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...