Wednesday, February 24, 2010

Why invest in Canada?

Here is a transcript of my latest chat with our media consultant.

Q: Why does redev focus primarily on Canada?

RC: Our strategy and focus on Canada goes hand-in-glove with my professional aversion to risk. I only shop for opportunity where risk can be controlled, minimized or eliminated completely. These days this means staying inside our traditional investment zone.

These days when you look at the US home prices are deflating in 21% of the 143 markets according to The Economist. According to the web site 1 in 5 home owners are under water on their mortgages especially on the fourth quarter of last year. We see that for this year in the US there have been 4.5 million foreclosure filings up from 2.8 million in 2009, according to Realty Track. When I hear those kinds of numbers, I’m actually scared. I see in the States, quoting from the mortgage bankers association that 15% of homeowners are either in foreclosure or behind at least one payment on their mortgage in quarter four. According to the mortgage bankers association at least 3.9 million Americans are more than 90 days behind on their payments, which is triple the level of two years ago.

In the US in 2010 there were four more regional banks that failed recently bringing the total to 20 banks that have failed. We’re talking 20 billion plus in assets.
Those are the kinds of numbers I hear and see, I have to ask do I really want to invest in a place where things are going so poorly? Being risk averse this is something I just don’t want to do. You have to worry and you have to wonder.

In Canada we have good government and a well-regulated banking system and a safe economy and we have many resources. We should be very thankful to live here in Canada. So the bottom line is, "I go where I know and know where I go..."

Richard Crenian

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