Financial Markets Meltdown

[Jim Blake]

Boy oh Boy oil is sure taking a trashing again this morning!! Likewise of course the TSX as well.

[Twisted Canuck]

And the Dow is down almost 800 pts. And CDN$ is off almost a cent. Everything is down today.

And it is no big surprise either.

[ward]

OPEC agrees to increased production, Delta variant taking off and some people believing the NA economy may have peaked.

Buying opportunity ?

[Jim Blake]

Originally Posted by ward

OPEC agrees to increased production, Delta variant taking off and some people believing the NA economy may have peaked.

Buying opportunity ?

Another "perfect storm" in the making. IMO a buying opportunity is coming but not quite there yet.

I'd like to see Dean's analysis on this.

[elkhunter11]

I am still sitting on a fair bit of cash, I have been waiting a while for a correction, and this may be it.

[Dean2]

The markets are 4% off the recent highs but still 19,600, so far above the pre-Covid highs of 17,900. If the TSX hits 18,700 or below, I would call that evidence of a large correction happening with a likely bottom of 16.500. No one thinks anything of the days when the markets go up 2-3% for days in a row but if it goes down the same amount everyone starts to talking major correction. There is a LOT of hot money in the markets right now from far too much government stimulus and there are a ton of people trading on margin. That is going to exaggerate swings and we are going to see swings. but the VIX is still only 24, but it is rising. It was at 75 back in Mar 2020, and has been as high as 40 in the past 6 months. So far I see this as normal range volatility. There may be some deals, relative to recent prices, but we aren't going to see Royal Bank go from 127 to 75 bucks again any time soon, which is where it was back in April 2020.

Since equities are really the only option with Bonds prices where they are and inflation growing I really don't see a big run down in share prices hitting any time soon. That said, I don't own any airplane makers, airlines, cruise ships, hotel stocks, theatres or anything else that is dependant of re-opening to prosper. Those have been bid up heavily on re-opening over exuberance and are priced above what full open would value them at. They are due for a big pull back, especially if travel opening is delayed.

[pikeman06]

Originally Posted by elkhunter11

I am still sitting on a fair bit of cash, I have been waiting a while for a correction, and this may be it.

Me too, not sure why the markets are so high maybe just investors backing off on rrsp and playing the market instead but I think if there's a 5 percent drop in a short period you should see a real sell off as people panic to protect their gains. I can't buy shares riding 52 week highs. I wish I woulda bought on the covid dip but it seemed like the end of the world was coming so it was hard time to invest without knowing how low things could go. Dean has the right idea gotta lose a couple thousand more points at least before its time to jump in for me anyways. Inflation is insane right now and people will start to cut their spending when they realize how much more the cost of living has increased. Just my opinion.

[Dean2]

Screenshot 2021-07-19 at 12-11-50 ROYAL BANK OF CANADA.jpg


Screenshot 2021-07-19 at 12-38-29 TELUS Corp.jpg


Click on screenshot to expand. Had you bought at the highest point in any given year for RBC or Telus, despite the fluctuations you would still be a long ways up from where you started. If you check the charts for the other stocks below they look pretty much the same over ten years, and even more so over 20.
If you can pick up the stock on a large dip like the recent Covid one, you can really magnify your returns but as you can see, over a ten year period those real big dips don't happen very often. That is exactly why I am not a fan of trying to time the market, as long as you are buying top quality, long term hold, dividend paying type stocks and use the DRIP programs. My thoughts on what I consider good long term holds for me has never changed, Royal Bank, TD, Visa, Coke a Cola, Trans Canada Pipe,TRP, Enbridge ENB, Pembina Pipe PPL, Fortis, BCE, Telus, Canadian Ulities, Alberta Energy, Costco, Freehold Royalties, and a couple of REITS, Canadian Apartment, H&R Reit, Dream Industrial.

Even if a guy couldn't pull the trigger at the bottom in March, April May of 2020, that is more than a year ago. Sitting on the sidelines for the last 6-8 months has been very expensive in terms of foregone earnings.

[Twisted Canuck]

Wow. If a guy wants to buy the dip, he better be fast!

Markets right back up again today. It was almost a correction, for almost 24 hours.

An interesting article from BNN I was reading this morning about retail investors driving the Bull. I suspect sooner or later they will get a further education on Bears.

https://www.bnnbloomberg.ca/a-lot-of...ocks-1.1630680

[Dean2]

Originally Posted by Twisted Canuck

Wow. If a guy wants to buy the dip, he better be fast!

Markets right back up again today. It was almost a correction, for almost 24 hours.

An interesting article from BNN I was reading this morning about retail investors driving the Bull. I suspect sooner or later they will get a further education on Bears.

https://www.bnnbloomberg.ca/a-lot-of...ocks-1.1630680

Agreed. What this clearly demonstrates is the difficulty in timing major market moves. Even the best experts usually only recognise a major event after it happens. None of the things people are worried about before a major swing is what actually causes it. It is almost always driven by something that comes out of left field for large moves up or down though in general up is easier to forecast.

[Ken07AOVette]

Originally Posted by elkhunter11

I am still sitting on a fair bit of cash, I have been waiting a while for a correction, and this may be it.

I missed out huge, lost $2000 CAD when our dollar climbed. Now I am on the buying side again, but it is neither high enough to sell or low enough to buy.

Did the same with a little bit of gold lol

[Twisted Canuck]

Biden, oh my. Figures dumping trillions into the economy and infrastructure is going to keep prices down.

I don't understand how a president can be that dumb. It's like he thinks the budget is going to balance itself or something.

https://www.wsj.com/articles/preside...ve-11626732122

It isn't going to end well.

[Twisted Canuck]

Just happened to catch this on the ticker, Nvidia is getting hammered today! I don't own any, but anybody who did ignored all the recent warnings about a potential crash. They are way way down in trading today, over 75%. Like, huge loss.

https://markets.businessinsider.com/...-does-10335340

[tranq78]

Originally Posted by Twisted Canuck

Just happened to catch this on the ticker, Nvida is getting hammered today! I don't own any, but anybody who did ignored all the recent warnings about a potential crash. They are way way down in trading today, over 75%. Like, huge loss.

https://markets.businessinsider.com/...-does-10335340

Nvidia's shares just split 4 for 1. Looks like the market has adjusted for that now.

But yeah, Nvidia has become a meme stock.

[Twisted Canuck]

Originally Posted by tranq78

Nvidia's shares just split 4 for 1. Looks like the market has adjusted for that now.

But yeah, Nvidia has become a meme stock.

When you dilute like that, it never ends well that I have seen.

[ward]

Originally Posted by Twisted Canuck

Biden, oh my. Figures dumping trillions into the economy and infrastructure is going to keep prices down.

I don't understand how a president can be that dumb. It's like he thinks the budget is going to balance itself or something.

https://www.wsj.com/articles/preside...ve-11626732122

It isn't going to end well.

It’s been a while since the US had a President that cared about debt and spending. The “too big to fail” thing I guess.

[bdub]

Originally Posted by Twisted Canuck

When you dilute like that, it never ends well that I have seen.

A share split is nothing more than an accounting entry. Every Nvidia share held becomes 4 and the price is divided by 4. It's not a share dilution. Share dilution means the company is raising capital by selling more shares, reducing the proportion of the company held by existing shareholders. Hundreds of companies split shares, the majority of large caps have split at one time or another. The only thing a share split does is perhaps attract a bit of attention and makes shares more affordable for small investors to buy.

[Twisted Canuck]

Thanks for that, ^ I misunderstood what they had done, was actually just reading up on it. The drop in price shocked me, until I looked into it more. Still, there seems to be somewhat of a consensus that their share price may still crash for various reasons, though obviously that is not the case with what happened today.

[bdub]

Originally Posted by Twisted Canuck

Thanks for that, ^ I misunderstood what they had done, was actually just reading up on it. The drop in price shocked me, until I looked into it more. Still, there seems to be somewhat of a consensus that their share price may still crash for various reasons, though obviously that is not the case with what happened today.

Hey no problem.

I completely agree with you on the Biden thing, the States and Canada is heading down the crazy trail on spending and budget deficits.

[Zip-in-Z]

Lots of Green today ....

[tranq78]

Originally Posted by Twisted Canuck

Thanks for that, ^ I misunderstood what they had done, was actually just reading up on it. The drop in price shocked me, until I looked into it more. Still, there seems to be somewhat of a consensus that their share price may still crash for various reasons, though obviously that is not the case with what happened today.

NVDA is still a meme stock. NVDA makes chips used in gaming, but their chips are also being used for cryptocurrency mining, so their product is in great demand. Buyers of this name think it is a way to play bitcoin etc.

[Vantage Point]

Originally Posted by Dean2

Attachment 174046


Attachment 174047


Click on screenshot to expand. Had you bought at the highest point in any given year for RBC or Telus, despite the fluctuations you would still be a long ways up from where you started. If you check the charts for the other stocks below they look pretty much the same over ten years, and even more so over 20.
If you can pick up the stock on a large dip like the recent Covid one, you can really magnify your returns but as you can see, over a ten year period those real big dips don't happen very often. That is exactly why I am not a fan of trying to time the market, as long as you are buying top quality, long term hold, dividend paying type stocks and use the DRIP programs. My thoughts on what I consider good long term holds for me has never changed, Royal Bank, TD, Visa, Coke a Cola, Trans Canada Pipe,TRP, Enbridge ENB, Pembina Pipe PPL, Fortis, BCE, Telus, Canadian Ulities, Alberta Energy, Costco, Freehold Royalties, and a couple of REITS, Canadian Apartment, H&R Reit, Dream Industrial.

Even if a guy couldn't pull the trigger at the bottom in March, April May of 2020, that is more than a year ago. Sitting on the sidelines for the last 6-8 months has been very expensive in terms of foregone earnings.

I would venture to look at both/either Canadian railways at this time also. Both are very volatile with Kansas City Southern deal in the air and alleged fires are adding to the bouncing around. They are both off highs and pulled back by a certain amount.

[Dean2]

Over the past couple of years, and on this thread too, I have often said that I do not, nor would I ever invest in Chinese owned companies or the Chinese stock market. There is no equivalent to the SEC, the books of the companies can be complete fabrication and there is too much government control and interference in private business. Some on here had other views and talked about Alibaba, tech companies etc that are doing well and that they have made a lot of money on. What has been happening over the past 6 months is bearing out the very high risk of that market.



China Crash Continues
Fears over China cracking down on yet another industry sent education stocks tumbling this week. On Friday alone, $EDU (New Oriental Education) was down 54%, $GOTU (Gaotu Techedu) down 63%, and $TAL (TAL Education) down 71%. Shares of these companies are now down 80-90% year-to-date.
What is the concern? In a “worst-case scenario,” China could ban teaching on weekends and holidays and force these companies to become non-profits. China has said it wants to “ease the financial burden” associated with child-rearing, including the cost of education. And in recent months, authorities have called for less homework and after-school tutoring for students, saying “we shouldn’t let an industry with social conscience become a profit-seeking one.”

​

​Powered by YCharts​
The divergence with US equities has become stark. While US Internet stocks ($FDN) ended the week at all time highs (+18% YTD), Chinese internet stocks ($KWEB) ended the week at 52-week lows (-28% YTD).

​

​Powered by YCharts​

[fishtank]

i think there will be another shake down on the chinese stock , their vaulation are sky high, the listing in the us market get them alot of exposure and capital.

we are addicted to cheap chinese goods/manufacturing ,
Chinese companys are Addicted to the US capital market and listed their IPO in the US .( noted the biggest chinese ipo's are listed in the us- alibaba )

[fishtank]

Originally Posted by fishtank

i think there will be another shake down on the chinese stock , their vaulation are sky high, the listing in the us market get them alot of exposure and capital.

we are addicted to cheap chinese goods/manufacturing ,
Chinese companys are Addicted to the US capital market and listed their IPO in the US .( noted the biggest chinese ipo's are listed in the us- alibaba )

ealier in the year ANT finacial ( alibaba's payment system ) was to be listed in the NYSE and the ccp pull the rug out on it days before the us IPO for $30 billion, that would have been the biggest ipo in history. In a way we need to thank the ccp for keeping the bags in china, as many of US shareholders would be holding the bags right now .

[bdub]

Makes a guy wonder what the CCP got going on with their crack down on bitcoin, tech(big data), commodities prices and commodity speculation.

Investing in China. A culture of dishonesty, corruption, and the ability of the government to do pretty much anything they want. I got burnt on Sino-Forest years ago like plenty of others. That was enough for me.

[fishtank]

Originally Posted by bdub

Makes a guy wonder what the CCP got going on with their crack down on bitcoin, tech(big data), commodities prices and commodity speculation.

Investing in China. A culture of dishonesty, corruption, and the ability of the government to do pretty much anything they want. I got burnt on Sino-Forest years ago like plenty of others. That was enough for me.

Ccp wants absolute control over everything, things are getting a little loose with the big tech and internet and outside influences. So they will reset everything .

[raab]

Were at war with the CCP, and no one realizes it yet. Id suggest everyone move their money out of Chinese companies.

[bdub]

Check out what’s happening with Bitcoin right now. Wild move

[Dean2]

Well, the IPL/PPL merger is off the table and PPL will be collecting the large break fee. If will be interesting to see if Brookfield collects enough shares to hit their 55% requirement, not counting the 20% they already hold. Glad I got out of IPL in the 20.25-21 range, the shares dropped back under 20 this morning on the announcement of PPL stepping back. PPL's share price jumped to 41.00 this morning on the news and since I bought PPL at 38-38.50, and Freehold at 8-8.50 with the IPL proceeds that is working out well too. Other advantage is both pay double the monthly dividend that IPL did. I want to thank Brookfield and PPL, they moved the IPL shares from 12 bucks to just over 20 far faster than would have happened without the buyout attempts.