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shorting Canadian Banks

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  • Sep 22nd, 2017 10:09 am
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Sr. Member
Oct 21, 2014
625 posts
406 upvotes
Burlington, ON
muppetslayer wrote:
May 8th, 2017 8:30 am
So how exactly did you do this OP when RY's all time high was 99.9?
Nice catch. Must be "mosaic theory".
[OP]
Member
Dec 13, 2014
355 posts
104 upvotes
Hampstead, QC
If you MUST know:
I added 2200 short at 98.87 which gave me a cost of 84.65
I covered a measly 300 shares recently.
And GUNG, I do not accept your bet...I am off on the timing YES...for sure I do admit this...But I am convinced that oil and real estate will hit RY earnings in a big way. The dividend cut will come as will the collapse of share price.
Deal Addict
Nov 24, 2013
4051 posts
1101 upvotes
Kingston, ON
muppetslayer wrote:
May 8th, 2017 8:30 am
Last December OP posted:


today OP posted:


So he added 1900 shorts, while his short cost increased from -$815,223.56 to -$1,007,370.31, which is an increase of 192146.8.
Which means he newly shorted at 192146.8/1900= 101.13
So how exactly did you do this OP when RY's all time high was 99.9?
Said it before and we can say it again. This is a troll thread.
Deal Addict
User avatar
Oct 9, 2008
3943 posts
819 upvotes
Thornhill
muppetslayer wrote:
May 8th, 2017 8:30 am
Last December OP posted:


today OP posted:


So he added 1900 shorts, while his short cost increased from -$815,223.56 to -$1,007,370.31, which is an increase of 192146.8.
Which means he newly shorted at 192146.8/1900= 101.13
So how exactly did you do this OP when RY's all time high was 99.9?
The wealthiest man on RFD OP continues with his relentless short-attack Face With Stuck-out Tongue And Tightly-closed Eyes
Member
Sep 22, 2005
467 posts
40 upvotes
BC
maybe because of adding dividend payment to the cost?
Jeenyus1 wrote:
May 9th, 2017 9:09 am
The wealthiest man on RFD OP continues with his relentless short-attack Face With Stuck-out Tongue And Tightly-closed Eyes
Member
Aug 14, 2010
356 posts
135 upvotes
Toronto
leflower wrote:
May 10th, 2017 8:31 pm
https://www.bloomberg.com/news/articles ... ebt-burden

But my thesis is nonsense Gung will tell you. As we quickly approach the 200 DMA. I understand that bulls hate hearing this but at least newbies should understand the risks of buying bank shares at these levels.

Long, longggggg way to go to get to $59/share bud. Which is what it'll need to hit for you to be right. In 3 months. And then all the excuses is the world will commence. But but but my timing was off, but but but oil was supposed to stay at $30, but but a recession was supposed to happen etc etc.
Sr. Member
Aug 17, 2008
524 posts
149 upvotes
I'm sure most ppl here have not read the Moody's ratings action in full. While the main stream media and the OP have focused on private debt levels, that was not the only comment by Moody's on RY.

Below is a broader excerpt and here is the full press release. I would disagree as to the length RY has grown their capital markets business. IMO, they have been generally successful since "the Big Bang" in 1986, with only a pullback in European sovereign trading about 5 years ago as a misstep.

Royal Bank of Canada (RBC A1/A1 negative, a3 ); RBC's ratings reflect its profile as a strong and diversified universal bank with sustainable leading market shares across many retail products and services in its home market. The stable earnings from RBC's domestic Personal and Commercial franchise are a key credit strength. RBC has had very low earnings volatility, supported by the stabilizing effect of the recurring profitability of RBC's solid domestic retail banking franchise.

However, over the past four years RBC has demonstrated rapid growth in its Capital Markets business, led by growth in its US corporate loan book and the repo and securities finance business. We believe that RBC's US focused Capital Markets growth strategy increases its exposure to risks that could more rapidly erode its creditworthiness in volatile or adverse market conditions, and is therefore negative for the credit. To date, this risk has been well managed and its performance has been very stable. Maintaining this performance through more volatile markets will be key to RBC's longer term risk management track record. We do not expect that this business will continue on this growth trajectory, and, in fact, that capital committed to the Capital Markets business will be more constrained.

I don't own. Never have and that's my mistake.
Sr. Member
Oct 21, 2014
625 posts
406 upvotes
Burlington, ON
jerryhung wrote:
May 11th, 2017 1:37 pm
Time to buy banks?

everyone at their 2017 low
Maybe. No one really knows what an equity will do in the short to medium term, but long term they've been winners before and I believe they will continue to be.
Sr. Member
Jun 15, 2012
756 posts
51 upvotes
MB
jerryhung wrote:
May 11th, 2017 1:37 pm
Time to buy banks?

everyone at their 2017 low
RY still trades at 2.11 p/b at the same time DB at 0.4
Fair value of RY are around 45 CAD based on books
On what else would you estimated financial institutions
"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
Deal Addict
Nov 24, 2013
4051 posts
1101 upvotes
Kingston, ON
leflower wrote:
May 10th, 2017 8:31 pm
https://www.bloomberg.com/news/articles ... ebt-burden

But my thesis is nonsense Gung will tell you. As we quickly approach the 200 DMA. I understand that bulls hate hearing this but at least newbies should understand the risks of buying bank shares at these levels.
If you have a thesis (as in a written out and supported summary of research), let's see it. I'm pretty sure all you have is a "hunch" and some zero hedge links.

Big talk about "risk" in buying bank shares when shorting them was "one of the safest trades out there!"
Deal Addict
Aug 27, 2009
1105 posts
249 upvotes
Oakville
OP is a troll but the discussion of Cdn banks as investments is worthwhile to have.

Moody's last downgraded Cdn banks in 2012 when RY was trading around $52. Today it's trading around $92 having corrected from almost $100. A simplistic calculation would say $40 gain over 5 years = 8% pa. Add the 4-5% dividend and you get 12-13% total return per year. I'll take that all day any day.

Can RY fall further? Sure it can. We could have nuclear war with N. Korea, global trade wars, Trump could get assassinated, etc. but to bet on those types of things or black swan events would be folly as part of a long term investment strategy.
Sr. Member
Oct 21, 2014
625 posts
406 upvotes
Burlington, ON
RETD wrote:
May 12th, 2017 10:14 am
OP is a troll but the discussion of Cdn banks as investments is worthwhile to have.

Moody's last downgraded Cdn banks in 2012 when RY was trading around $52. Today it's trading around $92 having corrected from almost $100. A simplistic calculation would say $40 gain over 5 years = 8% pa. Add the 4-5% dividend and you get 12-13% total return per year. I'll take that all day any day.

Can RY fall further? Sure it can. We could have nuclear war with N. Korea, global trade wars, Trump could get assassinated, etc. but to bet on those types of things or black swan events would be folly as part of a long term investment strategy.
It's true, you can't argue with axe grinders, they are by definition impervious to facts and instead rely on a headlines.

I like your attempt to inject reality in to this thread. It will be short lived, but here you go: RBC 2017 Q1 Results

To quote the article: "Royal Bank of Canada (RY on TSX and NYSE) today reported net income of $3,027 million for the first quarter ended January 31, 2017, up $580 million or 24% from a year ago. Results reflect strong earnings in Personal & Commercial Banking, Wealth Management, Capital Markets and Investor & Treasury Services. Our performance also reflects benefits from our ongoing focus on efficiency management activities, driving strong operating leverage across most of our business segments. Excluding our share of a gain related to the sale of the U.S. operations of Moneris Solutions Corporation (Moneris), which was $212 million (before- and after-tax), net income of $2,815 million(1) was up $368 million or 15% from the prior year."

^ FYI to all shorts, this is what you're betting against. Not Zerohedge, not what your brother's neighbor thinks, not what a priced out renter who needs a crash to get in to the market thinks. This.
Sr. Member
Jun 15, 2012
756 posts
51 upvotes
MB
Guys do really believe everything that banksters say ? Assets can be rubbish and all income increases are forged. Don't you think they are cooking their books ?
If something is too good to be true it probably is.
"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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