Financial Markets Meltdown

[ward]

Originally Posted by Twisted Canuck

And all the talking heads say.....

https://financialpost.com/investing/...loff-out-there

And I say, relax. Enjoy the ride.

Not all the talking heads. Just the ones who like to be the first to say I told you so. They are everywhere, not just in the investment world.

I agree with you and Dean. Relax and take advantage of the opportunities.

[Glion]

Originally Posted by Dean2

This volatility makes for some nice short term trading opportunities. Might as well take advantage of them. Everyone talks about buying low and selling high. It is very often the other way round with many retail investors.

Dean I have really been following what you say and appreciate all of your input in this thread, it has helped me alot. I currently am sitting on some more cash and not sure what to do with it. Whether to jump in now or wait or just throw it against a mortgage.

[Dean2]

Originally Posted by Glion

Dean I have really been following what you say and appreciate all of your input in this thread, it has helped me alot. I currently am sitting on some more cash and not sure what to do with it. Whether to jump in now or wait or just throw it against a mortgage.

If it was me, and this is what I had actually done when I was about 26, bought our first home at 24: pay off the mortgage, that interest isn't tax deductible. You can then borrow the same money back, put it into a good Blue Chip dividend paying stock like RBC or TD Bank and the interest on the loan will be tax deductible. You make exactly the same payment you make now, difference is one is a house loan the other is an investment loan. Never pay interest that isn't tax deductible if you can help it. I have never made an interest payment on a credit card, or consumer loan, vehicle loan or anything not tax deductible. I have borrowed lots to buy revenue property and other investments.

Both Bank stocks pay about a 3.5% dividend, that is increasing, and that is effectively tax free till you get to 48,000 each, and the mortgage will have an interest rate of about 2.5% that is fully tax deductible.

[Jim Blake]

Originally Posted by Twisted Canuck

And all the talking heads say.....

https://financialpost.com/investing/...loff-out-there

And I say, relax. Enjoy the ride.

Exactly!! How many times have we seen this movie in the last two years....four....now five. Every wave of Covid has presented buying and selling opportunities... great opportunities!!

The more the Media and Governments hype these up the more bounce to the wave.

[Dean2]

I posted a model portfolio about a year ago that I use. Thought you guys might like to see the results over the past 12 months, 36 etc. Some of these are long term hold, some you trade in and out of. Walmart I have never personally owned, it is illustrative for large U.S. retailer versus Amazon.

[Dean2]

Originally Posted by Jim Blake

Exactly!! How many times have we seen this movie in the last two years....four....now five. Every wave of Covid has presented buying and selling opportunities... great opportunities!!

The more the Media and Governments hype these up the more bounce to the wave.

Yep, so much for the Omnicron induced melt down the talking heads are on about. Dow, TSX, Nasdaq all up 1-2% today alone, and WTI oil is back to $71.

[KGB]

Don’t forget that the last 3 weeks of December is usually when people sell for tax losses…. So if you are investing even for a short period of time- by the end of January you will be just fine

[Dean2]

I found this quite interesting. Says a lot about the decline of the smokestack industries in NA

After 90 years on top, GM is no longer the No. 1 automaker in America
1 hour ago - Reuters
After 90 years on top, GM is no longer the No. 1 automaker in America

WASHINGTON (Reuters) - Japanese automaker Toyota Motor Corp outsold General Motors Co in the United States in 2021, marking the first time the Detroit automaker has not led U.S. auto sales since 1931.

Toyota sold 2.332 million vehicles in the United States in 2021, compared to 2.218 million for General Motors, the automakers said Tuesday.

GM's U.S. sales were down 13% for 2021, while Toyota was up 10%. For all of 2020, GM's U.S. sales totaled 2.55 million, compared with Toyota's 2.11 million and Ford's 2.04 million.



(Reporting by David Shepardson; Editing by Nick Zieminski)

[KGB]

I think the biggest reason why is the shortage of the chips for NA automakers. Trucks were in huge demand and in huge deficit…

[Dean2]

The inflation juggernaut just keeps on rolling. Transitory my Butt. Lying bunch of skells. These are U.S. figures but Canada is as bad or worse.

The impact of the stimulus on the American consumer was nothing short of remarkable, with retail sales surging 22% above pre-covid levels in just 15 months (Jan 2020 – Apr 2021). That increase was more than the sales growth in the previous 5 years combined.


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Surging consumer demand coupled with supply chain shortages laid the foundation for the classic definition of inflation: “too much money chasing too few goods.”
This phenomenon played out everywhere you looked, from the gas pump to the supermarket. Here’s a breakdown of price increases from December’s CPI report:
• Fuel Oil: +59.3%
• Gasoline: +58.1%
• Used Cars: +31.4%
• Gas Utilities: +25.1%
• Meats/Fish/Poultry/Eggs: +12.8%
• New Cars: +11.1%
• Overall CPI: +6.8%
• Electricity: +6.5%
• Food at home: +6.4%
• Food away from home: +5.8%
• Apparel: +5.0%
• Transportation: +3.9%
• Shelter: +3.8%
Overall, US inflation rose from a benign 1.4% at the start of year to an alarming 6.8% at the end, the highest we’ve seen since 1982.


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And by all accounts, this was understating the true inflation rate, as the distorted CPI methodology showed a meager 3.8% increase for “shelter” (the largest single component of CPI at 33% of the index).
What was the actual increase in the cost of housing?
Much, much higher.
Rents in the U.S. rose 18% (the highest rate of increase ever) while home prices rose 19% (also the highest rate of increase ever).


Additional upward pressure on consumer prices came from rising wages, with US average hourly earnings increasing 4.8% in the last 12 months.


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Nearly every major corporation (Amazon/Walmart/Costco/McDonald’s/Starbucks/Bank of America/etc.) has announced pay hikes and increased benefits for their employees.
What was the impetus pushing wages and benefits higher?
Supply and demand.
The number of job openings in the US currently exceeds the number of unemployed persons by over 4 million, a record high.


Help wanted signs were everywhere, and employers had to increase wages to incentivize workers to reenter the labor force.
An additional factor impacting supply was the percentage of workers who were quitting their jobs, which hit an all-time high during the year (3%). After three rounds of stimulus checks, employees had additional savings and the ability to leave a job they don’t like in search one that they do. This put added pressure on companies to increase pay and benefits in an attempt to retain workers.


As wages are the biggest expense for most companies, a choice had to be made. Either accept lower profits or raise prices of goods/services, passing on the cost to the end consumer.
What did companies do? The latter, and more than enough to offset higher costs.
Earnings of S&P 500 companies hit record highs in each of the first three quarters of 2021, with profit margins expanding to record highs as well.

[fishtank]

High flying tech is getting a correction , probably has more room to correct .

[Twisted Canuck]

Markets took a good turn up, and then a worse turn down in short order today. Huh. Volatility. Who could have foreseen this? Besides Dean.

[bdub]

Every time the FED opens their yaps recently it pukes. Rotation is just getting started out of tech and long duration on higher rates??and the minutes released today just enforcing that view today. Tanked it instantly. Markets are going to be watching to see if they have any follow through or if its just bs. Either way, they are screwed with the amount of debt I think.

[Dean2]

Oil just cracked the 80 dollar mark for WTI and it is only Jan 6th. I had earlier predicted we could see $100 oil this year and everyone laughed and laughed. They aren't laughing that hard now.

Demand is still constrained with all the Airlines cutting back flights, Cruises not sailing etc, but supply is even tighter. Between supply chain issues, shortage of employees and energy prices, we are a long ways from being anywhere close to a normal economy.

Originally Posted by Dean2;4439236 Nov 14, 2021

This is U.S. date, Canada is even worse. Transitory my ass. The lying, bobbing heads just keep digging the hole deeper. Kill off Canada's main economic engines, pump out money and drive even well off Canadians into the poor house, imagine what this is doing to the poor, or those on fixed incomes, who were just making it before all this stupidity that uses Covid as the excuse.

If we have a cold winter in Europe we could see Nat gas at ten bucks, and I would not be surprised to see oil hit 100 over the winter. That will drive even more inflation, as will increasing carbon taxes and world wide shortages of electricity etc for heating.

[MountainTi]

Originally Posted by Dean2

Oil just cracked the 80 dollar mark for WTI and it is only Jan 6th. I had earlier predicted we could see $100 oil this year and everyone laughed and laughed. They aren't laughing that hard now.

Demand is still constrained with all the Airlines cutting back flights, Cruises not sailing etc, but supply is even tighter. Between supply chain issues, shortage of employees and energy prices, we are a long ways from being anywhere close to a normal economy.

$100 oil has been predicted for this year for quite some time now. That's not coming from an AO source. Pretty well known

That's what happens following a few years of low crude prices which result in a decline in investment in the industry (less exploration), while worldwide demand still climbs (minus the vid hiccup). As I've said before, keep an eye on NG prices and NG driven companies if you wanna invest. There is a lot of 48" pipe going in the ground right now....and it will be full of NG

[Drewski Canuck]

Multi National Oil Cos (Exon, Chevron, etc) have been on a tear since January 4. They are awash in cash, and are not investing in exploration in North America.

There is a big find off the coast of Guyana / St. Kitz where outfits like Total are investing. Likely because there are no screaming environmentalists whip sawing the local Governments against the Oil Cos. Big Oil is not investing in the US or Canada. No one can blame them for that.

Meanwhile, Biden is very worried about Russia who has not increase production and supply of Natural Gas to Europe, and the price of oil keeps going up because the supply continues to be consumed without efforts to replace in Russia and the Middle East. The US driving public will be screaming as the price goes up, as will all the home owners that see their heating costs go up.

I am not complaining as obviously I am in a mutual fund heavily concentrated in Multi National Oil Cos.

BUT WOULDN'T IT BE NICE if Trudeau would take steps to bring back the big Oil Cos to Alberta to finish off all the projects that were shelved in 2015 - 2016?

Cenovus alone has 3 projects where billions were spent that they have left unfinished. Shell has Carmden Creek by Peace River where 2 Billion spent was walked away from. No oil has been produced from any of these unfinished projects. No royalties or tax revenue is being received by Alberta or Canada either. The Green Energy movement is not paying any taxes to make up the shortfall.

The list goes on and on for lost potential for Alberta, because the Environmentalists have hijacked Ottawa and the Liberals have been complicit with a ridiculous Carbon Tax that makes no difference to Global CO2 emissions.

Expect 2022 to be a great year for the energy sector on the Stock Markets. All the posturing from the Environmentalists against the Oil Industry will mean nothing when the companies keep piling up the cash and not investing in the mega projects.

Drewski

[Ken07AOVette]

Originally Posted by KGB

I think the biggest reason why is the shortage of the chips for NA automakers. Trucks were in huge demand and in huge deficit…

I agree.

I was looking at the numbers Ford put out, and they are dismal for this reason.

Are the chips all made in Asia?

I heard there were 2 manufacturing facilities, one burnt down, the other was closed due to covid. I can not call it a fact though.

[mac1983]

Originally Posted by MountainTi

$100 oil has been predicted for this year for quite some time now. That's not coming from an AO source. Pretty well known

That's what happens following a few years of low crude prices which result in a decline in investment in the industry (less exploration), while worldwide demand still climbs (minus the vid hiccup). As I've said before, keep an eye on NG prices and NG driven companies if you wanna invest. There is a lot of 48" pipe going in the ground right now....and it will be full of NG

Do you think there is more upside on the NG side or the Oil side? I know they are putting a lot of pipe in the ground, but I wonder if the money is made on LNG rather than straight NG. I would be surprised if any more plants are built in BC after LNG Canada due to the politics, and the benefactors there are Korea, China, Malaysia, Japan and Shell. So that leaves all our gas shipped, liquified and exported on the US gulf coast with the Americans benefitting the most. I suppose you could say the same thing about our heavy oil though, but I think there is more potential upside on the oil price than gas price.

[bdub]

Originally Posted by MountainTi

$100 oil has been predicted for this year for quite some time now. That's not coming from an AO source. Pretty well known

That's what happens following a few years of low crude prices which result in a decline in investment in the industry (less exploration), while worldwide demand still climbs (minus the vid hiccup). As I've said before, keep an eye on NG prices and NG driven companies if you wanna invest. There is a lot of 48" pipe going in the ground right now....and it will be full of NG

The greening of natural gas is a big deal I’m thinking.

https://www.canadianenergycentre.ca/...ral-gas-green/

[MountainTi]

Originally Posted by bdub

The greening of natural gas is a big deal I’m thinking.

https://www.canadianenergycentre.ca/...ral-gas-green/

I've been hearing the terms green and NG used in the same sentence for a while now. All we need now is to get the propaganda (MSM) machine on board and the leaf lickers will soon follow. I see nothing but good in the years to come in regards to NG. Even Ft. Nelson may boom again.
Who knows, maybe the MVPL will go from a dream to reality.
Alberta's best and most prosperous days were NG driven, I think we'll see it again

[bdub]

Originally Posted by MountainTi

I've been hearing the terms green and NG used in the same sentence for a while now. All we need now is to get the propaganda (MSM) machine on board and the leaf lickers will soon follow. I see nothing but good in the years to come in regards to NG. Even Ft. Nelson may boom again.
Who knows, maybe the MVPL will go from a dream to reality.
Alberta's best and most prosperous days were NG driven, I think we'll see it again

The narrative is starting to come around. Natgas producers are going to go from off limits to investable for lots of the big money.

[roper1]

Originally Posted by MountainTi

I've been hearing the terms green and NG used in the same sentence for a while now. All we need now is to get the propaganda (MSM) machine on board and the leaf lickers will soon follow. I see nothing but good in the years to come in regards to NG. Even Ft. Nelson may boom again.
Who knows, maybe the MVPL will go from a dream to reality.
Alberta's best and most prosperous days were NG driven, I think we'll see it again

My son flew in & out of Ft Nelson for a couple years. Crazy how much gas in some of those wells. Be nice to see an upswing, anyone owning real estate of any kind there really stuck.

[MountainTi]

Originally Posted by bdub

The narrative is starting to come around. Natgas producers are going to go from off limits to investable for lots of the big money.

Gives me goosebumps thinking of it. lol.

I believe the approvals are still in place for the MVPL. There's a whack of gas up there. And a ton of country. Be a boom that lasts 20 years up there

[MountainTi]

Originally Posted by roper1

My son flew in & out of Ft Nelson for a couple years. Crazy how much gas in some of those wells. Be nice to see an upswing, anyone owning real estate of any kind there really stuck.

Seems I spent a good part of my life working up there. Always loved working in Ft. Nelson. Especially when the evening shows were staggered every 1/2 between the Fort and the Trappers. Lot of trips back and forth across that highway lol

[Bergerboy]

Originally Posted by MountainTi

Seems I spent a good part of my life working up there. Always loved working in Ft. Nelson. Especially when the evening shows were staggered every 1/2 between the Fort and the Trappers. Lot of trips back and forth across that highway lol

I dont miss the train bridge then 3 hours of the sierra high grade to get to the rig.

[MountainTi]

Originally Posted by Bergerboy

I dont miss the train bridge then 3 hours of the sierra high grade to get to the rig.

Yeah that was always a bit sketchy. They built that connector past the airport many years ago though, haven't had to share the bridge with trains for a long time now. Lot of country back up in there though, especially if going all the way up into july lakes

[bdub]

Originally Posted by MountainTi

Seems I spent a good part of my life working up there. Always loved working in Ft. Nelson. Especially when the evening shows were staggered every 1/2 between the Fort and the Trappers. Lot of trips back and forth across that highway lol

Originally Posted by Bergerboy

I dont miss the train bridge then 3 hours of the sierra high grade to get to the rig.

What a small world lol. Thanks for jogging the memory bank.

[MooseRiverTrapper]

How long till we see $100wti my guess is June. WCS is currently trading near $100cdn.

[Sundancefisher]

Originally Posted by MooseRiverTrapper

How long till we see $100wti my guess is June. WCS is currently trading near $100cdn.

https://oilprice.com/oil-price-charts/ WCS. Trading $66.50.

My opinion…

OPEC can’t afford oil price going to high and creating conditions for US production to ramp up.

So they will wait… and when price goes up enough and companies start talking about spending more they will release more production.

Companies right now are stock piling cash or paying down debt or buying up stock rather than putting cash into new drills.

People banking on $100 oil… Is a big gamble.

[Dean2]

Shopify is trading this morning at $1350, that is 40% off the high of the past 12 months. Canadian Banks stocks are trading up 40% over the past 12 months. The Canadian Banks pay 3.5 to 4% dividend, most tech stocks pay zero.

Do not listen to the bobbing heads on BBN. Most of them touted the line that said the Canadian Banks were uninvestable and all your money should be in teck growth stocks. Do your own research, they have both an agenda to move the markets to benefit their firms, as well as not having any better insight or crystal balls than the average well read civilian.