Financial Markets Meltdown

[EagleEyes]

Thanks for the great advice as usual!!

[Dean2]

One more point that just occurred to me, if you stick to the big banks, utilities, communications and pipelines, even if you chose the relatively poor performer for the sector, you are still WAY, WAY further ahead than having put that money into GICs, and almost all of the low risk mutual funds. Thus, if you are uncomfortable or cant pick individual stocks, the market weight etf for canadian banks, utilities, communications and pipelines would still produce very good long term returns.

The one thing you have to watch with the poorer performers like Suncor are long periods of time with zero capital appreciation. If you look at the chart above you can see that you gained almost nothing over the past 15 years in Suncor while CNQ did much better and grew well.

[roper1]

Originally Posted by Dean2

The only reason to continue holding SU at $50 is if you think it will continue to rise, it does not pay great dividends at 4.3%, compared to its major competitors. The shares like CNRL, Cenovous, Tourmaline, Vermilion that already rose 5-7 times, will also keep rising if SU rises, but they will still continue to rise faster than SU, and pay larger dividends. Sort of the same as the banks. BNS goes up when TD and RB does, just not as fast, and that has been going on for 40 years. If you print out the 30 year chart for each company and compare them side by side with the other companies in that industry it is REALLY easy to see who the best long term performers are.

As far as what to buy if you sell SU, it really depends on what the rest of your portfolio looks like, time horizons, and the like. The only point I am trying to make with Suncor is as a longer term buy and hold it fails my "Best Couple Of Companies in the Segment" rule. (To be clear, I do not think any Company involved in commodities, including oil and gas, is a good candidate for long term buy and hold. I buy the best run ones when they are down and sell when I think the cycle is reaching a peak. Even then I try to buy the very best run of the bunch in gold, Uranium, copper or oil.)

So like I have said before, of the 6 big banks, RY and TD, never Laurentian or CIBC, never Manulife, Great West and Sunlife yes. Of the Pipelines TRP and PPL, not Enbridge. Of the communications companies, Telus and BCE, not Rogers or Shaw. Utilities and the rest of the sub groups are all the same, there is always a top one or two companies. That is what you want to own for long term gains. Over 50% of the return on a stock comes from re-investing the dividends they pay so the amount of the dividend and it growing regularly every year is also critically important to long term returns.

Thanks Dean!

[Map Maker]

Great list Dean

RY (TD)
SLF (GWO)
TRP (PPL)
T(BCE)

A lot of my favourites in there as well.
I would also add :
Railroads
CP (CNR)
Utility (Electrical)
F (H)

[Ken07AOVette]

I would trust this fellow if I had any stocks

https://markets.businessinsider.com/...t-crash-2022-8

[Dean2]

Originally Posted by Ken07AOVette

I would trust this fellow if I had any stocks

https://markets.businessinsider.com/...t-crash-2022-8

You might want to rethink that. He became famous for one right call 20 years ago that they made a movie about. The fund he now manages, Scoin, has 4 clients. All of the business sites endlessly report the gloom and doom forecasts of these guys that were right one time. They never go back and look at how the forecasts they made the past 15 years actually worked out.


Portfolio Performance

Top 20 equal-weighted holdings. Performance numbers calculated through 2022-08-15
Performance for Q2 2022: -13.32%
Performance Last 4 Quarters: 2.51%

Scion is the Brown line, the Blue is the S&P 500

[eric2381]

The only fellow I trust with my money and my life and my decision making is myself.

[eric2381]

I’ll expand on that a bit. Many people believe they are doing their research and being smart investors by reading a million articles and watching BNN. Their opinions and thoughts are swayed by that. When really they should be looking at numbers and data and cycles and history and trusting themselves when they have put the effort in and minimized risk and made a good decision.

[Dean2]

Originally Posted by eric2381

I’ll expand on that a bit. Many people believe they are doing their research and being smart investors by reading a million articles and watching BNN. Their opinions and thoughts are swayed by that. When really they should be looking at numbers and data and cycles and history and trusting themselves when they have put the effort in and minimized risk and made a good decision.

You are exactly correct. If you want to go broke in a hurry, listen the the "experts", "analysts" and 'strategists" that show up endlessly on the various business networks and news streams. These places need to fill 24 hours 7 days a week with stuff that will keep eyes on their feeds. The more outlandish and salacious the guest comments are the more likely they are to generate clicks. If you look at the actual track records of the guests you will quickly see why you don't want to take advice from most of them. Worse yet are pump and dumps like Eric Nuttal and the like that pump stocks they are unloading and poop on stocks they want to accumulate. BNN is particularly bad for having guest who recommend top picks yet own none of the stock they are pumping.

You definitely want to do your own research. There are a ton easy to use tools and lots of information to work with. Other choice is to find someone good at investing that has nothing to gain by feeding you bullshiet. Investment clubs/circles where the members each research a selection of stocks and share the information with the circle are also a good option for many.

[eric2381]

Exactly right Dean. Thanks

[eric2381]

https://youtu.be/8OcegOGAGIs

[Dean2]

That is an absolutely brilliant interview. It is so dead on the money and aligned with how I think it is kind of spooky. I have seen lots of Warren Buffet interviews but never that one. What is also interesting is how his net worth has gone from 500 million to 103 BILLION in the relatively short time since he did that interview. He is now the 7th richest man in the world.

Anyone who invests should watch that once a month.

[eric2381]

It should be watched over and over with serious thought put into it and write notes on.

[bdub]

Originally Posted by KGB

Look at the techs - looks like they are on the move!

Some food for thought on the last big tech bust.


Sent from my iPhone using Tapatalk

[59whiskers]

Originally Posted by Dean2

You are exactly correct. If you want to go broke in a hurry, listen the the "experts", "analysts" and 'strategists" that show up endlessly on the various business networks and news streams. These places need to fill 24 hours 7 days a week with stuff that will keep eyes on their feeds. The more outlandish and salacious the guest comments are the more likely they are to generate clicks. If you look at the actual track records of the guests you will quickly see why you don't want to take advice from most of them. Worse yet are pump and dumps like Eric Nuttal and the like that pump stocks they are unloading and poop on stocks they want to accumulate. BNN is particularly bad for having guest who recommend top picks yet own none of the stock they are pumping.

You definitely want to do your own research. There are a ton easy to use tools and lots of information to work with. Other choice is to find someone good at investing that has nothing to gain by feeding you bullshiet. Investment clubs/circles where the members each research a selection of stocks and share the information with the circle are also a good option for many.

Bang on!

[Dean2]

Thought some might find this useful and interesting.

The_Owl

Rob Roach, ATB Economics | August 18, 2022

Location, location, location: Alberta’s housing market in a national context

If you’re a homeowner, headlines like “a sharp correction is coming” and “the bubble is about to burst” send shivers up your spine, but they are music to the ears of anyone looking to break into the market.

The extreme downward trajectory of house prices suggested by these headlines and expected in some parts of Canada is not, however, on the horizon in Alberta.

Average home prices in Vancouver and Toronto were already skyhigh going into the pandemic while other Canadian cities have experienced rapid price escalation since COVID became a household word.

Take Moncton, New Brunswick: According to the Canadian Real Estate Association, the benchmark* price of a home on the resale market in the city jumped by 82% between February 2020 and July 2022. With the benchmark at $334,500, it was still a relatively affordable market (the benchmark in Toronto in July was, for example, $1,184,100), but buyers still had to come up with over $150,000 more for a typical home in the area than they did just two-and-a-half years ago.

While markets like Halifax-Dartmouth (+70%), Victoria (+50%) and Hamilton-Burlington (+49%) saw prices spike during the pandemic, Calgary and Edmonton posted solid, but more modest, growth at +25% and +16%, respectively. As such, because a housing bubble didn’t form here, there isn’t one to burst.

At the same time, robust economic growth in Alberta (we will likely lead the country in this regard in 2022), the recent return to being a net recipient of interprovincial migrants, a somewhat younger (though still aging) population, and the high quality of life offered here provide strong support for the provincial housing sector going forward.

As a recent report from Desjardins points out, “the oil-producing provinces of Alberta, Saskatchewan, and Newfoundland and Labrador [are] benefitting from post-pandemic tailwinds, largely in the form of higher commodity prices. The resulting job creation and workers it attracts from across the country will provide support to existing home sales and prices.”

Higher interest rates combined with national and global economic uncertainty may eat away somewhat at home prices in Alberta, but we should be able to avoid the potentially severe erosion that some other markets may experience.

*The MLS® Home Price Index (HPI) model is used to calculate benchmark prices in key Canadian markets. A “benchmark home” is one whose attributes are typical of homes traded in the area where it is located and includes single family homes, townhouse/row units and apartment units.

[Ken07AOVette]

Originally Posted by Dean2

You might want to rethink that. He became famous for one right call 20 years ago that they made a movie about. The fund he now manages, Scoin, has 4 clients. All of the business sites endlessly report the gloom and doom forecasts of these guys that were right one time. They never go back and look at how the forecasts they made the past 15 years actually worked out.



Portfolio Performance

Top 20 equal-weighted holdings. Performance numbers calculated through 2022-08-15
Performance for Q2 2022: -13.32%
Performance Last 4 Quarters: 2.51%

Scion is the Brown line, the Blue is the S&P 500

The haha emoji 🤪 😅 is not after my reply, not sure why lol. I wouldn't lend that guy a wheelbarrow!

[Twisted Canuck]

Just imagine how incredibly prosperous Alberta would be, if we only had pipelines and could get our resources to foreign markets that would love to have them.

Thanks Justin.

https://calgaryherald.com/opinion/co...mical-discount

[KGB]

Originally Posted by bdub

Some food for thought on the last big tech bust.


Sent from my iPhone using Tapatalk

Not even close! You are comparing apples to oranges. Dotcom bust in 2000 was just that- a bubble burst. Companies with zero income had astronomical valuations who went kaboom. I am not even interested in a small cap penny stocks but rather in the established and profitable ones. Never ever played with penny stocks(got burned earlier but not for much).
I haven’t touched penny stocks in over 20 years.

[lmtada]

Originally Posted by KGB

Not even close! You are comparing apples to oranges. Dotcom bust in 2000 was just that- a bubble burst. Companies with zero income had astronomical valuations who went kaboom. I am not even interested in a small cap penny stocks but rather in the established and profitable ones. Never ever played with penny stocks(got burned earlier but not for much).
I haven’t touched penny stocks in over 20 years.

Didn’t Murray Pezzim make millions in the 80’s onPenny Stocks (late Murray Pezzim, R.I.P. BC lions owner).

[lmtada]

Originally Posted by eric2381

https://youtu.be/8OcegOGAGIs

That was good video. Thank You. PB43

[KGB]

Originally Posted by lmtada

Didn’t Murray Pezzim make millions in the 80’s onPenny Stocks (late Murray Pezzim, R.I.P. BC lions owner).

I honestly don’t know, so I trust what you said and he did make money. It doesn’t change anything for me and for my approach to investing. Sorry, not my cup of tea. Don’t get me wrong, I did threw a few bucks into a highly speculative investments including bitcoin dogecoin, crapcoin etc. nothing I can loose my sleep about. Basically treat that same way as a lottery ticket.

[bdub]

Originally Posted by KGB

Not even close! You are comparing apples to oranges. Dotcom bust in 2000 was just that- a bubble burst. Companies with zero income had astronomical valuations who went kaboom. I am not even interested in a small cap penny stocks but rather in the established and profitable ones. Never ever played with penny stocks(got burned earlier but not for much).
I haven’t touched penny stocks in over 20 years.

There are plenty of tech stocks that were not or barely profitable right now that have gone “kaboom”. Shop comes to mind immediately. Plenty of similarities between the 2000 tech bust and this one. The Nasdaq has been held up largely by a handful of mega caps bit if you look under the surface you will still find plenty of overpriced garbage that has been hammered. Nvidia appears grossly overvalued just quickly looking at some of the metrics like p/e and p/cf unless growth keeps up.

With interest rates still rising I don’t see any rush to dip in yet. The relationship between rising rates = falling valuations for long duration/tech has been holding since last November. The chart was meant to suggest we may have a ways to go yet before it’s safe to jump back into tech. My opinion for what its worth, which is exactly nothing, is that the sector generally is going to suffer until we see inflation and rates reverse course. But who knows. Good luck.


Sent from my iPhone using Tapatalk

[KGB]

That’s exactly what I wish to everybody invested in the stock market- a good luck! Your opinion is greatly appreciated, just like all other fine folks here. It never hurts to listen to the others.

[Fisherdan]

I like the advice about picking companies with a history of good management. It makes sense, and goes against the broad basket method of etfs, iShares, etc. if oil goes another leg lower, I will look at CNQ or TOU.

About REITs….

Do they typically follow their own path instead of stock market trends?
What affects their valuation? Increasing interest rates? I saw Dean, that you had listed Canadian Rental Properties on a portfolio a while ago. The long term charts look okay. The last year has been a steady drop. Similar story with IIP.UN. Different story than CRT.UN, which does Canadian Tire and retail. That one is super steady, whereas the residential ones seem to bounce a bit more.

[Dean2]

Originally Posted by Fisherdan

I like the advice about picking companies with a history of good management. It makes sense, and goes against the broad basket method of etfs, iShares, etc. if oil goes another leg lower, I will look at CNQ or TOU.

About REITs….

Do they typically follow their own path instead of stock market trends?
What affects their valuation? Increasing interest rates? I saw Dean, that you had listed Canadian Rental Properties on a portfolio a while ago. The long term charts look okay. The last year has been a steady drop. Similar story with IIP.UN. Different story than CRT.UN, which does Canadian Tire and retail. That one is super steady, whereas the residential ones seem to bounce a bit more.

To fully explain REITs would take a lot of typing because there are so many different types. Simplest form of an explanation, a REIT is a Real Estate Holding company that derives its income predominately from renting out property. Most of their net profit is distributed to shareholders as dividends or return of capital. Most REITS have moved to more of a pure play from the older versions that had Industrial, Shopping Malls, Office Buildings and residential rental, all held in one REIT. A recent example is H&R Reit who spun off it shopping centres, and office buildings to a spin off called Primaris. Funny enough, Primaris has done better than H&R since the spin off.

Single use REITS swing more depending on what the current "'hot" properties are. So right now, residential rental and Industrial are the darlings, Shopping Malls and Office Buildings are out of favour. Avoid REITS that have more than 50% debt, are in only one market, or focus on buying and selling property rather than buying or developing Class A rental property. Reits are bought mainly for the dividend stream just like rental income for real estate. They do go up over long term, just like property. They are negatively affected by rising interest rates, partly due to cost of borrowing but mainly due to the Bond/Corp Debt versus dividend relationship.

As far as single tenant REITs, think about the REIT that held Canadian Target stores. Even Reits that had large anchor tenants like Searrs, Eatons in multi tenant malls had major square footage to re-develop and lease back out. You have to judge the stability of the tenant to decided whether that REIT is a good idea or not and the fortunes of the tenant will affect the valuation of the REIT. Saving grace is, even if tenant goes broke, they still own the property and it can be redeveloped.

Reits are a way to be involved in real estate rental without the aggravation of being a land lord. When you buy a Reit think about it the same as buying the properties they own.

[Fisherdan]

Originally Posted by Dean2

To fully explain REITs would take a lot of typing because there are so many different types. Simplest form of an explanation, a REIT is a Real Estate Holding company that derives its income predominately from renting out property. Most of their net profit is distributed to shareholders as dividends or return of capital. Most REITS have moved to more of a pure play from the older versions that had Industrial, Shopping Malls, Office Buildings and residential rental, all held in one REIT. A recent example is H&R Reit who spun off it shopping centres, and office buildings to a spin off called Primaris. Funny enough, Primaris has done better than H&R since the spin off.

Single use REITS swing more depending on what the current "'hot" properties are. So right now, residential rental and Industrial are the darlings, Shopping Malls and Office Buildings are out of favour. Avoid REITS that have more than 50% debt, are in only one market, or focus on buying and selling property rather than buying or developing Class A rental property. Reits are bought mainly for the dividend stream just like rental income for real estate. They do go up over long term, just like property. They are negatively affected by rising interest rates, partly due to cost of borrowing but mainly due to the Bond/Corp Debt versus dividend relationship.

As far as single tenant REITs, think about the REIT that held Canadian Target stores. Even Reits that had large anchor tenants like Searrs, Eatons in multi tenant malls had major square footage to re-develop and lease back out. You have to judge the stability of the tenant to decided whether that REIT is a good idea or not and the fortunes of the tenant will affect the valuation of the REIT. Saving grace is, even if tenant goes broke, they still own the property and it can be redeveloped.

Reits are a way to be involved in real estate rental without the aggravation of being a land lord. When you buy a Reit think about it the same as buying the properties they own.

Thank you for the great info. Will take some time to learn more about this.

[eric2381]

https://youtu.be/j2em__lppHk

[eric2381]

https://youtu.be/P305CTi8_FQ

[bdub]

Originally Posted by Fisherdan

I like the advice about picking companies with a history of good management. It makes sense, and goes against the broad basket method of etfs, iShares, etc. if oil goes another leg lower, I will look at CNQ or TOU.

Perhaps you know already, but I'll just throw out some info on both outfits. There are quite a few differences between the two companies. Despite having Oil in its name, Tourmoline Oil is largely a play on natural gas. They are the largest Canadian producer of natural gas at 2.3 mmcf/d in the the last quarter. The volumes of the rest of their product mix in Q2 was 11000 bbl/day crude oil, 32500 bbl condi and 69000 bbl/day of NGL.

CNRL is product mix is much more oil weighted despite producing almost as much nat gas as Tourmoline, roughly 2.1 mmcf/day. They are producing darn close to 1 million bbl /day combined of oil and NGL.

Market cap wise, CNRL is a much larger company than Tourmoline, 83 billion$ vs 26.

This is just barely scratching the surface but overall Tou stock price is more correlated to nat gas prices whereas Cnq moves more on the price of crude oil. If you want exposure to oil pick Cnq, exposure to nat gas Tou. We are roughly equal weighted between the two and have other exposure to energy via Pembina, Alta Gas and Brookfield Infrastructure (winning bidders of the IPL project vs PPL).

https://tourmaline.cdn.prismic.io/to...ents+Final.pdf
https://www.cnrl.com/upload/report/1...022-q2-mda.pdf