# GoEasy (GSY)



## timely (Dec 30, 2014)

Banks ran up a lot lately, so I was looking to buy something for more potential of rallying, within financials.
I do like HomeCapital and Genworth valuations and late come-back, after the shorts were proven wrong once again, but I prefer even more 'stealthy' stocks,
those that get little attention on BNN.

GoEasy
- 2.6% dividend
- PE = 10
- Last quarter was great
- 15% away from its 52-week high

I'm buying a half position at 19.15.


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## CPA Candidate (Dec 15, 2013)

I've held the stock for almost 3 years. The company has been doing great, but the stock has been stalled for 2 years. The more the company earns, the more the market discounts the valuation so the price never moves up much.

I think it's stuck in this same negativity surrounding financials in Canada with the oil bust, but it seems the big banks are finally breaking out of it. It hard to imagine if the market keeps rallying that eventually it won't filter down to GoEasy. The stock should be a lot higher. My target is mid-20s.


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## MrBlackhill (Jun 10, 2020)

Nobody talking about this stock?

Multiples are some of the cheapest on the TSX, other fundamentals are good (operating margin, return on equity, etc.).

Earnings are growing fast. The stock itself is growing very fast. It's even paying some growing dividends for those who like dividends.

I feel pretty confident about the growth of this one. But I don't like when I'm confident, so I want to be challenged by other opinions.

I know that many people don't like their business model.

Any opinion?


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## Pluto (Sep 12, 2013)

MrBlackhill said:


> Nobody talking about this stock?
> 
> Multiples are some of the cheapest on the TSX, other fundamentals are good (operating margin, return on equity, etc.).
> 
> ...


I like it. Revenue growth in the 18 - 20 % range. EPS growth around 26%. ROE 20 %. 
Ticks a lot of the right boxes. 
Niche market. Not aware of any serious competition. Previous company in this market was Household Finance but they disappeared - Apparently they were bought out then the market was abandoned but not sure about that.


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## doctrine (Sep 30, 2011)

I've owned GSY several times - recently this year made a nice 100%+ gain on it. It sells off at the first sign of financial stress and of course has an extremely resilient business model. Would buy again on any big pullback, but I typically wait for 40-50% corrections. It has so much free cash flow that once the selling stops, the buybacks take over.


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## james4beach (Nov 15, 2012)

doctrine said:


> I've owned GSY several times - recently this year made a nice 100%+ gain on it. It sells off at the first sign of financial stress and of course has an extremely resilient business model. Would buy again on any big pullback, but I typically wait for 40-50% corrections. It has so much free cash flow that once the selling stops, the buybacks take over.


Definitely a volatile sucker. In the 2018 rate hike scare, the drawdown was 44% versus just 16% for the market (nearly 3X the drop)

In the 2020 crash, drawdown was 74% versus 38% for the market (about 2X the drop)

It's performing much more strongly than the broad market. So it's high beta, but has a good risk-adjusted return nevertheless. Market cap is only $1 billion so it's a small cap, expected to be very volatile.

If picking small cap stocks is your thing, could be a good one!


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## MrBlackhill (Jun 10, 2020)

doctrine said:


> Would buy again on any big pullback, but I typically wait for 40-50% corrections.





james4beach said:


> If picking small cap stocks is your thing, could be a good one!


I already own it and I was thinking that I should've made it a bigger holding. I like it a lot.

But since it's very volatile and as @doctrine said and as I was also thinking, it's better to wait for a pull back.

First time I bought it, it was on April 15 (the date I started buying stocks for the first time of the year 2020) but I was being cautious so I took only a very small position which gained +159% so far. Then in June I decided to take a bigger position and that bigger position is now at +75% so my overall is +86%, but I don't plan buying more at this point since we're at all-time high.


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## MrMatt (Dec 21, 2011)

I love the business model, however I have several concerns, particularly with their lease to own service.

1. They prey on poor credit individuals. What happens when they can't pay
- This is hedged by the fact that their prices are so insane, they break even almost immediately.
2. Their pricing is predatory and IMO would violate usury laws, one good consumer protection complaint could destroy this business.
Playstation 4 Pro








Lease to Own SONY PS4 PRO CONSOLE, Financing SONY PS4 PRO CONSOLE Rentals in Canada | Easyhome.ca


4K TV gaming. HD power. HDR technology.




easyhome.goeasyuat.com




@$25/wk for 104 weeks = $2700 over 2 years
Retail 


https://www.londondrugs.com/ps4-pro-1tb-console/L6485676.html


$499.99. << at retail!!!

The rip off level is IMO so bad that
1. To even suggest pricing this bad makes me question their ethics.
2. They're are at huge risk of consumer default
3. They're at huge risk of government action.

I don't do business with unethical people, if they'll screw other people they'll screw you.


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## MrBlackhill (Jun 10, 2020)

Seems odd that you said you love their business model and immediately listed all the reasons why most people say they don't like their business model. 

I'd question the ethics, true. If the government takes action to decrease the legal maximum interest on a loan, they would be hit bad, true. Or maybe they are already at the limit of legal and that could be a risk, true. About defaults, I think their business model is already running smoothly with that risk.


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## MrBlackhill (Jun 10, 2020)

I think there's a sure thing though. As their business grows, it'll draw more attention and their business will be perceived negatively which will hurt them. They won't be allowed to continue growing at 40% CAGR and outpace banks. (I believe it would take at least two decades though, even at 40% CAGR)


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## MrMatt (Dec 21, 2011)

MrBlackhill said:


> Seems odd that you said you love their business model and immediately listed all the reasons why most people say they don't like their business model.
> 
> I'd question the ethics, true. If the government takes action to decrease the legal maximum interest on a loan, they would be hit bad, true. Or maybe they are already at the limit of legal and that could be a risk, true. About defaults, I think their business model is already running smoothly with that risk.


I love the business model, but I think that their rates criminal.
They get the full retain price in less than 6 months, then continue for 18 more months.

I think waterheater companies have the same business model, but the rates aren't quite as bad, and they don't prey on the vulnerable.


I think loans, product financing, futures contracts etc are all perfectly legitimate and reasonable business transactions.
I actually think commodity trading and futures markets are WONDERFUL.

That being said, I have little tolerance that will use these tools to exploit people.


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## Pluto (Sep 12, 2013)

MrMatt said:


> I love the business model, but I think that their rates criminal.
> They get the full retain price in less than 6 months, then continue for 18 more months.
> 
> I think waterheater companies have the same business model, but the rates aren't quite as bad, and they don't prey on the vulnerable.
> ...


I wonder if you have a credit card, and what is the interest rate on such unsecured credit? 
High rates are usually related to the degree of risk to the lender.


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## MrMatt (Dec 21, 2011)

Pluto said:


> I wonder if you have a credit card, and what is the interest rate on such unsecured credit?
> High rates are usually related to the degree of risk to the lender.


I used Loan Calculator

$25/wk for 2 years, on a $500 loan is an interest rate of 280%.

Credit cards max out at 30%
Criminal Usury s 60% in Canada

However payday loans are exempt (and limited to 390% in Ontario)








What is the Maximum Amount of Interest I Can Be Charged in Ontario?


Payday loans charge an equivalent interest rate of 546%. How can this be given interest limits in section 347 of the Criminal Code of Canada.




www.hoyes.com





Legal or not, I consider an interest rate of 280% unethical.

Honestly wait 4 1/2 months and save for your PS4, or furniture.


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## Pluto (Sep 12, 2013)

MrMatt said:


> I used Loan Calculator
> 
> $25/wk for 2 years, on a $500 loan is an interest rate of 280%.
> 
> ...


Save for your PS4: I agree. You talk as if customers are forced not to save for it.


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## MrMatt (Dec 21, 2011)

Pluto said:


> Save for your PS4: I agree. You talk as if customers are forced not to save for it.


No, I simply think it's unethical to charge criminal interest rates.
There are more than enough ethical companies out there, I simply choose to deal with them.

I also think poor ethics is a business risk, why would I choose to invest in a riskier business.

I understand that many people see a significant detachment between the stock market and the underlying investment (eg company). That is not my investing philosophy.


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## Pluto (Sep 12, 2013)

MrMatt said:


> No, I simply think it's unethical to charge criminal interest rates.
> There are more than enough ethical companies out there, I simply choose to deal with them.
> 
> I also think poor ethics is a business risk, why would I choose to invest in a riskier business.
> ...


"Criminal " is your subjective opinion. And since you are not the lender who has a responsibility to calculate risk with clients with no credit rating and bad credit, I think you word "criminal" is blather.


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## MrMatt (Dec 21, 2011)

Pluto said:


> "Criminal " is your subjective opinion. And since you are not the lender who has a responsibility to calculate risk with clients with no credit rating and bad credit, I think you word "criminal" is blather.


No, when I say Criminal, I specifically mean criminal in accordance with the Criminal code of Canada.
Criminal Code 347
"criminal rate means an effective annual rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds sixty per cent on the credit advanced under an agreement or arrangement; (taux criminel) "

Now there is an exception that makes it legal, but yes I hold that charging an interest rate of 280% is a criminal rate, as defined by the Criminal Code of Canada.


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## Pluto (Sep 12, 2013)

MrMatt said:


> No, when I say Criminal, I specifically mean criminal in accordance with the Criminal code of Canada.
> Criminal Code 347
> "criminal rate means an effective annual rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds sixty per cent on the credit advanced under an agreement or arrangement; (taux criminel) "
> 
> Now there is an exception that makes it legal, but yes I hold that charging an interest rate of 280% is a criminal rate, as defined by the Criminal Code of Canada.


Well the authorities don't seem to agree with you. This topic has all been discussed in another forum, and no it is not criminal. If you insist it is criminal, call the police and prove it. 

Is it ethical for banks to decline to loan money to these folks? You claim that you would only deal with ethical banks, but you don't seem to grasp that the clients we speak of were rejected by the banks. Is it ethical for the banks to turn them away?


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## doctrine (Sep 30, 2011)

GSY escapes the regulation oversight for the most part because they are not as far down the chain as the payday loan stores, which also operate legally. Their rates can certainly be high, but this company has a very significant and very visible presence in every province in Canada including Quebec now, they are not hiding in the shadows. You don't have to like it, but I would agree that they do offer credit to people who couldn't get it, and they also do still have to turn down a _lot_ of people who apply.

Let's also point out they write off 10-15% of all their loans. The big banks have loan losses that are a fraction of 1%. So no, other than giving people money outright, there are no other options other than the Payday Loan companies which will charge a lot more. GSY has found a way to make reasonable operating margins (_less_ than the big banks, I might also add) in the middle ground of credit profiles and provide loans to tens of thousands who would otherwise not be able to find it.


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## MrMatt (Dec 21, 2011)

Pluto said:


> Well the authorities don't seem to agree with you. This topic has all been discussed in another forum, and no it is not criminal. If you insist it is criminal, call the police and prove it.
> 
> Is it ethical for banks to decline to loan money to these folks? You claim that you would only deal with ethical banks, but you don't seem to grasp that the clients we speak of were rejected by the banks. Is it ethical for the banks to turn them away?


The interest rate is by definition a criminal interest rate under the laws of Canada.
The actual arrangement is apparently legal.
I'm sure all sorts of things are discussed on other forums.

Yes, I do believe it is ethical for banks or any other lender to refuse lending services to those unlikely to pay back the loan. 
I have not heard any reports that they were refused banking services.


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## Pluto (Sep 12, 2013)

MrMatt said:


> The actual arrangement is apparently legal.
> 
> 
> Yes, I do believe it is ethical for banks or any other lender to refuse lending services to those unlikely to pay back the loan.
> I have not heard any reports that they were refused banking services.


1. I'm glad you find it is legal. 
2. Why would they go there if they were not declined by the banks? Just cause you don't hear things doesn't make it so.


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## MrMatt (Dec 21, 2011)

Pluto said:


> 1. I'm glad you find it is legal.
> 2. Why would they go there if they were not declined by the banks? Just cause you don't hear things doesn't make it so.


1. It is currently legal, but it's really on the edge and I think this is a significant business risk. 
- I think the rates they charge are criminal, which is the ethical issue

2.They were declined loans, because they shouldn't be taking out loans.
They weren't denied other services, that would be a concern.


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## Pluto (Sep 12, 2013)

MrMatt said:


> 1. It is currently legal, but it's really on the edge and I think this is a significant business risk.
> - I think the rates they charge are criminal, which is the ethical issue
> 
> 2.They were declined loans, because they shouldn't be taking out loans.
> They weren't denied other services, that would be a concern.


Obviously what you think should or should not be for other people is you personal opinion. You sound like you want a totalitarian nanny state.


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## MrMatt (Dec 21, 2011)

Pluto said:


> Obviously what you think should or should not be for other people is you personal opinion. You sound like you want a totalitarian nanny state.


I just identified that I think charging criminal interest rates is a significant business risk, and makes me question the ethics of those running the operation.

From the numbers alone, sure I'd buy this, but I think the risk is too high for me.

Enjoy.


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## MrBlackhill (Jun 10, 2020)

Nice jump today.


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## Pluto (Sep 12, 2013)

That was a pleasant surprise.


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## MrBlackhill (Jun 10, 2020)

Bad press for GoEasy.



https://www.cbc.ca/news/canada/alternative-lenders-marketplace-1.5891676


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## Pluto (Sep 12, 2013)

MrBlackhill said:


> Bad press for GoEasy.
> 
> 
> 
> ...


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## MrBlackhill (Jun 10, 2020)

Yes I'm still holding GSY.TO for the long term and I'm pretty sure it'll be an amazing investment.

I'm just wondering if such bad press can affect them if it gets on a political momentum or if such article pops once in a while and is forgotten as fast as it appeared.


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## sags (May 15, 2010)

A senator has drawn up a bill to limit interest rates.

Easy Financial charges 49.9% interest. If the bill passes, these types of lenders would be impacted.

I would rather see the credit unions issuing small loans guaranteed by the government at a much lower rate.

Provide some competition for the alternative lenders and they will go away on their own.


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## Pluto (Sep 12, 2013)

To my recollection all these outfits have had press like this previously. 

Nothing wrong with the press noising about and seeing what's what. I like their investigations of used car dealers. repair shops and what not. Where would we be without a "free" press. 

All the lenders, even the big banks. charge rates according to risk. Nothing amiss with that principle. That's part of what a credit rating is about. If the banks see too big a risk, why just say no. They want high quality low risk customers. That leaves an opening for higher risk lenders. My understanding is Go Easy helps people with no credit rating or poor credit rating get a higher rating thereby earning a lower interest rate. Besides loans, they are offering experience and learning which, if effective, can only strengthen the financial fabric of the country. 

The do - gooders offer nothing but preventing the cat from sitting on the hot stove. No learning, no experience, just micromanaging.


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## sags (May 15, 2010)

The alternative lenders would have a stronger argument if they were more transparent on their interest rates and lending practices.

Requiring someone to to sign up for expensive "disability" insurance that is full of disqualifications, isn't teaching anything.

Advertising low interest rates that they never give to anyone is misleading. Telling people they can re-apply at a lower rate after a year is a falsehood.

In any event, I wouldn't want to see the alternative lenders disappear without a replacement in place.

A government secured loan from a COOP or charitable organization could do a better job of "teaching" while helping the clients.

Governments have exclusive powers of collection, so the default risk is largely mitigated and they can charge a lower rate of interest.


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## Pluto (Sep 12, 2013)

sags said:


> The alternative lenders would have a stronger argument if they were more transparent on their interest rates and lending practices.
> 
> Requiring someone to to sign up for expensive "disability" insurance that is full of disqualifications, isn't teaching anything.
> 
> ...


If this is true and you can find it out, why can't clients of these lenders find it out? You imply that a nanny state is required. When you get a nanny state you end up with a nation of toddlers who always look to nanny to fix things. What happens when the head nanny turns out to be a psychopath? Then you have a nation of toddler sycophant's who blindly follow Head Nanny. I prefer people who are educated, either self educated or otherwise, who can stand on their own two feet and think for themselves.


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## Pluto (Sep 12, 2013)

sags said:


> A government secured loan from a COOP or charitable organization could do a better job of "teaching" while helping the clients.


Go do it then. set yourself up as the charitable organization. No one is stopping you.


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## Gator13 (Jan 5, 2020)

Marketplace did an episode on Go Easy, Fairstone, Cash Money and Money Mart. All are charging interest rates of over 40% on their loans. Canada allows a max of 60%.

Definitely some very shady and high pressure sales tactics. Sky high insurance rates, interest on insurance, not allowed to take a copy of the contract until you sign. All of this clearly caught on camera. Definitely predatory.

I understand that folks should understand what they're signing, etc, but the truth is a lot of folks simply don't have the capacity. I also understand the high risk, etc the lender is takibg. The government needs to step in and better regulate this industry.


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## newfoundlander61 (Feb 6, 2011)

The people that go to these places for money must be desperate.


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## MrMatt (Dec 21, 2011)

sags said:


> A government secured loan from a COOP or charitable organization could do a better job of "teaching" while helping the clients.
> 
> Governments have exclusive powers of collection, so the default risk is largely mitigated and they can charge a lower rate of interest.


I don't think it's an education problem.

As for the default risk, it's still there.
The point is that these people are bankrupt or near bankrupt. They have little to no ability to pay the debt back.


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## OptsyEagle (Nov 29, 2009)

The point people miss about these alternative lenders is that without them these people would have zero options of borrowing money. Money is a necessity of life. If you take away a necessity of life, from any human, you will find their reactions to it will carry more hardship for them and society, then what these lenders are doing. That is why the government allows it. 

It is a competitive industry and it is a service that is as necessary as food.


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## MrMatt (Dec 21, 2011)

OptsyEagle said:


> The point people miss about these alternative lenders is that without them these people would have zero options of borrowing money. Money is a necessity of life. If you take away a necessity of life, from any human, you will find their reactions to it will carry more hardship for them and society, then what these lenders are doing. That is why the government allows it.
> 
> It is a competitive industry and it is a service that is as necessary as food.


But the problem is that they'll use these guys, and become even too risky for them, then they're still have needs.

We have to deal with the actual reason how people get themselves into such a situation.
Once they're too far for these, they'll go to even less ethical lenders.


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## m3s (Apr 3, 2010)

OptsyEagle said:


> Money is a necessity of life. If you take away a necessity of life, from any human, you will find their reactions to it will carry more hardship for them and society, then what these lenders are doing. That is why the government allows it.
> 
> It is a competitive industry and it is a service that is as necessary as food.


A major point of DeFi is that it is permissionless. Half of the population doesn't have access to banks and loans.


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## MrMatt (Dec 21, 2011)

m3s said:


> A major point of DeFi is that it is permissionless. Half of the population doesn't have access to banks and loans.


No.

Almost everyone has access to banks, and creditworthy people have access to loans.

If you can't get a bank account, you're likley not going to be able to get access to crypto.

If your current credit history is so bad that nobody will lend you money, I can't imagine the cryptspace is going to be all eager to lend you money either.


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## m3s (Apr 3, 2010)

You seem to be thinking of just the Canadian population rather than the world population

Peer to peer lending already exists in many forms - DeFi just makes it easier and more efficient


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## MrBlackhill (Jun 10, 2020)

GSY reports incredible results, increases dividend by 47% (it's been constantly increasing their dividend by such huge percentages), it's currently rallying and its short ratio is 9.23. What's not to like?


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## MrMatt (Dec 21, 2011)

MrBlackhill said:


> GSY reports incredible results, increases dividend by 47% (it's been constantly increasing their dividend by such huge percentages), it's currently rallying and its short ratio is 9.23. What's not to like?


The ethics of the management.


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## MrBlackhill (Jun 10, 2020)

My initial purchase of GSY during the crash just hit 4X (+300%).


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## sags (May 15, 2010)

You might want to keep an eye on the progress of Bill C-274, which would reduce the maximum interest rate to 20% over the BOC lending rate.

Adjusting the usury laws are also mentioned in the 2021 Federal budget.

Changes would not likely affect credit cards or payday loans (exemption for the Provinces to decide) but would impact a number of "alternative" lenders.

Rates of lending among the companies typically varies in a range of 39% to 49% per year.

Personally, I don't think it is a good idea to cut of lending sources for people who don't qualify for a bank loan, without being replaced with some kind of other method of financing.

Some companies do report to credit agencies which does give people a chance to improve their credit rating, and that is a good thing.

But it appears, the consumer groups have a different opinion.


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## sags (May 15, 2010)

Congratulations on jumping in when you did.

It reminds me of years ago I heard about a company called Carfinco that lent money at 49% to people to buy used cars. They put a GPS on it so they could track it and shut down the engine if the payments weren't made.

At the time, I had about $70,000 invested in penny stock biopharma companies and was immersed in that on a daily basis. It was pure speculation and gambling........and my money would increase $4000 one week and down $3000 the next.

I thought at the time I should sell all those penny stocks and put it all into Carfinco, at...........25 cents a share. But, as per usual I got distracted and forgot about it.

I finally sold out all my biopharma shares on an upswing.........and was thrilled to get out and make a few dollars.

Then one day I saw a headline on the business news........Carfinco bought by a big lender and paid I think it was $9 something a share.

Cripes....I would have had 280,000 shares but that is the story of my life...........a day late and a dollar short........LOL.


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## MrMatt (Dec 21, 2011)

sags said:


> You might want to keep an eye on the progress of Bill C-274, which would reduce the maximum interest rate to 20% over the BOC lending rate.
> 
> Adjusting the usury laws are also mentioned in the 2021 Federal budget.
> 
> ...



Just means the businesses will close, and these people will have no legal options to borrow money.


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## sags (May 15, 2010)

I think the Liberals are acting slow on the changes because they recognize the need to get something else in place for people who need affordable small loans.

Giving access to loans doesn't necessarily have to cost 49% a year in interest, or in the case of payday loans.....600% interest per annum.

Maybe these companies could borrow directly from the BOC at low rates and then charge a more reasonable rate of interest.

If the government is the final guarantor of the loan......they have the power to seize anything, including pensions and government benefits.


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## MrMatt (Dec 21, 2011)

sags said:


> I think the Liberals are acting slow on the changes because they recognize the need to get something else in place for people who need affordable small loans.
> 
> Giving access to loans doesn't necessarily have to cost 49% a year in interest, or in the case of payday loans.....600% interest per annum.
> 
> ...


What needs to happen is financial literacy and get these people more productive so they have more money.
It's bad to be overleveraged.


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## sags (May 15, 2010)

I agree..........the banks need some education in financial literacy.

These alternative loan companies and payday loan companies are gobbling up the profits.


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## MrMatt (Dec 21, 2011)

sags said:


> I agree..........the banks need some education in financial literacy.
> 
> These alternative loan companies and payday loan companies are gobbling up the profits.


The banks are poorly equipped to handle the high risk markets.

Great credit customers can today easily apply and get loans with very little (if any) human interaction from the bank side, all the transactions are handled by computer.

Payday loans are a lot more risk, and a lot more work.

If these restrictions are bad, the borrowers will just go to unregulated financial services, which is likely not good for them.


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## james4beach (Nov 15, 2012)

GoEasy is a subprime lender, and their success closely mirrors the American credit boom (and mania) in the early 2000s.

We have a runaway housing bubble, record low interest rates, tremendously easy credit (for homes, cars, and consumer goods) and companies like GoEasy are well positioned for the current environment. For example, GoEasy finances home furnishings and appliances, so as people buy homes they can't afford, and fill it with junk they can't afford, GoEasy is there.

I think they are incredibly exposed to the housing and credit bubble (the two are closely related) so they should do fine as long as the credit bubble continues. But they are also very exposed, if the "fun" ends.


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## MrBlackhill (Jun 10, 2020)

Looking at some of the stuff they sell... If someone is stupid enough (or rich enough that they don't care) to buy a "gaming chair" worth $300 for $12/week for 104 weeks, then I have no empathy and I'm happy those people are contributing to the valuation of my GSY shares currently running more than +300% in a year. That's just money going from the stupid to the wise. Darwin's natural selection. Meanwhile I'm making $100k a year, yet I'm buying a desk chair $30 at IKEA for my work-from-home setup, and I bought my desk $25 on Marketplace.

Some people have sad stories, but some are just plain stupid.


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## doctrine (Sep 30, 2011)

MrBlackhill said:


> My initial purchase of GSY during the crash just hit 4X (+300%).


Did you keep it? I got a 2X out of GSY last year, but have sold and moved most of that into oil (which has also doubled).


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## MrBlackhill (Jun 10, 2020)

doctrine said:


> Did you keep it? I got a 2X out of GSY last year, but have sold and moved most of that into oil (which has also doubled).


The position I bought in mid-April 2020 is currently at +326%. And I'm overall at +210% with the other (bigger) position I took a bit later. I'm still holding long.


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## james4beach (Nov 15, 2012)

MrBlackhill said:


> The position I bought in mid-April 2020 is currently at +326%. And I'm overall at +210% with the other (bigger) position I took a bit later. I'm still holding long.


Awesome! Just beware, this is going to be a volatile sucker. I had to reject it from my own portfolio because it failed my volatility screening criteria.

For example it could easily drop 40% and still remain in a technical uptrend.


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## MrBlackhill (Jun 10, 2020)

james4beach said:


> Awesome! Just beware, this is going to be a volatile sucker. I had to reject it from my own portfolio because it failed my volatility screening criteria.
> 
> For example it could easily drop 40% and still remain in a technical uptrend.


Yes, definitely.


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## MrMatt (Dec 21, 2011)

james4beach said:


> GoEasy is a subprime lender, and their success closely mirrors the American credit boom (and mania) in the early 2000s.
> 
> We have a runaway housing bubble, record low interest rates, tremendously easy credit (for homes, cars, and consumer goods) and companies like GoEasy are well positioned for the current environment. For example, GoEasy finances home furnishings and appliances, so as people buy homes they can't afford, and fill it with junk they can't afford, GoEasy is there.
> 
> I think they are incredibly exposed to the housing and credit bubble (the two are closely related) so they should do fine as long as the credit bubble continues. But they are also very exposed, if the "fun" ends.


When the credit bubble stops inflating a lot is in trouble.

Fortunately it seems that a lot of people used that COVID stimulus money to improve their situations, not to buy crap.


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## MrBlackhill (Jun 10, 2020)

I've touched a 5X (+400%) today on the first position that I took on this stock in April 2020, 16 months ago. Wow. My highest return so far. Sure, it's easy because I bought it during the dip of a flash crash.

(So that I don't look like I'm just bragging about the good picks, my worst pick is currently at -62% after 8 months. But let's just say that I currently have 5 picks at -40% or worse and 4 picks at +200% or better and overall my XIRR is currently more than 50%)


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## MrMatt (Dec 21, 2011)

Yeah it's impressive.
But they prey on people with bad credit.. at some point the cards will collapse.
I was lookign at Home Capital Group in the early 20 teens, but came to the same conclusion.

Good luck, but it's a risky stock, with IMO predatory practices.
When things go south, it will be fast.

I'd clear a few chips off teh board now TBH.


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## james4beach (Nov 15, 2012)

MrMatt said:


> Yeah it's impressive.
> But they prey on people with bad credit.. at some point the cards will collapse.
> I was lookign at Home Capital Group in the early 20 teens, but came to the same conclusion.


Yeah I think GoEasy and HCG are both sketchy lenders. But certainly correlate with the state of the real estate mania.


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## MrMatt (Dec 21, 2011)

james4beach said:


> Yeah I think GoEasy and HCG are both sketchy lenders. But certainly correlate with the state of the real estate mania.


There is going to be massive political interference in the real estate and financial markets to keep everyone "happy".
I think it's a pending disaster that will make the subprime crisis look like a well thought out plan.


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## MrBlackhill (Jun 10, 2020)

New all time high. My first position from April 2020 is reaching 6X (+500%).

Momentum plays are tough because I know it'll crash at some point.

I've noticed that AVDV (Avantis International Small Cap Value ETF) is holding GSY.TO as part of that Small Cap Value ETF, yet it shouldn't be considered value anymore, it's more like growth at the moment, but I'm pretty sure they keep holding for the momentum. I guess they've picked it cheap (value) and now they hold it through momentum, which is a sound strategy in my opinion. I'll be curious to know when will they sell. Sure thing, I'll still be holding the bag.


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## MrBlackhill (Jun 10, 2020)

That's ironic. I understand that people question the ethics of a company like GoEasy.

Meanwhile...









goeasy Ltd. Named One of Canada’s Most Admired Corporate Cultures


MISSISSAUGA, Ontario, Nov. 25, 2021 (GLOBE NEWSWIRE) -- goeasy Ltd. (TSX: GSY), (“goeasy” or the “Company”), one of Canada’s leading non-prime consumer...




www.globenewswire.com


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## MrMatt (Dec 21, 2011)

MrBlackhill said:


> That's ironic. I understand that people question the ethics of a company like GoEasy.
> 
> Meanwhile...
> 
> ...


You notice the Glassdoor rating of Waterstone human resources is lower than that of GoEasy.


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## james4beach (Nov 15, 2012)

MrBlackhill said:


> I've noticed that AVDV (Avantis International Small Cap Value ETF) is holding GSY.TO as part of that Small Cap Value ETF, yet it shouldn't be considered value anymore, it's more like growth at the moment, but I'm pretty sure they keep holding for the momentum.


Congrats on having a position in GSY. I was tempted to "join the party" but just couldn't do it.

Avantis tends to imitate Dimensional Fund Advisors, and I believe that they use a modified value factor technique that involves using a bit of momentum.

They are, after all, stock-pickers. They just use a bunch of academic work to convince everyone that their stock-picking is being done a "good" way. Of course, the same people will tell you that *your* stock-picking is bad.


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