Former Lehman Trader: Here’s how I’m shorting Canadian housing

Real Vision TV
Real Vision TV
A man hangs a Canadian flag on the deck of his cottage in Rideau Ferry, Ontario, Canda July 1, 2016. REUTERS/Gary Cameron

Home prices in Canada are “goofy” expensive.

That’s according to former Lehman Brothers trader and New York Times Bestselling financial author Jared Dillian.

Dillian is a professional investor who trades stocks for a living. He thinks house prices in Australia, Canada and Sweden are all crazy right now, but “Short Canada” is one of the biggest trades in his portfolio right now.

As you surely remember, U.S. housing surged to bubble prices in the early 2000s. A few smart investors who saw the crash coming made a killing. They made billions betting against U.S. homebuilder stocks, U.S. banks, and other U.S. sectors.

Dillian believes betting against Canada today could generate similar large gains. Consider:

  • The average Toronto home has appreciated 42% in the last two years
  • The average Vancouver home has appreciated 57% in the last three years
  • A run-down, 86-year-old Vancouver home recently sold for $2.4 million

“I get the question all the time. ‘How do you short Canada?’” Dillian says. “And the first thing I say is Canadian dollar. And the second thing I say is the banks.”

Some traders may think these trades are too broad. But in the following two-minute video extract, Dillian uses an example from recent history to explain why traders could stand to make huge gains.

Click here to watch the video: