Investing

[Merged] Another bloody red day on the TSX

  • Last Updated:
  • May 23rd, 2018 5:39 am
Deal Guru
Jun 26, 2011
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Markham
If people are thinking this is a bad drop.....there is gonna be some major pain when a real correction comes.
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Sep 19, 2004
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RolandCouch wrote:
Aug 18th, 2017 11:51 am
If people are thinking this is a bad drop.....there is gonna be some major pain when a real correction comes.
Problem is, TSX hasn't seen any meaningful pop at all (despite crude is closer to $50 than $40)
So it goes stairs down while US is all-time high, and Elevator down when US drops too
The longer it goes, the less people want to invest in TSX/Canada
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Deal Addict
Nov 28, 2010
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Brampton
So any extra cash should be held onto until the real correction or delegate now and borrow to invest when/if things get worse?
Sr. Member
Feb 26, 2017
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endokuken wrote:
Aug 18th, 2017 12:09 pm
So any extra cash should be held onto until the real correction or delegate now and borrow to invest when/if things get worse?
I'd probably just invest when you have funds. Try to buy companies that are fairly or undervalued. Sometimes it works out great other times its less than ideal. Overall, it should work out over time.
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Apr 21, 2004
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Besides North Korea, what other possible black swans are there?

Trump has been on the sit for almost a year already.
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Oct 27, 2014
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Toronto, ON
alanbrenton wrote:
Aug 18th, 2017 12:17 pm
Besides North Korea, what other possible black swans are there?

Trump has been on the sit for almost a year already.
If you can predict it, then it is not a black swan. So no point predicting it. Just ensure you have liquidity at all times
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muppetslayer wrote:
Aug 18th, 2017 12:21 pm
If you can predict it, then it is not a black swan. So no point predicting it. Just ensure you have liquidity at all times
You cannot predict when it will occur but of course, it helps to know what some of these events are. I never asked when (and the magnitude) because like you said, that's impossible to find that out unless one is the Korean dictator or a cuckoo out to hurt other people and even then, the magnitude will still be an unknown.

=====

5-6% down from the all time high and people are complaining?
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Jun 15, 2012
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MB
alanbrenton wrote:
Aug 18th, 2017 12:17 pm
Besides North Korea, what other possible black swans are there?

Trump has been on the sit for almost a year already.
20 trillions USA debt is not enough?
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
- Warren Buffett
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ukrainiandude wrote:
Aug 18th, 2017 10:01 pm
20 trillions USA debt is not enough?
As we all have witnessed, the US can pile up as much debt as it can as long as the USD is the de facto global reserve currency for central banks.

Only when these holdings are massively dump by China will it pressure yields to rise. I doubt China will ever do that and jeopardize its own economy. I think Japan is happy with they bond yields they are getting on their USD treasury holdings.
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jerryhung wrote:
Aug 18th, 2017 11:55 am
Problem is, TSX hasn't seen any meaningful pop at all (despite crude is closer to $50 than $40)
So it goes stairs down while US is all-time high, and Elevator down when US drops too
The longer it goes, the less people want to invest in TSX/Canada
I believe that's because TSX, the index, is heavily concentrated in energy and financial sectors only. But many other stocks and sectors are doing better. LNR has been undervalued for some time, look at their performance this year. Same with CJR.B. Look at CCA, WJA, RCI.B or RCH. Or stocks in the defensive sector like LAS.A. Utilities sector. Meanwhile many companies are fairly valued or undervalued, which is ideal if you want to invest in Canadian stocks. It's a lot harder to invest in US stocks now.


Rod
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Jun 3, 2009
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rodbarc wrote:
Aug 19th, 2017 8:52 am
I believe that's because TSX, the index, is heavily concentrated in energy and financial sectors only. But many other stocks and sectors are doing better. LNR has been undervalued for some time, look at their performance this year. Same with CJR.B. Look at CCA, WJA, RCI.B or RCH. Or stocks in the defensive sector like LAS.A. Utilities sector. Meanwhile many companies are fairly valued or undervalued, which is ideal if you want to invest in Canadian stocks. It's a lot harder to invest in US stocks now.


Rod
Aren't RCH and LAS.A massively overvalued on FASTGraphs?
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cn_habs wrote:
Aug 19th, 2017 9:50 am
Aren't RCH and LAS.A massively overvalued on FASTGraphs?
Yes, they are. I was just mentioning that not every company in TSX is performing like the index.


Rod
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Jul 1, 2007
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What's absolutely amazing is that this thread has been going on for more than 10 years (first post in 2007). Only posts 1-2776 happened during an actual bear market. Posts 2777 to 6287+ were made during a bull market. That's now the majority of posts.

True, the TSX over that time period went up to 15 thousand something, then down to around 7000, then up again and now is actually back to below 15K.

A couple of learnings:
  1. The TSX is a garbage index and is completely irrelevant when measuring either the strength of the global stock markets or the economy in Canada.
  2. Thusly, it is ever important to diversify diversify diversify. Diversifying doesn't mean holding a 10% allocation to global stocks. Canadian stocks should in fact be a minority of your portfolio
  3. Maybe for the Canadian equity part of your portfolio (which should be a minority!) an actively managed fund is worth it. Plenty of Canadian equity funds out there have done pretty well, despite the TSX being rangebound. I'm just saying indexes make sense for all your large cap U.S. and international holdings, but maybe not so much for Canadian.
  4. There will always be volatility, and despite over 3500 posts in this thread from March 2009 to present global stock markets have made significant gains.
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Sep 19, 2004
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TSX is only 3-5% of global markets, so technically we should only hold 3-5% in our portfolio (vs. even Couch Potato's 25%-33% recommendation, like split between Canada/US/Int'l/Bonds)
I really thought 2016-2017 would be a turnaround year for TSX, guess not. TSX now lives and dies with Energy or Canadian R.E.

Garbage INDEX for sure, long-term return-wise
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