Financial Markets Meltdown

[bdub]

From the Globe this am. Numbers prior to todays session. Tech taking a good chunk of the beating.

Scotiabank’s portfolio strategy team have updated their data showing that the decline in the S&P/TSX Composite understates the carnage beneath the surface,
“The S&P 500 is now down 4.5% from its September 2, 2021 high and the TSX pullback is a tad milder at -3.6%. While indices remain well behaved, we see much more damage beneath the surface, which could suggest that a lot of the bad news is already priced-in. If October is choppy as well, opportunities could surface. Canada: 142 stocks (61%) in the TSX are trading in correction territory, i.e., they’re down more than 10% from their 52-week high. Of those, 85 (36%) are in bear market territory (i.e., 20%+ off their highs). US: 314 stocks (62%) in the S&P 500 are trading in correction territory and 80 (16%) are in bear market territory "

[Twisted Canuck]

So, back to investing in small arms and ammo, tinned goods, toilet paper, coffee whiskey and a few kg of Belgian chocolate.

Check.

[bdub]

Originally Posted by Twisted Canuck

So, back to investing in small arms and ammo, tinned goods, toilet paper, coffee whiskey and a few kg of Belgian chocolate.

Check.

Lol no. Get ready to go shopping. Stuff is going on sale.

[Map Maker]

My first negative gain this year as I track my monthly net worth.

This may be the drop some of us are waiting for.

[Twisted Canuck]

This is such a simple, elegant answer to all the problems. I can't believe I didn't think of it myself.

https://www.axios.com/trillion-dolla...841d181de.html

Jesus wept. Do these 'smart' people not study history? 'Without any impact on inflation'....

[Trochu]

Originally Posted by Twisted Canuck

This is such a simple, elegant answer to all the problems. I can't believe I didn't think of it myself.

https://www.axios.com/trillion-dolla...841d181de.html

Jesus wept. Do these 'smart' people not study history? 'Without any impact on inflation'....

Don't forget, inflation is a good thing, as your wage will go up.

[MooseRiverTrapper]

Meg cve su cnq tve bte kel nva

[bdub]

Originally Posted by MooseRiverTrapper

Meg cve su cnq tve bte kel nva

WTI over $79, nat gas over $6.25. Analysts are raising price assumptions for oil and nat gas as well as increasing price targets on producers.

From Desjardin analyst's in the Globe today.

"We are maintaining our US$70 per barrel WTI forecast for 2022, which we now believe has considerable upside risk. Moreover, unlike natural gas prices, which we expect to hit their cyclical peak in 2022, we believe that conditions are ripe for even stronger oil prices moving into 2023, including a potential return to US$100 per barrel WTI!”

With that view, Desjardins recommends investors should be buying producer equities “with reckless abandon.”

Target prices - ARX $20, CNQ $60, CVE $20, SU $41, TOU $70.

[bdub]

Originally Posted by Twisted Canuck

This is such a simple, elegant answer to all the problems. I can't believe I didn't think of it myself.

https://www.axios.com/trillion-dolla...841d181de.html

Jesus wept. Do these 'smart' people not study history? 'Without any impact on inflation'....

They floated that idea before. Hard to believe that a gimmick could be what hold the US financial system afloat. Lots of back and forth going on about the debt ceiling between the Red and Blue. I expect it will get raised once again and be a non-event.

https://www.forbes.com/sites/jonatha...h=2544fd3665eb

[Trochu]

Anyone have thoughts on land? Around here, one wonders how it's sustainable, a quarter going for $1.5M or more. But, when you look at the 50 year historical trend, it's gone up something like 46 of last 50 years and has never really been "affordable". The thing I don't like about it is, if you rent, the return, given the purchase price, is pathetic.

If there is a big correction, anyone think land prices will fall or will they remain fairly stable?

[Dean2]

Originally Posted by Trochu

Anyone have thoughts on land? Around here, one wonders how it's sustainable, a quarter going for $1.5M or more. But, when you look at the 50 year historical trend, it's gone up something like 46 of last 50 years and has never really been "affordable". The thing I don't like about it is, if you rent, the return, given the purchase price, is pathetic.

If there is a big correction, anyone think land prices will fall or will they remain fairly stable?

Never buy real estate that won't give you at least a 4% annual return. It may make a decent store of value, assuming it keeps going up with inflation, but it is a heck of a lot better if you are getting paid more than the inflation rate every year to hold it. High priced land is not as liquid as stocks or bonds. I do not own any real estate that does not have an inflation positive cap rate, and most are double to triple the inflation rate. Long term land always goes up but that is over 15 or 20 years, it can also drop a whole bunch in the short term, and it has done it quite a few times here in Alberta and many times in Toronto and BC too. Just like stocks, always buy the ones with a dividend that pays you to wait for the capital appreciation.

[mac1983]

Originally Posted by bdub

WTI over $79, nat gas over $6.25. Analysts are raising price assumptions for oil and nat gas as well as increasing price targets on producers.

From Desjardin analyst's in the Globe today.

"We are maintaining our US$70 per barrel WTI forecast for 2022, which we now believe has considerable upside risk. Moreover, unlike natural gas prices, which we expect to hit their cyclical peak in 2022, we believe that conditions are ripe for even stronger oil prices moving into 2023, including a potential return to US$100 per barrel WTI!”

With that view, Desjardins recommends investors should be buying producer equities “with reckless abandon.”

Target prices - ARX $20, CNQ $60, CVE $20, SU $41, TOU $70.

^^^^
Top 5 companies of the WCSB all Canadian, I always laugh when the foreign multinationals exit Canada. Encana would rank among the best if it wasn't for Doug Suttles...

[fishtank]

Any thoughts on crescent point ?

[MountainTi]

Originally Posted by bdub

WTI over $79, nat gas over $6.25. Analysts are raising price assumptions for oil and nat gas as well as increasing price targets on producers.

From Desjardin analyst's in the Globe today.

"We are maintaining our US$70 per barrel WTI forecast for 2022, which we now believe has considerable upside risk. Moreover, unlike natural gas prices, which we expect to hit their cyclical peak in 2022, we believe that conditions are ripe for even stronger oil prices moving into 2023, including a potential return to US$100 per barrel WTI!”

With that view, Desjardins recommends investors should be buying producer equities “with reckless abandon.”

Target prices - ARX $20, CNQ $60, CVE $20, SU $41, TOU $70.

High gas prices are here to stay...IMO of course. Hang onto you hats when it comes to home heating costs. Can't see subsidies coming this time around.
Good time to be in the firewood business

[bdub]

Originally Posted by fishtank

Any thoughts on crescent point ?

I don't know much about them and not a recommendation to buy or not buy, I suggest you do your own homework. Just a quick look this morning for you and going off memory.

I know they were having debt issues a few years back. The CEO and CFO quit suddenly in 2018. No clue who or how the new CEO and CFO are making out but sounds like a bit of a turnaround story. It was an investor favorite for a while and then they got into the debt trouble if I recall. They chopped the dividend at the start of the pandemic but have now raised it to .03$. Raised guidance in July, expecting FCF after the dividend of 625 - 825 million. One thing of note is that they have hedged 40% ish of production this year at 65$ CDN/about 50$ bbl USD, which cuts both ways. National bank has a target price of $12.50 on them.

https://www.crescentpointenergy.com/...ancial-reports
https://www.crescentpointenergy.com/invest

[MooseRiverTrapper]

Originally Posted by bdub

I don't know much about them and not a recommendation to buy or not buy, I suggest you do your own homework. Just a quick look this morning for you and going off memory.

I know they were having debt issues a few years back. The CEO and CFO quit suddenly in 2018. No clue who or how the new CEO and CFO are making out but sounds like a bit of a turnaround story. It was an investor favorite for a while and then they got into the debt trouble if I recall. They chopped the dividend at the start of the pandemic but have now raised it to .03$. Raised guidance in July, expecting FCF after the dividend of 625 - 825 million. One thing of note is that they have hedged 40% ish of production this year at 65$ CDN/about 50$ bbl USD, which cuts both ways. National bank has a target price of $12.50 on them.

https://www.crescentpointenergy.com/...ancial-reports
https://www.crescentpointenergy.com/invest

Apparently CPG has learned from their previous mistakes.

[Jim Blake]

Originally Posted by MountainTi

High gas prices are here to stay...IMO of course. Hang onto you hats when it comes to home heating costs. Can't see subsidies coming this time around.
Good time to be in the firewood business

I remember getting 13 bucks for gas plus liquids. I believe our home heating cost with the shop was around 600 bucks a month at that time. I am going to give our gas Co-Op a call this week to see if they have locked in a contract price for the Winter or not. My opinion is as yours...higher prices are here for quite a while.

I see oil cracked the 80 buck mark today. All this good news for Alberta.

[MountainTi]

Originally Posted by Jim Blake

I remember getting 13 bucks for gas plus liquids. I believe our home heating cost with the shop was around 600 bucks a month at that time. I am going to give our gas Co-Op a call this week to see if they have locked in a contract price for the Winter or not. My opinion is as yours...higher prices are here for quite a while.

I see oil cracked the 80 buck mark today. All this good news for Alberta.

I sent the gas Co-op an email the other day with the same question but never received a response. Will give them a call tomorrow as well.

I saw the $80 this morning. Was kinda hoping nat gas would be $6 at the same time...but never made it.

Time to start cutting firewood this days off

[nelsonob1]

Originally Posted by Trochu

Anyone have thoughts on land? Around here, one wonders how it's sustainable, a quarter going for $1.5M or more. But, when you look at the 50 year historical trend, it's gone up something like 46 of last 50 years and has never really been "affordable". The thing I don't like about it is, if you rent, the return, given the purchase price, is pathetic.

If there is a big correction, anyone think land prices will fall or will they remain fairly stable?

Vacant land can be a bit sticky and take time to sell. It is generally the least liquid real asset parti ularly in a declining market.

[Dean2]

Anyone not on a contract fixed price for electricity and natural gas would be well advised to checkout what kind of deals are around. The price of nat gas and therefore electricity is going to go up over the winter, potentially by a lot.

[MountainTi]

Originally Posted by Dean2

Anyone not on a contract fixed price for electricity and natural gas would be well advised to checkout what kind of deals are around. The price of nat gas and therefore electricity is going to go up over the winter, potentially by a lot.

Contract in my REA is 8.4 cents. Current pricing is close to 13 cents

[mac1983]

Are there any retailers to avoid or are they all the same?

[Jim Blake]

Originally Posted by Dean2

Anyone not on a contract fixed price for electricity and natural gas would be well advised to checkout what kind of deals are around. The price of nat gas and therefore electricity is going to go up over the winter, potentially by a lot.

I am with Enmax. I have found them to be decent to deal with. I phoned them in July to get clarification on a couple of the charges on our bill. The Enmax Representative after explaining my query asked if I wanted to renew my Easy Max 5 year fixed. I took him up on that and locked our's in at 6.89 cents for the 5 year term. Glad I did but the actual power consumption is a small part of the bill with distribution and transmission and all the other ad-on's LOL .

I wonder what the inflation numbers will look like by January? Certainly doesn't look good!

[Trochu]

Originally Posted by Dean2

Never buy real estate that won't give you at least a 4% annual return. It may make a decent store of value, assuming it keeps going up with inflation, but it is a heck of a lot better if you are getting paid more than the inflation rate every year to hold it. High priced land is not as liquid as stocks or bonds. I do not own any real estate that does not have an inflation positive cap rate, and most are double to triple the inflation rate. Long term land always goes up but that is over 15 or 20 years, it can also drop a whole bunch in the short term, and it has done it quite a few times here in Alberta and many times in Toronto and BC too. Just like stocks, always buy the ones with a dividend that pays you to wait for the capital appreciation.

Farmland is a non-starter around here if that's the metric then. A quarter for $1.6M would have to rent out for around $400/acre, likely closer to $120.00-$150.00/acres. A different discussion if one is farming it though.

Puts me in a pickle. I love farmland as it generally increase in value year over year, easy to rent out, little to no maintenance, and expenses are almost non-existent. Don't like it as the return is paltry and you don't typically realize the appreciation until you sell.

Originally Posted by nelsonob1

Vacant land can be a bit sticky and take time to sell. It is generally the least liquid real asset particularly in a declining market.

Also that to consider.

[Dean2]

Originally Posted by Trochu

Farmland is a non-starter around here if that's the metric then. A quarter for $1.6M would have to rent out for around $400/acre, likely closer to $120.00-$150.00/acres. A different discussion if one is farming it though.

Puts me in a pickle. I love farmland as it generally increase in value year over year, easy to rent out, little to no maintenance, and expenses are almost non-existent. Don't like it as the return is paltry and you don't typically realize the appreciation until you sell.



Also that to consider.

I would never be willing to tie up 1.6 million for a return of 1 to 2 percent. I am not sure what the net crop value is produced by a quarter but I am thinking it is far from making sense either. 60 bushels to an acre at 10 bucks, with zero input costs is still only 96000 a year or 6 percent and planting is definitely not free.

When I can get 4% divided on RBC shares, the dividend tax credit that makes it the same as a 7 percent return interest or rent, plus great liquidity, makes way more sense to me. I like land for diversification but the return on commercial or residential rental property is way better than raw farm land at those prices.

[Jim Blake]

Well everything is banging on all cylinders today!

Amazing not long ago there were companies paying to get rid of their oil and today it's 81.50.

[fishtank]

Originally Posted by Jim Blake

Well everything is banging on all cylinders today!

Amazing not long ago there were companies paying to get rid of their oil and today it's 81.50.

everything cycles, it only a matter of time

[Jim Blake]

Originally Posted by fishtank

everything cycles, it only a matter of time

Yes I've seen a few of them.

So far this one looks like one of the biggest/quickest swings. Yes I know Turd 1's NEP was a quick downturn but the recovery was much longer.

Maybe someone does, but I can't remember any other time when companies were paying to get rid of their oil and a few months later getting over 81 bucks for it LOL!

[bdub]

Originally Posted by Jim Blake

Well everything is banging on all cylinders today!

Amazing not long ago there were companies paying to get rid of their oil and today it's 81.50.

What a nice run we're having!!

I think this rally has some legs for a while yet. US hyper shale growth is in the rearview mirror. OPEC stated quite a wile back that they are defending $60 oil so we have a long term floor at that level. China's CCP has instructed their people to secure energy supplies at any cost just a couple weeks ago. Huge underinvestment in traditional energy sources due to the greentards in the US, Canada and Europe. North American producers are emphasizing returns to shareholders and financial discipline rather than focusing on increased production. More takeaway capacity on the horizon.

Funds are going to be looking at increasing exposure into year end into a hot sector rather than look like idiots for missing out. Watched an economist today talking about justifying oil investing by focusing on companies working on carbon capture etc. More or less the oil companies are making so much money at these prices that institutions are starting to have a hard time ignoring the returns.

[Jim Blake]

Originally Posted by bdub

What a nice run we're having!!

I think this rally has some legs for a while yet. US hyper shale growth is in the rearview mirror. OPEC stated quite a wile back that they are defending $60 oil so we have a long term floor at that level. China's CCP has instructed their people to secure energy supplies at any cost just a couple weeks ago. Huge underinvestment in traditional energy sources due to the greentards in the US, Canada and Europe. North American producers are emphasizing returns to shareholders and financial discipline rather than focusing on increased production. More takeaway capacity on the horizon.

Funds are going to be looking at increasing exposure into year end into a hot sector rather than look like idiots for missing out. Watched an economist today talking about justifying oil investing by focusing on companies working on carbon capture etc. More or less the oil companies are making so much money at these prices that institutions are starting to have a hard time ignoring the returns.

Bang on they just can't help themselves LOL! They will spin doctor it up to make this blend into the "green jobs" part of the recovery. As you pointed out things are lining up for additional large gains.

Now to find workers to make this happen.