Featured Article
Opening day is a glorious time for baseball fans. Warmer temperatures and blooming shrubbery are on their way, and more importantly, their favorite teams will begin a stretch of 162 games that culminates with a best-of-seven battle between the American and National League champions.
With leaves falling and colder temperatures upon us, most baseball fans are left out in the cold. However, here in Washington D.C., and no doubt in Houston, everyone is a diehard fan cheering their team on to a World Series crown.
Curly W’s, the logo of the Washington Nationals (Nats) baseball team, litter the streets, schools, and even office buildings of D.C. Everyone is on board the Nationals train, yet in August you could have spent a paltry $20 for a decent seat and shown up to a half-empty stadium to see the same Nationals play. Today, standing room only tickets for the World Series are said to be fetching $1000.
As the Nationals and Astros begin the World Series, the baseball gods are teaching us a valuable lesson that applies to investing as much as it does sports.
Bandwagon Bias
Within the last month or so, the Nationals and Astros have attracted a huge following of “bandwagon” fans. People who were casual fans or not even fans at all are gripped by a desire and the camaraderie of being with a winner.
Trina Ulrich, a friend of ours and sports psychology professor at American University, was recently interviewed by radio station WAMU to talk about the psychology behind bandwagon fans. The interview and article can be found HERE. Stay tuned as The Lance Roberts Podcast will be interviewing Trina in November.
Trina Ulrich defines the bandwagon effect as follows: “[It’s] essentially a psychological phenomenon that happens when people are doing something because others are doing it already.” Sound familiar?
We have written many articles describing and warning about the dangers of market bandwagons, in particular, investor conformity and the so-called herding effect. These biases are widespread in today’s market place and are extremely important to grasp….CLICK for complete article
Vivian Krause is Canada’s best investigative journalist (Robert Fife and Terry Glavin honourable mentions). Her tireless efforts churning through thousands of pages of US tax returns revealed the extent of US involvement in the opposition to Alberta oil and every proposed pipeline. Her new documentary Over A Barrel is a must see and you can do that for free until the end of the month.
Despite rock bottom borrowing rates, some Canadian real estate buyers are paying more. Bank of Canada (BoC) numbers show variable rates on residential mortgages made a big jump. Even with borrowing rates generally falling, variable interest mortgages are at a six year high.
Variable Rate Mortgages
Variable rate mortgages are when the borrower sees the interest rate fluctuate. Payments usually stay the same, but the amount that goes towards interest fluctuates. If rates rise during the term, the borrower pays more interest, and less principal. If rates fall during the term, borrowers pay less interest, and more principal. At the end of the term, depending on rates, you may have a bigger or smaller mortgage balance than expected.
Uninsured Variable Rates Are Up Over 26%
Uninsured rates made a very large increase over the past year. The rate paid on new uninsured residential mortgages hit 3.74% in July, up 1.63% from a month before. The rate is now 26.35% higher than it was during the same month last year. Rates are the highest they’ve been in at least 6 years, and likely beats that record for some time….CLICK for complete article
Noted Laval Economist, Stephen Gordon Calls the Election “the stupidest ever.” That’s an understatement when it comes to economic policy. Whether you’re issue is sustainable healthcare, the high cost of living, poverty or climate change – it all comes down to economics.
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Mike’s Editorial – Stop Treating Canadians Like Victims
Posted by Michael Campbell
on Saturday, 26 October 2019 10:11
The politics and policies that played out over the election seemed to collectively treat Canadians as victims in dire need of government assistance. This is a fundamental dis-service to those that really need our help.