laudable goal. I suspect it will end up like most other Canadian procurement projects. also why all the love for Canadian Pacific rail?
Why is HN so pessimistic?
It's the default for any non USA story.
Canada's first sovereign wealth fund
51–60 of 120 posts
Re: Canada's first sovereign wealth fund
#52This is a great way to sidestep the political process to fund popular projects. The political constraints will ensure returns are middling, so unless they subsidize with tax breaks on dividend income I think it would be a poor commercial investment. Whether its perfect or not, it almost has to be better than the current status quo.
How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP? Are they going to fund their "wealth" with debt? This is an oxymoron. You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually. And by the way, if you have -$3M, sorry, but you're the last person I want to invest money with... Norway gets to have a wealth fund because they have a…
GDP isn't wealth. This is closer to making $1M/year and owing $4 million.
Re: Canada's first sovereign wealth fund
#53This is a great way to sidestep the political process to fund popular projects. The political constraints will ensure returns are middling, so unless they subsidize with tax breaks on dividend income I think it would be a poor commercial investment. Whether its perfect or not, it almost has to be better than the current status quo.
How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP? Are they going to fund their "wealth" with debt? This is an oxymoron. You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually. And by the way, if you have -$3M, sorry, but you're the last person I want to invest money with... Norway gets to have a wealth fund because they have a…
> How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?
https://en.wikipedia.org/wiki/Canadian_public_debt this article says it's 57% of GDP. Where are you getting your 300% from?
Re: Canada's first sovereign wealth fund
#54Earlier quoted context omitted.
"We achieved superior risk-adjusted returns" as an excuse for sovereign fund underperformance is nonsense. PE (depending on how levered it is) inherently has lower volatility than buying public stocks. If your fund gets consistently lower returns than if you had just stuck everything in a 60/40 portfolio, the whole endeavor has failed.
I really like the ideal of just chucking it all in VTI (or, since it's Canada, some other equivalent). But does it still work at that scale? Or does the fund exert its own gravitational field on the index in question?
Not Canada, but Bank of Japan and the equivalent JP pension fund have juiced the crap out of domestic JP stocks with ETF purchases.
Re: Canada's first sovereign wealth fund
#55This is a great way to sidestep the political process to fund popular projects. The political constraints will ensure returns are middling, so unless they subsidize with tax breaks on dividend income I think it would be a poor commercial investment. Whether its perfect or not, it almost has to be better than the current status quo.
How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP? Are they going to fund their "wealth" with debt? This is an oxymoron. You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually. And by the way, if you have -$3M, sorry, but you're the last person I want to invest money with... Norway gets to have a wealth fund because they have a…
GDP isn't the only measure of wealth. Canada has vast resources that act as collateral for the debt. You wouldn't be friends with a billionaire who only owns stock and lives mostly off the debt issued against that stock?
Re: Canada's first sovereign wealth fund
#56This is a great way to sidestep the political process to fund popular projects. The political constraints will ensure returns are middling, so unless they subsidize with tax breaks on dividend income I think it would be a poor commercial investment. Whether its perfect or not, it almost has to be better than the current status quo.
How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP? Are they going to fund their "wealth" with debt? This is an oxymoron. You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually. And by the way, if you have -$3M, sorry, but you're the last person I want to invest money with... Norway gets to have a wealth fund because they have a…
>How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?
This seems to be incorrect. Including federal, provincial and local, the debt is about 110% of the GDP.[1]
The US has 3x more debt per citizen than Canada.
[1] https://www.imf.org/external/datamapper/GG_DEBT_GDP@GDD/CAN/...
Re: Canada's first sovereign wealth fund
#57This is a great way to sidestep the political process to fund popular projects. The political constraints will ensure returns are middling, so unless they subsidize with tax breaks on dividend income I think it would be a poor commercial investment. Whether its perfect or not, it almost has to be better than the current status quo.
How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP? Are they going to fund their "wealth" with debt? This is an oxymoron. You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually. And by the way, if you have -$3M, sorry, but you're the last person I want to invest money with... Norway gets to have a wealth fund because they have a…
> You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually.
I'm not sure the simile lands. If that $1M is financing a lavish lifestyle, then you are for all intents and purposes rich. As for the crushing down part, the modern economy shows us one can stay solvent longer than the market is irrational (especially true the more zeros are added to the numbers above).
Re: Canada's first sovereign wealth fund
#58Earlier quoted context omitted.
Is setting expectations based on track record considered pessimism?
Incessant nit picking, negativity and doubt casting is my issue. And Canada is unrecognizable these days. Why should I think past performance is indicative of future success?
> Incessant nit picking, negativity and doubt casting is my issue.
That has unfortunately been very common internet culture since 2020. It was there before the pandemic, but post-pandemic internet never recovered its full whimsy and veered headfirst into a depressive state. Probably says something about everyone's general mood.
Re: Canada's first sovereign wealth fund
#59[deleted]
Re: Canada's first sovereign wealth fund
#60Earlier quoted context omitted.
That seems fine as long as they can show lower volatility than market while still being close in return? Did they?
Why does it matter if volatility is lower than the market? Future payments in the short term are covered by inflows. You might as well maximize the returns now so that in the future when it's not covered by inflows you've acrewed a larger return.
> Why does it matter if volatility is lower than the market?
Because I can trivially beat the market by ~100% by going long on 3:1 margin.
The volatility is why that's a bad idea. One time out of five, the consequence of that investment strategy is 'The market had a crash and I lose everything'.
'Lol, YOLO' is not a great investment strategy for a well-ran country.