So last night we had our year-end Rock Star VIP event of the year.
And we had an "Ugly Christmas Sweater" theme going on.
We had about 130 people come out and gathered those of us who went with the theme for a picture.
It's a bit of a blurry picture so it's hard to find Nick in there but he's in the back row!
And I stand by my comment that I shouldn't have been in the picture because my Toronto Maple Leafs sweater was beautiful, definitely not ugly.
Anyway...on to serious matters.
First, in case you're living under a rock and haven't heard, last night Bitcoin hit USD$100K (~$141K CAD).
It's likely no surprise to Bitcoiners out there.
If you're new to this, the compound annual growth rate of this thing is wild.
With all of its volatility, the CAGR over the last 4 years is 50%.
Check this out from two days ago...
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The lowest rolling 4-year compound annual growth rate that we can find is approximately 26% (compounded, annually). This is absolutely insane.
So with all of its price swings, volatility and FUD (fear, uncertainty and doubt)...Bitcoin is still crushing every professional money manager's returns out there and it's been doing it for 15 years now.
Wild times. HODL on friends.
Next, real estate...
There's some fear popping up around the current regime's decision to finally pull in some immigration targets.
The idea being that less immigration is somehow going to kill the Canadian real estate market.
Here's a chart summarizing it...
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However, the government never gets anything right and this will likely be proven to be the case once again.
Check out this chart showing how they are with projections vs. actual numbers.
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And finally, here's housing starts in Canada.
We're just not building enough housing to support almost any sort of immigration at all.
We have a glut of new condo completions to get through but even condos have little to no supply coming on after 2028 because of the lack of starts.
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(We can't recall the source of these last two charts but we think credit goes to Mike Moffatt for them, so thank you Mike).
This country has a structural, long-term imbalance between housing needs and housing supply.
A change in immigration targets is welcome, but it's not nearly enough to making housing affordable or to "crash the market".
Again, to be clear, there are a lot of new condos being completed over the next two years, especially in Toronto, which can cause some softness there for sure.
It will be interesting to see how aggressive the Bank of Canada gets with rate drops and how aggressive the government gets with programs to "help Canadians" own a home (whatever they do will likely make everything worse, LOL).
Here's what we do know...
2025 is going to be wild.
With Bitcoin hitting new all time highs, yet again.
And with central banks, including the Bank of Canada, on a path to lowering rates.
With the current federal and provincial (Ontario) regimes mailing out cheques...the "easy money" is coming in again.
It's not right, it causes major misallocation of capital, but it's the reality of this old system.
So brace for a pretty fun and exciting 2025.
That's it for this week....
Tom & Nick
