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The S&P/TSX Composite Index rose two points on the second-last day of 2020. Canadian stocks were hit with turbulence in February and March as the severity of the COVID-19 pandemic became apparent. Since then, the TSX Index has roared nearly all the way back. Opportunistic investors have been rewarded for buying low back in the early spring. However, investors should be wary in this overheated environment. Is a market crash inevitable in 2021? Let’s discuss. Why a stock market crash is coming in 2021 Back in September, I’d discussed some of the reasons a stock market crash was dead ahead....

"Gambling is a venture without calculation; speculation is a venture with calculation." — Dickson G. Watts Being a self-professed speculator in the junior mining space for the past forty-odd years, I used to include that quote in every client letter and in every research piece as a means of reminding readers that the art of speculation involves weighing many different but converging data points. That quote was the brainchild of Dickson G. Watts, an exceedingly successful speculator from the late 1800s and former president of the New York Cotton Exchange, whose book "Speculation ...

Image source: Getty Images There were many firsts for Canadians this year. For the first time, there was a nationwide lockdown, double-digit unemployment rate, generous cash benefits, and economic slowdown. Despite an economic crisis, the stock market rallied riding on the tech bulls. This was a rally that even Warren Buffett feared to jump into. The famous Buffett Indicator showed that the stocks were overvalued, warning of a market crash 2.0. How correct are Buffett indicator’s warnings? The Buffett indicator measures market capitalization to gross domestic product (GD...

Image source: Getty Images Last week, I’d discussed one of Warren Buffett’s favourite market indicators. The Buffett Indicator, which takes the combined market capitalizations of publicly traded stocks and divides it by a nation’s gross domestic product (GDP), has soared to dangerously high levels in late 2020. There is optimism due to the vaccine rollout, but developed nations are still entangled in a pandemic that is spurring more restrictions and lockdowns. This will inevitably take an economic toll. Today, I want to discuss how investors can follow in Warren Buff...