.*
> 2. Bottom line is that whatever is invested in - has to have *great growth.*
> 3. I like contributing a *solid, long term investment during a downturn*.


Ditto on all 3!

Like with any other account, and especially now for those that may not have blown their TFSAs, there is enough room for various strategies.


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## avrex (Nov 14, 2010)

DavidJD said:


> Expected more advice on how folks had made large gains, what had not worked, some tips like that. Things people could adopt and get the TFSA up!


I agree with what those above have stated.
The only way to generate Higher gains, is to take on Higher risks.
Remember that your TFSA might only be one part of your total portfolio.

I have a diversified portfolio, which includes a certain percentage allocation to 'riskier' investments. 
I utilize my TFSA as a portion of those 'riskier' selections (conversely my RRSP is very conservative).
This year, *my TFSA only has Options* in it. That's right. It only has calls and puts.

Do I recommend you do this? no.
I'm using leverage and it's very risky. It's a double-edge sword. 
I could make huge gains. I could also incur huge losses. 
If huge losses occur, I will have lost that TFSA contribution room 'forever'.


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## Eclectic12 (Oct 20, 2010)

To add some of what does not work or is difficult to make work in a TFSA ....

1) Investing in someone one does not understand or is taking a risk with no understanding. 

If the investment tanks, as others have mentioned - the capital loss is not available to help balance the situation, should there be capital gains going forward. The big killer here IMO that is usually glossed over is that the only source of re-instating the lost value is growth from other investments.

2) Assuming the yearly amount is too small to be worthwhile and avoiding the TFSA. Those with modest to spectacular gains and/or taking advantage of a downturn to tax shelter a solid, long term quality stock demonstrate the folly of ignoring the TFSA.

3) Chasing the latest stock tip, popular stock etc. without any due diligence (this applies in all accounts).

4) Those that were spectacularly successful with high risk stocks may disagree but IMO - putting all one's eggs in one basket, over the long term for the average investor won't work either. I personally have several solid companies growing that give me leeway to take some calculated risks now and then.

5) Trying to reproduce what other were successful doing without having the patience, work ethic etc. required. If seeing an investment in a penny mining stock bounce around won't let the investor sleep at night - it's probably not a good choice. Similarly, if the method requires being able to buy/sell at any time but the investor has a day job with full day meetings, this is probably not a good fit to be successful.


That's it for now .... maybe there will updates later.

Cheers


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## Eclectic12 (Oct 20, 2010)

Sampson said:


> I'm not saying that the TFSA is not beneficial, but simply strategies that produce large (very large in this case) returns are not account specific.
> 
> What works in one will work in the other. What you take home after CRA get's their hands on the proceeds is a different story.


In the broad strokes - I agree.

However if one does not keep in mind the restrictions of a TFSA - the investor can have a mitigation strategy in mind for a high risk play that when needed, is not available to the investor.

Similarly - some of the leverage methods to multiply the anticipated gain can only be implemented indirectly, are capped as to the effect and may simply not available.


Cheers


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> That's it for now .... maybe there will updates later.


To expand on the list above, I find the TFSA a great place to stash stocks/ETFs that pay weird distributions, such as ROCs, mix of interest income and ROC, and other things I can't be bothered to keep a track of.
Stick them in the TFSA and forget about tax accounting.
Therefore, it is a good place for REITs and other high yield stocks that don't pay eligible dividends (such as Chemtrade).


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## Sampson (Apr 3, 2009)

HaroldCrump said:


> ROCs, mix of interest income and ROC, and other things I can't be bothered to keep a track of.
> Stick them in the TFSA and forget about tax accounting.


But this is not the biggest advantage. REITS and former income trusts were given the tax structure because the government assumed they would get the monies from the hands of the investors. They could and still can afford higher payouts compared to classic corporate structures that pay out dividends post taxation. As long as their payouts are sustainable, these are amongst the most tax advantaged types of investments to place in the TFSA.


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## Eclectic12 (Oct 20, 2010)

Sampson said:


> ... REITS and former income trusts ... are amongst the most tax advantaged types of investments to place in the TFSA.


I'm thinking you mean that since these are tax advantaged, they would be better to be held in a taxable account?

Cheers


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## Sampson (Apr 3, 2009)

That's not what I mean at all.

If you hold a ROC paying investment in a non-registered fund, your ACB eventually will be reduced to zero at which point any distribution you receive will be taxed as a capital gain (in most cases, more taxes than on an equivalent eligible dividend payment). This will go in perpetuity.

Within the TFSA, all those tax advantaged (advantaged from the payout corps perspective, hence higher payouts) see no tax, ever.


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## andrewf (Mar 1, 2010)

TFSA is always better than non-reg. The question arises when one runs out of TFSA room.


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## humble_pie (Jun 7, 2009)

sampson i agree that high ROC vehicles are good in tfsa, in fact tfsa is the best place for em.

the prob i see is that their market price as traded entities does seem to decline quite often.

perhaps we could attempt to jiffy up a list of the few that pay mostly or 100% ROC but haven't declined over past 2-3 years?

there's mhy.un, whose price has declined. I believe onex has one, it might have done better. There are others ...


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> sampson i agree that high ROC vehicles are good in tfsa, in fact tfsa is the best place for em.


That is what I meant.

Sampson, you are correct that ROC erodes the ACB.
But there are several high yield securities that pay a mix of various types of distributions, incl. interest income, foreign dividends, capital gains, and of course ROC.
We should assign a $ value to our time required to keep track of all this, and reporting to CRA.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> That is what I meant.
> 
> Sampson, you are correct that ROC erodes the ACB.
> But there are several high yield securities that pay a mix of various types of distributions, incl. interest income, foreign dividends, capital gains, and of course ROC.
> We should assign a $ value to our time required to keep track of all this, and reporting to CRA.


HC u were also right, of course, along with sampson.

imho, the task is now to jiffy up a list of what's good & what's likely to decline in share price.

chemtrade is an excellent example of a good one. BTW i think for chemtrade discovery we should all take off our hats to londoncalling, as i recall it was his presentation here in cmf that alerted us.

there have to be some others paying ROC, foreign, other odds n sods that are annoying to have to report as non-registered holdings on tax returns? i'll go check the onex vehicle. As i recall it held a large number of hi-yield but lo-quality assets; lose a few of those & the unit price would alas plunge.

somebody's buying cpg today, it's another hi-yield although it's all eligible dividends. Add in option sales & yield can push north towards 10%!


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## Eclectic12 (Oct 20, 2010)

Sampson said:


> ... Within the TFSA, all those tax advantaged (advantaged from the payout corps perspective, hence higher payouts) see no tax, ever.


Where one is strictly comparing taxable versus TFSA and are not a high income earner - sure.




andrewf said:


> TFSA is always better than non-reg. The question arises when one runs out of TFSA room.


Always is a strong statement. 

Where the comparison is choosing between a dividend paying stock versus a REIT, as Sampson mentions - I believe if one's income is high enough, it will become preferable to capital gains instead of the dividends tax, especially for foreign dividends. I'll have to do some checking but I have seen articles arguing that for a high income earner - it is better to put US dividend paying stocks in a TFSA, despite having to pay the US 15% withholding tax as well as not being able to write off the US taxes paid.

In any case - this is drifting too far from the original question so I'll start a separate thread later today or tomorrow.

Returning to topic - another method to use leverage in the TFSA is split shares. They are risky but do provide a nice boost where it works. 

For example, when I bought TransCanada Pipe common stock for $10, the capital split share was worthless but was trading for $1. A year later, the stock was around a double where the split shares were trading for something better than $6, as I recall. So part in common stock and part in the split share would have substantially increased the gain.


Cheers


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## andrewf (Mar 1, 2010)

I intended it to be strong. The main exception is for low-income eligible dividends, which face a slightly negative effective tax rate. But if the same holding also rises in value, you're facing capital gains tax liability. For any asset you expect a positive return on, TFSA is better than non-reg. If you're expecting a negative return, non-reg is better and you're an idiot for holding.


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## DavidJD (Sep 27, 2009)

Bragging rights go to...

_"Five years into the TFSA program, the Financial Post wants to know who has bragging rights to the richest account. Dozens of readers have emailed us with how they accumulated wealth in their tax free savings accounts. Here’s one of their stories

Penny stocks can mean dollar gains, albeit with some major risks.

That’s the route Trevor, as the 30-year Calgary engineer is known to friends, took to have his tax-free savings account skyrocket to *$47,319 *since it was first opened in 2009."_


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## humble_pie (Jun 7, 2009)

DavidJD said:


> Bragging rights go to ... That’s the route Trevor, as the 30-year Calgary engineer is known to friends, took to have his tax-free savings account skyrocket to *$47,319 *since it was first opened in 2009."[/I]


jd is that yourself? are u trevor? didn't you tell us upthread that your own tfsa was north of $48k early this year?


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## DavidJD (Sep 27, 2009)

humble_pie said:


> jd is that yourself? are u trevor? didn't you tell us upthread that your own tfsa was north of $48k early this year?


Nope. i am in a bit of a slump today...

Total Account Value $43,063.64 0 
Securities Market Value $40,609.92 0 
Cash Balance $2,453.72 1 
Margin Available
(as of yesterday)
N/A 0


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## humble_pie (Jun 7, 2009)

upthread, jd, upthread. 

did u not also clock in that your wife's tfsa was north of 40k?

nobody's measured anything since that date. The tfsa declarations upthread were all in jan 2013, i believe.

many tfsas could have been higher in jan/13 than they are this sorry minute. Mine was, although it has only dropped since january by roughly 1k.


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## DavidJD (Sep 27, 2009)

Sorry - not sure what upthread means.

Wife's is $37-38K right now. I dont feel as aggressive with hers. I have been buying on some lows for both of us, so if they rise, it may be even better.

Totally ignoring 'sell in may and go away' 

maybe should not have.


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## DavidJD (Sep 27, 2009)

and nope, not Trevor


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## andrewf (Mar 1, 2010)

It's the largest anyone is willing to admit to, at least .


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## humble_pie (Jun 7, 2009)

hmmmn how very interesting.

here is davidJD in his linked post upthread, just like i said.

http://canadianmoneyforum.com/showt...-are-you-doing?p=167097&viewfull=1#post167097

on 1 feb/13 at 10:01 am, davidJD said:

*Mine is at $48,771.71
Wife's is at $40,423.56

Goal is to break $50k each by end of year*


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## none (Jan 15, 2013)

Hey DavidJD - looks like you got yourself a creeper. Congrats. :tongue-new:


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## humble_pie (Jun 7, 2009)

journos are good investigators

always double-checking

this can rattle the folks who can't stop firing off blanks even when they're sober


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## marina628 (Dec 14, 2010)

$34,631.83 is my balance today.


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## DavidJD (Sep 27, 2009)

humble_pie said:


> hmmmn how very interesting.
> 
> here is davidJD in his linked post upthread, just like i said.
> 
> ...


What is so interesting?

How is your TFSA doing Humble? Reaching your goals?


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## Eclectic12 (Oct 20, 2010)

DavidJD said:


> What is so interesting?
> 
> How is your TFSA doing Humble? Reaching your goals?


It would appear you are asking for ideas when it would seem the actions already taken has put you into the running for large TFSA.

So what methods worked for you? What methods didn't work for you?


Cheers


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## humble_pie (Jun 7, 2009)

jd thank you for asking
right now my tfsa is higher than yours by at least 1k ...

you yourself would have been cmf's all-time front runner except for that one guy who effortlessly flew north of 100k
he'd bought just one single venture exchange silver miner
he was probably more surprised than anybody else.

later he would name the stock & take early retirement with the extra boost his tfsa had given him

you yourself were into exchange income fund, later a common stock, plus a mineco also, i believe?


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## DavidJD (Sep 27, 2009)

Eclectic12 said:


> It would appear you are asking for ideas when it would seem the actions already taken has put you into the running for large TFSA.
> So what methods worked for you? What methods didn't work for you?
> Cheers


I think everybody is looking for good suggestions I was hoping to hear more from larry81 (Sp?) who was VERY high over a year ago. I was interested in hearing from respondents answering the FP call, not necessarily on this forum. I posted it as it was interesting and - obviously not unpopular a topic.

Methods that worked for me - I gambled. I trasnferred a lot of stock in at a 52Week low, hours after the account was opened in 2009. it did well and I sold all of it over time and bought into high dividend paying stocks (yes risky) and got burned on some, and did very well on others. Also contributed 100% that was permitted. Withdrew some to buy a cottage and transferred all back in the next calendar year. I also time my deposits (transfers actually) to be a low price - this avoids higher capital gains triggered and gets more through the $5k and now $5.5k hole. Usually it rebounds soon after transfer (Transferred hundreds of shares at $25+ (aprprox) and those were trading back at at $27+ soon after with a 5% dividend every month. Some are also DRIPed, which has worked well in some cases.


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## DavidJD (Sep 27, 2009)

humble_pie said:


> jd thank you for asking
> right now my tfsa is higher than yours by at least 1k ...


Good for you. Mine is not very accurate as there is a trading halt on a stock that are in both TFSA - which shows up as zero in the cut and paste total I posted. 

Will update if there is a significant change some time.


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## humble_pie (Jun 7, 2009)

did larry81 ever really say his tfsa was high? don't recall this

some folks reported back here in a kind of spontaneous round robin in january 2013. Everyone can see those january posts in the linked thread.

the front runners were:

- north of 100k - unknown username
- north of 48,000 - davidJD
- north of 45,000 - hum pie
- north of 41,000 - Eder
- north of 40,000 - davidJD's wife


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## Eclectic12 (Oct 20, 2010)

DavidJD said:


> I think everybody is looking for good suggestions ...


Agreed ... if I started thread and was looking for details, I would have "primed the pump", so to speak, by listing a few actions taken to increase the odds of a gain. Note that this is suggestion to keep the thread on track - not a complaint.




DavidJD said:


> I was interested in hearing from respondents answering the FP call, not necessarily on this forum. I posted it as it was interesting and - obviously not unpopular a topic.


Hmmm ... I wonder how many bothered to respond to the FP call? 

I'm under the impression that most are more interested in CMF than the mainstream media.





DavidJD said:


> Methods that worked for me - I gambled. I trasnferred a lot of stock in at a 52Week low, hours after the account was opened in 2009.


Was there leverage? Were they penny stocks?


Cheers


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## humble_pie (Jun 7, 2009)

eclectic i'm with u in looking for hints, tips & how-tos.

i think 3 valuable ideas have emerged in this thread:

1) although hi-performing accounts often included penny stocks, these are not suitable for many investors;

2) a useful strategy, as davidJD explains, is to contribute, in kind, solid stocks that one already owns & is familiar with, but these stocks happen to be at low price levels;

3) haroldCrump & sampson present an excellent idea in several posts upthread. They suggest buying tfsa vehicles that have hi distribs consisting of ROC, foreign income & other incomes which are challenging to report in non-registered account.

this strategy imho has much broader appeal for tfsa owners than the doomed effort of trying to pop for that elusive one-in-a-million vancouver junior miner!


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## Eclectic12 (Oct 20, 2010)

humble_pie said:


> sampson i agree that high ROC vehicles are good in tfsa, in fact tfsa is the best place for em.
> 
> the prob i see is that their market price as traded entities does seem to decline quite often.
> 
> ...


It would appear there is a short list of those with large RoC - before looking for declines.

RioCan is rather pedestrian at approximately 40 to 63% RoC but looks like it is steady and/or rising.
Chartwell Seniors Housing REIT, in comparison, ranged from 95 to 84% RoC and has been trading in a relatively narrow band. 


Cheers


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> 2) a useful strategy, as davidJD explains, is to contribute, in kind, solid stocks that one already owns & is familiar with, but these stocks happen to be at low price levels;


If I may add a caveat, one has to make sure that the stocks contributed in-kind to a TFSA or RRSP should ideally be ones with small or no capital gains and avoid contributing stocks with capital losses.


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> If I may add a caveat, one has to make sure that the stocks contributed in-kind to a TFSA or RRSP should ideally be ones with small or no capital gains and avoid contributing stocks with capital losses.


yes, absolutely.

but i think davidJD did explain that pretty well, no? there was no reason for me to repeat all of his message, he did excellently describe choosing to contribute good stock that was only temporarily at low prices - ok one does have to have a bit of hope here - in order to avoid large taxable capital gains in the non-registered.

adding the caveat that one should avoid contributing stocks with capital losses - because one cannot claim these losses - puts the cherry on the suggestion cake!


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> 2) a useful strategy, as davidJD explains, is to contribute, in kind, solid stocks that one already owns & is familiar with, but these stocks happen to be at low price levels;


I have done in-kind contributions of stocks in two past contribution years.
There were capital gains, though, but I figured it is a one-time hit - might as well get it over and done with.
All future capital gains and dividends will be tax free.


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## DavidJD (Sep 27, 2009)

_2) a useful strategy, as davidJD explains, is to contribute, in kind, solid stocks that one already owns & is familiar with, but these stocks happen to be at low price levels;_

This is very true. If you believe in a stock enough to own it, you will know when a dip is not warranted and can take advantage of that.

I have changed some of my holdings - which at one time were getting over $200/m in dividends so not they are a bit over $150/month. This really padded some cash into the account, and allowed some smaller and riskier purchases. I bought a lot of Automodular (as posted elsewhere here) and more than doubled my investment by gains, which were erased with some news of a contract not being continued. All the dividends (including a special one) cancelled a 'loss' but had I sold when my gut told me, (at $3.10 instead of $1.60 today). Alas so many misses...


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## humble_pie (Jun 7, 2009)

DavidJD said:


> [re contributing stock in kind to tfsa when stock price is low] If you believe in a stock enough to own it, you will know when a dip is not warranted and can take advantage of that.


there's a problem issue i'd like to raise if i may.

new ministry of finance rules do not allow us to swap securities into or out of tfsa any more.

we can contribute securities in kind, but only when we are actually making the annual contribution to the tfsa.

i'm one who contributes the maximum amount on jan 2nd each year, regular as clockwork. So it's pretty problematic that on that very date, a good ole stock i might own in non-registered has conveniently swung low enough in price that it would make a good contribute-in-kind candidate.

of course, one could hold off one's annual contribution to tax-free. Contribute nothing on jan 2nd, but instead wait around all year until the above-described low-priced opportunity shapes up? i'm not crazy about that, either. Because what if opportunity does not shape up? one would lose an entire year of tax-free growth by waiting around to contribute ...


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> of course, one could hold off one's annual contribution to tax-free. Contribute nothing on jan 2nd, but instead wait around all year until the above-described low-priced opportunity shapes up? i'm not crazy about that, either. Because what if opportunity does not shape up? one would lose an entire year of tax-free growth by waiting around to contribute ...


humble, if I may make a counter-point : I wouldn't fret about the capital gains that will be owed to CRA if such in-kind contribution were made exactly on 2nd Jan of every year.
After all, the contribution limit is only $5,500 (and only $5,000 for years 2009 - 2012).
How much capital gains tax are we really talking about here?
Unless this magical stock were bought literally for pennies, there won't be a significant enough capital gains due on this to justify waiting indefinitely for the rest of the year for a correction.

Also, let's keep in mind the capital gains taxes won't be due until April 30th, of _the next year_.
Apply some time value to the 15 months in question, and it may not be a big deal at the end of the day.

If the stock in question is a long term hold, and investor is comfortable holding this through various market conditions, take the capital gains hit now (unless it is truly huge), move it into the TFSA and be done with it.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> take the capital gains hit now (unless it is truly huge), move it into the TFSA and be done with it.


That's exactly what I did this year & it worked really well as the stock in question took off. Minor gains/losses in the transfer out don't matter. 

Good summary by HP, and those points were listed in proper order IMHO, as let's remember that the forum has many reading [including newbies]. Near 5,300 views since DJ started the thread 7 days ago.


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## Eclectic12 (Oct 20, 2010)

humble_pie said:


> eclectic i'm with u in looking for hints, tips & how-tos...
> 
> 2) a useful strategy, as davidJD explains, is to contribute, in kind, solid stocks that one already owns & is familiar with, but these stocks happen to be at low price levels;...


A good summary - though I can't say I'm learning anything with #2 as I posted the same strategy in albeit less detail and T.gal ditto'd it almost two days before davidJD answered my question about the strategies he used.

His familiarity with this strategy may be part of why he was disappointed in the responses to the thread. :biggrin:


Cheers


*PS* I'd guess it's another case of great minds thinking alike ... (or finding opportunities alike!)


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## Eclectic12 (Oct 20, 2010)

CanadianCapitalist said:


> If I may add a caveat, one has to make sure that the stocks contributed in-kind to a TFSA or RRSP should ideally be ones with small or no capital gains and avoid contributing stocks with capital losses.


This is a good reminder.

But then again - if one's time is limited like mine, is it really worth sweating forgoing a $200 or less capital loss? 
Or will CRA bother the tax payer who reports the deemed sale, zero's out the loss and attaches a note saying it's not being claimed?

The superficial loss rule articles I've read indicate if the loss were claimed, it would be rejected. I haven't seen anything saying it can't be done at all or there are penalties in addition to rejecting the capital loss that is being attempted to be claimed. 

I may call CRA at some point to find out for sure.




humble_pie said:


> there's a problem issue i'd like to raise if i may.
> 
> new ministry of finance rules do not allow us to swap securities into or out of tfsa any more.


AFAIKT - except for the discussion around how big the swap TFSA were able to grow, the discussion has acknowledged that the new TFSA rules do not allow swaps and the discussion is about contributing shares in-kind.

So unless a reader is not paying attention - I'm not sure there is a problem.




humble_pie said:


> we can contribute securities in kind, but only when we are actually making the annual contribution to the tfsa.
> 
> i'm one who contributes the maximum amount on jan 2nd each year, regular as clockwork. So it's pretty problematic that on that very date, a good ole stock i might own in non-registered has conveniently swung low enough in price that it would make a good contribute-in-kind candidate.


Actually - it's when one has contribution room available. 

In my case - I'd cashed in some big gainers the year before and had ear marked possibilities so it was really only something like a Jan to Mar time frame.




humble_pie said:


> of course, one could hold off one's annual contribution to tax-free. Contribute nothing on jan 2nd, but instead wait around all year until the above-described low-priced opportunity shapes up? i'm not crazy about that, either. Because what if opportunity does not shape up? one would lose an entire year of tax-free growth by waiting around to contribute ...


It is a trade off but if there's a screaming bargain that one does not already own in a taxable account where one already has cash - contributing the cash to buy the bargain ASAP is the way to go.

If there's something that looks like it's temporarily tanking that is already owned in a taxable account and/or coming up with cash on Jan 2nd is an issue - a transfer in-kind may be just the ticket, even if one has to wait a couple of months to get a good transfer price.

Like a lot of other things in investing - one should keep in mind the possibilities, review the "as of now" options and make a decision.


Cheers


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## DavidJD (Sep 27, 2009)

My gains were quite high on the stocks i transferred in. I did so in late January. Sure it had a sudden drop below my transfer in value since, but that ship had sailed. I also carried some losses that i applied to the gains triggered from the transfer into the tfsa. I have plenty more of these (@ Humble - yes EIF) that have gained from my book value of $14 to close to $28 recently. When it dropped to $25.80 it was better than transfering at $28 on JAN 2nd. I think some previous years' losses mitigated any tax hit.

ALso by doing so, the taxable tradding account dividend$'s coming in dropped from $720/month the $592/month. So less tax on the dividends (I know, I know they are not taxed as heavily - buy why pay any?) Also in Manitoba the amount the province increased the tax cost on dividends (8% compared 11%!)


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## mrPPincer (Nov 21, 2011)

To be clear, the new rules still allow in-kind transfers for the TFSA right?
With the only thing to watch out for being trivial losses or capital gains when transferring in.

I plan to do an in-kind transfer from TFSA to non-reg later this year to make some extra room for 2014.
I'm assuming the swap transactions spoken of upthread are a different beast and I shouldn't have any problems.


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## HaroldCrump (Jun 10, 2009)

mrPPincer said:


> To be clear, the new rules still allow in-kind transfers for the TFSA right?


Yes



> With the only thing to watch out for being trivial losses or capital gains when transferring in.


Losses in securities being transferred from non-reg. to TFSA _cannot_ be claimed.
However, profits in securities being transferred from non-reg. to TFSA _must_ be reported.



> I plan to do an in-kind transfer from TFSA to non-reg later this year to make some extra room for 2014.


That will be a withdrawal.
As long as you don't re-contribute before 2014, it's fine.



> I'm assuming the swap transactions spoken of upthread are a different beast and I shouldn't have any problems.


Yes, a swap is different.


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## RedRose (Aug 2, 2011)

Only $25,723


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## Toronto.gal (Jan 8, 2010)

mrPPincer said:


> I plan to do an in-kind transfer from TFSA to non-reg later this year to *make some extra room for 2014*.


I understand what you're saying, but for clarity purposes, you're not really having extra room per se, as you would simply be re-contributing a prior withdrawal.


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> I understand what you're saying, but for clarity purposes, you're not really having extra room per se, as you would simply be re-contributing a prior withdrawal.


+1 

Or maybe a better way of stating it is that the _growth that has already happened in the TFSA_ is going to converted to TFSA contribution room by withdrawing it.

At the end of the day, if $10 is withdrawn - no matter how one slices it, only $10 can be re-contributed. The withdrawal/re-contribution does not affect the value.


Cheers


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## Ethan (Aug 8, 2010)




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## Ethan (Aug 8, 2010)

I sent a screen shot of my TFSA to Garry Marr at the Financial Post but I haven't been contacted yet, so I assume I'm not getting an article written about me in the Financial Post 

My TFSA was my first venture into a self-directed account, my investing experience and knowledge have grown with it. I funded it with $5,000 on August 4, 2009, a few months after convocation. I promptly put the entire amount into the Consumer Water Heater Income Fund (since renamed to Enercare). The stock had one of the highest dividend yields on the TSX, and quickly sank to half of my purchase price. I then started focussing on PE ratios, which lead me to purchasing TD and AltaGas with my 2010 contribution in January 2010. As this was happening, I was going through CASB and working at a CA firm, and I was starting to learn the complexities that go into financial statements. It lead me to become very skeptical of income statements, and I started focussing on cashflow statements as a measure of a companies ability to fund growth and increase dividend payments. This is when I really started getting big gains. My biggest gains were on Petrobakken, AutoCanada, TD and CN Rail. My TFSA is also where I first started option trading in the summer of 2011.

My focus going forward is to buy companies with a several-year history of free cash flows that are well in excess of common dividend requirements. I look for economic moats, such as the duopoly held by CN and CP rail. I expect these stocks to be able to pay healthy dividends while growing the business without the need to take on significant amounts of debt or equity. I expect my companies to regularly increase their dividends, which will fund future purchases for me. My goal is to one day have a $1 million TFSA.

We just finished topping out my fiancée's TFSA in March, it's at roughly $30,000.


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## mrPPincer (Nov 21, 2011)

Thanks Harold, thought so.

Tgal & Eclectic, you're right when you put it that way ofc.
I guess it's a matter of semantics, what I meant was some extra contribution room for 2014 over and above the 2014 annual $5,500 limit, which I would get in 2014 by doing a withdrawal in late 2013, all of which was not explicitly detailed in my earlier post but was assumed to be understood. Thankyou for clearing that up 

Nice work so far Ethan!
Mine is only at 28K but it's just one piece of yet another boring indexing strategy.


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## humble_pie (Jun 7, 2009)

the nat post article had plenty of commentators posting that their tfsas were higher than Trevor's.

one party wrote in to say he had north of $1 million, which, as has been detailed upthread, is entirely possible.

just here in cmf forum, 5 members had zipped well north of 40k by january 2013.

yet none of the 40-northers commenting in the nat post were asking the editorial team for a writeup. It must be a class thing. It's class to avoid being interviewed by the nat post, it's cheap to go there.

speaking of which, a suggestion if i may: frequently posting one's tfsa throughout the year does cheapen the exercise. In cmf forum, i move we keep it to january only.

further suggestion: posts with helpful suggestions that are applicable to many tfsa investors on a broad scale, such as sampson's & harold's ROC suggestions upthread, seem valuable to me. Less valuable are posts detailing i-bought-this-stock-then-i-sold-that-stock-then-i-bought-another-stock, because there's an entire cmf section called Individual Stocks for stock picking. Plus there are threads entitled What u buying & What u selling.

the big challenge imho is capturing capital gains in the tax-free. There's precarious risk here, because losses incurred can't be written off. For my own part, i did pursue a number of tiny resource stocks throughout the tax-free's first 4 years. But resource stocks are more of a long shot now than they were 2009 thru 2012 (on the other hand many are very inexpensive right now.)

right now i think quality stocks with dividends plus call option sales are a good strategy. Perhaps my window might narrow on energy of this type which is not dependent on export to asia.

a good model to study is Dmoney's diary over in Money Diaries. What's paying off for Dmoney is sound option knowledge plus conservative strategies plus biblical patience.


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## Ethan (Aug 8, 2010)

humble_pie said:


> yet none of the 40-northers commenting in the nat post were asking the editorial team for a writeup. It must be a class thing. It's class to avoid being interviewed by the nat post, it's cheap to go there.
> 
> speaking of which, a suggestion if i may: frequently posting one's tfsa throughout the year does cheapen the exercise. In cmf forum, i move we keep it to january only.


Why is it cheap to be interviewed by the nat post, and why is it cheap to posts one's TFSA balance throughout the year? This whole thread you've been talking up the people with $40k TFSA's, some of those people (yourself included) have been giving updates on the size of their TFSA's. As soon as I post that I have a $40k TFSA that I submitted to the financial post you comment that its cheap to do that, why is that?



> further suggestion: posts with helpful suggestions that are applicable to many tfsa investors on a broad scale, such as sampson's & harold's ROC suggestions upthread, seem valuable to me. Less valuable are posts detailing i-bought-this-stock-then-i-sold-that-stock-then-i-bought-another-stock, because there's an entire cmf section called Individual Stocks for stock picking. Plus there are threads entitled What u buying & What u selling.


Look at post #38, you quoted Eclectic 12 who said "I thought the thread was about who had the largest TFSA and how they did it" to which you responded "Right, thread is about the biggest tfsa." If you're agreeing with Eclectic 12 that the thread is about the largest TFSA and how they did it, why are you now complaining that people are bringing up the size of their TFSA's and the trades that made it happen?

I also find it odd that you are suggesting which threads the people keep their conversations to. If I want to talk about kayaking with a go pro, where would you suggest I talk about it? Perhaps in a money diary, that's where you seem to think it's appropriate. Am I correct here, talking about my TFSA size and how I got it there in a thread about TFSA size and how you got it there is inappropriate, but talking about kayaking with a go pro in a money diary is appropriate?

http://canadianmoneyforum.com/showthread.php/6955-Race-to-Financial-Independence/page11



> a good model to study is Dmoney's diary over in Money Diaries. What's paying off for Dmoney is sound option knowledge plus conservative strategies plus biblical patience.


Why do you consider it cheap to bring up TFSA balances more than once a year, yet you advocate for some posters to post their net worth monthly? Why the distinction between the two?


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## humble_pie (Jun 7, 2009)

ethan i'd make an exception in your case but for one reason only. You've posted about your new project, which is managing capital for outsiders for a fee. It's likely that the publicity would help you, at least in the short term, so there could be an advantage to media coverage.

as for other persons, what i said, precisely, is that the nat post commentators who held more than Trevor's 47k were obviously not applying to the journos. I suggested, precisely, that they might be avoiding for class reasons, aka dignity, privacy & modesty.

as it happens, i've worked in PR. A lot of this work, at high levels, consists of keeping people out of the news instead of in the news. The uber-wealthy Kruger lumber family in quebec, for example, have superb media consultants. As a result you never read about them in mass media. Yet when the krugers meet with lumber barons in other countries, i am sure the other parties know, exactly, with whom they are dealing ...

as for myself, when it comes to discretionary money management, i'd want my discretionary advisors to be like my surgeons. Cool, dignified, intently alert, superb technical skills, peer-recognized high over-performance, sterling moral character. The opposite of a publicity-seeking character.

as for posting one's tfsa frequently, what would be the point. An annual review is fun. A continual string of me-me-me messages about something so extremely small dilutes the fun into boring.

as for the money diaries, imho these are quite different. They were deliberately designed to be frequent diary benchmarks. Parties who don't want to read this kind of information can easily avoid the section.

what i'd hoped to do in my message was call for good tfsa-building ideas that other forum members could utilize. I mentioned 2 highly different approaches - sampson/harold's & also Dmoney's - that have already been discussed & explained. These can be effective in the hands of many investors.

i'm certainly sorry that you are choosing to be offended, but i'm not retracting this call. As far as i am concerned, the hunt is very much on for tax-free building blocks that can grow capital to a certain degree while limiting or restricting risk.

btw ethan - not sure you have thought about this, but media coverage could also backfire & harm your money-management-fee project instead of helping it. It will bring out your youth & relative lack of experience, is the problem. You will never be able to control what the journo writes & it's likely that he or she would pick up on your fiery ambition (i certainly have!)

an experienced media consultant might suggest to you that it could be better to market quietly, using your own materials, moving through your own personal contacts.


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## Eclectic12 (Oct 20, 2010)

mrPPincer said:


> Thanks Harold, thought so.
> 
> Tgal & Eclectic, you're right when you put it that way ofc.
> 
> ...


It's only semantics - if there has been previous growth to fund the withdrawal. 

Problem is - I've seen too many posts where the assumed growth wasn't there, so it wasn't going to work ... or worse, there was an assumption that "if my TFSA investment tanked, the gov't is going to let me replenish the losses with fresh cash that won't count against the contribution room".

Neither of these are mistakes you are making but I like to keep the details clear so that a novice reading the thread doesn't base on ineffective move on an assumption.


Cheers


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## Eclectic12 (Oct 20, 2010)

Ethan said:


> ... Look at post #38, you quoted Eclectic 12 who said "I thought the thread was about who had the largest TFSA and how they did it" to which you responded "Right, thread is about the biggest tfsa." If you're agreeing with Eclectic 12 that the thread is about the largest TFSA and how they did it, why are you now complaining that people are bringing up the size of their TFSA's and the trades that made it happen?


HP knows for sure but a while ago it was posted ...



DavidJD said:


> Expected more advice on how folks had made large gains, what had not worked, some tips like that. Things people could adopt and get the TFSA up!


... which has sort of moved people away from "I bought x at a crash price" and into ideas that apply more often.


Cheers


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## mrPPincer (Nov 21, 2011)

Eclectic12 said:


> It's only semantics - if there has been previous growth to fund the withdrawal.


No
Any withdrawn dollar amount can be put in after Jan 1st, regardless of whether there's been growth or not.
This nitpicking is pointless and is clouding the issue
I need more than 5.5K room in 2014 to transfer a stock into the TFSA, I thought I was clear about that and both you and Tgal understood what I was saying; there was nothing misleading about what I said, so leave it alone now please.

The reason I posted my questions in this thread in the first place on the subject of in-kind transfers, was brought on by this comment which *is* misleading and false; so if you want to nit-pick, nit-pick about this:



humble_pie said:


> there's a problem issue i'd like to raise if i may.
> 
> new ministry of finance rules do not allow us to swap securities into or out of tfsa any more.
> 
> we can contribute securities in kind, but only when we are actually making the annual contribution to the tfsa.


This worded as it is implies that new rules say we are allowed only one TFSA in-kind transfer per annum, which I doubt was exactly what h_p intended to say, but nevertheless brought on my questions which were already so thoroughly answered by HaroldCrump.

/we now return you to your regularly scheduled program..


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## Eclectic12 (Oct 20, 2010)

mrPPincer said:


> No .... Any withdrawn dollar amount can be put in after Jan 1st, regardless of whether there's been growth or not.
> 
> This nitpicking is pointless and is clouding the issue ...


And I'm glad that you have the value to withdraw from the TFSA to achieve your goals.

My point is others have used the same "withdraw to increase the TFSA contribution limit" but did not have enough value to withdraw to achieve their goal (ex. need $8K but only have $1K then can withdraw plus the $5.5K - which falls short of the needed amount).


If would seem you already understand this already as you see the clarification as nitpicking ... 




mrPPincer said:


> ... /we now return you to your regularly scheduled program..



Cheers


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## mrPPincer (Nov 21, 2011)

I may have overreacted to the criticism a tad Eclectic, if so, my apologies.

What I've been thinking of doing is transferring a 20K+ ETF out this year and transferring a 6.5K REIT in next year.
The remainder of the TFSA room I was thinking of keeping in a People's Trust HISA at 3% since I am already keeping my fixed income in a HISA at only 1.9%.

This limits TFSA growth potential, but on the plus side it locks in any gains and ups my fixed income rate by a percent.. and the cash is still freely available to use if there's a major correction.
I'm still mulling it over, this strategy for sure won't give me the biggest TFSA, but that's not always the only factor to consider.


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## Eclectic12 (Oct 20, 2010)

mrPPincer said:


> I may have overreacted to the criticism a tad Eclectic, if so, my apologies.


No worries ... I'd done similar.

At the end of the day, I could have been clearer as I was not intending any criticism. I wanted to make it clear that for your plan, what is driving the extra 2014 TFSA contribution room over & above the new $5.5K that is granted - is that you are intentionally reducing the TFSA the year before.

As has been posted upthread, it can be a good move that increases the TFSA when an investment is transferred at a low & then quickly rebounds/grows but from a transaction basis, it has no effect. 

To illustrate using numbers (for the benefit of novices reading the thread as I think you are already clear on this), for someone with a $25.5K TFSA in 2013, a withdrawal of $7.5K reduces the TFSA to $18K. On Jan 2nd, 2014 or after - putting back the $7.5K plus the new 2014 contribution room of $5.5K, results in $18K + $7.5K + $5.5K = $31. This is the same as having the $25.5K plus the new 2014 $5.5K (i.e. $31K).

The available TFSA contribution amount is increased for 2014 by $1 only by withdrawing $1 in 2013 so in the long run, it balances out. 




mrPPincer said:


> What I've been thinking of doing is transferring a 20K+ ETF out this year and transferring a 6.5K REIT in next year. The remainder of the TFSA room I was thinking of keeping in a People's Trust HISA at 3% since I am already keeping my fixed income in a HISA at only 1.9%.
> 
> This limits TFSA growth potential, but on the plus side it locks in any gains and ups my fixed income rate by a percent.. and the cash is still freely available to use if there's a major correction.


It does lock in gains and does position you well to take advantage of any bargains over the summer/fall.

On the flip side, there are some other factors to consider that jump to my mind.

Will the REIT grow faster than the ETF (i.e. are you thinking you will shelter the faster growing investment)?

Does the ETF pay Return of Capital (RoC) as part of it's distributions? 

If so, the bookkeeping effort is likely the same as what is likely in place for the REIT.
Then too - does the REIT pay more RoC than the ETF? If so, likely your tax bill will increase.




mrPPincer said:


> I'm still mulling it over, this strategy for sure won't give me the biggest TFSA, but that's not always the only factor to consider.


True ... as long as you like what you are getting out of the plan and are clear/comfortable with it, that's more important IMO.


Cheers


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## Toronto.gal (Jan 8, 2010)

The patience and level of such clear/helpful details in every post of yours *Eclectic* [for the sake of ALL those reading], is fantastic & much appreciated!


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## Echo (Apr 1, 2011)

Another post is up - $79,738 was the 'winner' - http://business.financialpost.com/2...ng-try-to-top-this-guys-tfsa/?__lsa=7924-1928


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## humble_pie (Jun 7, 2009)

Echo said:


> Another post is up - $79,738 was the 'winner' - http://business.financialpost.com/2...ng-try-to-top-this-guys-tfsa/?__lsa=7924-1928




talk about a made-in-heaven story! this young man works in the restructuring & insolvency industry, said the nat post, so he has access to trade information & analytics that the rest of us simply do not have.

i don't mean any kind of insider information. I just mean that he works every day surrounded by trade publications listing public companies that are in trouble plus accounting methodologies for determining what kind of assets still remain in such companies.

so of course he can find situations like the Brick. Of course he realized that leveraged warrants would increase his exposure to that near-insolvent a thousandfold.

i for one am overjoyed by this story. It's like watching an olympic athlete perform. They're supposed to be pre-professional, just like this 25-year-old investor. But everything they do is star perfection. They are thrilling to behold.

as for the rest of us who toil along day to day, labouring as regular plumbers, poets & pen-pushers, the necessary analytic skills are not handy at all. Loading up on one-way warrants & options in order to use leverage in registered accounts is especially dangerous imho. It normally takes up to a year to feel comfortable in these tricky markets imho. An entire TFSA could be obliterated by foolish option trading in a few weeks, imho.

we saw an illustration of this when a cmf member recently picked june 600 calls in AAPL as a virtual option choice. Thanks be that it wasn't a real-life purchase. Because whatever those calls would have cost at the time he fell in love with them, they are virtually worthless today. The probability that they will expire worthless is 99.99999%.

in the nat post's $79k tfsa example, investor Garrett was not fooling around with options in general. His approach was highly targeted, like an arrow. First he identified a publicly-trading vehicle that was so far out of favour that all its instruments - stocks, options, warrants, debentures - were trading at zip. Then he uncovered that there was still value hidden in the corporate ruins. Only after that did he go for warrants & options. What a wonderful story.

look out Prem Watsa, storied chairman of fairfax financial. Garrett is only 25.


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## kcowan (Jul 1, 2010)

humble_pie said:


> in the nat post's $79k tfsa example, investor Garrett was not fooling around with options in general. His approach was highly targeted, like an arrow. First he identified a publicly-trading vehicle that was so far out of favour that all its instruments - stocks, options, warrants, debentures - were trading at zip. Then he uncovered that there was still value hidden in the corporate ruins. Only after that did he go for warrants & options. What a wonderful story.
> 
> look out Prem Watsa, storied chairman of fairfax financial. Garrett is only 25.


It is stories like this that put the lie to passive index investing. It is the best approach for the average investor. But one size does not fit all, just most.


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## Echo (Apr 1, 2011)

humble_pie said:


> Only after that did he go for warrants & options. What a wonderful story.


So why was his upside higher with the warrant purchase versus just buying the stock outright?


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## HaroldCrump (Jun 10, 2009)

Echo said:


> So why was his upside higher with the warrant purchase versus just buying the stock outright?


You get leverage, similar to a call option.


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## humble_pie (Jun 7, 2009)

echo i'm sure you understand how leverage works in warrants & options. One dollar invested in a warrant or option will control a far greater quantity of an underlying common stock than the same dollar actually invested into the stock itself. The downside is that there's a time limit, so both positive & negative trends will be sharply exaggerated.

in Garret's case, he took the well-calculated risk that leverage in the Brick would work for him. And it did. The article doesn't specify how his stock-plus-warrants Brick combo was actually built, but in the end his original 6k became 36k.

in the options threads, cmf has some talented posters who have shown in painstaking detail both how leverage has worked for them & also how it has worked against them.



> [Fin Post] He saw the opportunity with warrants to buy the The Brick Ltd. trading at around 25.5¢ and bought 6500. The warrants gave him the rights to buy a Brick share for $1. He bought more as the warrants went down in price.
> 
> The Brick would eventually get a boost when Fairfax Financial stepped in to backstop the appliance operator's debt before the company was eventually sold to Leon's Furniture with Garrett along for the ride. His $6,000 investment ended up being worth $36,000.


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## praire_guy (Sep 8, 2011)

humble_pie said:


> talk about a made-in-heaven story! this young man works in the restructuring & insolvency industry, said the nat post, so he has access to trade information & analytics that the rest of us simply do not have.
> 
> i don't mean any kind of insider information. I just mean that he works every day surrounded by trade publications listing public companies that are in trouble plus accounting methodologies for determining what kind of assets still remain in such companies.
> 
> ...


If he has access to information none of us do, then how is it not insider trading?

Seems he has an unfair advantage,and should be investigated.


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## HaroldCrump (Jun 10, 2009)

praire_guy said:


> If he has access to information none of us do, then how is it not insider trading?
> Seems he has an unfair advantage,and should be investigated.


This is not insider trading at all.
The documents in question must have been available through Brick's investor website and on SEDAR.


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## praire_guy (Sep 8, 2011)

Your post was confusing. You said he had info that none of us had access to, but then you said not insider info. 
If we don't have access to it, then it's inside info. 
If its not inside info then we would have access to it.


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## Eclectic12 (Oct 20, 2010)

praire_guy said:


> Your post was confusing.
> 
> You said he had info that none of us had access to, but then you said not insider info.
> If we don't have access to it, then it's inside info.
> ...


I believe HP meant access to info that the average investor won't have access to.

An imperfect analogy is where one is working in the IT industry, has access to research firm reports on software and is writing an evaluation of the software from ABC Corp. for one's employer. The investor on the street does not have access to most of this info but there are lots of people do.

A real life example would be Peoplesoft, before Oracle bought them out - which I know people profited from at the time, just based on how they figured it would be popular going forward.


Insider trading on the other hand - would be the investment group at a company letting one know that they are about make a buyout bid for software company ABC Corp. A handful of people at the bidding company plus their partners know but that's it.


Cheers


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## praire_guy (Sep 8, 2011)

I get what you are saying, but it all seems shifty, and shady. 

You are taking advantage of a situation not everyone can reasonably do.


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## HaroldCrump (Jun 10, 2009)

praire_guy said:


> You are taking advantage of a situation not everyone can reasonably do.


But that is true for all large institutions, investment banks, and hedge funds.
They employ scores of highly skilled analysts, scientists, geologists, doctors, and other types of specialists.
All large investors have advantages that ordinary retail investors don't.


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## humble_pie (Jun 7, 2009)

what i meant was that Garrett had rarefied information related to his work & he also had rarefied analytical skills. All i said, exactly, is that he had "access to trade information & analytics that the rest of us simply do not have."

how many of us keep handy to our email devices the latest paid-circulation data from toronto stock exchange about listed companies in arrears with filings? or trade publications written & published for insolvency restructurers? or forensic accounting platforms capable of drilling down to expose hidden values deep inside corporate wrecks?

praire do you have this information washing all over your laptop/phone day in, day out? do you have the specialized knowledge to be able to interpret it?

if you really wanted this info, praire, you could certainly obtain it. It's not insider info. If you wanted the know-how, you could certainly get the training.

offhand, i can't think of any forum member who appears to be an insolvency restructurer. There are several members who are chartered accountants. They would presumably find this forensic approach - identifying extreme value, then overloading with derivatives - to be familiar & comfortable.

as for myself, i can't do this, i don't have the accounting skills. But i'm thrilled to watch when someone like Garrett dazzles, because it's like watching an olympic athlete perform.

please notice that Garrett pulled off mega-success not once in his tfsa, but twice. The 2nd high flyer was a real estate company whose shares were dramatically undervalued when Garrett found them. His story is not an account of one lucky break. He's obviously a talented young man. 

(aside to haroldCrump) a delicious aspect of this win/win story, don't you think, is that Garrett was David stepping nimbly around the Brick long before the heavy-duty Goliath hedgies showed up in the persona of Fairfax to bail out the dregs of the furniture retailer. Garrett got it right. In the david-&-goliath stories, all the world usually loves a david.


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## jcgd (Oct 30, 2011)

So the only difference is that he did his research, and is always looking at this info rather than looking it up every few months like us regular folk. Goes to show how valuable due diligence really is.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> (aside to haroldCrump) a delicious aspect of this win/win story, don't you think, is that Garrett was David stepping nimbly around the Brick long before the heavy-duty Goliath hedgies showed up in the persona of Fairfax to bail out the dregs of the furniture retailer. Garrett got it right. In the david-&-goliath stories, all the world usually loves a david.


That Brick warrants thing he did was pure beauty, if I understand it correctly.
Even better than the Ford (F) bonds in '09 when the other two were going bankrupt.
Garrett identified an opportunity, leveraged his pre-existing knowledge of insolvency/re-structuring, and took a well calculated risk.
As stalwarts like Buffet say, if you know what you are doing, the risk is actually _less_, not more.
And, as Edison said, genius is 99% perspiration and only 1% inspiration.


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## Eclectic12 (Oct 20, 2010)

praire_guy said:


> I get what you are saying, but it all seems shifty, and shady.
> 
> You are taking advantage of a situation not everyone can reasonably do.


Since when is equal opportunity available to everyone? I need to file a complaint as I've missed opportunities being stuck in meetings or when I haven't had cash. :biggrin:


I don't have the skills and knowledge that a construction worker I know has to to buy a rundown house, live in it while fixing it up and sell it a handsome, tax free profit. There's lots of people in construction who have the skills so I don't see how just because I don't have equal skills or access means there's anything shifty or shady involved.

Now if the construction worker is golfing buddies with the city procurement head honcho and all of a sudden, where he'd normally buy one property, he buys five properties at the same time in an area that the city expropriates a bit later - that's different (plus likely shifty as well as shady :rolleyes2: ).


Cheers


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## praire_guy (Sep 8, 2011)

Your handy construction buddy is also gaming the system. Tax free primary residence is not meant for flipping houses.


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## HaroldCrump (Jun 10, 2009)

praire_guy said:


> Your handy construction buddy is also gaming the system. Tax free primary residence is not meant for flipping houses.


Yet, that is precisely what that tax credit is being used for.
It may not have been _originally_ intended for that purpose, but nevertheless, that is what it has become.
The govt. is happy to stand by and watch because it helps them keep the R/E market pumped.
If they were the least bit concerned about it, they would have put some sort of cap on it (such as a max. amount of CG cap, or a number of years gap before you can claim that credit again).


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## Eclectic12 (Oct 20, 2010)

praire_guy said:


> Your handy construction buddy is also gaming the system. Tax free primary residence is not meant for flipping houses.


I suppose one could see it that way but then again, as he has a regular job and life with a wife plus kids - his version of a "flip" takes about six years.

If you prefer a cleaner example - I've known other construction workers who have bought cottage land, used their skills as well as contacts to cheaply build the cottage and then sold for a tidy profit. They had to pay taxes on it so there's no gaming involved, where lots of other people can & have done the same.

Cheers


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> Yet, that is precisely what that tax credit is being used for ...
> It may not have been _originally_ intended for that purpose, but nevertheless, that is what it has become.


Some use it for ... yes. 

On the flip side (pun intended) - the few I know who do this have put in a lot of time and effort, particularly where the spouse plus the kids have to put up with no bathroom and/or no running water. So I'm not sure how broadly this happens.

As a matter of fact - with the current housing market, the guy at work hasn't done this in over seven years as he's not seeing cheap enough houses to bother taking the risk.




HaroldCrump said:


> The govt. is happy to stand by and watch because it helps them keep the R/E market pumped.
> 
> If they were the least bit concerned about it, they would have put some sort of cap on it (such as a max. amount of CG cap, or a number of years gap before you can claim that credit again).


Or it could be when they look at all of the tax and money issues (ex. bogus charitable receipt schemes, TFSA swaps, bogus tax refund applications etc.) - the barrier of what's needed keeps the numbers low enough that there's bigger fish to fry.

Statistics on how much this is happening would help but likely the gov't is the main one in a position to figure this out.


Cheers


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## humble_pie (Jun 7, 2009)

construction workers & contractors in eclectic's examples are not gaming the system at all. People - including Garrett with his brilliant capers in Brick & other shares that paid off so well - are legitimately using their personal skills.

what i thought we were doing here in cmf forum is pooling knowledge & skills, because the path to success is so very steep & challenging.

i know about the derivatives part of Garrett's winning TFSA strategy, but where i totally lack expertise is the forensic financial drilling. I accept that i'll never have this skill.

companies teetering on the verge of bankruptcy alarm me enough that i stay away from all of them, on the grounds that many are going to topple completely into the brink & i don't have the skills to uncover whether some might have enough hidden value to attract a white knight bid for their corpse-like remains.

as i mentioned, there are CAs, economists & financial analysts in this forum who do have the necessary skills & training, so i'm assuming that they all paid attention to Garrett's capers each:


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## Eclectic12 (Oct 20, 2010)

humble_pie said:


> construction workers & contractors in eclectic's examples are not gaming the system at all.


Personally - I don't think using the primary residence to avoid taxes, assuming one is living in the house is "gaming". 




humble_pie said:


> People - including Garrett with his brilliant capers in Brick & other shares that paid off so well - are legitimately using their personal skills.


From what I understand - Garrett used the resources he had to find his moves and on them. So I changed my example to remove the grey area.




humble_pie said:


> ... i know about the derivatives part of Garrett's winning TFSA strategy, but where i totally lack expertise is the forensic financial drilling. I accept that i'll never have this skill.
> 
> companies teetering on the verge of bankruptcy alarm me enough that i stay away from all of them, on the grounds that many are going to topple completely into the brink & i don't have the skills to uncover whether some might have enough hidden value to attract a white knight bid for their corpse-like remains ...


There's where at times, at worst I thought there would be a short lived rally so I limited my exposure and bought a few. The calculated gambles either broke even or made a three fold or better return.

Like you, I don't know how to do this on analysis basis - so it has been few and far between.


Cheers


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## andrewf (Mar 1, 2010)

I think the residency period requirement for primary residence capital gain exemption is sufficient to prevent 'abuse' by flippers. Keep in mind that these flippers can't deduct any of their expenses from income either, so really all they are getting away with is any value added through their own home production. I don't think this is a big problem, and you can't flip houses every few months this way.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> construction workers & contractors in eclectic's examples are not gaming the system at all. People - including Garrett with his brilliant capers in Brick & other shares that paid off so well - are legitimately using their personal skills.


HP, most of us agree that Garett and his Brick warrants were a masterful trade.
I was responding to prairie_guy's comment about house flipping.
IMHO, that is an abuse of the original intent of the primary residence CG exemption rule.

And this matter is entirely unrelated to the topic of TFSAs, therefore, we went off topic.


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## humble_pie (Jun 7, 2009)

ok we got a bit off-topic but only by one tiny degree each:

the house/cottage examples were only introduced to show that scoffers, jeerers & parties calling for *investigation* of success are kind of draining energy.

better to examine how did the successful do it, imho. Better to ask oneself Is There Anything I Could Learn From This.

a very smart guy once showed me how this is what the internet should be about ...


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## Toronto.gal (Jan 8, 2010)

There will always be jealousy; human nature I'm afraid.


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## Eclectic12 (Oct 20, 2010)

humble_pie said:


> ok we got a bit off-topic but only by one tiny degree each:


Agreed ... though compared to some of the side discussions other threads have had, it's content was related as ...



humble_pie said:


> the house/cottage examples were only introduced to show that scoffers, jeerers & parties calling for *investigation* of success are kind of draining energy.


Though IMO, "scoffer" is a tad strong. 

At the end of the day, if "equal access to information" is the criteria for determining insider trading - there's a lot of investigations to be started up as just about any mutual fund or financial institution is going to have a lot more of it and in a more timely many than a one person band like me. :biggrin:


So it is an important criteria but I don't think it should be taken in isolation.


Cheers


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## Belguy (May 24, 2010)

Sometimes, I wish that some of you folks would talk down to my level.:stupid::stupid::stupid::stupid:


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## donald (Apr 18, 2011)

Flipping houses or making a profit living in a home for over a yr(rebuilding) and not paying capital gains tax is not the easiest nor so straight forward.Your bearing all the risk and there are no guarantees!Let's not pretend it is easy peeze!
It is a huge undertaking and the process can take a full year and a hell of a lot of work!
It is not ''easy'' money.
Nobody is stopping anybody from doing this....everybody is free to do this(being in the industry or not)


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## mrPPincer (Nov 21, 2011)

donald said:


> Flipping houses or making a profit living in a home for over a yr(rebuilding) and not paying capital gains tax is not the easiest nor so straight forward.Your bearing all the risk and there are no guarantees!Let's not pretend it is easy peeze!
> It is a huge undertaking and the process can take a full year and a hell of a lot of work!
> It is not ''easy'' money.
> Nobody is stopping anybody from doing this....everybody is free to do this(being in the industry or not)


Exactly what I was thinking.
It's not easy to keep renovating costs down, even if you are doing everything yourself.
One usually runs into a lot of unanticipated additional things that need to be done when renovating an older home.
The costs could easily become greater than the increase in the home's value when all is said and done.

People who are doing this to flip houses are improving the quality of the real estate in neighbourhoods and it wouldn't make sense to penalize them for it with a capital gains tax imho.
It would just make it that more difficult to keep their head above water and there'd be less people doing it as a result.


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## marina628 (Dec 14, 2010)

mrPPincer said:


> Exactly what I was thinking.
> It's not easy to keep renovating costs down, even if you are doing everything yourself.
> One usually runs into a lot of unanticipated additional things that need to be done when renovating an older home.
> The costs could easily become greater than the increase in the home's value when all is said and done.
> ...


We have been in Real Estate about 23 years now and every home we have lived in my husband put much time and money into it to improve it for ourselves.Our first home we were just starting out and did not have alot of extra cash so we would pick a project each year and spend $3000 -$5000 .Over nine years we did windows,roof,siding , two new bathrooms and ripped out the ugly basement and bought it up to standards.After expenses we made a profit of $28,000 over 9 years but if you put my husband's hours in there he probably worked for $14 per hour which was /is not much money.But we did live on the cheap in that house ,mortgage ,taxes and utilities were only $800 a month and we rented the basement to our relative for $450 but it allowed us to save for the next house and build some equity.
We did buy a Bungalow in Oshawa in 2009 and we planned on keeping it to rent long term but we spent $40,000 on it plus my husband's free time and flipped it a year later for $60,000 Profit after taxes.My husband had help on this house but he enjoyed working on it and probably made closes to $40 an hour pre tax on that project.
It definitely is not easy job to flip and the reason we made $60,000 profit is because in the year it took us to renovate the home prices around us increased on average 20% .We just bought a condo in Ajax which was probably the ugliest and most outdated in the building.


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## donald (Apr 18, 2011)

Marina,i had to source out a building lot(08)survey,get blue prints,buy drawings,submit to bank(after demoloshing a old house),apply for a construction mortgage,hook-up sewar & water,get 3 bids on about 14 different trades and stay in budget/time and quality along with visiting the job at least once a day(this does not include all the time spent at the plumbing supply outlets/electrical ect ect)while running a day business.
The bank makes you submit all costs before hand and gives it in 4 installments(each phase)It is highly stressful!And you do not know how it will turn out after everything is said and done.(you also have to carry it for a full yr/including property taxes ect ect)
The point is,it is not so simple!(RISK)There is this myth that it is easy(people watching ''flip this house" with armando montelongo.
My father and grandfather use to also build custom homes....building homes has a lot of moving parts and is time consuming and takes knowledge.....i always get this feeling ''white collars'' think it is a cake walk because it has a blue collar ''environment....They are typically the ones who lose there lunch on projects or moonlighting!love that about this industry....it is a smart *** banker who has a ego that usually gets killed being cocky doing ''side'' ventures-seen it before.(a mba or ca won't save u)


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## marina628 (Dec 14, 2010)

Donald we bought ugly and outdated but the house was only 28 years old for the flip in Oshawa and no changes to the exterior that is a new ball game .I am not that brave so hats off to you


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## Ethan (Aug 8, 2010)

This Calgary based financial planner has a TFSA balance of $172,382!

http://business.financialpost.com/2...housing-market-for-your-tfsa/?__lsa=3622-9285


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## My Own Advisor (Sep 24, 2012)

Awesome and lucky call on his part. Good for him!


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## avrex (Nov 14, 2010)

He’s got the largest TFSA …and now the CRA should give him a tax bill.


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## My Own Advisor (Sep 24, 2012)

I was wondering about the transaction as well....but didn't think much of it until I read your post Avrex. Was that a designated exchange?

http://www.fin.gc.ca/act/fim-imf/dse-bvd-eng.asp


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## Eclectic12 (Oct 20, 2010)

As it appears he broke the rules - I suspect CRA will be looking at it. 

I'm not sure the 1% penalty rule will apply though. 

Should CRA see this as a non-qualified investment, the text of the proposed TFSA changes say that under the *existing* TFSA rules:


> ... where a TFSA holds a non-qualified investment or a prohibited investment, the holder of the TFSA is subject to a tax equivalent to 50% of the fair market value of the property ...
> 
> Prohibited investments also trigger an additional income tax for the TFSA holder (equivalent to 150% of Part I tax in order to provide a proxy for the combined federal-provincial income tax rate) applicable to investment income earned on the prohibited investments. With respect to non-qualified investments, the trust governed by the TFSA is liable for income tax at regular federal/provincial rates on any investment income earned on non-qualified investments held inside the TFSA. The Income Tax Act does not provide for a similar Ministerial discretion to waive or cancel these additional taxes.


The changes that are now presumably in place are intended to remove the tax shelter from ancillary income derived from non-qualified investments.

http://www.fin.gc.ca/n08/09-099-eng.asp


I suspect this would add up to more than the 1% penalty.


Cheers


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## avrex (Nov 14, 2010)

Thanks @Eclectic12. You are correct
A couple of other people have also pointed out to me that the 1% monthly penalty refers to the over contribution penalty.

I have updated my post to reflect the possible penalty of 50% of the fair market value of the property.
Thanks.


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## avrex (Nov 14, 2010)

I have to give the Financial Post credit. 

They quickly updated their online article to reflect what I mentioned about possible tax consequences of this transaction. 
Upon learning of this, I'm sure that they wanted to clarify this with their readers.

They have added the following line to their article just before noon today.


> .... since a number of readers have pointed out that this may be a prohibited use of the TFSA. If that is the case, it will be subject to full taxation and possible a penalty.


*Update: June 18, 2013 9:00 pm.*
They have now updated the article again.
The article title has been changed from 
*"How about a big bet on the U.S. housing market for your TFSA?"* to
*"Is this winning stock TFSA eligible? Only the CRA knows for sure"*

The quoted section above has been replaced by the following,


> Indeed, a number of readers have protested that this product is a prohibited use of the TFSA. If that is the case, it will be subject to full taxation and possibly a penalty.
> 
> Under CRA rules, over the counter facilities such as NASDAQ OTC bulletin board, and the Canadian OTC automated trading system are not included in the list of designated stock exchanges.
> 
> ...


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## humble_pie (Jun 7, 2009)

something like this is what i meant far upthread by referring to the power of the media & how it can so swiftly & so unexpectedly turn against any subject. 

quite often, deliberately staying away from mass media can be the class act.

rushing to the media for no reason other than to get one's name into the newspaper can sometimes be a thoughtless act that backfires. It's cheap, in the sense that a subject may innocently believe he will obtain national publicity for free. But publicity is a double-edged sword, because the subject can never control what the journos & editors will report, let alone the lengths to which readers will carry the news.

look what has happened here to sharik hirani. It's terrible. It could even impact his reputation as a financial planner. All because he was thoughtlessly hungry for national publicity.


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## marina628 (Dec 14, 2010)

Even if he has to pay 50% to CRA I think he still may win bragging right .


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## marina628 (Dec 14, 2010)

I agree with you H_Pie on the going public issue , not something I could ever be comfortable with.


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## Eclectic12 (Oct 20, 2010)

marina628 said:


> Even if he has to pay 50% to CRA I think he still may win bragging right .


For the FP article ... possibly. 

After subtracting 50% - he'll come out somewhere around $86,191 - which is short of our CMF penny mining stock guy who was at or over $100,000. 


IMO, there is another problem here as this assumes that he's only going to pay 50% - which I believe was the old rules.


This seems doubtful as the new rules are supposed to deal with the fact that the old rules allowed


> ... the investment income associated with the {non-qualified) investments may remain tax-sheltered in the TFSA, resulting in an unintended permanent increase in TFSA savings and contribution room.


The new rules allow for


> ... *any income* reasonably attributable to prohibited investments will be considered an "advantage" and *taxed accordingly, i.e. at 100%.*



Cheers


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## CanadianCapitalist (Mar 31, 2009)

Even assuming the TFSA gains were taxed at 50 percent, how is that a good outcome when the trade could have been conducted in a non-reg and the tax would have been 25 percent?


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## avrex (Nov 14, 2010)

It sounds like we have a final clarification.

The title of the online article's title (and contents) changed three times over the last 24 hours. It went from,
*"How about a big bet on the U.S. housing market for your TFSA?"
"Is this winning stock TFSA eligible? Only the CRA knows for sure"*
and finally to,
"A bulletin board stock in a TFSA netted reader big gains"

They added the following line to the story,


> However, if shares are cross-listed with an acceptable exchange, they can be held in a TFSA.


Therefore, Mr. Hirani's $172,382 is all his.

The biggest surprise in all of this. The CRA got an answer back to the Financial Post writer within 24 hours. Wow, that's quick.


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## jcgd (Oct 30, 2011)

And it turns out the financial planner knew exactly what he was doing and was within his rights. Good on him. Maybe e got lucky, or maybe he is bright and knew exactly what he was doing.


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## praire_guy (Sep 8, 2011)

Where is this list of eligible exchanges/stocks? Etc?

Google didn't turn up much, nor did the CRA web site


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## avrex (Nov 14, 2010)

*[Update 11:00 pm]*
Another update was added to the online story.
The following quote from the CRA media person was just inserted into the article.


> “The income tax rules require TFSAs to limit investments to qualified investments. The list of qualified investments is similar to the list for RRSPs and includes shares that are listed on a designated stock exchange,” said Mylène Croteau, a media relations advisor with Canada Revenue Agency. She added since Fannie Mae is also listed on designated exchange, Mr. Hirani is allowed to hold it in his TFSA.


I'm glad the Financial Post actually got the quote from the CRA and updated their online article. 
Now us investors have official clarification from the CRA on this issue. Case closed.


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## Retired Peasant (Apr 22, 2013)

jcgd said:


> And it turns out the financial planner knew exactly what he was doing and was within his rights. Good on him. Maybe e got lucky, or maybe he is bright and knew exactly what he was doing.


I thought it was odd that a financial planner wouldn't have verified what was eligible for a TFSA - that's kinda basic.


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## Eclectic12 (Oct 20, 2010)

Retired Peasant said:


> I thought it was odd that a financial planner wouldn't have verified what was eligible for a TFSA - that's kinda basic.


True ... though with the number of shysters promising "I can call the company directly to get info where they won't bother with you" and then placing money in essentially MFs only - there seems to be a broad range out there.


Cheers


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## humble_pie (Jun 7, 2009)

in the event that there had been no Salvation by Stuttgart, i would imagine that the broker would bear a considerable part of the responsibility for an outlaw OTC purchase in a TFSA.

it doesn't surprise me either that the nat post would have used its powers at the highest level to extract a prompt opinion from the CRA. Otherwise the newspaper could have been accused of influencing or encouraging speculation in banned pink sheet penny stocks in registered accounts ...

if i were betting, i'd say that financial planner sharik hirani didn't think about the OTC restriction - his oversight - plus he didn't know about the stuttgart saviour. Rather, he was extravagantly lucky, for the 2nd time in a row on this stock. 

one can't help noticing that the nat post is not hearing anything from the $1 million-plus tax-free accounts. The ones whose transactions triggered the no-swapping rule from the minister of finance. Presumably these tfsa owners are avoiding the media spotlight :biggrin:


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## avrex (Nov 14, 2010)

The Financial Post online article has been updated again.

The CRA reminds us that the broker also has an obligation to ensure compliance.



> “Responsibility for compliance with the *qualified investment rules generally lies with the financial institution* that administers the TFSA. In this regard, financial institutions must take reasonable care to ensure that TFSAs hold only qualified investments. Failure to comply with this obligation may result in the financial institution being liable for a penalty under the Income Tax Act. In addition, if a TFSA were to invest in a non-qualified investment, certain tax implications apply to the holder of the TFSA and the TFSA trust,” said Ms. Croteau, also via email.


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## humble_pie (Jun 7, 2009)

avrex wasn't there something in this on-again-off-again story about regulated Stuttgart market vs unregulated stuttgart market?

something about how CRA might not accept securities traded on unregulated stuttgart ... oh dear, poor sharik, life is such a roller-coaster!


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## avrex (Nov 14, 2010)

Yes, they did update the online story "again" yesterday with the following.


> “Like many stock exchanges in the European Union (EU) the Stuttgart Stock Exchange operates two market segments, an official EU-regulated market and an unofficial market that is regulated by the exchange itself. Only the official market is considered a designated stock exchange for Canadian tax purposes. The unofficial market does not qualify. It is not recognized as an official market under European law, nor is it subject to stringent transparency requirements and investor protection regulations. It follows then that a listing on the unofficial market is not a basis to obtain qualified investment status for TFSAs. Unless the security qualifies under another provision, it cannot be held in a TFSA without triggering adverse tax consequences. These comments apply equally to investments for RRSPs and other registered plans that are subject to the qualified investment rules under the Income Tax Act.”


As of late yesterday, I had thought that the CRA had given Mr. Hirani their blessing on this transaction. But now it's not so clear.


> Mylène Croteau, a media relations advisor with Canada Revenue Agency, says Ottawa won’t comment on whether specific securities are allowed in a TFSA.
> 
> “Given the wide variety of investments that exist, the CRA does not make determinations as to whether a particular investment is a qualified investment except in the context of an advance income tax ruling or audit.” said Ms. Croteau, via email.


And here's the latest statement from Mr. Hirani.


> Mr. Hirani says he’s ready for the CRA, if it claims the investment ineligible. He got approval from his bank before making the trade.


Pretty confusing, huh?


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## kcowan (Jul 1, 2010)

Looks like the CRA will not give up!


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## humble_pie (Jun 7, 2009)

kcowan said:


> Looks like the CRA will not give up!


actually i believe the CRA hasn't even started yet.

willing to bet: the CRA is going to lock the door on stocks trading in the numerous unregulated european satellite exchanges. Stuttgart, apparently, has one. London has the AIM, said to be wilder, woollier & more teacherous than canada's own venture exchange. Sweden has FirstNorth OMX. Dusseldorf is an exchange where many canadian penny dreadfuls as well as countless US pink sheets trade.

closing the back door will keep the bureaucrats busy for months on end ...


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## avrex (Nov 14, 2010)

*MoneySense magazine - The Great TFSA Race*

I just received the latest MoneySense magazine (Dec/Jan 2014) in the mail. 

Similar to the Financial Post's query earlier this year, MoneySense magazine was also asking it's readers to let them know how well they were doing with their TFSA accounts. Here is the 'winner' of their search.

A 38 year old man, named Jim, has the *largest recorded TFSA with over $300,000*. Wow!

Here are some quotes from the article.


> "I have a good defined-benefit pension with my employer, so I knew I could take some risk with the TFSA. If it goes to zero, I'm fine with that."
> "I saw the TFSA as a way to swing for a home run."


The article also mentioned that he had maxed out his RRSP and that he was a conservative 'vanilla type of person' with his other investments.

So, how did he do it?
He made two consecutive all-in bets on two *penny stocks.*


I personally don't want to have a portfolio of just penny stocks.
However, depending on your own circumstances, it is reasonable to take on some risks in your TFSA account.

For example, if the majority of my portfolio is conservative, then there’s nothing wrong with taking on some riskier investments in my TFSA, as part of an overall diversified portfolio.


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## andrewf (Mar 1, 2010)

andrewf said:


> The winner will be someone who took a high risk, highly leveraged bet and had it work out.


From page one.


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## GoldStone (Mar 6, 2011)

avrex said:


> He made two consecutive all-in bets on two *penny stocks.*


Survivorship bias at its finest.

Did MoneySense profile anyone who reduced their TFSA to zero, by making all-in bets on penny stocks?


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## andrewf (Mar 1, 2010)

The best strategy is to buy a few thousand powerball tickets. Someone will win and have millions in their TFSA, and magazines will hail them as a genius investor.


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## Toronto.gal (Jan 8, 2010)

andrewf said:


> From page one: The winner will be someone who *took a high risk*, highly leveraged bet and had it work out.


How else could you have turned a $20K investment [he mentions $20K not $25.5K] into $300K+ in 5 years [as of July/2013], if not with high risk taking? He doesn't mention borrowing either. Today that account, at 84,000 shares, would be down by around $100K, however, he took profits along the way & made good use of them, ie: paying for a home, which is another investment in itself. 

*'two consecutive all-in bets on two penny stocks'* = gambling for sure and not the kind of article that belongs in anything titled 'MoneySense', but depending on the size portfolio, he wasn't exactly going to lose his shirt with $20K.

Many congrats to him!


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## wendi1 (Oct 2, 2013)

Funny - I also took a "swing for the fences" approach, at least initially. My TFSA is not at zero, but it lost enough for me to go back to large dividend stocks.


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## HaroldCrump (Jun 10, 2009)

> I have a good defined-benefit pension with my employer, so I knew I could take some risk with the TFSA. If it goes to zero, I'm fine with that


^ that is the reason he could (and did) take such a risk with his money.
This is a classic illustration of Milvesky's _Are you a stock or a bond_.


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## humble_pie (Jun 7, 2009)

GoldStone said:


> Did MoneySense profile anyone who reduced their TFSA to zero, by making all-in bets on penny stocks?



great idea. Let's ask MoneySense to write an article about these

only problem is that subjects willing to admit will be hard to find


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## HaroldCrump (Jun 10, 2009)

Writing about some folks blowing away $20K on penny stocks doesn't sell too many copies of the magazine.
Writing about someone turning $20K into $300K sells more copies.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> Writing about some folks blowing away $20K on penny stocks doesn't sell too many copies of the magazine.


It's called Money*Sense*, after all [natural understanding or intelligence]. 

That was a buy/hold story btw!

*Edit:* and one of those 2 penny stocks is up 9% 2day; due to CMF?


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> Writing about some folks blowing away $20K on penny stocks doesn't sell too many copies of the magazine.
> Writing about someone turning $20K into $300K sells more copies.



i'm not worried about sales so here's my ti-mot du jour: penny stock pumpsters are often mob-linked criminals operating in quasi-organized gangs.

in montreal, a member of the rizzutto mafia clan was nailed not long ago for trafficking in naked penny pink sheet shorts, along with his wife, who also born into a prominent new york mob-linked family. At the same time, the FBI arrested a montreal couple in miami, FL. They were members of the same gang.

all belonged to a loose apparatchik of roughly 20 persons, based in montreal & ottawa (yes one member was a respected high-ranking civil servant), who systematically, frequently, repetitively, every few months, launched naked penny shorts into the pink sheets. Regrettably, though, the kindpin himself is still on the loose.

the SEC & the mounties IMET division have a standing bilateral force that cooperates on cross-border penny stock scams. The authorities don't have enough manpower to pursue all of the perpetrators, so they concentrate on the rainmakers, hoping to eviscerate an entire gang by taking out the key players.

interestingly, not every company whose penny stock is being pumped (or shorted as the case may be) knows what is happening, or why. All they know is that their stock has suddenly gone to the moon, for no reason they are aware of. In other words, such a company is entirely innocent, but a pump operation has picked it for a campaign.

there's an obscure US pink sheet penny stock in the next section (under Individual Equities) that looks as if it may be one of those. The principals are retired US military of reasonably high rank, in addition to retired scientists from the US national nuclear laboratory in Los Alamos, NM. 

most of the principals' scientific publications are dated in the 1990s or 1980s. Only a few date as recently as the early years of this century. Meanwhile their stock has recently zoomed from four to 24 pennies. The story causes me to wonder if these highly qualified but somewhat over-the-hill seniors may have been deliberately picked for a pump campaign, because they would be powerless to stop the run, possibly not even quite able to understand it.

i was once investigating one of the penny stock scams mentioned above, the one whose 2 principles were eventually arrested in miami FL. One of their pumped non-companies had a president who had been, once upon a time, a real-life quebec-based geologist, with a traceable record, although it dated fairly far back in time.

the problem with the company was that the president had been dead for many years.


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## wendi1 (Oct 2, 2013)

Humble: I propose for the next edition of Webster's that we pump/promote the word "kindpin" - meaning someone who heads an organization whose purpose is the spread of fellowship and goodwill. And charity.

Better than "twerking", no?

"Well-known kindpin Stephen Lewis, speaking about his recent trip to Africa, reiterated the importance of helping others."


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