Canadian Banks

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rharvey199
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Re: Canadian Banks

Post by rharvey199 »

i have TD, BNS, RY. Never considered CIBC. Should have picked up BMO years ago when it lagged but 3 banks is enough for me. they usually revert to the mean so laggards end up catching up to the others over time.
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Re: Canadian Banks

Post by kcowan »

My holdings represent 6.4% of my total portfolio, and I am missing CIBC and SCOTIA. No plans to change.
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Re: Canadian Banks

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Very conscious effort to exclude CIBC. Extremely overweight the banks and have been rewarded accordingly. No plans to change.
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Re: Canadian Banks

Post by Taggart »

Personally, I haven't even thought about selling the Canadian Banks in the portfolio. I'll probably just ride out the financial storm whenever it comes.

------------------------------------------------------------------

Tempted to sell your bank stocks? Just stay put

Friday, May 12, 2017
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AltaRed
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Re: Canadian Banks

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Taggart wrote: 12 May 2017 14:20 Personally, I haven't even thought about selling the Canadian Banks in the portfolio. I'll probably just ride out the financial storm whenever it comes
Nor will I except as part of my overall withdrawal plan.
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Shakespeare
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Re: Canadian Banks

Post by Shakespeare »

I expect to add more in the forthcoming sale - whenever it is. :wink:

(I sold 2/3 of my BMO at 10% above today's price a couple of months back.)
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Re: Canadian Banks

Post by adrian2 »

SQRT wrote: 12 May 2017 11:58 Very conscious effort to exclude CIBC.
Very conscious effort to include CIBC.
For personal banking, in my two decades+ of being in Canada, I've only had an account with them, before eventually transitioning to PCF (indirectly owned by CIBC).

My first stock purchase two decades ago was CM, followed by TD (I still own them both).
I've had shorter stints with NA, BMO and LB, and no longer hold them.

For all CIBC hating guys, may I quote from James Hymas:
Perhaps, as printed, my “sucker” epithet was too general – I certainly did not mean to suggest that all capital units were always bad all the time at all prices. If somebody offers to sell me capital units with an intrinsic value of $10 for a penny each, I’ll back up the truck! As I like to say, at the right price, even a bag of shit can be attractive: I buy fifteen of them every spring for my garden!
I certainly do not consider CM shares as shit, though!
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Re: Canadian Banks

Post by AltaRed »

adrian2 wrote: 12 May 2017 15:26 I certainly do not consider CM shares as shit, though!
Neither do I. Just that they seemed to run into more sharp objects. FWIW, I banked with CIBC for just over 40 years until considating into one bank. That said, I still have a dividend paying CC with them since early 1973!
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Re: Canadian Banks

Post by 2 yen »

No CIBC held here. When in the accumulation phase, they were too hot to handle.

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Re: Canadian Banks

Post by kcowan »

CIBC became famous to me as the only one of 4 banks using our software who regularly needed our help to recover their accounts. It was a nice source of revenue. When they acquired Merryl Lynch, we became investment portfolio clients of WG. Later, we had an Aeroplan Visa. We were forced to move to TD under protest because they refused to recognize the WG assets!

We maintain WG so that DW will have someone she trusts to go to when she takes over the portfolio. It only holds 13 % of our assets. The rest is under my control.
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Re: Canadian Banks

Post by randomwalker »

Like many on line here I've been a long time holder of the Canadian bank stocks and have done well with them. Even today I'm still more or less comfortable with them if one looks at their fundamental valuations. That being said I sold out of all of them when they started to break down technically over March and into April. For me the Canadian banks are no longer buy and holds forever. I have attached a report by David MacDonald of the Canadian Centre for Policy Alternatives which no doubt many here have already read. The report changed my opinion of the what seems to be a general view that that "Canadian banks are the soundest in the world," "that banking is done differently here in Canada," "that Canada is a model for the world when it comes to banking."


The Big Banks' Big Secret, Estimating government support for Canadian banks during the financial crisis
by David Macdonald, April 30, 2012

https://www.policyalternatives.ca/sites ... Secret.pdf


From where I stand the banking sides of Home Capital Group and Equitable Group are bank failures in everything but name and only because they are being propped up by government and big money. They are I believe the proverbial canaries in the coal mine.

I tripped across this article this morning,

Home Capital is a minor meltdown that’s left a major mark on Canada
by Theophilos Argitis and Kristine Owram, Bloomberg News, May 12, 2017
http://business.financialpost.com/news/ ... -on-canada
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Shakespeare
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Re: Canadian Banks

Post by Shakespeare »

I have attached a report by David MacDonald of the Canadian Centre for Policy Alternatives
A source with a left-wing agenda. Add them to the Fraser Institute and divide by two to get a better opinion. :wink:
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AltaRed
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Re: Canadian Banks

Post by AltaRed »

Shakespeare wrote: 14 May 2017 09:10 A source with a left-wing agenda. Add them to the Fraser Institute and divide by two to get a better opinion. :wink:
I agree. I am of the opinion that both are so severely tainted with their biases that they are opinion operations rather than objective analysis.

My angst is way more focused on what the Bloomberg piece Randomwalker linked is saying. I think Canada is in dangerous territory with its heavy reliance on the housing boom and its knock-on effects. Our GDP is a house of cards and is perhaps why Bill Morneau is paying way too much attention to HCG's current woes. How far will Ottawa go to avoid a US style crisis? All that deficit spending in the world is not going to fix the upcoming 'stall' or worse 'fall' in GDP.
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Re: Canadian Banks

Post by randomwalker »

Shakespeare wrote: 14 May 2017 09:10
I have attached a report by David MacDonald of the Canadian Centre for Policy Alternatives
A source with a left-wing agenda. Add them to the Fraser Institute and divide by two to get a better opinion. :wink:
I agree with you with respect to left and right agendas. The question is, are David MacDonald's/ CCPA numbers correct? If MacDonald's numbers are right and report is correct then the Fraser Institute would be appalled and call it "corporate welfare" and a "delaying of the inevitable" both sentiments that I agree with.
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Re: Canadian Banks

Post by randomwalker »

AltaRed wrote: 14 May 2017 09:54
Shakespeare wrote: 14 May 2017 09:10 A source with a left-wing agenda. Add them to the Fraser Institute and divide by two to get a better opinion. :wink:
I agree. I am of the opinion that both are so severely tainted with their biases that they are opinion operations rather than objective analysis.

My angst is way more focused on what the Bloomberg piece Randomwalker linked is saying. I think Canada is in dangerous territory with its heavy reliance on the housing boom and its knock-on effects. Our GDP is a house of cards and is perhaps why Bill Morneau is paying way too much attention to HCG's current woes. How far will Ottawa go to avoid a US style crisis? All that deficit spending in the world is not going to fix the upcoming 'stall' or worse 'fall' in GDP.
Agreed. It seems all that is left to keep the economic balls in the air are increased debts and deficits by both governments of all political stripes I might add and by individuals. That and interest rate manipulation. I've attached a fun link which tracks the amount of deficit spending done annually and the political party in power since 1962. I think the conclusion one might draw is there is no difference between the two major parties when it comes to deficit spending. As attributed to Richard Nixon "We are all Keynesians now."

http://www.cbc.ca/news2/interactives/ca ... index.html
Last edited by randomwalker on 14 May 2017 12:42, edited 1 time in total.
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Re: Canadian Banks

Post by Thegipper »

and we are electing governments that are anti business and anti oil because of their faith in the politics of climate change. The whole thing adds up to witch's brew. What is in the brew besides this. 1 USA protectionism, 2.provincal and federal government debt and deficit 3 record levels of individual debt 4 the housing bubbles in Toronto and Vancouver .
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Re: Canadian Banks

Post by kcowan »

Well since my pension which I have been drawing since 1992 in non-COLA, I have been pleased with the efforts to control inflation. Now I am ready for some inflation to burst some bubbles. That should create some new opportunities for those of us with money to invest?
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Re: Canadian Banks

Post by SQRT »

AltaRed wrote: 12 May 2017 16:07
adrian2 wrote: 12 May 2017 15:26 I certainly do not consider CM shares as shit, though!
Neither do I. Just that they seemed to run into more sharp objects. FWIW, I banked with CIBC for just over 40 years until considating into one bank. That said, I still have a dividend paying CC with them since early 1973!
Agree they are not sh?t. Total return over last 20 years is 10.2% per year CAGR. Same stat for TD is 13.6%. 3.4% difference compounded over 20 yeas is quite a bit. When I was working (retired in 2006), they really had a string of unimpressive CEOs. Particularly Al Flood and John Hunkin. CEO succession was handled very poorly. Got to know their senior execs fairly well over this period.

If there was a problem ii always seemed worse at CIBC. They seemed to have worked hard to de -risk their bank, but this has resulted in missed growth opportunities, especially in US. They were poor executors and had an investment banker's approach to business. Future, who knows, but I have the other banks and need a stock like CM for my gambits.
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Re: Canadian Banks

Post by Thegipper »

SQRT wrote: 15 May 2017 11:37
AltaRed wrote: 12 May 2017 16:07
adrian2 wrote: 12 May 2017 15:26 I certainly do not consider CM shares as shit, though!
Neither do I. Just that they seemed to run into more sharp objects. FWIW, I banked with CIBC for just over 40 years until considating into one bank. That said, I still have a dividend paying CC with them since early 1973!
Agree they are not sh?t. Total return over last 20 years is 10.2% per year CAGR. Same stat for TD is 13.6%. 3.4% difference compounded over 20 yeas is quite a bit. When I was working (retired in 2006), they really had a string of unimpressive CEOs. Particularly Al Flood and John Hunkin. CEO succession was handled very poorly. Got to know their senior execs fairly well over this period.

If there was a problem ii always seemed worse at CIBC. They seemed to have worked hard to de -risk their bank, but this has resulted in missed growth opportunities, especially in US. They were poor executors and had an investment banker's approach to business. Future, who knows, but I have the other banks and need a stock like CM for my gambits.
IN 1976 CM was the second largest Canadian bank. Over the years they have led the charge when things went bad. Back in the 1970's they lost a pile of money with bad loans in Argentina, if i recall they had a pile of bad loans to oil companies , then they lost billions with Enron and they were big losers with sub-prime mortgages . They have been a poorly managed operation. They were in USA investment banking and they got out of that. They tried some retail banking and that went bad. I wouldn't invest anything with them. I think they have a bad culture and it is hard to shake it.
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Re: Canadian Banks

Post by kcowan »

When I retired in 1992, a number of my buddies who also retired went to work for the banks. CIBC, TD and Royal. I knew Tony Comper of BMO and I was impressed when one of my buddies was killed in an avalanche in The Bugaboos and Tony lined up on Mount Pleasant for the visitation along with the rest of us!

I also knew Ed Clark of Canada Trust and was both impressed and then disappointed with his performance at TD.

I agree with Adrian that it is not your judgement on a bank but its stock performance that counts.
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Re: Canadian Banks

Post by adrian2 »

8 years ago or so, BMO was yielding over 10%, not CM.
There was serious talk that BMO would cut its dividend.
To each their own, that's what makes it a market.

From a current commercial: CIBC was the first to introduce an ATM in Canada.
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Re: Canadian Banks

Post by ig17 »

‘No rotting carcass of bad loans’: Why now might be a good time to buy Canadian banks

http://business.financialpost.com/inves ... dian-banks
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Re: Canadian Banks

Post by kcowan »

I wonder about the lifecos? Floods, longevity, shaky real estate holdings?
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Re: Canadian Banks

Post by Londoncalling »

adrian2 wrote: 15 May 2017 23:04 From a current commercial: CIBC was the first to introduce an ATM in Canada.
What goes up, must come down... (and sometimes viceversa)
According to this link the commercial is stating a mistruth.

http://esask.uregina.ca/entry/automated ... hines.html

I don't hold CM but wished I purchased it when it was the highest yielder of the group. Historically, they all take turns leading and lagging. I try to rotate in and out. Currently I hold BMO, RY, CWB and BNS. Never had a chance to get TD at what I felt was a fair price.

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Re: Canadian Banks

Post by randomwalker »

ig17 wrote: 16 May 2017 08:44 ‘No rotting carcass of bad loans’: Why now might be a good time to buy Canadian banks

http://business.financialpost.com/inves ... dian-banks
Speaking about Home Capital Group the head of TD Asset Management’s core Canadian equity team Mike O’Brien said “The difference between this situation and what we saw in 2008 is there isn’t a rotting carcass of bad loans or poor-quality credit underneath all that...” Well maybe? Not to doubt for a moment the head of TD Asset Management's view on the subject but I think if I was the writer I might have solicited more than one opinion or at least one at arms length for one of the institutions that now "might be a good time to buy." A question I would have asked is, would the banks be as free with their mortgage lending without the backstop of CMHC? If the answer is "no" then is such lending responsible? The banks seem to be in a "heads we win tails we don't lose" position.

As an aside I doubt Legg Mason's Bill Miller (The Man Who Beats the S&P) thought he had any "rotting carcasses" in his Value Trust mutual fund until 2008 arrived :wink:


https://www.amazon.com/Man-Who-Beats-In ... 0470832584
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