# Looks like a lot of companys on sale



## 1980z28 (Mar 4, 2010)

Wow


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## jargey3000 (Jan 25, 2011)

yeah. which are the best bargainies?


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## 1980z28 (Mar 4, 2010)

Financials,mining,utility's,


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## jargey3000 (Jan 25, 2011)




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## gladaki (Feb 23, 2014)

Are we talking about Atco and BNS here


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## gibor365 (Apr 1, 2011)

gladaki said:


> Are we talking about Atco and BNS here


imho it's applicable to all banks


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## supperfly17 (Apr 18, 2012)

1980z28 said:


> Wow


I would try and hold it out until tsx goes into the 13 000, just like last fall.


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## jargey3000 (Jan 25, 2011)

ya think so, fly?


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## sags (May 15, 2010)

The stock market today feels like you are sleeping nicely in bed, and hear somebody rummaging around downstairs.

It could be the kids coming home late...............or it could be someone loading the electronics out the back door.

I get the feeling that Joe Oliver is paddling as fast as he can, but the boat is still taking on water.

It reminds me of a scene I saw at a local harbour a few years ago.

The water was very rough and a small runabout was trying to come in with 6 people in it. It was bobbing up and down and barely making headway.

They were trying to get into the relative safety of the channel and as they passed by, all the people in the boat were bailing as fast as they could with their shoes.

After some anxious moments..........they finally made into the calmer water.

Nothing but big smiles on their faces then..............and a few bravado comments, but none of them went back out in the boat that day.

And that is the essence of a big stock market slide.

People start bailing...........they get out and are happy they did..........and they don't come back for a long time.


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## Beaver101 (Nov 14, 2011)

^


> ... The water was very rough and a small runabout was trying to come in with 6 people in it. It was bobbing up and down and barely making headway.
> 
> They were trying to get into the relative safety of the channel and as they passed by, all the people in *the boat were bailing as fast as they could with their shoes.
> * ...


 ... why weren't they wearing life jackets here?


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## gibor365 (Apr 1, 2011)

supperfly17 said:


> I would try and hold it out until tsx goes into the 13 000, just like last fall.


and then what?! you start selling?!


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## jargey3000 (Jan 25, 2011)

woulda, coulda, shoulda ...


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## Moneytoo (Mar 26, 2014)

S&P 500
*2,068.59*
-11.06 -0.53%
12:52 PM EDT

Have a limit order for VTI @$105.50, but it seems to be stuck just under $107... Less than 1% to go! lol


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## RBull (Jan 20, 2013)

Sags, thanks for the funny story. 

However I don't think the water is overly choppy right now compared to what is likely coming. 

I would also suggest "some" people start bailing and are happy they did at the time, and stay out for a long period. Those that do certainly can't be happy though; when they miss the rising tide that lifts the boat again since they're still on the shoreline counting the zeros in lost investment $, while others merely waited for the storm to pass.


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## supperfly17 (Apr 18, 2012)

gibor said:


> and then what?! you start selling?!


I dont know what selling means sorry.


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## gladaki (Feb 23, 2014)

I probably need to be more patient. I started my portfolio
bought ESI 100 share @ 9.48 40 shares @ of CWB @24.75 next CWB purchase will be at 24.75-2.47


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## sags (May 15, 2010)

RBull said:


> Sags, thanks for the funny story.
> 
> However I don't think the water is overly choppy right now compared to what is likely coming.
> 
> I would also suggest "some" people start bailing and are happy they did at the time, and stay out for a long period. Those that do certainly can't be happy though; when they miss the rising tide that lifts the boat again since they're still on the shoreline counting the zeros in lost investment $, while others merely waited for the storm to pass.


True enough.........a lot of people stayed out and lost in the rebound.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ ... why weren't they wearing life jackets here?


No, but they should have been.

15 years ago, Nortel was the highest traded stock on the TSE...accounted for over 36% of the volume traded and at its' peak in 2000, it was around $125, from what I remember.

I received some stock options and* on paper*..I could have been a "wealthy barber". Things were looking good..then the downhill slide started shortly after..the stock options
that were given to me would have cost me more to exercise than what the stock was worth.

Later in 2001, as the stock price kept going down, and the company was trying some desparate attempt to consolidate it's stock by buying back some of it,
I was able to trade in my original stock options for NEW stock options struck at a lower price.

I did that, hoping that someday when I retired, I could still exercise these options ( *which would have* still cost me a fair amount of money..I think it was around $4500 or so out of pocket)..and I held on.
By the time 2008 rolled around, after new stock was re-issued in a desperate attempt to stem the downhill slide and the books were cooked to make the company appear to
be in better shape that it actually was, these new stock options that were revalued for the employees in 2001 were much higher excercise price than the penny stock at the time;

$125 -> $45 per share to exercise buying stock that was basically underwater ($1 or less per share when it got delisted from the TSE) , so my options at that point were worthless paper.

In January 2009, Nortel went bankrupt, and I'm sure many investors out there that were still holding the bag at that time, were given a severe bath. 

I predict the same is going to happen with these ETFs (Social Media, etc) ... at some point the bubble will burst, just as it did with high tech, 

and a lot of investors out there will be taken a bath.

http://www.theglobeandmail.com/glob...traded-funds-are-not-perfect/article14160977/


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## Eclectic12 (Oct 20, 2010)

carverman said:


> No, but they should have been.


Agreed ... especially for those who thought about it but as their relative didn't sell, they didn't.




carverman said:


> I received some stock options and* on paper*..I could have been a "wealthy barber".
> 
> Things were looking good..then the downhill slide started shortly after..the stock options that were given to me would have cost me more to exercise than what the stock was worth.


On one hand ... I empathize that it didn't work out.

On the other hand, options granted to employees are typically limited as to when they can be used whereas options/stock bought on the market have no restrictions so that they can be sold/used at any time. 

Which is why I think of employee options like a neighbour or relative making promises. If it pans out, it's a bonus and if it doesn't, I intentionally avoid making plans based on it.




carverman said:


> In January 2009, Nortel went bankrupt, and I'm sure many investors out there that were still holding the bag at that time, were given a severe bath.


Yes ... one fellow I met said when he checked around the height - his stock was worth $1 million. But as he did not sell, he ended up with nothing.

That said ... there was a long downward decline and then a bounce up so there was lots of time to risk mitigation and selling for a profit. I had the advantage of not having a lot so I was able to profit from buying at $3 then selling for $11 and $8.




carverman said:


> I predict the same is going to happen with these ETFs (Social Media, etc) ... at some point the bubble will burst, just as it did with high tech,
> and a lot of investors out there will be taken a bath.


+1 ... especially for the exotic ETFs that IMO are counter to the whole idea of an ETF.

That said ... is that any different than those who bought any other stock where the company went bankrupt or was bought out for a loss?


Cheers


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## Beaver101 (Nov 14, 2011)

^^ + ^


> That said ... there was a long downward decline and then a bounce up so there was lots of time to risk mitigation and selling for a profit. I had the advantage of not having a lot so I was able to profit from buying at $3 then selling for $11 and $8.


 ... would those "options" be considered taxable income in the year that you received them? And when sold, taxable as capital gains?





> Originally Posted by* carverman *
> 
> I predict the same is going to happen with these ETFs (Social Media, etc) ... at some point the bubble will burst, just as it did with high tech,
> and a lot of investors out there will be taken a bath.


 ... but people loves FB, TWT, etc. :biggrin:


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## Eclectic12 (Oct 20, 2010)

^^^^

I probably wasn't clear ... I bought shares, not knowing enough about options to use them.

As I understand it ... for the options to be considered taxable income, I'd have to have been an employee plus possibly be using them. Perhaps those with employee options can comment ... though I seem to recall changes to the tax treatment of employee options around that time as well due to lobbying from high tech companies about how the existing treatment was scaring away potential employees versus the US tax regime. 

When buying the options on the open market, I don't believe there is a taxable income impact.


Cheers


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## AltaRed (Jun 8, 2009)

Beaver101 said:


> ... but people loves FB, TWT, etc. :biggrin:


That love affair is going to wear thin someday too. Someday, even the prolific 'look at me' crowd is going to be disgusted with themselves and get nausea. There is only so much 'self-importance' that even the most self-centered can absorb.:cower:


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^^ + ^ ... would those "options" be considered taxable income in the year that you received them? And when sold, taxable as capital gains?


I never got the chance to find out. 

By the time, I got the new option recalculated strike price, the stock was starting on a downward slide and already underwater, and not knowing if it was ever going up past the new price, (I think the new strike price was around $40 or so),
I wasn't going to take a chance of losing between $4500 and 4800 of my money to exercise the option. So I don't believe it would be treated as taxable income, since the
company was not offering it as a freebee, I still had to use my own money to buy the stock, as I had no employee DSP shares left at that point.

In 2001, I saw the "writing on the wall" and decided to withdraw the entire DSP savings I had which included stock. The stock was cashed in at the current price and I had to pay
income tax on the part that the company put in my DSP.



> The second reason is if the current stock price is lower than the strike price, which is the price that your option allows you to buy it at. For example, if the current stock price is $75 per share and your strike price is $50 per share, then by exercising your option you can buy the shares at $50 and immediately sell them for the current market price of $75 for a $25 per share profit (less applicable taxes, fees, and expenses). That’s the fun part. But what if your strike price is $75 and the current market price is $50? In that case, your options are said to be “underwater,” which is about as fun as it sounds (and we’re not talking scuba diving here).


Had things worked out and Nortel managed to stay in business past the critical period between 2008/9, and the stock was on the rise, I may have taken it out, but there was an expiry
date as well on the stock options (2010)and it was past the point where they went officially bankrupt in 2009. The original options were offered in 2000. 

I believe that buying the stock and then selling it would have had some capital gain tax treatment. 
And the opposite, had I lost money..capital loss....but I didn't have the money to gamble at that point.


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## sags (May 15, 2010)

Life jackets in a boat ?........People are too "cool" for that.

Here is a clip of how people boat.............one guy holding a beer, 7 people standing in the boat, and nobody wearing a life jacket......while travelling about 70 miles an hour.

What could possibly go wrong ?


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## Beaver101 (Nov 14, 2011)

^


> ... The original options were offered in 2000. ...


 ... that's what I meant - those options (the right to buy some stocks) "granted=freebie" would have had some value should you have exercised them. Only you were too smart (or saw the writing on the wall) to exercise them ... them stocks on a free-fall. I don't supposed they granted you those options in lieu of an annual performance bonus -that would be so farcial.


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## Beaver101 (Nov 14, 2011)

sags said:


> Life jackets in a boat ?........People are too "cool" for that.
> 
> Here is a clip of how people boat.............one guy holding a beer, 7 people standing the boat, and nobody wearing a life jacket......while travelling around 70 miles an hour.
> 
> What could go wrong ?


 ... yeah, just too cool ... but don't they have water safety requirements for boating (aka "laws") like wearing helmets when biking? Maybe not during the Happy Days are here era - hey the Fonz is cool. :biggrin:


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## Beaver101 (Nov 14, 2011)

AltaRed said:


> *That love affair is going to wear thin someday too*. Someday, even the prolific 'look at me' crowd is going to be disgusted with themselves and get nausea. There is only so much 'self-importance' that even the most self-centered can absorb.:cower:


 ... does that include stockholders or investors here? Doesn't seem to be based on this timely headline ...

*Facebook’s ascent has investors betting on more gains*

http://www.theglobeandmail.com/globe-investor/investment-ideas/facebooks-ascent-has-investors-betting-on-more-gains/article25732036/



> *The big selloffs in shares of social media companies last quarter following weak results seem to be brushed under the carpet *this earnings season as investors focus instead on the success of Facebook Inc.
> 
> Investors in the options market are betting on more gains for the stock after it reports results Wednesday. ...


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## AltaRed (Jun 8, 2009)

IMO, usage of social media is going to wear thin. As I understand it, Twitter momentum is slowing and Instagram is likely to follow the same path. I have not figured out what LinkedIn wants to be when it grows up, or where it is going, if anywhere. Facebook is the darling of course, but it is gaining a reputation as the place to go for social outcasts, terrorists and criminals. How that will ultimately affect this medium long term remains to be seen. 

FWIW, I have accounts at most of these social media but use only LinkedIn, and primarily as a means of finding and staying in contact with some friends and past co-workers.

P.S. I obviously own these things indirectly via US ETFs.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ ... that's what I meant - those options (the right to buy some stocks) "granted=freebie" would have had some value should you have exercised them. Only you were too smart (or saw the writing on the wall) to exercise them ... them stocks on a free-fall. * I don't supposed they granted you those options in lieu of an annual performance bonus* -that would be so farcial.


You mean in lieu of a raise?...no. This was something that Nortel decided to do in 2000 to all employees that had a few years of service (10 minimum, where the DB pension would be vested) or
management. I believe that management took advantage of these stock options early in the game, but if one held on to them once they went underwater, there was also the tax hit that
one could face, (read)
http://www.financialpost.com/relate...s+rolled+dice+with+options/1643923/story.html

even though the shares were worth less than the original stock price...very nasty "gotcha" . I was so glad that I saw the "*writing on the wal*l" early enough not to take a chance.
I retired in mid 2002. 


> 2000: John Roth (CEO) cashes in his own stock options for a personal gain of C$135 million


When I read this in 2000 after he retired, I was very concerned about what was going on behind the scenes. Obviously upper management played the stock option game to suit themselves
and there was some that even claimed it was "insider trading". I heard that he was investigated for this, but nothing was proved. 



> 2001-2003: Two-thirds of Nortel's workforce (60,000 staff) are laid off
> 2001: writedowns of nearly US$16 billion
> 2003: temporary return to profitability resulting in *$70 million in bonuses awarded to the top 43 managers.*
> 2000-2002: *Nortel's market capitalization fell from C$398 billion in September 2000 *to *less than C$5 billion in August 2002*, as Nortel's stock price plunges from C*$124 to C$0.47*.


And that was the beginning of end for the goose that laid the golden eggs for a lot of investors.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> Beaver101 said:
> 
> 
> > ... would those "options" be considered taxable income in the year that you received them?
> ...


CRA says if there's a benefit to the employee - exercising the option is a taxable benefit.
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/bnfts/fnncl/scrty/stckpt01-eng.html

So if FMV is $10 and the option is for $3 ... there is a taxable benefit of $7 a share to report on the employee's T4.

This blog link highlights that the taxable benefit is generated by exercising the option ... if when the employee sells the shares, they have tanked - the tax on the benefit is still the same despite the shares no longer generating a CG.
http://madanca.com/blog/taxation-of-stock-options-for-employees-in-canada/

Also interesting from the same blog that where the company is a Canadian Controlled Private Corp, it is only when the shares are sold that taxes come into play.


In both situations - if specific criteria are met, there may be a 50% reduction.


Cheers


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... I believe that management took advantage of these stock options early in the game, ...


Most annual reports I've read have most of management from CEO though junior executives and committee members having a stock option plan in place *the minute* they are hired. The theory is having significant share holdings will influence their decisions towards the shareholder's interest.

Typically they have to work for a while to earn the option, then they have a set period to exercise the option and in come cases, are required to own set amounts of stock as their years of service increase.


Regardless of an employee stock option plan or options instead of bonus or whatever ... the execs almost always have stock options plans.




carverman said:


> ... but if one held on to them once they went underwater, there was also the tax hit that one could face ...


Exercising the option when FMV is above the option price creates the taxable benefit hit.
The shares being underwater is only removing the choice of selling the shares to pay all of taxes to end up with a net positive situation. 

While I sympathise ... it seems prudent to know this before using options and plan accordingly.




carverman said:


> ... I was so glad that I saw the "*writing on the wal*l" early enough not to take a chance.


Good for you to avoid this trap.




carverman said:


> ... Obviously upper management played the stock option game to suit themselves and there was some that even claimed it was "insider trading".
> I heard that he was investigated for this, but nothing was proved.


With the time delays that are usually build in between earning the option, being able to use the option and in some cases, a delay before selling the shares - without a smoking gun such as a recording of Roth ordering someone to fix the books until the sell went through - it would be hard to prove.




carverman said:


> ... And that was the beginning of end for the goose that laid the golden eggs for a lot of investors.


I'd put it more as when the rot came out of the woodwork to the point of being visible.

There were lots of question marks and worrying signs that came to my attention before 2000.


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> CRA says if there's a benefit to the employee - exercising the option is a taxable benefit.
> 
> So if FMV is $10 and the option is for $3 ... there is a taxable benefit of $7 a share to report on the employee's T4.
> 
> ...


That's a rather nasty surprise.

Good thing I saw the "writing on the wall" that they were in trouble as soon as Roth resigned/retired. There were too many other things going on that didn't sit right with me at the time with the
way the company was dumping employees every 3 months, thousands at a time, not to mention going back to divorce court to fight over spousal support payments from my pension on my retirement. 

That was a nasty year and half battle, I had 3 lawyers, fired two of them, and almost $30k in legal fees by the time I actually went from the leave of absence to full retirement. 

So, that financial situation, precluded any exercising of employee share options...good thing I suppose.


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## carverman (Nov 8, 2010)

Eclectic12 said:


> M
> Regardless of an employee stock option plan or options instead of bonus or whatever ... the execs almost always have stock options plans.
> 
> Exercising the option when FMV is above the option price creates the taxable benefit hit.
> ...



From what I can still remember:
Roth took retirement rather suddenly. The buzz in the company was that he was advised by the board to retire, as there was serious money flow issues at that point, after he bought Bay Networks for 9 billion..a totally inflated and ridiculous price for a second rate router company. 
This came about because Roth and Cisco had a falling out on negotiations to a agreement to use CISCO exclusively in exchange for a large percentage of Nortel shares. 
This was before the share prices started to "go south". 
The purchase of Bay Networks, (and changing the name from Nortel to Nortel Networks),turned our to be the turning point for Nortel after 1999. 
Things were not going so well as the Telcos used mostly Cisco and didn't want to buy Bay routers for a few reasons..that messed up a lot of potential sales for Nortel, not to mention the company was severely squeezed with cash flow problems against sales to support a large employee base.

Roth was investigated for insider trading at the time, but it was done in a very clever way, so no actually proof was found that this was planned all along from 1999 when he planned to retire and take advantage of the stock options when the share prices were at their highest. 

Cooking the books, well not sure how much he had to do with that, the CFO who was promoted to CEO after Roth retired, may have more to say about that, since he and some other senior execs did that to ensure they could collect their bonuses on potential sales, not actual sales at the time. They were sued (unsuccessfully) a few months later.


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