Financial Markets Meltdown

[Fisherdan]

Originally Posted by bdub

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

👍 Thanks. Appreciate the info and links.

[Map Maker]

Originally Posted by eric2381

https://youtu.be/j2em__lppHk

Big opportunities have to be seized.
I can agree with that in life.

My story:

Always wanted a camp by water but always too expensive. I got lucky on the stock market one year and had a modest sum of money that I was going to put into a piece of recreational land.
I looked all over and even tried to low ball properties near by. No one budged. For my price range, I needed to buy 6 hour drive in the middle of the boonies to get water access at my budget.
Then the big flood came in 2005 and everyone along the red deer river got worried and selling land at a discount. Even though it was a risk, I saw a property and jumped on it. Offered the asking price, cash.
Bought it and one of my great buys ever. Had the money ready and waited for right opportunities.

[eric2381]

I’d like to add, that you should never “get lucky” in the stock market. I hear of people making “YOLO” trades. You Only Live Once. The mind set should instead be “NELO”. Never Ever Lose, Ok? When I go to work at my job, I don’t hope to get lucky and get paid. I expect to get paid. It’s the same when you put your money to work.

[Twisted Canuck]

Well said.

[Map Maker]

It’s all context.
Even when value investing and finding a company that is undervalued, it can be a long time before that value is realized by the market.
Getting lucky is when a bunch of companies value is realized at the same time. It causes a nice windfall.

[bdub]

"Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said “extreme” volatility and lack of liquidity mean the futures market is increasingly disconnected from fundamentals and OPEC+ may be forced to cut production.

“The paper and physical markets have become increasingly more disconnected,” he said in response to written questions from Bloomberg News."

"Prince Abdulaziz represents the largest oil producer in OPEC+ and is arguably the most important player in the 23-nation alliance. He said futures prices don’t reflect the underlying fundamentals of supply and demand, which may require the group to tighten production when it meets next month to consider output targets."

This is a interesting development for energy names. OPEC raising the floor on oil prices. They previously implied that 60$ was about the lowest level they would tolerate and they are now implying defending the 90$ level.

Right on time for the smart money to finally move into the space. Even everyone's favorite investor, Uncle Warren is buying in size.

Multiple expansion coming??

https://www.bloomberg.com/news/artic...rnd=markets-vp

https://ca.finance.yahoo.com/news/ho...183944299.html

https://www.theglobeandmail.com/inve...ree-cash-flow/

[mac1983]

Originally Posted by bdub

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

Is Mark Carney a positive or negative in regards to Brookfield?

[bdub]

Originally Posted by mac1983

Is Mark Carney a positive or negative in regards to Brookfield?

Bruce Flatt must think so I guess. I imagine with his past roles he has plenty of connections and ties in places that benefit BAM.

I like the BIP part of Brookfield more than the main holding company. I like the type of assets they are holding, especially in an inflationary environment.

[Dean2]

Originally Posted by bdub

Bruce Flatt must think so I guess. I imagine with his past roles he has plenty of connections and ties in places that benefit BAM.

I like the BIP part of Brookfield more than the main holding company. I like the type of assets they are holding, especially in an inflationary environment.

Just a heads up, a few U.S. analysts appear to now agree with me about Carnival, who own Princess and quite a few others, and Norwegian cruise lines, having put a $0 and $1 price target on their shares. On top of investment considerations this has implications for putting deposits and fully paid cruise bookings in place with these companies. If you are going to book a cruise you may want to look at how you protect your deposits.

Carnival is the largest global cruise company, with 91 ships in its fleet at the end of fiscal 2021, with all of its capacity set to be redeployed in 2022. Its portfolio of brands includes Carnival Cruise Lines, Holland America, Princess Cruises, and Seabourn in North America; P&O Cruises and Cunard Line in the United Kingdom; Aida in Germany; Costa Cruises in Southern Europe; and P&O Cruises in Australia. Carnival also owns Holland America Princess Alaska Tours in Alaska and the Canadian Yukon. Carnival's brands attracted about 13 million guests in 2019, prior to COVID-19.

Norwegian Cruise Line is the world's third-largest cruise company by berths (at more than 62,000), operating 29 ships across three brands (Norwegian, Oceania, and Regent Seven Seas), offering both freestyle and luxury cruising. The company has redeployed its entire fleet as of May 2022. With eight passenger vessels on order among its brands through 2027 (representing 20,000 incremental berths), Norwegian is increasing capacity faster than its peers, expanding its brand globally. Norwegian sailed to around 500 global destinations before the pandemic.

[bdub]

Originally Posted by Dean2

Just a heads up, a few U.S. analysts appear to now agree with me about Carnival, who own Princess and quite a few others, and Norwegian cruise lines, having put a $0 and $1 price target on their shares. On top of investment considerations this has implications for putting deposits and fully paid cruise bookings in place with these companies. If you are going to book a cruise you may want to look at how you protect your deposits.

I don't follow them and don't know anyone going on a cruise anytime soon but appreciate the heads up. They must really be having a rough go of it if they are on the verge of going belly up.

[Dean2]

Originally Posted by bdub

I don't follow them and don't know anyone going on a cruise anytime soon but appreciate the heads up. They must really be having a rough go of it if they are on the verge of going belly up.

I wasn't trying to direct it at you. I didn't actually intend to quote you in that post, but it showed up somehow, and I did not see it till way past edit time elapsed. No idea how that popped in there after I posted. Was supposed to be just a general comment and heads up for everyone.

[bdub]

Originally Posted by Dean2

I wasn't trying to direct it at you. I didn't actually intend to quote you in that post, but it showed up somehow, and I did not see it till way past edit time elapsed. No idea how that popped in there after I posted. Was supposed to be just a general comment and heads up for everyone.

No worries, it did seem a bit odd lol. Definitely a nice heads up though non the less. Thanks

[mac1983]

Originally Posted by bdub

Bruce Flatt must think so I guess. I imagine with his past roles he has plenty of connections and ties in places that benefit BAM.

I like the BIP part of Brookfield more than the main holding company. I like the type of assets they are holding, especially in an inflationary environment.

Good point, just trying to understand the implications of Mark Carney and his Race to Zero fossil fuel initiative and their investing in fossil fuel infrastructure. I guess they must be separate issues. Is one hedging his bets by investing in both or is it a non issue. I also realize following Bruce Flatt lead is a pretty safe bet.

[bdub]

Originally Posted by mac1983

Good point, just trying to understand the implications of Mark Carney and his Race to Zero fossil fuel initiative and their investing in fossil fuel infrastructure. I guess they must be separate issues. Is one hedging his bets by investing in both or is it a non issue. I also realize following Bruce Flatt lead is a pretty safe bet.

Probably alot of greenwashing going on. He is a big weasel. Unfortunately ESG and the climate cult has infiltrated every large organization in the west. Not just investment firms like Brookfield. They are literally all bowing down to the nonsense. Even firms like CNQ are going hard on carbon capture and reducing methane emissions. It's a business cost that the west is forcing upon its economy that much of the rest of the world does not.

[mac1983]

Originally Posted by bdub

Probably alot of greenwashing going on. He is a big weasel. Unfortunately ESG and the climate cult has infiltrated every large organization in the west. Not just investment firms like Brookfield. They are literally all bowing down to the nonsense. Even firms like CNQ are going hard on carbon capture and reducing methane emissions. It's a business cost that the west is forcing upon its economy that much of the rest of the world does not.

Yes my investment's in CNQ and CVE and interest in the Brookfield Infrastructure is what has me interested in this issue.

[Dean2]

If you are looking for a good deal on TD, RBC etc the next few days through earnings season is going to be a good time to watch for deals. Banks are taking large provisions and even though this is completely in line with what they should be doing, the market is not taking the news well. Shows just how spooked many investors are. When blood is running in the streets, buying opportunities abound.

With respect to Mark Carney, he has always been a blatant self promoter and advocate of anything that will make him look leading edge and keep him in the news. He makes David Suzuki look like a piker. Brookfield engaging him while investing heavily in Carbon industries, is just another example of Brookfield having no scruples. Watch my right hand while my left picks your pocket.

He was a cheap price to pay for his contacts, and the appearance of ESG progress. No company is stupid enough to fight the trend, Brookfield just makes an art of manipulating perception. I have never owned shares in any of their companies because A) I don't trust their leadership and B) most importantly, I cannot make sense of their byzantine and convoluted corporate structure and inter relations. I never buy businesses I can't understand.

[mac1983]

Originally Posted by Dean2

If you are looking for a good deal on TD, RBC etc the next few days through earnings season is going to be a good time to watch for deals. Banks are taking large provisions and even though this is completely in line with what they should be doing, the market is not taking the news well. Shows just how spooked many investors are. When blood is running in the streets, buying opportunities abound.

With respect to Mark Carney, he has always been a blatant self promoter and advocate of anything that will make him look leading edge and keep him in the news. He makes David Suzuki look like a piker. Brookfield engaging him while investing heavily in Carbon industries, is just another example of Brookfield having no scruples. Watch my right hand while my left picks your pocket.

He was a cheap price to pay for his contacts, and the appearance of ESG progress. No company is stupid enough to fight the trend, Brookfield just makes an art of manipulating perception. I have never owned shares in any of their companies because A) I don't trust their leadership and B) most importantly, I cannot make sense of their byzantine and convoluted corporate structure and inter relations. I never buy businesses I can't understand.

So calling Bruce Flatt Canada's Oracle of Omaha is s bit overblown?

[Dean2]

For you guys that own chip makers as well as looking at the mass storage firms.

London (CNN Business)When consumers were stuck inside during the early stages of the Covid-19 pandemic, there weren't many places to spend money. So they turned their attention to technology, scooping up new gaming consoles, monitors and PCs that made living and working from home a bit easier.
Now, as people return to offices, gyms and restaurants and rethink their spending as inflation starts to bite, sales of gadgets are taking a hit — as are the companies making the chips that power them.
What's happening: Nvidia (NVDA), which warned earlier this month that its sales were dropping due to weaker gaming revenue, shared earnings on Wednesday. The firm posted revenue between May and July of $6.7 billion, up 3% from one year ago but down 19% from the previous quarter.

"This was a challenging quarter," Chief Financial Officer Colette Kress told analysts. "Macroeconomic headwinds across the world drove a sudden slowdown in consumer demand."

Gaming revenue was dinged in part due to a decline in cryptocurrency mining that relies on Nvidia's chips. Matt Bryson, an analyst at Wedbush Securities, told me that the downturn was tied to the pullback in crypto prices, which has chilled enthusiasm in the sector, and to changes in how the digital coin ether is produced.

Revenue of data center chips reached a record last quarter, but wasn't as high as the company would have liked given supply chain disruptions.
Looking ahead: The situation isn't due to improve any time soon. The company said that revenue for its current quarter would come in around $5.9 billion, down 17% year-over-year, and that its gaming business would continue to retrench. Shares are off more than 3% in premarket trading on Thursday.
Nvidia isn't the only company in the industry that's run into trouble. Last month, Intel (INTC) posted a surprise loss, pointing to the "sudden and rapid decline in economic activity."
The firm forecast a sharp drop in PC chip sales this year as top customers tried to clear out existing inventory, a sign they're expecting lower demand for products.
"This weakness is pervasive across the semiconductor industry for companies that sell into either the PC space ... or into the handset space," Bryson said. "It comes back down to the consumer."
Problems are spread across markets, too. A report by analytics firm Canalys published on Thursday found that PC shipments from China fell by 16% in the second quarter, the worst decline in nine years.
On the radar: Providing chips for data centers has been a huge revenue driver in recent years, as cloud offerings from companies like Google and Amazon have taken off. But there are concerns that Big Tech firms could pull back spending on this front if other parts of their businesses run into trouble.
The fear, Bryson said, is that if companies spend less on Google ads, or Amazon customers don't order as many items, those giants of the tech world (and the stock market) may turn more conservative.
His question: "Will the struggles of the consumer ultimately affect them?"

[bdub]

Originally Posted by Dean2

For you guys that own chip makers as well as looking at the mass storage firms.

Where nosebleed valuations meet slowing growth and rising rates. Still an ugly place to be.

[Glion]

Dean do you see the Tesla stock split in the same way you see the Shopify etc stock splits ie: that it is more for manipulation of consumers traders than anything? Thanks for posting so much here btw, it has been an incredible resource for me.

[Dean2]

Originally Posted by Glion

Dean do you see the Tesla stock split in the same way you see the Shopify etc stock splits ie: that it is more for manipulation of consumers traders than anything? Thanks for posting so much here btw, it has been an incredible resource for me.

Tesla previously split 5 for 1 on Aug 31, 2020 and now they are doing it again. You need to look at the share price on a post split basis. If you had bought Tesla in 2019, you would be an extremely happy camper today. Despite all the fluctuations, ten thousand is worth about 1.5 million now. If you had bought Shopify in 2019 you would be under water today. With Tesla, I think it is more about keeping the stock highly liquid and easy to trade. Does not mean I would be buying Tesla stock at these prices but I don't see it in the same light as Shopify splitting. Also, Elon Musk is a guy I have a lot of respect for, I don't see him in anywhere near the same light as the Board and Executive of Shopify.

Bdub - you are spot on about nosebleed valuations meeting truly crappy execution and performance.

Those of you that were looking for deals on the Banks, hope you managed to get a bunch yesterday, the big discount party is taking a breather and moving up today already. Be interesting to see what Friday brings.

[HVA7mm]

Reading this thread is quite timely. I had been dragging my heels on transferring some mediocre performing mutual funds in my RRSP to my RRSP brokerage account and now realize that I should have a while ago. But should've/could've/would've won't change anything, and I know that it's not too late. I'm still close to a decade out from tapping into my RRSP, so there's still plenty of time to get the ball rolling in a more upward direction. I also recently checked out the mutual funds in my wife's RRSP, so I'll help her set up a brokerage account so that she can dump the poor performers and start building a more palatable portfolio.

I guess dealing with the same financial institution for 30+ years can lead to complacency, not to mention the revolving door of financial advisors. I swear that every time I log into my account there is a new "advisor" listed in my profile. No worries, onward and upward.

[Map Maker]

GICs are approaching 4%.

They have been so low for 20 years, they are off most peoples radar.

With inflation and taxes, they don’t make too much sense yet but it they go up another couple percentage points, I’ll be buying.

[Dean2]

Originally Posted by Map Maker

GICs are approaching 4%.

They have been so low for 20 years, they are off most peoples radar.

With inflation and taxes, they don’t make too much sense yet but it they go up another couple percentage points, I’ll be buying.

Just something to think about, unless it is in an RRSP, TFSA or Registered Education plan, the interest income is taxable annually. Therefore you are going to lose the marginal tax rate of the income, for most people that is about 35%. So a 6% GIC earns you 3.9%, then you have to deduct the rate of inflation. Right now you would need to earn 12% on a GIC just to stay even after tax and inflation. In the absence of other income, the first $50,000 of dividend income is tax free annually.

[bdub]

No signs of a pivot on rates.


https://www.cnbc.com/2022/08/26/powe...inflation.html


Sent from my iPhone using Tapatalk

[Dean2]

Originally Posted by bdub

No signs of a pivot on rates.


https://www.cnbc.com/2022/08/26/powe...inflation.html


Sent from my iPhone using Tapatalk

The people that believed central bank interest would level out at 2.5-3.0% are the same ones that fell for the "Transitory" inflation nonsense. Either the Central Banks are outright lying or they are completely incompetent. Neither is good for us as consumers and tax payers. Anyone still in a variable rate mortgage is going to be in BIG trouble over the next 24 months because we are going to have high interest rates and still high inflation.

Bank Results - TD good, BNS very good and actually best of what has posted so far. BNS shares are getting beat on because they missed "Expectations" so at 73 and 74 to me they are good value and they are paying a strong dividend. I have added some BNS and I don't usually hold a lot of this one. RBC average to not great - they have a heavy capital markets business and that did not do well this past quarter. Canadian Western - suck and have for the past 4 quarters. CWB used to be a pretty well run Bank, it isn't any more.

[HVA7mm]

Originally Posted by Dean2

The people that believed central bank interest would level out at 2.5-3.0% are the same ones that fell for the "Transitory" inflation nonsense. Either the Central Banks are outright lying or they are completely incompetent. Neither is good for us as consumers and tax payers. Anyone still in a variable rate mortgage is going to be in BIG trouble over the next 24 months because we are going to have high interest rates and still high inflation.

Bank Results - TD good, BNS very good and actually best of what has posted so far. BNS shares are getting beat on because they missed "Expectations" so at 73 and 74 to me they are good value and they are paying a strong dividend. I have added some BNS and I don't usually hold a lot of this one. RBC average to not great - they have a heavy capital markets business and that did not do well this past quarter. Canadian Western - suck and have for the past 4 quarters. CWB used to be a pretty well run Bank, it isn't any more.

I had been dipping into BNS lately and will likely continue to do so. Thanks for your take on CWB, as I was going to ask for opinions on this particular bank. It does seem to be a pretty cyclical stock in regards to stock price and dividends, but I don't know enough about it as a company.

[KGB]

The markets are definetly reacting badly on the interest rate news from central bank dude… Wonder why- it was well anticipated before that the rates will be going up…Could be another buying opportunity? Or dead cat bounce?

[bdub]

Originally Posted by KGB

The markets are definetly reacting badly on the interest rate news from central bank dude… Wonder why- it was well anticipated before that the rates will be going up…Could be another buying opportunity? Or dead cat bounce?

It is being taken by the market as more Hawkish than anticipated. Powell is saying they are continuing to raise even if the economy takes a hit, even if the stock market takes a hit, until inflation starts coming under control.

Meanwhile we have fiscal policy continuing to go nuts with Biden's latest free money/student loan policy, stoking more inflation.

It may be a buying opportunity but I wouldn't count on it being a buying opportunity in tech. Until we see rate expectation pivot tech is a dead horse imo. But who knows, right.

[Dean2]

Originally Posted by KGB

The markets are definetly reacting badly on the interest rate news from central bank dude… Wonder why- it was well anticipated before that the rates will be going up…Could be another buying opportunity? Or dead cat bounce?

I am generally a pretty patient guy but you have exhausted that with this ongoing dead cat bounce bullshiet. If you don't get it by now you never are going to. Look at the friggin 10 year chart. This applies to TD, RBC and BNS, and to a large degree BMO and even CIBC. If you bought any at the low between Jan and Dec of any year, you made great money, if you paid the highest price between Jan and Dec of that same year, you have still made good money. RY was $38 in 2012 it is now $125 and you collected at least $30 in dividends over those 10 years. How hard is that to actually figure out. Yes there are stocks like Nortel and Blackberry, Shopify and a whole bunch more that do dead cat, but those aren't what most people should be buying anyhow. Try not to confuse volatile crap stock with the good stuff. You don't get rich in one year.