Thanks for sharing your knowledge and what your team member said, I will certainly consider it.jaysdt wrote: ↑ yes, there will be a segment of people who will make the right decisions, but please don't compare a random RFD poster to someone that has their PHD/ivey undergrad. in addition, looking at trailing earnings tells you nothing about what's happening now or the future. anyways i'm not here to dissuade you; i initially asked to see if you had a cogent investment thesis instead of a cursory glance at the company. to be clear i'm neutral on banks and neither bullish/bearish, but see them having a hard time beating the index (take a look at the breakdown of total return if you haven't). take it for what it's worth - this is what i do for a living and my US institutional trade desk contact just emailed me this "Tech still holding on pretty well all things considered but Financials and Energy action is gross as the losers keep losing. Look at Fins /Energy. Bottom today, bottom YTD and furthest away from their 200 day moving averages ". keep in mind that this was his day to day commentary - hope this helped and have a nice day.
Why are bank stocks not recovering as economy begins to reopen?
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- May 28th, 2020 11:53 am
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- SCORE+1
- Gungnir
- Deal Addict
- Oct 21, 2014
- 1939 posts
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- Burlington, ON
- johanscott
- Deal Addict
- Mar 22, 2012
- 2151 posts
- 382 upvotes
- Toronto
Millions are out of a job and many businesses closing. At the same time, debt levels are the highest it's been. Could be big losses for banks if many can't pay their loans.
- Stryker
- Deal Fanatic
- Jul 23, 2007
- 5130 posts
- 4924 upvotes
Geez you don't need a university degree to buy the common shares of a bank stock. I don't have any uni and I've been doing fine for the last few decades with the investments. Too many investors only focus on recency, and what has been doing well over the last little while. The major Canadian banks have been survivors in one form or another since the 1800's. Somehow or other they managed through the Great Depression along with two world wars over the last century. Personally I could care less whether my portfolio beats the Canadian market or not. I just keep focused on the income it generates year after year.
Fifteen years in retirement now, including the past financial crisis and the dividend income seems to keep going up most years. Part of it from investment of savings and reinvestment of dividends and the rest from dividend growth. If I get a dividend yield higher than inflation then I know I've already got a head start. In the good years, I also get the added bonus of portfolio dividend increases growing faster than inflation.
Fifteen years in retirement now, including the past financial crisis and the dividend income seems to keep going up most years. Part of it from investment of savings and reinvestment of dividends and the rest from dividend growth. If I get a dividend yield higher than inflation then I know I've already got a head start. In the good years, I also get the added bonus of portfolio dividend increases growing faster than inflation.
- Wiretin
- Jr. Member
- Jan 30, 2020
- 149 posts
- 185 upvotes
I bought puts on td. Banks are going much much lower. Massive loan losses are coming. After that they have a decade low interest rates.
- johanscott
- Deal Addict
- Mar 22, 2012
- 2151 posts
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- Toronto
Banks will be fine in the long term but he's referring to short term.Stryker wrote: ↑ Geez you don't need a university degree to buy the common shares of a bank stock. I don't have any uni and I've been doing fine for the last few decades with the investments. Too many investors only focus on recency, and what has been doing well over the last little while. The major Canadian banks have been survivors in one form or another since the 1800's. Somehow or other they managed through the Great Depression along with two world wars over the last century. Personally I could care less whether my portfolio beats the Canadian market or not. I just keep focused on the income it generates year after year.
Fifteen years in retirement now, including the past financial crisis and the dividend income seems to keep going up most years. Part of it from investment of savings and reinvestment of dividends and the rest from dividend growth. If I get a dividend yield higher than inflation then I know I've already got a head start. In the good years, I also get the added bonus of portfolio dividend increases growing faster than inflation.
- treva84
- Deal Fanatic
- Nov 9, 2013
- 5877 posts
- 7458 upvotes
- Edmonton, AB
"Simple, but not easy."Stryker wrote: ↑ Geez you don't need a university degree to buy the common shares of a bank stock. I don't have any uni and I've been doing fine for the last few decades with the investments. Too many investors only focus on recency, and what has been doing well over the last little while. The major Canadian banks have been survivors in one form or another since the 1800's. Somehow or other they managed through the Great Depression along with two world wars over the last century. Personally I could care less whether my portfolio beats the Canadian market or not. I just keep focused on the income it generates year after year.
Fifteen years in retirement now, including the past financial crisis and the dividend income seems to keep going up most years. Part of it from investment of savings and reinvestment of dividends and the rest from dividend growth. If I get a dividend yield higher than inflation then I know I've already got a head start. In the good years, I also get the added bonus of portfolio dividend increases growing faster than inflation.
Buy quality. Keep calm and go long (and note to self STOP SELLING).
- Stryker
- Deal Fanatic
- Jul 23, 2007
- 5130 posts
- 4924 upvotes
Yes, but I don't think short term when it comes to common stock investing. Never have, especially since all my individual Canadian equities including the banks are in a taxable account. In the meantime, I recognize the investment world has changed and I'm certainly not prone to selling a stock now because a company has cut or suspended it's dividend like I would in a bull market. I'll certainly be a witness to what the Canadian banks do, or not do moving forward.johanscott wrote: ↑ Banks will be fine in the long term but he's referring to short term.
- johanscott
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- Mar 22, 2012
- 2151 posts
- 382 upvotes
- Toronto
No one would suggest to buy stocks short term but he's asking why it's not going up in the short term.Stryker wrote: ↑ Yes, but I don't think short term when it comes to common stock investing. Never have, especially since all my individual Canadian equities including the banks are in a taxable account. In the meantime, I recognize the investment world has changed and I'm certainly not prone to selling a stock now because a company has cut or suspended it's dividend like I would in a bull market. I'll certainly be a witness to what the Canadian banks do, or not do moving forward.
- Stryker
- Deal Fanatic
- Jul 23, 2007
- 5130 posts
- 4924 upvotes
I don't know Trev. I found my first downturn kind of scary back in 1987, especially since the major newspapers at the time were comparing the market to the 1929 - 1932 collapse. Except for one major brain failure in the late 90's buying a few of the tech stocks that the masses were craving, it's since been more like what do the majority of stock investors not like now. Even though it may be down, is there a dividend and does it look like the company has a future? If I can answer yes to that question, then I may buy or add to what I already have. Not too much in any one sector/industry. Other than that, really I don't find it all that difficult.
- Stryker
- Deal Fanatic
- Jul 23, 2007
- 5130 posts
- 4924 upvotes
Well that's just the way markets work. Even in a bull market there's always sectors doing well, while others are lagging. Not any different from what we're seeing in this bear market. Most of the market commentators in the media will tell you why, but after you listen to it over a few decades you begin to realize that it's mostly just useless information.johanscott wrote: ↑ No one would suggest to buy stocks short term but he's asking why it's not going up in the short term.
- MrMom
- Deal Guru
- Aug 17, 2008
- 10989 posts
- 13539 upvotes
LOL, @Stryker you have too much "experience." Everyone on RFD likes to look at inconsequential details or details that the management should be entrusted to do. People are debating how to redesign commercial usage for Bruce Flatt. I bet some would call up Dave McKay to tell him how to run RY if we posted his #. The only international Canadian bank. Diversified business lines whether you go globally East/West or North/South. See who are in the top ten of the league tables? Then think about all the global banks who are not!
This month has been a bonanza for Cdn covered bond issuance. Why? Because international investors have done their homework and like the assets. They did in 2008/9 and they do now.
For the rest, time for you to figure out your pain threshold or move on.
This month has been a bonanza for Cdn covered bond issuance. Why? Because international investors have done their homework and like the assets. They did in 2008/9 and they do now.
For the rest, time for you to figure out your pain threshold or move on.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
- johanscott
- Deal Addict
- Mar 22, 2012
- 2151 posts
- 382 upvotes
- Toronto
Stryker wrote: ↑ Well that's just the way markets work. Even in a bull market there's always sectors doing well, while others are lagging. Not any different from what we're seeing in this bear market. Most of the market commentators in the media will tell you why, but after you listen to it over a few decades you begin to realize that it's mostly just useless information.
Well that's his question and that's what people are trying to explain.
- faken
- Deal Guru
- Sep 21, 2007
- 13044 posts
- 11386 upvotes
- ...
yeah.. there's no way bmo is going back to up 72 anytime soon.. I'm holding just for the Dividends.. I think they get paid soon.. friday?kasm wrote: ↑ Small business bankruptcy is still yet to be completely unveiled.
People with no emergency funds may default on mortgage payments in the next couple months before the economy and jobs recover.
Housing bubble may burst as well.
People not spending - Cash is king, so credit card debt is declining. Credit card balances are a huge profit center for banks.
Keep bank stocks for dividends, but don't expect any capital appreciation any time soon.
If you're a Div investor.. this is pretty good for you thought to get in a low prices...
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
- treva84
- Deal Fanatic
- Nov 9, 2013
- 5877 posts
- 7458 upvotes
- Edmonton, AB
I got Flatt on speed dial. McKay is coming over for dinner as soon as the restrictions are lifted as well.MrMom wrote: ↑ LOL, @Stryker you have too much "experience." Everyone on RFD likes to look at inconsequential details or details that the management should be entrusted to do. People are debating how to redesign commercial usage for Bruce Flatt. I bet some would call up Dave McKay to tell him how to run RY if we posted his #. The only international Canadian bank. Diversified business lines whether you go globally East/West or North/South. See who are in the top ten of the league tables? Then think about all the global banks who are not!
This month has been a bonanza for Cdn covered bond issuance. Why? Because international investors have done their homework and like the assets. They did in 2008/9 and they do now.
For the rest, time for you to figure out your pain threshold or move on.
Buy quality. Keep calm and go long (and note to self STOP SELLING).
- retireat50
- Sr. Member
- Sep 29, 2007
- 762 posts
- 247 upvotes
All the bank charts look awful here so big time downside coming. BNS at Oct 2006 lows lol
- jerryhung
- Deal Expert
- Sep 19, 2004
- 26761 posts
- 9330 upvotes
- where I belong
EQB reported and big provision for credit loan losses
I think, similar to previous TD $1B warnings
I think, similar to previous TD $1B warnings
Which Credit Cards to sign up? >> Jerry's Mega Thread of Credit Cards Q&A
- Haris
- Deal Addict
- May 12, 2004
- 3058 posts
- 488 upvotes
- Mississauga
Most banks reporting end of May, is that how quickly we could see stocks drop lower for banks or will they likely report a massive profit for last quarter as well
- choclover
- Deal Fanatic
- Oct 7, 2007
- 9404 posts
- 5374 upvotes
Unless times have changed, my experience in corporate finance has shown me that banks never lend money to businesses that is at risk. They will only lend when the funds loaned can be secured against something. Even if the business appears to be successful and showing strong financial position. So while the banks may not make as much profit if people can't repay their loans, I think that most small business loans are secured against valuable assets and/or a personal guarantee of some sort. In terms of credit card risk which is typically unsecured, banks probably make lots of money on the interest BUT will suffer a loss if people default on their credit card payments.johanscott wrote: ↑ Millions are out of a job and many businesses closing. At the same time, debt levels are the highest it's been. Could be big losses for banks if many can't pay their loans.
- Wiretin
- Jr. Member
- Jan 30, 2020
- 149 posts
- 185 upvotes
You must have been born after 2008. Our backs are going to get smashed.choclover wrote: ↑ Unless times have changed, my experience in corporate finance has shown me that banks never lend money to businesses that is at risk. They will only lend when the funds loaned can be secured against something. Even if the business appears to be successful and showing strong financial position.
- Qrewpt
- Sr. Member
- Jun 19, 2017
- 582 posts
- 923 upvotes
Way too much uncertainty with Banks right now. They've relied too heavily on shrinking PCLs to drive earnings growth in the past. The scale and speed of the uptake in mortgage deferrals has been staggering, shows a lot of so called "prime" borrowers were actually living on the edge. Add to that possible permanent job losses, declining asset prices, a hurting energy sector, etc, we may all be underestimating the size of the losses these banks may be facing. Their provisions to this point have been a joke.
Just look at 10 year European bank charts to see how they've been coping with negative interest rates, its pretty hard to find one that isn't down 70%,
Just look at 10 year European bank charts to see how they've been coping with negative interest rates, its pretty hard to find one that isn't down 70%,
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