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Locked: Cdn Bank stocks

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Mar 11, 2016
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Cdn Bank stocks

What Cdn Bank stock are you most bullish about and why?
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Aug 10, 2005
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Fjr2005 wrote: What Cdn Bank stock are you most bullish about and why?
None. They're all trading at near record highs.
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Nov 2, 2013
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Not any I'd buy expecting to make a lot of money. Just something to park some money in, collect dividends, and then get a little growth.
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Thanks for the comments...what would be a good sector/or grp of blue chip companies that might offer similar dividend income with MORE potential for growth??
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Fjr2005 wrote: Thanks for the comments...what would be a good sector/or grp of blue chip companies that might offer similar dividend income with MORE potential for growth??
MORE is going to be extremely subjective. Depends on how much risk you would like to take. Riskier -> more potential

As for dividends there is a extremely lengthy list.
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Sep 6, 2010
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If any of the comments are discouraging you from buying any of the big Canadian banks and your time frame is longer than 20 years....pay no attention to any negativity.
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Nov 9, 2013
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Fjr2005 wrote: What Cdn Bank stock are you most bullish about and why?
RY, TD and to a lesser extent BNS and BMO

They aren't going away anytime soon. They are facets of every day life and everyone, from all walks of life, in all industries, requires their services.

Each big bank has allocated an amount of capital for loss provision, in the event of an economic collapse. This is money that does nothing for the company - it just sits in their accounts (this is why bank ROE's have been decreasing as of late). As the economic conditions improve, they can plow this capital back into the business, which will provide a nice tail wind.

Are there risks? Sure, nothing is risk free. But the banks are highly regulated and provide an essential service.

In terms of valuation, price itself plays no impact. What you should be concerned about is what you get for the price you pay. I would say most are probably pretty close to their fair value, if not slightly undervalued.
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Feb 23, 2004
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I was going to buy TD. But i went for Telus instead because it's cheaper.
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Sep 19, 2004
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some would say to buy Banks ETF like ZEB (or ZWB), or XFN (banks + insurances, etc...
I think RY & BNS are relatively most exposed to oil, TD is to USA... I hold only BMO/BNS now after sold out TD/RY


just like for USA, I wouldn't know which one to buy (C, BAC, MS, JPM, etc...) , and would target XLF instead
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Oct 21, 2014
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Soda Popinski wrote: None. They're all trading at near record highs.
RY is currently trading at 11.79x earnings, not that expensive really. RY is trading near all time highs because their EPS is at an all time high.
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Gungnir wrote: RY is currently trading at 11.79x earnings, not that expensive really. RY is trading near all time highs because their EPS is at an all time high.
If I recall correctly CIBC is even slightly cheaper. Nice dividend too. They're more exposed to RE risk though.
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FirstGear wrote: If I recall correctly CIBC is even slightly cheaper. Nice dividend too. They're more exposed to RE risk though.
Hey, not to be sidetracked.. but um congratz on the purchase of your first house.
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Nov 24, 2013
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The banks each have different extents and locations of foreign operations, so you could choose based on what you think CADUSD or another currency will do. Personally, I think it's bottomed and the long term direction of the Canadian dollar is towards parity, 1.20, 1.15, 1.10 and so on, so I chose BNS. It was down more than the others (in terms of P/E) earlier in the year, and has recovered since along with the CAD recovery.
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Nov 9, 2013
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redflagdealboy1 wrote: I was going to buy TD. But i went for Telus instead because it's cheaper.
What do you mean by "cheaper"? Because the share price is lower than TD? Share price shouldn't matter.

For example, comparing RY to T (dividends ignored):

RY's current P/E is 11.74 at a price of 78.01. 2017's earnings per share are projected to be 7.11, so therefore if the PE remains at 11.74 the price would be 83.47 (7% gain). Moving to a historical average P/E of 15, the share price would be 106.65, which works out to a 27% gain.

Telus, on the other hand, has a current P/E 18.56 at a price of 41.66 (close to 1/2 RY's share price). 2017 EPS is projected to be 2.75 in 2017. Thus, if the PE remains the same at 18.56 the price would be 51.04 (19% Gain). However if the PE reverts to a historical average of 15, the share price in 2017 would be 41.25, or a 1% loss.

Thus, RY has a higher potential upside and lower downside. This, among other things, makes me believe RY is the better investment. The price of a share shouldn't dictate whether or not you invest in a company.
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rapashoo wrote: Hey, not to be sidetracked.. but um congratz on the purchase of your first house.
Thanks, I looked at easily 50+ properties before I bought that one lol. Though it was partly an emotional purchase it was the numbers that brought me to it. Previous owner wanted a fire sale so got below market value, and vacancy is lowest and rents on the high end in the region.
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Dec 13, 2014
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Fjr2005 wrote: What Cdn Bank stock are you most bullish about and why?
In my thread I explain why one should be short Canadian banks and not long. Likely to correct at least 30% but closer to 50% within a few years.
Im short 4000 shares of RY.
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Nov 9, 2013
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Sanyo wrote: Bank stocks look too expensive for me.

Also we are sitting on a housing bubble of epic proportions! They will get almost no growth when the bubble pops.
Amid a chorus of concern about Canada’s overheated housing market, Moody’s Investors Service says it believes the country’s biggest lenders can easily withstand a severe market downturn, after the credit-rating agency simulated a U.S.-style mortgage crisis...

In a nod to the banks’ earning power and diversification, Moody’s believes lenders would recover from losses associated with a sharp housing downturn in as little as three months.
http://www.theglobeandmail.com/report-o ... e30531315/
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Oct 21, 2014
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leflower wrote: In my thread I explain why one should be short Canadian banks and not long. Likely to correct at least 30% but closer to 50% within a few years.
Im short 4000 shares of RY.
Is that the same thread that you falsified your accounting by not including all the costs you pay for shorting a stock? If you want to throw away your money go ahead I don't care but don't bring other people into your nonsense.
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Dec 6, 2006
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Gungnir wrote: Is that the same thread that you falsified your accounting by not including all the costs you pay for shorting a stock? If you want to throw away your money go ahead I don't care but don't bring other people into your nonsense.
Dont' forget to include other completely different trades which are currently profitable to somehow justify the bank shorting strategy works.
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boyohboy wrote: Dont' forget to include other completely different trades which are currently profitable to somehow justify the bank shorting strategy works.
Sanyo wrote: Bank stocks look too expensive for me.

Also we are sitting on a housing bubble of epic proportions! They will get almost no growth when the bubble pops.
The problem is that money just doesn't disappear from the financial system- it has to go somewhere. So if you were actually bearish on Canadian Banks, better to invest in something else as a hedge. Or just do the typical approach and diversify your money and experience.

Gold is a primary example, people flock to it when everything else goes into the toilet. But being bullish on gold is like betting against the entire economy. Part of the reason Warren Buffett doesn't believe in investing in gold. Many people just buy it as a hedge (excluding junior miners).
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