# WHAT'S WRONG WITH THE CANADIAN BANK STOCKS?



## gemma119 (Apr 6, 2009)

Can someone tell me why the Canadian bank stocks are falling so bad compared to other segments of the market?


----------



## KaeJS (Sep 28, 2010)

gemma119 said:


> Can someone tell me why the Canadian bank stocks are falling so bad compared to other segments of the market?


Zoom out.
They have done incredibly well.

Sure, the last week or so hasn't been fantastic, but they are still fully valued.

I would assume there are some people trimming positions and some who fear a housing crash.


----------



## newfoundlander61 (Feb 6, 2011)

Nothing wrong at all, its best not to pay attention too much to their share prices and just hang on to them long term. I only check and update my stock spreadsheets once a month and thats mainly for dividend income totals. I too a full position in RY on *19 Oct 2018 @$99.12* per share and as of yesterdays close its now *@$135.57 *so putting the banks stocks away and bascially ignore their share price is a best way to own them for the *long term*.


----------



## Mortgage u/w (Feb 6, 2014)

They're on sale!


----------



## Gator13 (Jan 5, 2020)

KaeJS said:


> Zoom out.
> They have done incredibly well.


This sums it up quite nicely.


----------



## Ukrainiandude (Aug 25, 2020)

Garbage stocks?


----------



## Numbersman61 (Jan 26, 2015)

The Canadian budget called for tax increases on Canadian bank income.


----------



## Covariance (Oct 20, 2020)

deleted.


----------



## Tostig (Nov 18, 2020)

gemma119 said:


> Can someone tell me why the Canadian bank stocks are falling so bad compared to other segments of the market?


Did you just buy some bank stocks? That's what usually happens when someone takes the plunge. The uptrend stops. Now the market is waiting for you to panic sell before it recovers.


----------



## AltaRed (Jun 8, 2009)

Numbersman61 said:


> The Canadian budget called for tax increases on Canadian bank income.


I agree it is the budget item of additional taxes on excess profits of banks and insurance companies. This was an election promise and shouldn't have been a surprise to investors, but it seems these things always are to some degree.... albeit we are seeing a bounce back this morning.

Our government seems hell bent on whack-a-moling successful engines to our economy.


----------



## Tostig (Nov 18, 2020)

AltaRed said:


> ...
> 
> Our government seems hell bent on whack-a-moling successful engines to our economy.


Until they're no longer successful. Then they expect the government to bail them out. So it goes both ways.


----------



## MrMatt (Dec 21, 2011)

gemma119 said:


> Can someone tell me why the Canadian bank stocks are falling so bad compared to other segments of the market?


They're not, they continue to do well.

Also the government decided to seize a bunch of their profits, if they get away with it once, they might be emboldened to do it again.
This is third world dictatorship crap, "You're too rich, so we'll take your money". This sets a VERY bad precedent for Canadian investors and will likely discourage investment.

Myself I'm going to look at other jurisdictions which are less likely to engage in this type of seizure.


----------



## Ponderling (Mar 1, 2013)

Ukrainiandude said:


> Garbage stocks?


WCN doing just fine for me, with a position in my TFSA since it is a low divvy payer.


----------



## AltaRed (Jun 8, 2009)

Tostig said:


> Until they're no longer successful. Then they expect the government to bail them out. So it goes both ways.


Depends on your perspective on what one calls a bail out. Re-hash 2008-2009 all that you wish. What did change post financial crisis was to make prefs NVCC compliant which means convertible to common equity at $5 per share IF and when commons felt to that level. I think something was also done regarding their bonds as well but my memory has faded. Essentially shareholders were going to be totally fleeced first before gov't would come to the rescue of the banks. Capital ratios were revised upwards as well. Most likely, a failing bank would be foisted on to the survivors and that is appropriate to make the taxpayer rescuer of last resort.


----------



## Raggedy Dandy (Mar 12, 2020)

Started my position in RY in mid-2011. Have done some minor trimming here and there to rebalance it. 

End of 2014 there was a similar sharp dip to now, and even larger from that point to the start of 2016. To tell you the truth I don't even remember what happened then or what it did to my portfolio, because 2016-2022.

I'm up 139% including dividends/DRIP, or CAGR of 14.4%. So, what's wrong with them? You tell me, because I sure can't tell


----------



## afulldeck (Mar 28, 2012)

AltaRed said:


> I agree it is the budget item of additional taxes on excess profits of banks and insurance companies. This was an election promise and shouldn't have been a surprise to investors, but it seems these things always are to some degree.... albeit we are seeing a bounce back this morning.
> 
> Our government seems hell bent on whack-a-moling successful engines to our economy.


Worse still, is now the consumer will pay even more fees at the bank. Why governments don't like success I'll never understand.


----------



## like_to_retire (Oct 9, 2016)

afulldeck said:


> Why governments don't like success I'll never understand.


It's a form of marxism for business - they need to re-distribute the wealth to ensure equality of outcome. The antidote is for Canadians to stop voting for socialist governments. Seems so simple.

ltr


----------



## AltaRed (Jun 8, 2009)

We need to have a viable alternative first.


----------



## like_to_retire (Oct 9, 2016)

AltaRed said:


> We need to have a viable alternative first.


Well, I suppose you would have to wait until they elect a new leader in September, although I would personally vote for a homeless person before I would vote for the Liberal dictatorship menace that is presently in power.

ltr


----------



## MrMatt (Dec 21, 2011)

afulldeck said:


> Worse still, is now the consumer will pay even more fees at the bank. Why governments don't like success I'll never understand.


Because by keeping people down, they keep power.

Just like UBI, it's a scheme to keep people in economically unviable situations so they're dependant on the government.

The really scary thing is that they'll use this "one time emergency" again and again.


----------



## Fisherman30 (Dec 5, 2018)

Just buy some BNS, sit on it, and enjoy the dividends.


----------



## robfordlives (Sep 18, 2014)

Not sure about the others but for BNS, Brian Porter is a total joke. The day he resigns or is fired the stock will be up 15%. Complete destruction of capital vs the competition. I guess 10 years of underperformance is not enough, let's go for two decades. Where is the BOD in this????


----------



## Gator13 (Jan 5, 2020)

robfordlives said:


> Not sure about the others but for BNS, Brian Porter is a total joke. The day he resigns or is fired the stock will be up 15%. Complete destruction of capital vs the competition. I guess 10 years of underperformance is not enough, let's go for two decades. Where is the BOD in this????


BNS has treated us okay. Up 42% and paying us a 6.5% dividend on our original investment. (4.5% on current value). Not bad for a set it and forget it kind of investment.


----------



## londoncalling (Sep 17, 2011)

Historically, the big 5 take turns being the underachiever of the group. CIBC long held the title. Currently, its BNS's turn.


----------



## AltaRed (Jun 8, 2009)

BNS has struggled with its Latin America strategy. Seems most of these countries are chronic basket cases BUT BNS has been shedding several losers and consolidating to a few with potentially the most promise. Something will likely break wide open for them some time but patience is wearing thin. There was no point them bidding against their competitors in the USA space where acquisition prices have been climbing. That horse has left the barn.


----------



## Gator13 (Jan 5, 2020)

As with any investment, it's important to identify you objective; stable dividend, growth or a combination of the two.


----------



## james4beach (Nov 15, 2012)

Note that XFN has exactly the same return as the TSX Composite (XIC) since 2020, going back to before the pandemic started.

The 5 year return of XFN is also the same as XIC. So there's nothing wrong with bank performance recently.


----------



## OneSeat (Apr 15, 2020)

Nothing personal in this but James often selects specific dates to prove a point. 
Let me do the same - XNF did* far better* than XIC (or XIU) over 2 years - and over 10 years.

If you are in fact interested in these comparisons just go look at the graphs yourself.


----------



## AltaRed (Jun 8, 2009)

XFN is not really a direct comparison with the big banks since the banks are 'only' 68% of XFN and that includes smaller ones like Equitable and Home Capital but the point is taken that it's been a 'losers game' to bet against financial stocks in Canada over any reasonable periods of time. The headline for this thread seems rather sensationalist but hey, it has stimulated conversation yet again.


----------



## Bewilderedbymarkets (9 mo ago)

Ukrainiandude said:


> Garbage stocks?


Canadian banks are garbage stocks? Dude...


----------

