Getting out of 21st Century Fox
Five years ago I wrote about purchasing 26 FOXA shares for $34 USD each. At that time the stock was trading at 20 times earnings, so it wasn’t exactly cheap. However I saw great potential in this company because it had a lot of popular brands and intellectual properties. I had planned to hold this stock for decades. But I didn’t have to.
Fox shareholders approved the acquisition by Disney, and last month I was forced to sell all my FOXA stocks for $1,843 CAD. That’s a tidy 83% return on investment, before even adding on the dividend income I received over the years. 🙂 Plus, there’s no capital gains tax because it was held in my RRSP. Yay!
Overall March has been a really positive month for my finances. All my liquid assets went up in price.
Liquid’s Financial Update
*Side Incomes: = $3,300
- Part time job =$700
- Freelance = $600
- Dividends =$1200
- Interest = $800
*Discretionary Spending: = $2,400
- Food = $300
- Miscellaneous = $700
- Interest expense = $1400
*Net Worth: (ΔMoM)
- Total Assets: = $1,340,100 (+8,200)
- Cash = $12,200 (+1000)
- Canadian stocks = $171,400 (+800)
- U.S. stocks = $124,600 (+4000)
- U.K. stocks = $21,700 (+900)
- Retirement = $128,800 (+1000)
- Mortgage Funds = $34,900 (+200)
- P2P Lending = $34,500 (+300)
- Home = $367,000 (assessed land value)
- Farms = $445,000
- Total Debts: = $411,000 (-900)
- Mortgage = $188,800 (-300)
- Farm Loans = $178,600 (-500)
- Margin Loans = $43,600 (-100)
*Total Net Worth = $929,100 (+$9,100 / +1.0%)
All numbers are in $CDN at 0.75/USD
Preparing for Interest Rates to Drop
It’s been several years since the Bank of Canada lowered interest rates. The last cut was in 2015. Central banks around the world dropped rates near zero as a reaction to the global finance crisis in 2008 and rates have been low since. Policy makers expected the economy and rates to rebound back to normal in short order. But they discovered an inconvenient truth to the markets; low interest rates are addictive. Once consumers get a taste of easy credit, it’s very difficult for them to pull back.
Real estate related debt is cheaper in Canada than in the U.S. As a result, on a per capita basis, HELOC balances in Canada were $4,849 in October last year, more than 4 times the $1,080 balance in the U.S. Canadian households have borrowed a lot in recent years, sending our debt to record levels as a percentage of the overall economy.
But debt is a global issue. In China, the government is cracking down on shadow lending which has lead to tightening monetary conditions. According to 2 separate banks, defaults for Chinese corporate bonds have soared in 2018. In the United States total credit card debt has reached a record high. Even without any additional rate hikes in 2019, Americans will spend $122 billion on credit card interest this year, about 8% more than last year. Many people are struggling to get by. I don’t know when the next interest rate change will be, but when it happens it will probably be a rate drop instead of a raise.
Random Useless Fact: