The Canadian Investor - 5 RRSP Mistakes to Avoid and Investing Biases to Avoid
Episode Date: May 19, 2025Following up on our TFSA episode, we dive into 5 of the most common RRSP mistakes we’ve seen Canadians make—from contributing when your tax rate is low to accidentally double-claiming a ta...x credit. We also shift gears and explore the psychological traps that investors fall into, including the endowment effect, anchoring bias, and the disposition effect. These are the subtle but powerful behaviours that can quietly drag down your investment returns over time. To wrap up the episode, Simon revisits his past investment in Allied Properties REIT, why he sold it at a loss, and how the company and office space market have fared since then. Tickers of stocks discussed: AP-UN.TO Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor Spotify - The Canadian Real Estate Investor Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Finchat.io for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.
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Welcome back into the show. This is the Canadian investor podcast made possible by our friends and show sponsor EQ Bank, which helps Canadians make bank with some of the best rates on the market.
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Welcome back to the Canadian Investor Podcast. I'm here with Dan Kent. We have
a fun episode lined up here today. We'll be talking about some RSP mistakes, also some
psychological traps or mistakes that investors need to be careful for. And then we'll finish
off the episode. I'll be revisiting allied properties. The reason why I
wanted to revisit allied is because we talked about it a little bit a couple weeks ago when we you did
the news and earnings for Ryokan and we were kind of looking at allied a little bit at the same time.
I was looking at some of their recent results a little bit just
as I was seeing them so didn't really have time to prepare for that because we were just comparing
them on the spot. So I decided to do a deeper dive just to see how the business progressed.
I think it'll be interesting for people just to see how office real estate specifically urban
downtown office real estate high quality real
estate how it's doing how it's been trending allied as typically be seen as
one of the best reads when it comes to office real estate so we'll see how that
is trending especially since I sold my share about a year ago at this time after
holding it more than a year and a half. But like I said we will start off with some mistakes that are made specifically in the RSP. So four
mistakes that I think people really need to pay attention to that can be very
costly as well. And Dan feel free to interject because I did this first
segment but I know you'll probably want to chime in here. So the first one is I'll just mention just a quick I guess
brief on what an RSP is. Just some basics because I do know we have some new listeners that sometimes
are not as familiar with these investment vehicles and because also I used to do a lot of education
in my previous job and I can tell you even having worked in a financial institution where you think
most people know how RSPs work,
a lot of people don't fully understand how they work.
Even though we hear about them all the time,
I've seen it time and time again,
there's still a lot of confusion with them.
Yeah, especially you hear a lot of people say
that they're gonna buy RSPs when in reality,
that's one of the number one things I hear from a lot of people. But yeah, they're gonna buy our RRSP's when in reality that's one of the number
one things I hear from a lot of people but yeah they're they're a great account
but there's some situations where they're actually not a great account I
mean obviously that's depending on your on your overall situation but yeah it's
it's gonna be an interesting segment. Yeah so first RRSP's are tags for
investment vehicle and when I see say vehicle, I just said
investment account, that type of account. It's just a synonym here. You don't pay taxes now,
you end up paying taxes when you withdraw the funds from your RSP. There's no taxes really
applied within the fund. There are some little exceptions with ETFs and withholding taxes,
but let's just assume in general that you don't pay taxes while it's in the account
While the money in the RSP, like I said, it grows tax-free. It's only tax when it's withdrawn
All those are RSPs are typically for retirement money can be withdrawn earlier
If you have a regular RSP that is not locked in
You can usually like you can withdraw the RSP whenever you want so then you're
you're still young I'm still you know a few few more months that I'll still be
in my 30s well before retirement I could decide if I wanted to to withdraw some
RSPs there will be some taxes that will be applied obviously it's going to add
to my taxable income so typically the idea is that you want to put money into
an RSP because your taxable rate is higher right now, your tax rate is higher
right now, and you anticipate it being lower when you will withdraw your RSPs
typically in retirement. So that is the gist of it. The latest you can start
withdrawing your money is the year after which you
turn 71. So if you turn 71 in November of this year for example you'll have to
convert your RSP by December of that year so that the following year you're
starting to receive payments from your RSP in the form of a RIF. A RIF is a
retirement income fund. These are just the key points. Obviously, we could go into more detail.
There's some over-contribution penalties.
There's also this kind of $2,000 buffer that the CRA does kind of give you flexibility
if you do over-contribute.
But these are the general ideas behind the RSP.
Anything I missed that would be good for a bit of a primer on RSPs here?
Nope, that was well said.
Okay, so the first mistake is contributing to an RSP when there is a high likelihood
that your current tax rate is lower than your tax rate or your projected tax rate in retirement.
So that's pretty common, especially if you're younger and you're just starting your career
because early in your career, your income is lower
and therefore your tax rate will be pretty low.
Typically, and obviously this is just a general rule of thumb,
it may change from person per person,
so don't take this as financial advice.
The podcast is never financial advice.
These are just kind of general rule of thumbs.
But typically, the younger you are, if you're're very just coming out of school you get your first
job it's oftentimes just a better deal to put money in a TFSA because your tax
rate will be much lower but again it's still case by case the reality too is
that no one knows what the tax rates will be in the future the further you're
out the harder it gets to predict and I think that's a really important point.
And I think people oftentimes just forget about that.
They just assume that the current tax rates will apply in the future.
And although there's historical precedent, I think it's important to remember on a macro
stage here, we've talked about it quite a bit on the podcast, we're in a period of significant
change.
There could be some big changes on a global stage, but also in Canada, and that could
include tax rates, whether they go up or down.
But I'm just saying that if you're more than 10, 15, 20 years out from retirement, it gets
more and more difficult to properly plan that. I
know some financial planners will say well you can look at historically but
we're really entering a period of great change. I mean lack of better word I
think it's fair to say if people are familiar with Neil Howe, the fourth
turning when there is some basically the the world order is changing and that
could lead to some big changes domestically on the tax front as well. Yeah I think
that's one of the main like bear cases against the account wouldn't it be the
fact that you know the the tax rate is relatively unpredictable so you don't
really know you know if you're contributing right now and getting a
particular back you know a particular amount back because of your tax rate
like whether or not that will be beneficial down the line when you withdraw is, is heavily
dependent on, on the tax rates. And I think even, you know, it's if you're contributing
now and you expect your income tax to be higher in retirement, it's not all that beneficial.
But I think also if, you know, if you're in the lowest bracket, let's say, and you're,
I mean, if you're going to be in the lowest bracket, let's say, and you're, I mean, if you're gonna be in the lowest bracket
in retirement, even that leveled out element of,
the tax you're gonna pay then,
compared to the tax you're saving now,
kinda makes the TFSA a little bit better of an account.
And I know that's, we talked about that,
yeah, last week on the TFSA mistakes.
That's why I think it is the best tax sheltered account, the TFSA.
But also if you're a high income earner, I mean, the RSPs are pretty great, especially
because you're going to get that large refund now. And then theoretically in retirement,
you're probably not going to be making that type of income. So you can pull it out and
kind of get that net benefit. But it really depends on the situation overall,
like individually.
Yeah, and there's a way to structure things too, right?
With CPP, when we retire, you can decide, you know what?
I'm gonna delay CPP as much as I can
to have a higher benefit and to make sure
that I'm still receiving income,
because if I'm delaying CPP, I'm not getting income
from CPP, which is the Canada Pension Plan.
Well, I'm going to withdraw more from RSP because I'll be in a relatively lower tax rate during
that period of time. So there's some ways you can be strategic about it. You can also be strategic
and midway through your career, for example, maybe have a year or two where your income is much lower.
That oftentimes will be a really good opportunity to withdraw some money, whether it's example, maybe have a year or two where your income is much lower. That often time will
be a really good opportunity to withdraw some money, whether it's an unpaid maternity leave
or it's a mat leave where you don't have any top-up benefits or parental leave for whatever
reason or maybe you lost your job or whatever it is, it could be a very opportune time to
withdraw those RSPs because you are at a much lower tax rate.
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Now, I'll move on to the second mistake
because we do have a whole lot to cover in this episode.
Holding investments that are not appropriate
with your retirement timeline.
I think this is very, very prevalent.
This could apply in two general ways.
The first one, you're holding too much cash, GICs, bonds,
cash-like instruments, when you have decades left
before you will start needing the money.
So you're too conservative in your investment mix
when you have, like, let's say decades before retirement.
And then on the other end, you're holding too much
in terms of risk assets, like equities,
when you're just a few years away from retirement.
Now the first one holding too much cash-like instruments
decades out just means that you're likely not going
to reach your goals for retirement.
That's the most likely outcome
because you're going to have a lot of trouble
just keeping up with basically purchasing power,
with inflation, with those type of instruments. If anything, you may lose purchasing power with
these. And then on the other hand, if you have too much equities, and I know this is very prevalent
right now because people are becoming complacent and I've seen what equities have done over the
last couple of decades. If you're weighted like 80-90% equities, you're playing with fire if
you're very close to retirement. You're just a massive correction away of really
hurting and potentially having a major impact on your retirement plan. So it's
really important to properly, I'm looking for the words, but really have an asset
mix that makes sense
with your retirement horizon.
Yeah.
And I think on the situation of owning too many equities, I think this is especially
if you're trying to structure your retirement around dividend stocks, which is a very popular
situation.
I mean, I guess you can get overloaded with equities
relying on that generation of dividend income
when in reality, I mean, especially when you get closer
to retirement and you're talking about sequence
of risk returns, I mean, the best way to do that
is just proper allocation in terms of an overall portfolio.
And I mean, I've never seen a situation in the RRSP
where people are holding a lot of like GICs,
cash and stuff like that.
But the TFSA, I've seen this as, you know, really?
Yeah, that's crazy.
Yeah, and it's like, if you think about it,
like it's obviously not as tax friendly as the TFSA
in terms of withdrawal basis,
because the TFSA is tax free on withdrawals.
But I mean, you take 20 years of tax deferred returns that adds up over time for sure. When you know,
even a percent or two extra in the RRSP over a couple decade long time period is pretty
significant.
No, exactly. So the next mistake here, not having a beneficiary, this is a really bad
mistake and it's easy to correct. You just, you know, name a beneficiary. Yeah, saying
a few papers, a lot of institution will allow you to even do it online. The reason for that
is if you don't name a beneficiary and pass away, the amount is considered fully taxable
at your current tax rate. So the full value of your RSP.
If you do have a spouse name, for example, then the RSP can be rolled over, which allows
your spouse to be more tax efficient with the withdrawal.
This is a mistake that can cost you depending like obviously how big your RSP is.
This could easily cost you tens of thousands of dollars just because you're you ended up not having a beneficiary and the tax
efficiency went out the window. Now if it like I don't know too too much on RSPs
but if you if you passed away and your spouse was the beneficiary did they have
to withdraw it or do they have to can they actually keep it in there until? My
understanding it's rolled over to their name.
So the RRSP is rolled over, it stays in the RRSP form.
So that's my understanding what I read.
If I'm wrong, let me know, but that's, I'm like 99% sure that's correct.
The next one is mistake four, claiming the tax credit twice for contribution.
So a lot of people, and I had to go over it with you before the call, so a lot of people
may not be familiar with this.
It really typically happens under one type of situation when you have the possibility
of doing payroll contributions to an RSP.
So basically your employer allows you to put pre-tax
dollars, so dollars that have not been taxed, straight into an RSP. What that
does, it gives you the tax credit upfront essentially because you know you don't
have to... for example if I'm contributing to Questrade where my
RSP is, well when I'm contributing, I'm actually contributing post-tax dollars.
So when I file for my taxes, I'll get a tax refund.
But if you do it straight off of payroll, it's a tax credit that you get upfront because
there's no taxes being taken off.
And this is a mistake I've seen at my old job time and time again, people doing it,
not realizing it. So the situation where we encounters was
in February of every year, people got a bonus
for the work that they did the previous year.
So it was paid in February.
And that's important because the first 60 days of the year,
you can make contributions to an RRSP,
but apply them to the previous calendar year.
So for example, this year, just assume someone got a $10,000 bonus.
That's a gross amount.
They decide to have payroll directly put that in their RRSP.
There's no taxes taken off.
Well, that was paid in February 2025.
So it's going to apply to the 2025 tax year.
If you want to apply it to the 2024 tax year because it's in the first 60 days,
you have to be very careful. And what I've seen a lot of people do in those situations is
they don't get any taxes taken up upfront because it's a direct transfer. But then when they filed their taxes
this April for the 2024 tax year, they apply the tax credit for 2024. So they essentially end up
claiming twice, but don't worry, the CRA will catch up to you in those situations. So yes, you'll net and you'll get a nice tax refund for 2024.
But what will happen is for 2025, you'll owe taxes
because you ended up putting the RSP contribution,
the tax credit, you applied it to the previous year.
So when you were not taking off any taxes,
when you made that direct transfer in the current year,
then you'll have to pay the piper a year later.
So you have to keep that in mind.
And I saw a lot of people who got into a vicious cycle
of constantly doing that every single year.
And then after five years, they need the money one year.
So they decide to get their bonus just paid out to them.
And then when they file their taxes,
they get a salty tax bill because they hadn't realized
that they were doing that
and essentially
getting to that vicious cycle.
Yeah, this is as we had mentioned before we started recording, this was something that
I did.
I mean, it was probably back when I was a lower income earner, like I back in like 2010,
I was pretty much maxing out my RSPs every year to try and get enough money for the for
the home buyer, like the first time home buyer.
And I, I used to do this too. I didn't even know this was a thing. But again, I probably did get hit
with a tax bill eventually, but I wasn't really making that much back then. So, it probably
wasn't, you know, it's a dollar amount that I can't really remember. But yeah, even at the time,
I've never even thought of this. So, yeah, it's interesting.
Yeah.
And I guess on the tax file, let's say mistake number five, I had four, but mistake number
five is thinking that the withholding taxes will cover your tax bill.
So when you withdraw RSPs, the financial institution that you have the RSP with will have a withholding
tax.
So they'll tax you depending on the amount, depending if you're in Canada or Quebec,
because the rest of Canada will have a different withholding tax versus Quebec.
They'll take off, let's say like 10, 15, 20%, whatever the amount is.
Well, one big mistake that people will do is they'll assume that they just paid their taxes, they're
good to go, but that withholding tax is not necessarily reflective of the tax rate that
you're paying currently. And I made that mistake myself when I was younger and you have to be very
aware that it's very possible that they did not take off enough taxes. So make sure that you do some rough calculation
and you do set some money aside.
Or at least if you figure out that they did take enough taxes
off, that's fine.
But that's something really important
because you could have a nasty surprise again
when you file your taxes with the CRA.
Yeah, if you are a high income earner
and pay a 10% withholding tax on the withdrawal,
you're probably getting
hit with another 20% bill when you file, like depending on how much you're earning.
Yeah, exactly.
So these are four mistakes I think people have to be careful.
The one that I gave an example for my previous employer, that's a very specific set of circumstances.
It's really more when it happens in that first 60 days
of the year and you get typically a bonus. It could happen in other circumstances, but
I think that's the most common one.
Now we'll move on to the next part here. You have some psychological traps for investors.
I know you have a lot of note. We'll try not to make it too long, but I think we'll be
okay to get it done under
50 minutes for the whole recording. Yeah, so we did the TFSA and the RSP, and I figured it'd be pretty good to tackle some of the biggest mistakes I've personally witnessed
just over my, well, I've been at stock trades for a decade. You know, this is not like kind of surface level mistakes,
like mistakes that investors are aware of.
They tend to be like more on a psychological and even sometimes like a subconscious level.
I mean, I could almost guarantee that every single listener listening to the podcast
has probably made every single one of these errors and might even continue to make them.
I mean, I do. They're really hard habits to kick. podcast has probably made every single one of these errors and might even continue to make them.
I mean, I do.
They're really hard habits to kick.
And first off, I will say that I had no idea of the actual names of these mistakes.
I just knew what was going on, but I figured that out.
But the first mistake is called the endowment effect.
And this is probably the one that has the largest overall impact on
investment returns and just overall investment results.
And in a nutshell, this is kind of our natural tendency to place higher
value on something that we own.
So this wouldn't only apply to stocks.
I mean, I'm sure everybody has had some sort of item they've owned where
there's definitely a gap in the actual value of the item versus our perceived value of that item.
You know what it makes me think of for all like the sports fan out there and obviously
I know there's a lot of hockey fans listening to is when you're talking about prospects
and your team's prospects are always like the best ever, right?
And people tend to forget that they probably view the prospects
or the teams themselves review their own prospects way higher
than oftentimes the other teams will view them.
So that that kind of made me think of that.
Well, and that's exactly what it is.
It's like it's.
As soon as you own something,
you generally tend to have a biased view on that asset,
whereas somebody who is taking kind of an
outside objective view on it will probably be able to spot the issues like very quickly.
I mean, if we think of other things, I mean, you can think of like homes, automobiles,
collectors items, things like that. I mean, a lot of people, you know, when they go to
sell a used vehicle, they think it's worth a lot more than it actually is. And I mean, sometimes you get, you know,
somebody coming in and telling you what it's worth, but this happens a lot with stocks as well.
Again, like you'll naturally take a more unbiased approach to stocks or ETFs you don't own. You'll,
you know, you'll be easily able to spot the flaws or issues, but for stocks we own,
we tend to focus more on the positives.
I wouldn't say outright ignore the negatives,
but kind of play them off as not a big deal.
And the one situation I can think of
is something like BCE.
I mean, there was a lot of commentary from outsiders
who didn't own the stock
that did believe that the dividend needed to be cut.
And operationally, this company was really struggling. However, you know, there was a lot of warning signs,
but a lot of holders that own the stock kind of, you know, spoke on how they'll navigate
through the situation, the dividend will, it'll become more affordable next year. You
know, the management team is, is top notch.
Oh, my favorite one. They've been paying it for a hundred years.
Yeah, exactly. I mean, it's yeah, there's this even if you don't
realize and you might not even know that you're doing this.
Like this is one of the ones where you can be making this mistake
and you might not even realize it.
But once you do recognize that, you know, this is a mistake and
the issue exists, you'll start to notice you do it all the time,
not just in stocks, but just in everyday life. And the quicker you can eliminate this issue,
the better your buy and sell decisions will be inside your portfolio. And I was looking up a
study prior to this and I actually couldn't locate it, but they said that, I believe it was done back in 2022. And they said that 43% of retail investors
struggle to sell a losing position that they've
owned for more than two years.
I mean, they get emotionally attached to it.
And just overall, I mean, they value the asset
higher than what it is, when in reality, somebody
on the outside telling you to sell the stock for the last year or so, they tend to have a bit more objective approach.
Yeah.
Yeah.
I mean, I think that's so true.
I've been guilty of that in the past too.
So it's not like I'm immune to that sometimes.
That's why I like to listen to different views, not only for the stocks I own, but typically
just for everything in general.
I like to seek out views that I think I will disagree with.
And then at least I get another perspective and then I can try and make a better decision.
I mean, it's not perfect.
And I think you're right.
Sometimes we're just innately
resistant to that because we don't want to admit that we might have been wrong, for example.
Yeah, definitely. But the second mistake is probably the most common. And that would,
well, the most common I've seen for sure, and that would be anchoring bias. And anchoring bias would be
when an investor focuses too much on an individual piece of
data that pretty much becomes our anchor for the investment.
And this is typically made right when we make the initial investment, but it can end up
dragging on for years.
And there's a multitude of anchors you could come up with. But I mean, the most common ones you'll see is a specific valuation
multiple and adjusted cost basis, a 52 week high or something like that.
So a prime example of like an anchoring situation is an investor will make a purchase of the stock
based on the fact it's trading well below its 52 week high.
That 52 week high becomes the anchor.
So I mean, their investment thesis primarily revolves
around that stock returning to that 52 week high.
And I mean, we tend to ignore fundamental results
and instead we kind of fixate on that price point.
And the other situation where this would creep in,
and I see this a lot, is the adjusted cost basis.
So we buy a stock at a particular price point,
that ACB effectively becomes our anchor
and it kind of impacts our decisions made in the future.
And I think this is like deeply rooted
in the buy low, sell high concept.
So I mean, investors, they're obsessed
with bringing that adjusted cost basis down.
So they accumulate shares when it's below this price point
and they tend to avoid purchases as it gets, you know, above that price point. And the difficulty here
is like the stock prices for the most part, they actively reflect the value of the business
at that point in time. And obviously the market is, I don't believe the market is 100% efficient,
but generally it is fairly efficient. There can be miscalculations, things like that.
But the prices move with the quality of the business.
So I mean, anchoring to something like an adjusted cost basis kind of combined with
the mentality of buy low, sell high, it can actually end up in us, you know,
accumulating poor quality businesses and avoiding high quality ones.
And this is actually this is another one.
And this is one that's probably the worst.
And that would be analyst price targets
or like a fair value calculation they see on a website.
Or even like as basic as someone buys a sock
for say $100 and then it's down 50%
and they're like, oh, like,
I know the business not doing well,
but I'll sell it when it gets back to 100. Yeah when I'm even that's a classic one
That's the next one. That is yeah, that one is yeah
it's we'll get into that that one's actually probably the the most interesting one of the bunch, but
The the analyst target and the fair value calculations. I've seen this a lot
So, you know a firm a bank an, they'll issue a price target on a
company. The company will buy that company and that price target becomes the anchor. So, you know,
you have a $200 stock and an analyst puts out a $300 target. You buy it because of that. That $300
price is now your anchor. And a lot of people get obsessed with those price targets being hit. And
I mean, I won't name any websites individually, but most discounted
cashflow calculators, they're terrible.
Like they're really not that like these, they make them, they're automated,
very little human involvement.
And, um, they tend to be overly bullish almost all the time.
And in terms of price targets, so they they've done numerous studies over the
years that pretty much prove
they're close to useless.
Back in 2014, I believe they ran a study that looked into the accuracy of analysts 12 to
18 month price targets.
They collected all these analysts targets, analyzed them for the 18 months over numerous
time periods and they found the accuracy rate is around 30%.
So that means out of a hundred price targets, 30% of them actually would have hit those targets 12 to 18 months later.
So I mean, I don't know about you, but that's just it's you can probably attribute most of that to luck.
I mean, I'm sure if you gave retail investors a hundred stocks and told them to pick targets on all a hundred,
I could see them getting 30, right? Give or take. Just overall, I mean,
investing is far too complex to focus on one individual anchor point for an
investment, whether it be, you know,
say the company typically trades at 15 X earnings, it's trading at 10 X now.
So that's, you know, you're kind of hoping it'll get back to that valuation
multiple. I mean, it could be a dividend yield. It could be a price target 52 week high things like that
Yeah, no, that's that's really good. And the last one here the mistake number three
disposition
disposition effect
So this is a mistake that I actually make to this day
However, now that I've become a little more aware of it,
I actively try to avoid it at all costs,
but it definitely creeps in.
And this focuses on the fact that investors tend
to sell winning investments way too early
and they hold onto losers for way too long.
So this kind of combines a bit of anchoring bias
into it as well.
I mean, we kind of fixate on a set amount of gains we're comfortable with.
Let's say 100%.
We sell the stock off after it's reached that despite the company performing pretty well.
And on the losing side of things, sunk cost fallacy creeps in and our anchor is typically
break even like you had mentioned.
I mean, I can't tell you how many times I've heard the, I don't really like this stock anymore,
but I'll sell it when I break even.
I mean, it's crazy how many people
actually adopt that mentality.
And I mean, that's because we fear loss
much more than we desire gains.
I mean, this is a deep rooted mentality,
primarily from the fact we're engineered
to protect what we have and avoid danger overall.
And so this is why,
and I'm sure every single investor listening
to this podcast has experienced it,
it's much easier for us to pull the trigger
and sell a stock when we're up 100%,
but selling something we're 50% in the red on
is near impossible,
especially if you don't acknowledge the fact
that this is kind of like a,
it's a deep-seated issue that a lot of people have.
And to contrary to what many people would think, I actually believe that selling too early actually costs more investors more money than hanging on too long.
I mean, this seems kind of counterintuitive, but it does make sense.
I mean, if we buy $5,000 of a stock, our maximum loss is $5,000. But I mean, selling too early, it our maximum, I guess I wouldn't say loss,
but I don't know the correct word for opportunity costs.
Yeah. Opportunity cost is effectively infinite.
So I mean, selling a multi-bagger too early will cost you more
actual dollar money than holding on to a loser too long.
Obviously, that would come into the situation where every stock you sell 100%
up is, it turns out to be a multi-bagger. That's not the case,
but it does happen and you know, eliminating it,
eliminating this mistake is probably the toughest out of them all. This is,
because again, it's, it's just a, it's deeply rooted. And I mean,
the quickest way to becoming more comfortable with selling at a loss, and this is something that I do is just thinking of the loss as realized all the time, even though it's not.
For example, if I buy $5,000 worth of stock and it falls to 2,500, the $50 loss is irrelevant
to my eyes.
All I'm thinking about is where that $2,500 is best placed moving forward.
Sometimes it will be in
the current stock. Sometimes it will be elsewhere. But I mean, the element of breaking even and
selling so you don't have to take that mental hit of losing money on an investment, that is one that
I think is kind of irrelevant. I mean, these are just obviously just random numbers by me.
But if you hold on to an investment, say you bought that stock, it fell 50%
and that stock earns 4% a year
because it's really not all that well performing.
It will take you 18 years to actually get back
to that $5,000 mark.
Whereas if you were to put it
into a better investment earning 8%,
it's about nine years to break even.
Obviously like picking something that would return double
the current holding you have,
it's not as easy as it sounds,
but it just shows you that,
cutting losses and putting money
in better quality investments does,
it will help your portfolio's returns overall.
And on the winning side of things
and the prevention of selling winners too early,
I just kind of say that you need to focus on fundamentals. I mean, if I sold every stock I
was up 100% on, I would have made the correct decision a couple of times. But like most of the
time, I mean, I would have actually cost myself returns. I mean, if you think about it, if a
company doubled its earnings per share and its stock price doubled, I mean, that business isn't
any more expensive than it was when he first bought it.
So don't let the actual dollar amount of gain get in the way of actually, you know, the
underlying fundamentals of the company.
And definitely don't let that, nothing more than a mental hurdle of, you know, not wanting
to lose money on a stock.
So you're not going to sell, you're just going to hang around until it breaks even.
Yeah, I think personally, that's why I think trimming is such a powerful tool.
You can use it either way, right?
So if you have the big, big winner and it's just becoming a huge portion of your portfolio,
let's say it's 15, 20% plus and you're starting to lose sleep, which I think is a key thing,
it's starting to stress you out.
I've said it time and time again with Braden and look,
there's nothing wrong if the fundamentals are good,
but the valuation is just very expensive
and it's too big of a part of your portfolio.
There's nothing wrong with trimming a little bit.
It doesn't have to be an all or nothing.
And I think that's where a lot of people make the mistake
is they tend to see things as an all or nothing.
So with trimming, you actually kind of hedge it, right?
Like you kind of say, okay,
I may be missing out on more gains.
That's fine, I'm comfortable with it.
I will trim it back.
I'll book some profits,
but I'll still keep a healthy position as company
because I think the prospects or whatever investment it is,
I think the prospects are very bright going forward in the future.
But you know, it's still making me nervous and there's still some possibilities that
it does not pan out as well as I think.
So I'm taking those profits and same thing if you're looking at a loss.
I mean, maybe you still think the company can turn things around and get back to your money, but you have some doubts
Well, okay, like you have 2,500 maybe you keep
Half of that and you sell half of it because you think there's still a decent chance it turns things around and then you invest
the rest like there's that's why I like the kind of
Yeah, the trimming approach and kind of the nuance approach, because it does allow you to,
it gives you a bit more flexibility
and you don't have to fear being wrong
by just doing one big decision, if that makes sense.
Yeah.
Well, yeah, it makes like individual,
especially when you're looking on an individual equity side,
I mean, they can go sour really, really quickly.
I mean, we talked about it last episode with United.
Yeah, or just even Apple, right?
Like now it's kind of turned around a little bit,
but during Liberation Day, the aftermath of Liberation Day,
I mean, Apple was still seen before that
as like top blue chip stock.
And then you just saw the stock lose like
what 20, 25, 30% within like the span of a week and a half, not even.
So that's just an example is like as good as a solid as the investment may seem and
as un improbable an outcome it may be that a company that you really love could face
some really bad headwinds,
it's still a possibility.
So that's why I think for me it's just,
a lot of the times it's not about selling a winner,
it's more about trimming it if I still like the company.
Yep, well said.
That's all I got for those three mistakes.
Well that's good.
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Now we'll go about selling at a loss with Allied Properties REIT.
The reason, like I said in the preface when we started the episode, it's a company I used to own.
I sold it pretty much like a year to today. I think it was like pretty much May 15 or mid-May
last year. I started buying Allied in late 2022, continued in early 2023.
My average cost, my cost basis was around $24 a share.
Have a look at trading around what, like 15 right now if I remember correctly.
Yeah, I think so.
Yeah, $15 a share.
I sold it last year at around 17.
So if I held it last year from this time, I'd be down about a percent or so, percent
and a half factoring in the dividends or distribution.
So in my mind, it was a very good move because I could have taken that money, put them in
treasury bills and I would have made probably about 5% more if I factor in the loss from
allied compared to what I could get on just holding US Treasury bills or even
Canadian government Treasury bills, maybe a bit less.
So yes, for me, it was the right decision and I'm happy I did it.
But I bought the company as a value play.
So I thought the market was overly pessimistic on office real estate because we just had
come out of the pandemic.
And to be clear, Allied owned high quality office real estate. They own type class
A and even like trophy class. So basically the top real estate, the most in demand for urban
companies and urban workers with all the the amenities. Sometimes it'll be new buildings,
sometimes they'll be old buildings that they renovated and put in all those amenities. And
I thought more and more companies would require employees to return to work. And I thought that Sometimes there'll be old buildings that they renovated and put in all those amenities.
And I thought more and more companies would require employees to return to work.
And I thought that having those high quality buildings in the downtown areas of major cities
in Canada, including Toronto, Montreal, Vancouver, Ottawa, pretty much all the major cities,
Calgary too, was a big advantage for them.
And the market was just being overly
pessimistic that we'd see more and more businesses requiring their employees to
go back to the office. And if you want to encourage employees to come back to work
there's no better way than giving them a nice office to go to with some perks.
Right? So that was the idea behind it. After close to a year and a half of
holding the company I decided to sell it because
of what I was hearing from the management team on earnings calls.
The numbers were starting to trend in a direction, and I will touch more on the numbers since,
so people have a better idea how it's trended.
But they started trading in the wrong direction too.
I gave myself a couple quarters and then last year after they came out
with their Q1 result I said you know what I'm just not comfortable I just don't see the light at the
end of the tunnel here. I don't know if this will be a turnaround play in the short to medium term
maybe long term but it kept being a longer longer and longer turnaround play which at that point
kind of coming back to your mistakes, I said,
you know what, I think my money is better invested elsewhere.
And I don't think the management team was misleading
investors or anything like that, but you could tell
that they just had a lot of difficulty understanding
the current leasing environment for the type of office
real estate that they had. And they kept pushing things back out more and more
when our occupancy rate going to come back to levels near pre-pandemic and it
was always constantly more and more being pushed back and pushed back and
that was pretty alarming if the to me if the management team is that unsure it just means that there was a whole lot of uncertainty ahead so my
plan was to sell when things would start turning around and obviously when I'd
have a nice profit but clearly you know in my mind just became a no-brainer to
sell at that point I just didn't know when things would get better and that
was a real possibility that things could get worse as well. So that's
why I decided to sell the company. And I want to look at some numbers and a big
shout out to the FinChat team and obviously Braden and Esteem there
because they didn't have the KPIs for allied and I was texting Braden.
I was showing him just a spreadsheet I had worked on because I plugged in the numbers myself.
And he's like, oh, you want my team to add those KPIs?
I said, okay.
Just said, oh, when are you guys recording?
I said tomorrow.
I was like, okay, well, I'll have it ready by then.
Texted me this morning around nine and all the KPIs are there.
I had some specific ones I wanted to look at and it's great.
So for our joint TCI subscribers, you'll actually be able to see those KPIs now.
So the first one I'm looking at here is
the funds from operation per unit and the adjusted funds from operations per unit.
Without going into detail what that means,
it's just a metric that's pretty widely used
by real estate investment trusts.
It just levels out the earnings,
it kind of puts back in depreciation and amortization.
It also factors in things like adjusted funds from operation,
like reoccurring capital expenditures
that would be like, you know, just happen constantly.
So it factors that.
It's just a very useful metric.
If you're going to use it,
just make sure you look at how they define it
because companies will define it a bit differently.
And it also excludes if they dispose,
so sold the property,
which obviously would boost the cash coming in.
So it would also exclude those types of things.
Now, if you're looking at the funds from operation and the adjusted funds from
operation so FFO and AFFO it is really has been trending down and it's the
trend is very clear if you start looking because they didn't post AFFO on their
quarterly every single quarter they started doing it in mid
2023 so that's why it's a bit more limited, but they had the funds from operation available and
lack of better words, I would say
Q3 Q4 of last year you can really of sorry of 2023
You can really see funds from operation going down. So, and AFFO as well.
So I'll look at funds from operation,
but it's a similar story for AFFO.
At the end of 2023, it was about 60 cents per unit.
And they say units for real estate investment trust,
but just call it a share, it doesn't matter.
And then the latest quarter, it's at 51.
So this is not something you want to see. That's a
pretty big decline and same kind of thing it went from 56 to 46 cents per
unit every quarter of course but it's still you see that clear trend of the
FFO per unit and the FFO going down. So that is not a good sign right there. And
then the next one is the average in place net rent
per occupied square foot.
Basically what that means is what they'd be charging
per square foot to their tenants.
And again, this one's a bit harder to show.
So I will share that.
I thought I forgot to change the tab.
So now you see the right one.
Now you see it. So if people see the right one. Now you see.
So if people wanna kind of wrap their heads around that,
so there was a big drop.
I can't really remember why the drop.
I think it was, they sold their urban data center.
I would imagine that was it.
Yeah, I think that would have been it.
So there was a big drop in mid 2022 when they sell they had these data centers the urban data centers
They sold that off. There was a big drop and then you know
I continued going up the idea was to sell that off pay down some debts and potentially reinvest in some
Some future projects and it's been trending up since but now you see for the last couple quarters
It's been a bit stagnant here actually going back you see for the last couple quarters, it's been a bit stagnant
here.
Actually going back to like probably the last four quarters, it's been around $25 per square
foot.
So that tells me that the pricing that they can charge per square foot is starting to
level off a little bit.
It's harder to say for this one, but is something that is clearly not trending in
the right direction especially if you're looking at 2019 up until the sale of their urban data
centers they constantly saw that price per square foot go up. So that is another trend that is not
great because if there's softness in that price, it means that there's likely less
demand for that office space and they have to lower the prices or at least not increase them
as much to be able to retain and get new clients. Yeah. Well, I was just going to say like you have,
you also have, you know, a point of inflation to a certain degree. I mean, the rents are only up,
point of inflation to a certain degree. I mean, the rents are only up. What was it? $2,250 or something pre-pandemic and you're at $2,500 now. Yeah. So there really hasn't been all
that much growth in rent, especially when I can't remember the numbers off the top of my head,
but with RioCan, I'm pretty sure they were getting new leases like 19% higher or something.
So I mean, yeah, it looks like it's recovered nicely from 2022. But if you look over the long term, it looks like they're struggling to to get
more rent from the space. And I would imagine that would be, you know, kind of a situation
of occupancy and just overall demand. It's like, how can you, you know, jack up leases
that much when you're what is their occupancy at? It probably, isn't it only at like 80% or something?
Yeah, I'll show you. I have that here. So the occupancy,
so the least area, which is pretty much the occupancy,
it's just because occupancy could be that it's,
it oftentimes can be lower than least area. Cause you have like,
especially during the pandemic, right? You could have areas that are leased, but they're not being occupied. So I use leased area very similar it
could be probably just a couple basis point different. So if you're looking at leased area
same kind of thing not good. So this is annual here I will put it quarterly the trends the same. So essentially you're looking at pre-pandemic
You're looking at least area of about
95 percent pre-pandemic which is fine
I obviously don't expect that to be at the pre-pandemic level because we're still you know a lot of businesses figure it out
You know what we can run a pretty efficient business by not having that space
So you did get some businesses that clearly just will not need either office space
altogether or they'll need a lot less. So you were looking at 95 and now that
leased area is around 87% and the more concerning here is that it's dropped
from late 2022 being around 91% to 87% now.
And that's basically when the log downs were done
and you think more and more companies
are returning to the office.
So you'd expect to at least have that level off,
even if it's around 88 and 89%,
but it's actually kept trending down.
It's basically trended down ever since and it's not
looking like, I mean, it's not improving. So you have to hope that it's at least staying to this
level and ideally improving but that just shows that they're having more and more trouble leasing
it which in turn will likely start impacting the price per square foot that they are able to charge
Yeah, like if you go back to an annual, I don't know if you can go back to the annual look on this chart
You can see like pre-pandemic
Like from 2012 well even 2016 to what would that be 2018?
I mean it went up to like 97% and if you follow their their
Lease prices you can see that pre-pandemic it was also going up quite a bit too went up to like 97%. And if you follow their lease prices,
you can see that pre-pandemic, it was also
going up quite a bit too.
So I mean, I think this is, yeah, it's an element of demand.
I mean, the lower demand there is, the less you have,
less maneuverability you have in terms of lease rates.
Whereas a company like RioCan is like 98 some percent
of occupancy.
They have kind of that fully booked leasable
area to be able to say hey we're gonna up your rent you know 15 19 percent things like
that whereas this is just this isn't the case and it's starting to it's definitely starting
to impact them.
Yeah exactly and now if you're in the other worrying stuff the Allied is the total indebitiveness ratio. So this is a ratio that they calculate
It's essentially just their debt compared to the the assets that they have obviously there's good
It's not like you know an absolute number anything just because clearly the value of a building will vary over time
These are large buildings
so they're not really mark to market and these
are the value that they put on their buildings. And even despite that, their total indebtedness
ratio has basically gone up with the exception of when they sold that urban data center.
They were able to get that down so that's a little drop that they saw in 2022 but since 2020 it's been a steady road up
and this is where it starts getting pretty alarming where if you look on an
annual basis they had never really been that high so they I would say for them
it probably was around the mid 30s low to mid 30s in terms of total indebtedness
now they're at 42.9% and it's constantly been going up.
So it's not a good, this is not a good sign at all.
So it just shows that they're getting, they've been selling off some non-strategic assets,
but what that's doing is they're essentially, you know, they have less assets and compared
to their debt, that ratio is going up. So it's not it's not great
What I'm pretty sure they've also just from the quarters
I've looked at it has to mark down a lot of assets as well
I'm pretty sure they take a lot of hits to the to the value of the assets over the last few quarters, which will
Ultimately impact it there as well. But yeah, Yeah, I mean, which is normal, right? Like there's not a big market for these large office spaces
and for the market that there is, I mean, if you're a buyer,
like you're not giving a pre-pandemic price, why would you?
No, definitely not.
Like if you're seeing, like they have access
to the CBRE data, which is,
provides a really good report
on this state of office real estate,
whether it's downtown or suburban doesn't matter with the different asset classes and I'll
talk a little bit about that I mean buyers are not stupid like they'll see
it they'll be like okay we're interested but I'm not at that price
yeah I mean what's that what is it the the endowment effect they think their
buildings are worth more than they actually are. Yeah, exactly. It's a private equity effect. It's not mark to market. So you think everything's
going up because it's not mark to market, or there's not a lot of transactions. But
the next one here is for our dividend payers that may be looking at this company. So look,
I think the dividend is at risk or the distribution that would be called
for this. It's currently yielding close to 12%. Yes, it's a REIT. REIT's 10. It's not unusual to
see anywhere between 4% to 7%, 8%. That's a pretty common range for REIT like it's not when it starts getting above 8%
that's where you need to start looking pretty closely. This one I would be very
careful so what I'm showing you is the payout ratio so if you remember
the funds from operation and the AFFO so those two metrics they provide the payout
ratio so basically the distribution that they do compare to those metrics it's never been this high. So the funds from operation payout
ratio is 97% and the AFFO is 88.5% and then if you're backing out on a quarterly basis
it's the highest it's been pretty much and then if you're looking backing out, I mean the ratios are the same,
right? They're way way much higher than it had been previously, historically for them. They're
typically more in the 70s in terms of range. So the fact that you're starting to look at the high 90s,
that's a big sign that I think the distribution, another one that I would not be surprised if this continues to trend this way
To see a dividend cut in probably the next 12 months 12 to 18 months here
Yeah, and you you actually had them reversed the a FFO is 97 the great the a FFO
Oh, yeah, that's 100. Yeah, so they're adjusting out some things and it's still coming in that high. Yeah, that's so I mean, that's
Yeah, it's teetering right now.
I mean, if it goes above 100%, there's very few REITs
that can sustain that for, you know,
they could probably sustain over the short term.
But with the way it's trending, I mean,
if that starts ticking above 100%,
it's probably likely there's some sort of distribution cut there.
I mean, it's hard to see the environment turning around right now.
Like, I don't know what this like, again, I don't know all that much about the office
space, so I can't really comment on that.
But 97% is like, typically you want to see, you know, 80 with a REIT.
I mean, they're kind of structured that they have to pay out the vast majority of income
back to shareholders.
So you're never going to see a REIT paying. No, you know, it's not like a stock.
Their payout ratios are typically high, but 97% is is too high. Yeah, exactly. So and look,
is that like doing good compared to its peers in that space? I would say yes. So I was looking at the occupancy rates, right,
I was talking earlier I'm just going back here to the occupancy rate. So I was
looking at the least area, right, which is like I said very similar to occupancy
rate, not quite the same, but let's just say it's the same for the sake of this
discussion here. So you're looking at I would say vacancy rate about like
14% roughly 14-15% and you're looking now at the CBRE report so they come out
every quarter with Canada office figures and they break it down. Very useful. I'll
put in the show notes if you're interested in this kind of space I
recommend that you just look at it every single quarter.
And you have here for downtown because most of their buildings are downtown so you're looking
at a vacancy rate for class A of around 17% and then trophy properties around 11% so trophy are
really top of the top class A very high as well And then you have Class B and C those are just older buildings that have not been renovated.
That one is 25%. So you can see clearly there's a big discrepancy between the
two but all that to say that Allied I would say it's probably in line with the
market. Maybe faring a little better if you think that Allied is a blend of Class A and Trophy properties so between a 17 and 11 in terms of
vacancy rates so I would say that's about appropriate so they're doing
pretty well when it comes to comparing with that segment but it's still not a
segment that's doing all that well and one thing though that it has going for
them and that segment as a
whole is that there has not been new supply coming on. So they literally said in that CBRA report
that there is essentially no new supply coming online for Downtown Office page, which is rare,
which is good because if you assume that if the demand, if there's a decent demand there,
at least the supply is not increasing.
The problem is we just don't know how strong the demand
will be for the foreseeable future.
You had in some macroeconomic concerns,
they keep talking about how the tours
for their property are high.
There's a lot of companies that are
visiting so the visits are good, but the issue is when there's so much
uncertainty, what kind of company wants to commit for a long-term lease for
office space if they are really uncertain about the macroeconomic
environment? So clearly having a high level of tours is good, it's better than
not having any, but it also means that there's probably gonna be
more tire kicking in this type of economy right now
when there's high uncertainty,
whether it's in Canada with our economy,
but if you factor in the tariffs as well.
So I'm not saying that, look, Allied is one of the better
reads if you're looking at office space specifically but the reality is
office space is it's not in a great space right now for the lack of better words.
Yeah it's the entire segment really it's not necessarily that allied is doing anything
wrong it's just like they're not building any new supply because there's not a lot of demand so
I mean effectively if demand does pick back up, they should be in the best position to kind of take advantage of that.
But yeah, I mean, there's just no need to build new office space because there's
not a lot of demand for office space.
You can kind of see that in the results.
Yeah, and more and more companies like Suburb is actually doing better than
office, than sorry, than downtown.
Just because I think, yeah,
I think because companies are just looking here
that there's more, well, I'll show you here before we, so.
A little more value outside, probably?
Yeah, more value, and I think a lot of the time,
that's where the employees are living, right?
So the employees like it.
There's more chances of having free parking versus paid parking.
Oh yeah, that's true.
Yeah, so that's another thing. So if you're looking at a vacancy rate, it always used
to be that downtown was lower and then starting in 2022 it's shift. Yeah, so that is something
that yeah, just to give people some insight here. So it used to be that it was always a lower vacancy rate and now things have essentially flipped over and they
will see whether it continues or not, but it is a different trend that we saw pre-pandemic.
Yeah, because Allied is the vast majority of properties are pretty much. I think they're all downtown pretty much. Yeah, downtown.
So, yeah. Yeah, so I think I mean at the end of the day I'm not I'm happy I took the
decision like I said I took a loss so I think it's a good reminder in terms of
the mistakes that people make is look I ended up taking a loss like it was not
it was not a good play on my part to bet on them. Hindsight is 20-20, but when it was starting
to get obvious for me that this was not really a turnaround play like I thought it would
be, I said, you know what? I was wrong. I'm selling my position. I didn't think it was
appropriate to trim. I thought at that point I did not have any more confidence in it.
I took the loss, probably took a 15-20% loss all in all if I factor
in the dividend. But you know sometimes you just have to move on and use that capital
elsewhere and I think it's this is a good example here. And maybe the last thing I'll
mention is look who knows maybe they won't cut the distribution but I think there's a
high risk of them cutting the distribution.
And we talked about BCE the last episode.
And I think it's a reminder for the dividend investors, like there are signs most of the
time when a dividend cut has a high chance of happening.
We talked about BCE for like a year and a half to say like, look, they need to cut the
dividend.
I'm looking at Allied here.
I'm seeing some of the,
some similar warning signs as BC as well,
that look, a distribution could be cut.
Like it's just to show,
know what you own,
because if you know what you own
and you're looking at the proper KPIs,
you'll probably be able to spot when there's a high risk
and then you can take a decision to say look,
yes, I love getting that income, but you know what, I think I need to get out of this company
and pick another dividend stock because there's a good chance that that dividend is not sustainable
and will be cut in the next 12 to 18 months. Yeah, they kind of had like, if you look at the
just the overall results, they kind of had a bit of a buffer
a few years ago. And now like that buffer, the buffer is all but gone away. And now they
pretty much need things to go very well moving forward or else it's yeah, it's going to get
to the point where it just can't be paid. And I mean, they the cuts tend to come quicker
with the REITs when it becomes unaffordable than the than the stocks. I mean, the cuts tend to come quicker with the REITs when it becomes unaffordable than
the stocks.
I mean, BCE held that dividend for two, three years.
You wouldn't see that in a situation like Allied.
If it gets unsustainable, they'll probably cut it very quickly.
But yeah, they need a lot of things to go right moving forward and then it would be
sustainable. But I mean, it's hard hard to see that but it's definitely possible.
Yeah, yeah, there's just so many non-strategic core asset that you can sell too, right?
Yeah, exactly.
Without at some point coming to the realization that it's not sustainable.
But I think it was a good discussion. I think it's going to be a really good episode for people just to get around some of the mistakes that are pretty
common for RSPs, psychological mistake.
And then I would even say like kind of a case in point of some of those mistakes that I
did with this investment.
But also one that I avoided by not having an anchor bias or sticking to my gun and not trying to reevaluate my thesis which I think I avoided
compounding on more mistakes. I'm proud of myself for that but not so proud that I lost about 20%
but you know I think it's a good example for people. Yeah you could just as easily could
have continued to average down average down average down sell when you break even
yeah it's it is a good it's actually a very good example yeah so i think that's a good
way to end it we will have some news coming up in the next couple weeks for some meetups that
are planning so we are just finalizing the page for our Calgary meetup that will be on July
8th. So for people tune in for the next episode, we're going to start the episode with some
information on that. So for our folks out west will be on in Calgary on July 8th. We have the
venue booked. We just need to put the event bright page up. So we'll have that. We'll also have a
early bird pricing that'll be a
bit less expensive for people a bit cheaper. I think the tickets are very very reasonable in price.
There's going to be some food there as well so I think we're looking about 40 dollars for the tickets
and then 30 dollars for early bird for for about like a 10 10 days period
that's what we're thinking about we'll have the firm details on the next
episode so for our listeners out West we've never done one we will be going to
Calgary so hopefully we'll get some people that are around that area maybe
even driving down from nearby towns to come in see us it'll be an event with
you Dan well me Dan Brad Dan, Brayden will
be there as well and the real estate show Dan Foch and Nick Hill will be there. So we'll have
more detail and then we'll also have some more details on a Toronto event that we'll be having
later in July. I don't have the date in front of me but it'll be late July as well. Yeah it should
be pretty fun. That's during Stampede, yeah I think it is. Yeah Stampede so I'm gonna get my cowboy
hat cowboy hat and cowboy probably not cowboy boots cuz that I feel like I have
so many body problems that I probably want to be comfortable but definitely
cowboy hat. Yeah there's a lot of people who head out and buy one just for the
Stampede, dust it off every year. Yeah, that's it.
That's going to be me.
So anyways, I think that's a good place to end it.
Thank you everyone for listening and we'll see you on Thursday.
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