Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Karim Zaghib of Hydro-Quebec

Luc Lavergne

Charged up

Re Hydro-Québec's quest for the 'God Battery' (Feb. 6): Hydro-Québec is a public utility, fully funded by the taxpayers of Quebec. Research in any area other than the generation and distribution of bulk electricity should be terminated immediately. All monies currently spent on battery and other pie-in-the-sky research should be put toward reducing electricity rates for Quebec residents. As mentioned in the article, there are dozens and dozens of private firms around the world, funded by voluntary investors, carrying out 'God battery' research – and that's the way it should be. Peter Lewis-Watts, Barrie, Ont.

Too good to be true

Story continues below advertisement

Tim Cestnick's recent three-part series on leveraged investing outlines the strategy's lure and potential pitfalls, but fails to mention that leveraging offers no upside when paired with low- or medium-risk investments. Its only hope of being profitable lies in using higher-risk products, increasing both the likelihood and magnitude of losses. And these structural risks really can't be mitigated.

His key touchstone is an example using an 8-per-cent rate of return. That's not realistic for balanced portfolios today. The Financial Planning Standards Council's 2015 projection-assumption guideline for balanced portfolios is 3.25 per cent. At that rate, leveraging's upside completely vanishes – leaving nothing but the risk of loss magnification and the risk that a rise in interest rates will push the investor's break-even point higher while simultaneously knocking down the value of equities in their portfolio.

None of the series' mitigation suggestions addresses this problem. In particular, it's no use turning to segregated funds. They charge high fees for their capital-repayment guarantees, so their net performance lags other funds, and those high costs will just push the leveraging strategy's break-even point further out of reach.

The notion that you can safely and reliably accumulate wealth by using (i.e., borrowing) other people's money is simply too good to be true. Neil Gross, executive director, FAIR Canada

Finance basics

Re Money 101: Three things every teen should understand about money (Feb. 5): Tim Cestnick got it right when he said that "no one is learning much about money at school." I'm 25 and at the stage of life where many of my peers are in the process of purchasing new vehicles and houses, dealing with student debt, contributing to retirement savings and generally trying to manage life's big financial decisions for the first time. Unfortunately, many of these decisions are proving difficult and stressful.

This is largely because no one learns the basics of personal finance in school. Instead, everyone has to learn from their own costly mistakes. What if we were taught in high school why savings are important, the basics of investing and budgeting, how to file income taxes? What if people had all the knowledge needed to make sound financial decisions the first time around? Anna Moat, Chesterville, Ont.

Story continues below advertisement

Overfunded? Untrue

Re Six Easy Steps, Canada, For Better Tech Ecosystems (Feb. 2): As co-founder of a Toronto startup, let me dismiss a few myths. First, to suggest that government programs are overfunding in Series A financing in Canada is patently untrue. How can a Canadian company build the necessary tech team with a grant of $10,000? Peter Thiel's thesis that you need to align workers and evangelize them into the culture by means of sweat equity may have worked in 2005, but today's graduates rightfully want to be paid a salary. The problem is that Canada lacks the hybrid risk-taking philosophy associated with vibrant hubs such as Silicon Valley and Israel. Moreover, most venture capital (VC) investors in Canada are postrevenue investors. This is a direct manifestation of our lack of a risk-taking culture. When a startup is generating revenue, it can self-finance without VC money.

The second myth is that Canadian startups have not developed a collaborative community. But in Toronto alone, there are many incubators cross-pollinizing ideas and know-how. My own company has partnered with IBM in their Innovation Space and the positive feedback loop associated with this is incredibly collaborative and inspiring.

There are too many brilliant ideas coming out of Canadian universities that end up monetized and scaled up abroad. We must invest at the early stages to ensure global scalability and commercial viability. Gregory Melchior, CEO and co-founder, 4D Virtual World

Letters to the editor should be exclusive to The Globe and Mail. Letters may be edited for length and clarity. Submit to letters@globeandmail.com.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies