# Torc Oil and Gas Ltd. (TOG.TO)



## favelle75 (Feb 6, 2013)

Torc Oil and Gas. Rumbling that they are going to combine 5 shares into 1 (reverse split?). Just wondering if anyone has any thoughts on this one?


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## Just a Guy (Mar 27, 2012)

A reverse split is not a sign of a growing company, rather the reverse.


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## HaroldCrump (Jun 10, 2009)

Splits and reverse splits are fundamentally meaningless.
Companies do it because it creates a temporary buzz, and also allows them to fit into (or out of) certain investor classes.
Such as some conservative mutual funds won't buy any stocks below $2 - therefore a reverse split helps.
Some companies (like Buffet's Berkshire) don't want their shares held by short term day traders so they've never done a split.

There have been junior speculative mining and energy companies that do reverse splits, only to watch the shares slowly drop back down to the pre-split nominal price :rolleyes2:


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## Toronto.gal (Jan 8, 2010)

favelle75 said:


> 5 shares into 1 (reverse split?).


Yes, that would be a reverse split.

While a reverse split is all about increasing the share price [opposite of a stock split], but resulting in no changes in market cap, you still need to find the reasons for the RS, ie: was it to avoid falling to penny status and running in danger of being delisted? Does not necessarily appear to be the case here, but just mentioning it as I noted that the stock did drop nearly 50% this year [$2.72/$1.34], and not impossible to have fallen/or fall in the future below $1.

I would just keep in mind that while nothing changes in either a reverse or stock split, the reasons for doing so are exact opposites [backward vs forward].

But also, not necessarily a reason to always sell, if you already owned the shares, or not buy.


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## favelle75 (Feb 6, 2013)

Toronto.gal said:


> Yes, that would be a reverse split.
> 
> While a reverse split is all about increasing the share price [opposite of a stock split], but resulting in no changes in market cap, you still need to find the reasons for the RS, ie: was it to avoid falling to penny status and running in danger of being delisted? Does not necessarily appear to be the case here, but just mentioning it as I noted that the stock did drop nearly 50% this year [$2.72/$1.34], and not impossible to have fallen/or fall in the future below $1.
> 
> ...


Thanks guys. Yeah, this seems like too much of a gamble for me at this point.


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## underemployedactor (Oct 22, 2011)

CPP bought a bunch of this company for whatever that's worth. So did I.


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## humble_pie (Jun 7, 2009)

just catching up on this story but as an eye-opener it looks good.

they're the old Tristar O&G gang, no wonder they were able to raise a quarter of a billion dollars for new acquisitions last month, easy as ice cream. No wonder the cppib bellied up. These are blue chippers.

see the insiders in the table below, all buying subscription rights in the new issue on 6 august/13. There's the cppib. Those other guys are the executive, pretty near all of them. Strong signal.

if company is reverse splitting, i'd have to dig deeper for more story but ottomh this is a fairly new gang at the helm, they're purchasing large promising light oil property in southern saskatchewan (hence the 1/4 billion $ new issue), they're initiating a dividend, they're considering reverse splitting in order to push the share price up to institutional levels, since most institutions are prohibited from buying penny stocks.

the OP was favelle? good for you, favelle. but wait, you left without buying? pity, you had a good thing by the tail. it's probably not too late to come back.
.


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## Toronto.gal (Jan 8, 2010)

No need for pity; the stock is trading now at the same price as it closed the day the OP posted, so he hasn't missed anything YET.


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## humble_pie (Jun 7, 2009)

yea all my short-term charts are saying TOG should drop now but it is refusing to behave itself

there's also TOG.R. These are the subscription receipts. They are actually what was issued august 6th for something like 1.57.

closing date is mid-november. One subscr receipt will be exchanged for one share. The receipts are trading about 6 pennies below the share price - 1.68 vs 1.74.

there is apparently one major investor in the subscription issue (the cppib?) who still has the right to drop out. This would collapse the deal. Subscription receipt holders would then be refunded out of the escrow monies, but only to the tune of the original 1.57, ie the potential loss between now & november 12 is roughly or mostly - but not entirely - capped at 11 pennies.

what are the exceptions? well, things could turn bad but the cppib might not drop out. That would leave the deal intact. There'd be no easy way out, then, for small retail investors.

it's a hard choice. I think the reason there's such a brisk market in the subscr receipts is that institutional investors are thinking phooie if things turn real bad the cppib will drop out for sure, so by buying the subscr receipt we are, in effect, buying a kind of put on the purchase ...


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## underemployedactor (Oct 22, 2011)

The Sask assets they bought off Pengrowth was what caught my attention. And the 6% yield is nice too which you don't get holding the Sub receipts.


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## humble_pie (Jun 7, 2009)

quick check of the dividend news shows that a shareholder would receive .01666 per share for the 2 dividends combined that are payable in october & november/13. These are the dividends that a subscription receipt holder would miss.

yet the subscription receipts are trading 5-6 pennies below the shares, so clearly the risk factor - that the deal might possibly fall apart - is in play. 

http://torcoil.com/wp-content/uploads/2013/07/TORC-Acquisition-_July-16_2013.pdf

but i see no evidence whatsoever that the cppib is doubtful or weak-kneed about this deal. On the contrary, the cppib will have a representative on the TOG board, they will be 25% majority owners, the evidence is that the cppib itself was the locus that played a key role in bringing about the reconstruction & the renascence of Torc Oil & Gas.

the company says that as soon as the subscription period closes on 12 nov/13, it will carry out a 5-1 reverse split (some might call it 1-5, but i'm sure everybody gets the drift).

the dividend that will commence 15 oct/13 - with a record date of 30 sep/13 - will be .10 per share per annum, for a yield of 5.81% on today's prices. Investors who favour DRIP dividends might be pleased to learn that TOG intends to offer a 5% discount on DRIP dividends, a relatively high discount rate that is becoming hard to find these days.


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## underemployedactor (Oct 22, 2011)

^Right, thanks for the correction. I agree that CPP is in for the long haul. Appreciate your informative research, Humble.


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## favelle75 (Feb 6, 2013)

Toronto.gal said:


> No need for pity; the stock is trading now at the same price as it closed the day the OP posted, so he hasn't missed anything YET.


Yeah, haven't bought yet....still on the fence. I'm not really a trader. I noticed this at $1.64/share. Its at $1.71 now. I might still grab some.


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## favelle75 (Feb 6, 2013)

So I guess this split happened? My Questrade account still says I have all the shares I bought, but if I want new ones, they are $8.65 now!


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## humble_pie (Jun 7, 2009)

you did buy in the end? good for you.

brokers often take a few days to settle things after a big reorg so u will soon find the correct number of post-split shares in your account, i am sure.

i didn't buy which might very well have been a dumb failure. I still think this company is neat & a keeper. The negative factor for me was simply that an options market in TOG has not yet developed.

there are other quality keeper stocks with strong dividends plus lively options markets, so i'll wait on TOG until the options appear.


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## favelle75 (Feb 6, 2013)

humble_pie said:


> you did buy in the end? good for you.
> 
> brokers often take a few days to settle things after a big reorg so u will soon find the correct number of post-split shares in your account, i am sure.
> 
> ...


I did, yeah, thanks man. In for 1000 shares at $1.74...so I guess 200 shares now at $8.69. 

What do you mean by options?


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## humble_pie (Jun 7, 2009)

exchange-traded options known as puts and calls.

there are now 12 options exchanges in north america; one in canada, the others in the US.

TOG's options will appear on montreal exchange. There are some thresholds the stock must pass first, before dealers are permitted to set up an options market. Criteria such as top quartile market capitalization or top quartile trading volume over a period of time are used.

TOG will pass, it's likely only a matter of putting in the time.

there are other quality canadian stocks yielding 5% dividends plus they already have decent options trading. Where i might have shot myself in the foot is that, by electing to wait until TOG has options (probably in 2014), there is the possibilitiy that the stock might move north, even into the $10 range!

but you & actor both did find something of good quality, favelle. Félicitations to both of you. Price-wise it looked like just another penny stock to begin with, but situation-wise it was a diamond in the rough.


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## favelle75 (Feb 6, 2013)

humble_pie said:


> exchange-traded options known as puts and calls.
> 
> there are now 12 options exchanges in north america; one in canada, the others in the US.
> 
> ...


Thanks dude, it was suggested to me by my father-in-law. Its at less than my original buy-in now, wonder if I should dump my ZUT and get some more...?


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## PatInTheHat (May 7, 2012)

Anyone else a bit concerned this reverse split may hurt the stock in the long run? I've seen it before where a stock does a reverse split and slowly falls back to its previous levels... I like this stock a lot I just question if there is any real upside to the reverse split and if it adds in additional risk.


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## GoldStone (Mar 6, 2011)

Benj Gallander (Contra The Heard guy) doesn't like the reverse splits. He is a smart guy worth listening to. He cites a striking stat: 90% of companies that do a reverse split are still down one year later, below the split price. 

No idea if his number is right. Right or not, TOG might be the 10% exception. CPP involvement is a reassuring sign.


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## humble_pie (Jun 7, 2009)

it's possible that TOG could be part of the successful 10%. This wasn't an ordinary reverse split, it was not designed to patch a broken stock. It was more like a reverse takeover.

the way i see it, TOG is a re-engineered company. Out went the old penny stock ID. In came a new medium-size oil & gas producer with a new business plan & huge new light oil properties in southern saskatchewan.

the story looks as if it had been scripted to order by & for the cppib.


EDIT (aside to favelle) if you have a chance might you let us know what else your father-in-law is liking each:


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## PatInTheHat (May 7, 2012)

I guess it just seems silly to me to do the reverse split at all. Are there no good reasons to actually do this?


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## favelle75 (Feb 6, 2013)

PatInTheHat said:


> I guess it just seems silly to me to do the reverse split at all. Are there no good reasons to actually do this?


I was told that certain funds can't use penny stocks, so companies do a reverse split to "legitamize" their stock.


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## favelle75 (Feb 6, 2013)

humble_pie said:


> it's possible that TOG could be part of the successful 10%. This wasn't an ordinary reverse split, it was not designed to patch a broken stock. It was more like a reverse takeover.
> 
> the way i see it, TOG is a re-engineered company. Out went the old penny stock ID. In came a new medium-size oil & gas producer with a new business plan & huge new light oil properties in southern saskatchewan.
> 
> ...


He suggested CNR in January and ATP right after they tanked. He still thinks POT is a good buy as well as Dundee REIT.


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## favelle75 (Feb 6, 2013)

Well, its doing crappy so far. Down almost 3%.


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## PatInTheHat (May 7, 2012)

favelle75 said:


> Well, its doing crappy so far. Down almost 3%.


I'm not surprised. Sigh. Wish they hadnt done this but hopefully they know what they are doing and this turns out to be better long term move.


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## favelle75 (Feb 6, 2013)

PatInTheHat said:


> I'm not surprised. Sigh. Wish they hadnt done this but hopefully they know what they are doing and this turns out to be better long term move.


2% jump today...but then again, after the fed announcement, what didn't go up? LOL.


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## james4beach (Nov 15, 2012)

favelle75 said:


> 2% jump today...but then again, after the fed announcement, what didn't go up? LOL.


Canadian banks and insurance companies fell


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## favelle75 (Feb 6, 2013)

james4beach said:


> Canadian banks and insurance companies fell


My RBC certainly didn't fall. Up another 46 cents today (0.7%).


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## james4beach (Nov 15, 2012)

favelle75 said:


> My RBC certainly didn't fall. Up another 46 cents today (0.7%).


That's just an illusion caused by the weak US dollar. The +0.7% rise on the US exchange was offset by a nearly equivalent drop in the US dollar.

In fact you *lost* money today on RBC in CAD terms. Look at the big financial stocks on the TSX:

RY -0.08%
TD -0.31%
BMO -0.13%
BNS -0.10%
CM +0.10% (the only one up)
SLF -0.86%
MFC -2.12%


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## PatInTheHat (May 7, 2012)

It seems to be stable so far which is a huge relief. I've been looking to add more but may wait a bit yet


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## favelle75 (Feb 6, 2013)

PatInTheHat said:


> It seems to be stable so far which is a huge relief. I've been looking to add more but may wait a bit yet


Yeah, not terrible. Ex-dividend date is coming up soon. Interesting to see what October brings for it.


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## favelle75 (Feb 6, 2013)

Upgraded to a "buy" recently:

http://business.financialpost.com/2013/01/16/oil-patch-down-but-not-out/


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## favelle75 (Feb 6, 2013)

5.4% jump today...not bad!


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## PatInTheHat (May 7, 2012)

favelle75 said:


> 5.4% jump today...not bad!


I had a buy yesterday that didn't get filled. Almost was doubly sweet. Great to see it moving along though!


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## humble_pie (Jun 7, 2009)

did ya'll get DRIPs? remember the company is going to pad those sweet dripped divvies by 5%!

i didn't buy, drat. I look for stocks w TOG's profile but also w strong options markets, which haven't developed yet for torc & probably won't for a while.

the desired profile: strong, steady, middle-of-the-road. Nothing too wild either upside or downside. But enough volatility to generate decent premium in the options.

mille félicitations à tous les acheteurs!


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## favelle75 (Feb 6, 2013)

humble_pie said:


> did ya'll get DRIPs? remember the company is going to pad those sweet dripped divvies by 5%!
> 
> i didn't buy, drat. I look for stocks w TOG's profile but also w strong options markets, which haven't developed yet for torc & probably won't for a while.
> 
> ...


I didn't get a DRIP....how do I do that with Questrade?


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## PatInTheHat (May 7, 2012)

favelle75 said:


> I didn't get a DRIP....how do I do that with Questrade?


Questrade would just be a synthetic drip which wouldn't give you the 5% (I think?) but I have no idea how to take advantage of the bonus drip unfortunately. Hopefully humble_pie will shed some light on it


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## Toronto.gal (Jan 8, 2010)

Call the broker to find out for sure, as it really depends on the issuer [TOG], but my feeling is that only registered shareholders would get that high discount.

Transfer agent for a true drip is Olympia Trust.
http://torcoil.com/investor-information/dividendrip/
http://css.olympiatrust.com/transfer-agent/investors/dividend-reinvestment-plans.aspx


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## Toronto.gal (Jan 8, 2010)

favelle75 said:


> how do I do that with Questrade?


All you need for a synthetic DRIP, is a phone call to the broker, although for some reason, not all brokers have same rules. For example, even though BBD.B does not offer a DRIP program, I'm able to DRIP with my broker [synthetic], yet I hear that brokers such as BMO, don't offer a synthetic DRIP for it.

Some people dislike DRIPs as you need to keep track of your ACB, but I'm a huge fan of the strategy, but only for the stocks that I'm holding long-term.
http://www.theglobeandmail.com/glob.../why-you-should-be-a-drip-fan/article4308705/


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## favelle75 (Feb 6, 2013)

Toronto.gal said:


> All you need for a synthetic DRIP, is a phone call to the broker, although for some reason, not all brokers have same rules. For example, even though BBD.B does not offer a DRIP program, I'm able to DRIP with my broker [synthetic], yet I hear that brokers such as BMO, don't offer a synthetic DRIP for it.
> 
> Some people dislike DRIPs as you need to keep track of your ACB, but I'm a huge fan of the strategy, but only for the stocks that I'm holding long-term.
> http://www.theglobeandmail.com/glob.../why-you-should-be-a-drip-fan/article4308705/


Thanks TG. I'll give Questrade a call and see what they can do.


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## favelle75 (Feb 6, 2013)

Big jump today...but then again, virtually everything did.


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## PatInTheHat (May 7, 2012)

Well im getting a little sad my order to double down didn't fill last week. Another day of ups. Anyone have a target price on this one? I'm was looking at $10 in 12 months but we might get there an awful lot sooner


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## favelle75 (Feb 6, 2013)

PatInTheHat said:


> Well im getting a little sad my order to double down didn't fill last week. Another day of ups. Anyone have a target price on this one? I'm was looking at $10 in 12 months but we might get there an awful lot sooner


Good question. 52-week high of $14+....


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## favelle75 (Feb 6, 2013)

Up another 3.xx % today.....wonder why the rally? They announced October's dividen yesterday as well...same as September.


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## favelle75 (Feb 6, 2013)

$10 today people. Anyone else jump in?


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## Toronto.gal (Jan 8, 2010)

Still on my watch-list.

Glad you're doing well!


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## favelle75 (Feb 6, 2013)

Thanks TG. Other than the CPP thing, I can't find any news lately on the company. Nothing of note anyways.


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## underemployedactor (Oct 22, 2011)

Nice Q3 results and encouraging guidance yesterday. I like this one. I might just stick around for a while.


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## favelle75 (Feb 6, 2013)

underemployedactor said:


> Nice Q3 results and encouraging guidance yesterday. I like this one. I might just stick around for a while.


Yeah, pretty decent jump again today...but then again, with Yellen's remarks, everything was up.


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## PatInTheHat (May 7, 2012)

I reduced my position a bit today at 10.35 but I would add more on any pullback (This is probably a bit premature but my position was slightly overweight. This could run to $11 within days at the pace its going)

Put the money towards ESN which fell off a cliff today (-8%) for no reason I can find, seems like easy money


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## PatInTheHat (May 7, 2012)

favelle75 said:


> Good question. 52-week high of $14+....


Looks like you were ahead of the banks on this one


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## favelle75 (Feb 6, 2013)

PatInTheHat said:


> Looks like you were ahead of the banks on this one


Yeah, got lucky, ha ha!


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## Time4earlyretirement (Feb 21, 2014)

Been following this company for a while...


Anyone familiar as to what "corporate decline" is?



> TORC has the following key operational and financial attributes:
> High Netback Production 2014E Avg: greater than 10,300 boepd (~85% light oil & NGLs)
> 2014E Exit: greater than 10,550 boepd (~85% light oil & NGLs)
> 
> ...


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## favelle75 (Feb 6, 2013)

Time4earlyretirement said:


> Been following this company for a while...
> 
> 
> Anyone familiar as to what "corporate decline" is?


Isn't it the rate at which the oil/gas reserves decline? ie depletion rate.


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## PatInTheHat (May 7, 2012)

I keep thinking I should trim a little bit but even though it seems to dip a lot, it consistently makes new highs


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## Feruk (Aug 15, 2012)

favelle75 said:


> Isn't it the rate at which the oil/gas reserves decline? ie depletion rate.


No, it's the rate at which production declines, not reserves. That means if you're producing 100bbl/d oil, without any additional drilling, you'll be making 75bbl/d next year. So to grow production by say 10% year over year, a company will have to spend money to add 35bbl/d (25 for decline and 10 in growth). A number like 25% is hugely positive as a number around 40% is not sustainable long term. Reserves do not decline proportionately with rates.


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## underemployedactor (Oct 22, 2011)

Do whatever you feel comfortable with of course PITH, but I don't see any compelling reason to unload this one just yet. What is your reasoning, if I may ask?


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## Time4earlyretirement (Feb 21, 2014)

I'm actually looking to grow my position during dips. There is no way my research and analytical abilities can top that of the talent they have at CPPIB.


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## PatInTheHat (May 7, 2012)

underemployedactor said:


> Do whatever you feel comfortable with of course PITH, but I don't see any compelling reason to unload this one just yet. What is your reasoning, if I may ask?


It's a little over 8% of my portfolio.

Yeah I don't either. We are also in seasonal strength for energy. I suspect we will keep moving up.


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## favelle75 (Feb 6, 2013)

Time4earlyretirement said:


> I'm actually looking to grow my position during dips. There is no way my research and analytical abilities can top that of the talent they have at CPPIB.


Me too. I have $1800 to deploy into either TOG or CCO....just waiting for the right dip!


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## londoncalling (Sep 17, 2011)

I think the right dip was in February. As mentioned up thread energy is in a period of seasonal strength


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## favelle75 (Feb 6, 2013)

londoncalling said:


> I think the right dip was in February. As mentioned up thread energy is in a period of seasonal strength


Unfortunately......probably.


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