Bank of Nova Scotia / Scotiabank (BNS)

[Daf]

I am thinking of buying Scotiabank, ideally at 50 bucks a share through my TFSA thoughts on this? Or what would you recomend? I want something stable, and good dividends.

[cjottawa]

I am thinking of buying Scotiabank, ideally at 50 bucks a share through my TFSA thoughts on this? Or what would you recomend? I want something stable, and good dividends.

BNS is one of a handful of companies that offers full dividend reinvestment and optional cash/share purchase plans. (DRIP & SPP/OCP).

No commissions and a 2% discount on share purchases are big selling points of getting in as a direct DRIP investor instead of going through a brokerage.

[Daf]

I just bought at 80.55 hopefully a good buy.

Edit: whoops meant to say 50.55

[adeel]

I assume you are referring to investments not held in a registered account?

[Jungle]

BNS has an amazing track record or increasing dividends beyond inflation (almost) every year. I loved the last increase around 6%.

[Daf]

Whoops, I meant I bought it for 50.55 and I bought in my TFSA

[S5]

Whoops, I meant I bought it for 50.55 and I bought in my TFSA

How did you buy below the day's low? http://tmx.quotemedia.com/quote.php?qm_symbol=BNS

[Sauerkraut]

How did you buy below the day's low? http://tmx.quotemedia.com/quote.php?qm_symbol=BNS

on NYSE using $US funds?? more likely though, another typo

[Daf]

Iv clearly been out of it every time I posted...

Ok.. One more time..... 50.85.....big whoops. On my postings...sorry guys

[Daf]

With the S&P downgrade is it time to sell? Or hold off and collect dividends?

[Sauerkraut]

With the S&P downgrade is it time to sell? Or hold off and collect dividends?

Your OP said you wanted something stable with good dividends and now you want to sell it after 3 days...are you bipolar?

[angelok]

With the S&P downgrade is it time to sell? Or hold off and collect dividends?

Ignore the S&P noise.

[cjottawa]

Ignore the S&P noise.

Put another way...

From "The Four Pillars of Investing" by Dr. William Bernstein, on short term volatility versus long term return:


A superb metaphor for the long-term/short-term dichotomy in stock returns comes from Ralph Wanger, the witty and incisive principal of the Acorn Funds.

He likens the market to an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog's owner is walking from Columbus Circle, through Central Park, to the Metropolitan Museum. At any one moment, there is no predicting which way the pooch will lurch. But in the long run, you know he's heading northeast at an average speed of three miles per hour.

What is astonishing is that almost all of the market players, big and small, seem to have their eye on the dog, and not the owner.

Stop watching the dog.

[Daf]

I do...but I don't want to lose my capital! I have no problem to buy and sell, but ideally I do want long term.

@ang and cj....thx for the tips

[SkimGuy]

Put another way...

From "The Four Pillars of Investing" by Dr. William Bernstein, on short term volatility versus long term return:



Stop watching the dog.

I gotta read this book lol

[Mowie666]

I would be very careful here. Could easily see a 10-15% pullback in the short-medium term if CDN real-estate starts to teeter as it appears it may. Disclaimer: I own a bunch of ZWB, but very wary of that holding right now.

[ccyk]

Ignore the S&P noise.
not noise, S&P is right. if RE bubble pop, say 40% down, many banks are in big trouble. this is not a remote risk.

[angelok]

not noise, S&P is right. if RE bubble pop, say 40% down, many banks are in big trouble. this is not a remote risk.

The Real Estate issue is already priced in to all of the banks stock prices. BNS is already down about 18% from it's 52 high. Having said that, most of the mortgages are insured by CHMC. The tax payers will be the ones that will be holding the preverbial bag.

[Daf]

So with all this, is it time to sell?

[ccyk]

The Real Estate issue is already priced in to all of the banks stock prices. BNS is already down about 18% from it's 52 high. Having said that, most of the mortgages are insured by CHMC. The tax payers will be the ones that will be holding the preverbial bag.

I disagree. that 18% down from 52wk high is just movement with general market due to European mass. CHMC will bankrupt with a 40% RE crash-> banks will follow-> a repeat of 2008 US. it is likely taxpayer will save the banks, but shareholders will get wiped out.

[Cerenity]

BNS is the most international cdn bank, and thus, is a proxy on global / emerging market growth and middle class emergence
while its hard to say how much banks are really exposed to RE or other risky assets, BNS and TD are really the relatively safer banks out of the big 5.

personally, i think BNS sell off is mostly due to dampening global prospects and slow downs in emerging markets (it has a big basket of businesses in latin america).

[Johnny0c]

Picked it up on sale around 50.50 over 3% profit in a couple days will exit around 53.00, don't see any reason not to pick up a quality stock when the price is right. Close to 52 week low trades decent to it's earnings and has a nice divi.

[Daf]

It has a very nice dividend, which is why I'm considering keeping it. That's, the only thing keeping me in it.

[ccyk]

Picked it up on sale around 50.50 over 3% profit in a couple days will exit around 53.00, don't see any reason not to pick up a quality stock when the price is right. Close to 52 week low trades decent to it's earnings and has a nice divi.
http://i.imgur.com/OT9JF.png
hardly close 52 wk low...

if you hold bank stocks for past year, only TD can breakeven with dividend.

RY, BMO, BNS, CM are all at loss, even with dividend.

[rfdrfd]

http://i.imgur.com/OT9JF.png
hardly close 52 wk low...

if you hold bank stocks for past year, only TD can breakeven with dividend.

RY, BMO, BNS, CM are all at loss, even with dividend.


Its very dangerous to fall in love with a stock. When something is on a clear down trend, we say to ourselves, Oh... this QUALITY stock/company is now so cheap, let's buy in. Yes, logically it makes sense. But think about it. Why is a stock going down ? Because SELLER > BUYERS. It doesn't matter if its a GREAT company, the stock is traded by traders. Are they looking at the quality of the company?

If yes, then why is it going down? As you pointed out, RY, BMO, CM, etc. are all down, even with dividends.

Trade the stock WITHOUT looking at the company, that's the trick. Look at each chart objectively. Don't think, oh, this is Google, or Apple, it never goes down. Ignore that symbol, just look at the trend.

if its DOWN, then short it when price comes back up to a good supply zone.
if its UP, then buy it when price comes back to a good low demand zone.

Right now, BNS is DOWN down.... play here is short. On a Daily chart, 57 was a very good SZ back from 2011 July 26. Price came up to here on March 27-29. Short there. Current price is now 52. A beautiful $5 gain.

So if you missed that short, whats the next chance? Perhaps 52.60 would be a good try. Have a stop above that to kick you out if you are wrong of course.

Next good time to short BNS.to is at 53.94 area. Now that is a nice one, let's see when price gets there.

[rfdrfd]

Picked it up on sale around 50.50 over 3% profit in a couple days will exit around 53.00, don't see any reason not to pick up a quality stock when the price is right. Close to 52 week low trades decent to it's earnings and has a nice divi.

Reason not to buy:
- you are going counter trend by going long
- yes, it will work sometimes, but the dominant trend is down = probability of price dropping is HIGHER than going up
- keep your profit targets tight
- of course use stops

[Daf]

Great post! Thanks so much for your feedback....

When u cash out a stock, how much on average do you make?

[Cerenity]

i actually see a long term consolidation trend in the 2 main banks i follow, TD, and BNS.

i think you're right on a short term chart (daily or shorter) but the weekly chart for both show consolidation after a bull run off the 2009 lows
for BNS it ran 25 to 60, and currently consolidating 50-60
for TD it ran 30 to 85 and currently consolidating 70 to 85

for both the volatility bands are narrowing though. i dabbled in both over the last year or so when they were at the bottom of those ranges, and so far they've held. but i guess we'll see which way the chart resolves going forwards. neither long term bull trend is broken fwiw.

[rfdrfd]

i actually see a long term consolidation trend in the 2 main banks i follow, TD, and BNS.

i think you're right on a short term chart (daily or shorter) but the weekly chart for both show consolidation after a bull run off the 2009 lows
for BNS it ran 25 to 60, and currently consolidating 50-60
for TD it ran 30 to 85 and currently consolidating 70 to 85

for both the volatility bands are narrowing though. i dabbled in both over the last year or so when they were at the bottom of those ranges, and so far they've held. but i guess we'll see which way the chart resolves going forwards. neither long term bull trend is broken fwiw.


Yup, it all depends on what you are trying to do. Position, swing or intraday trading.

If you are doing longterm position trading, then only look at monthly/Weekly/daily charts, and plot your setup there. The direction can be very different vs. a smaller timeframe.

On a larger frame, it could be on an UP trend
On a medium timeframe, it could be on an UP trend
On a shorter timeframe, it could be on a DOWN trend <--- this scenario is a classic BUY now (long)

It is on a pullback or corrective move from an impulse UP move.

[Johnny0c]

A lot closer than its high at 57 and change lol, yeah I wouldn't advocate holding for long either but very attractive buy at 50.50 for myself.

[angelok]

I disagree. that 18% down from 52wk high is just movement with general market due to European mass. CHMC will bankrupt with a 40% RE crash-> banks will follow-> a repeat of 2008 US. it is likely taxpayer will save the banks, but shareholders will get wiped out.

You are more negative on RE than I am. I am predicting a 15% haircut. We will see how it plays out though..

[Daf]

Another good day for BNS :)

[ccyk]

You are more negative on RE than I am. I am predicting a 15% haircut. We will see how it plays out though..

not 100% chance of a 40% drop
more like
40% chance of 15% drop
40% down 25%
20% down 40%

you get the idea