How to trade bitcoins on QuadrigaCX

Now that you’ve opened and verified and also funded your QuadrigaCX account, you are ready to trade some Canadian dollars and US dollars for bitcoins and ethereum. This post will explain how to make a trade on cryptocurrency exchange QuadrigaCX.

After logging into your QuadrigaCX account, choose the “Trade” tab from the main menu. When on the “Trade” menu, you will see the current order book displayed for the default market (btc/cad) with the bids displayed on the left side of the page and the offers displayed on the right side. Stacked on top of the order book are order entry modules that you can use to place your order.

If you are unfamiliar with how a market works and/or how prices are formed, the first thing you do is examine the current bids and offers. The bids and offers listed are orders from other users who have placed orders to either buy or sell at certain prices. For example, if you see a bid price of $4,000 CAD for 2 BTC, this means that someone (or a number of users) has placed an order to buy 2 bitcoins at a price of $4,000 CAD.  Oppositely, if you see an offer for 2 BTC at $4,010 CAD, this means that someone (or a number of users) has placed an order to sell 2 bitcoins at a price of $4,010 CAD.

The “price” of bitcoins is simply the last time that a bid or an offer was matched. If you want to buy bitcoins with Canadian dollars, then examine the offers. Using the example above, the lowest price offered is $4,010 CAD for 2 BTC. This means that you can buy up to 2 BTC at a price of $4,010 CAD. If you want to buy 0.10 BTC, and this price meets your objective, then go ahead and enter your order to make a transaction. Using the BUY side order entry module on the left side of the order book, enter a price of $4,010 and quantity of 0.10 BTC. As you enter your order details, you will see that the order entry module dynamically updates to reflect your inputs. This helps you confirm the price and amount you wish to enter.

Once you have input your desired price and quantity, and reviewed your order, simply press the “buy” button located within the order entry module, and your order will be sent to the market. If the current offer was $4,010 and you enter an order to buy at this price, your order will be matched and filled. This will mean you purchase bitcoins at this price.

Conversely, if you’d like to sell bitcoins, the same mechanics are used to sell, but instead of trying to pay the lowest price, you are trying to sell at the highest.

Maybe you’d like to buy bitcoins, but only if they reach a certain lower level. Maybe you’ve determined that a price of $3,500 is the highest price you are willing to pay. You can enter these details in the order entry module, and your order will be sent to the order book where it waits until the market falls to this price, or you cancel your order. This is called a “limit” order. From what I can tell, there is no time limit to how long orders can sit.

QuadrigaCX is the best place for Canadians to buy and sell bitcoins with the most liquid order book and the most stable deposit/withdrawal methods. Please use this link to open an account as it will mean some referral revenue for me 🙂

Creating a Legal Will for Ontario

Many Ontario residents do not have written wills. Dying without a will causes headache for loved ones who then have to deal with unnecessary financial and legal administrative costs during a time when they could be grieving. For most of us, writing a simple holograph will is good enough. A holograph will is written in your own handwriting, dated, witnessed & signed by a couple of people and it outlines what you want to happen when you die. If you don’t feel comfortable with writing your own will, consult a lawyer.

Here is a checklist of items to address in your will:

  • date the will was made
  • who will be your executor?
  • what to do with your assets?
  • who looks after your kids?
  • who decides your personal (medical) care when you can’t speak for yourself?
  • how to access your digital accounts such as your social media accounts
  • communicate your intentions

First, date your will and if its more than 1 page, say how many pages the will is and put page numbers on each page (tip, if your will is more than 1 page, consult a lawyer). Start your will by stating its purpose such as “this is the last will and testament of xxx”. Name your executor by writing something like “I want my executor to be xxx”. Outline what you would like to do with your assets by saying something like “I would like my daughter xxx to be the beneficiary of my estate”. If you have kids, outline the person who will be the guardian of your children. It would also be good if you name someone in your will who will speak for you if you can’t speak for yourself, this is sometimes called a “living will”. This person will address your medical care while you are in a coma, and can be a different person than your executor.

After you’ve written and signed your will, it is important to communicate your intentions to those who have an interest in your estate. Make sure your executor knows about their responsibilities, tell the key people with an interest in your estate where your will is located, and make sure everyone who has an interest in your estate is up to date, this will reduce conflict. If the people with an interest in your estate are currently in conflict, try and resolve these conflicts as soon as possible.

For most of us without business interests, settling our estate is a simple administrative task. If you are married, it might help to hold financial assets jointly with your spouse. If you own a small business, make sure the business has a succession plan. Keep your will somewhere that is accessible to your heirs and/or your executor. That way, they can begin settling your estate in a timely manner.

If this sounds too complicated, consult a lawyer.

Aston Hill Financial Update

Aston Hill Financial is a struggling mutual fund company trading on the TSX symbol AHF. The current market cap of AHF is only $10.64 million as the company is weighed down by a large debt in the form of convertible debentures issued during more optimistic times. According to their most recent financial statement, AHF has about $26 million worth of convertible debentures outstanding, which means the company is insolvent based on its current market value (in the sense that its liabilities are more than its market cap).

Aston Hill runs a fairly traditional mutual fund business focused on a retail wholesaling model. Their lead portfolio manager is Ben Cheng, who still has a decent following from investors, and the company recently brought on James Werry as CEO.  James Werry is an old hand on Bay Street, and the idea must be that Werry will arrange a sale of AHF to another mutual fund manager or dealer? The company recently managed to extend the maturity of its convertible debentures from 2016 to 2019 by increasing the rate paid to holders by 0.50%. I’m not sure the holders of the debentures had much of a choice since default of payment would mean AHF is bankrupt.

AHF should probably dramatically change its strategy soon. Either the company needs way more scale, or it needs to sell itself and/or wind down as a public company. The wife of the former founder control 18% of the common shares, and her son was the former CEO. This company is a real big mess.

The company is also running operating losses.  You’d think the convertible debentures would be a noose around their neck, but interest on the debentures runs about $1 million per quarter, whereas revenues last quarter were $6 million.  The problem is scale. Employee and administrative expenses are almost $5 million per quarter. Add in other expenses such as trailers and sub-advisory expenses, and it looks like AHF needs to double revenues from the current level to even begin thinking about digging themselves out.  But if the debenture holders keep getting paid, I’d say AHF has another few years (till 2019, when the debentures mature) to figure things out.

Power Financial Review

Power Financial is a holding company that is controlled by Power Corporation of Canada, which is in turn controlled by the French Canadian Desmarais family. The company was built by Paul Desmarais, who was a wealthy Canadian financier that used a type of cascading share ownership to control a number of Canadian public companies. Paul Desmarais has passed away and his companies are now controlled by his sons. Today, Power Financial has a market cap of $21 billion and a controlling ownership of IGM Financial (Investors Group & Mackenzie Financial), and Great-West Life. Power Financial also owns a stake in Pargesa, which is a holding company based in Europe that holds shares in a number of European public companies.  Pargesa is controlled by Power Corp & Albert Frère’s CNP. The relationship with Albert Frere is based on an historical alliance between him and Paul Desmarais who used the same cascading share ownership techniques and financial arrangements. In Canada, Power Financial most closely resembles E-L Financial, which is the holding company controlled by the Jackman family. Both Power Financial and E-L Financial are highly liquid and have investments in financial services.

The share price of Power Financial has gone nowhere in a decade, but it continues to pay a healthy dividend. The performance of Power Financial shares are closely related to the liquid nature of its holdings (Power Financial’s main assets are publicly traded) and the types of businesses that it owns. Low interest rates are causing life insurance margins to be compressed. Higher interest rates will help Great-West Life offer higher returns to policy holders and annuitants. But compared to its peers such as Manulife & Sunlife, Great-West has performed ok.  Great-West Life sports a dividend yield of 4.06%, compared to Manulife at 4.25%, and Sunlife 3.84%. These companies are competing in a defensive industry, and so shareholders should expect high dividend yields.

IGM Financial (which owns Investors Group & Mackenzie Financial) has a huge dividend yield right now (6.37%), but its facing systemic headwinds as the financial advisory and fund management businesses go through long-term transformations. IGM faces challenges because of fee compression, which is partly caused by new technology, index funds, and competition. One aspect of IGM that I don’t think enough investors are talking about right now is their balance sheet. IGM has a market cap of $8.5 billion, but it also has long term debt of $8.5 billion. IGM’s balance sheet is pretty leveraged and the share price could become more volatile if interest rates go higher (which doesn’t look likely right now, but times change).

Overall, I think long term investors should keep an eye on Power Financial.  It is a suitable investment for a conservative equity portfolio as part of a financial sector allocation. The high dividend and liquidity of the underlying assets provide some nice cushion for someone holding these shares in a taxable account.  But Power Financial investors should be cautious because interest rates may remain low (thereby putting added pressure on the life insurance business) and the fund management business will continue fighting against the tide of fee compression.

Emera selling most of AQN stake in secondary offering

Emera Inc. Sells 50.1 Million Common Shares of Algonquin Power & Utilities Corp.

HALIFAX, NOVA SCOTIA and OAKVILLE, ONTARIO–(Marketwired – May 17, 2016) – NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES Emera Inc. (Emera) (TSX:EMA) and Algonquin Power & Utilities Corp. (APUC) (TSX:AQN) today announced that Emera has agreed to sell 50.1 million common shares of…

Reporting FX gains on USD investments

Now that the Canadian dollar has fallen in value against the US dollar, many Canadian investors with US holdings are wondering how to recognize these gains for tax reporting purposes. For investments inside registered accounts such as RSPs, RIFs, RESPs, TFSAs, RDSPs, capital gains are tax free while the funds remain inside the registered accounts. For investors with US holdings in non-registered accounts, gains in foreign exchange need to be recorded and reported as recognized.

If an investor buys shares in IBM at $100 USD per share when the exchange rate is CAD/USD 1.0000, then the cost base is $100 CAD.  If the investor sells those shares for $100 USD per share when the exchange rate is CAD/USD 0.7000, then the investor’s proceeds are $143 CAD, and the capital gain that should be reported to CRA is $43 even though the value of the shares remained the same, the currency gains impact the Canadian dollar value of the proceeds. CRA says, “Report your gains or losses in Canadian dollars. Use the exchange rate that was in effect on the day of the transaction” to determine your capital gain or loss.

I frequently see Canadian investors with US securities fail to record the exchange rate on the day of a US dollar investment.  This can cause administrative time to be wasted especially at tax season when it comes time to report a capital gain or loss.  This is especially true if the securities are disposed of many years following their initial purchase. If you fail to record the cost base in Canadian dollars at the time the securities were purchased, you (or your admin) will be forced to hunt down the specific date of the initial transaction to determine an accurate cost base.  Statements from your broker will list the cost base in US dollars, but you’ll need the Canadian dollar value. Once again, good record keeping is a stress saver.

Dealing with foreign exchange issues in an RRSP

I just read your February 2015 article in the Globe and Mail with some interest . I purchased some U.S. stocks in 2012 when the Canadian dollar was at par or better than the U.S. dollar. These stocks were held in an RRSP account. I decided to sell the U.S.

Red Rock Resorts closer to IPO

Station Casinos’ corporate name will be Red Rock Resorts after IPO

Nevada gaming regulators signed off Thursday on plans for Station Casinos to become a public company under a new name – Red Rock Resorts – which will be traded on the Nasdaq. Company officials told the Gaming Control Board in a special hearing in Las Vegas that Red Rock Resorts would be a holding company.

Regulators approve Station Casinos’ proposed initial public offering

Nevada regulators today approved Station Casinos’ plan for an initial public offering, allowing the locals gaming giant to move forward with its transition back into a public company. Station, which was taken private in 2007, intends to be publicly traded under the new name Red Rock Resorts Inc.

Fertitta brothers file paperwork to take casino company public, earn $225 million

Frank and Lorenzo Fertitta are ready to take Red Rock Resorts public in an unusual way. Paul Gift has the details. It’s good to be a Fertitta. Not only is the UFC believed to be coming off a record year in terms of revenue, but co-owners Frank and Lorenzo Fertitta are about to take their other majority-owned enterprise public.

Morguard taking control of Temple Hotels

Happy to hear this week that Morguard will take over management of Temple Hotels, details listed in the press release below. This is positive news for Temple which is being hurt by the Western Canadian slump and a weak balance sheet. Hopefully Morguard will clean up Temple’s balance sheet, re position and further diversify its assets, and ultimately create new shareholder value.

Temple Hotels Inc. Announces Conditional Assignment of Asset Management from Shelter Canadian Properties Limited to… — WINNIPEG, Dec. 23, 2015

Dec. 23, 2015 /CNW/ – Temple Hotels Inc.

Ontario Securities Commission investigating Titan Equity

There were so many red flags for investors in Titan Equity, I don’t really feel sorry for them.  Here are some tips for investors in private equity, especially private placement real estate and hedge funds.

Pay attention to the promoter’s lifestyle.  What kind of car does the promoter drive? If they are driving Aston Martins and Bentley’s then beware. Why would they be asking you for an investment when they are already wasting funds on luxury items? Also, if someone is spending their personal money on luxury items, how careful would they be with investor’s resources? Is the promoter going on fancy vacations and living in a fancy house?  What does the promoter’s spouse do?  If they are a trophy wife who goes shopping all day, this may put pressure on the promoter to maintain a lifestyle for her and this might cloud his judgement. If you are investing in someone, make sure that person is living an average lifestyle and pouring all his time and money into the project as well.

Make sure you are being provided with adequate financial reports. Especially for private equity investments that involve more than just family and close friends, financial statements should be audited and provided on a regular basis. There is a significant cost to providing audited financial statements, but this cost goes along with a large project with numerous unrelated investors. The other benefit to audited financial statements is that in order for an accountant to sign off, an internal accounting process must meet certain standards. Its not easy to provide audited financial statements and requires a advanced level of management.  Smaller projects with a few related investors can get by without audited financials, but other checks and balances should be in place such as providing all investors with access to bank statements in order to keep everyone better informed.

Keep management on track. Sometimes privately funded investments get off track as the founders constantly pivot to new ideas.  These founders can’t stay focused long enough on one project and so they spread resources too thin and end up accomplishing nothing. In the case of Titan Equity, they had investments in a retirement home, but also in a townhouse development. These are different types of real estate and management should have been focused on a specific type of real estate such as just retirement homes or just townhouse developments, but not both.

Make sure management is communicating. Sometimes a business project does not always go as planned. There will be times when projects fail and its important that management is transparent and honest to investors. It can embarrassing for founders to admit they have failed, especially to close friends who have invested in their project. But hiding the truth is what ponzi schemes and fraud are made of.

Ontario Securities Commission investigating York Region real estate firm with ties to Toronto FC | Toronto Star

A real estate investment company that once ran a $1-Million Dream Home contest for Toronto FC is facing allegations that its chief executive officer misused investors’ money to buy luxury cars, an expensive home and pay himself “excessive” management fees. Titan Equity Group Ltd.