Boom Times For Canadian Capitalism
Date: Tuesday, November 14 2006
From the Globe and Mail comes this good news for capitalism in Canada.
"Since 1977, the profit growth of the TSX composite is about 6 per cent a year, excluding some unusual items. It's not steady, naturally, because profits dive during recessions and then stage monstrous recoveries. But 6 per cent is the average.
Now here are the TSX profit growth figures for the past four years, based on data by RBC Dominion Securities' quantitative research group:
2003: 36 per cent
2004: 25 per cent
2005: 12 per cent
2006 (through October): 24 per cent.
Never in the 29-year history of the TSX composite have we witnessed a streak like this. (The closest thing to it was in the late 1970s oil and gold boom.) Perhaps it will continue, even in the face of a slowdown in the United States, and maybe 24-per-cent profit gains can be sustained for a long time to come. But then, there are also people who believe in Martian invaders, unicorns, and Jeb Bush for President in 2008"
So ask yourself why the government is planning this..."Flaherty plans eventual cut to capital gains tax"
And don't cry me a river about how Canadian manufacturers are losing money and being forced offshore, they were doing that before the Loonie rose. Like Gilden which offshored its T-Shirt manufacturing into Haiti.
"Manufacturers in Canada have been hurt by a rising currency and competition from cheaper rivals in Asia. The Canadian dollar has gained about 38 percent against the U.S. currency in the past four years. That's prompted exporters such as T-shirt maker Gildan Activewear Inc. and packaging producer Norampac Inc. to shut Canadian plants this year because the facilities had become too costly to operate."
And despite Gilden Active Wear (GIL) claiming to be hurt by the Canadian dollar it is not. As one investment newsletter points out it is a good investment;
"In the apparel sector, Gilden Activewear (GIL), a maker of tee shirts, has sprinted from 15 two years ago to 46"
Another investment newsletter points this out about sweatshop Gilden; Gilden Activewear (GIL)—Up 157% in 367 days