Investing

shorting Canadian Banks

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Jr. Member
Nov 28, 2011
154 posts
63 upvotes
SCARBOROUGH
zobi123 wrote: OP your dream is coming true, a few more people like you are shorting.

Atlanta-based PAA Research is laying out a short argument against Royal Bank of Canada and CIBC, arguing the outl...

https://www.bnn.ca/1.928053.1511908831
PAA Research is a joke of a research site, full of conspiracy theories, half-truths and general BS.

This is the returns they've posted themselves on their "investment ideas":

Image
Deal Addict
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Apr 12, 2012
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Toronto
peregrine01 wrote: PAA Research is a joke of a research site, full of conspiracy theories, half-truths and general BS.

This is the returns they've posted themselves on their "investment ideas":

Image
Wow that is terrible, they have no credability with that kind of performance...
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Oct 1, 2011
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Jungle wrote: lol

The firm suggests worse case scenario, that after 3 years, stock prices could drop by 50%

However,

"PAA set price targets for RBC and CIBC at $70 and $76, respectively. "
They think RBC should be valued at less than CIBC? Weird.
Deal Addict
Oct 21, 2014
1773 posts
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Burlington, ON
RY reported. link That closes the books on another record year... As I've been saying for the past few years, don't short one of the most profitable banks in Canada.

TORONTO, November 29, 2017 – Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $11,469 million
for the year ended October 31, 2017, up $1,011 million or 10% from the prior year. Results were driven by strong earnings in Personal
& Commercial Banking, Wealth Management, Capital Markets and Investor & Treasury Services, partially offset by lower earnings in
Insurance. Results also reflect strong credit quality, with a provision for credit losses (PCL) ratio of 21 basis points (bps)
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Dec 14, 2010
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RBC beats market expectation in earnings and revenue :
- Q4 EPS of C$1.88, beat by $0.01.
- Revenue of C$10.52B (+12.4% Y/Y), beat by C$640MM.

Quarterly results: http://www.rbc.com/investorrelations/pd ... elease.pdf

Annual report: http://www.rbc.com/investorrelations/pdf/ar_2017_e.pdf


Rod
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Dec 14, 2010
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• CIBC: Q4 EPS of C$2.81 beats by C$0.21.
• Revenue of C$4.27B (+16.0% Y/Y) beats by C$90M.
Press release

• TD Bank: Q4 EPS of C$1.36 misses by C$0.02.
• Revenue of C$9.27B (+5.9% Y/Y) misses by C$50M.
Press release
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Deal Fanatic
Aug 17, 2008
8976 posts
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New issue RY 5yr CAD deposit note (bond borrowing) in the market today. "Benchmark size" targeted => there will be lots of demand from institutional FI investors.
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Dec 21, 2005
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London, ON
Anyone following LB?
Dividend increased with their earnings release

Pretty weird drop after 2pm today...$62 down to $56
:idea: :) :lol: :razz: :D
Deal Fanatic
Nov 24, 2013
6280 posts
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Kingston, ON
charliebrown wrote: Anyone following LB?
Dividend increased with their earnings release

Pretty weird drop after 2pm today...$62 down to $56
Laurentian? That would be because of this,

http://www.cbc.ca/news/business/laurent ... -1.4433982

They're rebuying some mortgages they had previously packaged and sold, due to "documentation issues" revealed by an audit.
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Dec 6, 2006
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Toronto
BTFD? 90 million isn't even worth a drop in the bucket for the bank..
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Nov 24, 2013
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Kingston, ON
boyohboy wrote: BTFD? 90 million isn't even worth a drop in the bucket for the bank..
I think the article said $90m was “so far” and the total buyback is expected to be $300-some. Either way if that’s priced in, may be a good buy-in time.
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May 11, 2014
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Rankin Inlet, NU
Mike15 wrote: I think the article said $90m was “so far” and the total buyback is expected to be $300-some. Either way if that’s priced in, may be a good buy-in time.
Definitely for sure. This isn't a good thing, but there isn't necessarily anything wrong with the mortgages themselves. In this case, Laurentian is a well-established bank with fairly stable deposits vs Home Capital. I will definitely keep an eye on this and possibly make a move.
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Jr. Member
Nov 20, 2016
151 posts
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Are there any good ETFs to short the TSX? Or specifically the Canadian banks. Thanks.
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Oct 21, 2014
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jimmyho56 wrote: Are there any good ETFs to short the TSX? Or specifically the Canadian banks. Thanks.
You could sell puts on FIE or XIU, or outright short them. I would suggest reading the first few pages of this thread in it's entirety before doing so.
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Nov 3, 2008
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National Capital Reg…
If you want to short Big6, ZEB would be an ETF to sell.
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May 11, 2014
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Mike15 wrote: I think the article said $90m was “so far” and the total buyback is expected to be $300-some. Either way if that’s priced in, may be a good buy-in time.
Ended up buying 100 shares for now, (thank goodness for penny a share trading :) )

I plan to keep monitoring the situation. Any further announcements as per their announcement increasing the buyback of mortgages will be a negative on the stock at which point I plan to load more with risk assessment. Having 100 shares for now will mean though I will still have something if nothing else is announced, but means I won't be caught holding a bag either.
Support your local Credit Union!

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Deal Addict
Oct 21, 2014
1773 posts
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Burlington, ON
leflower wrote: Emanon86...since you diss the miners...lets make a bet taking ydays closes.
RY closed at 92.98
SSRM closed at 12.62
Lets take a look a year from now how these gains/losses compare. my bet is there will be a 30-40% spread in my long/short in my favour.
( we can add the divs to the price at end )
Lets see how the "bet" is going.
SSR Mining is at 10.33, loss of ~18%
Royal Bank is at 102.49, loss of ~9%. Not including the horrifying losses from before this date, nor dividend losses.

Again, masterful stock picking. I'm certain we won't hear from leflower again because he probably pawned his computer. To those who want to short, go ahead if you want, but understand the business before shorting, because someone else does and instruments that are undervalued can get revalued pretty fast once the news cycle ends and the news gets forgotten about.
Deal Fanatic
Aug 17, 2008
8976 posts
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I'm not one to follow ZH, but someone pointed this out.

How did you feel when you bought that position?”
Authored by Nicholas Colas via DataTrekResearch,

An odd question, perhaps, but I heard it every week during my first year at SAC Capital in the late 1990s. My inquisitor was Ari Kiev, who was the in-house psychologist there. He met with every trader in the room on a regular basis. For new guys like me, it was the toughest hour of the week.

We’d go down a list of every position I had traded and discuss each one in minute detail. What was my logic? What catalysts did I expect? Who had I spoken to?


But there was one question I hated the most…

“Why didn’t you get bigger?”


That question, in a nutshell, is the essence of trading. You make most of your gains from a handful of names where you owned enough to really generate an outsized return. Put on 20 ideas a week, and 1-2 really work. The trick is to identify those early enough and then buy or short as much as you can stomach. The rest of your ideas usually just net out to zero.

I bring all this up because I have noticed something strange in my conversations about bitcoin with many savvy Wall Street types: they don’t know/remember many old-school rules of trading. Perhaps the last +5 years of low volatility US equity markets have made those skills rusty. Or maybe they think crypto currencies are different from equities – more volatile, different fundamentals, whatever…

Fortunately for this discussion, I have the memory of an old embittered elephant – I remember everything, including plenty of things I should probably forget in order to live a happier life. Bad for me, but good for you. Because I remember those sessions with Ari like they were yesterday.

Here’s what I know about trading anything, from bitcoin to stocks and everything in between:

#1: Respect the trend. No one is bigger than the market. Early is the same thing as wrong. Don’t short new highs or buy new lows. Don’t buy or sell based purely on valuation.

Sorry for all the clichés, but they are all 100% correct. Trading means admitting you aren’t the smartest person in the market. Someone always knows more than you, and chances are good they are acting on knowledge you don’t have.

This is especially true with crypto currencies. They are – and will continue to be – extremely leaky in terms of information flow. You will never, ever, be the first to know anything.

#2: Plan your trade, then trade your plan. One thing I learned at SAC is to document everything I thought was important prior to entering a trade. Catalysts – events like earnings announcements, management presentations, trade shows – were on the list in minute detail. So were macro events that might move the stock, as well as market events like rebalances and options expiration.

Case in point: the bitcoin futures set to launch next week. I’ve heard plenty of people say these will be beneficial to bitcoin’s price. And with bitcoin ramping to new highs today, that seems to be right. But will that trend continue once the futures start to trade? That is an entirely different calculus. And I doubt anyone really knows what will happen.

#3: Set targets, stops, and time frames and write them all down before you buy your first share. This sounds simple, but the process is extremely helpful. You pair up your expected catalysts with price targets and time frames.

Remember the “Why didn’t you get bigger?” question… This is where it makes its appearance. You won’t always know how “right” or “wrong” you are until events start to unfold. But sometimes you really have it right, and that’s when you add to a position instead of just taking profits and moving on. You were right about something, but didn’t see just how powerful your observation was.

Writing everything down before you start eliminates some of the selective memory bias we all have, and keeps today’s “You” honest relative to “you” before you entered the trade. Those are two different people, and they need to be able to communicate honestly with each other.

#4: Don’t ever turn a trade into an investment. In the words of Bob Dylan, “If something’s not right, it’s wrong.” Even for a small position, if it is a loser you sell it. We’re not managing P&L here; we’re managing your time. Once you sell something you will spend no further time worrying about it. You can make more money – you can’t make more time.

#5: Know yourself. Everyone has different risk tolerances, so no two trading styles are exactly the same. Some traders can carry 10 positions and maxed out leverage and happily live with the resultant volatility. Others (myself included), like to limit drawdowns and always have gas in the tank in the form of unused capital.

In the end, that last point should inform all the others. Trading and investing are both manifestations of how we make decisions. That process is a function of our personality, risk tolerance and experience.

So when somebody asks me if they should trade/own bitcoin, my first answer back is “I don’t know… Tell me about yourself.”

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