Co-op Week

It’s national coop week from October 17 to 23 and I would like to talk about a cooperative that has been part of my life since my parents opened my first bank account when I was 5 years old. I speak of course, of the leading financial cooperative in Canada Desjardins. We know the group mainly for its banking services to individuals and businesses, but they are also specialized in wealth management and insurance. They are investing in the future with their youth advisory committee and it is certainly essential for the sustainability of your cooperative. This is, in a way, the essence of the coop week: contributing to prosperity, social equity, and environmental justice in the community. You can check their campaign ‘Together when it matters most’ at . Have a great week and don’t forget that together we are stronger!

Cyclically adjusted price-to-earnings ratio or CAPE

(information contained in this website do not constitute investment advice, I’m not a financial professional…)

The Shiller PE Ratio is one of the tools that I like to refer to feel the health of the market. The ratio is an average of ten years of price-to-earnings and adjusted for inflation. I believe that this ratio is one of the most relevant to see if the market is undervalued or overvalued. Do not forget that this data is valid mainly for the American market, given the fact that it calculates the P / E 10 of the S&P 500. I advise you to read Irrational Exuberance from Robert Shiller to dive deeper in the subject. He is one of the most fascinating teachers I have had the chance to study with. You can take an introductory course online with him on Coursera at

Lumber’s flash crash

(information contained in this website do not constitute investment advice, I’m not a financial professional…)

The housing market is on fire, the price of woods is crazy. What is going on and why it is impossible for the lumber price has always reached the roof. Lumber historically fluctuates between 200$ to 400$ USD/1,000 board feet express has (bd ft). Take a look at this graph, representing the price for the past 50 years. Like almost everything in finance the price is driven by supply and demand. The supply chain was clearly disrupted during the pandemic, partly because of the closing of the dryers but also of the expedition. On the demand side, the saving rates increase to increase significantly, the mortgage rates were at a record low and lots of owner made renovation for the new stay-at-home lifestyle. I personally calculate that my second home project will cost me 30 000$ more to build only for the lumber part. If the price continues to increase, maybe around the psychological barrier of 2000$/bd ft, the demand will almost disappear and the price will tank. The most important factors in Canada are in order: interest rate, re-opening and sawmill production. Those factors will influence directly the demand on the new house building project and renovations. Just so you know, a 2×4 cost around 8$ each compared to 2$ before the pandemic. I believe that this anomaly will have repercussions on the rental price soon too. We will see a pronounced drop in lumber prices within 12 to 18 months depending on the month. I even have the impression that it could fall to its historical price if people start travelling again and go back to work in the big cities.