Thursday, October 11, 2007

where were you august 16th, 2007?

Back in late July I posted here on my blog regarding the value that Canadian banks were beginning to show. Little did I know at the time that they were in for quite a sharp drop for the next two weeks, reaching a crescendo of selling on August 16, 2007. Were you a buyer on August 16th? I was a bit early, as I initiated a position in Bank of Nova Scotia (BNS), which I felt showed the best value at the time, on August 14th at $47.56, as I pointed out in another post.

Let's have a look at the rebound that these banks have experienced since that dark August day:

Royal Bank of Canada (RY) - 10% rebound since Aug.16.
Bank of Montreal (BM) - 7% rebound since Aug.16.
Toronto Dominion Bank (TD) - 14% rebound since Aug.16.
Bank of Nova Scotia (BNS) - 11% rebound since Aug.16.

Not much has changed since August 16th. I still drink my coffee every morning; Brantford recycling still empties my blue box and leaves it in the middle of my driveway every Wednesday. I still hear business news stories about declining U.S. housing activity, and credit gone bad. The weather is starting to get quite a bit cooler in Southern Ontario; but in the meantime 3, if not 4 of these banks have returned, in about 55 calendar days, what would probably please most conservative investors on an annual basis. Not to mention you probably grabbed yourself a pretty attractive yield if you bought on August 16. Timing seems to be everything sometimes...

6 comments:

FourPillars said...

Thanks - why didn't you post this on Aug 16? I would have bought some of those stocks for sure :)

Mike

MG said...

4P,

touchée.

I've often thought that a good strategy for buying stocks would be to buy when the stock market decline is the top story on a national newscast, such as CTV News with Lloyd Robertson.

White Eagle said...

Where was I? Hmm, oh yeah, I remember now... I was stuck in meetings all week and had no way to take advantage of the bargain deals... its days like that I wish I didn't have a day job and could concentrate on the markets from 9:30-4 and call it quits for the day.

The question now is... when's the next Aug.16-like day? If only this stupid crystal ball would work for once ;)

I guess I'll just have to rely on the national newscasts and my financially-ignorant co-workers to help me indicate the next bottom!

Anonymous said...

I bought USB on that day. I have not had enough cache to buy more of TD.
By the way TM fell to its 52 week low today. What do you think about TM. Its PE is 12 and a very stable company. Should we use negative sentiment on auto industry and Japan?
It has great cars. I need to do more home work

-A

telly said...

A friend of mine working at Chrysler bought TM last week! Tsk tsk... ;)

telly said...

Anonymous,

I think one of the reasons Toyota's stock has fallen recently is due, in part, to the exodus of some of their executives to the likes of Ford and Chrysler.