Market Opportunities

The market has been swinging wildly with the professionals utilizing the media to scare the smaller retail investor to unload while the market craters.  Someone will be making a lot of money having purchased great companies at value prices. Keep your cool and watch as the opportunities unfold.  

Financials: Many Canadian financials have hit or are very close to new 52 week lows. These corporations are much better capitalized than those in the US and are beginning to look very attractive with solid dividend payouts. Top of the list to watch include: Bank of Montreal (BMO), Scotia Bank (BNS), National (NA), Royal (RY) & TD. There will be an opportunity very soon (if not now) to pick these up at discount rates. Insurance companies are worth watching but offer a little less safety.

Resources: Energy, Agriculture & Mining stocks have all been hit hard as the media advises us of a world slowdown that will impact demand. Yes, demand could be impacted, but to what degree as the world’s population continues to grow, particularly the middle classes in the BRIC countries ? Keep a close watch on these great companies: Agrium (AGU), Canadian Natural Resources (CNQ), Potash (POT), Suncor (SU), Teck Resources (TCK.B). Canadian National (CNR) is a perfect compliment to this group.
Safety Plays: Telecoms have faired very well throughout the recent turbulence. BCE & Telus (T) offer rich and reasonably safe dividend yields.

Value Investing Theory: When the market is swooning, great companies’ stock prices fall in tandem with the worst of companies. However, don’t get too smart as the market might have further to drop. Good Luck.

  

Is Now the Time to Consider Getting Back into the Market ?

I’ve taken off the past number of weeks because this is a stock trading blog. As there really hasn’t been much to recommend for a trader to consider,  there was theoretically nothing to write…

Trading Rule Number One: When all others are selling in a down market, smart traders should look to buy great companies that are being sold off along with the weak ones. Great Market Timers always buy when everyone is running for the hills (albeit it’s quite easy being brave if you’re only handling other people’s money…). Something is happening now that is going to make someone a lot of money in the next few months. Scared traders are being spooked out of the market. We certainly may not be at the bottom so no major positions are recommended immediately, but there are some good deals becoming available.

Great Market Leaders Coming Off Highs: In alphabetical order this would include: BCE (now paying 5.7% dividend), Bombardier (BBD.B), Canadian National Railway (CNR), National Bank (NA), & TD.

Great Companies Available at Discount Prices: In alphabetical order, great companies that may not have performed in recent months as well as those noted above: CIBC (CM), Canadian Natural Resources (CNQ), Canadian Pacific (CP), Encana (ECA), Royal (RY), Sunlife (SLF), Suncor (SU), & Talisman (TLM).

Great Companies To “Possibly” Watch for Further Declines Prior to Re-Purchasing: Canadian Oil Sands (COS), Crescent Point Energy (CPG) & Teck Resources (TCK.B).

Other Stocks of Interest: Power Corp. (POW) & Power Financial (PWF).

Long Shots to Watch: Research in Motion (RIM), Sino Forest (TRE), & yes, Yellow Media (YLO).

Worth Watching: Bank of Montreal (BMO), Scotia Bank (BNS), Manulife (MFC), & Pengrowth (PGF).

Watch the market very closely now for both getting out and in. Good luck.