Roaring back

.
RYAN   By Guest Blogger Ryan Lewenza
.

Humility is an important quality in my line of work as arrogance and hubris can lead to big financial losses. But today my humility takes a back seat as I’m going to take a ‘victory lap’ for a good call I made last year.

Canadian dividend stocks took it on the chin in 2020, in large part due to weakness in the Canadian banks. I highlighted this weakness as a buying opportunity in a November blog post titled “What’s up with divy stocks?”. Well, right on cue, they’ve come roaring back, with Canadian dividend stocks up double-digits this year (the iShares S&P/TSX Canadian Dividend Aristocrats ETF is up 17% year-to-date).

In the blog post I noted that the conservatively-run Canadian banks often overestimate their loan losses in economic downturns and when the economy turns back up, the banks start reversing their earlier loan losses, which helps boost earnings and share prices.

Quoting from the blog post:

“Now the cool thing about this is that the peak in loan losses generally marks the bottom in bank share prices with large gains following in the first and second year following the peak. This is one key reason why I’m advising our clients to stick with their dividend stocks and in fact, that they continue to add to them. I see dividend stocks doing much better next year in large part due to my bullish view of the Canadian banks. Patience will be required as Covid-19 is surging again and the Canadian economy remains under pressure, but this patience should be rewarded with nice gains in 2021.”

Well that’s exactly what’s played out this year, as the banks are reporting strong earnings results and big share gains.

Canadian Dividend Stocks Come Roaring Back

Source: Stockcharts.com, Turner Investments

The banks have reported their second quarter earnings over the last few weeks and the results have been impressive! Why? Those reversing loan losses.

Starting with ‘Big Blue’, Royal Bank reported blow out numbers with total profit of $4 billion dollars. That’s $4 billion in just 90 days! On a year-over-year basis this equated to growth of 176%. This time last year the banks were reporting huge loan losses as they tried to estimate what the fallout would be from the pandemic. Since the economic hit was less severe and the recovery quicker than most expected, earnings have come surging back. TD Bank reported earnings growth of 150%, while CM saw the largest growth increase at 327% yoy (they took a bath in Q2/20).

The banks cited stronger investment banking earnings but also lower loan loss provisions. Royal Bank, for example, took a $2.8 billion write off in Q2 2020 but this quarter they actually ‘released’ some of their previous loan losses, meaning, they do not see those loans now going bad. When banks ‘release’ these previous loan losses they flow right to the bottom line.

This is exactly what I called for in my earlier blog, hence my self-congratulatory ‘victory lap’.

‘Big Six’ Banks Q2 Earnings Growth YoY

Source: Bloomberg, Turner Investments

Looking out over the rest of the year, the banks are projected to grow earnings at a solid clip so this could help push bank share prices even higher.

And there could be even more good news on the horizon as I see dividend increases coming soon from many of the banks. OSFI, which is the main Canadian bank regulator, has restricted the banks from dividend increases or stock repurchases since the pandemic hit. Given the uncertainty of the pandemic and economic shock this was a prudent move. This is another good example our strict regulatory oversight of the banks and why I believe we have the strongest banking sector in the world. But now as the vaccinations pickup and the economy rebounds I expect OSFI to ease these restrictions, which could lead to some nice dividend increases in the coming quarters.

Below is a chart of cash and short-term investments held on the balance sheets of the Canadian banks and with them holding back on dividend increases we’ve seen a big increase in cash and assets on the balance sheet, which could be used to fund future dividend increases.

Lastly, banks remain attractively valued at 10-11x earnings and banks tend to do better in a rising interest rate environment, which could be a strong tailwind for the sector.

So last year we called for the banks and dividend stocks to rebound this year, which has turned out to be a prescient call. But I see more tailwinds ahead so I think there’s more upside to come in the banks and Canadian dividend ETFs. We sure are happy that we added to them last year!

Canadian Banks are flush with Cash

Source: Bloomberg, Turner Investments
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

86 comments ↓

#1 SOMETHINGS UP!! on 06.05.21 at 9:05 am

Man’s best friend “Hooch”
Man’s 2nd bestie “Dividends”

#2 crowdedelevatorfartz on 06.05.21 at 9:11 am

Good news from Canada!
A refreshing Change….
:)
Now if only the Liberal “leadership knew what it was doing.

#3 tbone on 06.05.21 at 9:13 am

I sold ZWB and bought 1000 shares of CM for 82 bucks with a 7 % dividend in April 2020 .
Took a capital loss of 20 % also on ZWB .
CM closed at 145 yesterday.
Worked out real good . Had the same dollar amount of dividend payment per year.
Dont i wish that i should of bought more … lol

#4 Phylis on 06.05.21 at 9:41 am

Since the moratorium on dividend increases, what are the chances of them being cumulative upon return?

#5 VicPaul on 06.05.21 at 9:42 am

RBNK.TO up 19.7%…3.6% divvie…yummy!
Total return, 26.67%.

Thanks for the advice Ryan!

M57BC

#6 Tarot Card on 06.05.21 at 9:46 am

Thanks for the blog Garth
Thanks for the post Ryan
Thank you for your recommendations last year
I bought banks and oil.
I bought ZWB ENB and ARC, I am a little heavy in oil … but you cannot beat the dividends!

And your picks for this year? Resources?

Have a great weekend

#7 Dharma Bum on 06.05.21 at 9:51 am

Don’t OWE the bank.

OWN the bank.

Good call Ryan.

Mmmmmmmmmm…..divvvvviiiiiieeeees.

#8 LewenzaCountry aka Prince Polo on 06.05.21 at 9:53 am

GoBanksGo!
Any predictions on magnitude of the dividend increases? I read an article a week ago that backed into the numbers – it stated:

An early indication from Royal Bank of Canada suggests that the boost could be big – as in, nearly 30 per cent. At National Bank of Canada, the boost could be 17 per cent or more.

SOURCE: https://www.theglobeandmail.com/investing/markets/inside-the-market/article-canadian-banks-growing-cash-piles-raise-expectations-for-big-dividend/

Now that’s what I call *juicy* sizzle!

#9 Don on 06.05.21 at 9:55 am

Yes, it looks like a great buy here. Shame on you.

https://finance.yahoo.com/chart/CDZ.TO/#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–

#10 the Jaguar on 06.05.21 at 10:00 am

Yep. Canadian Banks. Those old meanies. Or ancient warriors, depending on your point of view. RBC-1869, BMO-1817, CIBC (Imperial 1875, Canadian Commerce 1867), Scotia -1832, TD (Bank of Toronto 1855, Dominion Bank 1869). Not exactly fly by night operators.

They pay out your dividends, employ hundreds of thousands, donate heavily to charities and other good causes, set an example to other corporations with their employment equity programs, invest in Canadian art, sponsor events of every imaginable type, and help Ryan Lewenza look like the smartest guy in the room. He just might be that all on his own. We’ll ask Doug for his opinion.

Work hard in silence. Let success be your noise. Like that little ‘Perseverance Rover’ landing on Mars, they just ‘keep on keeping on’. I’m a fan.

Amen.

#11 TurnerNation on 06.05.21 at 10:22 am

Viva Cuba. Viva Canada.
Yes now you know why T1, T2 fawned over this regime.

1. Elections: Feds seemingly suspended elections until their say-so. Shall we expect a T3? Same-same with Cuba.

2. Cars. All Former First World Countries are on track with banning sale of new Gasoline powered cars, mostly by 2030. (That UN timeline eh…)
Oh you cannot afford the 50-100k for a new Electric Car? Or 10k for battery replacement? You better learn car repair.
We will be like Cuba with its antique gas powered cars on the streets, held together with cobbled parts.

3. UBI. Were you declared Non-Essential in this New System? You will be taken care of with a UBI. It will not be enough to afford you an electric car. So yeah you better learn to repair your obsolete gas car.


Speaking of have you seen the size of new 2021 Escalade? Larger/taller even than the old Ford Expedition.
0-60 in 6.1sec, it will pass anything – but a gas pump.
This weblog knows, there’s No Replacement for Displacement?!

https://www.motortrend.com/cars/cadillac/escalade/2021/2021-cadillac-escalade-first-test/

#12 Flop... on 06.05.21 at 10:23 am

Happy Charturday.

Gotta get back in the swing of things.

If you’ve ever had a fantasy about seeing the top half of the U.S draped in a Canadian flag, then this visualization is the one you’ve been waiting for…

M46BC

“Visualizing the Top Export Partners for Each U.S. State.

Who does the U.S. trade with the most? Our latest map breaks down one side of the equation, focusing on the top export partners for every state in the U.S.

Canada is the single biggest trading partner for the vast majority of states, receiving the most exports for 33 states.

North Dakota and New Mexico are the two states most heavily dependent on a single country for their export industries. 84.6% of all exports from North Dakota head north, and 59.5% from New Mexico go south.

China is the largest trading partner for only 5 states, which includes Alaska. This is one sign of the large trade deficit between the U.S. and China.

Most states have a balanced and diversified number of international trade partners, with the average across all states coming in at 26.4%.”

https://howmuch.net/articles/each-states-main-export-partner

#13 Sail Away on 06.05.21 at 10:27 am

Good call, Ryan.

#14 Andy on 06.05.21 at 10:32 am

Hmm. Looks like a jet about to hit the twin towers.

Pretty much exactly the financial cataclysm that lies ahead, I fear.

We’ll barely be able to catch our breaths “after” Covid is “sort of” over, before we end up fully confronted with demographic shifts, international conflict and environmental disasters due to overpopulation.

The last year has been great, Ryan, for banks.

But the next decade for investing looks very scary to me.

Maybe the masses are more understandable, flocking to overspending so crazily on shelter, fearing what lies ahead.

#15 Flop... on 06.05.21 at 10:39 am

Wife got home last night, and first thing she blurted out before even asking how my day went was “I saw Garth.”

“Where, wandering the rough and tumble streets of East Vancouver” I enquired.

Alas, no.

Apparently in one of her classes, Social Studies 10, whatever that is, the teacher has been showing footage of some old tape from the 90’s called “Government In Canada”, she said she was looking at Brian Mulroney and next thing she knew Garth Turner was staring back at her.

Show me proof that you saw this Wildebeest, I demanded.

She could not, said the teacher taped it way back when, and was unable to find any trace online.

Starting to believe this Garth Turner fella is just a myth…

M46BC

#16 Bezengy on 06.05.21 at 10:41 am

You sure do deserve a victory lap. I also recall you saying the tsx would have a banner year and that oil would rebound. Maybe two victory laps are in order.

#17 Don on 06.05.21 at 10:44 am

Shame on you for pumping CDZ when it is about to crater.
CDZ.TO will be available for a 40% discount. Buy area is 25-22.

#18 Joseph R. on 06.05.21 at 10:55 am

#99 Concerned Citizen on 06.04.21 at 5:30 pm
#66 Joseph R. on 06.04.21 at 2:21 pm
“The central bankers know they’re actively encouraging this crap. Yet not only do they not stop, they don’t even hint at stopping. What does that tell you? ”

——————————————————————

Central Banks (CB) base their interests rates based on the unemployment rate, the relationship is inversely proportional.
CB’s will increase their rates once they calculated its time to do so without increasing the unemployment rate. However, inflation also increase employment.

CB’s are walking on a tight rope: how to control inflation without hurting the employment rate.

You will hear the term Non-Accelerating Rate of Unemployment (NAIRU) the next little while: https://www.investopedia.com/terms/n/non-accelerating-rate-unemployment.asp

*****

Actually, only the Fed bases rates in part on unemployment. They have a dual mandate of maintaining an inflation target and low unemployment.
The BoC and other major central banks have just the inflation mandate.

——————————————————

You are right. I stand corrected

#19 Concerned Citizen on 06.05.21 at 11:09 am

“The U.S. poses a serious threat of enticing Canada’s skilled workers to move south”

https://financialpost.com/investing/the-u-s-poses-a-serious-threat-of-enticing-canadas-skilled-workers-to-move-south/

I’ve been thinking this way for months – once the pandemic ends, it’s goodbye to Canada for many. Canada is turning into an education and bedroom country. Educate the kids, then see them move abroad to a saner/lower cost of living country, and then have them move back in 30-40 years to retire and get free health care. I’m sure many of the kids don’t want to leave, but what choice do they have? They’re priced out of their own country.

I fail to see how this is sustainable. I guess we’ll need to ramp up immigration to 500,000 to 600,000 per year to compensate. But at this point, what skilled immigrant in their right mind would choose Canada over other alternatives?

#20 TurnerNation on 06.05.21 at 11:13 am

Ontariowe’s license plates read ‘Yours to Discover’ or ‘A Place to Grow’. Sure. Flip what our rulers tell us 180 degrees to make sense.
= “Yours to Recover”, “A Place to Wither”.

2021 and it’s still TOO DANGEROUS to get a haircut. The Party will not allow it. If you cannot see our rulers are simply humiliating us now, mocking…
(Anyway many are WFH, HST be dammed…)
Get ready for Stage 8 in Q4 2022…this ain’t going away. Also too many Useful Idiots are supporting this New System.)

https://www.bnnbloomberg.ca/ontario-salons-and-tattoo-shops-left-high-and-dry-amid-covid-restrictions-1.1612422#.YLo8_e1XqF8.twitter
Personal care services, such as salons and tattoo parlours, will be permitted to open their doors in Step 2 of the province’s reopening plan, under capacity restrictions where face-covering rules can be observed at all times.

https://en.wikipedia.org/wiki/Useful_idiot
The term was originally used during the Cold War to describe non-communists regarded as susceptible to communist propaganda and manipulation.
————
—–
The children are the focus of this New System. Get em hooked on screens – if they are not already. And then T2’s Soma. Even the small towns are littered with new Weed stores.
You see the State owns the children now. They will give you the injections, anti-depressants at school. No parental consent required. They will rule the young minds via the globalist technology companies. That’s why schools have be closed.
Big Tech already has more data on us than God. Child’s play.

https://twitter.com/AppleEDU/status/1400119081429344267
Apple Education @AppleEDU
Every iPad includes built-in features that support your vision, hearing, motor skills and literacy. In this video, you’ll learn how features such as Speak Screen and Safari Reader enable reading fluency, comprehension and composition for every learning style

#21 crowdedelevatorfartz on 06.05.21 at 11:20 am

@#15 Flop
“Starting to believe this Garth Turner fella is just a myth…”

++++

Well as Churchill said about Garth, ” He’s an enigma, cloaked in a riddle, wrapped in a mystery”…… or something like that.

But enough about Churchill.
Floppie survived a week of govt employment and he’s still able to type.

#22 crowdedelevatorfartz on 06.05.21 at 11:24 am

@#14 Andy
“We’ll barely be able to catch our breaths “after” Covid is “sort of” over, before we end up fully confronted with demographic shifts, international conflict and environmental disasters due to overpopulation.”

++++
A very positive outlook.
I’m just watching Container shipping contracts skyrocket beyond nosebleed levels and wonder when THAT inflationary shoe will drop….

https://www.cnbc.com/2021/01/22/shipping-container-shortage-is-causing-shipping-costs-to-rise.html

#23 Ponzius Pilatus on 06.05.21 at 12:12 pm

Banks are boring. Boring is good.
Excuse me. Gotta take a nap.

#24 Andrewski on 06.05.21 at 12:15 pm

Ryan, thanks again for the erudite & pro bono advice!

#25 Dr V on 06.05.21 at 12:17 pm

Sorry Ryan, I think this one was as close to a no-brainer for non-pros as there is. The banks were just sooo cheap with divvies around 7% at that time. My new advisor helped me pick one. It is my only single-stock holding. Also purchased a dividend fund, which also went up big-time, and I have taken some profits from that.

I’m up over 70% on the stock, but I really did buy it for the divvy, so my current plan is to keep it, and maybe buy some more of it (or another bank) on the next big downturn.

Cant wait for the next divvy increase.

#26 Dr V on 06.05.21 at 12:30 pm

Ryan – so I dissed you a bit there, but I would be interested on your opinion on the following.

Years ago, there was some chatter about some the big
5 merging. Haven’t heard this for quite some time. Has something changed in either the regulatory framework
or relative bank size/strength?

With RBC having the largest market cap, TD a strong
second, and the remaining 3 all being of considerably
smaller but similar market caps, would certain mergers look feasible?

Thanks. All hail the banks.

#27 JSS on 06.05.21 at 12:40 pm

Hi Ryan, any chance of stock splits from any of the big six Canadian banks.

#28 Upenuff on 06.05.21 at 12:57 pm

Ryan,
Again thanks for this!

Garth,
thanks for this great blog that affords us a bit of clarity through all the junk that is continually thrown at us!

Upenuff

#29 I'm not a doc on 06.05.21 at 1:08 pm

#17 DON
“Shame on you for pumping CDZ when it is about to crater.
CDZ.TO will be available for a 40% discount. Buy area is 25-22.”

Shame on you for not listening to past free advice and buying when it was on sale…

#30 Sail Away on 06.05.21 at 1:24 pm

#22 crowdedelevatorfartz on 06.05.21 at 11:24 am

Re: ocean shipping

———-

Yes, a combination of low oil fuel prices and booming demand has sent the shipping stocks skyward- doubling, tripling and quadrupling in some cases. N1Tro and I also discussed this likelihood back when oil hit its alltime negative futures low.

Diana Shipping, Seaspan, Maersk, etc.

#31 Woke up this morning... on 06.05.21 at 1:30 pm

My goodness, have you read this in National Post today?

https://nationalpost.com/opinion/peter-foster-mark-carney-man-of-destiny-arises-to-revolutionize-society-it-wont-be-pleasant

“Carney’s Brave New World will be one of severely constrained choice, less flying, less meat, more inconvenience and more poverty: “Assets will be stranded, used gasoline powered cars will be unsaleable, inefficient properties will be unrentable,” he promises.”

The more I read stuff like this, the more it makes me wonder what the hell is going on with these politicians.

They actually break it so they can ‘fix it’!

“Carney clearly feels himself to be a man of destiny. “When I worked at the Bank of England,” he writes in Value(s), “I would remind myself each morning of Marcus Aurelius’ phrase ‘arise to do the work of humankind’.”

“At the Bank of Canada, he often seemed like the Zamboni driver who thought he was Wayne Gretzky. He could never resist lecturing private businesses to stop sitting on “dead money,” or telling them they were too timid in the international arena, or advising consumers that they were spending too little, or borrowing too much. He promoted “macroprudence,” the idea that regulators, in their panoptic wisdom, would focus on the forest, not the trees. Now, he wants to establish himself as an intellectual.”

Lord, have mercy upon us all! Advisor to Justin and Boris!

So on one hand Bank of Canada will turn Big Six into less profitable entities very soon, if they even survive the Digital Loonie. Could be Big Three soon, or perhaps even a Duo.

On the other hand Carney and his Carnaval amusement show is going to make all private corporations less profitable.

I have to tell you, I feel less and less enthused about FIAT currencies going forward – they’ve gone from gold standard and being linked to something of value, to physical representation of value to virtual electrons stored on a data server. Not tangible, easily controlled, easily erased, and most importantly fully tracked.

And I see a lot of risk in the markets with these leaders and their agendas coming to light.

This all isn’t going to happen gradually I think either.

It will take place in one swift bandaid pull.

Eat well and exercise Garth. You will want to stick around to see this show. Wonder how long before it’s all ready to deploy and implement? 2023? 2025?

#32 JSS on 06.05.21 at 1:35 pm

Mixing Canadian banks with railroads also proves a potent combination in the long run. For example, chart RBC and CN Rail (or CP), and have a look.

#33 Frank DiAngelis on 06.05.21 at 1:40 pm

Since the banks are doing so well and now Dr V wants bank mergers they should easily afford to pay much more for CDIC deposit insurance and CDIC should up their deposit insurance coverage.

If they don’t merge immediately to $160,000 from $100,000 and if they merge minimum double that $320,000. They should also have much higher capital bank reserves of 10% to start maybe even more.

Also, CMHC mortgage insurance premiums should be raised too from the highest I believe today of 4% over 5 years to 7% over 5 years and eventually to 9% over 5 years to make sure all this massive mortgage debt is being paid by the borrowers that are gorging on it.

#34 ogdoad on 06.05.21 at 1:46 pm

It’s why you get paid the big bucks, Ryan :)

Og

#35 espressobob on 06.05.21 at 1:51 pm

Yield rocks when we go paleo. Canadian and International dividend ETFs are knocking it out of the park. Finally. Stagnant for quite some time, on the upside, when compared to pure index investing.

Good call Ryan, you nailed it. Take a bow.

#36 conan on 06.05.21 at 2:04 pm

This recent G7 agreement concerning corporate tax rates is going to hit the FANG stocks to the tune of 10 % plus.

#37 Quintilian on 06.05.21 at 2:44 pm

Any time I see this degree of adulation it reminds me of the Emperor With No Clothes.

Yes the stats are real, but the game is rigged and can’t last.

#38 S.Bby on 06.05.21 at 3:00 pm

Canadian banks are gouging their customers which is why they are making record profits. I don’t begrudge any business from making a profit but when banks are seemingly colluding together and raising their fees and charges in lockstep with each other, something needs to change. These excessive profits are draining money from other areas of the economy. If the CBs hadn’t pumped trillions into the financial system where would these banks be? These massive profits are made on the backs of taxpayers and future generations.

#39 The ten commandments on 06.05.21 at 3:05 pm

#3 tbone on 06.05.21 at 9:13 am
I sold ZWB and bought 1000 shares of CM for 82 bucks with a 7 % dividend in April 2020 .
Took a capital loss of 20 % also on ZWB .
CM closed at 145 yesterday.
Worked out real good . Had the same dollar amount of dividend payment per year.
Dont i wish that i should of bought more … lol

______________________

You, tbone, must be banished from this blog for eternity. Who do you think you are buying individual stocks …??

Off with ye. You have broken one of this blogs ten commandments!

#40 Sacrificial Lamborghini on 06.05.21 at 3:09 pm

“Starting to believe this Garth Turner fella is just a myth…”

Yes, and also a legend in his own mind!

I heard that. – Garth

#41 Ryan Lewenza on 06.05.21 at 3:10 pm

Phylis ‘Since the moratorium on dividend increases, what are the chances of them being cumulative upon return?’

It doesn’t work that way for stock dividends. If prof dividends are cut then they are often cumulative when they resume paying them. But in this case they just suspended future dividend increases so once this restriction is removed then they could start increasing them again. – Ryan L

#42 Passive fire on 06.05.21 at 3:13 pm

#38 S.Bby on 06.05.21 at 3:00 pm
Canadian banks are gouging their customers which is why they are making record profits. I don’t begrudge any business from making a profit but when banks are seemingly colluding together and raising their fees and charges in lockstep with each other, something needs to change. These excessive profits are draining money from other areas of the economy. If the CBs hadn’t pumped trillions into the financial system where would these banks be? These massive profits are made on the backs of taxpayers and future generations.

_________________________

Oops…. bring out the pacifier!

It’s looking like someone forgot to buy his bank stocks like a good little boy…..

#43 Ryan Lewenza on 06.05.21 at 3:13 pm

JSS “ Hi Ryan, any chance of stock splits from any of the big six Canadian banks.”

Absolutely. But share prices need to rise more before management teams would consider splits. – Ryan L

#44 Keith on 06.05.21 at 3:13 pm

Trudeau has expressed “disappointment” in the Catholic Church during the same week the Finance Minister Freeland has expressed “disappointment” in the executive of Air Canada over bonuses paid while on the government dole. This is what leadership by a substitute teacher sounds like. I have to confess, I’m disappointed.

#45 Mobile banking on 06.05.21 at 3:18 pm

#32 JSS on 06.05.21 at 1:35 pm
Mixing Canadian banks with railroads also proves a potent combination in the long run. For example, chart RBC and CN Rail (or CP), and have a look

_______________________

Great idea! We’ll call it mobile banking. We can take banking to the customer (via rail)in underserviced communities. Convenient for the customers; no expensive brick and mortar for the business.

#46 Displace this! on 06.05.21 at 3:28 pm

#11 TurnerNation on 06.05.21 at 10:22

This weblog knows, there’s No Replacement for Displacement?!

________________

Duh, yeah …sleepy TurnerNation. Its called EV and it’s coming to a showroom near you!

#47 Ponzius Pilatus on 06.05.21 at 3:29 pm

#34 ogdoad on 06.05.21 at 1:46 pm
It’s why you get paid the big bucks, Ryan :)
————-
Yeah,
Garth give da Man a new Lambo.
Make it an electric one.
His trophy wife is getting bored.

#48 Ponzius Pilatus on 06.05.21 at 3:42 pm

#30 Sail Away on 06.05.21 at 1:24 pm
#22 crowdedelevatorfartz on 06.05.21 at 11:24 am

Re: ocean shipping

———-

Yes, a combination of low oil fuel prices and booming demand has sent the shipping stocks skyward- doubling, tripling and quadrupling in some cases. N1Tro and I also discussed this likelihood back when oil hit its alltime negative futures low.

Diana Shipping, Seaspan, Maersk, etc.
————–
Boy’s get your own blog.
Or apply for the job of weekend warrior.
Bring you CV and credentials.

#49 Don on 06.05.21 at 4:11 pm

#26 I am not a doc…

First off, thank God for that.

Advice is NOT when you pump when you are about to dump.

I trade. Don’t hold bags.

#50 crowdedelevatorfartz on 06.05.21 at 4:44 pm

@#48 Ponzie’s Pejorative Prattle
“Boy’s get your own blog.”

++++

Something woke you early from your nap nap time?
Little grumpy?
That’s ok.
We’re used to it.
Now go play.

#51 Marc Roger on 06.05.21 at 5:24 pm

Yup. Happy with my ZDV as of late.

#52 Flop... on 06.05.21 at 5:35 pm

Here is footage of the last Greaterfool meetup I organized.

We get on most of the time.

My favourite part was when The Jaguar came out from behind the counter.

Well, besides Ponzi’s uncomfortable dad dancing after his third laced milkshake that is…

M46BC

https://m.youtube.com/watch?v=hQE0TrJbPAk

#53 Phylis on 06.05.21 at 5:50 pm

#41 Ryan Lewenza on 06.05.21 at 3:10 pm
Phylis ‘Since the moratorium on dividend increases, what are the chances of them being cumulative upon return?’

It doesn’t work that way for stock dividends. If prof dividends are cut then they are often cumulative when they resume paying them. But in this case they just suspended future dividend increases so once this restriction is removed then they could start increasing them again. – Ryan L
Xxxxx
Ah, I see I used the wrong word that has a specific meaning. Second attempt. What are the chances that some of the future dividend increases will be a little larger than they typically have been able to provide?

#54 Another Deckchair on 06.05.21 at 6:12 pm

hey @31 Woke up this morning…

If Trudeau was serious about climate change, he’d ensure that the Canadian airline industry does NOT start up again. Close most airports in Canada. It’s what Greta would do. (smile)

He’s been handed a gold-plated “Paris agreement coupon” with the lack of air travel, which has reduced our carbon emissions. We’ve been trained not to fly thanks to COVID.

Don’t worry, I don’t think he’d stop airline travel either… So much for a climate-change gift! And, if he does not take this gift, what are the chances of him listening to Mark Carney?

#55 Nonplused on 06.05.21 at 6:43 pm

#19 Concerned Citizen on 06.05.21 at 11:09 am
“The U.S. poses a serious threat of enticing Canada’s skilled workers to move south”

https://financialpost.com/investing/the-u-s-poses-a-serious-threat-of-enticing-canadas-skilled-workers-to-move-south/

——————————————–

This trend has been going on as long as I can remember. Ever since they shut down the Avro Arrow.

I worked in the Alberta oil patch. With a big company like Shell, BP, Chevron, etc. it was quite common for US employees to take up a position in Canada for a few years and then head home. It was also common for Canadian employees to take up a position in the US and then just stay there permanently.

“Encana” was named so as a play on “Energy Canada”. Now it is called “Ovintiv”, which I have no idea where that came from, but it is headquartered in Denver. So even the companies move when they can.

The US has many problems, but if you can get plugged into the “system” including company sponsored health insurance, it is not a bad place to live. Just don’t leave the freeway on the wrong exit. I wouldn’t mind living in Denver. Texas is too hot for me though.

#56 Nonplused on 06.05.21 at 7:08 pm

#46 Displace this! on 06.05.21 at 3:28 pm
#11 TurnerNation on 06.05.21 at 10:22

This weblog knows, there’s No Replacement for Displacement?!

________________

Duh, yeah …sleepy TurnerNation. Its called EV and it’s coming to a showroom near you!

————————

EV’s and eve hybrids don’t make economic sense unless you drive a lot. The $10,000+ to replace the battery pack every 7 years is killer. Remember, the batteries die whether you use them or not.

I spoke to a taxi driver while riding around in the back of his Prius and he was unequivocal: The fuel savings for him were worth it because the car logs 300 km a day, but he would never buy one for his wife. She gets a Corolla.

#57 Sail Away on 06.05.21 at 7:24 pm

For those concerned about their financial future and looking for reasonable advice, this week’s Globe and Mail features another of their standard Financial Facelifts for the common couple.

These two, aged 61 and 62, only have assets of $5.2M, zero liabilities and no children.

After a careful, detailed analysis by the G&M experts, the conclusion was that through judicious financial management, the couple might be ok. Who could’ve guessed?!? Thanks Globe!

#58 Stone on 06.05.21 at 7:28 pm

Hey Ryan. Just wanted to say thanks. My return is 13.94% ytd as of yesterday on my B&D portfolio. I make my decisions based on listening to smart people who are smarter than me. You’re a smart guy so I listen to what you have to say. Doing that always gives me fantastic outcomes. So again, thanks for doing what you do.

#59 Ryan Lewenza on 06.05.21 at 7:38 pm

Dr V “Years ago, there was some chatter about some the big5 merging. Haven’t heard this for quite some time. Has something changed in either the regulatory framework
or relative bank size/strength?”

No way the regulators approve it. A few banks explored a merger (I believe it was CIBC and BMO) a few decades ago and the government and regulators were against it. I think this is low probability event. – Ryan L

#60 safe money? on 06.05.21 at 7:42 pm

#19 Concerned Citizen on 06.05.21 at 11:09
____________________________________________

Yup. I have a second passport. Getting my kids second passports. Give them options for the future. Speak a few different languages. Never know what the future holds.

#61 IHCTD9 on 06.05.21 at 7:43 pm

#56 Nonplused on 06.05.21 at 7:08 pm
#46 Displace this! on 06.05.21 at 3:28 pm
#11 TurnerNation on 06.05.21 at 10:22

This weblog knows, there’s No Replacement for Displacement?!

________________

Duh, yeah …sleepy TurnerNation. Its called EV and it’s coming to a showroom near you!

————————

EV’s and eve hybrids don’t make economic sense unless you drive a lot. The $10,000+ to replace the battery pack every 7 years is killer. Remember, the batteries die whether you use them or not.

I spoke to a taxi driver while riding around in the back of his Prius and he was unequivocal: The fuel savings for him were worth it because the car logs 300 km a day, but he would never buy one for his wife. She gets a Corolla.
——

Yep, my 3/4 ton weighs 7500 lbs, has a 8.1 litre V8, and gets 12 mpg on a good day. My work commute is 13 minutes each way, and I spend maybe 50.00/wk on gas.

The chance of me winning with an EV are exactly zero. I won’t work/live long enough for an EV to make much of a difference. If the battery takes a crap while I own it, it’s a total loss and likely headed for the scrapyard…

#62 the Jaguar on 06.05.21 at 7:54 pm

#52 Flop… on 06.05.21 at 5:35 pm
Flop, that gal is too short to play me. I’m 5’9″, and the nurse outfit she’s got on isn’t my style.

Here’s some real dancing for you. From a film made years ago in southern Alberta called’ Days of Heaven’. A classic movie, which showcases the beauty of the southern part of the province. Highly recommended for that and because the story gives a real glimpse into an earlier age when survival and prosperity were no sure thing. A Terrence Malick film.

https://www.youtube.com/watch?v=7cMQBeUu-nc

#63 Phylis on 06.05.21 at 8:15 pm

Up to number one in first vaccinations percentage-wise.
Second dose, same as the first. A little bit louder and a little bit worse. Well, you know, make sure your second is booked!

https://informationisbeautiful.net/visualizations/covid-19-coronavirus-infographic-datapack/

#64 crowdedelevatorfartz on 06.05.21 at 8:17 pm

@#57 Sail Away
“These two, aged 61 and 62, only have assets of $5.2M, zero liabilities and no children.

After a careful, detailed analysis by the G&M experts, the conclusion was that through judicious financial management, the couple might be ok. Who could’ve guessed?!? Thanks Globe!”

+++++

Yeah.
I used to enjoy reading the Globe’s Saturday ‘Dear Abby” Financial Advice but about 5-10 years ago it took a weird turn where about one saturday a month people would write in that seemed to be bragging.
“I have $9 million in assets, no debt and a $250k annual pension…..Will I be ok in retirement?”

I dont bother any more.

#65 Sail Away on 06.05.21 at 9:01 pm

#58 Stone on 06.05.21 at 7:28 pm

Hey Ryan. Just wanted to say thanks. My return is 13.94% ytd as of yesterday on my B&D portfolio.

———-

Really Stone? What portfolio is that?

The one you shared on this blog is currently at 10.2% YTD.

Oh, that’s right. It’s the secret portfolio that nobody but you can see. Ah.

The simple thing to do would be to share your portfolio, but I’m guessing you’ll insult me instead.

#66 Flop... on 06.05.21 at 9:12 pm

#62 the Jaguar on 06.05.21 at 7:54 pm
#52 Flop… on 06.05.21 at 5:35 pm
Flop, that gal is too short to play me. I’m 5’9″, and the nurse outfit she’s got on isn’t my style.

Here’s some real dancing for you. From a film made years ago in southern Alberta called’ Days of Heaven’. A classic movie, which showcases the beauty of the southern part of the province. Highly recommended for that and because the story gives a real glimpse into an earlier age when survival and prosperity were no sure thing. A Terrence Malick film.

https://www.youtube.com/watch?v=7cMQBeUu-nc

//////////////////////

Yeah, but Jag, Ponzie had in best cardigan on in mine…

M46BC

https://m.youtube.com/watch?v=hQE0TrJbPAk

#67 cramar on 06.05.21 at 10:04 pm

One wise sage (Garth Turner) once said (or something close to this), “Average people put their money in the bank. Wealthy people own the bank.”

Took his advice when bank stocks tanked in March 2020. Now I’m a happy camper

#68 BCWally on 06.05.21 at 10:22 pm

Sweet when a plan comes together…good call and good article. I have to believe that this is also a booster for the whole TSX this year, sure looks like it so far.
Not long ago I read an article about a group of American investors trying to short “Canada”. They had to resort to shorting the bank stocks to try it.

#69 Walking on sunshine on 06.05.21 at 11:46 pm

#58 Stone on 06.05.21 at 7:28 pm

Hey Ryan. Just wanted to say thanks. My return is 13.94% ytd as of yesterday on my B&D portfolio. I make my decisions based on listening to smart people who are smarter than me. You’re a smart guy so I listen to what you have to say. Doing that always gives me fantastic outcomes. So again, thanks for doing what you do.

_________________________

Stone …. right, it’s not Stoner. I’ve noticed you don’t seem to be thinking clearly.
Not to throw shade on Ryan’s self-aggrandisement party, but a monkey with some darts could have made those calls. When markets go down 40% and economies tank without some financial reason, its hard not to hit a home run.

Be careful which donkey you hitch your wagon to!
And most importantly, remember, a wise man once said … something.

#70 MF on 06.06.21 at 1:54 am

https://www.cbc.ca/news/politics/eu-us-covid-passports-canada-concern-spread-1.6003172

“He who controls others may be powerful, but he who has mastered himself is mightier still.”
— Lao Tzu

#71 MF on 06.06.21 at 1:56 am

“Our anxiety does not come from thinking about the future, but from wanting to control it.” Khalil Gibran

https://www.theglobeandmail.com/politics/article-wherabouts-of-two-scientists-fired-from-winnipeg-virus-lab-for/

#72 Wrk.dover on 06.06.21 at 5:18 am

#64 crowdedelevatorfartz on 06.05.21 at 8:17 pm

I used to enjoy reading the Globe’s Saturday ‘Dear Abby” Financial Advice but about 5-10 years ago it took a weird turn where about one saturday a month people would write in that seemed to be bragging.
“I have $9 million in assets, no debt and a $250k annual pension…..Will I be ok in retirement?”

I dont bother any more.

_________________________________

To me, their long term plans always include dying with yet more money than they have at time of writing.

Because that’s how they role (not roll) in toney neighbourhoods? Jane should know.

Makes a trailer park full of 3/4 ton trucks appeal to me.

(Am I soon Alberta bound?)

#73 westcdn on 06.06.21 at 9:01 am

I created an acronym for myself and a few close friends know. Wiffie. It is an idea that I use when it comes to public policy and where to place my money.

It is hybrid of “what is in it for me?”, “follow the money” and “who benefits”. Wiffie is a tool I use frequently to guide my decisions so often I say I will get back to you. It does not prevent me from leaping on opportunity.

I read that the tallest grandest buildings are a reflection of the ruling power of the times. I look around and see a lot of bank towers. You would be wise to hold financials whether through ETF’s or stocks. I tend to be a cowboy and like warehouses better.

Alas, RE will become a ball and chain for most. I am getting too old for more BS and agenda’s. I always tip 15% minimum when I go out for dinner – no wonder the Italians liked me. If I think it is a waste, I simply don’t and swallow the envy.

I think levering up is a bad idea coming the next decade. To be blunt, I see too much deadwood being heaped on our economy and is killing productivity. Sometimes, there is no easy way out and I curse my predecessors.

#74 Stone on 06.06.21 at 9:18 am

#69 Walking on sunshine on 06.05.21 at 11:46 pm
#58 Stone on 06.05.21 at 7:28 pm

Hey Ryan. Just wanted to say thanks. My return is 13.94% ytd as of yesterday on my B&D portfolio. I make my decisions based on listening to smart people who are smarter than me. You’re a smart guy so I listen to what you have to say. Doing that always gives me fantastic outcomes. So again, thanks for doing what you do.

_________________________

Stone …. right, it’s not Stoner. I’ve noticed you don’t seem to be thinking clearly.
Not to throw shade on Ryan’s self-aggrandisement party, but a monkey with some darts could have made those calls. When markets go down 40% and economies tank without some financial reason, its hard not to hit a home run.

Be careful which donkey you hitch your wagon to!
And most importantly, remember, a wise man once said … something.

———

I made 11.15% in 2020. Like I said, I like to listen to smart people who are smarter than me. That also means finding multiple smart people who are smarter than me. Once I’ve heard what they all have to say, the final decision is mine to make as the final outcome is what I have to live with.

By the way, Ryan is a mighty fine donkey.

And don’t worry about how clear my thinking is. I don’t need to throw shade at people to feel better about myself.

#75 crowdedelevatorfartz on 06.06.21 at 10:09 am

@#72 Wrk.dvr
“To me, their long term plans always include dying with yet more money than they have at time of writing.”

+++

Yeah , I never understood why the Globe would even bother using people that were obviously well prepared for retirement as examples.

” I have $9 million saved. No debts. A $250k annual pension from work. Will I still be able to afford weekends in Staad AND Gardeners for the Monaco cliff side condo?”

#76 crowdedelevatorfartz on 06.06.21 at 10:11 am

@#70 MF
““He who controls others may be powerful, but he who has mastered himself is mightier still.”
— Lao Tzu”

+++

I think Lao was talking about a screaming baby in wet diapers

#77 Sail Away on 06.06.21 at 10:38 am

#74 Stone on 06.06.21 at 9:18 am

Like I said, I like to listen to… people who are smarter than me.

———-

That is an almost unimaginably long list. You’re welcome.

#78 Penny Henny on 06.06.21 at 11:16 am

In the latter parts of 2020 I went all in one Canadian high dividend payers. YTD up over 24%. Makes up for the measly 3.7% last year.

Last year a balanced portfolio yielded 7.5%, and this year is ahead double digits. You should stick with the plan. A one-asset strategy is foolish. – Garth

#79 Dr V on 06.06.21 at 11:50 am

Recent listing of world’s largest banks by market cap.

https://www.advratings.com/banking/worlds-top-banks-by-market-cap

33 – good morning Frank. I didn’t say I was in favour of any mergers, but Ryan was kind enough to reply they were highly unlikely anyways.

I recall one of the arguments put forth by the banks at that time included they weren’t large enough to compete on a global scale, but they all make the list linked above. It is interesting though that marketbeat
lists RBC and TD as “global” banks, while the other 3 are labelled “money centre” banks.

Here is a year old listing, from S & P, based on assets

https://en.wikipedia.org/wiki/List_of_largest_banks

#80 NSNG on 06.06.21 at 12:13 pm

#57 Sail Away on 06.05.21 at 7:24 pm

For those concerned about their financial future and looking for reasonable advice, this week’s Globe and Mail features another of their standard Financial Facelifts for the common couple.

These two, aged 61 and 62, only have assets of $5.2M, zero liabilities and no children.

After a careful, detailed analysis by the G&M experts, the conclusion was that through judicious financial management, the couple might be ok. Who could’ve guessed?!? Thanks Globe!

You need to understand. They are just playing to their audience. Those are the only types that can afford a Globe subscription these days. :D

#81 Penny Henny on 06.06.21 at 12:50 pm

#78 Penny Henny on 06.06.21 at 11:16 am
In the latter parts of 2020 I went all in one Canadian high dividend payers. YTD up over 24%. Makes up for the measly 3.7% last year.

Last year a balanced portfolio yielded 7.5%, and this year is ahead double digits. You should stick with the plan. A one-asset strategy is foolish. – Garth
//////////////

I meant all in on, not one. 3 etfs and 15 stocks. Risky because it all Canada but the vast majority is blue chip and getting in when I did means I can live off the dividend stream. Blue chip=solid dividend payer

If you have 15 stocks you must have a seven-figure+ portfolio, or be two decades from retirement. Otherwise, bad idea and common DIY mistake. – Garth

#82 Faron on 06.06.21 at 1:02 pm

Thanks for the post Ryan. I think an additional aspect is that the rise in Bank equity prices has come with very little realized volatility. That also has value.

#83 Penny Henny on 06.06.21 at 1:24 pm

If you have 15 stocks you must have a seven-figure+ portfolio, or be two decades from retirement. Otherwise, bad idea and common DIY mistake. – Garth
/////////////

former, retired 7 yrs ago at 49.
MSU, I do owe a lot of it to you and your writing. It gave me the confidence to make the jump from reading and learning to actually doing.
So, thank you

#84 NOSTRADAMUS on 06.06.21 at 6:15 pm

PUTTING FOR A BIRDIE!
So far, a lot of overindebted speculators appear to have landed right smack in the middle of the fairway. All they have to do is sit back and take credit for their genius in following the advice of the club house pro. They’ll soon be putting for an easy birdie. However, if you listen carefully you may hear the ominous sounds of thunder and lightening fast approaching the fairway. Just another weather bubble, nothing to fear, play on.
However, bubbles are like wars- when normal civilized life is suspended . And today, the irrational dollar and stock market has become a mad, mad, war of the worlds, with fake money, fake interest rates and fake prices, all guided by a delusional bunch of Jackass Generals at the Fed. Could the whole market be setting itself up for a disastrous ending — like the cynics version of” Independence Day” where the Aliens attack earth and win”? As for me, I think I’ll head indoors and wait for the coming storm to pass. Call me a dreamer, but I’m not the only one.

#85 DavidW2 on 06.06.21 at 7:42 pm

Great post. I only wish I invested more and went all in – now sitting on too much cash. Any new great insights?

#86 crowdedelevatorfartz on 06.07.21 at 9:58 am

@#31 Woke up this morning

https://nationalpost.com/opinion/peter-foster-mark-carney-man-of-destiny-arises-to-revolutionize-society-it-wont-be-pleasant

An excellent opinion piece on the mind of Mark Carney.
Another reason to not vote Liberal for at least a generation.